Bill C-44 (Historical)

Budget Implementation Act, 2017, No. 1

An Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures

Part 1 implements certain income tax measures proposed in the March 22, 2017 budget by
(a) eliminating the investment tax credit for child care spaces;
(b) eliminating the deduction for eligible home relocation loans;
(c) ensuring that amounts received on account of the caregiver recognition benefit under the Veterans Well-being Act are exempt from income tax;
(d) eliminating tax exemptions of allowances for members of legislative assemblies and certain municipal officers;
(e) eliminating the tax exemption for insurers of farming and fishing property;
(f) eliminating the additional deduction for gifts of medicine;
(g) replacing the existing caregiver credit, infirm dependant credit and family caregiver tax credit with the new Canada caregiver credit;
(h) eliminating the public transit tax credit;
(i) ensuring certain costs related to the use of reproductive technologies qualify for the medical expense tax credit;
(j) extending the list of medical practitioners that can certify eligibility for the disability tax credit to include nurse practitioners;
(k) extending eligibility for the tuition tax credit to fees paid for occupational skills courses at post-secondary institutions and taking into account such courses in determining whether an individual is a qualifying student under the Income Tax Act;
(l) extending, for one year, the mineral exploration tax credit for flow-through share investors;
(m) eliminating the tobacco manufacturers’ surtax;
(n) permitting employers to distribute T4 information slips electronically provided certain conditions are met; and
(o) delaying the repeal of the provisions related to the National Child Benefit supplement in the Income Tax Act.
Part 2 implements certain goods and services tax/harmonized sales tax (GST/HST) measures proposed in the March 22, 2017 budget by
(a) adding naloxone and its salts to the list of GST/HST zero-rated non-prescription drugs that are used to treat life-threatening conditions;
(b) amending the definition of “taxi business” to require, in certain circumstances, providers of ride-sharing services to register for the GST/HST and charge GST/HST in the same manner as taxi operators; and
(c) repealing the GST/HST rebate available to non-residents for the GST/HST that is payable in respect of the accommodation portion of eligible tour packages.
Part 3 implements certain excise measures proposed in the March 22, 2017 budget by
(a) adjusting excise duty rates on tobacco products to account for the elimination of the tobacco manufacturers’ surtax; and
(b) increasing the excise duty rates on alcohol products by 2% and automatically adjusting those rates annually by the Consumer Price Index starting in April 2018.
Part 4 enacts and amends several Acts in order to implement various measures.
Division 1 of Part 4 amends the Special Import Measures Act to provide for binding and appealable rulings as to whether a particular good falls within the scope of a trade remedy measure, authorities to investigate and address the circumvention of trade remedy measures, consideration of whether a particular market situation is rendering selling prices in an exporting country unreliable for the purposes of determining normal values and the termination of a trade remedy investigation in respect of an exporter found to have an insignificant margin of dumping or amount of subsidy.
Division 2 of Part 4 enacts the Borrowing Authority Act, which allows the Minister of Finance to borrow money on behalf of Her Majesty in right of Canada with the authorization of the Governor in Council and provides for the maximum amount of certain borrowings. The Division amends the Financial Administration Act and the Hibernia Development Project Act to provide that the applicable rate of currency exchange quoted by the Bank of Canada is its daily average rate. It also amends the Financial Administration Act to allow that Minister to choose a rate of currency exchange other than one quoted by the Bank of Canada. Finally, it makes a consequential amendment to the Budget Implementation Act, 2016, No. 1.
Division 3 of Part 4 amends the Canada Deposit Insurance Corporation Act and the Bank Act to
(a) specify that one of the objects of the Canada Deposit Insurance Corporation is to act as the resolution authority for its member institutions;
(b) require Canada’s domestic systemically important banks to develop, submit and maintain resolution plans to that Corporation; and
(c) provide the Superintendent of Financial Institutions greater flexibility in setting the requirement for domestic systemically important banks to maintain a minimum capacity to absorb losses.
Division 4 of Part 4 amends the Shared Services Canada Act in order to permit the Minister responsible for Shared Services Canada to do the following, subject to any terms and conditions that that Minister specifies:
(a) delegate certain powers given to that Minister under that Act to an “appropriate Minister”, as defined in section 2 of the Financial Administration Act; and
(b) authorize in exceptional circumstances a department to obtain a particular service other than from that Minister through Shared Services Canada, including by meeting its requirement for that service internally.
Division 5 of Part 4 authorizes a payment to be made out of the Consolidated Revenue Fund to the Canadian Institute for Advanced Research to support a pan-Canadian artificial intelligence strategy.
Division 6 of Part 4 amends the Canada Student Financial Assistance Act to expand eligibility for student financial assistance under that Act to include persons registered as Indians under the Indian Act, whether or not they are Canadian citizens, permanent residents or protected persons. It also amends the Canada Education Savings Act to permit the primary caregiver’s cohabiting spouse or common-law partner to designate a trust to which is to be paid a Canada Learning Bond or an additional amount of a Canada Education Savings grant and to apply to the Minister for the waiver of certain requirements of that Act or the regulations to avoid undue hardship. It also amends that Act to provide rules for the payment of an additional amount of a Canada Education Savings grant in situations where more than one trust has been designated.
Division 7 of Part 4 amends the Parliament of Canada Act to provide for the Parliamentary Budget Officer to report directly to Parliament and to be supported by an office that is separate from the Library of Parliament and to provide for the appointment and tenure of the Parliamentary Budget Officer to be that of an officer of Parliament. It expands the Parliamentary Budget Officer’s right of access to government information, clarifies the Parliamentary Budget Officer’s mandate with respect to the provision of research, analysis and costings and establishes a new mandate with respect to the costing of platform proposals during election periods. It also makes consequential amendments to certain Acts.
This Division also amends the Parliament of Canada Act to provide that the meetings of the Board of Internal Economy of the House of Commons are open, with certain exceptions, to the public.
Division 8 of Part 4 amends the Investment Canada Act to provide for an immediate increase to $1 billion of the review threshold amount for certain investments by WTO investors that are not state-owned enterprises. In addition, it requires that the report of the Director of Investments on the administration of that Act also include Part IV.‍1.
Division 9 of Part 4 provides funding to provinces for home care services and mental health services for the fiscal year 2017–2018.
Division 10 of Part 4 amends the Judges Act to implement the Response of the Government of Canada to the Report of the 2015 Judicial Compensation and Benefits Commission. It provides for the continued statutory indexation of judicial salaries, an increase to the salaries of Federal Court prothonotaries to 80% of that of a Federal Court judge, an annual allowance for prothonotaries and reimbursement of legal costs incurred during their participation in the compensation review process. It also makes changes to the compensation of certain current and former chief justices to appropriately compensate them for their service and it makes technical amendments to ensure the correct division of annuities and enforcement of financial support orders, where necessary. Finally, it increases the number of judges of the Court of Queen’s Bench of Alberta and the Yukon Supreme Court and increases the number of judicial salaries that may be paid under paragraph 24(3)‍(a) of that Act from thirteen to sixteen and under paragraph 24(3)‍(b) from fifty to sixty-two.
Division 11 of Part 4 amends the Employment Insurance Act to, among other things, allow for the payment of parental benefits over a longer period at a lower benefit rate, allow maternity benefits to be paid as early as the 12th week before the expected week of birth, create a benefit for family members to care for a critically ill adult and allow for benefits to care for a critically ill child to be payable to family members.
This Division also amends the Canada Labour Code to, among other things, increase the maximum length of parental leave to 63 weeks, extend the period prior to the estimated date of birth when the maternity leave may begin to 13 weeks, create a leave for a family member to care for a critically ill adult and allow for the leave related to the critical illness of a child to be taken by a family member.
Division 12 of Part 4 amends the Canadian Forces Members and Veterans Re-establishment and Compensation Act to, among other things,
(a) specify to whom career transition services may be provided under Part 1 of the Act and authorize the Governor in Council to make regulations respecting those services;
(b) create a new education and training benefit that will provide a veteran with up to $80,000 for a course of study at an educational institution or for other education or training that is approved by the Minister of Veterans Affairs;
(c) end the family caregiver relief benefit and replace it with a caregiver recognition benefit that is payable to a person designated by a veteran;
(d) authorize the Minister of Veterans Affairs to waive the requirement for an application for compensation, services or assistance under the Act in certain cases;
(e) set out to whom any amount payable under the Act is to be paid if the person who is entitled to that amount dies before receiving it; and
(f) change the name of the Act.
The Division also amends the Pension Act and the Department of Veterans Affairs Act to remove references to hospitals under the jurisdiction of the Department of Veterans Affairs as there are no longer any such hospitals.
Finally, it makes consequential amendments to other Acts.
Division 13 of Part 4 amends the Immigration and Refugee Protection Act to
(a) provide that a foreign national who is a member of a certain portion of the class of foreign nationals who are nominated by a province or territory for the purposes of that Act may be issued an invitation to make an application for permanent residence only in respect of that class;
(b) provide that a foreign national who declines an invitation to make an application in relation to an expression of interest remains eligible to be invited to make an application in relation to the same expression of interest;
(c) authorize the Minister to give a single ministerial instruction that sets out the rank, in respect of different classes, that an eligible foreign national must occupy to be invited to make an application;
(d) provide that a ministerial instruction respecting the criteria that a foreign national must meet to be eligible to be invited to make an application applies in respect of an expression of interest that is submitted before the day on which the instruction takes effect;
(e) authorize the Minister, for the purpose of facilitating the selection of a foreign national as a member of a class or a temporary resident, to disclose personal information in relation to the foreign national that is provided to the Minister by a third party or created by the Minister;
(f) set out the circumstances in which an officer under that Act may issue documents in respect of an application to foreign nationals who do not meet certain criteria or do not have the qualifications they had when they were issued an invitation to make an application; and
(g) provide that the Service Fees Act does not apply to fees for the acquisition of permanent residence status or to certain fees for services provided under the Immigration and Refugee Protection Act.
Division 14 of Part 4 amends the Employment Insurance Act to broaden the definition of “insured participant”, in Part II of that Act, as well as the support measures that may be established by the Canada Employment Insurance Commission. It also repeals certain provisions of that Act.
Division 15 of Part 4 amends the Aeronautics Act, the Navigation Protection Act, the Railway Safety Act and the Canada Shipping Act, 2001 to provide the Minister of Transport with the authority to enter into agreements respecting any matter for which a charge or fee could be prescribed under those Acts and to make related amendments.
Division 16 of Part 4 amends the Food and Drugs Act to give the Minister of Health the authority to fix user fees for services, use of facilities, regulatory processes and approvals, products, rights and privileges that are related to drugs, medical devices, food and cosmetics. It also gives that Minister the authority to remit those fees, to adjust them and to withhold or withdraw services for the non-payment of them. Finally, it exempts those fees from the Service Fees Act.
Division 17 of Part 4 amends the Canada Labour Code to, among other things,
(a) transfer to the Canada Industrial Relations Board the powers, duties and functions of appeals officers under Part II of that Act and of referees and adjudicators under Part III of that Act;
(b) provide a complaint mechanism under Part III of that Act for employer reprisals;
(c) permit the Minister of Labour to order an employer to determine, following an internal audit, whether it is in compliance with a provision of Part III of that Act and to provide the Minister with a corresponding report;
(d) permit inspectors to order an employer to cease the contravention of a provision of Part III of that Act;
(e) extend the period with respect to which a payment order to recover unpaid wages or other amounts may be issued;
(f) impose administrative fees on employers to whom payment orders are issued; and
(g) establish an administrative monetary penalty scheme to supplement existing enforcement measures under Parts II and III of that Act.
This Division also amends the Wage Earner Protection Program Act to transfer to the Canada Industrial Relations Board the powers, duties and functions of adjudicators under that Act and makes consequential amendments to other Acts.
Division 18 of Part 4 enacts the Canada Infrastructure Bank Act, which establishes the Canada Infrastructure Bank as a Crown corporation. The Bank’s purpose is to invest in, and seek to attract private sector and institutional investment to, revenue-generating infrastructure projects. The Act also provides for, among other things, the powers and functions of the Bank, its governance framework and its financial management and control, allows for the appointment of a designated Minister, and provides that the Minister of Finance may pay to the Bank up to $35 billion and approve loan guarantees. Finally, this Division makes consequential amendments to the Access to Information Act, the Financial Administration Act and the Payments in Lieu of Taxes Act.
Division 19 of Part 4 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to, among other things, expand the list of disclosure recipients to include the Department of National Defence and the Canadian Armed Forces and to include beneficial ownership information as “designated information” that can be disclosed by the Financial Transactions and Reports Analysis Centre of Canada. It also makes several technical amendments to ensure that the legislation functions as intended and to clarify certain provisions, including the definition of “client” and the application of that Act to trust companies.
Division 20 of Part 4 enacts the Invest in Canada Act. It also makes consequential and related amendments to other Acts.
Division 21 of Part 4 enacts the Service Fees Act. The Act requires responsible authorities, before certain fees are fixed, to develop fee proposals for consultation and to table them in Parliament. It also requires that performance standards be established in relation to certain fees and that responsible authorities remit those fees when the standards are not met. It adjusts certain fees on an annual basis in accordance with the Consumer Price Index. Furthermore, it requires responsible authorities and the President of the Treasury Board to report on fees. This Division also makes a related amendment to the Economic Action Plan 2014 Act, No. 1 and terminological amendments to other Acts and repeals the User Fees Act.

[Azfar Ali Khan, Director, Performance, Institute of Fiscal Studies and Democracy]

Thank you so much.

Thank you, Chair, vice-chairs, and members of the House of Commons Standing Committee on Finance. It is an honour to be with you today.

I'll quickly comment on Bill C-44, in particular regarding Canada's critical infrastructure.

The Institute of Fiscal Studies and Democracy—of which I am the director of performance, and my colleague, Randall Bartlett, is the chief economist—recently published a piece on assessing the risks and opportunities associated with a Canada infrastructure bank. The key premise underlying our piece is that a national infrastructure plan and strategy is required, supported by evidence. This should be the first priority.

Our work in this area enabled us to identify three key factors. These factors form the basis of the steps needed to develop a work plan and national strategy for critical infrastructure.

First, a thorough assessment of our current infrastructure stock needs to be performed. Specifically, is this stock delivering, or on track to delivering, the benefits expected from it at the time it was approved? A report by the U.K.'s National Audit Office highlighted the cost and challenges of delivering major projects in government, with a number of recurring issues affecting performance.

Of the 149 major projects in the U.K. as of June 2015, with a total life-cycle cost of 511 billion pounds, successful delivery of 34% was considered to be in doubt or unachievable unless action was taken. Infrastructure investments alone are not a guarantee of infrastructure outcomes.

The second step is to conduct a strategic analysis of future infrastructure needs in Canada.

This analysis would identify the economic, social, and environmental benefits expected of infrastructure investments. It would consider factors such as demographic trends, population growth, current and projected economic activity, trade corridors and future drivers of economic growth, the environment, and any significant regional variations and needs.

Finally, by understanding the condition of our current infrastructure stock and our future needs, we can identify our infrastructure gap relative to the future infrastructure needs. This is the evidence base, at a minimum, that we feel is needed to develop a national infrastructure plan and strategy.

Currently, estimates of the national infrastructure gap in Canada range from zero to $1 trillion. While estimates always come with some uncertainty, this is a wide range by any measure, and not one on which to build a national infrastructure strategy.

It's critical to understand where we are and where we're headed. Only then can we draw a roadmap to help us reach our destination.

In fairness, budget 2017 identifies an ambitious data initiative on Canadian infrastructure to provide the intelligence to better direct infrastructure investments. Further, the budget implementation act identifies the collection and dissemination of data to monitor and assess the state of infrastructure in Canada as one of the functions of a Canada infrastructure bank.

In our view, this data initiative identified in budget 2017—and the function it gives to a Canada infrastructure bank—is precisely what is required first and foremost in order to have an evidence-based national infrastructure plan and strategy. Details on this initiative are to be announced in the coming months, and we are very much looking forward to understanding the details and timelines expected of this initiative. Let us develop the plan first, and then put in place the right strategies and instruments, such as the infrastructure bank, that are tailored to best achieve that plan.

Unfortunately, these initiatives are in the wrong order. We put the cart before the horse.

Thank you for your time and the opportunity to speak to you today. I look forward to answering any questions you may have.

[Toby Sanger, Senior Economist, Canadian Union of Public Employees]

Thank you.

Thank you very much for inviting me.

I'd like to say at the outset that I welcomed this government's promise in the election and in ministerial mandate letters to establish the Canada infrastructure bank to provide low-cost financing for new municipal infrastructure projects.

I also strongly welcomed the promise to set a higher bar for openness and transparency in government and the promise to stand up for and strengthen the middle class and those working hard to join it.

I was very happy to hear the Prime Minister say that they'd end the undemocratic practice of using omnibus bills to prevent Parliament from properly reviewing and debating proposals. This is why I and others, I think, are so disappointed in these plans for the infrastructure bank in Bill C-44. They represent broken promise after broken promise.

Right from the outset, it won't provide low-cost financing for municipalities. That was the promise in the election campaign and in the ministerial mandate letters. Instead, the priority has shifted to leveraging higher-cost private sector capital. In a recent report that I wrote, I demonstrated how the higher cost of private sector finance could mean that these projects could cost twice as much. No one has disputed those figures. In fact, people have said that the rate of return on the private sector side is larger than that. This means we'll get half as much bang for our buck in terms of infrastructure—less infrastructure, not more.

The bank won't be open, transparent, or accountable to Canadians. The federal Auditor General has limited power to review the operations of crown corporations, less than direct public projects. This legislation also threatens anyone who discloses information about projects relating to proponents with a $10,000 fine and six months in jail. Investments are supposed to be in the public interest, but the legislation bars officials from being on the board.

It won't help strengthen the middle class and those working hard to join it. Yes, jobs will be created from infrastructure investments, but many more could be created if the money were to go to construction and employment and not to higher financing costs. Higher user fees associated with these projects will hurt middle and working classes the most. They'll also be bad for the economy, taking money away from other spending.

The bank was designed—as we'll find out—by a small, privileged group of financiers who stand to benefit the most from it, including BlackRock Inc., the biggest asset manager in the world, which recently hired top civil servants. As others have said, if this isn't a conflict of interest, I don't know what is. The infrastructure minister and the Prime Minister say they consulted with unions and others, but we know the design for this came from the finance minister's economic advisory council, which is dominated by CEOs.

And it's included in the budget omnibus bill.

Another concern is that the bank also won't help with the type of comprehensive national infrastructure planning that we need. Instead, private interests that dominate it will focus on what will maximize their private profits. Allowing it to entertain unsolicited proposals will mean that they'll also cherry-pick public assets to privatize for the greatest profit. It will result in a patchwork of privatized projects, driven by no other logic than private profiteering off public infrastructure. The initial $35 billion in federal public funding would just pave the way for this.

Now, I was very surprised to hear the finance minister say yesterday that cabinet would approve projects, because from my reading of the legislation—and I think that of most others—that's not the case.

Instead, the government should do what they promised and what Canadians voted for. It should establish a public infrastructure bank that provides low-cost financing—and that means public financing—for new municipal infrastructure projects. There's no shortage of financing available for the Government of Canada to borrow at low interest rates. Also, if this were done through a public bank and lending institution, such as the Business Development Bank of Canada, CMHC, or EDC, then its investments and borrowing wouldn't need to increase the deficit or net debt any more than the current proposal would.

Number two, it should also ensure much stronger accountability, transparency, and review by auditors general over the bank and its projects. It should provide full public disclosure of all details in business cases, value-for-money assessments, and contracts. It should also have public officials on the board so that it acts in the public interest. We should ensure that public infrastructure projects remain public and aren't secret deals.

You should also establish a public and transparent process, using evidence-based analysis for truly objective project planning of what should be the priority public infrastructure projects across the country. We should use this type of proposal to engage in truly sensible national infrastructure planning.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

I'll call the meeting to order. We're dealing with the order of reference for Bill C-44, an act to implement certain provisions of the budget tabled in Parliament on March 22.

I apologize to the witnesses for the delay. We will try to proceed with this panel for one hour and the next panel for one hour.

To start, we have the Canadian Union of Public Employees, Mr. Sanger, senior economist.

Toby, the floor is yours.

[Glenn Campbell]

The legislation in Bill C-44 lays out very clearly the governance structure, and who would appoint the first—

[Glenn Campbell, Executive Director, Canada Infrastructure Bank Transition Office, Office of Infrastructure of Canada]

Good afternoon. I'm Glenn Campbell, assistant deputy minister at Infrastructure Canada. I'm joined by Niko Fleming, a chief at Finance Canada.

Division 18 of part 4 would establish the Canada infrastructure bank, announced first in the 2016 fall economic statement, as well as in budget 2017. For reference, the proposed amendments are clauses 403 to 406, which can be found on pages 236 to 248 of Bill C-44.

Please allow me to begin by providing some background and context around the proposed bank. Then I'll walk through the contents of the proposed legislation at a high level, and finally, we'd be happy to answer any questions.

The Canada infrastructure bank is intended to provide innovative financing for new infrastructure projects and help more projects get built, including those transformative projects that would not have otherwise been built in Canada, by attracting private and institutional investment. The proposed bank is part of the government's overall “Investing in Canada” infrastructure plan of more than $180 billion. Federal support for infrastructure would continue to be delivered largely through traditional infrastructure models. The Canada infrastructure bank represents less than 10% of the total planned amount.

The bank would be one tool that government partners, particularly municipal, provincial, and territorial, could choose as an option to build more infrastructure projects. The bank is a new partnership model to transform the way infrastructure is planned, funded, and delivered in Canada. Leveraging the expertise and capital of the private sector, the bank would allow public dollars to go farther and be used more strategically, with the focus on large transformative projects such as regional transit plans, transportation networks, and electricity grid connections, just as examples.

This is a review of the legislation. The legislation proposes the Canada infrastructure bank act and can be grouped into six main areas, including incorporation, mandate, function and powers, governance, funding, and accountability. I will address each of these in turn.

I had prepared a rather lengthy response to cover the contents of the bill, so it's up to you whether....

[Sarah Ryan, Senior Research Officer, Canadian Union of Public Employees]

Hi, my name is Sarah Ryan and I'm a senior research officer at CUPE. Thank you very much for inviting CUPE to present our concerns regarding the Canada infrastructure bank today.

The Canadian Union of Public Employees, or CUPE, is Canada's largest union, representing 643,000 workers across Canada. CUPE members work in health care, education, municipalities, libraries, universities, social services, public utilities, emergency services, transportation, and airlines.

As more details about the Canada infrastructure bank have emerged, CUPE members have expressed strong concerns that the bank is essentially a bank of privatization. They are deeply concerned that the bank could lead to the privatization of airports, ports, public transit, roads, highways, bridges, water and waste-water systems, hydroelectric utilities, and transmission grids. These are all key services that the Canadian public depends upon every day.

Bill C-44 states that infrastructure projects financed by the bank must generate revenue and promote the public interest. Revenues can only be generated in two ways: by charging high interest rates on loans, and by introducing tolls and user fees on new infrastructure projects or existing infrastructure assets.

The mandate of the bank is fundamentally contradictory. Private investors will be the clear winners, since revenues from projects financed by the bank will fall into their pockets. Canadians who depend every day on infrastructure to heat their homes, to get them from place to place, and to ensure they have safe drinking water will be the losers. The public will shoulder the costs of the bank's high interest rates and will be hit hard by added costs of living that will result from new tolls and fees.

Bill C-44 will also allow infrastructure projects to be privately pitched through unsolicited bids. This puts private investors in the driver's seat and allows them to set priorities on what gets built.

The bank gives investors unprecedented control over how infrastructure is built, operated, and structured. Infrastructure projects developed by private investors will be tailored to profit the projects' backers and risk being totally out of touch with the public's needs and interests. This eliminates the capacity of governments and citizens to decide what infrastructure their communities need and how it should be built and paid for. It severely limits the public's capacity to influence decision-making on infrastructure investments.

Minister Morneau said that cabinet will have the final say on what gets built, but to sustain a private investment in the bank, CUPE members are not confident that cabinet will be willing or able to deny investors' proposals. Furthermore, the private sector will still play a key role in shaping the project structure to maximize profits.

When governments propose, design, finance, and build infrastructure projects, the public can hold them to account. However, Bill C-44 limits the bank's public transparency and accountability requirements. It allows project information and investor deals to be kept secret from the public. This means that information about how community infrastructure is being funded, who is involved in projects, and how much investors are profiting will not be available to the public. This is bad news for Canadians who have a right to know how public monies, which will partially fund the bank, are being spent and how public infrastructure is being built.

In conclusion, CUPE offers the following recommendations.

First, the government should establish a public infrastructure bank that provides low-cost financing for new infrastructure projects, and that means public financing. There is no shortage of financing available for the federal government to borrow at low interest rates right now. If this is done through a public bank and lending institution, similar to the Business Development Bank of Canada, CMHC, or EDC, then its investments in borrowing wouldn't need to increase the deficit or net debt any more than the current proposal.

Second, the government should ensure there's stronger accountability, transparency, and review by auditors general over the bank and its projects. The bank should be mandated to provide full public disclosure of all business deals, value-for-money assessments, and contracts. The bank should also have public officials on its board to ensure that it acts in the public interest. Public infrastructure projects must remain public and not turn into secret deals with private corporations.

Finally, the government should not allow private corporations to determine infrastructure priorities, including through unsolicited bids. Instead, it should establish a public and transparent process using evidence-based analysis for truly objective planning of priority infrastructure projects.

Thank you.

[Azfar Ali Khan, Director, Performance, Institute of Fiscal Studies and Democracy]

Thank you, Chair, vice-chairs, and members of the House of Commons Standing Committee on Transport, Infrastructure and Communities. It is an honour to be with you today.

I will briefly comment on Bill C-44 as it relates to Canada's essential infrastructure.

The Institute of Fiscal Studies and Democracy, of which I am the director of performance, recently published a piece on assessing the risks and opportunities associated with the Canada infrastructure bank. The key premise underlying our piece is that a national infrastructure plan and strategy supported by evidence is required. This should be the first priority.

Through our work, we identified three core elements that must inform the first steps needed to build a work plan and national strategy around essential infrastructure.

First, a thorough assessment of our current infrastructure stock needs to be performed. Specifically, is this stock delivering or on track to deliver the benefits expected from them at the time they were approved?

A report by the U.K.'s National Audit Office highlighted the costs and challenges of delivering major projects in government, with a number of recurring issues affecting performance. Of the 149 major projects in the U.K. as of June 2015, with the total life-cycle cost of 511 billion pounds, successful delivery of 34% was considered to be in doubt or unachievable unless action was taken. Infrastructure investments alone are not a guarantee of infrastructure outcomes.

The second step is to conduct a strategic analysis of Canada's future infrastructure needs.

This analysis would identify the economic, social, and environmental benefits expected of infrastructure investments. It would consider factors such as demographic trends, population growth, current and projected economic activity, trade corridors and future drivers of economic growth, the environment, and any significant regional variations and need.

Finally, by understanding the condition of our current infrastructure stock and our future needs, we can identify what our infrastructure gap is relative to the future needs. This is the evidence base, at a minimum, that we feel is needed to develop a national infrastructure plan and strategy.

Currently, estimates of the national infrastructure gap in Canada range from zero to $1 trillion. While estimates always come with some uncertainty, this is a wide range by any measure, and not one on which to build a national infrastructure strategy.

Understanding where we are and where we are going is paramount. Only then can we map out the way to arrive at our destination.

In fairness, budget 2017 does identify an ambitious data initiative on Canadian infrastructure to provide the intelligence to better direct infrastructure investments. Further, the budget implementation act does identify the collection and dissemination of data to monitor and assess the state of infrastructure in Canada as one of the functions of the Canada infrastructure bank.

In our view, this initiative identified in budget 2017 and this function of the bank are precisely what is required, first and foremost, to have an evidence-based national infrastructure plan and strategy. Details on this initiative are to be announced in the coming months, and we are very much looking forward to understanding the details and timelines expected of this initiative.

Let us develop the plan first, and then put in place the right strategies and instruments, such as the bank, that are tailored to best achieve that plan.

Unfortunately, these initiatives are in the wrong order; we are putting the cart before the horse.

Thank you for your time and the opportunity to speak with you today. I look forward to answering any questions you may have.

Proposed Canada Infrastructure Bank

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

Mr. Speaker, I am rising to offer additional submissions on the question of privilege which was raised last week by the hon. member for Victoria and supported by the hon. member for Perth—Wellington.

In his remarks on Friday afternoon, the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons quoted from one press release in an effort to exculpate the government's arrogant approach to setting up the Canada infrastructure bank while Parliament is seized with legislation proposing its creation.

Mr. Speaker, I would like to refer you to the job postings at the appointments.gc.ca website maintained by the Privy Council Office. Those documents are the ones any serious candidate interested in the positions would be reviewing. Nowhere on there is there any suggestion that Parliament's approval has yet to happen. A reader might be forgiven for concluding that the bank already exists, that this is a fait accompli.

Not only do these job postings suggest that the bank is a done deal, but they also treat the particulars of the bank's mandate, which are actually details buried in the government's omnibus budget bill, Bill C-44, in the same fashion. Let me quote from the job postings as found on the government's website on Friday.

On the posting for the bank's chairperson, we read, “The new Canada Infrastructure Bank is being established to initiate and invest.... ” That also appears in the postings for directors and the president.

Then, we read the following concerning the mandate of the Canada infrastructure bank:

The Bank will be mandated to invest $35 billion into projects.... The Bank will also act as a centre of expertise on infrastructure transactions...and provide advice to all levels of government in that context. In addition, the Bank will lead a data initiative to improve knowledge....

Those same phrases appear in all three job postings.

Now, if we turn to the proposed Canada infrastructure bank act, which would be enacted by clause 403 of Bill C-44, we see the following: Proposed paragraph 7(1)(e) of the proposed act would establish the bank as “a centre of expertise on infrastructure projects” . Proposed paragraph 7(1)(f) would give the bank a mandate to “provide advice to all levels of government with regard to infrastructure projects”. Proposed paragraph 7(1)(g) would authorize the bank to “collect and disseminate data”.

Proposed section 23 of the proposed act reads in part:

The Minister of Finance may pay to the Bank, out of the Consolidated Revenue Fund, amounts of not more than $35,000,000,000 in the aggregate

Later in the job postings for the chairperson and directors, we see this comment: “The Board of Directors of the Bank will be composed of the Chairperson and 8 to 11 other Directors.”

Looking at the proposed act, proposed subsection 8(1) states, “The Bank has a board of directors composed of the Chairperson and not fewer than eight, but not more than 11, other directors.”

These are all details which are currently before the House of Commons and could theoretically be amended at committee, at report stage, or even by the other place, but the government treats them as final and settled, given how those job postings read.

The parliamentary secretary's defence of the government's arrogance seems to be that some other document that includes a passing reference to parliamentary approval should get them off the hook.

Speaker Milliken ruled on May 29, 2008, at page 6276 of Debates, on advertisements about pending amendments to the Immigration and Refugee Protection Act. He stated:

It is with these precedents in mind that I reviewed the advertisements in question. They contain phrases such as “the Government of Canada is proposing measures”, “These important measures, once in effect,” and “These measures are currently before Parliament”. In my view, the advertisements clearly acknowledge that these measures are not yet in place. I am therefore unable to find evidence of a misrepresentation of the proceedings of the House or of any presumption of the outcome of its deliberations.

There is nothing in the job postings to suggest that Parliament has yet to approve the bank's creation or that it could, in its work, tweak the government's proposed details. The job postings most certainly presume the outcome of deliberations in the House.

Most recently, the Speaker's predecessor, the hon. member for Regina—Qu'Appelle, was also asked to rule on a procurement notice seeking audit information concerning the financial impact of scrapping the Canadian Wheat Board monopoly, a policy initiative in the 2011 Conservative platform. His ruling on September 28, 2011, at page 1576 of Debates, held:

The notice itself presents a hypothetical scenario. It does not foresee a specific timetable for legislative action, let alone presume the outcome of such action. As I see it, the notice and task force terms of reference form part of a planning process that might be expected in contemplating the possibility of the repeal of the Canadian Wheat Board Act. I know the member for Malpeque does not expect the Chair to monitor all internal processes undertaken by the government as part of its preparatory work in advance of proposing legislative measures to the House. Accordingly, I cannot agree with the hon. member for Malpeque's statement that “The government presumes that the act has been repealed, which in fact it has not”. I see no evidence of such a presumption.

In the present instance, I do not believe that the wording of the text of the notice of procurement posted on the MERX site is ambiguous: rather, in my view, it presents a hypothetical case and seeks information on the impact of such a scenario.

There is, to put it simply, nothing hypothetical about how these job postings read. Given that the appointments.gc.ca website is administered by the Privy Council Office, I can only assume that it was acting on the express instructions of the Prime Minister's Office, which would have been micromanaging the rollout of a marquee initiative of the budget.

Mr. Speaker Parent, on March 13, 1997, at page 8987 of Debates, was also called upon to rule on advertisements, and offered this piece of advice to government communications staff:

Those whose duty it is to approve the wording of communications to the public for a minister must surely be aware that the terms used in parliamentary language have a very specific meaning. Trying to avoid them or to use them for advertising purposes shows a lack of consideration for the institution of Parliament and the role of the members in the legislative process. If there is no ambiguity in the choice of terms the public will be better served and the House can get on with its work without being called upon to resolve the difficulty caused by such misunderstanding.

Unfortunately, this sound counsel was simply ignored by those in the PMO who approved the wording of these job postings. The whole episode is, sadly, yet another example of a prime minister and a government who are dismissive of Parliament, and simply find the House of Commons to be an irritant and speed bump on their path to governing.

The House of Commons is, and must always be, seen as more than a rubber stamp for the government's legislative proposals. To address this attack on the authority and dignity of the House of Commons, I urge you to find a prima facie case of privilege.

[The Clerk of the Committee, Mr. Philippe Grenier-Michaud]

Basically, the chair of the committee will write a letter to the chair of the finance committee mentioning that the committee studied the matter. We could include a link to today's minutes and transcript, so the finance committee members could take a look at the discussion, and it could be included at the end of the letter that the committee doesn't have any specific amendments to propose to Bill C-44

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

Hello, gentlemen. Thank you for being here this morning.

I want to talk about some of the amendments proposed through the omnibus Bill C-44, which implements Budget 2017-18.

On August 4, 2011, we wanted to consolidate all the government's technological services and procurement, including computers, USB keys or other things of that nature. Unless I'm mistaken, I would say that clause 113 of the bill, which will replace section 7 of the Shared Services Canada Act, aims to deconsolidate what we wanted to consolidate, to a certain extent. Am I mistaken, or is that what's going on?

[Louis Marcotte, Director General, International Business Development, Investment and Innovation, Department of Foreign Affairs, Trade and Development]

Thank you, Mr. Chair.

The Budget Implementation Act, 2017, No. 1 introduces the enabling legislation of the Invest in Canada Hub announced in the 2016 Fall Economic Statement.

This new federal body is to work globally, in partnership with federal departments, as well as with provincial and municipal investment attraction offices, to ensure that Canada makes the most of every opportunity to attract global investment.

Foreign direct investment makes a significant contribution to the Canadian economy—creating jobs, spurring innovation and driving trade. Foreign-controlled enterprises in Canada employed 1.9 million Canadians in 2015, representing 12% of Canadian jobs and 30% of manufacturing jobs. They are responsible for 49% of all of our merchandise exports and 37% of all business expenditures in research and development.

The Advisory Council on Economic Growth noted in its October 2016 report that Canada stands to gain enormously by attracting more foreign direct investment.

The enabling legislation that you're reviewing determines, first, the nature of the entity as a departmental corporation.

Second, its mandates and functions are to create the partnerships required to leverage all of what Canada has to offer; brand Canada as a premier investment location; and to provide a one-stop service to assist investors in navigating the investment landscape; and to actively pursue anchor investment projects and deliver world class after-care services.

Third, the act also determines the governance of the entity where the minister provides directions, the board of directors manages the organization, and the CEO operates it on a day-to-day basis.

Fourth, the act determines the general powers, and its specific authority of the entity over administrative policies.

Fifth, it determines its human resources regime.

Overall, the enabling legislation allows for the creation of an organization able to interact effectively with business while being subject to the necessary oversight and accountability measures.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

I don't have a formal written motion, but I think we need to ensure, when we do clause by clause as a normal procedure, that we establish parameters to make sure that we understand how long we'll be debating clause by clause.

It's my understanding that previously.... Perhaps I can get assistance from the clerk, but I've highlighted a few key points, which we could discuss, to make sure that we have parameters for our clause-by-clause study.

First is that the committee proceed to clause-by-clause examination of Bill C-44 no later than Monday, May 29, which I think is something we already agreed to.

The second is that the chair may limit debate on each clause to a maximum of five minutes per party per clause.

Next is that the committee may sit until 9 p.m. on May 29, 2017, and start again on May 30 at 8:45.

The next is that if clause-by-clause consideration has not been completed by 9 p.m. on May 30, all remaining amendments be deemed moved and the question be put by the chair.

The last would be that after completion or passage by the committee, the chair report to the House as soon as possible. I'm gathering that there would be some more technical language to ensure this scheme, but I think those are the key elements that would be normal in preparation for clause-by-clause study.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you.

During the time I have left, I would like to discuss mutual insurance companies.

I think you were surprised by the proposal in Bill C-44; no one expected to see that, and neither did I. It seems that during the last pre-budget consultations, you had made representations to improve the situation. However, today's bill is proposing the opposite.

Can you measure the repercussions this could have on mutual insurance companies? Will this mean that they will be less competitive than their competitors? Do you see a certain risk for those businesses?

What do you have to say to the government,which claims that access is easy now that insurance companies are on the Internet, and that with the new technologies, there is no longer a need for this in remote and rural areas?

[Normand Lafrenière, President, Canadian Association of Mutual Insurance Companies]

To qualify for the tax exemption, insurers have to maintain a minimum farm/fishing premium of 25% of their total written premium. According to the Department of Finance, in 2014, some 40 companies were still benefiting from the tax exemption, 37 of which were farm/fishermen mutual insurers, most of them small mutuals.

A number of these farm mutual insurance companies report that their continued existence depends on the tax exemption.

The three non-mutual insurers benefiting from the tax exemption do so through a special tax exemption giving them an unfair advantage over mutual insurers.

Because of the evolution of the rural landscape, and the resulting effect on insurance, the average farm mutual insurance company reports doing 15% of its business with farmers and fishers. In CAMIC's pre-budget submission, we recommended that the qualifying threshold be reduced to 5% of the total written premium, in concert with the elimination of the special tax treatment given to the three non-mutual insurers. The suggested measures would have been cost revenue neutral to the federal government.

While the government has not agreed to bring about the recommended changes, we fear that the elimination of the total tax exemption, as proposed under Bill C-44,, will have a very negative effect on mutual insurers of farmers and fishers.

We, therefore, recommend that paragraph 149(1)(p), and subsections 149(4.1) to 149(4.3) of the Income Tax Act be maintained as they are currently exist.

In closing, let me point out that farm mutual insurance companies provide significant benefit to the small rural communities in which they are located. They ensure that insurance is available at all times, even when the market is tight. Mutual insurers are also significant employers in their community. They purchase locally sourced goods and services whenever possible, and participate in the betterment of their community.

Thank you for considering CAMIC's recommendation.

[Frank Rider, Chairman of the Board, Canadian Association of Mutual Insurance Companies]

Thank you. First of all, I want to thank this committee for the opportunity to appear before you.

The Canadian Association of Mutual Insurance Companies is an association of 79 mutual and co-operative insurance organizations operating in Canada. About 75 of our members are what we would call farm mutual insurance companies, i.e., smaller companies created by farmers, for farmers, mostly in the 19th century—several even before Confederation.

We are here to present our concern in relation to Bill C-44 which, if adopted, would eliminate the tax exemption for insurers of farming and fishing property originally introduced in 1954. That was at a time when farmers and fishers had little choice other than to obtain insurance from their own mutual insurance company. To this day, in some regions across the country, that need still exists. You have to remember that farm risks and fishing risks represent high values, and oftentimes they are total losses.

While it would appear that the elimination of the tax exemption will affect only the insurance companies, this is absolutely not the case. This tax relief, provided by the exemption, is not retained by the mutual insurance companies. It is passed along to farmers and fishers through lower rates and premium refunds, and it also allows us to tolerate higher loss ratios on farm and fishing risks.

Indeed, the mutual insurance companies of farmers and fishers still exist for one reason: to provide affordable insurance protection to farmers and fishers on an at cost basis, without a profit motive. The large majority of active food producing family farms and fishing enterprises across Canada continue to be insured by their small mutual insurance company. Farmers and fishers still, to this day, make up the majority of board members governing their company.