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

[Pierre Breton, Liberal, Shefford, QC]

Mr. Speaker, I was just saying that the unemployment rate has dropped steadily and is now at 4.1%. That is a 40-year low.

Massive job creation and the Canada child benefit are boosting consumer confidence. This key measure, which is more focused and more generous than previous benefits, has channelled $115 million into my riding since July 2016. That tax-free money was distributed to 22,000 children in my riding. It has put more money in the pockets of 15,000 families so they can invest in their children, enabling them to participate in sports, arts, ballet, and more.

At the same time, the middle-class tax cut and major infrastructure investments have helped support and grow my riding's economy. Our government is funding a new aquatic centre in Shefford. This major infrastructure project will enrich the daily lives of people in my community while creating economic growth and well-paid middle-class jobs. Other parts of my riding are benefiting too. There is going to be a bike path in Waterloo, cultural events in Valcourt, a community centre in Rougemont, water and waste water infrastructure in Ange-Gardien, and so much more.

I also want to convey to everyone in my riding and indeed to all Canadians that the two budgets tabled by our government are working and producing meaningful results in creating jobs, strengthening the middle class, and helping others to join it. For two years now, our government has worked tirelessly to boost the economy and improve the financial situation of Canadians who could use some support.

One measure that I am particularly proud of is how we improved income security for low-income seniors. Canadian seniors who live alone and are the most vulnerable could receive up to $947 more annually in the guaranteed income supplement top-up benefit. Thus, our government is improving the financial security of 900,000 seniors across the country, including 3,000 in my riding.

Another key measure was the increase in the student grant program, which will allow students to focus on their studies and continue working hard to realize their dreams without having to worry about student debt. We have increased Canada student grant amounts by 50%, thereby helping over 350,000 students in Canada. On the heels of budget 2016, budget 2017 offers immediate help to those who need it most and helps guarantee everyone a real and fair chance of success.

More specifically, budget 2017 is part of the government's ambitious plan to make smart investments that will create jobs, grow our economy, and provide more opportunities for the middle class and those working hard to join it. It puts the skilled, talented, and creative people of Canada right at the heart of a more innovative economy of the future, an economy that will create jobs for the middle class of today and tomorrow.

I want to stress the fact that the investments that our government has made in people, our communities, and our economy are working. Among the G7 countries, Canada's economy is growing the fastest, and we are reinvesting the profits from that growth into the people who are contributing the most to this success. Thanks to this solid economic growth, the government has enjoyed better results and has been able to do more to help people in the middle class. For example, we kept our promise to lower the small business tax rate. The rate that was 11% in 2015 will drop to 9% in 2019.

Small businesses are key to growing our economy. We are committed to giving them full support to grow, invest, and create stable, well-paying jobs for the middle class. We also enhanced the Canada pension plan.

In that vein, I applaud the Quebec government's initiative, which adapts the Canadian formula to Quebec society. The Canada pension plan will get a boost from coast to coast to coast thanks to the Government of Canada's efforts.

This means young workers and young families can rest assured that they will have a better and more secure retirement. What they save now will be returned to them at the end of their working lives.

Of course, there is also the working income tax benefit. Just like everywhere else, some people have trouble getting off social assistance. They find it difficult to choose between getting back into the job market and continuing to receive social assistance. The measures we just announced will enhance this tax credit, which will make it easier for people to choose to go back to work, get back into the job market, and contribute more to society because they know they will get a tax credit, they know the federal government supports them, and they know that, financially, going back to work makes sense.

The budget implementation act we are debating today has the same objectives as previously stated, namely to grow our economy and to support the middle class and those working hard to join it. For example, more flexible work arrangements are being provided to federally regulated employees in order to help them balance their work and personal responsibilities. In practical terms, this measure will ensure they have more flexibility to take vacation and other annual leaves, such as up to 10 days of bereavement leave to deal with the loss of a loved one. There would also be more flexibility in granting unpaid leave for employees to manage various family responsibilities. Through those measures, the government is showing compassion and taking concrete steps to make life easier for hard-working people.

Students are not being forgotten. In my riding of Shefford, 160 organizations received $1.2 million over the last two years, to create 380 jobs. That is a major achievement.

Budget implementation act, 2017, No. 2 will also enable us to pursue our innovation and skills plan through an investment of $600 million in clean technologies and businesses.

It is an honour for me to be part of a government that works very hard to strengthen the middle class, grow the economy, and help families in tangible ways. I am convinced that our budget is excellent for my constituents. They give me confirmation of that every day. On their behalf, I congratulate the government and acknowledge the thousands of constituents in my riding who put their trust in me.

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

Mr. Speaker, we are now debating Bill C-63. The member for Shefford just used up two or three minutes of his time to thank the candidates in yesterday's elections. We could all do the same for the 78 ridings in Quebec and thank our colleagues who ran for office. He should move on to the heart of the matter, which is Bill C-63.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, it is my pleasure to rise to speak to Bill C-63. I intend to focus on commitments made by the government of the day, and the previous government, on the phasing out of inefficient or perverse subsidies for fossil fuels.

This commitment was made repeatedly since 2009 to the G20, including by the Liberal government in 2016. Canada, Mexico, and the United States committed to remove these perverse incentives by 2025. The government has voiced a commitment to phase them out in the medium term. The question then arises, as we move at a snail's pace, what exactly is the medium term?

The government also committed to take action to reduce greenhouse gases. They made that commitment in Paris, and we are now hearing from world leaders that this appears to be a sliding commitment on behalf of the Government of Canada, leading into the climate meeting in Bonn.

I would like to start off reminding those in this place of what the Prime Minister's mandate letter said about the phase-out of these perverse subsidies. The mandate letter for the finance minister is very clear.

First, his mandate was to work with the President of the Treasury Board and his colleagues in the cabinet to review tax expenditures and other spending to “reduce poorly targeted and inefficient measures, wasteful spending”, and ineffective initiatives.

Second, his mandate was to work with the Minister of Natural Resources to “enhance existing tax measures to generate more clean technology investments and work with the provinces and territories to make Canada’s tax system highly competitive for investments in the research, development, and manufacturing of clean technology.”

Third, the Minister of Finance was mandated to work with the Minister of Environment to fulfill the government's “G20 commitment and phase out subsidies for the fossil fuel industry over the medium-term.”

It does not end there. The mandate letter for the finance minister also says that if the government is to tackle climate change, the work must be “informed by performance measurement” and “evidence”. Then the mandate letter says that the government has committed to a “higher bar for openness and transparency”, and that the Prime Minister expects the minister to deliver on these commitments during this mandate in the first four years. However, two of those years are gone and we are now sliding into the third year.

What has a leading international entity said about Canada's sliding commitment to addressing greenhouse gases, including our commitment to remove the perverse incentives?

Jose Angel Gurría, the Secretary-General of the OECD, has expressed great pain at the sliding commitment. He says it is “a bit of a paradox” that Canada seems to be espousing the political will to reduce greenhouse gases, but does not seem to be going down that road. However, in the United States where the political will is gone, they have moved far ahead of Canada in taking action. He also stated that, “While at the same time, the local situation is showing that speed of reduction is not as fast as one would have wanted”, that emissions in Canada should have fallen 17% from 2005 levels, and instead the drop has been more like 2%. He also stated that Canada is “on a path where, by 2030, you may not be able to get to the target.”

It is very concerning. Therefore, it is not only Canadians expressing concern about the lack of commitment of the government to deliver on its commitments to reduce greenhouse gases. There will be growing concern about the failure to deliver the commitments to the G20 and their commitments in Paris.

This is reiterated by Canada's Auditor General in a letter sent by him on June 2 to the chair of the Standing Committee on Environment and Sustainable Development. It states:

This audit focused on whether the Department of Finance Canada and Environment and Climate Change Canada, in a manner consistent with their respective roles and responsibilities, supported Canada’s 2009 G20 commitment to phase out and rationalize inefficient fossil fuel subsidies while providing targeted support for the poorest.

It continues:

Overall, we found that [these departments] did not define what the 2009 G20 commitment to phase out and rationalize inefficient fossil fuel subsidies means in the context of Canada’s national circumstances.

The Auditor General then continues, and states:

We found that since 2009, six subsidies to the fossil fuel sector were reformed by legislation. Other tax measures for this sector were not reformed. We also found that the Department of Finance Canada did not consider all tax measures to determine whether they were inefficient fossil fuel subsidies under the commitment. The Department also did not develop an implementation plan with timelines to support the phase-out and rationalization by 2025 of remaining tax measures that are inefficient fossil fuel subsidies.

The Auditor General closes with this, which states:

...without a clear understanding of the fossil fuel subsidies covered by the G20 commitment and without an implementation plan with timelines, the departments cannot ensure that they are providing the support needed for Canada to meet the commitment by 2025.

Clearly serious concerns are being raised, in all quarters, about the failure of the current government to deliver on its commitments both to reduce greenhouse gases and to take more expedited action to remove the perverse subsidies. In this budget, the government appears to be partially addressing Canadian development and Canadian exploration expense deductions. With respect to the removal of these subsidies, it may be noted that the Canadian exploration expense deduction used to be 100%, but is now being slid into the Canadian development expense deduction, which is 30%. It is hard to tell from what is in the budget document how much further the government is going, but clearly it is not rapid enough to meet the demands of the Auditor General.

It is important to consider that these corporations can continue to defer the deductions. Therefore, while the budget document appears to suggest that by a certain date, which I think is 2021, they can no longer claim them, the corporations can hold those off and claim them at an end date. Therefore, we may have hundreds of millions of dollars being claimed in the near future, at a time when we need to be spending that money on supporting renewable energy.

Why is this of deep concern? I have gone through the reports where people have been adding up the subsidies and grants for the fossil fuel industry. It adds up to an astounding $5.8 billion a year, so the government has a long way to go, given the meagre measures it has in this budget document.

Therefore, the obvious question for the government is this. When will it step up to the plate, move this forward, and respond to the call by the Auditor General to provide a plan of action and a timeline? Further, is it going to begin to become transparent, instead of holding discussions on these perverse subsidies behind closed doors?

[Cheryl Hardcastle, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, my hon. colleague talked about the budget, how it created a distraction for Canadians, and how it was very confounding. In fact, it is not focused, as my colleague across the way mentioned. It is a distraction from very severe tax loopholes and evasions, and some judgment calls.

My hon. friend mentioned that this was a feminist budget. However, Canadian women today are still making 74¢ to the dollar compared to men. There has been inaction on pay equity. It has been very superficial.

Is my friend concerned at all with some of the issues around the Asian infrastructure bank? In budget 2017, it was to be $256 million over five years. Now, under Bill C-63, that amount would increase to $480 million. Is he concerned about that kind of distraction as well?

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I am happy to rise in the House to discuss Bill C-63, which arises from the budget, of course. On March 22 the Minister of Finance introduced his second budget, which basically seeks to create growth for the middle class and those who work hard to join it.

The idea is very simple: when we lend a helping hand to our fellow citizens in need, the whole society benefits. Lowering the income tax rate for the middle class was the first thing we did when we came to Ottawa. That was a tax cut for 9 million Canadians.

The official opposition party, who supposedly is the champion of taxpayers, voted against that initiative. Today we can perhaps see why: the Conservatives voted against that initiative possibly because we also raised the income tax rate on the wealthy.

The second measure we put in place to ensure more inclusive growth in Canada was the Canada child benefit. Again, the principle is very simple: those who need it more will get more help, and those who need it less will get less help. The previous approach from the Conservatives was to send cheques to millionaires. No matter one's revenue, everyone got the same cheque. To add insult to injury, they made it taxable. In Conservative la-la land, the principle of equity simply does not exist.

Under our plan, almost 18,000 children benefited from the Canada child benefit in Glengarry—Prescott—Russell, which is my riding. Families received an average payment of $510, which is non-taxable. The Canada child benefit directly impacts families and local businesses in Glengarry—Prescott—Russell.

The official opposition likes to talk the talk on defending the taxpayer, but when it comes to walking the walk, well, they voted against our plan and in favour of a plan that would tax families, which they still defend to this day. I would like to see them quote that particular impact in the Fraser report.

The question is on whether this plan is working. The answer is yes. The unemployment rate in eastern Ontario in September 2015 was 8.7%. Today, it is almost 2% lower, at 6.8%. The economy in Canada has added more than 500,000 jobs in less than two years. We have the lowest unemployment rate since 2008, and our economy is growing faster than any of the G7 countries.

This year, GDP growth will be 3.7%. This better-than-expected rate of growth means that the government will be able to index the Canada child benefit two years ahead of our original plan. That will mean an increase of $560 a year for a mother with two children who earns $35,000. We know that this will directly contribute to our country's economic growth. We are not the ones saying that. It is the Governor of the Bank of Canada.

What is more, we are enhancing the working income tax benefit by $500 million as of 2019. That is another measure that will have a significant impact on workers in my region. We are able to implement these measures because of our strong economic growth, and we are doing so while ensuring that the debt-to-GDP ratio continues to drop.

I would like to take a few moments to talk about the reason why we decided to carefully invest rather than make cuts. We cannot talk about deficits without mentioning the infrastructure deficit in Canada. None of the mayors in my riding are asking the government to cut infrastructure programs. This year, for the first time ever, the community of Maxville will finally have access to water thanks to a federal investment of $15 million. That is going to make a real difference in the lives of Maxville residents.

What is more, there has been talk about expanding Highway 17/174 for 40 years. With the announcement of light rail, $50 million will be allocated to build the interchange at the intersection of Highway 174 and Trim Road. This will have a direct impact on people who commute to Ottawa and on those who will be travelling to Trim station to take the train. More work remains to be done, but this is a step in the right direction.

I could name other infrastructure projects in Glengarry—Prescott—Russell, but the point is that there is tremendous need for our communities. As I have said before, not a single mayor is asking me to cut funding towards infrastructure.

What is the legacy we want to leave to our children and our children's children? We could balance the budget at all cost and kick the can down the road for major repairs to infrastructure, or we could own up to our responsibilities and reduce the infrastructure deficit so that our children and our children's children can benefit down the road. I choose the latter approach, because it is the responsible approach. If we have a leaky roof, we cannot simply balance the family budget in the hopes that the leaky roof will go away. We must take responsibility.

We are doing this because although the Conservatives supposedly balanced the budget during their 10 years in office, they did so by ducking their responsibilities towards our municipalities. “Too bad, so sad” was their refrain as they told our municipalities that their citizens would have to wait for clean drinking water and that fixed-income seniors, the most vulnerable members of our society, would have to wait for social housing. However, the fact that we have an aging population did not come out of nowhere. We need to make sure that the decisions we make today have an impact on tomorrow.

That is why I am proud that we are investing $11.9 billion in social housing. These investments will help seniors, single mothers, and women in domestic violence situations. We know that one of the barriers women face in trying to leave an abusive relationship is a lack of housing. Incidentally, I would like to thank the Centre Novas, which continues to advocate for the most vulnerable women in Glengarry—Prescott—Russell.

This goal is within reach, because we have chosen the path of investment and growth. Our track record on growth is good, the best in the G7, but we need to keep the momentum going.

The more our companies prosper, the better it is for our economy. In order to spur that growth, we are investing $400 million over three years in a venture capital catalyst initiative that will help young businesses scale up to the next level. With leveraged funds from the private sector, we could be looking at a $1.5 billion injection into our economy.

We will also honour our promise to our small businesses to lower taxes to 9%, down from 10.5%, by 2019. This will leave more money in the pockets of our entrepreneurs, so they can in turn invest it in their businesses.

In closing, Bill C-63 to implement certain provisions of the budget supports the growth of the middle class and helps those working hard to join it. The tax cut for the middle class, the Canada child benefit, the improvement of the Canada pension plan, the investments in our sewer systems and social housing, the tax cut for small and medium-sized businesses, the working income tax benefit, the improvement of the guaranteed income supplement—all of these measures help the middle class and those working hard to join it. Strengthening this class will benefit society as a whole, and I am proud to support this bill.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

I asked that particularly today because in Bill C-63, the budget implementation bill, there are some changes coming to the Business Development Bank of Canada Act. The changes are meant to give some new funds, a kick-start, to innovative companies, cleantech companies, companies that are going to be participating in the new economy, which would of course include e-commerce and international trade by definition. There's a great opportunity for the Canadian economy to grow through trade because of some new trade deals that are now online and the types of skills we can leverage.

I know there's the MOU, and I know you two work together. What client-facing dashboard or portal... How could someone who is trying to...They don't really care if it's BDC or EDC or if you're an SME. Is there a one-stop shop? Is that in place now, or is that getting any better?

[Marco Mendicino, Liberal, Parliamentary Secretary to the Minister of Justice and Attorney General of Canada]

Mr. Speaker, I am pleased to speak today about Bill C-63, the budget implementation act, No. 2.

This bill includes key measures of our government’s second budget, which will create jobs, grow our economy, and provide all Canadians with more opportunities for success.

Before I move into the details of Bill C-63, I would like to provide a brief update on the strength of the economy as we reach the midpoint of our mandate.

In 2015, we assumed office in the wake of 10 long years of a Conservative government that had run multiple deficits, despite promises to the contrary; that had cut essential services, despite the needs of hard-working Canadians; and that had led to the weakest economic performance since the Great Depression, despite claims of being a champion of growth.

Over the last two years we have turned it around, thanks to some smart investments, which have included lowering taxes for nine million Canadians; creating the Canada child benefit plan that is putting more money in the pockets of nine out of 10 families, an average of $2,300 per family, and lifting approximately 300,000 children out of poverty; making enhancements to CPP, OAS, and GIS, all of which is improving retirement security and the quality of life for seniors; adding scholarships, bursaries, debt relief, and training for students in adult learning; and creating a national strategy on innovation and climate change to foster a competitive and sustainable economy.

When we take the cumulative effect of these measures and add them to the $180 billion we have earmarked for infrastructure spending to build better transit, roads, bridges, and clean water initiatives, we see concrete evidence of an economy that is heating up. Specifically, unemployment has dropped from 7.1% to 6.2%, the lowest since 2008. The debt-to-GDP ratio is forecast to drop below 3.1% this year, the lowest in nearly 40 years, on the way to and over the next five years. Half a million jobs have been created since we were elected, the best record in over 14 years. Together these indicators demonstrate how, in just two years, we took a workforce that was sluggish and underperforming and transformed it into the fastest growing economy in the G7, with an average of 3.7% GDP growth over the last four quarters. These results are ones that every member in this House should celebrate.

To keep the momentum going with regard to our economic performance, we are proposing a number of additional measures in this bill, which represents the second phase of the budget implementation act for 2017. Let me highlight a number of those now.

I will start with the measures to support the middle class and those working hard to join it.

This budget implementation act protects the rights of federally regulated workers when they request flexible work arrangements from their employers. Flexible work arrangements include flexible start and finish times, the ability to work from home, and new unpaid leave to help employees manage their family responsibilities. These work arrangements benefit many women who continue to do the majority of unpaid work in the home.

Budget 2017 was the first budget in Canada's history to include a gender statement. It seeks to present a frank and honest analysis of the impact the budgetary measures will have on women. In addition, in its fall economic statement, the government announced that it would strengthen the Canada child benefit by indexing it to annual increases in the cost of living effective July 2018, which is two years earlier than planned.

What this means, in practical terms, is that for a single parent with two children and income of $35,000 the Canada child benefit will contribute an additional $560 in the 2019-20 benefit year towards the cost of raising his or her children.

Beyond strengthening the Canada child benefit, starting in 2019 we will also add $500 million to the working income tax benefit, sometimes referred to as the WITB. This will put more money in the pockets of low-income workers, including families without children and the growing number of single Canadians. These two actions alone will boost the total amount the government spends on the WITB by about 65% in 2019, increasing benefits to current recipients and expanding the number of Canadians receiving this support, which is essential for those who need it the most.

Finally, our government is going to help small and medium-sized businesses by lowering their tax from 10.5% to 9%, effective January 1, 2018, and then again January 1, 2019. This will provide a small business with up to $7,500 per year in corporate tax savings to reinvest in and grow its business. These kinds of savings are crucial for small business to grow, which is the engine of our economy.

The steps taken to date are having a positive impact on our economy and for all Canadians. Optimism is on the rise, and with good reason. Job creation is strong. As I said, there have been 500,000 new jobs created in the last two years, most of them full-time.

Growing the Canadian economy helps the government improve its record. Canada's financial situation remains solid, and the government will see to keeping the debt-to-GDP ratio on its downward trend.

Every Canadian deserves to benefit from this economic growth. The government has lowered taxes for middle-class Canadians and has committed to ensuring that the tax system does not offer unintended benefits to the wealthiest Canadians or those with high incomes.

For all these reasons, I urge all hon. members to vote for this bill that will benefit all Canadians.

[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.

[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.

[Gervais Coulombe]

The authority allowing the payments to be made will be defined in the agreements, which may or may not include such conditions. That's part of the regime. The payment specifics appear in proposed new section 8.81 of Bill C-63.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I am pleased to rise in the House today to speak to Bill C-63, a second act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures.

When it comes to budgets, it is extremely important that we do everything in our power to meet our fellow citizens' sustainability requirements. Sustainable development has three pillars. Yes, one is economic, but there are also the social and environmental pillars. It is through the lens of these three pillars that I will analyze the bill before me.

First, I must point out one troubling fact. Yesterday, we learned from the paradise papers that fundraisers who are very close to the Prime Minister were implicated in this tax haven scheme. However, Bill C-63 contains no concrete measures to fight tax evasion or tax avoidance. It leaves the CEO stock-option tax loopholes untouched and does not demand the co-operation of major corporations.

It is a little ironic considering that in question period today, we in the NDP asked dozens of questions, trying to find out what the Liberal government was going to do to stop billions of dollars from going to tax havens. We were told that the government is going to continue doing the same thing, so there is nothing new. The Liberals are not going to change any laws to stop this tax evasion and put an end to this scam, which is currently legal. Indeed, they are allowing many millionaires and billionaires to put money in tax havens and avoid paying their share of taxes. As a result, Canadians are seeing a reduction in services as well as an increasing fiscal burden, all because some people refuse to contribute what they should. If we had more money, we could do much more than we currently are to complete our shift towards green energy.

In addition, before the budget was presented, we wrote to the Minister of Finance and asked him to include certain provisions to make our society fairer and greener. Unfortunately, none of those provisions were included. I will come back to that in a moment.

Bill C-63 does contain some positive measures. For example, it would change the Canada Labour Code to allow federally regulated employees to request greater flexibility from their employers, and it would also expand the tax incentives for geothermal projects. However, these incentives pale in comparison to the changes that are needed.

COP23, the climate change conference, starts today in Bonn. In 2015, when the Canadian government went to Paris, the Prime Minister said, “Canada is back”, but unfortunately, Canada was back with Stephen Harper's old targets and almost the same measures. There was very little progress.

I want to quote an article from Le Devoir, published on October 31, entitled “UN on Climate: 'Catastrophic' gap between commitments and actions”.

On Tuesday, six days before COP23, the UN's environment chief warned that there is a 'catastrophic' gap between the national greenhouse gas reduction commitments and the reductions that would be needed to keep global warming below 2°C.

In short, there have been some lofty promises, but countries are not taking the necessary measures to follow through on them.

In an economic update, and with the climate change conference opening today, we would have expected a number of measures to support the shift to clean energy. Unfortunately, there is virtually nothing there. We made some recommendations, as I mentioned, in a letter to the Minister of Finance.

The Lancet Commission on pollution and health recently published a very important report. It is an extraordinarily well researched scientific report written by health experts.

I would like to read their conclusions, which are very important. Clearly, when it comes to sustainable development, issues related to society, the economy, and the environment all go hand in hand. We are zeroing in on a huge and serious problem. Indeed, dangerous climate change is having serious consequences on people's health. We are currently talking about pollution, but this is also about climate change. I would like to quote the summary of the report from the Lancet Commission on pollution and health:

Pollution is the largest environmental cause of disease and premature death in the world today. Diseases caused by pollution were responsible for an estimated 9 million premature deaths in 2015—16% of all deaths worldwide—three times more deaths than from AIDS, tuberculosis, and malaria combined and 15 times more than from all wars and other forms of violence. In the most severely affected countries, pollution-related disease is responsible for more than one death in four.

Why is fighting climate change and pollution in Canada so important?

Unfortunately, Canada's efforts have been quite weak. We sent a number of recommendations, including, for example, introducing a massive energy efficiency program. A group of people recently came to the Hill to talk to us about the importance of fighting climate change, and one way to do so is by investing in energy efficiency.

Energy efficiency creates jobs because people are needed to do the renovations or other related work. It also improves the living conditions of people living in poorly heated homes by reducing heating or air conditioning costs. Finally, the negative repercussions of pollution and climate change are also reduced. There would be benefits everywhere. The Liberal government has done nothing.

When discussing climate change and the environment, it is also very important to consider all of the recommendations by the Green Budget Coalition regarding the 2018 budget. All of those recommendations should have been adopted by the current government. One of them is very important: international climate change financing.

Clearly, we suffer, but let us think about the countries that suffer the most, the poorest countries. Those countries must be supported so they can adapt to climate change. We are the main emitters, but they are the main victims.

For example, the federal government could increase its financial participation through a tax on bunker fuels used in international aviation and maritime transportation. Aviation and maritime transportation do not currently contribute to the fight against climate change. Taxing the bunker fuels they use would be a way of redistributing money and assisting in international climate financing. There are a lot of other solutions, but my speaking time is ending. I would have liked to have the time to talk about the circular economy that could also be put forward. Those are examples of what is missing in Bill C-63, in this economic review.

[Gervais Coulombe, Chief, Sales Tax Division, Tax Policy Branch, Department of Finance]

Thank you, Mr. Chair.

I'm here to speak to two measures in Bill C-63, Budget Implementation Act, 2017, No. 2.

The first measure I'll be describing is in part 3 and has to do with the taxing of beer. The measure is dealt with in clauses 165 to 168, which amend the Excise Act so that beer made from beer concentrate for consumption on the premises is taxed in a manner that is consistent with other beer products.

The Government of Canada generally applies an excise duty on such alcohol products as beer, wine, and spirits that enter into the Canadian duty-paid market. The regular excise rate on beer is equivalent to $2.61 per 24 bottles of beer. It has been brought to the attention of the government that as a result of existing excise rules, new ways to sell draft beer may be taxed twice—first as spirits, given their high alcohol content, during the manufacturing process, and secondly as beer, once transformed into a form ready for consumption, at the point of sale.

This measure amends the Excise Act to ensure that beer concentrate is appropriately taxed according to the maximum quantity of beer that can be transformed at the point of sale in a manner approved by the Minister of National Revenue from that concentrate. Beer concentrate will not be taxed as spirits during the manufacturing process.

Public consultations on the measure were conducted in the past couple of months. The proposal appeared in the news release put out by the Minister of Finance on September 8.

I'd be glad to answer any questions you have on part 3 of the bill.

[The Chair, Liberal, Wayne Easter]

I call the meeting to order. Pursuant to Standing Order 108(2), this is a continuation of the subject matter of Bill C-63, a second act to implement certain provisions of the budget tabled in Parliament on March 22, 2017, and other measures.

We went through a couple of parts of Bill C-63. Today we'll start with part 3, the Excise Act.

From the Department of Finance we have Mr. Coulombe, chief of the sales tax division in the tax policy branch.

Welcome, Gervais. The floor is yours.

[Patty Hajdu, Liberal, Minister of Employment]

Mr. Speaker, it is a great pleasure to rise in this place and talk about the budget implementation act.

Before I talk about that bill, I would like to talk about the measures that the government has taken to date to give all Canadians, particularly the middle class and those working hard to join it, the opportunities they need to succeed.

To start, we raised taxes on the 1%, so that we could lower them for the middle class. We then brought in the new Canada child benefit, which has lifted hundreds of thousands of children out of poverty. As a result of our CCB, nine out of 10 Canadian families are getting more in benefits than they did under the previous system. Compared to the previous system of child benefits, the CCB is more generous, and it better reaches those who need it the most.

Recently, as announced in the fall economic statement, we are helping those who need it most by enhancing the Canada child benefit, indexing it to the rising cost of living. We are also strengthening the Canada pension plan, increasing the benefit for workers by as much as 50%. This will not only help those who are retired now have more money in their pockets, but it will also help future retirees save enough for a dignified retirement.

On top of that, our government is doing more to help those working hard to join the middle class, by enhancing the working income tax benefit by an additional $500 million per year starting in 2019. We know that many people work long hours, sometimes in more than one job, to advance their careers and to support themselves and their families. By letting low-income workers take home more money, the working income tax benefit offers real help to 1.5 million Canadians.

The steps we have taken to date are having a positive impact on our economy, and for Canadians. Optimism is on the rise, and for good reason. Job creation is strong, with over half a million new jobs created since we took office, and the unemployment rate is at its lowest level since 2008. Youth unemployment is at a historic low, and Canada is the fastest growing economy in the G7 by a wide margin, growing at an average rate of 3.7% over the last year, which is the fastest pace of growth since early 2006.

Growth is forecast to be 3.1% in 2017, significantly above expectations at the beginning of the year. The fiscal outlook has improved by more than $6.5 billion annually, on average, from what was projected in budget 2017 last March. That is why we are here today, to consider and discuss the important measures contained in Bill C-63.

I will briefly describe a few of the key elements.

This budget implementation act supports the middle class and those working hard to join it by protecting the rights of federally regulated workers when they request flexible work arrangements from their employers.

Canadians increasingly face pressure to balance work and family responsibilities. We all know a single parent struggling to find balance or someone taking care of an aging parent, or even someone who is supporting a spouse through chemotherapy. Our government was elected on a commitment to give workers and federally regulated workplaces the right to request flexible work arrangements, and we are delivering on that commitment. Things like flexible start and finish times or the ability to work from home will benefit both employers and employees, through increased productivity, lower absenteeism, and greater retention.

Budget 2017 also contained a gender-based analysis, ensuring that the implications of budgetary measures on men and women are considered thoroughly. Our government believes that having meaningful and transparent discussions around gender and other intersecting identities will help us better understand the challenges that Canadians face, and help us make informed decisions to advance the goals of gender equality, fairness, and stronger workforce participation. We know that our prosperity relies on the participation of all Canadians, so our efforts are focused on ensuring our growth as a country leaves no one behind.

Our government also recognizes that young Canadians today face challenges when it comes to finding and maintaining good, well-paying jobs. Many young Canadians tell us that not being able to get meaningful work experience is a significant barrier to getting a good job. While internships can give young Canadians the hands-on work experience they need to make that successful transition to the workplace, some internships, in particular those that are unpaid, can be unfair and exploitative.

The budget implementation act proposes to eliminate unpaid internships in federally regulated sectors where the internships are not part of a formal education program. These changes would also ensure that unpaid interns who are part of an educational program are entitled to labour standard protections, such as maximum hours of work, weekly days of rest, and general holidays. It is the right thing to do for our young people trying to gain the necessary work experience to enter the labour force.

Small businesses are a key driver of our economy and a cornerstone of communities across the country. As our plan works to grow the economy, small businesses see the benefits of that growth with lower taxes. Our government committed to reducing the small business tax rate to 9% from 11%, effective January 1, 2019, while ensuring that Canadian-controlled private corporation status is not used to reduce personal income tax obligations for high-income earners rather than supporting small businesses. This means up to $7,500 in federal corporate tax savings per year that will help entrepreneurs and innovators do what they do best.

Our government's plan to grow the economy is indeed working. Because of our strong economic growth, we continue to invest in the middle class and those working hard to join it. Whether it is ensuring that more families can pay for the high cost of raising a family, ensuring more low-income workers can make ends meet, or implementing flexible work arrangements, smart investments like these will ensure that more Canadians have a fair chance of success.

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 second time and referred to a committee.