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

Sponsor

Bill Morneau  Liberal

Status

This bill has received Royal Assent and is, or will soon become, law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

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.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Votes

Dec. 4, 2017 Passed 3rd reading and adoption of Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures
Dec. 4, 2017 Passed 3rd reading and adoption of Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures
Dec. 4, 2017 Passed 3rd reading and adoption of Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures
Dec. 4, 2017 Passed 3rd reading and adoption of Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures
Dec. 4, 2017 Passed 3rd reading and adoption of Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures
Nov. 28, 2017 Passed Concurrence at report stage of Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures
Nov. 28, 2017 Failed Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures (report stage amendment)
Nov. 28, 2017 Failed Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures (report stage amendment)
Nov. 28, 2017 Passed Tme allocation for Bill ,
Nov. 8, 2017 Passed 2nd reading of Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures
Nov. 8, 2017 Passed 2nd reading of Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures
Nov. 8, 2017 Passed 2nd reading of Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures
Nov. 8, 2017 Passed 2nd reading of Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures
Nov. 8, 2017 Passed 2nd reading of Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures

MarijuanaOral Questions

December 8th, 2017 / noon
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Bloc

Gabriel Ste-Marie Bloc Joliette, QC

Mr. Speaker, on Monday and Tuesday, finance ministers will be meeting to negotiate the sharing of the cannabis tax. As members know, Quebec and the municipalities will be responsible for 100% of the costs. They should therefore receive 100% of the tax.

However, out of the blue, in Bill C-63, the government, here in Ottawa, quietly decided to keep all of the tax and then transfer a portion of it as it sees fit.

Does the government agree that the tax sharing arrangement should reflect the cost sharing tax revenues should be shared in accordance with how costs are shared, meaning 100% to Quebec and 0% to Ottawa?

Budget Implementation Act, 2017, No. 2Government Orders

December 4th, 2017 / 8 p.m.
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Liberal

The Speaker Liberal Geoff Regan

I declare all the remaining elements of the bill carried.

The House having agreed to the entirety of the Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures at the third reading stage.

(Bill read the third time and passed)

The House resumed from December 1 consideration of the motion that Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures be read the third time and passed.

The House resumed consideration of the motion that Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures, be read the third time and passed.

Budget Implementation Act, 2017, No. 2Government Orders

December 1st, 2017 / 1:10 p.m.
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Bloc

Gabriel Ste-Marie Bloc Joliette, QC

Mr. Speaker, all federations use equalization programs to prevent certain regions from losing their populations to regions with more wealth. In the beginning, the program was developed to help a western province, Saskatchewan, I believe. The objective is to redistribute wealth.

We know the government makes choices based on economic development. These choices benefit the banking and automotive sectors in Toronto, for example. These choices also benefit fossil fuels in the west. In making these choices, the government neglected other segments of the economy, such as the Davie shipyard, which I mentioned earlier.

We are talking about several tens of billions of dollars in the coming decades. Half of this money should normally have returned to the Davie shipyard. If Quebec had received this money in return for the taxes it pays the federal government, we would not need equalization. Quebec could pay.

Equalization is the result of political choices made here and of choices made at the expense of Quebec and my people. That is why we are here to speak out against the situation.

This is about Bill C-63. With all due respect to my colleague from Beauce, he could have spoken about the situation we want to denounce. The government is resorting to predatory federalism and is appropriating another tax. This is what we are condemning. I would be very happy if my colleague supported us.

Budget Implementation Act, 2017, No. 2Government Orders

December 1st, 2017 / 1:10 p.m.
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Bloc

Gabriel Ste-Marie Bloc Joliette, QC

Mr. Speaker, equalization is a consolation prize. The government is allowing all the ships to be built in the Maritimes rather than in the Davie Shipyard, which has half of all of Canada's production capacity. It is a sorry consolation prize that we are paying for through our taxes, for the most part. It is time we busted that myth.

The government is imposing a new tax, but it is the provinces that will have to cover all the costs related to security, health, and prevention. All Ottawa has to do is sit back and collect money. Buried somewhere in the omnibus Bill C-63 is the fact that the government is going to collect the tax and blackmail the provinces by holding on to all the money if the provinces refuse to negotiate.

During the election campaign, the Liberals promised not to introduce omnibus bills. This bill has 318 pages, affects 19 departments, and hides a whole host of things. Frankly, this is disingenuous. I am quite disappointed to see that the Minister of Finance is putting his party above his people.

Budget Implementation Act, 2017, No. 2Government Orders

December 1st, 2017 / 1 p.m.
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Bloc

Gabriel Ste-Marie Bloc Joliette, QC

Mr. Speaker, there are many reasons to oppose Bill C-63.

Take, for example, last summer's botched tax reform and the supposed tax cuts for the middle class from which hardly anyone benefits fully because a person has to earn $110,000 a year to be entitled to the maximum amount. Then, there are tax havens. I would like to remind members that Canada signed the OECD's convention on tax evasion five months ago but still has not ratified it because the Income Tax Act is full of holes, and Bill C-63 does absolutely nothing to fix them.

I will talk about just one aspect of the bill, which is truly scandalous and has largely been overlooked so far.

I am talking about the cannabis taxation framework. Cannabis will be legal in eight months. At that time, the federal government will no longer really be involved. Quebec will be responsible for health and detox services. Quebec will be responsible for education and prevention. Quebec will be responsible for the administration of justice. Quebec and the municipalities will be responsible for public safety and security. In short, Quebec will be stuck with all of the responsibilities and the costs, and it will cost a lot. All that Ottawa is going to do is issue the production licences. That does not cost a penny. This is how the bill is drafted, and Ottawa will be issuing permits and raking in the tax money. The provinces will take on all of the costs and the federal government will not take on any.

Part 4 of Bill C-63 has to do with cannabis taxation. It states that cannabis will be taxed “under a single Act of Parliament”.

Yes, I said “a single Act of Parliament”. That is what it says in black and white in the new paragraph 8.8(1)(a), as set out in clause 170 of the bill. Ottawa wants to collect all of the tax. It wants to take up all of the available tax room. That is what Bill C-63 boils down to. It cannot be stressed enough that it is the provinces and cities that will be paying all of the costs. Once the federal government gets its hands on all the money, what will happen? If we want to know the answer, all we have to do is keep reading this nefarious bill, which makes it pretty clear.

The Minister of Finance will turn to the provinces and tell them he has gobbled up all the revenue and siphoned off all the money. He will tell them to come and see him so they can talk it over, and maybe he will be able to give them back a small amount. We heard the Minister of Finance say that he might go fifty-fifty. That means 50% for Ottawa, which will have paid for nothing, and 50% for the provinces, which will have paid for everything. Even then, the parliamentary secretary says this fifty-fifty arrangement is not set in stone and will have to be looked at. None of this is very reassuring.

We could end up with a ratio like 95% for Ottawa and peanuts for the provinces. We do not know. That is the problem with Bill C-63. It allows that kind of theft. The Minister of Finance will be free to do whatever he wants, because he will be the one setting the ratio. If this bill is passed in its current form, Quebec will just have to obey if it does not want to be hung out to dry and left with nothing, zip, zero, to pay for regulating cannabis consumption, educating and treating the public, and ensuring public safety.

A few years ago, former Quebec finance minister Nicolas Marceau coined the phrase “predatory federalism” to describe Ottawa's blackmailing behaviour over transfer payments. My good friend Nicolas Marceau, an excellent economist, was putting it mildly. We are seeing that predation happen in real time today, here in this House, in a debate being rammed through under a gag order. Under Bill C-63, Ottawa gets all the money. The Minister of Finance could decide to give some to the provinces, at his discretion and under his conditions.

Paragraph 8.8(1)(a) mentions those conditions. It says that the provinces must abide by the conditions if they want to get the transfer, but it does not say what the conditions are. That will be up to the federal government to decide later on, by itself, without having to come back to the House.

In Quebec, Minister Charlebois has started drafting a plan to regulate cannabis consumption. The Minister of Finance may decide that he does not like Quebec's plan. He might force Quebec to change its plan if it wants a share of the money the federal government gets its hands on thanks to Bill C-63. He might stop the payments if Quebec does something he does not like. This is serious.

Bill C-63 can say all it wants about coordinated cannabis taxation agreements, but the real story is something else altogether. Something agreed to at gunpoint is not an agreement; it is a shakedown. Bill C-63 is a weapon for extortion. Quebec has its hands full figuring out how to regulate this in terms of security, public service, and prevention, all of which Ottawa dumped on its plate, so the last thing Quebec needs is another pointless federal-provincial battle instigated entirely by a federal government that refuses to respect Quebec. The predatory federal government is taking all of the money and using it to make my people and their government do its bidding. I have had enough of the federal government shoving things like this down our throats with its mammoth bills.

A year ago, Bill C-29 tried to make Quebec consumers powerless against banks. The Bloc Québécois was unable to intervene until late in the process, but we moved heaven and earth. The National Assembly, consumer groups, the Government of Quebec, and everyone else protested loudly, and the government backed down.

There was another omnibus bill, another nasty surprise, six months ago. That time, the government was giving a gift to the private investors putting their money in the infrastructure bank. It gave them the right to ignore Quebec's laws, agricultural zoning, and municipal bylaws. Once again, no one said anything in committee, because the Bloc Québécois was not there to stand up for Quebec. Once again, the National Assembly protested, and so did the Union des producteurs agricoles. However, we lost the battle that time. It is frustrating that there are 40 MPs from Quebec who would rather clash with Quebec than defend it. We are facing the same situation today, another omnibus bill that is hiding a scam.

In the committee study, no one pointed out that Ottawa wanted to take all the money from cannabis and use that as blackmail to impose its conditions. No one raised any issues about that during the study of the bill, because the Bloc Québécois was not at committee.

Although it is late, it is not too late. We will very firmly oppose Bill C-63, and we will not be the only ones. As in the case of other omnibus bills, we will have Quebec behind us.

This time we will see whether the Liberal members from Quebec have found their backbones since last year. It remains to be seen. Time is running out.

Budget Implementation Act, 2017, No. 2Government Orders

December 1st, 2017 / 1 p.m.
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Liberal

John McKay Liberal Scarborough—Guildwood, ON

Mr. Speaker, I have two responses. First, Bill C-63, or the ancillary documents with the bill, move forward the benefit by two years. The anticipated benefit was going to start in 2019 or 2021, but it has been moved forward by two years.

As to child care spaces, the best way to have more of those is for the Canada child benefit to be real and meaningful, providing cash in the hands of parents. Also, the housing benefit that was announced in the last week or two is money that can be directed to all of the needs of parents, who are most able to decide what is of benefit to their family.

Budget Implementation Act, 2017, No. 2Government Orders

December 1st, 2017 / 1 p.m.
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NDP

Sheila Malcolmson NDP Nanaimo—Ladysmith, BC

Mr. Speaker, because my colleague has given some of us a bit of a challenge in terms of the relevance of his remarks, I would invite him to show us where in Bill C-63 it expands the Canada child benefit, because it is not in this legislation.

On the topic of other missing pieces, why does the budget not include any spending for new child care spaces, on which people could spend the Canada child benefit money? If we do not have new affordable child care spaces in last year's budget and this year's budget, there is nowhere for working women to spend that money.

The House resumed consideration of the motion that Bill C-63, A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures, be read the third time and passed.

Budget Implementation Act, 2017, No. 2Government Orders

December 1st, 2017 / 10:50 a.m.
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Green

Elizabeth May Green Saanich—Gulf Islands, BC

Mr. Speaker, I resisted the temptation, which came to me frequently throughout the speech by the member for Carleton, to ask about relevance to Bill C-63. He did occasionally, in fairness to the member, touch on things that are actually in Bill C-63, but I am going to ask a more partisan question.

This morning, going through The Daily Press, those media sources that are generally cheerleaders for his party, people like Terence Corcoran and the editorialists in The Globe and Mail, papers and columnists who uniformly endorsed the Conservatives in the last election, are wondering if the Conservatives have not gone out too far without evidence. In this constant attack, I am not going to defend the finance minister's decisions on many things, but if the member cannot get the cheerleading choir of the Conservative Party in The Globe and Mail and the Financial Post to agree that he is on to something, would he consider changing the channel and actually talking about the bill before us?

Budget Implementation Act, 2017, No. 2Government Orders

December 1st, 2017 / 10:05 a.m.
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Louis-Hébert Québec

Liberal

Joël Lightbound LiberalParliamentary Secretary to the Minister of Finance

Mr. Speaker, it is a great pleasure for me to participate in today's debate.

As hon. members know, our government came to office with a plan to grow the middle class and to grow the economy. Bill C-63 is the next step toward this goal.

The bill would help to make the tax system fairer and more efficient. This bill also includes measures to give federally regulated workers the right to request more flexible work arrangements from their employer, largely benefiting women, who continue to do the majority of unpaid work at home. Also proposed is the elimination of unpaid internships in federally regulated sectors that are not part of a formal educational program, and providing labour standard protections for unpaid interns who are part of an educational program.

Bill C-63 also provides yet another building block in our overall climate change strategy. Through the bill the government is taking action to ensure that Canadian exploration expense treatment for the oil and gas sector is effectively limited to unsuccessful exploration or early stage exploration where the linkage to success cannot reasonably be determined in the year the activity takes place. We believe these measures will be an important part of Canada's pursuit of a low-carbon economy.

If we look at the measures in Bill C-63, I think we can all agree that this legislation is an important step in our plan to build an economy that works for the middle class and those working hard to join it.

However, before I speak about the next steps in our plan, I would like to talk about how we got where we are today, and the signs that tell us our plan to build a stronger middle class and grow the Canadian economy is working.

First, let us look at what we inherited.

Just two years ago, the world economy was still in recovery. Canadians were feeling as though they were working harder than ever, but they just were not getting ahead. During the last election campaign we debated whether Canada was in or heading into a recession. There were grounds for that concern. The median real wage income of Canadians had barely risen over the previous 30 years.

The global economic environment was, and to a large extent still is, very uncertain. The fact is that when we talk to people across the country, there is a lot of anxiety that the next generation, our kids and grandkids, may not be as well off. Our government wants to ensure we create the conditions for all Canadians to succeed in a changing economy.

To get there, the government is committed to ensuring a healthy, thriving business environment and to protecting the ability of Canadian businesses to invest, grow and create jobs.

Let us look at where we are right now.

I would now like to focus on the state of our economy and the recent measures in the government's fall economic statement, which is a continuation of the government's plan put in place in 2015. Our past two budgets laid the foundation for this plan and we built on it in last month's fall statement.

The government's plan to invest in people and in our country's future is based on the belief that when we have an economy that works for the middle class, we have a country that works for everyone.

I think it is fair to say that there are many clear signs that the government's plan is working.

The Canadian economy is currently the fastest growing in the G7, with an average growth of 3.7% over the last four quarters.

This is due in large part to increased consumer confidence, a direct result of programs like the Canada child benefit, which puts more money in the pockets of moms and dads, so they can pay off debt, buy sports equipment for their children, or buy healthier food. Our government is providing a bit of breathing room for Canadian households that greatly need it.

Everywhere we look, there are signs of progress for the middle class.

Over 600,000 new jobs have been created since 2015, and the unemployment rate is nearly the lowest it has been in a decade. Canadian economic growth has accelerated sharply since the second half of 2016. Over the last four quarters, the Canadian economy has had its fastest rate of growth in more than a decade, and growth is forecast to be 3.1% in 2017, significantly above expectations at the beginning of the year.

These gains, coupled with a better than expected fiscal outcome in 2016-17, have resulted in a real positive improvement to our budget outlook.

In fact, Canada's fiscal outlook has improved by over $6.5 billion annually on average compared to what we expected back in March. The federal debt-to-GDP ratio has been firmly placed on a downward track, with Canada's net debt-to-GDP ratio projected to remain the lowest in the G7. Our government is committed to preserving Canada's low-debt advantage for current and future generations.

The actions the government has taken are having a real, positive impact on our economy and for all Canadians.

I would now like to expand on how our government's fall economic statement will keep us on this positive trajectory.

Canada's strong economy is giving our government the ability to reinvest the benefits of growth back into the people have who contributed most to that success. This is why we are strengthening the Canada child benefit, to ensure it continues to play a vital role in supporting families for years to come.

The Canada child benefit will be bolstered by annual cost of living increases starting in July 2018, which is two years ahead of schedule.

The government had previously committed to indexing the Canada child benefit to inflation as of July 2020. However, our economic growth and our improved fiscal record have allowed our government to achieve this commitment two years ahead of schedule, which is excellent news for Canadian families.

We are also putting money in the pockets of low-income Canadians by increasing the working income tax benefit by $500 million more per year as of 2019. This benefit will ultimately be 65% higher than it was when we came to power.

I remind members that the working income tax benefit is a refundable tax credit that supplements the earnings of low-income workers, the people who are working hard to get into the middle class, such as young, single workers who are struggling to carve out a place on the job market.

The working income tax benefit provides important income support and helps to ensure that work is rewarded. This $500 million enhancement announced in the fall economic statement is in addition to the increase of about $250 million annually that will come into effect in that year as part of the enhancement of the Canada pension plan. These two actions will boost the total amount the government spends on the working income tax benefit by about 65% in 2019, increasing benefits to current recipients and expanding the number of Canadians receiving that much-needed support.

This will give a needed boost to well over 1.5 million low-income workers as they work long hours, sometimes in more than one job, to advance their careers and support themselves and their families. Whether this extra money is used for things such as helping to cover the family grocery bill or helping to pay for work-related expenses, the improved benefit will help low-income working Canadians make ends meet.

We are also helping small businesses invest, grow, and create jobs by lowering the small business tax rate to 9% by 2019. We are making sure that Canada's low corporate tax rates serve to support businesses, not to provide unfair tax advantages to the wealthiest 1% of Canadians.

The investments we have made in our country's people, communities, and economy are producing results. They are putting more money in the pockets of those who need it the most, creating good, well-paying jobs, and giving Canadians more confidence in their future.

That is why we are doubling down on a plan that has been proven to work and reinvesting in the middle class, which, need I remind the House, was neglected by the previous government for a decade.

I would like to take a moment to discuss another measure in Bill C-63.

It is important for Canadians to have the confidence that our tax system is fair, simple, and efficient and that we have a growing and healthy economy. Initial action to implement changes from the comprehensive tax expenditure review conducted by the government were introduced in budget 2017. The review had a broad scope, which included corporate income tax expenditures, personal income tax expenditures, as well as goods and services tax expenditures. As part of the tax expenditure review, the government considered billed-basis accounting.

Billed-basis accounting is a method that allows certain designated professionals to declare expenses for tax purposes before the income related to those expenses is included in their revenue. It was eliminated in the 1980s for all professionals, except those in certain designated professions. Back then, those professionals could not access the small business deduction except under very limited circumstances, which put them at a disadvantage. That is no longer the case today.

With Bill C-63, the government is proposing to eliminate the option of using billed-basis accounting for income tax purposes for a limited group of professionals in order to avoid giving these professionals a tax benefit that other taxpayers do not have access to.

We intend to implement this measure in a fair and reasonable manner and give professionals the time they need to adjust and adapt. We are acting on the feedback we have received, and we are planning to extend the phase-in period to five years.

I would also like to reassure the House that this measure should not affect the legal services provided through legal aid or on a pro bono basis. It will not have any impact on the agreements regarding contingency fees, under which a lawyer is paid only if the client receives money. The Canada Revenue Agency has indicated that work in progress could be considered to have no value until a payment is made.

In summary, the government is committed to ensuring that the tax system puts everyone on an equal footing, and we are convinced that this measure will contribute to greater equity among professionals.

The government's plan will help strengthen the middle class and ensure Canadians have the support, resources, and confidence they need to succeed, create jobs, and grow our economy.

Economic growth is strong and because of that, we are in a position to do even more to help the middle class and those working hard to join it. We will ensure Canadians have the skills, training, and learning opportunities they need to compete and thrive in the rapidly changing global economy.

We are continuing to invest in public transit, our commercial networks, and cleaner water to keep our cities moving and to keep Canadians safe.

We will continue to build a better future for the middle class and all Canadians, no matter their circumstances. We want to ensure that they have a real chance to reach their full potential.

Budget Implementation Act, 2017, No. 2Government Orders

December 1st, 2017 / 10:05 a.m.
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Liberal

The Assistant Deputy Speaker Liberal Anthony Rota

I wish to remind hon. members of the Speaker's ruling of Wednesday, November 8, 2017, regarding Bill C-63, a second act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures.

At that time, the Chair indicated that pursuant to Standing 69.1 the question on the motion for second reading would be divided to provide for separate votes on measures that were not announced in the budget.

The Speaker also indicated that the vote at third reading will be conducted in a similar way if all of the identified elements are still part of the bill.

As that is the case, pursuant to Standing Order 69.1 the question will be divided at the third reading stage as follows: agriculture and fisheries co-operatives; GST/HST rebate for public service bodies; Excise Tax Act in relation to beer made from concentrate; Financial Administration Act in relation to the discharge of debt; all the remaining elements of the bill.

I would like to remind members that when putting the question on groups of clauses for Bill C-63, I intend to follow a procedure similar to that outlined in Standing Order 76.1(8) for the putting of the question on amendments at report stage.

Budget Implementation Act, 2017, No. 2Government Orders

December 1st, 2017 / 10:05 a.m.
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Liberal

November 30th, 2017 / 4:05 p.m.
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Senior Assistant Deputy Minister, Skills and Employment Branch, Department of Employment and Social Development

Rachel Wernick

I think I mentioned in my opening remarks Bill C-63, which amended the Canada Labour Code to prohibit unpaid internships unless they're part of an educational program. What we're doing with the educational program is making sure that, although unpaid, they're covered by standard protections, such as maximum hours of work, weekly days of rest, and general holidays. We believe in the importance, as we've said, of experiential learning, internships, co-op, but of course they need to be

given working conditions that are acceptable to all Canadians and that are in line with the Canada Labour Code.