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.

Report Stage

[The Speaker, Geoff Regan]

Once again, I want to remind members who are engaged in voting to try to avoid passing between the Speaker and the member who is speaking.

There are five minutes remaining in the speech from the hon. member for Barrie—Innisfil.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Mr. Speaker, I will remind the House that I moved a motion to adjourn debate yesterday when we were talking about Bill C-63. The reason I moved that motion was the fact that the finance minister refused to answer the question from the member for Carleton and others, including the member for Louis-Saint-Laurent. In the context of that bill, I moved that motion because of a lack of confidence in the finance minister's ability to talk about it. Again, unless and until the finance minister answers these tough questions, we will be at a stalemate.

When time allocation was moved this morning, during tough questions from the member for Carleton, very simple questions, too, the finance minister suggested the member take it outside. That has been a pattern of the government in the past. If the Liberals do not want to answer the questions in the House, the inference is that we should take it outside, a bully politic tactic. If the finance minister wants to threaten high-priced Bay Street lawyers by threatening us to take it outside, we will not stand for that. In this democracy and this Parliament, every one of us is sent here to represent the voices of our constituents and every one of us has an obligation to ask the tough questions, the simple questions, the yes or no questions.

The debate was adjourned yesterday because we lacked the confidence in the minister's ability to deal with Bill C-63. We did not know his agenda, and we still do not know what his agenda is with respect to Bill C-63. The funny thing was that every member of the Liberal Party voted to adjourn yesterday, including the finance minister. Therefore, the Liberal members clearly do not have confidence in the finance minister's ability to deal with this issue as well.

We read in The Hill Times yesterday that the Liberals' major concern was not transparency, not accountability, not openness, not the impact Bill C-63 would have, not the fact that the finance minister would not answer any questions, and continues to hide in the dark. Their concern is the next election, the fact that potentially in 2019, after four years, they may lose their pensions. This was said in The Hill Times. That causes me to greatly question the motivations of Liberal backbenchers. It is all about their pensions. How sad is that?

I hear them chirping on the other side, and to that I say “bring it on”. Until the finance minister answers the simple questions being asked by Her Majesty's loyal opposition, we will continue to ask the tough questions, the very simple questions, on behalf of all Canadians who sent us here, including my riding of Barrie—Innisfil.

There are no high-priced lawyers in Barrie—Innisfil. It is a working-class community. The finance minister thinks he can come in here, bully the opposition by threatening lawsuits, libel, or slander suits, telling us to take this outside and not ask the tough questions in the House. None of us will be intimidated by the bully tactics of the finance minister, and we ask him to answer the questions.

Returning to Bill C-63, the Liberals have talked about tax fairness and the fact that the middle class and those working hard to join it are somehow better as a result of what they have done. This is about the middle class and those working hard to stay in it. They talked about a revenue-neutral tax decrease, that they would tax the top wealthiest 1% and lower taxes on middle-class Canadians. It was not revenue-neutral. It was going to cost the treasury $8.9 billion over six years, further adding to the debt and deficit of the government, deficits as far as the eye can see, debt that is projected to be $1.5 trillion by the 2050s.

For those of us who live in Ontario, talk about compounding the problem. The Ontario government is mired in endless debt and deficits. Now the federal government is moving in that direction. Quite frankly, I am worried, not just for my four children but every young person in the country who will have to pay for the Liberals' spending.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Madam Speaker, I want to thank my colleague for standing up for democracy and for the hard-earned dollars that young families are contributing through their taxes. The government continues to squander that.

When we look at the deficit alone, between now and 2021, the interest costs alone on the deficit will be $33 billion per year. Just think for a moment what we could be doing with the $33 billion that would actually make a positive difference in our country. However, the government continues to spend money it does not have on projects we do not need. I wonder if my colleague would comment a bit about the long-term effects of this growing deficit that adds to our national debt, which my children, grandchildren, and even great-grandchildren will need to be paying back.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Madam Speaker, that is a very good and relevant question. If they say that imitation is the sincerest form of flattery, the hon. member for Kitchener—Conestoga does not have to look too far to understand the impact that high debt has. In Ontario, we are the largest sub-sovereign nation debtor in the world. In fact, payments on the debt alone are one-third, next to health care and education. If paying for the debt was a department in Ontario, it would be the third biggest funded department in the Province of Ontario at $1 billion a month, just in debt payments. When we start compounding that, think of the impact that is going to have on our kids. Two things happen: taxes go up and services go down. We have seen that in Ontario, and it is predictable federally as well.

[Celina Caesar-Chavannes, Liberal, Parliamentary Secretary to the Minister of International Development]

Madam Speaker, one of the things I have noticed in Durham Region—and my riding of Whitby is a part of Durham Region—is that, right now, we have the lowest unemployment we have had in 15 years. It is at 5.3%.

I wonder what my hon. colleague would say to his constituents who have benefited from the work our government has put in place. We have the largest growth in the G7, a strong economy, 500,000 new jobs created, and low unemployment. What does he say to his constituents who have benefited from such a great economy currently in Canada?

[John Brassard, Conservative, Barrie—Innisfil, ON]

Madam Speaker, there have been reports recently about Canadians being the most indebted nation in the OECD. We have seen the government show no limit to the amount of debt and deficit spending it is willing to do.

Employment based on debt that is funded is not sustainable in the long term. We have seen that in Ontario. Ontario has become a have-not province. Again, if we want to predict the future, we need only look at what has happened in Ontario. Every person in Ontario, under a Liberal government, is suffering as a result of the debt and indebtedness. It is not sustainable in the long term. If the hon. member ran her house in the same manner they are running the government, she would not be able to afford it, because it is not sustainable.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, it is a strange moment where Liberals voted, essentially a non-confidence vote against their own finance minister, in a way. That happened yesterday afternoon. One might understand some of their concerns and reservations with the conduct of the finance minister because of the recent number—

[Some hon. members]

Oh, oh!

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

You adjourned debate.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Confidence? It was to adjourn the debate.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, the vote happened, I will remind my friend from Winnipeg. However, here is the concern. Right now, Canadians are experiencing the highest personal debt rate of anywhere in the developed world. I wonder if the bill we are debating today is going to help out any Canadian who is experiencing these record high personal debt rates, or is it just more noise coming from the government?

[John Brassard, Conservative, Barrie—Innisfil, ON]

Madam Speaker, it is more noise, simply put.

When we look at the investment of $500 million in the Asian Infrastructure Investment Bank, we have to ask questions. Why we are not investing that money back into seniors in this country? Why are we not investing that money back into veterans this country? Why are we sending that money overseas? How about prioritizing Canada? How about prioritizing the people who have contributed most to this country?

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

[Member spoke in Cree as follows:]

Niwakoma cuntik Tansai Nemeaytane Awapantitok.

[English]

Madam Speaker, it is a pleasure to be speaking today on Bill C-63 and truly speaking on the issues related to the Budget Implementation Act, 2017, No. 2. This is an interesting piece of legislation. Budgets are important because they impact people on the ground, average Canadians, average people. It is my belief that a budget is a real reflection of the will of a people.

I think of the people in my riding who came to me and talked to me about, for instance, subsidies to the fossil fuel industry. They came to me in May 2016. They spoke to me with great passion. They talked to me about their beliefs, and how they wanted to make the world a better place. They said they wanted to make sure we could make room in this world for other human beings and we could look after each and every one of us. They believe in ideals like simplicité volontaire or voluntary simplicity.

There are people in the areas of my riding, like Wolseley, and when these young people ask what we are going to do about the environment and if we are going to fulfill our promises made during the election, I say, “Of course, I am going to fight for you every day to fulfill those promises.”

As an indigenous person, I have heard from my elders. “Treaty” is a buzzword today that we often use. It was a buzzword a thousand years ago as well. Wahka say jach was the very first man. When the creator, the Great Spirit, created all beings, when he created the two-legged ones, the four-legged ones, those who could fly, when he created the rivers and streams and mountains and sky, he created man last of all, and that was Wahka say jach.

He gathered all the animals together and asked them, “Who will protect this man, because it is cold today and he is cold?” The buffalo said, “I will give him my fur so he can stay warm.” The birds said, “We will give him food and sustenance. We will provide him with something to feed himself and his families.” They had a treaty. They had a relationship with each other. It was not something to be taken lightly.

I said:

[Member spoke in Cree as follows:]

Niwakoma cuntik Tansai Nemeaytane Awapantitok.

[English]

That says I honour all my relations.

We have to honour all of our relations because we have treaty with everything that exists in this world. If we use something, we must honour it afterwards. If we use an animal or a being, we must honour it in a good way, to make sure we do not waste, we do not destroy, and we continue to cherish, love, care, and protect.

Those things, today, are sometimes very hard, but that is what I saw in the people who came to speak to me on May 27, 2016, in my riding.

The world's largest economies in 2009 agreed to phase out subsidies for oil and other carbon dioxide fossil fuels in the medium term as part of efforts to combat global warming. Some $300 billion a year is spent worldwide to subsidize fuel prices, boosting demand in many nations by keeping prices artificially low, and that is leading to more emissions.

This agreement in 2009 was backed by all G20 countries, including Russia, India, and China. It was a victory for the United States president, Barack Obama. He said this reform would increase our energy security and it would help us combat the threat posed by climate change. He also said, “All nations have a responsibility to meet this challenge, and together we have taken a substantial step forward in meeting that responsibility”.

It is my belief that eliminating such subsidies by 2020 will reduce greenhouse gas emissions blamed for global warming by 10% by 2050, and this was also highlighted by the International Energy Agency and the Organisation for Economic Co-operation and Development. In a statement from the G20, comprising the major rich and emerging economies, energy and finance ministers said they would develop timeframes and strategies for implementing the phase-out of the subsidies and report back at the next G20 summit.

It was our prime minister back then, the Right Hon. Stephen Harper, who was the one to act on behalf of Canada at this G20 summit. In 2015, he agreed to a final communiqué for the G7 which said, “we emphasize that deep cuts in global greenhouse-gas emissions are required with a decarbonisation of the global economy over the course of this century”.

Our Parliament also voted last June to accept that the Paris accord is a necessary step to fight climate change. These are all truths.

However, another truth is that the Liberal Party promised in our 2015 platform:

We will fulfill Canada’s G-20 commitment to phase out subsidies for the fossil fuel industry. The next step will be to allow for the use of the Canadian Exploration Expenses tax deduction only in cases of unsuccessful exploration. The savings will be redirected to investments in new and clean technologies.

That is our engagement on behalf of Canadians that we decided to fulfill in the budget implementation act no. 2.

I will now quote what we are actually going to be doing in the budget implementation act in relation to the fossil fuel subsidies:

The success rates for exploratory drilling have increased substantially since the 1990s and, in a majority of cases, discovery wells now lead to production, which makes the well an asset of enduring value.

This measure would modify the tax treatment of successful oil and gas exploratory drilling. Consistent with the usual treatment of enduring assets, expenses associated with oil and gas discovery wells will be treated as Canadian development expenses, unless and until they are deemed unsuccessful.

This measure supports Canada's international commitments to phase out inefficient fossil fuel subsidies.

I have had the opportunity of sitting on the finance committee for the past two years, almost. I remember asking the Canadian Taxpayers Federation representatives about fossil fuel subsidies, and I asked what they thought about them. They said they were against corporate welfare in any form. However, we on the finance committee also recognize that we need to take a balanced approach and that, yes, there were and there still are continuing issues in Alberta related to employment. However, I believe it is a balanced approach that we have tried to take, not simply coming in and applying what we believe right away but taking the time to listen and to consult. We have waited for Alberta to lift itself to ensure that we have other programs that can take the place to ensure that we have good economic development in Alberta.

In my belief, we are fulfilling a promise of treaty to all our relations. We are fulfilling a promise of the Right Hon. Stephen Harper, one that we are willing to keep because it is important. We are willing to fight for the environment, fight for the beliefs of Canadians, and fulfill our promises that were contained in our 2015 platform. I am proud that even a bit of work, asking some of those questions on the finance committee, allowed us to ensure that today we are fulfilling that 2015 promise, fulfilling what should have been done in 2009 to 2011.

Thank you very much. Tapwe akwa khitwam.

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

Mr. Speaker, I thank my colleague, the member for Winnipeg Centre, for his speech. His introduction was very interesting because he explained the relationship that indigenous peoples have with animals and the planet Earth, the history of humanity, namely that there is a sacred relationship between man and animals, a reciprocal relationship based on the ethics of living together.

In the 2015-16 budget and in this one, and following the COP21 negotiations in Paris, the Liberal government decided to send billions of dollars to poor countries in the developing world to help them with climate change. It is not a sure thing that they will use the money for that purpose.

I would like to ask my colleague a question. I know that he will understand because he is an anthropologist. From the perspective of intergenerational ethics, can we really ask a generation, or the generation of living Canadians, to pay for the mistakes of their ancestors who have supposedly polluted the planet? Is this legitimate in terms of intergenerational ethics? In terms of the ethics of international relations, is it okay to send billions of dollars overseas to compensate for the mistakes of our ancestors? Do we have to pay for these mistakes?

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

Mr. Speaker, I thank the member for Beauport—Limoilou. That is a very interesting question. As an anthropologist, I know that cultures change and evolve. They are dynamic and constantly changing. That is part of the indigenous philosophy.

However, we still have a responsibility, even if our ancestors are the ones who made the mistakes. My own parents made plenty of mistakes in their lives, which are evident in the way they raised me. I have to try to correct that for my own children.

We cannot abdicate our responsibilities. We need to try to strike a balance in our society between the environment and the economy. I think it is possible, even if we have to help subsidize the economies of third-world countries or poorer economies. It is important to try to help everyone in this world move forward. We are not an island unto ourselves, even if North America's original name is Turtle Island.