Bill C-29 (Historical)

Budget Implementation Act, 2016, No. 2

A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures

Part 1 implements certain income tax measures proposed in the March 22, 2016 budget by
(a) eliminating the eligible capital property rules and introducing a new class of depreciable property;
(b) introducing rules to prevent the avoidance of the shareholder loan rules using back-to-back arrangements;
(c) excluding derivatives from the application of the inventory valuation rules;
(d) ensuring that the return on a linked note retains the same character whether it is earned at maturity or reflected in a secondary market sale;
(e) clarifying the tax treatment of emissions allowances and eliminating the double taxation of certain free emissions allowances;
(f) introducing rules so that any accrued foreign exchange gains on a foreign currency debt will be realized when the debt becomes a parked obligation;
(g) ensuring that amounts are not inappropriately received tax-free by a policyholder as a result of a disposition of an interest in a life insurance policy;
(h) preventing the misuse of an exception in the anti-avoidance rules in the Income Tax Act for cross-border surplus-stripping transactions;
(i) indexing to inflation the maximum benefit amounts and the phase-out thresholds under the Canada child benefit, beginning in the 2020–21 benefit year;
(j) amending the anti-avoidance rules in the Income Tax Act that prevent the multiplication of access to the small business deduction and the avoidance of the business limit and the taxable capital limit;
(k) ensuring that an exchange of shares of a mutual fund corporation or investment corporation that results in the investor switching between funds will be considered for tax purposes to be a disposition at fair market value;
(l) implementing the country-by-country reporting standards recommended by the Organisation for Economic Co-operation and Development;
(m) clarifying the application of anti-avoidance rules in the Income Tax Act for back-to-back loans to multiple intermediary structures and character substitution; and
(n) introducing rules to prevent the avoidance of withholding tax on rents, royalties and similar payments using back-to-back arrangements.
Part 1 implements other income tax measures confirmed in the March 22, 2016 budget by
(a) allowing greater flexibility for recognizing charitable donations made by an individual’s former graduated rate estate;
(b) clarifying what types of investment funds are excluded from the loss restriction event rules that otherwise limit a trust’s use of certain tax attributes;
(c) ensuring that income arising in certain trusts on the death of the trust’s primary beneficiary is taxed in the trust and not in the hands of that beneficiary, subject to a joint election for certain testamentary trusts to report the income in that beneficiary’s final tax return;
(d) clarifying that the Canada Revenue Agency and the courts may increase or adjust an amount included in an assessment that is under objection or appeal at any time, provided the total amount of the assessment does not increase; and
(e) implementing the common reporting standard recommended by the Organisation for Economic Co-operation and Development for the automatic exchange of financial account information between tax authorities.
Part 1 also amends the Employment Insurance Act and various regulations to replace the term “child tax benefit” with “Canada child benefit”.
Part 2 implements certain goods and services tax and harmonized sales tax (GST/HST) measures proposed or confirmed in the March 22, 2016 budget by
(a) adding certain exported call centre services to the list of GST/HST zero-rated exports;
(b) strengthening the test for determining whether two corporations, or a partnership and a corporation, can be considered closely related;
(c) ensuring that the application of the GST/HST is unaffected by income tax amendments that convert eligible capital property into a new class of depreciable property; and
(d) clarifying that the Canada Revenue Agency and the courts may increase or adjust an amount included in an assessment that is under objection or appeal at any time, provided the total amount of the assessment does not increase.
Part 3 implements an excise measure confirmed in the March 22, 2016 budget by clarifying that the Canada Revenue Agency and the courts may increase or adjust an amount included in an assessment that is under objection or appeal at any time, provided the total amount of the assessment does not increase.
Division 1 of Part 4 amends the Employment Insurance Act to specify what does not constitute suitable employment for the purposes of certain provisions of the Act.
Division 2 of Part 4 amends the Old Age Security Act to provide that, in the case of low-income couples who have to live apart for reasons not attributable to either of them, the amount of the allowance is to be based on the income of the allowance recipient only.
Division 3 of Part 4 amends the Canada Education Savings Act to replace the term “child tax benefit” with “Canada child benefit”. It also amends that Act to change the manner in which the eligibility for the Canada Learning Bond is established, including by eliminating the national child benefit supplement as an eligibility criterion and by adding an eligibility formula based on income and number of children.
Division 4 of Part 4 amends the Canada Disability Savings Act to replace the term “child tax benefit” with “Canada child benefit”. It also amends the definition “phase-out income”.
Division 5 of Part 4 amends the Royal Canadian Mint Act to enable the Royal Canadian Mint to anticipate profit with respect to the provision of goods or services, to clarify the powers of the Royal Canadian Mint, to confirm the current and legal tender status of all non-circulation $350 coins dated between 1999 and 2006 and to remove the requirement that the directors of the Royal Canadian Mint have experience in respect of metal fabrication or production, industrial relations or a related field.
Division 6 of Part 4 amends the Financial Administration Act, the Bank of Canada Act and the Canada Mortgage and Housing Corporation Act to clarify certain powers of the Minister of Finance in relation to the sound and efficient management of federal funds and the operation of Crown corporations. It amends the Financial Administration Act to provide that the Minister of Finance may lend, by way of auction, excess funds out of the Consolidated Revenue Fund and, with the authorization of the Governor in Council, may enter into contracts and agreements of a financial nature for the purpose of managing risks related to the financial position of the Government of Canada. It also amends the Bank of Canada Act to provide that the Minister of Finance may delegate to the Bank of Canada the management of the lending of money to agent corporations. Finally, it amends the Canada Mortgage and Housing Corporation Act to provide that the Bank of Canada may act as a custodian of the financial assets of the Canada Mortgage and Housing Corporation.

Second Reading

[Andy Fillmore, Liberal, Halifax, NS]

Mr. Speaker, as it happens, we are debating this year's budget today, Bill C-29.

The budget is responding to a ticking time bomb of deferred liability in the form of deferred infrastructure maintenance and deferred investment in social structure in this country. Right now there is a tremendous amount that we can and should be doing, and that the budget is getting done.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Mr. Speaker, I thank my colleague for his speech.

I would like to make three points. How is it that the Liberals, after roundly criticizing guillotines to force bills through, are using the same strategies as the Conservatives? How is it that the new government, without ever mentioning it in the election campaign, wants to privatize our infrastructure on such a massive scale? Lastly, could my colleague from Halifax explain to us why people who earn less than $45,000 a year, which is less than $23 an hour, are being completely ignored by the Liberals, who do not consider them part of the middle class?

[Andy Fillmore, Liberal, Halifax, NS]

Mr. Speaker, I think it is incumbent on everyone in the House to use to the greatest effect possible the time we have been given here by those who elected us. That is what the rules of Parliament allow us to do.

I would add that low-income families who earn less than $45,000 per year are in fact tremendously helped by the budget, largely through the Canada child benefit, through improvements to retirement packages, through investments in seniors housing, through investments in affordable housing across the board, and the list goes on.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I have been wanting to put this question to a government member all day and this gives me a chance to do so.

The difficulty I see happening in the House today is more a problem of how well the House leaders are getting along in scheduling time than it is the substance of the budget bill.

I just want to put on the record what I see, and although I am not privy to the meetings of the House leaders of the governing Liberal Party, the Conservative opposition, or the New Democrats, my sense from the fact that we have time allocation on the bill is that things are not going as co-operatively as they might.

I know that the bill has been before us for quite a while at second reading because of the fact that I was allowed to speak to it, and slots for members in the parties that are smaller only come along rarely, so we have had quite a lot more debate at second reading. But I object to these time allocations just the same.

While I am not going to say, “a plague on all their houses”, I wonder if the member for Halifax can give me any kind of insight as to what is going on, why we have time allocation when the bill, with co-operation, should have gone to committee already.

[Andy Fillmore, Liberal, Halifax, NS]

Mr. Speaker, I was very sympathetic to the words of the government House leader earlier in the day when she said it is only with great regret that she brought forward the motion for closure in the House.

Unfortunately, we have been unable to use our time together wisely, and this is merely an attempt to make sure that we do the job today that we were sent here by Canadians to do.

[Anne Minh-Thu Quach, NDP, Salaberry—Suroît, QC]

Mr. Speaker, the NDP opposes Bill C-29, the budget implementation bill, for a number of reasons. It has multiple flaws. The Liberals were very vocal in their criticism of the fact that the Conservatives introduced mammoth budget implementation bills known as omnibus bills.

Now the Liberals have introduced a bill with 146 clauses that amends 13 acts and is 234 pages long. It is quite an eclectic mix. The Liberals are also and undemocratically imposing time allocation, which is a tactic they themselves condemned back then. Imposing time allocation prevents us from debating our positions in depth. The Liberals want to rush this bill to committee, which means that our constituents will not have access to all of the information. This is moving too fast, and the Liberals are not honouring their democratic commitment to transparency.

Throughout the campaign and even to this day, for the past year, they have been talking about working for the middle class and reducing inequality. However, and I will talk about this in my speech, many of the proposals in Bill C-29, the budget implementation bill, are utterly incompatible with their stated aim of reducing inequality.

Let us start by talking about SMEs. During the election campaign, we heard time and again from the Liberals that they would reduce the small business tax from 11% to 9%. Now they are not moving ahead with that proposal, which is not in the budget. We know, as do the Liberals who keep saying this, that SMEs are the job creators in the regions. They create 80% of jobs and keep the economy running. Why then are the Liberals putting obstacles in their way?

Two independent grocers in my riding came to see me because they wanted to tell me that it makes no sense that our country has still not passed legislation to cap exorbitant credit card fees. One of these grocers told me that it costs him $141,000 a year just to be able to accept credit cards. Grocers make a net profit of only 1% or so a year. Credit card charges are between 1.5% and 2.5%.

What should we do to ensure that these independent grocers continue to invest in our community? Every time there are school or community projects, independent grocers are asked for their involvement and financial support. However, if they are constantly hobbled, how are they going to survive in order to create jobs, first of all, not to mention to be able to contribute to their communities and our society? Times are tough.

The Liberals also promised a tax credit for hiring youth. However, that is also missing from Bill C-29. Young people really are the forgotten ones in this bill. Just look at the lack of funding for youth organizations.

My riding has three youth consultation forums. One is in Vaudreuil-Soulanges, a second one is in Beauharnois-Salaberry, and the third is in Haut-Saint-Laurent. During the three meetings I had with over 100 youth organizations, everyone agreed that the Liberal budget does not include any investments for prevention.

The Conservatives made cuts, and then the Liberals came along and said they wanted to focus on youth and give them the tools they need to thrive. However, there is nothing for prevention, nothing for mental health, nothing to tackle crime and drug addiction. In my riding, Salaberry—Suroît, those three issues are related to a great many problems. When has this government ever talked about investing in youth programs and prevention? It never has, unfortunately.

Problems related to housing, homelessness, and youth suicide persist.

The NDP recently moved a motion calling on the government to reinvest in child services for first nations. This year alone, there is a shortfall of $155 million. In the end, the Liberals voted in favour of our motion after initially being opposed to it.

However, there is nothing in the budget to suggest that there will be a reinvestment. No announcement has been made on reinvesting in first nations youth. In January, the Canadian Human Rights Tribunal found that by failing to provide recurring investment year after year, the Government of Canada was demonstrating systemic discrimination and racism toward first nations children. How can this still be happening in 2016? There are cases where 25 young people are crammed into a substandard home and have limited access to drinking water, education, and health care. The Jordan principle is not always applied. Still, the Liberals are patting themselves on the back and imposing time allocation. They see no problem. They think the bill should be sent to committee right quick so that we can study it there. It is unbelievable.

That is not the only measure affecting youth services. Young people were supposed to receive $105 million, as announced in budget 2016, to help them gain work and life experience while also supporting communities. However, those funds still have yet to be allocated, and there is nothing on that in this bill. Young people are important, but the federal government is not taking any meaningful action that reflects that.

On the subject of legalizing marijuana, no new funds have been announced for prevention. In my riding, organizations like Liberté de choisir work on preventing addiction. According to them, every time the Prime Minister talks about legalizing marijuana, young people think it means that they can use it, because he said it was legal. This demonstrates a lack of awareness and a lack of prevention. This government has not announced anything on that. The Prime Minister is putting young people at risk by saying these things without giving the organizations and groups that work with young users the tools they need.

In a French article entitled “Légalisation du cannabis: les intervenants jeunesse aux aguets”, which was published two days ago on November 13, 2016, Jean-Sébastien Fallu, a professor at the University of Montreal's École de psychoéducation, stated:

Unfortunately, very few investments are made in prevention. When it comes to drugs, nearly 90% of the funding is allocated to the court system or addiction treatments.

I could talk for a long time about youth, but I would like to move on to other things. The Liberals have been bragging about lowering taxes for the middle class. However, if we look at this measure even just a little more closely, we see that the Liberals are lowering taxes for those who earn $45,000 or more. Over half the population earns less than $45,000, and these people will not benefit from a lower tax rate. Is that what working for the middle class and reducing inequality in Canada looks like? Personally, I do not agree with that.

The Liberals are also saying that they are going to help lift seniors out of poverty. However, they are only focusing on seniors who live alone. Seniors living alone will be entitled to more guaranteed income supplement benefits. That is a step in the right direction. However, what about those who do not live alone? Do they not also have the right to live out of poverty? Can the government not also increase their guaranteed income supplement benefits and make sure that those benefits are paid out automatically?

Many of the people who come to my office have heard about this measure, but they do not know what to do. They do not have the tools they need. They do not have Internet access. Most of our seniors live in difficult circumstances.

I would like to wrap up with some comments on employment insurance, where there are still problems. Only four in 10 workers have access to employment insurance even though all workers pay premiums. Six out of 10 workers who need help are denied the benefits, never mind those with serious illnesses. The people who help these individuals are entitled to 26 weeks of employment insurance compassionate care benefits, but the individuals who are gravely ill are entitled to just 15 weeks of benefits. That makes absolutely no sense. There are still problems, and we still need to talk about them.

It makes no sense to impose closure.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, the member talks about equality. I would challenge the member to tell the House when there was a more progressive budget than the one we are talking about today. There would be a redistribution of wealth of great significance where we would have a substantial increase to Canada's wealthiest, in terms of a tax; we would have the middle-class tax break, which would help everyone, from health care workers, firefighters, factory workers; we would greatly enhance the Canada child benefit; we would have a substantial increase to the guaranteed income supplement; and there is a litany of other things that would be redistributing Canada's wealth. Yet, the NDP seems to have chosen to vote against these types of measures.

The question for the member, specifically, is, can she indicate, to the best of her knowledge, if there was another budget in the last 30 or 40 years that has been more progressive than the one that we are actually voting on today.

[Anne Minh-Thu Quach, NDP, Salaberry—Suroît, QC]

Mr. Speaker, it would have been really nice if my colleague from Winnipeg North had taken the time to listen to everything I said because he would never have stood up and said that to me. In fact, once upon a time, my colleague had this to say about time allocation:

It is undemocratic and a type of abuse, as a rule, of the House of Commons of Canada.

Those are his own words, and now his government is imposing time allocation.

With regard to inequalities, since the member talked about the Canada child benefit, it has been shown that the Liberals’ benefit will not be indexed for four years. Therefore, families who thought they would receive more money from that child benefit than from the Conservatives’ benefit are realizing they have been duped. Because the indexing will not take place for four years, they will lose $5,500.

My colleague also talked about tax breaks. I will repeat what I said about that, since he probably did not understand: the tax breaks do not affect people who earn $45,000 or less per year, which is more than half the population. More than nine million people will not benefit from that measure.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, there are going to be many areas of disagreement, obviously, but one area of agreement I think that we have with the NDP is that we believe that social spending needs to be sustainable. We believe that, in the long term, we need to have a plan for getting the revenue for the spending. We cannot just promise things and do so on the basis of massive deficits that are then going to lead to cuts in the future. I think most opposition members understand the importance of having a balanced budget over the long term.

I wonder if the member would comment on that. Really, how many spending promises from the government are not real spending promises? Given how far ahead of actual revenue it is with spending, it knows these are going to lead to cuts; it knows it cannot sustain the promises it has made to people; it knows, in the long term, that these things are not going to be in place for people. Why is the government making commitments that are clearly not costed and not paid for?

[Anne Minh-Thu Quach, NDP, Salaberry—Suroît, QC]

Mr. Speaker, I thank my colleague, who has asked some very relevant questions.

The Liberals promised that they would only run up a deficit of about $10 billion if they were elected. Now, we realize that that deficit has tripled and future generations will bear that burden.

Since we are talking about measures that were not announced by the Liberals and are being announced in this budget, let us talk about infrastructure. They said they would invest in infrastructure that would meet the needs of communities for public transit and green infrastructure. However, as if by magic, we are now hearing that there will be a lot of privatization. When we talk about privatization, we are talking about companies whose primary goal is to make a profit and not to meet the public needs of the community.

Once again, the Liberals are pulling a rabbit out of their hat. No one saw that coming, and they themselves had not announced it. Now, we are stuck with it, because they decided to tell us about it at the last minute. This goes against the public interest of Canadians.

[David Graham, Liberal, Laurentides—Labelle, QC]

Mr. Speaker, I am pleased to rise to speak about Bill C-29, which implements a number of important elements of the 2016 budget. I proudly support this budget, because it represents the best that this country has to offer its citizens.

I have been following Canadian federal politics closely for more than 20 years, especially during the more than seven years that I worked as a constituency assistant, a parliamentary assistant and now as a member of Parliament. As a result, I have seen many budgets and changes, many attempts to try out new ideas, and numerous mistakes.

The bill before us is not just an annual budget intended to stay the course with policies that did not work before, in hopes that they will work this time. On the contrary, it is a budget that focuses on our future. It lays the groundwork for years of even better budgets, investments and innovations.

In the economic update presented a few weeks ago, new investments were announced. As the MP for a very rural riding, I am pleased to see a new $2-billion investment, as a first step, for rural infrastructure priorities.

We need to make up for the decades of negligence the regions have suffered. That money, along with $180 billion for infrastructure in many categories that are not specific to the regions, demonstrates the government's interest and its plans to deliver on that.

Where I come from, high-speed Internet access is a very important issue. As far as we are concerned, all socio-economic issues can be linked to high-speed Internet access. The government allocated $500 million for this in the budget. That money cannot come quickly enough. However, we are not so naive as to believe that this small amount is going to solve the problem of rural Internet access after 20 years of failures in digital communication. That money is merely a first step. I am very proud to finally see a forward-looking budget that focuses on long-term planning after 10 years of mismanagement.

I know the Conservatives will ask me how we can plan anything with such large deficits. It does not surprise me that they keep asking that question. For years, they looked at their own deficits and had no idea what to do about them or where they came from, even as they cut taxes and investment in our economy. They actually increased the national debt by more than $150 billion. Year after year, the Conservatives never stopped to think about how future generations would pay off the debt they accumulated.

The Conservatives eliminated government revenue sources and spent willy-nilly. They did not have an infrastructure plan to build the country and our future. They fixed potholes and built gazebos. They spent, but they did not invest, with the possible exception being economic action plan posters, which sprouted up all over the country like mushrooms.

During this debate, the Conservatives have repeatedly questioned whether paying taxes is the way to go. They do not believe that taxes are society's best tool for sharing common costs. They do not agree that it is the government's responsibility to manage that money and spend it in the country's best interest.

Clearly, our job is to improve the lives of all Canadians. However, I can assure the House that we are not going to change things just by listening to the Conservatives. It will take concrete action by the government, and that means spending money in almost every case.

As far as I am concerned, it is obvious that the government has an important role to play in the economy. As I said during yesterday's debate, taxes allow us to pool our resources in order to pay for the expenses shared by our society. The role of government is to improve citizens' lives and it does that by managing these pooled resources, in short, taxes.

We should be talking more about citizens rather than taxpayers. We often do not consider the goal of the institution we work for and the reason why we are here. When the Conservatives imply that the government has no useful role or function, or that taxes are nothing more than a burden for citizens and business, they have completely missed the point.

I find it amusing that the Conservatives are complaining about the government moving forward with enhancements to the Canada pension plan when they have a parliamentary pension plan. They complain about the fact that the government collects taxes and decides how to spend them to improve people's lives, but they do not turn down their own salaries, benefits, or their parliamentary budget.

They know that, as members of the government and members of Parliament, we have the vital role of managing common resources and expenditures and of debating the best ways to improve the lives of our fellow Canadians.

Accordingly, I believe that, eventually, we should consider the possibility of ensuring that all Canadians have a guaranteed minimum income. This idea has been debated in many countries by many generations and may have been around for as long as the debate on whether to annex Turks and Caicos, a measure that I am also not likely to oppose.

Because so many aspects of our society are becoming automated, one day, there may not be enough work for all Canadians. However, I may be wrong, but I believe that that day is still a long way off.

One of my favourite movies is The Gods Must be Crazy. The beginning of this South African and Botswanan movie from the 1980s explains how society becomes more modernized. We have created technology to simplify our lives, but the more simplified our lives become, the more complex the technology becomes. We need more education to understand our simplified lives, which are in fact becoming more complicated.

To come back to what I was saying, the Canada child benefit, which provides parents with up to $6,400 a year per child, is a type of guaranteed minimum income. We already have a guaranteed minimum income for seniors in the form of the guaranteed income supplement, which we increased by 10% in the budget for those who need it most. The idea is already present in our social structures because one of the shared commitments we made as a society was to take care of those who do not have the means or ability to take care of themselves.

Our budget therefore includes a number of components that focus on improving our future. Investments in infrastructure are essential, but we have to run a deficit to make those investments because our infrastructure is already in a deficit situation.

For example, Internet access in our regions is often so unreliable that it is having a significant harmful effect on our economy. Many of our roads are in disrepair. It is estimated that only 400,000 km of Canada's one million kilometres of roads are paved. The investment needs of indigenous communities are so great that I cannot even begin to describe them here. It costs money to make all of these changes and fix these long-standing problems. However, all these investments will improve the quality of life of Canadians in the short term and strengthen our economy in the long term.

Yes, we must go into debt to get there, but our society is already in debt, whether we are talking about our roads, our communities, or our basic infrastructure. By investing, we are simply quantifying this deficit.

With a stronger economy, improved infrastructure, and essential investments, government revenues will increase without hurting the economy and the deficits will start to go down. We have the record to prove it. There has not been a Liberal Prime Minister since confederation who has not managed to balance at least one budget. The only exception was when no budget was tabled. As for the Conservatives' record, the opposite is true.

The good news about infrastructure in the budget does not stop there. I initially had concerns about the idea of an infrastructure bank that the private sector would contribute to, as I consider myself more left-leaning. However, I now understand how we might benefit from it and I see the tremendous potential. I am by no means an expert on this, but if it is done correctly the possibilities are immense.

Private-public funding of infrastructure gives us the chance to finally address the issue of high-speed Internet access in the regions, seriously address the issue of affordable housing, and build other green, social, and traditional infrastructure where traditionally user-pay models are used, without giving up on the idea that infrastructure should belong to the public sector. It is quite interesting and I look forward to following this project.

I am proud of our budget, Bill C-29 and of our government's plans and I am not afraid to say so.

The House resumed consideration of the motion that Bill C-29, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures, be read the second time and referred to a committee, of the amendment and of the amendment to the amendment.

Budget Implementation Act, 2016, No. 2

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Speaker, indeed it is always good to stand in this place, particularly after the bit of confusion that we just went through in the voting. I can say that with Bill C-29, the budget implementation act, there is no confusion; it is actually a train wreck. It should not be called an implementation bill. It maybe should be referred to as a renovation bill, because when something is as disastrously wrong in the economy of this country as it is now, it takes not only severe renovations but also a change of culture within a government.

The riding of Lambton—Kent—Middlesex is in southwestern Ontario, and is very much a rural riding made up of small and medium-sized businesses. Quite honestly, in the riding I do not have a large business. We are made up of hard-working, middle-income folks and families who get up every day and go to work. They are strong entrepreneurs who generate wealth and employment, something that is hard to find in this budget. These folks in my riding actually stimulate jobs. That is because they have endured some hard times but have been able to buckle down and survive, up until some of these proposals in this budget.

Something that rang strong in a riding like mine and those across this country was the talk in the campaign by the Liberals about what they were going to do. Actually, the Liberals did not talk about what they were going to do, but actually made promises.

We were in the riding last week during Legion Week as we celebrated and thanked our veterans across this great country of Canada. We thanked the veterans who are alive, but we also recognized with our hearts the work and the commitment of those who gave their lives so we could be in a place like this and be able to have free discussion about topics that are important to Canadians. We celebrated Legion Week and thanked those who gave their lives for us in this great country and the veterans who were there. We always comment on and commend those who are in uniform, who stand up for us not only in our great nation of Canada but also abroad in many countries.

However, when the government breaks that promise, as the current government has done in so many ways, it takes a bit of the heart out of people. The broken promises did not happen three or four years after the election; they happened within days and weeks of the government being sworn in. It takes away the credibility not only of the government but, quite honestly, of all of us who are elected people, because people say they just do not trust any elected people. That is very unfortunate. Let me just say a bit about what happened with the breaking of promises and why that was so detrimental to people in my riding and, I am sure, across the country.

In the election campaign, the current Prime Minister talked about a teeny-weeny modest deficit that the Liberal government was going to hand to Canadians. They said it would be a $10 billion deficit. We have heard that time and again. Not within a year but within weeks, the $10 billion escalated to $30 billion.

That is 300% or three times what the projection was. When we talk about billions of dollars, ordinary Canadians really do not wrap their heads around what a billion dollars is, but they can wrap their head around what it actually means.

Let me give a little example of what it means, because this is what happens when the Liberals do not do what they say they will do and expect ordinary Canadians to believe them and then understand that when they break the promise, it does not mean much. That is really what the Liberals want us to think.

A small business guy goes into the bank with a proposal and a business plan that goes with it. He tells the bank or the lending institution that this is his business plan, that he needs a million dollars, that this is how he will bring it forward and this is how he will pay it back. His business plan talks about the growth. He thought about it. In six weeks he went back to the bank and tells the banker that he still has the same business plan and the sort deficit projection that I just mentioned, so that he needs not $1 million, but $3 million now.

I do not know if anyone on that side has ever had a business. Maybe no one on that side has had to put together a business plan and then take it to a financial institution. However, if an individual from a small business did what I just described, and it could have been any business in my riding, the banker would show them the door.

The difference is that the banker cannot show the government the door today, because the taxpayers are the lenders. Maybe in four years they will be able to show them the door. The Liberals promised they would cut taxes for small business. No, they never want to lose a revenue source from a tax.

The other promise was to make the tax plan revenue neutral, with the Liberals taking from the top earning rich and giving it to the poor, the lower income group. That was supposed to be revenue neutral. It took about three weeks to discover it was not revenue neutral. It was actually about a $2 billion hit to the taxpayers of Canada.

My point is that the government right now has absolutely no credibility. It now has a debt that is escalating. The Liberals have no plan for how they will pay it back. When the Prime Minister was asked when he would balance the budget, as was the Minister of Finance in question period today, they actually did not know. The Prime Minister indicated earlier that he did not know what the deficit would be.

I say to Canadians and to small business people and their families that we have a serious concern. We have a growing deficit and a debt that has escalated to what some say will cost us another $5 billion a year in interest payments. Where I come from, when we are in a hole, it is best to quit digging

However, I get the sense that is not the culture of the Liberal Party. They are on a glorious trip of big deficits, thinking they will just spend their way out of debt. I do not know where that has worked. From a business perspective, it just does not work.

I see that I am at the end of my time and I will be more than glad to take questions, but I am just concerned that with this budget the Liberals have betrayed Canadians and have broken their promises to them. This budget implementation act, unfortunately, will not be supported by me or my party.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, I wonder if the hon. member would reflect on what the former government claimed was a balanced budget, considering that there was billions of dollars in lapsed funding that was unspent from programs the Conservatives promised but had not delivered. They sold the shares in General Motors for a loss. All of it was really to construct the appearance of a balanced budget where clearly none existed, not to mention the fact that the former government had us in deficit when times were good, after inheriting many years of surpluses.

Perhaps he can reflect on that in terms of the virtues of a balanced budget as the Conservatives saw it.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Speaker, that is a great question. I do not know if the member was here when we were in government in 2008, but we went through the greatest recession this country had seen since the Great Depression of the thirties. At the time, I walked through how we would go into that in terms of the economy, as well as an exit plan on how we would come out of it. Interestingly, the current government is not in a recession, but appears to be content with and driven to creating a recession in Canada with its spending.

Is it easy to balance a budget the way the Liberals did by cutting all the transfers to the provinces, by cutting health care transfers? Absolutely. If we download everything onto someone else, it is easy. We did not do any of that. We increased our transfers, we cut taxes on Canadians to the lowest in 50 years, and we increased transfers to the provinces. We had a great record.

On top of that, in the last year no net new jobs have been created. Coming out of a recession in 2008, some 1.2 million net new jobs were created, 80% of which were full time and 80% in the private sector.