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.

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, and of the amendment.

Budget Implementation Act, 2016, No. 2

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Madam Speaker, I am pleased and honoured, but also humbled, to speak on behalf of all my official opposition colleagues and on behalf of all Canadians who were literally duped by the Liberal Party a year ago.

The Liberal Party promised heaven and earth, but it is breaking its promises. Worse yet, we see that the billions of dollars invested, supposedly in development, is not working. The Liberal plan is not working and we can prove it.

We are gathered this morning to talk about Bill C-29 which, in a way, is the second budget implementation bill. The people watching us this morning need to understand that the budget was tabled, voted on, and passed. However, two bills are being enacted to implement the budget.

What we are seeing is that all the government's budget measures are not working. When we left office a year ago, we left the House in order. This week, the parliamentary budget officer confirmed what we knew, and what Canadians suspected, namely that we left a $2.9-billion surplus. That was a good thing. In fact, a $2.9-billion surplus is responsible, realistic, conservative, and Canadian. We will come back to the current situation later.

We left Canadians the lowest tax burden in 50 years. Canadians had never before paid so little in taxes as under the Conservative government one year ago. That was the mindset that we left Canadians. That was the economic situation that we left Canadians. The major difference is that we believe that Canadian entrepreneurs and businesses, not government, create jobs. Our Conservative policies created 200,000 jobs during our last term of office. A $2.9-billion surplus, the lowest tax burden in 50 years, and 200,000 jobs created by private enterprise, all made possible by Conservative policies. That was the situation one year ago.

Where are we one year later? The Bank of Canada, the parliamentary budget officer, the International Monetary Fund, and the OECD confirm that the Liberal government's economic forecasts must be downgraded. Although we had excellent momentum a year ago, today all economic observers agree that the Liberal plan is not working and that the economic forecasts must be downgraded.

Everyone can see that the employment statistics are worrisome. The Liberal government's measures were supposed to create hundreds of thousands of jobs, but we have not seen any results. Not only is the unemployment rate stable at 7%, but now we are learning that tens of thousands of jobs are being lost, and the Minister of Finance, pleased as Punch, is telling Canadians that they will have to get used to part-time work How inspiring. Way to encourage people to do more and promote job creation. It is not inspiring at all and it is so typical of the Liberals.

Let us now look at the backbone of government management: deficits and surpluses. Need I remind members that our government left a $2.9-billion surplus? This is not the first time I have said it, and I can tell my colleagues right now that this is not the last time they will hear me say it either.

Today, we have a deficit of tens of billions of dollars. I would remind members that, on page 76 of the Liberal election platform, it reads:

...the federal government will have a modest...deficit of...$10 billion...

The deficit will shrink, and after four years, it will magically be transformed into a surplus. That is the Liberal promise. The reality is that the Liberal Party brought in a budget that spells out a $30-billion deficit. In fact, two weeks ago, TD Canada Trust said that the deficit could be as much as $34 billion. On October 19, to celebrate his first year in power, the Prime Minister of Canada was interviewed on TVA, and he said that he did not know how the whole deficit thing was going to turn out. Great. Just great.

Should such an amateurish response come as any surprise? Is this not the same member for Papineau, Prime Minister, and Liberal Party leader who, in an interview two years ago, said that budgets balance themselves? Right. If, according to his economic theory, budgets balance themselves, then he can promise a $10-billion deficit that is really a $30-billion deficit, or how about a $34-billion deficit or who knows how many billions exactly.

That is classic Liberal Party, and it is totally unacceptable. The Liberal government keeps talking about how wonderful everything is because it has the most ambitious infrastructure plan in Canadian history. On our watch, the hon. member for Lac-Saint-Jean, as Minister of Economic Development, headed a department managing an $80-billion infrastructure investment program. At the time, that was the most ambitious program in Canadian history. The difference is that we did it by creating a budget surplus, not a Liberal-style deficit.

The Liberals promised billions. They said that a growing deficit is not a problem and it is all good. It is not all good. Such a huge deficit is irresponsible because it is deferred taxation; we are forcing our children and grandchildren to pay the bill.

Let us look at what I like to call the this government's grand gestures. As I said earlier, this government is not creating jobs; private enterprise is what is creating them. We therefore need to give businesses the tools they need to create jobs. We in the Conservative Party believe that the real job creators, the real backbone of the Canadian economy, are small and medium-sized businesses. They are the real wealth creators, and yet, these Liberal measures work against them.

Was the Liberal carbon tax included in their platform? No. Also, we have not seen the corporate tax cuts those folks over there promised.

The following is written on page 80: “As we reduce the small business tax rate to 9 percent from 11 percent...” That is not true; they are not doing that. They are keeping taxes high and even increasing CPP contributions. This is going to cost Canadian workers $1,000 more per year, and cost businesses $1,000 more per employee every year. That is $2,000 less for the economy and $2,000 more in government coffers for the pension plan. It is unacceptable.

Let us now take a look at exactly how this government is managing its much-touted program to help children, the Canada child benefit.

They said they were going to abolish the three programs our government put in place to really help families, namely the universal child care benefit, the Canada child tax benefit, and the national child benefit supplement. We had fashioned three programs to meet the needs of all Canadian families. However, in its boundless wisdom, the government said those programs needed to go. It says it is going to reinvent the wheel and that it is going to come up with the best program that Canada has ever seen. That is pretty much what it said.

However, the reality is that this government promised to make changes at no cost, but that was a mistake. This is going to put us $3.4 billion in the hole. It is wishful thinking by the Liberals: give people money, help them, and stimulate the economy. That is nice, but it is wishful thinking. Someone has to pay for all this at some point. Those people were elected on a promise to implement a program at no cost. It has not worked out that way. We are $3.4 billion in the hole.

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

Madam Speaker, it has been just over a year since the previous federal election, and I think we would all agree it has been a tremendous year for all of us in this House. Twelve months ago, many felt the momentum building throughout the country. We were confident in our vision for Canada, and, as it turns out, so were Canadians.

In this past year, especially as a first-time MP, I have been thrilled to be working on behalf of Canadians, helping to impact their lives for the better. It is a pleasure for me to rise in this chamber and speak about the investments that the Government of Canada will be making to keep Canada and its people strong and growing for the long term.

Canada is one of the first countries in the world to put into practice the idea that when you have an economy that works for the middle class, you have a country that works for everyone.

In the last year we took some important steps towards helping families regain the confidence they will need to drive our economy forward. We cut taxes for close to nine million Canadians, and we introduced the Canada child benefit, which puts more money in the pockets of nine out of ten families with children.

We increased Canada student grants for students from low- and middle-income families and for part-time students. We increased monthly payments for the most vulnerable seniors. We signed an agreement with the provinces to enhance the Canada pension plan to provide young people and future generations of workers with a stable, dignified retirement.

We have also begun making unprecedented investments that will help the middle class grow and prosper today, while delivering economic growth for years to come.

We will continue to build on this momentum.

This second budget implementation act proposes items that will complete the implementation of outstanding measures from the Government of Canada's first budget, growing the middle class.

As a government, we are particularly proud of our first budget. This is a budget that puts people and family first. It introduces investments that take an essential step to growing the middle class. It is the first step of a long-term plan to restore hope and revitalize the economy for the benefit of all Canadians. This is a budget and a plan that is not only resonating with Canadians, but is gathering international praise around the world as well.

The Financial Times called Canada's approach a glimmer of light. The Wall Street Journal called our finance minister “the poster child” for the International Monetary Fund's global growth strategy. Christine Lagarde, head of the International Monetary Fund, praised our approach as well. At the recent IMF annual meetings, Madame Lagarde said, “Look at Canada.... They're using all possible levers to move the needle towards positive and more growth”. That is what all countries can do.”

Our budget earned these endorsements. I firmly believe that we as a government are focused on exactly the right things: on people, and on growing the economy for the long term in a way that will benefit all Canadians.

The bill before us today, budget implementation act, 2016, No. 2, completes the implementation of the measures we introduced in budget 2016. It provides additional assistance to the people who are the heart of our economy, Canada's middle class.

The bill we are debating today will help foster a strong Canadian economy and will enable Canadians in the middle class and those working hard to join it to keep more of their money to save, invest, and ensure economic growth.

This bill includes measures that will help families, give seniors a little more flexibility, protect consumers, and improve the quality and integrity of our country's tax system.

One of the cornerstones of our plan to strengthen the middle class is also a cornerstone of our first budget. In budget 2016, we introduced the new Canada child benefit. This benefit will help parents better support what is most precious to them, their children.

The Canada child benefit is simpler and more generous than the benefits it is replacing. It is also tax free and better targeted to help those who need it most in our society.

The Canada child benefit will lift hundreds of thousands of children out of poverty in Canada. That is because since the benefit was first rolled out in July, nine out of ten families are now receiving more money than they did under the previous system.

Whether that extra money is being used to buy school supplies, groceries, or warm coats for the winter, the Canada child benefit will help parents cover the growing cost of raising their children.

Let me explain how this benefit will help Canadian families. Parents of children under 18 will receive a maximum annual benefit of $6,400 per child under six and $5,400 per child aged six through 17.

Supporting this budget implementation bill will help ensure that the Canada child benefit will be indexed to inflation, so that families can count on this extra assistance today and for years to come.

This budget implementation act would also support seniors by helping them to retire in more comfort and with dignity. Canada's retirement income system has been successful in reducing the incidence of poverty among Canadian seniors. However, some seniors continue to be at heightened risk of living with low income. In particular, single seniors are nearly three times more likely to live with low incomes than seniors generally. Budget 2016 would help seniors retire comfortably and with dignity by making significant new investments that support them in their retirement years.

In budget 2016, we repealed the provision of the Old Age Security Act that increased the age of eligibility for old age security and guaranteed income supplement benefits from 65 to 67 years of age and allowance benefits from 60 to 62 over the 2023 to 2029 period. Restoring the eligibility age for old age security and guaranteed income supplement benefits to 65 will put thousands of dollars back into the pockets of Canadians as they become seniors and look to retire. That is the right thing to do.

Budget 2016 also increased the guaranteed income supplement top-up benefit by up to $947 annually for the most vulnerable single seniors, starting in July 2016. This is helping those seniors who rely almost exclusively on old age security and guaranteed income supplement benefits, and may therefore be at risk of experiencing financial difficulties.

These enhancements more than double the current maximum guaranteed income supplement top-up benefit and represent a 10% increase in the total maximum guaranteed income supplement benefits available to the lowest income single seniors in our country. This measure represents an investment of over $670 million per year and will improve the financial security of about 900,000 single seniors across our nation.

In this second budget implementation bill, we are delivering on the promise we made in budget 2016 to support senior couples who face higher costs of living and are at an increased risk of poverty because they must live apart.

This second budget implementation bill amends the Old Age Security Act in order to make the program more flexible. When couples who are receiving the guaranteed income supplement and the spouse's allowance have to live apart for reasons beyond their control, each of them will receive benefits based on their individual income.

By extending this treatment to couples receiving the guaranteed income supplement and spouse's allowance, the government is improving fairness for seniors and helping them live with the dignity they deserve and need in retirement.

Canadians deserve financial consumer protection that keeps pace with people's needs. In line with this, budget 2016 contains plans to strengthen and modernize the financial consumer protection framework.

Budget implementation act, 2016, No. 2 would amend the Bank Act in order to strengthen and modernize the financial consumer protection framework in our country. The financial sector plays an important role in supporting economic growth in this nation. Each day, the nation's financial institutions support the financial needs of consumers and large and small businesses, and enable payments and transactions. They form the infrastructure of our market system.

Canada's financial sector weathered the 2008 financial crisis well. We are seeking to build on this strength. We want to make sure that the financial sector is able to adapt to new trends, including emerging financial innovation and technologies that will challenge existing business models, evolving consumer preferences and customer relationships, changing demographics, and continuing globalization.

Budget 2016 proposes to modernize the financial consumer protection framework by clarifying and enhancing consumer protection in the Bank Act, and working with stakeholders to support the implementation of the framework. This legislation proposes to consolidate and streamline existing consumer provisions into one chapter of the Bank Act, and introduce amendments to the Bank Act to enhance consumer protection in the areas of access to basic banking services' business practices, disclosure, complaints handling, as well as corporate governance and accountability.

The federal government is showing leadership by implementing targeted measures to better protect consumers of financial products and services in Canada. These measures include improving access to basic banking services, setting limits on certain business practices, and improving disclosure of information to make it easier for consumers to make informed choices. These reforms reiterate the federal government's intent to have a system of exclusive consumer protection rules to ensure an efficient national banking system across the country.

Fairness is one of Canadians' fundamental values. That is why the government of Canada committed to implement an action plan to combat international tax evasion and aggressive tax avoidance that contains new measures and builds on the efforts that are currently being made both here in Canada and abroad. This work will help protect the tax base and boost Canadians' confidence in the fairness of a system that ensures that everyone pays their fair share of the tax burden.

As part of an international effort to combat tax evasion, budget 2016 confirms the government's intention to implement the common reporting standard developed by the Organisation for Economic Co-operation and Development, OECD. Under the common reporting standard, Canadian financial institutions will be expected to have procedures in place to identify accounts held by non-residents and to report information on those accounts to the Canada Revenue Agency.

Tax administrations in foreign jurisdictions will likewise collect information from their financial institutions about accounts held by residents of other countries, including Canada. The CRA will formalize exchange arrangements with foreign jurisdictions, having verified that each jurisdiction has appropriate capacity and safeguards in place. Then the financial account information will begin to be exchanged on a reciprocal bilateral basis.

The introduction of the common reporting standard is an important global development, which will help enhance tax compliance and eliminate opportunities for tax evasion in our country. Canada intends to implement the standard consistent with our commitment to the G-20 and similar commitments by more than 100 other jurisdictions.

The budget also announced plans to implement a new requirement for country-by-country reporting. This is an initiative agreed to under the G20/0ECD project to address tax avoidance by multinational enterprises through base erosion and profit shifting.

Under these new rules, large multinational enterprises will be required to file information with tax authorities providing a high-level profile of their activities in each jurisdiction in which they operate. These reports will enhance transparency and assist tax administrations in performing effective risk assessments.

Going forward, Canada will continue to work with the international community to ensure a coherent and consistent response to tax avoidance. In addition to these new legislative tools, budget 2016 also announced $444 million in new resources for the Canada Revenue Agency to address offshore tax evasion and aggressive tax avoidance.

In conclusion, budget 2016 represents a giant step forward in our plan to put people first and to deliver the help they need now while investing for the years and decades to come. With these investments, and inspired by a sense of fairness, we are ensuring that Canada's best days lie ahead. Our plan is about creating the necessary conditions to ensure that hope and hard work will not be wasted but will be rewarded in this country where our children and our grandchildren can flourish.

The Government of Canada is focused on the larger picture of ensuring prosperity for Canadians well beyond its 150th birthday. I therefore encourage all members in the House to support the bill. This is right for Canada. This is right for families. This is right for the middle class.

[Marie-Claude Bibeau, Liberal, Compton—Stanstead, QC]

moved 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.

[Martha Durdin, President and Chief Executive Officer, Canadian Credit Union Association]

Thank you, Mr. Chair, and thank you, committee members.

I'm here with my colleague, Rob Martin, representing Canada's credit unions.

Credit unions, as you know, are member-owned, full-service banking institutions that serve over 5.6 million Canadians. We contribute $6.5 billion to our country's GDP and help create over 58,000 jobs. We support small and medium-sized business with 11.5% market share, and that market share is close to 50% in some markets out west. In a recent CFIB study, credit unions are far ahead of the banks when it comes to serving small and medium-sized business in Canada.

This year, for the 12th year in a row, we ranked first in customer service, well ahead of the banks. We do this from what is largely a traditional banking model: taking deposits, making loans. However, the current environment is challenging for us, with low interest rates, federal tax changes, increased regulatory burden, and new mortgage lending rules, which are all making it more difficult to serve our markets, mostly middle-class Canadians.

My remarks today will focus on two key priorities: allowing for a regulatory pause to assess the full impact of recent mortgage change rules before any new risk-sharing measures are considered, and implementation of a risk-based approach to the common reporting standard.

Our first and most pressing recommendation is that the government implement a regulatory pause to assess the impact of recent mortgage rule changes before proceeding with new risk-based measures. As you know, the government recently announced two changes to mortgage insurance parameters. The first change implements a stress test for high-ratio insured mortgages. These borrowers have less than a 20% down payment. The second change will implement, as of November 30, new qualifying requirements to obtain low-ratio mortgage insurance. This is when a borrower has 20% or more as a down payment.

In our view, and the view of others, the recent measures will dampen mortgage markets across Canada and will make it more difficult for those aspiring to the middle-class goal of home ownership. To elaborate, in the October monetary policy report, the Bank of Canada recognized the impact that these measures will have, and projected a slowdown in the housing market through 2016 and 2017. In fact, the bank projects that in 2017, rather than being a net contributor to GDP growth, the housing sector will become a drag on the Canadian economy.

The bank also projects a significant dampening of resale activity across Canada. According to Genworth Financial, a little over one-third of insured mortgages, predominantly for first-time homebuyers, will have difficulty qualifying for mortgage insurance. Genworth has also estimated that approximately 50% to 55% of its total portfolio of new insurance written would no longer be eligible for mortgage insurance under the new low-ratio mortgage insurance requirements. Preliminary credit union analysis suggests that, in some instances, up to half of low-ratio mortgages would no longer qualify for low-ratio insurance. This could have a significant impact on funding opportunities for credit unions and our ability to raise capital, and would increase prices for members and our customers.

On top of these measures, the government released a consultation paper on mortgage insurance risk sharing just last week. Two of the proposed models would require lenders to accept more losses if loans default. A third model would establish premiums that lenders would pay that would be based on loan losses in a specific period. In our view, implementation of any of these proposed models during a period before other mortgage measures have taken hold would be unwise. Mortgage activity would face a further slowdown, credit costs would rise, resale activities would decline, and mortgage credit would be harder to come by.

As the market tightens, aspiring homeowners across Canada would find it more difficult to obtain a first mortgage or get home financing in economically challenged regions. It is especially concerning, because many of these regions have not experienced the housing sector upswings, as in the Toronto and Vancouver markets. Credit unions are particularly concerned about the impact these measures would have on the 380 small communities where they are the sole bricks-and-mortar financial institution.

Once again, I'd like to emphasize the need for a regulatory pause before the government moves toward implementation of a new risk-sharing framework.

Our second recommendation is to incorporate a risk-based approach to the common reporting standard. As you know, in Bill C-29, the government included an amendment that will bring a common reporting standard into force in Canada. The standard is intended to help curb cross-border tax evasion by facilitating the automatic exchange of financial account information between tax jurisdictions, except, of course, the U.S.

Bill C-29 does not propose a risk-based approach to compliance. Instead, the standard is being implemented on a one-size-fits-all basis to require all financial institutions, even those that are at low risk for being used for this type of tax evasion, to begin reporting on all accounts held by non-residents, this despite the fact that the CCUA survey found that the median number of non-U.S. non-residents served by Canada's credit unions is three—just three. This means that every credit union will have to dedicate additional resources for account screening, review, analysis, monitoring, reporting, and record-keeping. Banking system changes will need to be made and additional staff training undertaken, all to report to CRA annually on a handful of foreign-held accounts.

In our view, regulatory compliance based on risk assessments makes more sense. To this end, CCUA urges the federal government to apply a risk-based approach wherein institutions qualifying under an annually applied test would be exempt from CRS obligations. This is similar to the approach that we applied under FATCA, the current bilateral tax agreement with the U.S., and it makes sense to apply it for the common reporting standard.

Thank you for the opportunity to speak today. We look forward to your questions.

Business of the House

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

Mr. Speaker, I thank my colleague for her question.

This afternoon we will continue to debate the supply day motion. Tomorrow we will commence debate on Bill C-29, the second budget implementation act, and we will continue studying that bill next week.

On Tuesday afternoon, the Minister of Finance will present the fall economic statement. Following the speech, we will have debate for the remainder of the afternoon.

On Wednesday, immediately after question period, the House will welcome the Rio 2016 Olympic and Paralympic athletes to the chamber. I think I can speak for all members when I say this will be a very exciting day.

Last, next Thursday shall be an allotted day.

[The Chair, Liberal, Wayne Easter]

Okay. With that, I thank all of the witnesses for their presentations and the committee members for a fairly long afternoon with our second panel of the day.

I remind members that we have the budget implementation act, Bill C-29, to be reviewed.

With that, thank you all.

This meeting is adjourned.

Budget Implementation Act, 2016, No. 2

[Bill Morneau, Liberal, Minister of Finance]

moved 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 first time and printed.

(Motion deemed adopted, bill read the first time and printed)

[Hannah Dawson-Murphy, As an Individual]

Hi, everyone.

Thank you for taking the time to consult us on this matter. It's extremely important in my opinion and in the opinion of a lot of other Canadians. Terrorism is evolving and we've seen that it's picked up speed in the last 20 years and continues to threaten our everyday lives with new developments and new technologies.

As a student, I have focused my research and my studies on this topic. I've tried in the last couple of years to grasp this whole concept of terrorism, but I've also tried to grasp how a government can protect its people from this ever-evolving threat.

The measures outlined in Bill C-51 in my opinion are the right balance between protecting our rights as Canadians while also protecting Canadians' lives. We must keep in mind that Canada is not immune to terrorist attacks and home-grown radicalization. We currently have around 180 Canadians who are suspected of engaging in terrorist activities abroad, and we also have around 60 extremists who have returned to Canada after travelling overseas.

These rising numbers don't even include the people who are here now who are radicalized and haven't left, and who can take action at any moment. We've had two of our own military members lose their lives to terrorism-related activities, and I believe that if we'd had the measures imposed by Bill C-51 two years ago they might still be alive today. I hope as a committee you will work to ensure that our national security framework protects Canadians from this ever-changing threat, and I hope you will take my advice in this matter.

That's all I have to say.

[Ewa Infeld, As an Individual]

Hi. I'm a research fellow in mathematics and information security.

You guys have been doing this for a while, so I'm sure you've heard a lot of very eloquent arguments about why Bill C-51 should be repealed. I would like to tell you that this is not enough, because of international information sharing. As long as Canada is a member of the Five Eyes alliance, Canadian agencies can still use information obtained by GCHQ, with virtually no limitations from Canadian citizens. We can talk here all day, but it's kind of irrelevant you know.

The other side of this problem is that if you are a member of the Five Eyes alliance in the age of dragnet surveillance, you become complicit with NSA, GCHQ, and other agencies in breaking the rights of Canadians, which seems like a sovereignty problem. You also become complicit with said agencies breaking the rights of everyone else around the world.

I'll mention a little bit of a professional note for me. The CSE has been very vocal lately in saying that they don't mean to weaken systems. They want to build secure systems for everyone as opposed to backdoor technology. That sounds great. Let's put that in legislation. Let's not have backdoor systems.

Thank you.