Bill C-63 (Historical)

Budget Implementation Act, 2017, No. 2

A second 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) removing the classification of the costs of drilling a discovery well as “Canadian exploration expenses”;
(b) eliminating the ability for small oil and gas companies to reclassify up to $1 million of “Canadian development expenses” as “Canadian exploration expenses”;
(c) revising the anti-avoidance rules for registered education savings plans and registered disability savings plans;
(d) eliminating the use of billed-basis accounting by designated professionals;
(e) providing enhanced tax treatment for eligible geothermal energy equipment;
(f) extending the base erosion rules to foreign branches of Canadian insurers;
(g) clarifying who has factual control of a corporation for income tax purposes;
(h) introducing an election that would allow taxpayers to mark to market their eligible derivatives;
(i) introducing a specific anti-avoidance rule that targets straddle transactions;
(j) allowing tax-deferred mergers of switch corporations into multiple mutual fund trusts and allowing tax-deferred mergers of segregated funds; and
(k) enhancing the protection of ecologically sensitive land donated to conservation charities and broadening the types of donations permitted.
It also implements other income tax measures by
(a) closing loopholes surrounding the capital gains exemption on the sale of a principal residence;
(b) providing additional authority for certain tax purposes to nurse practitioners;
(c) ensuring that qualifying farmers and fishers selling to agricultural and fisheries cooperatives are eligible for the small business deduction;
(d) extending the types of reverse takeover transactions to which the corporate acquisition of control rules apply;
(e) improving the consistency of rules applicable for expenditures in respect of scientific research and experimental development;
(f) ensuring that the taxable income of federal credit unions is allocated among provinces and territories using the same allocation formula as applicable to the taxable income of banks;
(g) ensuring the appropriate application of Canada’s international tax rules; and
(h) improving the accuracy and consistency of the income tax legislation and regulations.
Part 2 implements certain goods and services tax/harmonized sales tax (GST/HST) measures confirmed in the March 22, 2017 budget by
(a) introducing clarifications and technical improvements to the GST/HST rules applicable to certain pension plans and financial institutions;
(b) revising the GST/HST rules applicable to pension plans so that they apply to pension plans that use master trusts or master corporations;
(c) revising and modernizing the GST/HST drop shipment rules to enhance the effectiveness of these rules and introduce technical improvements;
(d) clarifying the application of the GST/HST to supplies of municipal transit services to accommodate the modern ways in which those services are provided and paid for; and
(e) introducing housekeeping amendments to improve the accuracy and consistency of the GST/HST legislation.
It also implements a GST/HST measure announced on September 8, 2017 by revising the timing requirements for GST/HST rebate applications by public service bodies.
Part 3 amends the Excise Act to ensure that beer made from concentrate on the premises where it is consumed is taxed in a manner that is consistent with other beer products.
Part 4 amends the Federal-Provincial Fiscal Arrangements Act to allow the Minister of Finance on behalf of the Government of Canada, with the approval of the Governor in Council, to enter into coordinated cannabis taxation agreements with provincial governments. It also amends that Act to make related amendments.
Part 5 enacts and amends several Acts in order to implement various measures.
Division 1 of Part 5 amends the Bretton Woods and Related Agreements Act to update and clarify certain powers of the Minister of Finance in relation to the Bretton Woods institutions.
Division 2 of Part 5 enacts the Asian Infrastructure Investment Bank Agreement Act which provides the required authority for Canada to become a member of the Asian Infrastructure Investment Bank.
Division 3 of Part 5 provides for the transfer from the Minister of Finance to the Minister of Foreign Affairs of the responsibility for three international development financing agreements entered into between Her Majesty in Right of Canada and the International Finance Corporation.
Division 4 of Part 5 amends the Canada Deposit Insurance Corporation Act to clarify the treatment of, and protections for, eligible financial contracts in a bank resolution process. It also makes consequential amendments to the Payment Clearing and Settlement Act.
Division 5 of Part 5 amends the Bank of Canada Act to specify that the Bank of Canada may make loans or advances to members of the Canadian Payments Association that are secured by real property or immovables situated in Canada and to allow such loans and advances to be secured by way of an assignment or transfer of a right, title or interest in real property or immovables situated in Canada. It also amends the Canada Deposit Insurance Corporation Act to specify that the Bank of Canada and the Canada Deposit Insurance Corporation are exempt from stays even where obligations are secured by real property or immovables.
Division 6 of Part 5 amends the Payment Clearing and Settlement Act in order to expand and enhance the oversight powers of the Bank of Canada by further strengthening the Bank’s ability to identify and respond to risks to financial market infrastructures in a proactive and timely manner.
Division 7 of Part 5 amends the Northern Pipeline Act to permit the Northern Pipeline Agency to annually recover from any company with a certificate of public convenience and necessity issued under that Act an amount equal to the costs incurred by that Agency with respect to that company.
Division 8 of Part 5 amends the Canada Labour Code in order to, among other things,
(a) provide employees with a right to request flexible work arrangements from their employers;
(b) provide employees with a family responsibility leave for a maximum of three days, a leave for victims of family violence for a maximum of ten days and a leave for traditional Aboriginal practices for a maximum of five days; and
(c) modify certain provisions related to work schedules, overtime, annual vacation, general holidays and bereavement leave, in order to provide greater flexibility in work arrangements.
Division 9 of Part 5 amends the Economic Action Plan 2015 Act, No. 1 to repeal the paragraph 167(1.‍2)‍(b) of the Canada Labour Code that it enacts, and to amend the related regulation-making provisions accordingly.
Division 10 of Part 5 approves and implements the Canadian Free Trade Agreement entered into by the Government of Canada and the governments of each province and territory to reduce or eliminate barriers to the free movement of persons, goods, services and investments. It also makes related amendments to the Energy Efficiency Act in order to facilitate, with respect to energy-using products or classes of energy-using products, the harmonization of requirements set out in regulations with those of a jurisdiction. Finally, it makes consequential amendments to the Financial Administration Act, the Department of Public Works and Government Services Act and the Procurement Ombudsman Regulations and it repeals the Timber Marking Act and the Agreement on Internal Trade Implementation Act.
Division 11 of Part 5 amends the Judges Act
(a) to allow for the payment of annuities, in certain circumstances, to judges and their survivors and children, other than by way of grant of the Governor in Council;
(b) to authorize the payment of salaries to the new Associate Chief Justice of the Court of Queen’s Bench of Alberta; and
(c) to change the title of “senior judge” to “chief justice” for the superior trial courts of the territories.
It also makes consequential amendments to other Acts.
Division 12 of Part 5 amends the Business Development Bank of Canada Act to increase the maximum amount of the paid-in capital of the Business Development Bank of Canada.
Division 13 of Part 5 amends the Financial Administration Act to authorize, in an increased number of cases, the entering into of contracts or other arrangements that provide for a payment if there is a sufficient balance to discharge any debt that will be due under them during the fiscal year in which they are entered into.

Budget Implementation Act, 2017, No. 2

[Deepak Obhrai, Conservative, Calgary Forest Lawn, AB]

Mr. Speaker, let me start by saying that I have been in this Parliament for 20 years. During that period of time, members of Parliament were elected on this side of the House, on that side of the House, on every side of the House, and it keeps changing. I can assure the member that everybody represents their constituency very well, including that member. That is why he was elected. This is not about of the issue of representation. We are all representing our ridings, and we are all doing a great job for our constituents.

As my colleague said quite clearly, I have been in the government. I do know from experience, having been in the government, that policies and issues are made by the government, by the PMO, by those things, and they direct that.

During the summer, the Liberal government came out and tried to raise taxes on all these things, and it was spending money. There was a big push-back from Canadians. We could see them changing. There was a push-back because Canadians are worried. They are worried about their jobs, number one. They are worried about where the government is going with its economic agenda and with the TPP.

The government did not attend a meeting with our allies, and what a shame when the government is saying we are back on the world stage. Talking about NAFTA and where it is going, talking about pipelines not being built, not pushing to have pipelines built, this creates uncertainty across the country. Even the NDP leader in Alberta is talking about jobs and jobs.

The question that arises out of this is where the Liberals are taking us. We are concerned. Everybody out there is talking about the wasteful spending on the ice rink, the $5 million. Things like that really bother Canadians all across this country, and they are asking if the government is really in charge.

Canadians saw the Panama papers come out, and the Liberals' rich friends put money away so they do not have to pay taxes, while the government wants ordinary Canadians to pay taxes, while taking away the disability credit for diabetics and others. There is a big concern out there.

Today, while I am talking on that subject, Canadians want the government to address the issues in Canada. That is what they want. There are a lot of jobs being lost. The economy is not doing well—actually, it is doing well, but the Liberals are spending all the money.

The question that arises for Canadians is what is there for the future. In this bill—which really concerns us, aside from the fact of all the other money that the Liberal government is spending—is the $500 million going to the Asian Infrastructure Investment Bank.

In 1966, we joined the Asian Development Bank. The Asian Development Bank is another bank that is supposed to do infrastructure spending. Canada has contributed $7.5 billion during that period of time, up until today, not to say that in return Canadian companies have been awarded close to $715 million. However, there is a bank there that we have been associated with for such a long time, which has been doing the development assistance program in Asia.

Here come the Chinese—and I say to the Chinese, they are absolutely right, they are welcome to set up their infrastructure bank, but they should do it with their own money. They should not ask Canadians to pay for their foreign policy issues.

This infrastructure bank is designed to promote the foreign policy issues of China. Look at where the infrastructure bank has given its money. It has given its money to Bangladesh, it has given its money to Indonesia, it has given its money to Tajikistan, and it has given its money to Uzbekistan, countries surrounding China. That is because this fits into China's foreign policy.

I am not putting down what the Chinese want to do; they can go ahead and do it, but do it with their own money. Why would we, here, have our money go to promote the foreign policy of another country, when we could use that money here in this country to address the issues that Canadians want addressed? This is the big question that is being raised out there.

Let me say this again. There is a concern here. This policy of giving money to the infrastructure bank in China is something that is not well thought out, because we have a problem here with the Liberals, who are being over-friendly with China.

There is the concern about the free trade agreement with China. The previous government talked about a free trade agreement with India for years, a country that has similar values and is a democracy like Canada, but now the Liberals are going to sign a free trade agreement with China that is causing concern, because there is no level playing field between the Chinese and Canadians. The Chinese can invest here and we can go there, but there is no level playing field. Ask any Canadian business in China or Chinese businesses here. It is a common question.

The Prime Minister is going to China. The one big concern I have is that the Chinese government is saying that the Liberal government is biased toward China as opposed to other countries. When Conservatives were in government, we had a strategic dialogue with India, which has a democracy similar to Canada, to find common ground. The Liberal government has not done anything about it. It has had a strategic dialogue with China. A second dialogue was held with China. Our system of democracy is different. The Chinese have their own system, which is for the Chinese people to decide, and we have our own system. There is no compatibility. What is the point of having a strategic dialogue with a country that is pursuing its own foreign policy? Are we just riding its coattails? Do we not have our own policy? Can we not stand on our own feet and make our own decisions in this country? Why do we have to follow, just because the Prime Minister's father was a very big fan of China? That does not allow us to just close our books and look other ways.

There are big issues being raised in this country on the direction the Liberal government is going. The Prime Minister said we are on the world stage. For example, this afternoon, the Minister of International Trade talked about a historic visit to India. Imagine that, a historic visit to India. Before the Liberals came to this House, the prime minister of Canada visited India twice, the governor general visited India, and there were countless visits by other foreign ministers, yet for the Liberals, it is a historic visit. Come on, we need to get some sense of where the government is going and pay attention to what has been done, because thousands of bureaucrats and public servants have worked very hard over the years to ensure that we have very good standing around the world.

Of course, the biggest blowback was from the Prime Minister not showing up at the TPP negotiations. Imagine that. Other heads of government were there. Who are we? Think about that. Who are we to brush them aside? Let me get straight what the Prime Minister said. He said we are not ready. There is a department sitting there. The government has had negotiations on the TPP, so how can the Prime Minister suddenly say that we are not prepared? Liberals are not prepared, because they are looking for a free trade agreement with China. Is that why they are doing this? It is about time someone pointed out to the Liberal government that whatever direction it is heading, it is not the direction Canadians want it to go.

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

Mr. Speaker, it may have escaped the hon. member, but the relationship with our current largest trade partner is a little rocky, and the response we have had from the other side so far has been complete capitulation, that we should lie down, let them roll over us, and see if we can save something in it, as opposed to looking at a very large, very rich, growing market on the other side of the Pacific that has already demonstrated that it likes the products and services that come from Canada.

Compared with his strategy, does he not think developing new markets, especially in a country that wants to do business with us, as opposed to one that does not seem to, make sense?

[Deepak Obhrai, Conservative, Calgary Forest Lawn, AB]

Mr. Speaker, talking about NAFTA and the policy of capitulation is the Liberals' talking point. The fact of the matter is that we were negotiating the TPP, which is larger than anything else, and they walked away from it. When they want to look for new markets, they will take the opportunity to look for new markets, yet we are turning a blind eye to the fact that the Chinese have different rules. Their labour rules are different, their environmental rules are different, and the way they operate is different. They are not compatible with a free market. Why does the government want to open up Canada's markets to a country whose environmental and labour regulations do not match ours, giving it the advantage and us the disadvantage. That is not the right policy for trade.

[Blaine Calkins, Conservative, Red Deer—Lacombe, AB]

Mr. Speaker, I listened intently to a great speech by my colleague from Alberta, one of the only guys in the Alberta caucus who has been here longer than I have. I certainly appreciate his wisdom. He has been here a long time.

He has been here so long, could he remind all of our colleagues in the House of the fiscal position the Liberal government inherited from the previous Conservative government? Based on the tax position at the time, we were going to be debt free as a nation by the year 2055 versus having about $1.3 trillion in debt based on the current government's strategy. Could he remind Canadians of the importance of that?

[Deepak Obhrai, Conservative, Calgary Forest Lawn, AB]

Mr. Speaker, I thank my hon. colleague for bringing up our record. The Liberals always take credit for everything we did. We laid the foundation for a good economic base in this country, as my colleague said, and the Liberals want to say they did everything. They have only been in power for two years. All they have done is create uncertainty in the minds of Canadians.

We were going to balance the budget. Jim Flaherty was one of the best finance ministers Canada ever had, bringing us into account. I want to tell the other side clearly and simply that it was because of the base built by the Conservatives that we are enjoying economic growth today, yet the Liberals are putting us in jeopardy.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Mr. Speaker, somebody has to get up and say something. It is true that the member there at that time. I was in the previous Parliament too, and I can say that we often found the Conservative government's policies to be very tiresome and miserly with respect to many issues, especially social issues.

However, does the member not agree with me that the famous sunny ways of the government's election campaign have turned into a form of arrogance, or entitlement? The government has decided to set up a large skating rink in front of Parliament. It believes that China is really important. It is spending money hand over fist. It is accumulating a monstrous deficit. There is also the behaviour of the Minister of Finance, which has left everyone scratching their heads. How can they be so arrogant and believe that the rules do not apply to them? I would like to hear what my colleague has to say about that.

[Deepak Obhrai, Conservative, Calgary Forest Lawn, AB]

Mr. Speaker, of course, we are Conservative and they are NDP. We definitely have differences on the economy. There is no question about that. However, let me say that I agree with him one-hundred per cent that it is an arrogant government, a government that feels it is entitled to all these things. We see time after time the Liberals not listening to anyone. I one-hundred per cent agree with my colleague that in 2019, Canadians will speak.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I am delighted to hear that the Conservatives have the nerve to bring up their economic record, every year of which they were in deficit except one, with the lowest growth since the Great Depression, and huge unemployment.

I was more shocked to see the NDP suggest cutting funds for the largest housing project in Canadian history, money for low-income seniors, money for low-income students, the national child credit that has brought 300,000 children out of poverty, and the working income tax credit. These are all investments that have created the highest employment record in a decade, with the highest economic growth.

Could the member talk about something that is not his talking points?

[Deepak Obhrai, Conservative, Calgary Forest Lawn, AB]

Mr. Speaker, the member is wrong. I do not know what he is talking about. He is talking from his talking points without telling us all he is reading.

Let me say very clearly that the member's government is putting a huge burden on Canadians with this deficit. The Liberals said during the election campaign there would only be a $10 billion deficit. At this time, we have no idea where the deficit is going.

The legacy of the former government is not as the member is saying, but the legacy that Canadians will carry for years and years is the high debt load that the Liberals are putting on young Canadians.

[The Deputy Speaker, Bruce Stanton]

It being 6:46 p.m., pursuant to order made earlier today, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the report stage of the bill now before the House.

The question is on Motion No. 5. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Deputy Speaker, Bruce Stanton]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker, Bruce Stanton]

All those opposed will please say nay.

[Some hon. members]

Nay.