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

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Mr. Speaker, I am pleased today to join this debate on the budget implementation bill. I have seen many of these go through and I can say that I am really pleased with what I have seen in it. It is going to make a significant difference in the lives of all Canadians. As always, it is an honour to rise in the House today to speak about the budget implement act, Bill C-63.

Our government is making intelligent investments that will have a direct impact on job creation and strengthening our economy while at the same time creating opportunities for success for all Canadians.

Our government is taking the right steps to give all Canadians, including the middle class especially, a brighter future. Allow me to take this opportunity to tell everyone about some of these investments and what I consider to be the right steps.

For example, the richest 1% of Canadians will be asked to pay a little more tax than others so that we will be better able to provide the middle class with some tax breaks they very much need. This tax cut has directly benefited nine million Canadians and is something that we Canadians will be proud of.

Second, let me talk about the Canada child benefit. The Canada child benefit has lifted hundreds of thousands of children out of poverty. I know this for a fact because many of these children are in my riding of Humber River—Black Creek, and I will mention some of their stories.

Two weeks ago, I had the pleasure of hosting the hon. Minister of Families, Children and Social Development in my riding of Humber River—Black Creek, and as we walked through Yorkgate Mall, we encountered a constituent who was expecting her first child. The hon. minister and I took this opportunity to explain the financial opportunities this new mother stood to gain from our government's new Canada child benefit. This constituent, about to be a new mother for the first time, was overjoyed with a sense of relief to know that there would be financial help from the government and she thanked us for making a difference in her life and the life of her baby.

It would be a good idea to dig even deeper into the numbers on how the Canada child benefit is helping ridings like mine and many others throughout Canada. As of July 2017, there were a total of 12,250 payments provided in the riding of Humber River—Black Creek, which directly impact more than 20,000 children, who are so much better off as a result of the Canada child benefit. Their moms have extra money to be able to invest in everything from winter clothes to assisting with dancing or piano lessons, things they certainly could not do before. With some families, that money is putting more food on the table.

The average payment to a family is $770, and families in my riding have already received a total of almost $10 million dollars. That is $10 million dollars more that has gone into the riding of Humber River—Black Creek to help the single moms, the families, the children to have a better quality of life. That is all part of the budget implementation act. It is making a difference in their lives in that one riding. Repeat that throughout our country and think how much better off so many families and children are. These numbers cannot be ignored and do make a significant difference.

It is stories like these that allow me to rise today and speak confidently that the bill would help make a positive difference for Canadian families. The investments our government has made in people, in our communities, and in our economy are working. Canada has the fastest growing economy in the G7 and we are reinvesting the benefits of that growth back to the people who contribute most to that success.

Because of Canada's strong economic growth, our government's bottom line is better and we can, as a result, do even more to help the middle class and those working hard to join it. With lower taxes on small business, more support through the Canada child benefit, and an enhanced working income tax benefit, it will be an enormous help.

One of the things I have often heard from some of the parents or families who come into my office is that if they go to work, they will be worse off because everything they make will get clawed back. The working income tax benefit will help those families so they can go out and get a second job and not be penalized for it.

When the Canada child benefit was first introduced in July 2016, the extra money in parents' pockets had an immediate effect on consumer confidence and economic growth. Canada, as I said, has the fastest growing economy in the G7, giving our government the flexibility to reinvest a lot of these benefits.

With the increased cost of living increases to the CCB starting in July 2018, two years ahead of schedule, for a single parent with two children making $35,000—and I have a lot of them in my riding of Humber River—Black Creek—the strengthened CCB will mean $560 more next year, tax free, for books, skating lessons, or warm clothes for winter. The added confidence these increases bring to families is proven to have an immediate impact on economic growth.

Because the economy is growing so well, we are allowing low-income workers, including families without children and a growing number of single Canadians, to keep more hard-earned money from every paycheque by further enhancing the working income tax benefit by an additional $500 million per year, starting in 2019. This enhancement is in addition to the $250-million annual increase that will come into effect as part of an enhancement to another program the Liberals are strengthening, the Canada pension plan, to help people have a more secure retirement. That is very much top of mind for a lot of people given what has happened recently with Sears. We saw what happened with Nortel previously. These events really shake the foundations of many people. Taken together, the two enhancements that we have made will boost the total amount our government spends on WITB by about 65% in 2019, increasing benefits and expanding the number of Canadians who qualify.

Let us talk a little more about cutting taxes on small businesses. Our government committed to reducing the small business tax rate to 9% from 11%, effective January 2019. That represents a considerable amount for many small businesses. We want them to flourish and grow, while ensuring that Canadian-controlled private corporation status is not used to reduce the personal income tax obligations of high-income earners rather than supporting small businesses. This is about reinvesting money back into businesses so they will grow, can hire additional people, and certainly do much better. This means up to $7,500 in federal corporate tax savings per year to help entrepreneurs and innovators do what they do best. 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.

As we continue to move forward, we want to ensure that the average Canadian has a good quality of life and can take the opportunities the government is trying to provide them by tax advantages that only the richest individuals, using high-priced accountants, were able to take advantage of in the past. Instead, the government has listened to small business owners, professionals, farmers, and fishers and will move forward in a way that protects all of them, innovators and entrepreneurs as well. As we lower taxes on small business, we are committed to ensuring that they support business growth and investment and not give personal tax advantages to the wealthy over the middle class.

We are doing very well. As I said earlier, we are the fastest growing economy in the G7; we have the lowest debt to GDP ratio and have created over 500,000 more jobs, many of them full-time, good jobs, in the last two years; the economy is great, and our country is doing very well. I am very happy to support Bill C-63 and hope that everyone in the House realizes the benefits to all Canadians of supporting it.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

Minister and Mr. Rochon, thank you for being here.

Since we are talking about the budget today, we also have to talk about income. I am referring to the Income Tax Act, which falls under your authority. Bill C-63 includes dozens of pages of amendments to the act.

I'd like to ask you about Canadian direct investment abroad. Among the top 10 countries where Canadians invest the most, Barbados ranks third, Luxembourg ranks fourth, the Cayman Islands ranks fifth, Bermuda comes in six, the Netherlands is seventh, and, the Bahamas is in ninth place.

I am especially interested in the third country on the list, Barbados, where Canadians invested $68.3 billion in 2016.

Can you, as finance minister, give us an idea of the type of investments that $68.3 billion represents?

[Julie Dzerowicz, Liberal, Davenport, ON]

Mr. Speaker, it is a pleasure for me to rise in this House to speak to Bill C-63, the budget implementation bill, a second act to implement certain provisions of the budget, that was tabled earlier this year, in March.

As always, my comments are made on behalf of the residents of Davenport, who I am blessed to serve and who always inspire me with their passion for life, their love for their families, their love of community, and their desire to do their part to make our community, our country, and our world a better place.

In talking about the budget implementation bill, I would like to focus on what our budget this year does for women, for seniors, and, if I have time, for workers.

On women, our budget this year produced the first-ever budget gender statement, an assessment of how gender was considered in budget 2017 measures. For me this is vital to do, because I believe it is important to be transparent on how budgetary measures and spending are impacting women. This budget gender statement will not be a panacea for gender equity, but it will help the Canadian government assess and target how we can best allocate our resources so that both our men and women are supported equally. It is a long time coming, as there are many other countries that have already done this, but I am so glad we are doing it now and that we have committed to doing this on an ongoing basis.

One of the biggest stresses for Davenport parents continues to be the high cost of day care. Therefore, I was pleased to see that over $7 billion over a 10-year period was committed in budget 2017 to support and create more high-quality, affordable child care spaces across Canada. I know that our Minister of Families, Children and Social Development has worked hard with all the provinces to create a framework to foster fully inclusive early education and child care services across the country while respecting the needs and circumstances of each jurisdiction. Under the agreement, the federal government will send billions of dollars to the provinces and territories to focus on creating new child care spaces for families. Our plan is anticipated to create up to 40,000 new, affordable, accessible spaces across Canada over the next few years.

This is a good beginning. Indeed, this is a great beginning, and I think we need to go further and do more. Until we close the gap in women's participation in the workforce, until we ensure that every single family in Canada has access to affordable child care in this country, we have not finished our job.

There is currently a 10 percentage point gap between the labour force participation rates of men and women in Canada. According to the International Monetary Fund and a large body of research from a number of places around the world, the more women who enter the workforce, the more productive its economy will be. The best way to boost women's participation rates is to ensure not only affordable day care but also maximum flexibility for women in the workforce.

At this point, too many families in my riding still have to make a choice between either having one spouse at home to take care of the kids or having both parents work to earn enough to cover the high cost of day care in downtown Toronto, where the monthly costs are around $1,200 per month. Therefore, while we have made enormous, laudable progress, our work is not yet done.

One of the key areas I am very proud of that does support families and is helping with some of the costs of day care is our Canada child benefit. This is a huge benefit for working middle-class families in Davenport. I asked for the numbers to date with respect to the amount of money going to Davenport families, and what I received was this: from July 2016 to June 2017, there were a total of 9,210 payments, with an average payment of $5,880 for the year. The total amount that went to Davenport families over that one-year period was $54,164,000. That is an enormous amount. I know that Davenport families are very happy to have received this. I know that it goes a long way to support them, to support their lives, and to support their families.

I also should note that in the recent fall economic statement, which was released on October 24, the government announced that it would strengthen the Canada child benefit by indexing it to an annual increase in the cost of living, effective July 2018, which is two years earlier than planned. This will put more money in the pockets of Canadians immediately to help with the ever-increasing cost of living.

There is great progress and support for both women and families in our budget this year.

Now I want to move on to seniors. In the cold air of November that is a harbinger of the winter to come, the past summer now seems so long ago, but I did a lot of canvassing during the summer, and I had an interaction with a Davenport senior that is seared in my mind. The woman saw me canvassing, and she came up to me to tell me to make sure to tell the Prime Minister not to forget seniors. I relayed to her all the things we had done to support seniors. I told her we were going to continue to work hard to make sure that seniors continue to feel supported.

According to Statistics Canada, Canada's elderly poverty rate has fallen by a remarkable 25%, from 37% in 1976 to 12% in 2010. However, since the mid- to late 1990s, poverty rates have actually been growing among seniors, and 60% of low-income seniors are women. Therefore, I was very proud that as of July 2016, our government increased the guaranteed income supplement to $947 a month for the most vulnerable single seniors. We also restored the age of eligibility for OAS and GIS to 65 from 67. That will also go a long way to support our seniors, sooner rather than later, and make sure that they do not fall anywhere near the poverty level. I am pleased to say that this year's budget would take even more steps to support our seniors.

We have invested $6 billion over 10 years for home care. That will go a long way for those who want to be taken care of at home and not in hospitals. We have committed $2.3 billion over two years to expand affordable housing, which is expected to improve the housing conditions for all seniors, especially senior women. We provided an additional $4 million over two years to the enabling accessibility fund to improve the accessibility of public spaces. I know that is something that was very important for my mum, so I am glad that is something we have introduced right across the country. I am very proud of our Minister of Finance, who reached a historic agreement to enhance the Canada pension plan to ensure that there will be more money for Canadians when they retire.

A lot of work has been done to support our seniors. I want to give a shout-out to a couple of my colleagues who are doing such a tremendous job in terms of trying to make sure we create a national seniors strategy. They are my colleague from King—Vaughan and my colleague from Nickel Belt.

Finally are workers. The world of work is rapidly changing. What I hear are a lot of concerns about more contract work. We hear that there is more precarious work. There is more artificial intelligence and a continued loss of manufacturing jobs. In general, with the advances in communications technology, there is an anticipated way of working in the future that is causing quite a bit of consternation among many Davenport residents and among Canadians in general. Therefore, I am proud that our government has taken action to support workers who are looking to train in different jobs. There is also support for workers who are trying to improve or upgrade their skills, and there is more support in general for workers in an ever-changing workforce. Some of those changes include $2.7 billion over six years to boost skills training and employment supports for unemployed and underemployed Canadians. Under the labour market transfer agreements, we have put in $132 million over four years to expand flexibility within the employment insurance program to enable more unemployed workers to pursue self-funded training while remaining eligible for EI benefits.

I do not have time to go through the rest of the amazing things we are doing to support workers. There is more that needs to be done. One of the key areas I am hoping our government will start looking at is a basic income as a way to support workers in the future.

I will end on a wonderful note. Our economy is doing well. Over the last two years, we have created over 450,000 new full-time jobs. We have a historic low unemployment rate of 6.2%, the lowest since 2008. We have a youth unemployment rate at a historic low of 10.3%. Canada is the fastest growing economy in the G7, with an average rate of 3.7% over the last year. I know that more good news is to come.

I appreciate the wonderful opportunity to present on behalf of the residents of Davenport today, and I urge all my colleagues to support Bill C-63.

The House resumed from November 7 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.

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

Thank you. I have two more questions for you. I hope I have enough time.

The first has to do with division 1 of part 5 of Bill C-63, which deals with the Bretton Woods and Related Agreements Act. These provisions give you the authority to do certain things. Can you explain to Canadians why the Bretton Woods and Related Agreements Act is being amended to give you that authority?

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

Thank you, Mr. Chair.

Minister and Deputy Minister, thank you very much for your presentation on Budget Implementation Act, 2017, No. 2.

Further to the information sessions we held, the remarks heard by the committees, and the stories my constituents have told me, one thing is clear when it comes to this bill: we now have an excise tax collection system and GST and HST measures that are much more efficient than they were in the past.

Would you describe the measures that improved the efficiency of our goods and services and harmonized sales tax system?

[Bill Morneau, Liberal, Minister of Finance]

Thank you, Mr. Chair, vice-chairs, and honourable committee members, for the opportunity to be here with you today.

I'd also like to thank all of you for your work on budget implementation act no. 2 and for all the work that I know you've been doing on the pre-budget consultations.

As you know, our government came to office with a plan to grow the middle class and to grow the economy, and budget implementation act no. 2 is an important next step towards that goal. The bill will help to make the tax system simpler, fairer, more flexible, and efficient.

A second Act to implement certain provisions of the budget 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 domestic work in our society.

Also proposed is the elimination of unpaid internships in federally regulated sectors that aren't part of a formal educational program and providing labour standard protections for unpaid interns who are part of an educational program.

Mr. Chair, if you look at the measures in BIA 2, 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 for those who are working hard to join it.

Before I speak about the next steps in our plan, I'd like to tell you about how we got to where we are today and the signs that tell us our plans to build a stronger middle class and to grow the economy are working.

Just two years ago, the world economy was still in recovery. Canadians were feeling like they were working harder than ever but just weren't getting ahead, and there were grounds for their concerns. The median real wage income of Canadians had barely risen over the previous 30 years.

Middle-class Canadians were worried. They were looking for real change and elected a government with a plan to ensure that their hard work would not go unrewarded, a plan that would enable all Canadians to enjoy the benefits of a growing economy.

Today, as I mentioned, there are clear signs that this plan is working.

In just two years, we've lifted 26 long-term boil water advisories on reserve. Over 350,000 more students get help each year to afford books and tuition and earn their degrees. We've effectively doubled the Canada summer jobs program, helping almost 65,000 students find work in the summer months.

With the Canada child benefit, we've helped about 300,000 children to be lifted—

[The Chair, Liberal, Wayne Easter]

We'll call the meeting to order. Pursuant to Standing Order 108(2), we're studying 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.

In this first hour, we have with us the Honourable Bill Morneau, Minister of Finance, and the deputy minister, Mr. Rochon.

Welcome.

To start, the floor is yours, Minister, and then we'll go to questions.

Omnibus Bills—Speaker's Ruling

[The Speaker, Liberal, Geoff Regan]

I am now prepared to rule on the point of order raised on November 3, by the hon. member for Carleton concerning the applicability of Standing Order 69.1 to Bill C-63, a second act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures.

I would like to thank the hon. member for Carleton for raising this matter, as well as the hon. member for New Westminster—Burnaby, the hon. member for Calgary Shepard, and the hon. Parliamentary Secretary to the Government House Leader for their comments.

The hon. member for Carleton asked that the Chair use the authority granted under Standing Order 69.1 to divide the question on the motions for second and, if necessary, third reading of Bill C-63, as he argued the bill contained measures not announced in the budget of March 22, 2017.

He noted, for example, that the summary indicated that a measure in part 2 of the bill was implementing a change to the GST/HST rebate for public service bodies announced on September 8, 2017. He also argued that the measures concerning the taxation of agricultural and fisheries co-operatives in part 1, and those concerning beer made from concentrate in part 3, were not in the budget, nor were three measures from part 5, namely division 5 regarding the Bank of Canada, division 11 concerning judges, and division 13 regarding payments to discharge debt.

The hon. member also argued that the monies authorized in part 5, division 2, regarding the Asian Infrastructure Investment Bank, AllB, far exceeded what was announced in the budget.

In his budget speech, the Minister of Finance indicated that the government would be investing $256 million in the AllB over five years, while clause 176 of the bill authorizes the minister to spend $375 million U.S., or roughly $480 million Canadian.

While he indicated that he did not feel strongly about having a separate vote on each of the other measures, the hon. member for Carleton was particularly keen on having a separate vote on this measure. He thought the Standing Order provided the Speaker with such authority, given that the bill authorized quite a bit more spending than what was announced in the budget.

The hon. member for New Westminster—Burnaby argued that the bill was in fact an omnibus bill, insofar as it contained measures not announced in the budget. He also noted that this was specifically the case in relation to the measures concerning agricultural and fisheries cooperatives and those concerning beer from concentrate. Furthermore, he argued that the inclusion of such measures meant that Bill C-63 could not qualify for the exemption provided in the Standing Orders for budget implementation bills and that therefore the entire bill should be treated as an omnibus bill.

The hon. Parliamentary Secretary to the Government House Leader, in his intervention, sought to reassure the House that certain measures were indeed arising out of the budget. He pointed out that the plan for Canada to become a member of the Asian Infrastructure Investment Bank was indeed announced in the budget, and that the bill operationalizes that plan. He also argued that the amendments to the Judges Act in division 11 give effect to the intention announced in the budget to implement the recommendations of the 2015 Judicial Compensation and Benefits Commission. The changes relating to the Bank of Canada in division 5, he contended, are part of the government's plan to bolster the tool kit for managing the resolution of Canada's largest banks, as announced in the budget.

Finally, he insisted that the Standing Order does not foresee the division of a bill for the purposes of debate or committee referral, but only for the purpose of voting at second and third reading.

The hon. member for Calgary Shepard argued that in coming to a decision, the Speaker should be inspired by the procedure in the Quebec National Assembly in relation to motions to divide bills. He argued that the Chair should not confuse the principles contained in a bill with the field of legislative action it addresses. While the measures in the bill all deal with economic policy, he did not think that the Speaker should conclude that they are all interrelated. He also raised a number of points that were less specifically about Bill C-63, but concerned the mechanics of implementing a decision to divide a question, which he argued are unaddressed by the Standing Orders. In particular, he raised issues relating to amendments to the second and third reading motions, referral to committee, report stage and consideration of Senate amendments.

Yesterday, in response to a point of order from the hon. opposition House leader, I delivered a first ruling concerning the new Standing Order 69.1 on omnibus bills. This Standing Order empowers the Speaker to divide the question on the motion for second and third reading of a bill in circumstances where the bill contains a number of unrelated provisions.

The matter before us today concerns paragraph (2) of that Standing Order, which makes an exception for budget implementation bills. That paragraph reads as follows:

69.1(2) The present Standing Order shall not apply if the bill has as its main purpose the implementation of a budget and contains only provisions that were announced in the budget presentation or in the documents tabled during the budget presentation.

The question for the Speaker, then, is whether or not the measures identified by the hon. member for Carleton and the hon. member for New Westminster—Burnaby correspond to provisions announced in the budget.

Let me first say that establishing such a link is not always obvious. The budget document itself is almost 300 pages, while the supplementary tax information represents another 100 pages. The Chair has done its best to review the material in arriving at this decision.

Let me first deal with the measures in the bill relating to the Asian Infrastructure Investment Bank. The hon. member for Carleton acknowledged that these measures were indeed announced in the budget. The only issue is whether or not the variance in the amount invested is sufficient to sever this relationship.

In my view, the spirit of the Standing Order was to provide for a separate vote when new or unrelated matters were introduced in the budget implementation bill. The fact that the amounts are higher, though I admit the variance is considerable, does not, in my opinion, make the matter of the AllB markedly different from what was announced in the budget.

I believe it is understandable that, in between the time the budget is presented and the time the budget implementation bill is introduced, a change in circumstances could produce such a variation. I do not believe it is necessary to insist on an identical amount when the overall policy initiative is substantially the same. Therefore, I do not believe it would be appropriate to have a separate vote on this matter.

Let me turn now to the other issues raised by hon. members. I am willing to accept the arguments from the hon. parliamentary secretary that division 5 of part 5 regarding the Bank of Canada and division 11 of part 5 regarding judges’ compensation flow out of measures announced in the budget. Therefore, I believe it is appropriate that those measures be included in the general vote at second reading and, if necessary, at third reading.

However, in relation to the other matters raised by the hon. members for Carleton and New Westminster—Burnaby, I have been unable to find a link between them, and what is contained in the budget documents. The parliamentary secretary did not refute the contention that these matters were indeed new and unrelated to the budget.

Accordingly, I believe that I can and should exercise the powers granted to me in the Standing Order to divide the question at second reading and, if necessary, at third reading.

Having come to this conclusion, the question is, how to effect such a division? The hon. member for New Westminster—Burnaby argues that the entire bill should be subject to division. Since it does not solely implement measures announced in the budget, he believes the exemption in Standing Order 69.1(2) no longer applies.

As I stated earlier, I believe the purpose of the Standing Order is to allow such a division in relation to those matters which are unrelated to the budget, accepting that the purpose of the remainder of the bill is to implement the budget.

[The Chair, Liberal, Wayne Easter]

We will have to cut it off there.

On behalf of the committee, I certainly thank all of the witnesses for the interesting exchange at times. I think you've been helpful to our study on Bill C-63.

With that, the meeting is adjourned.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, sir.

I'll now go over to Ms. Thompson of the Canadian Geothermal Energy Association.

Would you characterize the measure introduced in the BIA, Bill C-63, as a game-changer for the industry?

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

I would like to thank the witnesses for being here today.

First, I would like to talk about the Asian Infrastructure Investment Bank. If Bill C-63 was adopted, $500 million from Canadian taxpayers could be paid into this bank, which involves risks, of course.

Mr. Robinson and Mr. Cross, I would like to hear your comments on the fact that this money comes from international development budgets. In your opinion, is this the right way to invest $500 million in international development? Does investing in such a bank meet our international development goals?

You could answer first, Mr. Robinson.

Budget Implementation Act, 2017, No. 2

[Bob Bratina, Liberal, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I am pleased to speak to Bill C-63, a bill to implement certain provisions of the budget. I want to first say how proud I am to be a colleague of the finance minister and to sit in the government with him.

The finance minister has led what most people would understand as an exemplary personal life. He has used much of his fortune to assist people in various parts of the world. He has to suffer the innuendo that is being offered almost every day, that perhaps he joined public life in order to enrich himself. I do not think anyone would seriously believe that we would engage in the election campaign and be successful in public life in the hopes of leaving this place as much wealthier people than when we came. The other thing I want to say about the finance minister is that his area of expertise is critical to the future of so many Canadians, because we have an aging population, we have many issues with regard to pensions, and it should be seen by most Canadians as a benefit to have someone with the profound expertise in the world of pensions such as our minister has.

The biggest take-away from the finance minister and the government legislation that we have put forward is the economic success of the country. All the numbers show it, and we have heard about the job creation. In my own city of Hamilton, we have an unemployment rate of 4.2%, and for the seventh year in a row we have over $1 billion in new building construction.

I also want to point out the success we have had with the Canada child benefit. In my own riding in the month of July, which is the latest for which I have the final figures, 9,470 families received cheques that affected 16,560 children for a total of $5.8 million. In the entire city of Hamilton, all five ridings, 44,700 families were affected, 80,620 children received the benefits, and the total amount for one month in Hamilton was $27.4 million. This money not only goes directly to the families involved, but one would assume it would immediately be reinvested in the community, in the neighbourhood stores, and in the small businesses in the neighbourhood where purchases are made. Therefore, this investment in the Canada child benefit plan is paying dividends that are almost impossible to understand. It is worth saying that in my city there are 80,000 children who are benefiting from this policy that stems from our budget, which was created in part by the finance minister.

I also want to briefly touch on the notion that comes from across the way referring to the costs to be borne by future generations. As a former mayor, I can say that the cities of Canada are in a desperate situation with a huge municipal infrastructure deficit that they cannot solve through the local tax revenues that they generate. Therefore, what would it be like for our future generations if the roads and sewers were even further incapacitated in the years ahead? In our case, we have just made a significant investment in safe drinking water. These are problems that exist now, and fixing them will be to the benefit of those future generations, so I am proud of what we have been able to achieve.

I will leave it at that for now.

[Alison Thompson]

Okay, fantastic. Then it's all for my privilege and for the other witnesses.

Good evening, everyone.

Thank you very much for having us. I'd like to acknowledge that we're on the traditional territory of the Algonquin and Iroquois first nations. I equally bring you greetings from Kitselas First Nation, who will be mentioned later in this presentation, as they are developing a geothermal project.

We represent CanGEA, the Canadian Geothermal Energy Association. I'm the chair of the association. I'm also a member of CanGEA, and I work with two companies that are also mentioned later in the presentation.

Cutting right to the chase, on slide number two, Bill C-63 and geothermal energy, thank you to this committee. Because of this committee and the March budget, geothermal heat is now considered an eligible renewable energy. Up until March 22, geothermal electricity was renewable, but geothermal heat was not. This kind of inequity in how geothermal was treated was holding the industry back. We want to reach out to you personally this evening and say thank you. We are now eligible for the Canadian renewable and conservation expenses, as well as the accelerated capital cost adjustment.

On the next slide are our five members. I want to bring to everyone's attention the fact that because of your work, what you did as a committee, and because of the budget that was tabled, we now have five heat and power projects going forward. The ones I'm highlighting tonight are from western Canada, starting with Borealis GeoPower out of Valemount. They're making a power and a heat project. Then we have the Kitselas First Nation leading a project out of Terrace, B.C., and that's also for heat and for power. DEEP, out of Saskatchewan, is also heat and power. Up until March, these companies would have been ineligible to claim the heat part.

What Bill C-63 will also unlock—in the bottom—is that we have two Alberta companies who are also developing heat only projects and, again, up until recently, they wouldn't have been considered renewable.

All of these companies are using clean tech, but they're also using technology transfer from the oil and gas industry and repurposing talent from the oil and gas industry.

What's further interesting to note is that in Yukon, the Northwest Territories, Nunavut, and Quebec, projects are also progressing. I hope that the next time I have an opportunity to appear here, I can report on those areas as well. I would especially note that Nunavut right now is running an RFP for a feasibility study to use heat in the Nunavut territory. That RFP closes on November 15. They have been absolutely inspired that geothermal heat can now be classified as renewable, and hopefully used abundantly in that territory to decrease our fossil fuel reliance.

I could stop the presentation here, but since I have five minutes, I'd like to go on. I want to bring to your attention that there are further improvements that our industry requires. I'm hoping that the committee is able to make these amendments as well.

Most notably, other renewable energies currently achieve both test turbine status and transmission expenses, so there is parity that is not yet being achieved by geothermal. When people ask why the industry isn't progressing, people start to make up reasons why. However, they're really economic, and it's because other industries are provided with incentives or are eligible for programs that geothermal is not.

I want to bring a consequence, a real life example, of that home. I'm now on the slide talking about geothermal test turbines. The wind industry has been granted test turbine status for up to 20% of its projects. Here we have a project in Valemount, B.C., that's going to be a demonstration, not just demonstrating and testing of a reservoir, but also demonstrating the capabilities of the geothermal industry.

This small project, again just as a test facility, is looking to employ 50 to 80 people. If this sounds incredible, a few slides later I talk about how it's not in fact incredible. If you look at countries like Iceland, New Zealand, and the U.S.A., they routinely achieve huge employment numbers based on deploying geothermal heat along with power.

The Iceland example I bring for you this evening shows that at a mere 175 megawatt plant, they're able to employ 60 people, but also an additional 840 people in other businesses that are using their heat. This is all off of two power plants that are commingled and have the heat part.

Going back to Sustainaville, it is pitching to get test turbine status so it too can have a test facility and demonstrate geothermal power and heat, but as well create 50 to 80 jobs. We're not making that up.

I'll end by talking about another item that we did not get. Wind, solar, and even tidal and hydro power all get transmission expenses. Our industry too would like to have transmission expenses. Here's a real world example from Valemount, where British Columbia power, BC Hydro, is serving the town. It's a 300-kilometre transmission line. Unfortunately, it stops short of the village.

There's a new load developing as an ecotourism resort. Because BC Hydro cannot serve the ecotourism resort, the province has approved a seven megawatt diesel power plant to be installed. Here we are, in the era of a pan-Canadian framework for clean growth and climate change, trying to shut down diesel and switch away from fossil fuels, and here's an example of a brand new diesel power plant that could go into operation. Standing between that spewing out of up to 50,000 tonnes of CO2 a year, or about 1.5 megatonnes over 30 years, is a 26-kilometre transmission line. If I were tidal, wind, solar, or hydro, geothermal wouldn't have to ask for this amendment.

I want to close by saying, in the United States they're targeting an additional 30,000 megawatts to build. They currently have about 3,500 megawatts on line, and 1,200 megawatts in development. Just to frame that, 1,200 megawatts is about a $4.5 billion contribution to GDP. We could have this too. We have the technology and the talent. We just don't have parity with the other types of energy.

Thank you.

[James Bradley, Chief Executive Officer, Amalgamated Dairies Limited]

Thank you, Mr. Chair.

Thank you for the opportunity to speak today to the Standing Committee on Finance. I'm here today representing Amalgamated Dairies, or ADL, which is a dairy co-operative located on Prince Edward Island. We currently we have 165 farmer-owners and employ over 300 Islanders.

ADL was established in 1953 and has grown and expanded to now have 100% of P.E.I. dairy farmers as owners. We are recognized nationally as a leader in cheese processing. We export our products across all of Canada and to other international markets.

The dairy industry is very important to the local economy, accounting for over $100 million of farm gate cash receipts and a total of over 3,000 industry jobs generating a payroll value in excess of $100 million.

Our co-operative is a source of great pride for our members, who are highly engaged and rely on their united voice to promote the dairy farmer and the dairy processor voice.

My remarks today will be focused on budget Bill C-63 and the subsection 125(7) amendment that would ensure that the rules preventing the multiplication of the small business deduction do not inappropriately deny access to small business deductions for Canadian-controlled private corporations owned by farmers or fishers selling farming products or fishing catches to an agricultural or fisheries co-operative.

I will admit that, as a dairy co-operative, the original budget bill was a major concern for our industry. As a dairy co-operative that relies on farmer-owners to supply 100% of our milk, we heard loud and clear from our farmers that the proposed changes to the tax system would be detrimental to their operations and their future.

Co-operatives are very important economic drivers, particularly on Prince Edward Island. At ADL, our annual sales of over $200 million are an important foundational piece of our province's great tradition of food production. Dairy farming is an important part of the fabric of our rural communities and a critical part of their continued viability. The original budget bill changes would have had a significant negative impact on family-owned farms, rural businesses, and co-operatives throughout the country.

Access to the small business deduction, which was threatened by the proposed budget provision, provides a significant tax incentive to incorporated farm and fishing business enterprises. Many farmers have incorporated their operations to take advantage of the reduced level of corporate income tax. In P.E.I., the difference in the combined federal/provincial tax rate is 15%, compared to 31% for income deemed ineligible for the small business deduction.

Many farm operations today involve multiple farm families, and many farm operations and rural businesses provide goods and services to corporations that they or family members have an interest in, such as agricultural co-operatives. I'd like to commend the Government of Canada for listening to our lobbying efforts and introducing an amendment to ensure that qualifying farmers and fishers selling to agricultural and fishing co-operatives are eligible for the small business deduction in respect of income from those sales.

Co-operatives have a long history of providing a model of fairness and success. They have proven very successful in the dairy industry by providing farmers the opportunity to be directly involved in the decision-making process and governance of an important part of their industry.

At ADL, it is very clear from our board of directors that they want to remain a strong and vibrant independent co-operative. They are eager to continue to make investments both in their farms and at the dairy processing facility to grow their communities and the economy. In a global marketplace with frequent turbulence, co-operatives provide an important vehicle for this investment, and a method to ensure a fair return for producers, with direct input to governance.

Lastly, we have a comment about future policy changes or initiatives. I would like to take this opportunity to invite the Government of Canada to work with our industry and other co-operatives to determine ways to work together on policies and programs that will see co-operatives grow and expand. The decisions that are made all across government have an impact on our industry and our future. A commitment to collaboration, consultation, and discussion would ensure that policies and programs benefit co-operatives and do not inadvertently cause harm.

I'd like to thank the finance committee once again for the invitation to speak here today on this important budget bill amendment, and I look forward to answering any questions you may have.

Thank you, Mr. Chair.