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.

Budget Implementation Act, 2016, No. 2

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

Mr. Speaker, the reason I feel it is important to make something of the member's choice of words is that she then accused people opposite her for reacting. In that context, decorum and respect are important in this place.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

There's no point of order; sit down.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Don't be a bully.

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

Mr. Speaker, I remind those who are now heckling me that they are breaking the rules of this place when they do so.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Come on, Mr. Speaker.

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

Mr. Speaker, I have never heckled in this place, not once, and I have never used language that was unparliamentary, not once. I recognize my friend's passion, but I do not forgive, nor do I accept—

[The Assistant Deputy Speaker, Anthony Rota]

I will read what is on page 619 of O'Brien and Bosc. It states:

In dealing with unparliamentary language, the Speaker takes into account the tone, manner and intention of the Member speaking; the person to whom the words at issue were directed...

—and it goes on.

There are times in the chamber when passion takes over, things get heated, and sometimes we say things that are out of order or that may not be parliamentary. The hon. member said a couple of things that were borderline, but it is up to her to decide whether they were unparliamentary. Someone took offence. I will take it under advisement and bring it back to the table, and we will go from there.

Questions and comments, the hon. Parliamentary Secretary to the Minister of Finance.

[François-Philippe Champagne, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I would first like to thank the member for her passionate speech. I think everyone in the House today and those listening at home understand how much she cares about Albertans and what is going on in the energy sector. I am one of those Canadians who goes from coast to coast to coast to listen to Canadians to see what they are going through and how we can improve things.

When she talked about Alberta, I can relate, because I come from Shawinigan and can say that, if there is a place in this country that has been hurting over the years, it is my own riding. Therefore, I understand her passion when she asked what the government has done for Canadians.

Let me set the record straight for people watching. The first thing we did as a government was reduce taxes. This is helping people in Alberta, it is helping people in Shawinigan, and it is helping people in Newfoundland and Labrador. It is helping every Canadian.

She asked what we have done for people in Alberta.

I am sure my colleagues would like to listen to this, because it does matter.

I went from Moncton to Yellowknife to listen to people and, trust me, people asked the government to help them and their families and to grow the economy. What have we done to help families? We introduced the Canada child benefit. Nine families out of 10 are receiving more money than they were under the previous government. Then we improved aid for seniors and for students.

What I would like to ask the member for Calgary Nose Hill is why she could not support measures that are helping the families that she herself is trying to help.

[Some hon. members]

Oh, oh!

[The Assistant Deputy Speaker, Anthony Rota]

Before the member responds, I would like to remind members that I am trying to hear what members are saying, and I was struggling to hear the hon. parliamentary secretary.

The hon. member for Calgary Nose Hill.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, I am going to respond by recounting a conversation I had with one of my constituents. He said that he listens to the Liberals every day when I ask about the carbon tax or why they are not supporting Keystone XL or why they are doing nothing for the Alberta energy sector, nothing. They always say they are helping the middle class. He said that the next time they give me that answer, I should tell them for him that he cannot take advantage of a tax break if he does not have a job.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, our economy is based on our regions. In the region I represent, families leave home all the time to go to work, because there is no work back home. Therefore, building regional economic development in a region that has been a have-not for a long time is really important.

I was shocked that the first decision the government made for northern Ontario was to cut all the broadband projects right across the north, as though we did not need to compete. Then it took our voice away from cabinet. I guess the Liberals think we are dummies. They think we do not need a voice in cabinet, that someone from Mississauga is fine. Then they took the resources that were meant to be spent on northern economic development and spent it in the minister's riding. If that is not the most egregious case of pork barrelling, or an example of the government's idea of the map extending around the little boroughs in the central areas it has members, we have a big problem.

I would like to ask my hon. colleague about the importance of speaking for regions that are outside the Liberal bubble.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, I could not agree more with my colleague. Canada is greater than the sum of its parts. The only way that happens is when we sit around the cabinet table and people from different parts of the country look around and ask if it makes sense for everyone. This document does not make sense for all parts of the country, at all. Frankly, I do not know who it makes sense for, but it certainly does not make sense for my riding.

I had one person come up to me and say that if this were a ketchup plant in Southwestern Ontario, there would be a national outcry. Why is the government not standing up for Alberta? A strong Alberta is a strong Canada.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Mr. Speaker, I am pleased to rise today to speak in favour of Bill C-29, a second act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures.

I will begin my remarks by speaking about my riding of Surrey—Newton, which is a community that will benefit directly from the measures outlined in the government's budget.

Much like the rest of Surrey, my riding of Surrey—Newton is experiencing the pressure of growth caused by the migration of 1,200 people moving into Surrey every month.

Surrey—Newton has a strong middle class, a range of different compositions of families with children and seniors. Because of the great interest from the residents regarding many of the budgetary issues and measures introduced last spring, I want to highlight a few of the items that will benefit my constituents the most.

The new Canada child benefit is a significant step forward in recognizing the financial pressures of the middle-class families with children. The new consolidated benefit is easier to account for, indexed according to income levels, and overall more generous than the previous system.

Today, families can receive up to $6,400 per year for each of their children under the age of six. For each child aged six to 17 years, families can receive up to $5,400 per year. This is significant because statistics show that nine out of 10 families have seen their benefits increase under the new plan that was rolled out as of July 1, 2016, with an average bump totalling approximately $2,300.

From the personal impacts I am hearing regarding such an increase, this is a windfall that is really extending the household budgets in Surrey—Newton.

Similarly, seniors are overwhelmingly appreciative of the changes to the Old Age Security Act, which returns the age of eligibility to 65, while at the same time increasing the amount of guaranteed income supplement up to $947.

Vulnerable seniors on fixed incomes are a group that every member of the House is encountering, given their respective constituencies. This budget would fulfill a promise to address those who are most at risk of financial uncertainty, both in terms of seniors as well as young families trying to get a foothold.

In fact, it is what classify as a people's first budget, meaning that this government is committed to improving the situations of middle-class families and seniors with tangible and targeted actions.

This does not mean, however, that it fails to recognize the broader picture when it comes to measures that will continue to build the nation's economic climate.

I want to touch on two specific areas of focus.

First is the number of changes that will allow for greater control over taxation. The budget does this by closing many of the loopholes and policies that allow for billions of dollars of unpaid tax dollars to escape scrutiny. This government believes that multinational corporations should never be able to accrue tax benefits that put them on a different level of consideration than the average, hard-working Canadian taxpayer.

By working with the G20 and the OECD, and ensuring that the provisions attached to both that addresses tax evasion are utilized, it disallows these mega business entities from operating in isolation within Canada.

There must be consequences for avoiding paying their fair share while operating in our country because the lost revenues that this government is currently encountering are dollars that can be invested in Canadian citizens.

Speaking of investment, this government is also looking at the infrastructure needs of the country and investing to build for our future.

For example, in the city of Surrey, residents and businesses alike are struggling with a public transit system that cannot keep up with the demand. As I mentioned earlier, 1,200 people are moving into Surrey every month. To deal with this demand, the Surrey LRT line is one of the most important and pressing projects in metro Vancouver at the moment. It is absolutely essential to keep up with the growth the city of Surrey is experiencing.

The fact is that with Canada having the lowest debt-to-GDP ratio of any G7 country, now is the time for Canada to build and invest for the future. These are not simply the opinions of the government, but one that is voiced by economists from across the country.

In fact, recently the Bank of Canada governor, Stephen Poloz, urged this government to spend more on infrastructure to boost sluggish and long-term growth. Let me provide a direct quote from Mr. Poloz. He said:

In the case of a targeted investment by government, which is identified in such a way that it will be growth enabling, is very likely to pay off very well, That is, it creates more economic growth for all those who use that infrastructure, and that of course creates tax revenues and the system keeps turning.

To address the fearmongering from the other side of the House, this is what Mr. Poloz said about the deficit. He said, “Canada is in a very good fiscal situation so we shouldn't be worrying about that at this time”.

This government is going to transform the empty announcements of the previous administration that often did not deliver on the funds. Instead it will make concrete investments that will energize our economy now and for decades to come by investing in Canadians who need consideration the most and for those whose spending serves as a spark for economic growth. By investing in infrastructure for our cities across the country, this government understands that a budget that does not deliver for people is a budget not worth delivering.

We recognize that impacting an individual or a family's daily life takes strong measures that clearly lay out a plan that is actionable and not just used for political purposes.

I am very proud to support this second budgetary implementation bill. I can see the difference being made in the lives of my constituents in Surrey—Newton and all Canadians. That is one of the most satisfying things I take away from being a member of Parliament and something I never take for granted.

[Alice Wong, Conservative, Richmond Centre, BC]

Mr. Speaker, I have been listening to seniors and their families in my riding of Richmond Centre and this is what I have heard.

First, there is nothing in the budget about family caregivers who have to look after their aging parents and grandparents as well as their own children while working. They can then choose to work only part-time, or stay home. That is a loss of productivity. That is bad for economic growth.

Second, there is nothing in the budget to protect seniors from all forms of abuse.

Why is the government not doing anything for seniors and for this specific group of families that has to look after seniors?