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

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I thank the hon. member for Edmonton Strathcona for her extremely important question.

I say this in almost all of my speeches because it is very important, but I forgot to mention it today. The $1.3 billion in subsidies to the fossil fuel industries could quickly be reinvested in renewable energy and energy efficiency. This would help us truly transition to a low-carbon economy, something that needs to be done right now.

Another thing is that the government always forgets the north. This is where renewable energy is most needed, but there is almost nothing in the Liberals' budgets. I will repeat the recommendations from the Green Budget Coalition. They are there in black and white, and this is not the first time the Coalition has said so. It recommends that we take back the money allocated to subsidies for fossil fuels and use it to transition towards clean energy. This is urgent, but unfortunately, the government is still twiddling its thumbs.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, my colleague from Avalon asked a worthy question about the NDP. I think $2.7 million were spent on satellite offices. It was an abuse of taxpayer dollars. How much of that money has the NDP actually paid back to Canadian taxpayers? They are owed that money.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I am trying to stay calm. My colleague knows that this case is in court. I can assure the member for Winnipeg North that not only will the ruling be in our favour, but the members of the Board of Internal Economy, those who hid behind closed doors to prevent us from saying what we have to say, will owe us an apology. I do not mind saying this. We will defend our case in court. There is no doubt about it.

The truth is that we used to hear about the Panama papers, but we now have the paradise papers. Whose hands are dirty and whose credibility is being questioned in this whole story? It is once again the Prime Minister's chief fundraiser. We did not get any answers about that today during question period. It is disappointing. We need action, but nothing is being done.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Mr. Speaker, I am pleased to speak today to Bill C-63, the budget implementation act, 2017, No. 2. This bill implements certain measures from budget 2017.

Since our party was elected, we have applied ourselves to investing in our economy in order to make it work for the middle class. We reduced taxes for the middle class and implemented a fairer and more equitable non-taxable Canada child benefit based on income. Accordingly, the benefit is more advantageous for those who are most in need and helps them to pay for activities, warm clothing, and school supplies or to save for their children’s education.

For example, in my riding, Alfred-Pellan, more than 17,000 children from 10,000 families benefited from the Canada child benefit last year. More than $5 million went directly into these families’ pockets, and they were able to spend the money in local stores or to pay for sports and cultural activities offered by local businesses or organizations. Obviously, this measure is advantageous not only for families, but for the economy as a whole. Each of us benefits from strong economic growth.

We also enhanced the financial security of Canadian seniors by improving the guaranteed income supplement and ensuring that eligible seniors are enrolled automatically. We also lowered the retirement age to 65, and improvements will be made to the Canada pension plan starting in 2019. We also instituted a tax credit and employment insurance benefits for family caregivers. This is a very important file for me, since I was a caregiver for my mother for many years. I am proud to see what we have accomplished in this area to give family caregivers access to measures providing financial relief.

Of course, we launched an ambitious infrastructure program to stimulate the economy, create quality jobs, and build modern, green, and sound communities. This is in addition to our historic investments in social housing, which will help meet major needs in affordable housing in our communities. We are also investing in loans and bursaries programs, as well as in innovation. All of these measures foster the well-being and individual growth of all Canadians, helping them achieve their full potential. That was a quick overview of some of our budget measures.

Let us now talk specifically about Bill C-63, one of the cornerstones of our budget. This bill contains various measures and 10 minutes is hardly enough to talk about each one. I will focus on one measure that I think is especially important for Canadians, one that amends the Canada Labour Code.

I will read the part I am talking about for the benefit of my colleagues and those watching:

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.

In short, our government is creating provisions to ensure that federally regulated workers can ask for more flexible working conditions.

If we are honest and realistic, we know that these are the types of measures that will help women most. Women are often the ones who need to strike a work-family balance because they are more likely to be responsible for childcare and household tasks, compared to men.

These measures will allow workers to ask their employer to change their work schedule, for example, in order to adjust to their children’s daycare or school schedule, or to telework on PD days. These are only two examples of a number of family situations that can require a flexible work schedule.

Division 8 will also create new leaves, specifically three days for family obligations. When your child is sick or a close relative is in the hospital, you want to be there to provide care and ensure his or her well-being. Federal employees will get these days off for family obligations.

We are also instituting leave for domestic violence. Women who make the decision to leave a violent environment are vulnerable and experience extreme stress. Often, they cannot report to work for a few days, and they do not know what type of leave they can ask for to justify their absence. This 10-day leave may encourage women who have been victims of violence to get out of a violent environment knowing that they have leave they can use without being penalized.

This amendment to the Canada Labour Code is a concrete example of our government’s determination to improve the living conditions of middle-class workers. Although a number of employers already have work-family balance measures in place and offer flexible work schedules, by amending the Canada Labour Code, we are clearly and officially saying that this is no longer a matter of choice.

It is a key principle and an important right. Workers are entitled to ask for flexibility and leave to balance their family and work responsibilities. People should not have to choose between their job and their children. In 2017, it is high time that the workplace adapted to diverse family situations and the obligations they entail.

I will close by pointing out that families and the middle class are at the heart of our commitments and the measures we are implementing. A strong economy is beneficial for the entire country, and it is based on families and a middle class who have access to quality jobs, who earn enough income to be able to spend, and who have access to opportunities unleashing the full potential of individuals and businesses.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Speaker, with respect to economic viability and the direction, the Liberals always said that they would have a small deficit of $10 billion. Now it is actually more than double that. The debt is increasing at a rate not seen before. There is no projection of when they will balance the budget. We now know that the tax laws that have been introduced target the middle class, protecting those who are very wealthy and the friends of the finance minister and the Prime Minister. Eighty per cent of the middle class are paying more tax now, about $840, than they were before you took office two years ago. Why are you taxing the middle class and protecting and sheltering those wealthy Liberal friends?

[The Assistant Deputy Speaker, Anthony Rota]

Again, I want to remind the hon. members to address their questions through the Speaker.

The hon. member forAlfred-Pellan.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Mr. Speaker, I thank my colleague opposite for his question.

I know the opposition is somewhat obsessed with the amount of the deficit. What we need to keep in mind, however, is that the more important figure is the debt-to-GDP ratio, which was 32.5% when we came to power. It has shrunk steadily since then to 30.5%, and it will continue to shrink.

Furthermore, based on our projections, that ratio will reach its lowest point since the 1970s. We brought it down to that level thanks to a healthy economy and a plan that is working. Revenues are up, and people are confident.

[Sheri Benson, NDP, Saskatoon West, SK]

Mr. Speaker, on this side of the House, we welcome the changes to the Canada Labour Code that would allow employees more flexibility at work and also prohibit unpaid internships.

I would like the hon. member to respond to a couple of things. What really would help those working hard to get into the middle class would be a federal minimum wage and pay equity legislation. Those things need to happen to have an impact on those vulnerable folks and those who are not making enough money to make ends meet.

My final comment is that the unpaid leave for victims of domestic violence would pose a barrier, especially for those women who are poor. We know that women who suffer in relationships of domestic violence are often economically controlled by their partners. Their ability to access unpaid leave to deal with issues like lawyers and child care and to then go home and interact with someone who now knew they had brought home less income and wanted to know why would be a huge barrier for women trying to access unpaid leave. I encourage the government to be open to making that leave paid leave so that it is accessible to all women.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

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

I am always surprised when the NDP opposes some of our key measures that primarily benefit low- and middle-income people.

For example, in the 2016 budget, we introduced the Canada child benefit, which reduced child poverty by 40%. The NDP voted against it, but we are now going to make it even better. I cannot believe the NDP was against that. It is an honour for me to be here to talk about the initiatives in our 2016 and 2017 budgets that put Canada back on track for growth, job creation, and prosperity.

Since coming to power, we have put Canada back on the path toward the kind of growth that is good for the middle class and everyone.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Mr. Speaker, I would like to recognize my colleague from Alfred-Pellan, who provided us with information.

However, I will try to debunk what he has said, as it is not consistent with the facts.

I am pleased to rise in the House to discuss the second bill to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures.

First, I would like to give a reminder. This Saturday, November 4, was the second anniversary of the Liberal government coming to power.

[Some hon. members]

Hear, hear!

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

I am not certain that all Canadians are applauding. It is limited, here, to one side of the House. What are the results of those two years? Only broken promises.

Through the Chair, I would like to inform those watching on television that I do not want to be alarmist. I only want to share facts. Canadians have enough judgment to be able to understand what is really happening and they will not be blinded by words or by flashes from the various cameras that follow the Prime Minister around.

During the election campaign, the Liberals went out to meet Canadians. Among other things, they said one important thing. They said to trust them, to vote for them, that they would create a slight deficit of $10 billion, and they assured their dear fellow Canadians that they would return to a balanced budget in 2019. They applauded earlier, but we cannot hear them now. They talked about $10 billion the first year; they finished the year with a deficit of $18 billion. This year, the deficit will be $20 billion. In 2018, it will be $18 billion. I remind you of their promise because it is a fixed date election. In 2019, they were to return to a balanced budget. Their economic update mentioned $17 billion. They talked about a balanced budget in 2019, but if I add it up, that makes $73 billion dollars in deficit over the four years that the Liberal Party is in power.

They have admitted that he budget will never be balanced. What hypocrisy and what a lack of respect for the Canadians who trusted them. That is unacceptable, but we are stuck with them for the next two years. We will live with the situation, but everyone needs to know that we, as the opposition, will be doing our work.

They promised transparency and a new way of governing. Wow! The Minister of Finance acts like a king who thinks he is above the law. He states that he created a blind trust for his company in which he has shares, Morneau Sheppell. It took two years and hard work by the opposition to make the minister take action. A few weeks ago, with assistance from the commissioner, he was able to understand the form, deposit his assets and opt for a blind trust. You have to take people for… I will not finish that sentence. People at home are able to finish it.

He tabled a law regarding pension plans for Canadians. Until recently, he was a shareholder in Morneau Sheppell. We know what Morneau Sheppell does: the company manages pension plans. So he is both judge and jury. Indeed, he establishes a law and his fellow shareholders and colleagues benefit from that law. How much money does the Finance Minister receive—I am not talking about his salary as a parliamentarian—as a shareholder in Morneau Sheppell? He receives $65,000 per month.

Let us not forget his villa in Europe and the numerous companies we keep pestering him about because we want to know exactly what they are about. It is because we suspect that the Minister of Finance has other sources of revenue. He is giving us no reason to think otherwise.

If he does not want to come completely clean, that is his choice, but until he does so, some doubt will always linger. We live in a democracy, not a dictatorship. The minister and his Prime Minister are not above the law. They have no right to take advantage of honest Canadians. That will conclude my opening remarks.

I will now focus on Bill C-63, an omnibus bill. Last week, my colleague for Carleton asked the Speaker for an analysis of Standing Order 69.1 introduced by the Liberals last June. I will read it to make sure everyone understands:

(1) In the case where a government bill seeks to repeal, amend or enact more than one act, and where there is not a common element connecting the various provisions or where unrelated matters are linked, the Speaker shall have the power to divide the questions, for the purposes of voting, on the motion for second reading and reference to a committee and the motion for third reading and passage of the bill. The Speaker shall have the power to combine clauses of the bill thematically and to put the aforementioned questions on each of these groups of clauses separately, provided that there will be a single debate at each stage.

This government has hidden a lot of things its Bill C-63. In June the Liberals put in place regulations, but they are not even able to manage the application of a regulation they implemented three months earlier. They are all mixed up in the management of a regulation. Imagine how the government manages finances.

We can also talk about the Asian Bank. The March 2017 budget presentation announced $256 million for the Asian Infrastructure Investment Bank. In today’s bill, however, we see that it is instead $375 million U.S. After converting, that gives $480 million Canadian. No problem, they will spend recklessly and then try to take money out of the pockets of middle-class Canadians. In other words, the omnibus budget implementation bill proposes something that was not originally provided for. As a result, Mr. Speaker, you have the authority to split the components of the bill.

The other problem is that the extra $224 million is being invested in the Asian Infrastructure Investment Bank instead of the Canada infrastructure bank. We are investing that money in a bank in Asia. That is one way of looking at things. This inconsistent and irresponsible government is spending recklessly.

The Fraser Institute confirmed that over 80% of middle-class families pay more taxes than they paid under the Harper government. Wow. They say one thing and put money in one pocket, but they take twice as much out of the other pocket. More money is being taken from middle-class Canadians. That statement is not from the Minister of Finance, it is from the Fraser Institute, which I trust.

In closing, I cannot give my vote of confidence to this government and its finance minister, who is determined to tell honest Canadians that he is a man worthy of his office. In my opinion, a finance minister must be above any doubt or reproach regarding credibility and integrity. He must comply with the law and be whiter than white. This finance minister, however, is very grey, bordering on black.

I would encourage the Minister of Finance, our national Superman, to come back to reality and to be sensible in managing Canada’s public finances.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, one of the consistent comments we get from the Conservative opposition is concern about the deficit. It is important to realize a bit of the history of deficits. When Stephen Harper was prime minister, he inherited a multi-billion dollar surplus and turned it into a multi-billion dollar deficit, even before the Canadian recession got under way. Year after year, the Harper government had nothing but deficit after deficit. In fact, I suspect we would find that the Harper government accumulated more in those annual deficits than in the history of any other prime minister, in terms of real dollars.

Given how disastrous the Harper government was in dealing with the deficit, why should any government take advice from a Conservative government that did so poorly and generated so little in terms of actual economic activity, especially compared to what we have done in the last couple of years?

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Mr. Speaker, my colleague has a very colourful way of speaking. However, speaking in a colourful way does not necessarily guarantee coherence. In 2007, the debt-to-GDP ratio was the lowest ever, and members cannot say whatever they want in the House.

I would like to add that we left the House in order. When we left the government to the Liberals in 2015, there was a surplus. In 2016, there was an $18-billion deficit and, this year, there will be a $20-billion deficit.

We cannot call that responsible government. The government has only been in power for two years. It is unacceptable. I will also mention what the Liberals actually did to hurt Canadians: they eliminated the universal child care benefit; eliminated the child fitness tax credit; eliminated the arts tax credit; eliminated the tax credits for post-secondary education and textbooks; eliminated income splitting; and cancelled the tax break for SMEs. They also reduced the TFSA contribution, cancelled the tax credit for public transportation, and more.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, it is interesting to listen to this discussion. The Liberals are pointing out that the Conservatives ran seven straight deficits in the House between 2008 and 2015, although they did balance the budget in the last year. The Conservatives are yelling at the Liberals about another six to 10 deficits in a row. Listening to the Liberals and the Conservatives accusing each other of running deficits all the time is not very productive. What both parties have in common is that they are not willing to address the fundamental basics of deficits.

Deficits are easy, and Canadians know it. It means that we are spending more money than we are taking in. The Conservatives did it after a recession, so at least they had the economic conditions in which we had to prime the economy from 2008 to 2011. The Liberals are going into deficit when the economy is firing on all cylinders. Traditional Keynesian thinking would be that a government runs deficits in poor economic times and pays down those deficits in good economic times. I am not sure what economic philosophy the Liberals are following. The bottom line is that a government has to have its revenue match its expenditures.

Would my hon. colleague suggest that the government cut spending right now, or would he agree with New Democrats and say that we have to raise some revenue, in an equitable manner, maybe by restoring the corporate income tax up a couple of points so that we can get the budget back in balance by getting more revenue into government?