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

[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.

[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.

[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?

[Joël Lightbound, Liberal, Parliamentary 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.

[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.

[Mélanie Joly, Liberal, Ahuntsic-Cartierville, QC]

moved 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.

[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.

[Rachel Wernick, Senior Assistant Deputy Minister, Skills and Employment Branch, Department of Employment and Social Development]

Thank you.

My apologies for the slight delay. I went to Centre Block.

I'm glad I'm here, and I am really pleased to have this opportunity to speak to you about experiential learning and what we are currently doing.

We know that investing in work-integrated learning pays off huge dividends in the labour market success of youth. We know that 60% of youth say that on-the-job training and hands-on learning are the most effective instructional techniques, but fewer than half of those youth are actually enrolled in curricula that prioritize this approach.

Getting a foot in the door, or a chance to learn about the profession, is particularly crucial for vulnerable youth who many not have the networks to get that first chance.

Nearly four in 10 recent graduates in Canada take more than three months to land their first job, with one in 10 taking longer than a year. Moreover, perception from industry is that young people exiting post-secondary degrees are not job ready.

Graduates with relevant work experience are ahead of their peers. Data shows that bachelor's level graduates with co-op experience earn more than their peers, have higher employment and full-time employment rates, and are more likely to have paid off debt two years after graduation.

Overall, in Canada, labour market indicators for youth are very positive and compare very favourably internationally. Canadian youth ranked sixth among OECD countries, with an employment rate of 56%, compared to the OECD average of 41%. Canadian youth also ranked first in post-secondary education attainment among OECD countries.

You are looking at experiential learning, and evidence demonstrates that work experience is key to successful transitions for youth. Sixty per cent of post-secondary education, PSE, students say that on-the-job training is the most effective. In fact, enrolment in co-op programs at universities jumped by 25% in less than a decade. University students who graduate from these co-op programs earn $15,000 more than their peers. For college students, this is $8,000 more than their peers. We know that employers are more likely to hire students with work experience: 61% of employers selected graduates who had participated in some form of work-integrated learning in their programs.

Providing experiential learning opportunities is already a key element of our programming for youth.

Career Focus provides wage subsidies to employers and helps close to 7,000 youth obtain work placements.

Last year, Canada Summer Jobs nearly doubled the number of summer jobs for Canadian students, with a total investment of almost $200 million serving more than 65,000 students.

Apprenticeship is another proven model for transitioning into well-paid jobs in demand across the skilled trades: 89% of apprentices who completed apprenticeships held a job related to their trade, and 25,000 apprenticeship grants were issued to youth aged 15 to 24 in 2016-17, representing about $30 million in funding.

Most recently, the government launched a new partnership with industry and PSE institutions to offer work placements for students in STEM and business. This is an investment of $73 million over four years that will create 10,000 new work-integrated learning placements.

This is how it works.

Employers are provided with a maximum of $5,000 in wage subsidies for each new placement created. This amount goes up to a maximum of $7,000 for students in under-represented groups, including women in STEM programs, indigenous students, persons with disabilities, and recent immigrants. We have had overwhelming demand from industry and PSE in the first six months, and we are almost fully subscribed for our first year.

Internships can give young Canadians the hands-on work experience they need to make a successful transition into the workforce. However, some internships—in particular those that are unpaid—can be unfair and exploitative.

Bill C-63 includes amendments to the Canada Labour Code that would prohibit unpaid internships unless they are part of the requirements of an educational program. Unpaid internships that are part of an educational program are covered by labour standard protections.

We also know that not all young Canadians are positioned for success in the same way and that tailored support is needed for vulnerable youth. Indigenous youth are less likely to finish high school at a rate that is three times greater than non-indigenous youth. Also, 26% of youth with disabilities were unemployed, compared to 15% of youth without disabilities. Skills Link, a stream under the youth employment strategy, helps young Canadians with multiple barriers get ready for a job through skills development. Pathways to Education is a program whereby participants from the poorest urban communities across Canada are now having above-average high school graduation rates and entries into post-secondary education.

We also believe that good quality and timely information and advice play an important role to inform career aspirations and support successful transitions.

Job Bank has been enhanced and we will continue to modernize it with current technology platforms to be youth-centred and user-friendly.

The recently launched Labour Market Information Council will focus on timely, consistent, and local labour market information for all Canadians.

Financial assistance is essential to removing barriers to post-secondary education access, and here again we have made some important enhancements. Increased non-repayable Canada student grants are now available to more students in low- and middle-income families. We've introduced the fixed student contribution, allowing students who work to continue to do so without having to worry about a reduction in their levels of financial assistance, and now no student has to repay their Canada student loan until they are earning at least $25,000 per year. This amount is even higher for students with children.

Skills requirements continue to evolve, and credentials don't always represent the skills employers are seeking.

Despite significant investments and overall positive labour market indicators, when internationally compared, too many young Canadians are either not pursuing their education or not getting jobs aligned with their skills and training. Successful transitions from school to work will require more involvement of employers, and this is where increasing efforts on experiential learning and placements to meet the demand across all professions and sectors will be key. There is an opportunity to continue to enhance partnerships with educational institutions and employers. In this way, we get the win-win situation of students getting the experience they need and employers finding the talent they want.

We are exploring some promising practices for approaches that are most effective with particular groups, such as immigrant and refugee youth, indigenous youth, and gender specific youth.

We are in the very early stages of exploring our renewed youth employment strategy, and your study will inform our work. The key areas for action that we are considering include supporting smoother transitions from school to work, supported by quality learning and labour market information as well as work experience opportunities; ensuring that youth develop skills that keep pace with the changing nature of work; providing all youth a fair opportunity to enter the labour market and receive the support they need; and obtaining greater involvement of employers in youth employment.

Thank you for the opportunity to share this information on our work, and now we're happy to answer your questions.

Business of the House

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

Mr. Speaker, today we will continue the debate on Bill S-3, indigenous registration. Tomorrow, we will take up third reading debate on Bill C-63, the budget legislation.

On Monday, we will have the last opposition day in a supply cycle, meaning that we will also vote on supplementary estimates (B) and the respective appropriation bill at the end of the day.

Tuesday, we hope to complete third reading debate on Bill C-58, concerning access to information reforms.

Wednesday afternoon, we will call C-61, the first nations education legislation.

We will round off the week with Bill C-24, the Salaries Act, at report stage.

I would like to take a moment to sincerely thank all hon. members in this House for coming together on the apology of the LGBTQ2 Canadians this week.

Finally, discussions have taken place between the parties, and if you seek it, I think you will find unanimous consent for the following motion:

That, notwithstanding any Standing Order or usual practice of the House, when the House begins debate on the second reading motion of Bill C-61, An Act to give effect to the Anishinabek Nation Education Agreement and to make consequential amendments to other Acts, a Member of each recognized party, a Member of the Bloc Québécois and the Member for Saanich—Gulf Islands may speak to the said motion for not more than 10 minutes, followed by 5 minutes for questions and comments, after which the Bill shall be deemed to have been read a second time and referred to a Committee of the Whole, deemed reported without amendment, deemed concurred in at the report stage, and deemed read a third time and passed.

Budget Implementation Act, 2017, No. 2

[Bardish Chagger, Liberal, Waterloo, ON]

moved 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 concurred in at report stage.

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

I am sorry, Mr. Speaker, that was my mistake.

The Prime Minister of Canada was being given his report card by the Auditor General of Canada, Michael Ferguson. The context is as follows. The Auditor General shows him a note with the following written on it: incompetence, lies, and unaccountable spending. That is written in the cartoon. Our famous rock star, and I am referring to the Prime Minister of Canada, is standing beside his wax sculpture at the Musée Grévin. He looks at himself in the mirror and says, well, that wax figure is not that bad.

That says a lot about the attitude of the Prime Minister and the government. That is our Prime Minister's priority, and what he thinks of the impartial officers of our Parliament.

Total disregard. He could not care less about the Auditor General of Canada, who evaluates how well Government of Canada departments and programs are doing.

Incidentally, in his latest round of reports, the Auditor General looked at the Phoenix pay system. There is no comprehensive governance structure to develop a sustainable solution to pay problems. The Auditor General himself mentioned that in his report. The Liberals' only defence is to say that we, the previous government, are responsible, but it has been 16—no, 18—months since they gave it the green light, and they have still not found solutions to make sure our hard-working Canadian public servants get paid.

This is unacceptable. They are floundering. I do not know whether yesterday's vote on marijuana got them thinking, but they have not implemented anything and they still have no date. Public servants do not know it. Public servants have gifts to buy and mortgages to pay, but all they get from the government is radio silence. The Liberals have no solution.

That is serious. Their sole defence is to blame the former government for this fiasco. We were not the ones who gave it the green light. They were. They need to find solutions. Their job is to govern, although for the sake of all Canadians, I hope it is only for four years.

During yesterday's question period, and again today, the parliamentary secretary to finance answered opposition questions directed at the Minister of Finance. We are unable to get any answers to highly relevant questions about ethics and the appearance of conflicts of interest. We are asking questions and doing our job properly.

We are doing it so well that the commissioner recently fined the Minister of Finance $200 for certain violations. The Liberals cannot say that they are following the rules and are guided by the commissioner. The 335 or so other members, and I hope there are no others on that side of the House, because we on this side are all in compliance, followed the rules and respected the commissioner's ethics.

It is ironic that the Minister of Finance has a bill here today that we are debating. I do not trust this minister. He is not capable of giving an answer. We would gladly move on to something else. We would love to get the economy moving forward. We would love to see programs and departments get the resources they need. Why does the minister refuse to answer yes or no? Once he does, we can move on to something else. They are the ones who refuse to answer.

The government introduced a bill several months ago. Yesterday, at third reading, we voted on the legalization of marijuana. The Liberals are unable to manage the public service pay system, and now they would have us believe that they are legalizing marijuana to protect our children and eliminate organized crime. I do not buy it. They have not proved that they are competent.

The real reason the government is in such a hurry to legalize marijuana by July 1, 2018, is the economic impact this will have. The government is in a tight spot and has backed itself into a corner with the budget. It has been spending money hand over fist but not seeing any results.

In 2019, the government will have a record to defend. Legalizing marijuana will do two things. First, it will allow the Liberals to recover a little more money to pay down their infamous deficit, since they promised to balance the budget by 2019. However, they are now realizing that the way they have been managing the public purse will not allow them to do that.

I have given four speeches in the House on marijuana. I said that the physical development of young people aged 18, 20, 21, or 22 is not yet complete, and that statement is based on studies conducted by psychologists, psychiatrists, and scientists. I am not a doctor, but all of the studies show that brain development is not complete until age 25. Why play Russian roulette with marijuana? I find that unacceptable.

Do my colleagues know why the government has set the legal age for marijuana use at 18? It is because they hope that in 2019, the young people who will have had the privilege of using marijuana legally will vote for them. The government has a hidden agenda. The Liberals are in financial trouble, and they want more votes. It is always smoke and mirrors.

Today, we are debating a second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures.

My introduction has been long, but I must say that the government is patting itself on the back. It is telling us that the Canadian economy is going well and that the Liberals are the champions of the economy. The way they see it, the Canadian economy has never been stronger. They need to come down to reality. It is true that the economy is doing well or at least it is not in such a bad shape. Luckily we are not in an economic crisis. What would we do if we were? It would be tragic.

We Conservatives have weathered an economic crisis. Under the leadership of Stephen Harper, Canada was the first country to emerge from the economic crisis and get back on its feet. Among the G20 countries, Canada was the first country to do so.

We need to be aware that we are now spending hand over fist. Occasionally we invest in an economy, which is perfectly fine in a fragile or precarious situation or an economic crisis. However, since we are not currently in a crisis, it is irresponsible for the government to be spending so recklessly.

The government is congratulating itself by saying that it is investing in the economy through its infrastructure programs. I have the privilege of being the deputy critic for infrastructure. Quebec municipalities do not know what to do with the program. The Liberals said that they would pay up to March 31, 2018, but they also said that there could be an extension until March 31, 2019, but only 40%. What we do not know is whether the 40% pertains to project completion or submission. Can we help out our regions by giving them some breathing room?

Since everyone is in a hurry, costs are increasing. There is no vision, because we want to have the money available right now. It is irresponsible. Who is going to pay yet again? It is Canadian taxpayers, that is who. Being responsible means thinking about the taxpayers and not raising their taxes. That is what we did for 10 years on this side of the House. As for the members on the other side of the House, they are raising taxes. At some point, our taxpayers will not be able to function anymore.

I would have liked to talk about several other aspects, but time is running out. I will take the time when I answer questions.

In closing, I would like to say that I do not feel that I can trust this Minister of Finance. He does not have the decency to answer the questions that opposition MPs and Canadians have for him. From now on, any bills he introduces will fuel my skepticism about him. He reacts only when his back is against the wall. Personally, I do not want to give this Minister of Finance a blank cheque. I do not trust him.

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Madam Speaker, I am pleased to speak again to the economic update, a second act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures.

This will be an opportunity for me to address, in particular, the issue of accountability in government decisions. Governing is not just about pleasing people. It is also about making well-thought-out and sometimes difficult decisions by going beyond the objectives of the mandate itself. Our political actions have repercussion on many future generations, and that is even clearer for budget issues.

The Liberals had promised us balanced budgets by 2019. They also promised us a deficit of less than $10 billion only for the first two years. That is what they promised Canadians, and Canadians elected this government because they believed those commitments. The Liberals are therefore accountable to all Canadians who expect those promises to be kept, and also to all those who elected opposition members and who are concerned about the growing government spending.

The Liberal deficit is now twice as large as what was promised and, unfortunately, the government does not foresee a return to a balanced budget. The Liberal government is thus increasing the debt twice as fast as promised and expects that debt to increase every year from now on.

I will read a quote: “We were the only ones in the last election to not focus on a balanced budget at any price, regardless of the repercussions”. Who said that? It was our esteemed Prime Minister himself, no later than this summer, on June 27, during a press conference in Ottawa. That statement by our own Prime Minister is a bit over the top.

Meanwhile, interest on the debt is growing, totalling more than $15 billion in 2017. I take this opportunity to clear up the confusion that exists sometimes between deficit and debt. A budget deficit, or a negative balance on the government budget, is when budget revenues, what the government receives from taxpayers and businesses, are lower than that government's expenditures. It is therefore a negative balance. To fund its overspending, or its deficit, the government must borrow money, and all government loans, every year, when added together, constitute the government's debt. Accordingly, the more deficits the government accumulates, year after year, as the Liberal government is doing, the more the government’s debt grows.

The two figures are different, but they are closely related. Budget deficits contribute to the debt, which, in turn, has an impact on the level of the deficit due to the increase in interest being paid. While the deficit corresponds to the money that is not available today, the interest on the deficit is simply lost money. Let me explain.

The government will tell us that it created a deficit to invest in infrastructure, and we can understand that reasoning. However, the interest that is paid on the debt is money that is completely lost. It is $15 billion. The infamous interest that we pay, $15 billion just in 2017, is an expenditure. It is therefore money spent just to finance the debt, not programs, structuring projects, or aid that could be provided to Canadians, such as tax cuts.

Here are some comparisons to illustrate the magnitude of the money lost by paying interest on the debt just this year. With $25 billion, we could have funded a half million child care spaces. We could have built three Champlain bridges. We could have built four dams like La Romaine or 11,500 affordable housing units.

Unfortunately, a series of deficits, year after year, fosters the creation of new deficits. If we continually increase the debt, the interest that it produces leads to an increase in the deficit. In other words, the country is driven further and further into debt. There is therefore collectively more interest to pay, year after year. That is what is called a snowball effect.

That is why I wanted to talk about government accountability. The Liberal government is currently operating on a line of credit and therefore on the backs of our children and grandchildren. This government constantly tells us that the economy is going well and that all indicators confirm that we are in a good economic cycle. However, if we rack up the debts now, when the economy is doing well, what will happen when the economy is not doing well? What will happen when we have no choice but to borrow to be able to deliver our programs and our services and our line of credit is in the red? What will happen when we need to borrow to stimulate the economy by investing in infrastructure while already being in the red?

What are we leaving for future generations? If the tendency that the Liberal government has begun continues, my daughter, who recently turned 16, will be 45 when the budget is balanced. What are we leaving to our children?

I will give an example: according to data from Statistics Canada, if we divide this year's $20 billion deficit by the number of children in Canada, that represents exactly $2,005.75 for each child just this year. That is in addition to last year’s deficit and future deficits.

Does this government think beyond its four-year mandate or does it think more about its re-election in 2019?

I would also note that if the previous Conservative government had not been such a good steward of the economy for the past 10 years, and if that government had not been able to balance the budget after a terrible global economic crisis, the Liberal government would never have been able to act so irresponsibly.

If we oppose this budget update today, it is because the government is asking for a blank cheque, with no guarantee regarding a return to a balanced budget. However, Canadians have a right to know when the country’s finances will improve and when we will see an end to this endless cycle of deficits that fuel an ever-growing debt, like the snowball effect I explained earlier.

In the meantime, someone will have to pay the bill. Today, despite the deficits, 80% of middle-class Canadians are paying more taxes than under the previous Conservative government.

Make no mistake: the money we are spending today will have to be paid back one of these days, whether by us, by our children, or by our grandchildren. The more recklessly we spend, the bigger our debt will be and the more it will cost us to repay that debt.

The bigger the deficit grows year after year, with no plan to balance the budget, the more we will be saddling our children and grandchildren with that debt. That, to me, is completely and utterly irresponsible.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Madam Speaker, I thank the leader of the Green Party for her speech, and there are many parts I agree with, and also for her work at finance committee, of which I am a member.

My question is in regard to some of the tax treatment changes in Bill C-63. One of the elements the member mentioned was changes regarding geothermal energy and its tax treatment. I am wondering if I could give the hon. member the opportunity to talk more about the measures, some of the changes she wanted to bring, and how in future budgets she would look for changes in that regard.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, it is an honour to rise today to review Bill C-63 at report stage. I lament that we have time allocation in place, but I am grateful that I was able to grab the slot that occurs every 34 slots for someone in a position like mine: being in a party with fewer than 12 MPs. Time allocation tends to be a real detriment to the principle that all MPs in this place are equal. That is the principle of Westminster parliamentary democracy. Of course, the increased power of party whips and the increased partisanship within the House means that all MPs are equal in the way that George Orwell described all animals as being equal in Animal Farm. Some are more equal than others.

Regarding the rules on recognized parties, I only recently discovered that Canada is the only Westminster parliamentary democracy that has the notion that a party needs a certain number of MPs before they get the same rights as their colleagues. It is unique to Canada. It is replicated in our provinces and is something I would like to see removed someday.

In the meantime, the bill has already made history. It is the first time the new rules for parliamentary procedure on omnibus bills have been applied. I appreciate that the Speaker accepted to look at this and separate out the sections that did not appear to be within the same theme of action.

Omnibus budget bills became, I have to say, horrific in the Harper era. We had two omnibus budget bills in 2012, Bill C-38 and Bill C-45, that had nothing to do with budgets and were omnibus bills of the most egregious kind. The term “omnibus budget bill” became, in the public mind, something to be absolutely rejected and condemned. However, there is such a thing as a legitimate omnibus bill; there is such a thing as a legitimate omnibus budget bill. This one came close, but there were sections I appreciated the Speaker separating out.

For the most part, the debate in this place has been misplaced in tending to be, from the opposition benches, primarily about the Minister of Finance's personal finances. We need answers to those questions, but not in the context of a debate on Bill C-63. Bill C-63 has much in it that I would urge colleagues to read closely, because I have read the bill closely, and there is much in the bill I like.

Although it did not go far enough, I certainly want to support the steps toward something the government promised. The Stephen Harper government promised to remove fossil fuel subsidies at the 2009 G20 summit. The promise has been on the books for some time that Canada would eliminate fossil fuel subsidies. It is, in that sense, a government promise that is not strictly a Liberal promise, but it is also a Liberal promise, and it was made in the platform and in the Speech from the Throne. We have seen very little done at the federal level to eliminate subsidies to fossil fuels. The accelerated capital cost allowance for oil sands investments was tapering off under the previous Conservative government. It remains in place for existing projects that are grandfathered under this very advantageous tax regime. It continues to amount to about $1 billion a year for oil sands companies, but it was once closer to $3 billion a year. People debate what is a subsidy and what is not, but a capital cost allowance is seen as pretty advantageous tax treatment that amounts to a subsidy.

The other one that has not been touched at all by the Liberals was one Stephen Harper brought in after he pledged to get rid of fossil fuel subsidies. That is the subsidy for the production of natural gas, particularly to assist liquified natural gas companies. It is hard to beat the one the former premier of B.C., Christy Clark, left in place for the Woodfibre LNG plant, which will amount to about $4,000 in public subsidies for every job created. Therefore, we are still subsidizing fossil fuels provincially and federally.

However, I was pleased to see what the bill would do on oil and gas drilling, in part one, although it would not go far enough. If a company had an unsuccessful oil and gas drilling experience, it used to get a 100% writeoff. Under Bill C-63, that would now be reduced to a 30% writeoff. That tax treatment would be better. It is a step in the right direction, but it does not go far enough.

The other piece in that same section that certainly is encouraging is better tax treatment for a real winner in renewable energy, and that is geothermal energy. We have known for a long time that we can do a lot with geothermal. We have seen countries around the world benefit from geothermal. The bill includes very good new tax treatment to encourage geothermal electricity.

There are also improvements in the bill on the donation of ecologically sensitive land. I was part of the national round table on the environment and the economy back in the day when the member for Ottawa South was the CEO. We took a real fight on to try to convince then minister of finance Paul Martin not to treat the donation of ecologically sensitive land as something that penalized the donor. People used to get dinged with a deemed capital gain, when they did not actually get anything; they were making a donation.

Over time, our tax code has moved consistently in the direction of better treatment. Bill C-63 would expand the kinds of land that could be donated and would improve the tax treatment. The ecologically sensitive land donations are quite welcome.

I also want to support the improvements in the tax treatment of nurse practitioners so that they would have some of the same tax treatment as other health professionals, which would improve their day-to-day lives.

Similarly, in division 10 of part 5, there are improvements to how the Energy Efficiency Act would operate. We definitely want to see more energy efficiency programming. It has been a big disappointment to me, and the Minister of Finance knows this, as I mentioned it to him recently, that we are not using the tools in the federal tool kit to approach climate change as if we take it seriously.

If we could go back and look at the current Minister of Public Safety's budget when he was minister of finance, in 2005, and pull all those measures out and decide that they were a top priority for the government to put in the 2018 budget, I would be one happy camper. That would include ecoenergy retrofits, which we do not have. It would include support for electric and hybrid vehicles and improvement of the east-west electricity grid.

Those are the things we do not have in the budget, but at least in Bill C-63 we have amendments to facilitate a lot of energy products to include harmonization of regulations to enhance energy efficiency. Those are very welcome.

What I tried to change the most in committee, through amendments, was something that is generally positive or a step in the right direction, which is to give people the right to time off work if they or members of their family are victims of violence. It is obvious to anyone who thinks about it or has gone through it. If a person has been a victim of a violent assault, or if someone in the family, particularly a child, has been the victim of a violent assault, it takes time. That child will have to be taken to therapy appointments. People will have to go to therapy appointments.

If people are going to recover from the trauma, they need time off work. This legislation is very welcome. It would give employees, by right, time off work. However, the bill operates in such a way that employers would have the option to say that someone could not take less than a full day. Employees could not say that they just wanted a couple of hours off, because that was all they needed. Employees would have to take a full day, and this would be time off work without pay. I am very disappointed that my amendments did not get through, because in committee, we said that this should be time off with pay.

The evidence we heard in committee was overwhelming, certainly from Hassan Yussuff, president of the Canadian Labour Congress, who pointed out that 90% of domestic violence survivors experience financial control issues.

If a spouse has been violently assaulted by a spouse, and in most cases it is the male partner who violently assaults his wife, and the wife is, generally speaking, in a reduced financial situation of independence compared to her husband, how does she manage, if taking time off work means she might lose her right to raise her own children because of the financial duress? These are the parts of the bill I would have liked to see fixed.