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.

[Michael Robinson, Q.C., As an Individual]

My name is Michael Robinson. I'm just an old lawyer, but I did have a letter to the editor printed that said I was a former board member of Transparency International Canada, an organization you may have heard of and know about. It's an anti-corruption organization. I suspect that I was therefore invited to speak on the inclusion in Bill C-63 of measures to allow Canada to become a member of the Asian Infrastructure Investment Bank. There are implications for corruption prevention that would arise in that context. I think that's why I'm here.

First, one should understand the great power and influence of the world's major international development banks, or IDBs. This sixth one, as of 2015, is this new one, the Asian Infrastructure Investment Bank, which commenced business in 2016.

Infrastructure projects in the developing and lesser-developed world are and will continue to be created significantly through public-private partnerships, or P3s, involving the private sector bidding for the financing of these projects to these banks. The banks are absolutely critical to anybody getting a contract for a piece of infrastructure, because they are the touchstone of respectability and financial credibility for the project when there's a private sector involved. The original five international development banks have the skills and finances to advise upon and become significant financiers, and even equity investors, as many of them are, in these projects in those countries.

Next, one should be aware that the construction industry, which performs these projects, is one of the most corrupt industry groups in the world. I don't think there's anything to debate about that. We've all seen what happened in the province of Quebec when the construction industry was investigated.

The World Bank is clearly the leader in the development of corruption controls and sanctions on the corrupt when so found by the bank, respecting infrastructure and other projects which it finances or in which it invests. The World Bank embarked on its corruption prevention and sanctions regime development in the early 1990s, under the direction of then president Wolfensohn. They've done a terrific job.

In April 2010, the other four established international development banks entered into an agreement for a mutual enforcement of debarment decisions with the World Bank group. The leader of the anti-corruption motion, which really was only effective from the 1990s forward, encouraged the other four banks to join. They are the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank group. This is a very potent agreement in controlling international corruption, because all five banks mutually debar the corrupt participant from participating in any other projects in which any of the banks are a financier.

On March 7 of this year, the Asian Infrastructure Investment Bank issued a statement in which it recited its progress in creating comprehensive corruption controls and sanctions. It noted that it had, quote, “voluntarily and unilaterally” adopted the list of sanctioned entities and individuals under the aforementioned agreement made by the Big Five, the one that I mentioned, the so-called AMEDD—there are too many acronyms here, I'm afraid—and this was a welcome development.

Now I will skip forward in my notes to leave more time for questions.

Based on the fact that the World Bank's regime represents the gold standard for corruption controls and sanctions, and the fact that it has a wealth of experience in developing that regime, I recommend that Canada condition its membership in the Asian Infrastructure Investment Bank on the AIIB's going the next step and becoming a member of this corruption and debarment recognition agreement, the AMEDD.

It's encouraging to notice that the AIIB stated in its March 7, 2017 public statement that it is actively engaging with these banks in an effort to join them as a signatory to the AMEDD. Once they have become a full signatory, they would be a full formal participant in the efforts of what would then be the big six international development banks to fight together the scourge of corruption.

That's my recommendation. I'm not criticizing the new bank at all. I think we must be aware that it is dominated, in terms of its share ownership and location, and the power to elect its board of directors, by China. China is not exactly at the top of the list that Transparency International maintains for lack of corruption. However, they are progressing, as they stated in March of this year, and that's why I'm making the recommendation I am.

As an addendum, for any of the committee members who might be concerned about risks that Canada is taking on by investing significant sums in the shares of AIIB, as well as creating its own infrastructure bank, it's worth noting that the AIIB stated that it had received in July of this year the highest rating from the Standard and Poor's global rating agency, namely AAA/A-1+, with an outlook of “stable”. Also, the world banking regulator in Basel has given a zero risk to the securities of the AIIB for purposes of investment in securities by regulated financial institutions like banks.

Those are my comments, Mr. Chair.

Budget Implementation Act, 2017, No. 2

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, I am pleased to have a chance today to discuss the latest iteration of the Liberals' budget implementation legislation, Bill C-63.

When the Liberals were running their election campaign back in 2015, they made a number of promises to Canadians. One of those promises was that they would incur a small deficit of less than $10 billion. During that same time, they also promised they would balance the budget by 2019. We now know that neither of these things are true, and that every time the Prime Minister gives with one hand, he takes more with the other.

As the Liberals like to make up words and change their meaning, I have made up a word for this action. It is “dispocketnesia”, which means using one hand to take from one pocket to the other and forgetting about it.

When the Minister of Finance tabled the government's fall economic statement just a couple of weeks ago, he confirmed the Liberals were borrowing $20 billion this year to pay for their out-of-control spending; that is $20 billion this year alone. That means the current deficit is more than double what the Liberals initially promised. This also means, as confirmed by the government, that the budget will never be balanced under the Prime Minister.

Of course, with reckless spending comes the need to increase taxes, which is in part what Bill C-63 would do. Since the Prime Minister is adding debt at twice the rate he promised and since his government projects that debt will grow every year into the future, someone needs to foot the bill. Unfortunately for my constituents and for all Canadians, it is the taxpayer who will bear the burden of the government's irresponsible spending.

I say all this because the Liberal track record of the broken promise after broken promise has fostered an environment of distrust and skepticism among the residents of my riding, and certainly across the country.

The Liberals constantly say that they are helping the middle class and those who wish to join it, yet over 80% of middle-class Canadians are now paying more taxes than they did before the Prime Minister took office. Bill C-63 would not help these people, but rather would push our country further and further into debt.

The 80% figure I just quoted does not even include a measure that will drastically affect my constituents in a multitude of ways. That measure is a carbon tax, or do the Liberals hope Canadians have forgotten about that, because that is 54 days away?

The good people in my riding just simply cannot afford another tax, certainly not one that will affect so many aspects of their lives. They will now need to pay more to heat their homes, to drive their cars, run their tractors and combines, get to work or see their doctor, and operate their businesses. What do these people get from their government in return?

I would like to say my riding is currently booming with government-funded infrastructure projects that it sorely needs, but that would be a lie. I would like to tell my constituents that in return for the increase in their household bills due to a carbon tax, they would have a government that cares about western Canada, but I definitely cannot say that under the Liberals.

I would very much like to tell the small business owners in my riding that the government will start making life easier for them by not changing the tax rules to the point they are unsure if their businesses will even be viable in the future. Alas, I cannot do any of these things. The government lacks the credibility, as shown by their dismal track record, and Canadians expect better.

One of the major measures contained in Bill C-63 that I would like to touch on is the Asian Infrastructure Investment Bank and the effect this investment will have on Canadians. The Liberals are investing $500 million, half a billion dollars, to be a part of an investment bank in another country. We would think that an investment of that size would be overwhelmingly beneficial to the Canadian public, especially given the fact that the federal government is not exactly swimming in dollars at the moment.

Unfortunately, there will be very little direct benefit to Canadians as a result of this investment, and those who do benefit are the wealthy 1% who are the only ones who can afford to consider bidding on contracts through the infrastructure investment bank. We do not know how our investment will be used. We do not know what it will be used on or whether it will be to fund a pipeline. No, not a pipeline in Canada, despite the fact energy east was cancelled, but rather a pipeline in Asia. Instead of making it competitive for Canadian companies to see their oil, this makes it easier for foreign countries to compete against us.

How can the Liberals claim to be helping and representing the middle class when they are investing in measures such as the Asian Infrastructure Investment Bank rather than using even a portion of that money to helping Canadians at home? The Liberals love to spend and we understand the need to create strong relationships and international partnerships through initiatives like investment banks, but it should not be at the cost of the Canadian taxpayer who will see no direct benefit. This is yet another reason why my constituents tell me they have completely lost faith in the government's ability to spend money responsibly.

It appears that the Liberals have a hard time understanding the needs of the middle-class Canadians for whom they say they are working. This is not surprising, given that the Prime Minister and the Minister of Finance have never actually been middle class. The finance minister cemented this general lack of faith when it was recently discovered that he failed to disclose financial assets to the Ethics Commissioner. He should have done this as soon as he became a minister, and yet it was overlooked.

If average Canadians failed to disclose their assets to the appropriate government body, they would be punished accordingly, but when it is the Prime Minister's right-hand man, the problem seems to simply disappear. How are Canadians supposed to trust the finance minister with control of our country's finances when he cannot even properly take care of his own?

The finance minister also refuses to disclose whether he recused himself from important conversations surrounding legislation that would have an effect on his multi-million dollar company, Morneau Shepell . As far as we know, he took part in discussions surrounding Bill C-27. Was he involved in the talks on pensions for Bombardier and did he fail to recuse himself from discussions on the Bermuda tax treaty? Thankfully, he was unable to recuse himself when the Ethics Commissioner came calling. He paid the $200 dollar fine for his actions, but this leaves the question of just how open and honest our finance minister really is.

Canadians expect the Liberal government to do better and be better. We expect that cabinet ministers will uphold the rules to the letter of the law and will also do the right thing. The government has shown that the conduct of its cabinet ministers is not befitting the expectations of the people they represent. Not only are they unable to follow the rules themselves, but they expect the support of Canadians who are being punished for doing just that, as they stated in their messaging surrounding the tax changes to close perceived loopholes.

Those tax changes are going to hurt Canadians, especially in my riding where there is a plethora of small businesses, including farms. There are huge concerns over the cost to transfer a farm down from one generation to the next, something people in my constituency have been doing for over a century in some cases. The cost of doing business is going to go up for all business owners too, not just farmers.

Who is the cost not going to go up for? The Prime Minister and the finance minister, whose family fortunes are safely tucked away and will be unaffected by these tax changes. This just goes to show how out of touch the Liberals are when it comes to the needs of hard-working middle-class Canadians.

Bill C-63 contains many provisions given that it is an omnibus bill. Unfortunately I am failing to see how this “sunny ways” legislation will actually help the people in my riding. My hometown of Estevan is known as the “Sunshine Capital of Canada”. Even with that moniker, everyone knows the Liberals are not building green transit lines in rural Saskatchewan.

On this side of the House, we believe in responsible government spending, lower taxes, and making life more affordable for every Canadian. We have learned that we absolutely cannot trust the Prime Minister to give Canadians a tax break. In fact, the only thing we can trust is that he will continue to break his promises and put us further and further into debt, one tax increase at a time.

This is not what my constituents want. It is not what Canadians want. We will continue to fight the Prime Minister's continued tax hikes every step of the way.

[Karen Cooper, Drache Aptowitzer LLP, As an Individual]

Thank you.

Good afternoon. My name is Karen Cooper. I'm a lawyer with the law firm of Drache Aptowitzer LLP. My clients are almost exclusively charities and not-for-profits. I also teach tax law and the law of charities and not-for-profits at the University of Ottawa. I chair my local hospital board, and I'm the past chair of an organization called the Canadian Land Trust Alliance. I expect it's in respect of that latter role that I was invited to speak.

The Canadian Land Trust Alliance is an organization that represents land trusts across Canada, and the particular measure of concern to them in Bill C-63 would be the changes related to the ecological gifts program. I was given the understanding that this is what you wanted to hear from me about.

Land trusts are non-profit charitable organizations whose main objectives include the long-term protection and management of ecologically sensitive lands. Sometimes they own those lands outright; they acquire them through donation or purchase. Sometimes they enter into something called a “perpetual” conservation agreement, and sometimes an easement or covenant; in Quebec, they're called “servitudes”, real or personal servitudes. The general objective is to preserve or restore the ecological features of the land.

We have about 200,000 individual members and donors and 20,000 volunteers. Collectively, they've protected over seven million acres. That's seven million acres of privately protected land, and this protection contributes to our network of diverse natural landscapes. They play a really important role in delivering on the government's species at risk, biodiversity, and climate change goals.

One of the reminders I like to provide folks is to say that when we're dealing with the ecological gifts program, we're dealing with an incentive in the Income Tax Act that in fact relates more to environmental policy than philanthropic objectives, necessarily. It's a measure that's designed to serve both needs, not just to support philanthropic giving.

Most land trusts are eligible recipients under Environment and Climate Change Canada's ecological gifts program, and there's a whole series of amendments in Bill C-63 that are related to that program. To the end of October 2016, there were 1,260 ecological gifts made, valued at over $807 million. It's a tiny program with an environmental focus, but the dollar values tend to be fairly large because they relate to fairly significant pieces of land.

Most of these ecological gifts contain areas designated as being of national or provincial significance, and many are home to Canada's species at risk. To participate in the ecogifts program, donors must have the ecological value of the land certified in advance, and then also the monetary value of the land certified in advance. Normally, these transactions don't close until the government or an independent panel has in fact certified that this is land that's important to protect and that there is no further disagreement with respect to the valuation.

In addition, for land trusts to participate in the program, the land trusts have to adhere to and implement Canadian land trust standards and practices. These practices promote integrity, perpetual sustainability, fiscal diligence, and good governance. There's an adherence to these standards and practices because generally land trusts recognize that actions of an individual land trust reflect upon the trust community at large.

As I said, Bill C-63 proposes a number of measures to better protect these gifts of ecologically sensitive land. I actually have no specific comments. I was invited to speak and, I believe, take your questions about these provisions given my expertise in the area. I'm more than thankful for that, and I welcome that opportunity.

[The Chair, Liberal, Wayne Easter]

For the record, pursuant to Standing Order 108(2), the committee is 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.

Panel two, welcome. Thank you for coming.

We will start with Ms. Cooper and Mr. Robinson, who are speaking as individuals. The floor is yours.

We'll start with you, Ms. Cooper.

[Michel Picard, Liberal, Montarville, QC]

Mr. Speaker, it is my great pleasure to speak to Bill C-63 today. The budget implementation act, 2017, no. 2 includes key measures from the government's second budget, which outlines the second phase of the government's plan to make smart investments that will create jobs, grow our economy, and provide more opportunities for every Canadian to succeed.

Thanks to these smart investments and an overall commitment to equity, the government is ensuring that Canada's best days are still ahead.

Before I get into the budget implementation bill, I want to talk about the measures the government has taken so far to give all Canadians, including those in the middle class and those working hard to join it, the opportunities they need to succeed.

To begin with, we asked the wealthiest 1% to pay a bit more in taxes in order to be able to give the middle class a tax cut. That tax cut for the middle class benefited nine million Canadians, and we are very proud of that.

Then we brought in the new Canada child benefit, which has lifted hundreds of thousands of children out of poverty. As a result of our CCB, nine out of 10 Canadian families are getting more in benefits than they did under the previous system. Compared to the previous system of child benefits, the CCB is more generous and better targeted to those who need it most.

In the fall economic statement released on October 24, the government announced that it would strengthen the Canada child benefit by indexing it to annual increases in the cost of living as of 2018, which is two years earlier than planned. What does that mean in practical terms? For a single parent with two children and an income of $35,000, the enhanced Canada child benefit will contribute an additional $560 in the 2019-20 benefit year towards the cost of raising his or her children. That means more money for books, winter coats, and skating lessons. The added confidence that the Canada child benefit brings to families can have a positive impact on economic growth.

Our government has also enhanced the Canada pension plan in order to provide Canadians with financial security when they retire from their hard work life. Enhancing the Canada pension plan ensures that Canadians will have more money in retirement so they are less worried about saving and can focus more on enjoying the good times with their families.

Starting in 2019, we will be enhancing the working income tax benefit by an additional $500 million per year. This will put more money in the pockets of low-income workers, including families without children and the growing number of single Canadians. The enhancement will be in addition to the increase of about $250 million annually that will also come into effect in 2019 as part of the enhancement of the Canada pension plan.

These two actions alone will boost the total amount the government spends on the WITB by about 65% in 2019, increasing benefits to current recipients and expanding the number of Canadians receiving this essential support.

This extra money could pay the family grocery bill or buy warm winter clothes. The improved benefit will help low-income Canadians make ends meet.

The government is also showing that it is committed to helping small businesses invest, grow, and create jobs by lowering the small business tax rate to 10% effective January 1, 2018, and to 9% effective January 1, 2019. This will provide a small business with up to $7,500 per year in corporate tax savings to reinvest in and grow its business. These kinds of savings are crucial for businesses to grow and prosper.

Lastly, the government intends to make important changes to the tax system that will ensure Canada's low corporate tax rates serve to support businesses, not to provide unfair tax advantages to the wealthy and the richest Canadians.

The steps taken to date are having a real positive impact on our economy and for Canadians. Optimism is on the rise, and with good reason. Job creation is strong with over 450,000 new jobs created in the last two years. The unemployment rate is at its lowest level since 2008. Youth unemployment is at a historic low.

Canada has the fastest growing economy in the G7 by a wide margin, growing at an average rate of 3.7% over the last year, which is the fastest pace of growth since early 2006. Growth is forecast to be 3.1% in 2017, significantly above the expectation at the beginning of the year.

The fiscal outlook has improved by more than $6.5 billion annually on average from what was projected in budget 2017 last March.

The tax measures that we have taken for the benefit of families and children are having a real impact every day in my riding, Montarville. Approximately 97% of the people of Montarville clearly define themselves as being part of the middle class. These positive impacts are reported back to us regularly. They are felt in a very real and tangible way in peoples' wallets. This kind of investment is crucial, perhaps even a game-changer, in giving people assurances of a better life that is easier to manage because their budget is easier to manage.

For example, the city of Saint-Bruno, where I live, has been named the best place in Canada to raise children.

This kind of tax break is key to giving families the help they all need, just as families are having more and more children. A young family with three very young kids lives right across from me. That family is benefiting directly from this kind of help. This help is making a real, tangible, and practical difference at the end of every month.

Another measure I find quite interesting among the budget measures is the government's decision to legalize and regulate cannabis, as well as the economic spinoffs that can be generated by such a measure.

Our government plans to legalize and strictly regulate cannabis. This policy is necessary and desirable and has two objectives: to keep marijuana out of the hands of youth, and to deprive criminals of any profits from illegal cannabis sales.

In advance of the government's plan to legalize cannabis, budget 2017 allocated several million dollars to public education programming and surveillance activities. On that note, I would like to inform the House that during the consultations I participated in, and even had the chance to lead in Quebec, one important concern was raised with regard to training, information, and above all prevention. Now that the system is regulated, the government can use the sales tax revenues it generates to take concrete action in certain areas, including prevention programs.

Taxation is one of the key factors that will play a major role in ensuring the objectives of legalization are met. As the Prime Minister and the Minister of Finance have clearly stated, in order for legalization to be effective, taxes must be low from the beginning, and the federal, provincial, and territorial governments must continue to work together to guarantee a coordinated approach. Co-operation is critical, and the federal government wants to engage our provincial and territorial partners in order to develop a coordinated approach to cannabis taxation.

I would like to remind all members that taxation is not the main objective of legalization. On the contrary, this is an essential health issue, given that the status quo has failed so spectacularly. That being said, by taking responsibility and legalizing cannabis, we will generate indirect tax revenue that will benefit Canadian society as a whole.

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

[Kimberley Hanson]

Very quickly, before I answer that question, I'd just like to thank you for your introductory remarks, and I'd like to briefly respond to a comment Mr. McLeod made in his question.

Mr. McLeod, I'm so sorry your mom had diabetes. As you say, it's a scourge.

I want to emphasize to the committee that I don't consider this a partisan issue. I'm thankful to the Conservative Party for the support it's given us in getting this issue out in the open. I consider this a procedural issue—an issue within the CRA. Diabetes Canada is working very closely with the government on the healthy eating strategy. We're very supportive of a number of initiatives, so I really don't want to position this as a partisan issue.

With respect to your question, no, there has been no change with respect to the Income Tax Act that pertains to how the DTC is made available to people with diabetes. As you well know, it's not in Bill C-63, and that's where it would be.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair.

Thank you, witnesses, for your testimony here today on Bill C-63. I would like to pursue the topic du jour, the disability tax credit.

Ms. Hanson, thank you for your advocacy, not just at this table but your ongoing commitment to making sure people get the help and resources they need. I would like to ask a little bit about the disability tax credit. Obviously, the typical type 1 diabetic who receives it gets on average, I believe, around $1,500.

There is a bigger cost, which I don't think we've discussed here today. In order for people to qualify for a registered disability savings plan, they must first be eligible for the DTC. Is that correct?

[Kennedy Stewart, NDP, Burnaby South, BC]

Mr. Speaker, this has been a very wide-ranging debate today on the budget bill, as it should be. I am going to add to that wide-ranging discussion of what we are faced with here in the House. I am speaking to Bill C-63, and it is the second budget implementation bill. I regret to say that I will be voting against the bill, and I hope to outline in this speech why that is the case.

In a nutshell, there are many things in this bill. It proposes to bring into effect new spending and new regulations with which I do not agree. There are many things that are not in this bill that I would like to see; for example, money for a national pharmacare program or more money for housing, which is of such critical concern in my riding of Burnaby South. However, that money is not there.

I want to bring to the attention of the House today that I am voting against this bill in part to protest and bring attention to the way the current government presents information to the public. In many cases, data are used to promote certain economic activities; the data that are used by the government are badly distorted, whether on purpose or through incompetence; or it is just plain wrong.

In the last Parliament when I would get up and talk about budgets, especially on the science portfolio, which I oversee for the NDP, I would ask for the presentation of data adjusted for inflation, for example, if they are looking at longitudinal data. I remember the Conservatives telling me that was some socialist voodoo economics, but in fact it is just a realistic way of looking at how money is spent over time.

I have not heard back from the current government, but I expect to be heckled a bit as I go through this talk today.

I would like to bring attention to the way the government throws around job-creation figures. As we did with the Conservative government in the last Parliament, we often get hyper-inflated numbers of job creation that always tie back to the budget, the spending, and those types of things. The Prime Minister's cabinet members are talking about jobs associated with their plan to ram a pipeline through British Columbia. That is of course the Kinder Morgan pipeline. If members will recall, this project was approved and the Prime Minister broke his promise to British Columbians and said that he would thoroughly review the project to see how many jobs and what would be the effect on the environment. However, he did not do that, and the Liberals are pushing it through against the wishes of the provincial government, most first nations communities, mayors and councils, and millions of British Columbians. Therefore, what I take specific issue with is the way the Liberals portray their job-creation numbers, not only in relation to the budget but in this specific case.

When the Prime Minister announced the approval of the pipeline, he said he would create 15,000 new middle-class jobs, and we see this in the budget document where we hear about all the jobs that the spending would create. However, in this case with the pipeline, the Prime Minister and his other ministers and parliamentary secretaries have said that this would create “15,000 new middle-class jobs”. This is repeated over and over. This is a lot of jobs; 15,000 jobs is a big number, and people might be tempted to overlook the environmental damage and the damage to relations with first nations that this might create, and they might support the project if, in fact, the figure of 15,000 jobs were true, but it is not. Really, the number is straight out of the mouths of the pipeline company proponents, the spin doctors, right onto the lips of the Prime Minister and of the parliamentary secretaries who defend the pipeline, and of the entire Liberal caucus in British Columbia, which is also solidly behind pushing this pipeline through our province.

The Prime Minister's ministers in cabinet repeat this number over and over again, so I feel it is important to delve into the number because it exposes the incompetence and duplicity of the current government when it comes to its economic statements. The first thing to note is that 15,000 jobs that the pipeline supposedly is going to create is just plain wrong, according to many analysts—for example, Robyn Allan, who has written extensively on this and testified both as an expert to the National Energy Board and on her own in many publications, is taking on this number firmly and convincingly.

Ms. Allan is no slouch. She is a former president and CEO of the Insurance Corporation of British Columbia, the vice-president of finance at Parklane Ventures Ltd., and senior economist for the B.C. Credit Union. She is an expert witness on economic and insurance-related issues right here in Ottawa. She has taught money and banking, public finance, and micro and macroeconomics in universities. She has written numerous articles and books. If we were to call a witness to talk about how many jobs a project or a budget would actually create, this is the type of person we would want to advise us.

According to Ms. Robyn Allan, this number of 15,000 jobs associated with the Kinder Morgan pipeline is six times the number of temporary construction jobs actually presented by the company in its National Energy Board application. The Prime Minister, the parliamentary secretaries, the cabinet, and the B.C. caucus are all saying that the Kinder Morgan pipeline will create 15,000 jobs during its construction. However, that is contrary to what the company presented in its documentation to the National Energy Board. Therefore, the government has inflated this number sixfold. If we extrapolate that over other parts of the budget and other parts of the claims by the government, this makes us doubt almost everything that it is putting forward.

The 15,000 jobs number comes from a fantastical calculation based on a doubling of the amount of construction time this proposed pipeline is allowed to take. The pipeline is supposed to be constructed over two years. This 15,000 job number comes from a four-year construction period. Therefore, according to Ms. Allan, “Trans Mountain's estimate of 15,000 construction workforce jobs is a scam. The more realistic figure is less than 20 per cent of that size.”

Therefore, when Canadians are here listening to this debate in the House about the Liberals and their fiscal plans, the latter are flat out telling falsehoods about what we can expect with respect to one of the biggest projects in the country. They downplay the environmental damage that just one spill from this pipeline or its construction would create in communities right across British Columbia and have artificially inflated the number of jobs that will be created.

What is also important is the second part of the Prime Minister's statement that these jobs will be middle-class jobs. These 15,000 jobs the government claims will come from this pipeline are not permanent. This is of course from documents submitted by the company to the National Energy Board, which state, “Once the proposed Expansion Project is complete, operating and maintaining...[this] Pipeline system will result in approximately 90 new operating positions”. In fact, we will never see the Prime Minister stand up and say that he has justified this pipeline because it will create 90 permanent jobs; rather, he uses the inflated number of 15,000 jobs, which is clearly wrong.

The idea that these jobs are middle class is also wrong. Kinder Morgan president Ian Anderson was here at committee and admitted that he hires temporary foreign workers, and that those are the workers who will be hired to build this pipeline. Therefore, these 15,000 are not full-time middle-class jobs, but 90 full-time jobs, and perhaps 2,000 or 3,000 temporary construction jobs filled by temporary foreign workers.

What is worse, Kinder Morgan has contracted with CLAC, which is not an official union. It is not, for example, the BC Building Trades union. Therefore, it is skirting the unions in British Columbia that would ordinarily protect workers in order to make this happen.

Once we actually start looking at the facts from the company and the National Energy Board, we see that this 15,000 job claim is wrong. We have temporary foreign workers, we have temporary jobs, and we have 90-full time jobs. That is hardly worth rupturing our entire relationship with first nations people or local communities. In fact, 45% of British Columbians oppose this pipeline, and 30% are strongly opposed and are willing to take action to stop it. Many people who have not been to British Columbia are not aware that we do not have treaties with the first nations there, and they have significant rights. We are seeing this play out right now. We have 18 court cases, many of which were filed by first nations, including one yesterday by the Squamish Nation challenging the legitimacy of the review process for the pipeline.

Therefore, I would suggest that the government go back and take a look at these numbers for real and come back with realistic numbers that we could debate more fully.

[John Nater, Conservative, Perth—Wellington, ON]

Mr. Speaker, it is a pleasure to rise today to debate Bill C-63, a second act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures. I find the “other measures” part interesting. It almost indicates that it may be an omnibus bill, despite the protestations to the contrary. It certainly seems like an omnibus bill. One would have hoped we might have been able to apply the provisions of Standing Order 69.1. Of course, the government carefully worded that Standing Order change to specifically eliminate the provision to budget implementation acts. However, I digress. That is certainly a debate that would be joyfully had on another occasion.

This bill further indicates the problem with the Liberal government. It has a spending problem. Time and again, we have seen the Liberal government commit to tiny deficits of $10 billion, small one-time deficits over three years, and to quickly return to balanced budgets by 2019. However, that is not happening and yet we see reckless spending time and again, like, for instance, $212,234 on a budget cover. We cannot invest in the priorities of Canadians when money is recklessly spent by the Liberal government.

Looking at the projections going forward, we see at least $100 billion in new deficit spending over the next six years, far beyond what was promised by the Liberals in the last election campaign.

It is intriguing. On the day before Christmas eve of last year, the government, through the Department of Finance, released its long-term economic and fiscal projections. Already the Liberal finance minister has projected that he will once again release these figures later in the year. I suspect we will all be feverishly refreshing finance.gc.ca to see these new figures released, perhaps on Christmas eve or perhaps on New Year's Eve. Either way, I am sure it will not be done with much fanfare.

When the figures were last released on December 23, 2016, we saw that the government would not be able to balance its books until at least 2055. That means high school students graduating this year, at the age of 18, will not see a balanced budget until they are 56 years old. They will spend nearly their entire working career dealing with the reckless spending of the Liberal government. That is 30 years. My children, who are now three and one, will spend this time paying for the reckless spending of the Liberal government.

It is not just Conservatives who are saying this. In fact, the parliamentary budget officer is saying similar things.

In the October 31 report entitled “Economic and Fiscal Outlook”, the parliamentary budget officer predicts that program spending will continue to rise every year until 2023. Public debt charges will also rise, surging from $24 billion this year to $38.5 billion by 2023. A lot of hard-earned taxpayer money will be going to service debt. The parliamentary budget officer predicts that the federal debt itself will also rise every year, reaching a total of $700 billion by 2023. It is unprecedented for our national debt to grow so steeply in the absence of a world war or global economic crisis. Moreover, such incompetent fiscal management is both inexcusable and intolerable.

Throughout the debate on the original budget tabled on March 22, I received a number of emails, phone calls, and letters from people in my riding. They were concerned that taxes were being raised on families, students, small business and, particularly in my riding, on family farms. Now, we see this going even further, with taxes being raised on those suffering with type 1 diabetes. This is all being done to garner more money for the government's out-of-control spending.

Last spring I received an email from a constituent in Arthur, Ontario. I should mention that Arthur, Ontario, is known as Canada's most patriotic village. As we lead into Remembrance Day later this week, I want to comment on the bravery of our brave men and women who serve today and have served in the past.

A constituent from Arthur wrote,“I feel compelled to pass on this feedback in regard to personal income tax, as I recently filed our taxes. We're virtually a single income family, as my wife makes less than the personal basic amount. We saw very limited changes in our income and deductions in 2016 relative to previous years. However, our tax refund is 50% less than it was in 2015. I know we are not alone, as others have told me similar stories.”

This is reflective of the changes the Liberals undertook in their first two budgets, which included cancelling the fitness credit for kids in sporting activities, the arts credit, the textbook credit for those undertaking post-secondary education, and the public transit tax credit. Time and time again, the Liberal government has made hard-working Canadians pay for its fiscal mismanagement.

What is more, the burden is being placed on the middle class. A recent study found that 87% of middle-class taxpayers are paying more in income tax now than they were just two years ago, as much as $800 more per year.

In division 2, clause 176, of Bill C-63, we see the government sending money overseas. In fact, the Liberals are sending nearly half a billion dollars to the Asian Infrastructure Investment Bank. Canadians may have heard about the bank, but for those who have not, let me read from the Department of Finance backgrounder. It says:

Founded in January 2016 and based in Beijing, the AIIB is an international financial institution focused on addressing the estimated US $8 trillion infrastructure gap in Asia.

Just last week we found that the Liberals will be delaying $2 billion in infrastructure spending here in Canada, yet half a billion dollars would be sent for overseas infrastructure projects. I think of my riding of Perth—Wellington and so many of the important infrastructure investments my municipalities are calling for. I look at places like West Perth and the town of Mitchell, which are looking to put in a second bridge and a second water crossing to connect the two sides of the town and to allow the flow of the water system to be more efficient and with a better flow capacity. There should be funding for that, but we have yet to see the government reopen the new building Canada fund to allow for investments in important infrastructure, such as roads and bridges.

I think of places like Arthur and Drayton, which have important waste water projects that need to be undertaken to allow those communities to continue to expand and development. I look at places like Perth South and the town of St. Marys, which are continually updating their roads, bridges, and important infrastructure to make sure those towns remain viable.

I look at places like Stratford, where there is strong cultural infrastructure and they are looking for funding through the Government of Canada, yet we see $2 billion in domestic infrastructure spending being delayed. The government sees fit to send half a billion dollars overseas, rather than investing in important projects in Perth Wellington and across Canada.

I was very pleased recently to be named by our leader to serve as the shadow secretary for interprovincial trade. I note that division 10, part 5, of the budget implementation bill deals with the implementation of the Canada free trade agreement. This alone could take hours and days of debate in the House, but we are not being given that opportunity. The free trade agreement is 353 pages long but has 147 pages of exceptions and exemptions, especially those related to the sale and import across provincial boundaries of beer, alcohol, spirits, and wine.

The government has not acted on interprovincial trade, and this sham of an implementation of the free trade agreement does not address the true interprovincial trade barriers that exist within Canada. We must work together to remove those trade barriers to see our communities and small businesses prosper.

[Yvonne Jones, Liberal, Parliamentary Secretary to the Minister of Crown-Indigenous Relations and Northern Affairs]

Mr. Speaker, it is a pleasure to rise today to speak to this particular bill. As members know, Bill C-63 looks at different provisions within the Government of Canada and the budget tabled in the spring of this year. It looks to see what needs to change for government to respond effectively to Canadians, and to ensure that their requests and expectations of their government are being met.

I know that many of my colleagues on both sides of the House have already spoken and given tremendous applause for this budget. They have certainly recognized that the investments we have been making as a country are smart investments, long overdue in many cases, but very smart, wise, and strategic with respect to meeting the growing needs of Canadians for jobs, infrastructure, and business development, allowing everyone the opportunity to move forward in this country. That includes many aspects of what government is involved in.

We talk a lot about skills training and trades, providing education to people who need it, and supporting our educational institutions. We talk about innovation and research, new models, and new ways of doing things for Canadians, always helping them to find better ways of making that a reality. We talk about how we need to do more with respect to social infrastructure, housing, and supporting families and children. Those have been the key policies of our government since the day we took office. The Prime Minister has made no apology about the fact that we are a government that came to office to lift up Canadians and the middle class, and to provide the long overdue infrastructure and supports they need in this country to be able to continue to grow and contribute.

We know that we are a strong nation. We know that, as Canadians, we are strong people. However, we always know that we can do better. No matter how good that job is today, we know we can do better tomorrow. That is what makes us the great country that we are. Therefore, when we talk about providing for child benefits in Canada, we may already have had a system that has contributed benefits to Canadians, but we can always do better, and that is what our government did. Will there be other ways to change and improve as we go along? Whenever we see a need to make that happen, and there is a better way, we are a government that has always been open to doing that.

We talk about how we are able to invest in our communities. I know that opposition members will sometimes say that the government is spending too much money. In many of our communities across Canada there has been tremendous neglect of infrastructure over a long period of time. If we want those communities to grow and contribute to the country that we are building together, then we need to invest in them. We need to invest while believing that they too can do better, and they know they can.

When we talk about all of these things, they are broad strokes. However, I am a member of Parliament who came to office to represent a riding that was neglected and left behind. Why? It was because it was rural, remote, indigenous, and was so far away from the centre of power that its needs were often not recognized. There are many areas like the riding I serve, the great riding of Labrador, that exist across Canada. Many of those ridings have been neglected. Why is it that when we came to office there were hundreds of boil water advisories on reserves and inadequate housing after 50 to 100 years of governments in Canada? Why is it that we came to office realizing that those who are rural and remote in Canada still do not have connectivity, who cannot access online services or be a participant in the global economy we are building? That is not building Canada together; that is about building a country and leaving distant people behind. If we are going to build this together, we have to work together and invest together.

I have a riding that is getting paved highways to remote communities for the first time. When I came into politics a number of years ago, no road existed to these communities. It was through the support and lobby of governments and partnerships that roads were built to connect these communities. In the last two years, we have invested nearly $100 million to pave those roads and bring those communities together.

We have launched a program to provide infrastructure to connect rural, remote, and indigenous communities. We have allocated $500 million for broadband across Inuit regions, regions like the one I represent. Today, people in many of these communities cannot go online. They cannot send me an email today if they want to, because they do not have the ability or the infrastructure in their communities to do so. Is that how we want to continue to run a country? No, it is not. As a government, we have seen the need to invest in every corner of the country to allow people to rise up and participate.

We know there are challenging issues. I talk about connecting communities with roads, bridges, and technology, but there are so many other challenges faced by rural and remote areas around the country, which our government has had to tackle. Many of these challenges, as we know, have been around the trauma that has impacted many indigenous Canadian, many of whom I represent. This government recognizes that the residential school survivors in Newfoundland and Labrador were left behind.

When the apology was made to the survivors of residential schools, those I represent were left behind by the Government of Canada. Now they have been included. In a couple of weeks, the Prime Minister will go to Labrador to personally apologize to the survivors, to right a wrong in Canadian history. That is what we should be doing in government. If we are to lead, we have to own up to the black marks on our record as a country and make those things right. When we are talking about reconciliation, we are talking about making those things right.

I went to a reception a few minutes ago in the Speaker's lobby for the Indspire Awards across Canada. I met a young Inuk lady named Donna. She is a doctor. I met another young first nations lady named Ashley. She has been a role model for youth. I look at what those two ladies have accomplished, despite the many challenges they have faced in indigenous Canada, and what tremendous role models they are. They are so many more out there who are unrecognized.

I want to highlight some things in my own riding. When I came into office, 5 Wing Goose Bay, for example, had no official mandate from the former government. It lived in fear every day that the military base would close. It did not have a contract that was extended more than two years in a 10-year period. Now 5 Wing Goose Bay has a mandate and investment under this government. The investment in two years at that base has grown from $15 million a year to $30 million a year. We have been able to establish full Inuit-crown relationships and invest in many of the social issues that have plagued Canadians around the country, including some in my riding.

There have been unprecedented investments in indigenous housing projects, infrastructure, fisheries development, in all the pieces that are so valuable in building communities. However, we still have a lot of challenges and we need a government that has vision and leadership to lead us through those challenges. When I think of what is happening with Sears workers today, my riding went through the same thing with Wabush Mines, where 1,600 pensioners lost 24% of their pensions.

Are there things we can do to continue to improve upon our record as a government and make life better for Canadians? There certainly are, and we will work together to make that happen.

[Victoria Lennox, Co-Founder and Chief Executive Officer, Startup Canada]

Thank you so much. Thank you to the honourable members for inviting Startup Canada and Canada's entrepreneurs to the table today.

Startup Canada is the national rallying brand, community, and voice for Canada's 2.3 million entrepreneurs. Since I launched it as a social entrepreneur, along with my co-founder, in 2012, Startup Canada has grown to represent more than 200,000 entrepreneurs across Canada and across 50 grassroots start-up communities that volunteer-led and entrepreneur-run from coast to coast to coast.

We represent the diversity of Canada's entrepreneurial community. It's so cool that I'm here beside Molson Coors, a great Canadian success story. Many of my members wish they could be so successful one day. We represent women, indigenous persons, mompreneurs, and hackers in their basements. We represent farmers. We represent every Canadian entrepreneur.

We work in the best interests of every entrepreneur to foster an inclusive economy and a growing middle class through entrepreneurship. Through digital programs and flagship events, Startup Canada is the network promoting, inspiring, connecting, and giving a voice to Canada's entrepreneurs, supporting their start, operation, and scaling up of their businesses to build a better Canada.

Our entrepreneurs are among our economy's most important natural resources for the future. Canada is home to 2.3 million entrepreneurs and 1.1 million small businesses, accounting for 78% of private sector job creation in Canada, 30% of exports, and 27% percent of GDP. More than 8.2 million Canadians work for small businesses in Canada.

From my comments, I want you to really understand that the world is competing for this natural resource and the rest of the world is vying for this talent. They're vying for the investments and their share of international markets. What we need to do is to really build a Canada in which our entrepreneurs can flourish, and to keep them here in Canada. We believe that being fair and competitive are not mutually exclusive.

From the recent tax consultations on changing the taxation of entrepreneurs, we have never felt more concern among our community than now, and certainly every member of Parliament who has met with their small business community has felt this. There has never been such an outcry before as when we started to look at our tax system and talk about fairness and our entrepreneurs. That was an opportunity for a conversation, which our entrepreneurs had with members of Parliament across the government.

As we're building tax policy and looking at Bill C-63 in all respects, we need to ensure that we do not inhibit entrepreneurial ambition in our country but that we are our entrepreneurs and demonstrating that Canada is behind our dairy farmers, our Molson Coors', and every entrepreneur. We need to recognize and acknowledge the risk that entrepreneurs take on personally, financially, and professionally when they start a company. We need to increase incentives for Canadians to participate in our entrepreneurial economy, as angel investors and through crowdfunding platforms to unleash entrepreneurial capital. We need to ensure that there are no unintended consequences in supporting the succession or transfer of businesses across generations, or any other unintended consequences, as we look to modernize and create a fairer Canada.

Rather than looking to see where we can tax more, our goal ought to be to grow our entrepreneurial tax base and unleash the entrepreneurial potential of every Canadian.

We have seen the difference that has resulted when entrepreneurs and government work together. Through consultations, we saw the Government of Canada begin to step back and recognize that there were unintended consequences for entrepreneurs in some of the proposed tax reforms. We also saw a recognition of the value of entrepreneurs with the reduction of the corporate tax rate. When we work together, we can create a better Canada for entrepreneurs, as we've shown in the last few months. We're really excited about the possibilities for the future.

In closing, we believe that the government, as it relates to entrepreneurs, can provide the best possible environment and culture for entrepreneurship. In Canada, this is our opportunity today.

There are six things that we can do and that we ask the finance committee to consider as you're looking forward to building our economy.

We need to continue to reduce red tape for every entrepreneur. There is more red tape in this binder here. We need to relentlessly reduce red tape.

We need to make it easy for entrepreneurs to understand and access government services and support. Here in this binder, once again, we're talking about changes to the labour tax code. We're talking about changes to the GST and HST. We need to educate our entrepreneurs on the impact these changes will have on their businesses. We need to ensure that we're making it easy for entrepreneurs to understand what's happening and to plan for the future.

We also need to ensure that we have the best possible tax environment to provide incentives for entrepreneurial growth. As I mentioned, this is through unleashing innovative capital solutions to seed our economy of the future. We need to ensure that every analysis of Bill C-63 takes into account the impact on Canada's entrepreneurs and their ability to create jobs and invest in each other. Whether it be amendments to the Income Tax Act related to legislation that closes loopholes around capital gains exemptions or ensuring that our farmers and fishers are eligible for the small business deduction, we really need to ensure that our tax environment is conducive to entrepreneurial growth.

Moreover, we need to continue to improve domestic and international market access and access to international capital. How will the Asian Infrastructure Investment Bank help us to expand trade links with China and investment between Chinese investors and businesses and our entrepreneurs? How are we looking at this investment in regional consolidation and regional collaboration as an investment in our small businesses? How are we ensuring that qualifying farmers and fishers are eligible for the small business tax deduction?

In addition to opening up new markets and capital, we really recommend that the Government of Canada work with entrepreneur support organizations like Startup Canada and other industry partners to continue the dialogue and conversation. It's only by working together that we can identify that there are implications for entrepreneurs from many of the aspects of Bill C-63. It's our opportunity as a nation to shine as an entrepreneurial nation.

Thank you so much for the opportunity to bring entrepreneurs to the table. We look forward to taking your questions.

[Gavin Thompson, Vice-President, Corporate Affairs, Molson Coors Brewing Company]

Thank you, Chair, and honourable members.

Thanks very much for allowing me to speak with you today about a very important aspect of Bill C-63, beer concentrate taxation.

As industries grow, it's imperative that they innovate and find better ways to do business. The beer industry is no exception. Innovation has always been core to Molson Coors' success and culture. From the invention of the aluminum can in 1959, right though to the introduction of the first light beers to the market, our pioneering spirit continues to drive us forward.

Our latest innovation is a new draft process that will reduce beer's impact on the environment, ease day-to-day operations for retailers, and make beer available in more places without sacrificing our valued consumers. By allowing the distribution of beer concentrate in place of the standardized keg, Molson Coors is building on an already solid reputation of being a responsible corporate steward. This latest innovation will allow for a reduction in the overall carbon footprint of the beer industry on the production, storage, and consumption sides of our industry. Additionally, we believe that businesses will realize positive economic impacts, as well as injury reduction in their workplaces. I'm not sure if anybody has lifted a keg, but it's a bit of a workout.

The capital costs of beer concentrate for customers are significantly less than the capital expense of having a keg room, maintaining its temperature, and ensuring regular cleaning, all of which can be costly in themselves. In addition, the reduced carbon footprint of having fewer trucks on the road to deliver the kegs, the reduction in electricity consumption, and the reduced material usage on the production side, makes this innovation a cause for excitement.

Molson Coors has been working with our research and development team to ensure a safe and high-quality end product that is strictly regulated and monitored for quality in every step of our process. As such, we have created and invested in a multi-million dollar innovation hub for this industry based right here in Ontario, and we will be looking to expand the reach of the project as soon as possible.

We are in the early stages right now of testing this new system in Toronto with a limited group of customer accounts, with plans to expand the pilot later in this year and into 2018. We look forward to sharing more details in the coming months as we continue to prove out this concept. I can say to the panel that the early reviews of the pilot are very positive, from both our licensees and the consumers. We're confident that this innovation will revolutionize the industry and begin a new path in beer production and distribution.

Molson Coors is very pleased with the direction the government is headed, and we look forward to the passing of this bill and important regulations.

Thank you very much for your time, and I will be pleased to answer any questions the committee may have.

[Steve Dolson, Chair of the Board, Gay Lea Foods Cooperative Ltd.]

Thank you very much for the opportunity to speak to Bill C-63 and, more specifically, the provisions to amend the Income Tax Act in relation to agricultural and fisheries co-operatives. As the legislation indicates, the changes are to ensure that qualifying farmers and fishers selling to agricultural and fisheries co-operatives are eligible for the small business deduction.

Briefly, Gay Lea Foods is the largest dairy co-operative in Ontario. We have recently expanded our membership to eligible dairy farmers within Manitoba, and we are the first North American dairy co-operative to include both licensed dairy cow and dairy goat members. At our nine facilities across Ontario, our employees produce a wide range of dairy products, from the consumer favourite, Spreadables Butter, to North America's first smooth cottage cheese, and more recently, Nothing But Cheese, an innovative snack product made with 100% cheese. We also recently added a cheese-making facility in Alberta to our growing business.

With members on more than 1,300 dairy farms and more than 4,000 members overall, Gay Lea Foods is as renowned for its co-operative-inspired values as it is for being a preferred supplier of award-winning dairy products and high-quality dairy components.

Back in the spring, we became aware that certain changes in the 2016 federal budget would have an unintentional but significant impact on co-operative member-owners. A number of co-operatives, financial and agriculture groups, and experts communicated to Finance Canada about this interpretation and the potential impact on members of co-operatives. We were pleased to receive the proposed changes that Finance Canada published in May of this year, and we acknowledge the efficient time frame in which they provided clarification on this technical matter.

We support the proposed changes in Bill C-63, and are satisfied that they will ensure that recently enacted amendments to the Income Tax Act do not inappropriately deny access to the small business deduction for a farmer selling farm products to an agricultural co-operative.

Co-operatives play an understated but vital role in enhancing Canada's economic and social prosperity, and they support our local communities.

I am tremendously proud that many of the values that define co-operatives are the same ones we celebrate as Canadians. As a proudly Canadian co-operative, Gay Lea Foods invests in our employees and members with training and leadership opportunities. We support the local communities where our employees and members live, work, and raise their families, by donating product, sponsoring local activities, and providing stable, long-term, skilled employment. I am humbled that we are able to do all these activities while growing a 100% Canadian-owned co-operative.

We are empowered by our member-owners who see great value in supporting an innovative, dynamic, and profitable co-operative. With that in mind, as government develops policies and programs to grow the Canadian economy, we encourage you to consider the broader spinoffs and benefits for Canadians that come from supporting Canadian co-operatives like Gay Lea Foods.

Thank you very much.

[Kimberley Hanson, Director, Federal Affairs, Government Relations and Public Policy, Diabetes Canada]

Thank you very much.

Thank you for the opportunity to speak to you on Bill C-63 today.

Diabetes Canada is very pleased to see Bill C-63 grant nurse practitioners the ability to certify applications for the disability tax credit. For many patients, they are their closest and most expert health care providers.

The matters referenced in Bill C-63 affect Canadians living with type 1 diabetes the most. Type 1 is a debilitating, chronic, progressive autoimmune disorder that threatens its sufferers with death on a daily basis. Its sufferers lack the ability to produce insulin, which is essential to metabolizing carbohydrates, which are in turn essential to sustaining life. While we don't know exactly what causes it, we know there is nothing anyone can do to prevent it. Type 1 is a painful, invasive, relentless disease from which none of those who live with it ever get a reprieve. It puts us all at high risk of serious complications like blindness, kidney failure, amputation, and heart disease, and it shortens our life spans by as much as 10 years.

Managing type 1 diabetes has been likened in complexity to flying an airplane. A study in 2009 found that there are 600 steps required to manage it each and every day, and even if its sufferers perform each of those tasks perfectly, their blood sugar doesn't always respond in kind. The same dose of insulin for the same set of circumstances on two different days often results in completely different responses, each of which frequently debilitates the patient. Its variability means it requires constant vigilance, each and every day.

Some people with diabetes don't like to refer to it as a disability, preferring to focus on achieving their dreams despite this challenging condition. That is an appropriate coping mechanism for some, but by any objective measure, it is a disability for which there is no cure.

Even with our publicly funded health care system, living with type 1 costs its sufferers up to $15,000 per year for supplies essential to delivering insulin and monitoring blood sugar. Insulin is life-sustaining therapy.

Given those costs and how imperative these drugs and supplies are for us, the DTC and RDSP offer welcome financial support and security. Although the DTC is only worth on average $1,500 per year, that's $1,500 that a person with diabetes can use towards their medical supplies and health. There's a strong chance that a person with type 1 will face periods of disability during their working life, and perhaps even have it cut short by the complications of the disease. An RDSP can therefore also provide a great deal of peace of mind for those with type 1 and their families.

Recently, that peace of mind has been denied to most Canadians with type 1. Whereas a year ago more than 80% of applicants with type 1 were being granted the DTC and RDSP, since May 2017 that number has plummeted to less than 20%. As the committee well knows, the Income Tax Act hasn't changed, nor have the eligibility criteria. What has changed is the interpretation by CRA agents.

Notwithstanding the difficulty of managing type 1 diabetes and the certification of hundreds of expert doctors and nurses, since May 2017 agents within the CRA have been overruling these certifications and stating that adults independently administering insulin therapy don't spend the required 14 hours a week treating their illness and therefore are ineligible. This change has been made without consultation or notice.

Diabetes Canada has received hundreds of complaints from people with type 1 diabetes who have recently been denied the DTC. Some were applying for the first time, but many had previously received the DTC and were reapplying. Some have been told they'll have to close their RDSPs in consequence of no longer qualifying. Every one of them had a certification from expert doctors and nurses that they meet the eligibility criteria. Not one has been cured.

That's why Diabetes Canada is urgently asking for the following: one, that the CRA revert to its pre-May practices, accept clinicians' certifications, and grant people with type 1 diabetes access to the DTC; two, that the CRA engage in open and transparent consultations with Diabetes Canada, JDRF, and diabetes experts to create eligibility criteria and a certification process that reflect the reality of this disease; and three, that the government consider granting eligibility for the DTC to all Canadians living with type 1 diabetes on the basis that it is incurable and that subjective application of criteria is both unfair and unethical.

That's why we respectfully request that the committee rectify inequities in the application of the Income Tax Act where it concerns the access of people with type 1 diabetes to the DTC and RDSP. Please help alleviate some of the burden these hundreds of thousands of Canadians carry.

Thank you.