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

[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?

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

Mr. Speaker, I can certainly tell the member that all the members from British Columbia, and I can vouch for the member for Steveston—Richmond East, are fighting hard for those seniors and those families in Richmond.

As I mentioned earlier, it was the Conservative government that wanted to raise the retirement age from 65 to 67. The government that kept the age at 65 is this Liberal government, and I am very proud to be part of it. I am certain that the member will also be proud when she goes back and talks to those citizens who need the help the most.

As I mentioned in my speech, we also increased the guaranteed income supplement by $947. I am sure that my colleague from Steveston—Richmond East will agree that this is going to benefit all seniors living in Richmond and in my riding of Surrey—Newton and across Canada.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Mr. Speaker, I will ask the member the same question I asked his colleague for York Centre regarding the fact that this budget does not do anything for the middle class. We have a so-called middle-class tax break that only kicks in for people making more than $45,000 a year.

I have looked up the data for Surrey, and 75% to 80% of the people in Surrey make less than $45,000 a year. It is not going to help anyone there. It is not going to help families who need to have both parents working, because they cannot afford child care.

There is no affordable child care in this budget. The child benefit will not come anywhere near to paying for that kind of child care. I do not know if the member is waiting for a new NDP government to be elected in British Columbia next year that has promised to bring that in, but I think it behooves the current federal government to help Canadians.

If the Liberals want to help the middle class, what have they done in this budget if they are not bringing in tax benefits for them and are only helping the wealthy?

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

Mr. Speaker, first of all, I would like to thank the hon. member for his passion for helping middle-class families. There is only one leader in Canada who talked about the middle class many years ago, and that is the hon. member for Papineau, who is now the Prime Minister.

The first thing we did when we took power was reduce taxes for low- and middle-class families, and we increased taxes for those people who are multi-millionaires, the 1%. On the other hand, we can look at the $125 billion over the next 10 years for infrastructure. Who is that going to help? Directly or indirectly, it is going to create high-paying jobs. Who will benefit most? It is middle-class Canadians.

My friend mentioned child care. I remember sitting in this House when a Liberal government brought in universal child care across Canada. Ken Dryden was the minister. Who was the party that brought the government down? It was the member's party that brought down the government, and that child care was abolished at that time. I can say that we are bringing child care—

[Some hon. members]

Oh, oh!

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

I will remind hon. members that normally everybody quiets down when the Speaker is speaking. It is in that book I quoted earlier.

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Selkirk—Interlake—Eastman, Foreign Affairs; the hon. member for Port Moody—Coquitlam, Fisheries and Oceans.

Resuming debate, the hon. member for Niagara Centre.

[Vance Badawey, Liberal, Niagara Centre, ON]

Mr. Speaker, it is a pleasure to stand in the House this evening to speak to Bill C-29. On behalf of the people of Niagara Centre, I rise today to speak about what this budget will mean for my community, our region, and the people and businesses that call Welland, Thorold, St. Catharines, Port Colborne, and all of the Niagara region home.

Since first being elected last year, I have participated in three federal budget consultations in my riding and throughout the Niagara region. The first was last January to ensure that the concerns and aspirations of my constituents were included in budget 2016. At this meeting, I met with over 15 social service groups, immigration groups, environmental groups, poverty groups, business associations, chambers of commerce, unions, and many other community leaders.

The second consultation last winter was with the parliamentary secretary for finance, the member for Saint-Maurice—Champlain, who joined me and 12 mayors from the Niagara region, the Niagara regional chair, various council members, and a number of economic development officers from the area who were all looking to re-engage with the federal government.

At both of these meetings, the message was very clear. The citizens of Niagara Centre and Niagara wanted to ensure that the federal government was helping Canadians by doing what we promised to do: first, create a business-friendly environment that keeps us competitive in a changing global economy; second, provide support for Canadians to learn new skills and knowledge to succeed in a changing world; third, partner with our provinces and municipal governments to build the core infrastructure people and businesses need to be healthy and secure and that will provide a springboard for success in the years to come; and fourth, provide returns that meet the requirements of a triple bottom-line mindset, that being economic, environmental, and social.

Last week, the member for St. Catharines and I held a pre-budget consultation for budget 2017. Much of the conversation reflected on the successes of budget 2016 and the long-term vision of the programs put forward last March. The regional chair, the mayors, business groups, social service providers, Brock University and Niagara College, and other community leaders once again came forward with their desire to build on budget 2016 and to continue to build partnerships between the federal government and the people of my riding of Niagara Centre, and, equally important, the people of the entire Niagara region.

These three formal consultations allowed me, as well as members of our community, to meet in partnership with municipal governments, social service providers, business groups, and educational institutions to discuss in an open forum how to strengthen the partnerships between these groups and the federal government while meeting the needs of hundreds of residents in my riding, middle-class Canadians and those working hard to join the middle class.

What I have been hearing from the people of Niagara Centre is how budget 2016 helps them. In my riding we have created a seniors council, a group of passionate individuals within our seniors community who meet with me and my staff throughout the year to discuss how governments and service providers can help seniors live healthy, independent, full lives. The Niagara Centre Seniors' Council supports the Old Age Security Act, which ensures 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.

In my riding we have also created a youth council, a group of engaged and inspirational young people from high school, university, and college as well as young business owners. These are the leaders of today. When this group comes together throughout the year, I am excited about Niagara Centre and the Niagara region's future. The youth council is motivated by this government's increased investments in Canadian colleges and universities, such as Brock University and Niagara College, both of which are in my riding of Niagara Centre.

They are also very supportive of the increased support for middle-class families and those working hard to join the middle class.

By increasing the amount of federal support for college tuition, they are now moving forward with more support for mental health services. They are in fact prioritizing, on behalf of all Canadians, moving forward on enhanced mental health services.

In my riding, many families are working hard to provide for their children so their kids can be successful. The Canada child benefit does just that. In early September, when so many of us were getting our kids ready to go back to school, I heard from mothers and fathers in my riding about how helpful the Canada child benefit was to them. For example, a family with an income of $65,000 a year, with two school-aged children, received a $500 tax-free cheque in September, money that was used to help pay for back-to-school supplies, clothes, registration for sports teams, cultural and theatre registrations, and nutritious foods for lunches.

My constituency office in the city of Welland had many hard-working parents from Port Colborne, Thorold, Welland, and south St. Catharines and from outside the riding come in to learn about the CCB. I have had many conversations with parents who have stopped in to thank us and tell me how the CCB has been a great help to them. As a father myself, it was incredible to see the effect this particular program had on families who want to ensure that their children have every opportunity to be successful.

Budget 2016 is an example of how the federal government can create partnerships with municipal governments, social service providers, the business community, and, equally important, hard-working Canadians to help grow our economy, support our next generation of business and innovation, and ensure that Canadians have the support they need to succeed today as well as tomorrow.

Budget 2016 focuses on partnerships that build sound infrastructure while creating good jobs with a strong focus on supporting hard-working Canadians. After three budget consultations to date, several youth and senior advisory committee meetings, and consultations with business groups, universities, colleges, anti-poverty groups, immigration groups, and various other community organizations, this is what the people of Niagara Centre have asked of their government.

Once again, it is establishing triple bottom-line results, including economic, social, and environmental. The result is that hard-working Canadians, middle-class families in Niagara and beyond, see in budget 2016 that the Government of Canada is working with them and listening to their needs and concerns to bring success today while ensuring the success of future generations. It is responsive government and responsible government.

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

Mr. Speaker, there is a question I have been wanting to put to a government representative today. I know that the hon. member did not touch on it in his speech, but my question does directly relate to Bill C-29 in that we had a series of commitments from the Liberal government when it was campaigning in the election.

There is one piece, which I have to say I have been very disappointed has not been in budget 2016. I am not sure I have heard the finance minister commit to it for budget 2017.

The Liberal platform committed that all fossil fuel subsidies would be terminated, but budget 2016 includes fossil fuel subsidies for liquefied natural gas continuing until at least 2025. I do not want to put the hon. member on the spot, but perhaps he has some indication of whether that Liberal promise relating to fossil fuel subsidies will be brought in in 2017.

[Vance Badawey, Liberal, Niagara Centre, ON]

Mr. Speaker, that is something we are discussing at the moment. With all due respect, I can get back to you on the information we have to date as well on the direction we may be taking in 2017.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

Before proceeding, I want to remind hon. members to speak through the Speaker and not directly across the aisle.

Questions and comments, the hon. member for Abitibi—Témiscamingue.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Mr. Speaker, in his speech, the member spoke about the Canada child benefit.

On that topic, the bill did not provide for the indexing of that benefit, which represents a loss for Canadian families.

Did the government fail to index this benefit because of a lack of attention or a lack of planning?

[Vance Badawey, Liberal, Niagara Centre, ON]

Mr. Speaker, that was brought up by members of this caucus most recently this past week, me included, and is something that we will be looking at for 2017.