Bill C-74 (Historical)

Budget Implementation Act, 2018, No. 1

An Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures

Part 1 implements certain income tax measures proposed or referenced in the February 27,2018 budget by
(a) ensuring appropriate tax treatment of amounts received under the Veterans Well-being Act;
(b) exempting from income amounts received under the Memorial Grant for First Responders;
(c) lowering the small business tax rate and making consequential adjustments to the dividend gross-up factor and dividend tax credit;
(d) reducing the business limit for the small business deduction based on passive income and restricting access to dividend refunds on the payment of eligible dividends;
(e) preventing the avoidance of tax through income sprinkling arrangements;
(f) removing the risk score requirement and increasing the level of income that can be deducted for Canadian armed forces personnel and police officers serving on designated international missions;
(g) introducing the Canada Workers Benefit;
(h) expanding the medical expense tax credit to recognize expenses incurred in respect of an animal specially trained to perform tasks for a patient with a severe mental impairment;
(i) indexing the Canada Child Benefit as of July 2018;
(j) extending, for one year, the mineral exploration tax credit for flow-through share investors;
(k) extending, by five years, the ability of a qualifying family member to be the plan holder of an individual’s Registered Disability Savings Plan;
(l) allowing transfers of property from charities to municipalities to be considered as qualifying expenditures for the purposes of reducing revocation tax;
(m) ensuring that appropriate taxpayers are eligible for the Canada Child Benefit and that information related to the Canada Child Benefit can be shared with provinces and territories for certain purposes; and
(n) extending, by five years, eligibility for Class 43.‍2.
Part 2 implements certain excise measures proposed in the February 27,2018 budget by
(a) advancing the existing inflationary adjustments for excise duty rates on tobacco products to occur on an annual basis rather than every five years; and
(b) increasing excise duty rates on tobacco products to account for inflation since the last inflationary adjustment in 2014 and by an additional $1 per carton of 200 cigarettes, along with corresponding increases to the excise duty rates on other tobacco products.
Part 3 implements a new federal excise duty framework for cannabis products proposed in the February 27,2018 budget by
(a) requiring that cannabis cultivators and manufacturers obtain a cannabis licence from the Canada Revenue Agency;
(b) requiring that all cannabis products that are removed from the premises of a cannabis licensee to be entered into the Canadian market for retail sale be affixed with an excise stamp;
(c) imposing excise duties on cannabis products to be paid by cannabis licensees;
(d) providing for administration and enforcement rules related to the excise duty framework;
(e) providing the Governor in Council with authority to provide for an additional excise duty in respect of provinces and territories that enter into a coordinated cannabis taxation agreement with Canada; and
(f) making related amendments to other legislative texts, including ensuring that any sales of cannabis products that would otherwise be considered as basic groceries are subject to the GST/HST in the same way as sales of other types of cannabis products.
Part 4 amends the Pension Act to authorize the Minister of Veterans Affairs to waive, in certain cases, the requirement for an application for an award under that Act.
It also amends the Veterans Well-being Act to, among other things,
(a) replace the earnings loss benefit, career impact allowance, supplementary retirement benefit and retirement income security benefit with the income replacement benefit;
(b) replace the disability award with pain and suffering compensation; and
(c) create additional pain and suffering compensation.
Finally, it makes consequential amendments to other Acts.
Part 5 enacts the Greenhouse Gas Pollution Pricing Act and makes the Fuel Charge Regulations.
Part 1 of that Act sets out the regime for a charge on fossil fuels. The fuel charge regime provides that a charge applies, at rates set out in Schedule 2 to that Act, to fuels that are produced, delivered or used in a listed province, brought into a listed province from another place in Canada, or imported into Canada at a location in a listed province. The fuel charge regime also provides relief from the fuel charge, through rebate and exemption certificate mechanisms, in certain circumstances. The fuel charge regime also sets out the registration requirements for persons that carry out certain activities relating to fuels subject to the charge. Part 1 of that Act also contains administrative provisions and enforcement provisions, including penalties, offences and collection provisions. Part 1 of that Act also sets out a mechanism for distributing revenues from the fuel charge. Part 1 of that Act also provides the Governor in Council with authority to make regulations for purposes of that Part, including the authority to determine which province, territory or area is a listed province for purpose of that Part.
Part 2 of that Act sets out the regime for pricing industrial greenhouse gas emissions. The industrial emissions pricing regime requires the registration of any facility that is located in a province or area that is set out in Part 2 of Schedule 1 to that Act and that either meets criteria specified by regulation or voluntarily joins the regime. The industrial emissions pricing regime requires compliance reporting with respect to any facility that is covered by the regime and the provision of compensation for any amount of a greenhouse gas that the facility emits above the applicable emissions limit during a compliance period. Part 2 of that Act also sets out an information gathering regime, administrative powers, duties and functions, enforcement tools, offences and related penalties, and a mechanism for distributing revenues from the industrial emissions pricing regime. Part 2 of that Act also provides the Governor in Council with the authority to make regulations for the purposes of that Part and the authority to make orders that amend Part 2 of Schedule 1 by adding, deleting or amending the name of a province or the description of an area.
Part 3 of that Act authorizes the Governor in Council to make regulations that provide for the application of provincial laws concerning greenhouse gas emissions to works, undertakings, lands and waters under federal jurisdiction.
Part 4 of that Act requires the Minister of the Environment to prepare an annual report on the administration of the Act and to cause it to be tabled in each House of Parliament.
Part 6 amends several Acts in order to implement various measures.
Division 1 of Part 6 amends the Financial Administration Act to establish the office of the Chief Information Officer of Canada and to provide that the President of the Treasury Board is responsible for the coordination of that Officer’s activities with those of the other deputy heads of the Treasury Board Secretariat. It also amends the Act to ensure Crown corporations with no borrowing authority are able to continue to enter into leases and to specify that leases are not considered to be transactions to borrow money for the purposes of Crown corporations’ statutory borrowing limits.
Division 2 of Part 6 amends the Canada Deposit Insurance Corporation Act in order to modernize and enhance the Canadian deposit insurance framework to ensure it continues to meet its objectives, including financial stability.
Division 3 of Part 6 amends the Federal-Provincial Fiscal Arrangements Act to renew Fiscal Equalization Payments to the provinces and Territorial Formula Financing Payments to the territories for a five-year period beginning on April 1,2019 and ending on March 31,2024, and to authorize annual transition payments of $1,270,000 to Yukon and $1,744,000 to the Northwest Territories for that period. It also amends the Act to allow Canada Health Transfer deductions to be reimbursed when provinces and territories have taken the steps necessary to eliminate extra-billing and user fees in the delivery of public health care.
Division 4 of Part 6 amends the Bank of Canada Act to ensure that the Bank of Canada may continue to buy and sell securities issued or guaranteed by the government of the United Kingdom if that country ceases to be a member state of the European Union.
Division 5 of Part 6 amends the Currency Act to expand the objectives of the Exchange Fund Account to include providing a source of liquidity for the government of Canada. It also amends that Act to authorize the payment of funds from the Exchange Fund Account into the Consolidated Revenue Fund.
Division 6 of Part 6 amends the Bank of Canada Act to require the Bank of Canada to make adequate arrangements for the removal from circulation in Canada of its bank notes that are worn or mutilated or that are the subject of an order made under paragraph 9(1)‍(b) of the Currency Act. It also amends the Currency Act to provide, among other things, that
(a) bank notes are current if they are issued under the authority of the Bank of Canada Act;
(b) the Governor in Council may, by order, call in certain bank notes; and
(c) bank notes that are called in by order are not current.
Division 7 of Part 6 amends the Payment Clearing and Settlement Act in order to implement a framework for resolution of clearing and settlement systems and clearing houses, and to protect information related to oversight, by the Bank of Canada, of clearing and settlement systems.
Division 8 of Part 6 amends the Canadian International Trade Tribunal Act to, among other things,
(a) create the position of Vice-chairperson of the Canadian International Trade Tribunal;
(b) provide that former permanent members of the Tribunal may be re-appointed to one further term as a permanent member; and
(c) clarify the rules concerning the interim replacement of the Chairperson of the Tribunal and provide for the interim replacement of the Vice-chairperson of the Tribunal.
Division 9 of Part 6 amends the Canadian High Arctic Research Station Act to, among other things, provide that the Canadian High Arctic Research Station is to be considered an agent corporation for the purpose of the transfer of the administration of federal real property and federal immovables under the Federal Real Property and Federal Immovables Act. It also provides that the Order entitled Game Declared in Danger of Becoming Extinct is deemed to have continued in force and to have continued to apply in Nunavut, as of April 1,2014.
Division 10 of Part 6 amends the Canadian Institutes of Health Research Act in order to separate the roles of President of the Canadian Institutes of Health Research and Chairperson of the Governing Council, to merge the responsibility to establish policies and to limit delegation of certain Governing Council powers, duties and functions to its members or committees or to the President.
Division 11 of Part 6 amends the Red Tape Reduction Act to permit an administrative burden imposed by regulations to be offset by the reduction of another administrative burden imposed by another jurisdiction if the reduction is the result of regulatory cooperation agreements.
Division 12 of Part 6 provides for the transfer of certain employees and disclosure of information to the Communications Security Establishment to improve cyber security.
Division 13 of Part 6 amends the Department of Employment and Social Development Act to provide the Minister of Employment and Social Development with legislative authority respecting service delivery to the public and to make related amendments to Parts 4 and 6 of that Act.
Division 14 of Part 6 amends the Employment Insurance Act to modify the treatment of earnings received by claimants while they are in receipt of benefits.
Division 15 of Part 6 amends the Judges Act to authorize the salaries for the following new judges, namely, six judges for the Ontario Superior Court of Justice, one judge for the Saskatchewan Court of Appeal, 39 judges for the unified family courts (as of April 1,2019), one judge for the Federal Court and a new Associate Chief Justice for the Federal Court. This division also makes consequential amendments to the Federal Courts Act.
Division 16 of Part 6 amends certain Acts governing federal financial institutions and related Acts to, among other things,
(a) extend the scope of activities related to financial services in which federal financial institutions may engage, including activities related to financial technology, as well as modernize certain provisions applicable to information processing and information technology activities;
(b) permit life companies, fraternal benefit societies and insurance holding companies to make long-term investments in permitted infrastructure entities to obtain predictable returns under the Insurance Companies Act;
(c) provide prudentially regulated deposit-taking institutions, such as credit unions, with the ability to use generic bank terms under the Bank Act, subject to disclosure requirements, as well as provide the Superintendent of Financial Institutions with additional enforcement tools under the Bank Act and the Office of the Superintendent of Financial Institutions Act, and clarify existing provisions of the Bank Act; and
(d) modify sunset provisions in certain Acts governing federal financial institutions to extend by five years, after the day on which this Act receives royal assent, the period during which those institutions may carry on business.
Division 17 of Part 6 amends the Western Economic Diversification Act to remove the requirement of the Governor in Council’s approval for the Minister of Western Economic Diversification to enter into an agreement with the government of a province, or with a provincial agency, respecting the exercise of the Minister’s powers and the carrying out of the Minister’s duties and functions.
Division 18 of Part 6 amends the Parliament of Canada Act to give each House of Parliament the power to make regulations related to maternity and parental arrangements for its own members.
Division 19 of Part 6 amends the Canada Pension Plan to, among other things,
(a) eliminate age-based restrictions on the survivor’s pension;
(b) fix the amount of the death benefit at $2,500;
(c) provide a benefit to disabled retirement pension beneficiaries under the age of 65;
(d) protect retirement and survivor’s pension amounts under the additional Canada Pension Plan for individuals who are disabled;
(e) protect benefit amounts under the additional Canada Pension Plan for parents with lower earnings during child-rearing years;
(f) maintain portability between the Canada Pension Plan and the Act respecting the Québec Pension Plan; and
(g) authorize the making of regulations to support the sustainability of the additional Canada Pension Plan.
Division 20 of Part 6 amends the Criminal Code to establish a remediation agreement regime. Under this regime, the prosecutor may negotiate a remediation agreement with an organization that is alleged to have committed an offence of an economic character referred to in the schedule to Part XXII.‍1 of that Act and the proceedings related to that offence are stayed if the organization complies with the terms of the agreement.

Budget Implementation Act, 2018, No. 1

[Jody Wilson-Raybould, Liberal, Vancouver Granville, BC]

moved that Bill C-74, an act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures, be read the second time and referred to a committee.

[Joël Lightbound, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I am very pleased to speak to Bill C-74 on behalf of the Government of Canada, as well as our government's planned investments to strengthen the middle class and maintain the strength and sustainable growth of the Canadian economy. Budget 2018, entitled “Equality + Growth: A Strong Middle Class”, represents the next stage in our plan to invest in people and the communities where they live in order to provide the best opportunities for success to the middle class and all Canadians.

The bill we are talking about today, budget implementation act, 2018, No. 1, is the next step in the plan that our government launched over two years ago. When we took office, we jumped into action by helping develop a confident middle class that stimulates economic growth and that is currently benefiting from more opportunities for success than ever. Giving Canadians the opportunity to reach their full potential is not only the right thing to do, but it is also the smart thing to do for our economy. The decision to invest in the middle class is the right decision. Targeted investments combined with the hard work of Canadians across the country have helped create good, well-paying jobs and will continue to strengthen the economy over the long term.

Canada’s economy is strong and growing, and the government's finances are continuously improving. Since 2016, Canada has been leading the G7 in economic growth. It has the lowest net debt-to-GDP ratio of any G7 country, by far. The federal debt-to-GDP ratio has been firmly placed on a downward track, and based on our projections, the deficit-to-GDP ratio should also drop to 0.5% in 2022-23. Our government knows that its plan is working because Canadians are working. Over the past two years, the Canadian economy has grown and generated 600,000 new jobs, most of which are full time. Today, we have the lowest unemployment rate in nearly 40 years. These jobs have made it possible for Canadians to better meet their families' needs and better plan for their retirement.

However, we know that there is still work to be done. We must ensure that the economy reflects the diversity of our county, a country where all Canadians can contribute to and benefit from the nation's prosperity in a significant way. Bill C-74 contains worthwhile measures. I would like to take a few moments to present a few of them, since they are an important part of our government's plan to help the middle class and all those who are striving to reach their full potential. The government believes that Canada's biggest strength is our diversity. In order to succeed in a rapidly changing world, our economy must reflect our diversity and give every Canadian real and fair opportunities to succeed.

Regarding gender equality, we know that although Canadian women today are among the best educated in the world, they earn less than men, are less likely to participate in the labour market than men, and are more likely to work part time. We believe it is time for a change. Closing these gaps and giving women equal opportunities to succeed will encourage a more inclusive dialogue on the questions that will shape our future. We know that it will also improve the quality of life of our families and communities while stimulating the economy. Simply put, when women have the support and opportunities to fully contribute to Canada's economy, all Canadians do better.

For example, the Canada child benefit is an important government initiative aimed at making a positive change for the millions of Canadian families with children. Close to 3.3 million families with children are receiving more than $23 billion in annual Canada child benefit payments. A single mom of two children aged five and eight with a net income of $35,000 in 2016 will have received $11,125 in tax-free Canada child benefit payments in the 2017-2018 benefit year. Naturally, this $11,125 is absolutely tax free. That is $3,500 more than she would have received under the previous child benefit system.

Last year, single mothers earning less than $60,000 a year received $9,000 in benefit payments on average to help make things like healthy food and summer programs for their kids more affordable. Thanks to this increased support, the Canada child benefit is helping to lift hundreds of thousands of Canadian children out of poverty. Child poverty has been reduced by 40% compared with 2013.

By better supporting those families that need it most, including those led by single mothers, the Canada child benefit helps them give their children a good start in life by providing a safe place to live, music lessons, affordable sports camps, and all the day-to-day necessities to which every child has a right.

With Bill C-74, our government will enhance the Canada child benefit in order to ensure that the benefit is indexed to the cost of living effective July 2018, which is two years earlier than initially scheduled.

We realize that some people, especially indigenous people living in northern and remote communities, have often faced barriers when it comes to accessing essential government services and federal benefits such as the Canada child benefit. With Bill C-74, our government will take steps to ensure that anyone who is eligible for support receives it.

Through Bill C-74, the government proposes to expand outreach efforts to all indigenous communities on reserves and in northern and remote areas, and to conduct pilot outreach projects for urban indigenous communities so that indigenous peoples have better access to a full range of federal social benefits, including the Canada child benefit.

Now I would like to talk about the Canada worker's benefit. Canadians working hard to join the middle class deserve to have their hard work rewarded with greater opportunities for success. We know that these Canadians are working to build a better life for themselves and their families. Low-income Canadians are sometimes working two or three jobs so that they can give themselves and their children a better chance at success. That is why budget 2018 introduced the new Canada workers benefit, the CWB. Building on the former working income tax benefit, the CWB would put more money into the pockets of low-income workers. The CWB would encourage more people to join and remain in the workforce by letting them take home more money while they work.

Through Bill C-74, the government would increase the overall support provided by the CWB for the 2019 and subsequent taxation years. In particular, the government proposes to increase maximum benefits under the CWB by up to $170 in 2019, and increase the income level at which the benefit is entirely phased out. As a result, low-income workers earning $15,000 could receive up to almost $500 from the CWB in 2019 than they could receive this year under the current working income tax benefit. That is $500 to invest in the things that are important to them, and to make ends meet.

The government would also propose changes to improve access to the CWB to allow the Canada Revenue Agency to calculate the CWB for anyone who has not claimed it starting in 2019.

Due to these enhancements and intended actions to improve take-up in 2019, the government estimates that more than two million working Canadians would benefit, many of whom were not benefiting from the working income tax benefit. This would help lift approximately 70,000 Canadians out of poverty.

With regard to small businesses, the government is also committed to providing direct support to the small businesses that create the jobs that Canadians depend on. Small businesses are a critical part of our economy, and the government is taking action to help them grow, invest, and create good, well-paying jobs. To that end, Bill C-74, proposes to lower the small business tax rate to 10% from 10.5%, effective January 1, 2018, and to 9%, effective January 1, 2019. This means up to $7,500 in federal corporate tax savings per year to help entrepreneurs and innovators do what they do best: create jobs. Lowering small business taxes should encourage new capital investment in businesses. These investments, whether in better machinery, more efficient technology or new hires, make businesses more productive and competitive.

Bill C-74 also proposes measures to ensure that the tax system encourages corporate owners, including small business owners, to use low corporate tax rates to support their business and not for significant personal tax advantages. The first measure would reduce the ability to access the small business tax rate for small businesses with significant income from passive investments. For those earning less than $50,000 of passive investment income each year, there will be no change in the tax treatment. Also, the tax applicable to investment income remains unchanged. Refundable taxes and dividend tax rates would remain the same.

A second measure corrects a flaw that allows larger private corporations to gain an unintended tax advantage. The measure would better align the refund of taxes paid on passive income with the payment of dividends sourced from passive income. Together, these two changes would impact less than 3% of all private corporations and provide a simpler and more targeted approach. Ninety per cent of the tax impact would be borne by households in the top 1%.

We listened and the design of these proposals is based directly on the feedback that we received during the consultations on our tax proposals. Thanks to this input, we have put forward an approach that is simpler and better targeted than what was outlined last summer. At the same time, we are doing more to help typical small businesses grow by enabling them to retain more earnings for investment and job creation through a lower small business tax rate.

To help Canadians succeed today and in the economy of tomorrow, the government is making long-term investments to grow the economy in a way that ensures good jobs, healthy communities, and clean air and water. Canadians understand that pollution is not free nor should it be. That is why putting a price on carbon pollution is central to the government's plan to fight climate change and grow the economy.

In Canada and abroad, the impacts of climate change are evident, including coastal erosion, thawing, permafrost, and increases in heat waves, droughts, and flooding. Our shared quality of life and our present and future prosperity are deeply connected to the environment in which we live.

Today, through Bill C-74, the government is taking action in order to reduce emissions by introducing the greenhouse gas pollution pricing act. Pricing carbon pollution is the most effective way to reduce emissions. It creates incentives for businesses and households to innovate and pollute less.

I would like to underline that our approach to putting a price on carbon pollution has been collaborative from the beginning. As a first step, the government worked with most provinces and territories and indigenous partners to adopt the pan-Canadian framework on clean growth and climate change in December 2016. The framework includes a pan-Canadian approach to pricing carbon pollution, with the aim of having carbon pricing in place in all provinces and territories this year. The plan provides provinces and territories with the flexibility to choose between two systems: an explicit price-based system or a cap-and-trade system. Right now, a price on carbon pollution is in place in four provinces—Ontario, Quebec, British Columbia, and Alberta—covering over 80% of the Canadian population. All other provinces have committed to adopting some form of carbon pollution pricing this year.

Four out of five Canadians live in jurisdictions that already have a price on carbon pollution, as I have mentioned, and right now those provinces are leading Canada in job creation. With that goal in mind, the government is moving ahead to ensure that a legal framework is in place for the proposed federal carbon pollution pricing system. In jurisdictions that fall short of the federal standard, the federal carbon pollution pricing system would apply on January 1, 2019, starting at a price of $20 per tonne of emissions. The direct revenue from the carbon charges on pollution under the federal system would go back to the province or territory of origin.

On an annual basis, the provincial and territorial systems in place would be assessed by the Government of Canada against the federal standard. By putting a price on carbon pollution, Canada is joining 67 other jurisdictions that have already taken this important step to curb greenhouse gas pollution. Together, those jurisdictions represent about half of the global economy and more than a quarter of global GHG emissions, according to the World Bank's November 2017 report, “State and Trends of Carbon Pricing 2017”.

Putting a price on carbon pollution would help put Canada on a course to meet our 2030 emissions target, in combination with other complementary clean growth measures under Canada's clean growth and climate action plan. It makes sense not only for our shared environment, but also to strengthen our growing economy.

This bill represents the next steps in the government's plan to put people first by giving them the help they need now, all while investing in the years and decades to come.

In order to remain competitive and successful in the global economy, every Canadian must have the opportunity to contribute to our prosperity and to benefit from it. As we continue to grow and strengthen the middle class, we are making significant progress in terms of equality of opportunity, to ensure that the next generation of Canadians can share in a prosperous middle class; a more innovative, creative, and competitive knowledge-based economy; and environmental protections.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, before I comment on my colleague's speech, I would like to draw attention to the fact that all of us in this House today are standing with the families of the Humboldt Broncos team, the unspeakable tragedy that occurred just days ago. We want them to know that our thoughts and prayers are with them. We are so grateful for the outpouring of support that has occurred.

In relation to the comments of my colleague, he failed to mention that the government is actually raising taxes on more than 90% of middle-class families. He also failed to mention that we are paying $26 billion in interest alone to carry the national debt, which will rise to $33 billion in just a few years. This year alone another $18 billion is being added to that national debt.

Could my colleague inform this House as to when the budget will be balanced? We were promised during the campaign that the budget would be balanced by 2019. Now we understand that it could be as late as 2045. I wonder if my colleague could enlighten this House as to when the budget will actually be balanced.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, I want to echo my colleague's sentiments about the recent tragedy. My thoughts and prayers are with the victims and the community as a whole. I think all members of the House share these sentiments.

As for the member's question about taxation, it is important to bear in mind that one of the first things we did as a government was to lower taxes on the middle class, in the $45,000 to $80,000 bracket, while increasing taxes on the wealthiest 1%, in order to give the middle class more money to make investments and meet their many day-to-day obligations. Actually, if I am not mistaken, that was the first thing we did.

However, we did not stop there. We introduced the Canada child benefit, which is more progressive than the family benefits program introduced by the Conservatives. It is more generous to those who need it most, and it is tax free. It provides support directly to Canadian families who need it the most. The Canada child benefit allows nine out of 10 families to keep more money in their pockets, money that is tax free. As I was saying in my speech, this measure has lifted hundreds of thousands of children out of poverty. It has reduced child poverty in Canada by 40% relative to 2013 levels.

As far as the deficit is concerned, as I said very clearly, the ratio of our debt to the size of our economy is the best in the G7 and is trending downward, as is the ratio of our deficit to the size of our economy. These were precisely the results we were looking for when we decided to grow our economy by investing in the middle class and in infrastructure.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Mr. Speaker, the budget implementation act seems to be very much in the realm of the Bay Street mentality with which the government approaches issues. It does not close any of the tax loopholes that are incredibly egregious, giving hundreds of millions of dollars to some of Canada's wealthiest citizens. It does not do anything to shut down the overseas tax havens. We have seen the government sign more and more of these tax treaties with these egregious overseas tax havens, letting tens of billions of dollars leave the country.

What the budget implementation act does is ask regular Canadians to wait. They are being asked to wait for pharmacare, until perhaps after the next election or perhaps another decade. Who knows? They are being asked to wait for pay equity, when Canadian women have already waited for decades and decades. For Canadians in my neck of the woods, in New Westminster—Burnaby, who have seen the acute housing and homelessness crisis we are facing, this budget implementation act and the budget basically say to wait as well.

My question is very simple. Since the government seems to be so incredibly generous with its Bay Street friends, why is it always asking Canadians to wait for the essential services they need and that they are asking for?

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, as far as tax havens are concerned, it is important to mention that nearly $1 billion were invested in the Canada Revenue Agency over the past two years so the CRA could have investigators on the ground conducting audits and getting results for Canadians. That did not make it to the list of priorities for the Conservative government of Stephen Harper, who did not even talk about it, as the then-minister, Mr. Blackburn, told us just last summer.

We invested $1 billion to conduct the necessary investigations in order to bring to justice those who send their revenue to tax havens. That is what the Minister of National Revenue is working hard to do at the head of the CRA.

The member said our government waited, but we did not wait when it came to indexing the Canada child benefit to make sure it met the middle class's growing needs and continued to reduce inequality in this country. We did not wait when it came to increasing the Canada workers benefit, formerly the working income tax benefit, by almost 165%, a move that will lift tens of thousands of low-income Canadians out of poverty.

In my opinion, our government is progressive to the core and is working hard to help those who need it most.

[Celina Caesar-Chavannes, Liberal, Parliamentary Secretary to the Minister of International Development]

Mr. Speaker, over this past weekend, I had a round table, an open discussion, about budget 2018 in the riding of Whitby. My hon. colleague had an opportunity to visit the riding a little while ago. In Durham region, of which Whitby is a part, over the last couple of years, we have seen unemployment decrease to the lowest it has been in 15 years. When I was knocking on doors, it was about 11% or 12%, and now it is down to 5.6%. Members in my riding are excited about that. They are excited about the fact that we have been reducing the small business tax rate, we have indexed the CCB, and we have introduced the Canada working income tax benefit.

One of the things that people were questioning and a bit concerned about is what we have done for seniors. I wonder if the hon. member could address some of the concerns that the residents of Whitby have had.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, it is true that I was in the member for Whitby's region. I was impressed by the dynamism of the local entrepreneurs and also the community members I met, who are very involved and shared their concerns with me. It is a region that is very dynamic. With regard to making sure that this growth is sustained, though it was not part of the member's question, I would like to highlight the investments in 2018 in science. They are historic and will make sure that we continue to innovate in this country and create well-paying jobs for Canadians as Canadian scientists are hard at work finding the bright ideas of the future.

In terms of seniors, it is important to remember that one of the things we have done as a government is to increase the guaranteed income supplement by 10%. That is helping close to a million seniors with a little less than $1,000 per year every year. That is something we should be proud of. That is on top of the national housing strategy we have put forward, which will help provide more housing for senior citizens across this country. These concerns have found an echo in the actions of this government, and I could go on for longer.

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

Mr. Speaker, in regard to the national carbon tax and imposing one upon provinces that may not be in agreement with the government's aims, the courts previously found, in the Vander Zalm ruling regarding the HST, that a province not only needed to be consulted, but there needed to be agreement by the province in order for the feds to collect a tax that would normally be collected by the province. It was under the good governance clause that it was allowed.

Does the member or his government have an opinion from the Minister of Justice's officials that he can share outlining the constitutionality of a nationally imposed federal carbon tax? Our Constitution would allow an environmental program to be tabled by the Minister of Environment, but a tax by a federal minister of finance basically engaging in energy regulation, I believe is ultra vires and outside its constitutionality. Does the member have any evidence that he can table, or will his government be tabling such an opinion, so that members can know this has been thought through? He said in his speech “a legal framework” for the imposition of this national carbon tax? Is it legal?

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, obviously we would not introduce a bill if we did not believe it to be legal.

Here is where I disagree with my esteemed colleague: we see this as a price on carbon pollution. My colleague calls it a tax, but it is actually a price on carbon pollution. I think this shows how the Conservatives' vision contrasts with ours. Members on this side of the House believe it is important to grow our economy in a way that protects and preserves our environment. I would also like to remind him that this type of system is in place in four Canadian provinces so far, four provinces that account for 80% of the population.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, there are only two questions that Parliament must ask when presented with a budget: what does it cost us, and what do we get for it as Canadians?

Let us start with the cost of this budget. Costs are borne out through government in three ways: spending, debt, and taxes. Debt and taxes are the symptoms; spending is the cause. Whatever Parliament agrees to allow the government to spend, it must ultimately tax or borrow from the citizens and from bondholders.

The Liberal government loves to spend. The stats show that it has been increasing spending at an annual rate of roughly 6.5% to 7% per year, which is three times the combined rate of inflation and population growth. In other words, spending is growing three times as fast as the need. That spending, of course, requires a source. The government has been plundering taxpayers and borrowing to pay for that spending ever since it took office.

Let me talk briefly about the government's approach to spending. In an adjoining piece of legislation to this budget bill, the government will attempt to change the way in which Parliament approves the executive branch's expenditure of money. We, as Canadians, live in the British parliamentary system, which for roughly 800 years has meant that the power of the purse rests with the elected officials and that the crown cannot spend what Parliament does not approve. That principle originated in the fields of Great Britain at the time that King John signed the Magna Carta.

Typically governments have come forward before the House of Commons with detailed spending plans, item by item, agency by agency, department by department, and purpose by purpose, saying “Here is what we want to spend. Here is what it is for.” Then, Parliament has scrutinized that spending and passed it, and that government has been restricted by the specificity that it put in that legislation. In other words, it can only spend the money on the things it said it would, and only in the amounts that it said it would spend.

Instead, this year the government wants to do something that has only once been done in Canadian history, and then only during a crisis, and that is for Parliament to approve $7 billion of discretionary spending, which ministers on the government's Treasury Board can spend whatever they want on, as long as it stays under that $7-billion limit.

As I said, normally that $7 billion would be carefully earmarked in the main estimates that come before the House, and we as parliamentarians would approve or reject it. If it were approved, then the government would have to spend each dollar where it said it would. However, not this time.

The government has changed the system in a way that allows the government to have a big bundle of cash for a group of politicians sitting on the Treasury Board to allocate as they wish. As it stands, based on the system of financial reporting, the results of that spending will only come out in subsequent public accounts.

The public accounts for the fiscal year we have just entered will not come out until the fall of 2019. As members all know, we will be in an election at that time, and therefore those accounts cannot be tabled in the House until after the election. What the government is asking us to do is approve $7 billion of discretionary spending, and it will get back to us after the election on how it spent it.

One example of the attitude of the government to spending money was what the parliamentary secretary to the Minister of Finance was saying. He was bragging that the government has spent an extra $1 billion on tax collectors. Normally, most governments blush when they talk about the resources they put into tax collecting departments. The Liberal government openly brags about it.

We all know that tax collection is necessary for any functional country. We also know that given their druthers, the Canadian people would like to see lower taxes and lower costs, and less money spent on bureaucrats hounding our small businesses and workers, as has become the customary practice of the government. We have seen tax collectors go after the tips of waitresses, shoe salesmen's discounts, and the disability tax credit for people suffering with diabetes.

However, the government brags openly about its expenditure on those same tax collectors, which is the Liberal approach to spending: Spend more. Spend now. Spend faster. What does that bring? It brings debt, which is the next pillar of the current Liberal government's plan. It is more debt.

The Liberals ran in the last election on a $10-billion deficit, which meant they would increase the national debt by a mere $10 billion a year. In the first two budgets, that deficit was twice what they promised. This time, it will be three times what they promised. Not only that, they promised that the deficit would be gone by 2019, which is next year. Now they say that will not happen for another quarter century. During that time, Canada's national government will add almost half a trillion dollars in additional debt. That assumes that the government introduces no additional spending in the upcoming pre-election budget next year—an unlikely story. It also assumes that direct program spending will only go up by about 1.5% over the next five years, when the government has been increasing that spending at a rate of about 5.5% since it took office. Therefore, we are expected to believe that the Prime Minister is a new man, that he has changed, and that he will not increase spending at 5.5% but only 1.5%. Who believes that the Prime Minister has even the intention of changing his ways, when his words have not suggested that he believes restraint is necessary?

Originally the government told us that its plan, its anchor, was that the deficit must never be more than $10 billion. Now the Liberals have shattered that promise. The Liberals said their anchor was that they would not add more than $25 billion total. Well, they have already done almost double that in new debt since taking office. They released that anchor as well.

However, the new anchor that the Liberals say will guide them in their spending is that the debt-to-GDP ratio will decline. That is, the debt will never be allowed to grow faster than the economy. Now, there are problems with using that measurement as an anchor, which I will list. One, the debt-to-GDP ratio of the Government of Canada is an incomplete measure of the country's ability to withstand indebtedness.

The Canadian government is supported by taxpayers. Those taxpayers have to support other levels of government which also have debt. Alberta is adding almost $10 billion to its debt this year, which means that one-fifth of every expenditure that the Government of Alberta makes is paid for by borrowing. Ontario has doubled its debt in the last 10 years alone, and it is the most indebted subnational government in North America. Atlantic provinces are similarly indebted. Their aging populations will retire in disproportionately large numbers, meaning fewer taxpayers and more people needing health care at a time when their provinces are already struggling with large debt interest payments to lenders. Therefore, the same taxpayers that the federal government are relying on to support the federal debt also have provincial debts that are growing exponentially. Finally, those taxpayers have personal debts, which happen to be among the largest in the OECD. Right now, the average Canadian household has $1.70 in personal debt for every dollar in disposable income.

If we take the personal debt, the corporate debt, and the government debt of the entire economy, it is three times the size of GDP, which is a larger ratio than Greece, Spain, or other basket cases on debt around the world. This is according to Gluskin Sheff, which is a major financial firm that performed that calculation just a month and a half ago. Therefore, if we take all the debt that the Canadian economy is supporting, we are in a worse financial position today than is Greece.

The government just assumes that all of its good luck will continue. Oil prices have doubled. The American economy is roaring. The world economy has picked up. Interest rates have been at historic lows. The real estate bubble in Toronto and Vancouver has created a short-term and unsustainable employment boom and revenue for the government it cannot count on. All of these events are temporary. They are out of the government's control, and they could be gone just as quickly as they appeared.

If we are running massive, promise-shattering deficits today, while lady luck is smiling, how will we pay the bills when she starts to frown? The government has not prepared for those eventualities. In fact, its arbitrary debt-to-GDP ratio anchor creates a whole series of perverse policy incentives.

The debt is the numerator in that measurement, and the GDP is the denominator. If we were hit with a financial crisis that caused the GDP to shrink, to reduce the debt-to-GDP ratio, as the government claims is its promise, it would actually have to cut spending dramatically in the middle of a recession, which is exactly the opposite of what it claims should be done during such economic times. It would have to cut spending to reduce the size of government faster than the economy overall was reducing in size, and it would have to do so in a way that would allow it to run budget surpluses in order to pay down the debt at a faster rate than the economy was shrinking.

Who in the House would really think it was responsible to prepare for a rainy day by suggesting that if a financial crisis were a problem and an external threat were to arise, the solution, according to the government's plan, would be to cut spending and dramatically reduce the government's ability to respond? That is effectively what the government's current anchor would require it to do to reduce the debt-to-GDP ratio in the event that a crisis came along and shrunk the GDP. Nevertheless, that is the anchor it chooses to rely upon as it goes forward.

That brings me to taxes, because, as we know, today's deficits are tomorrow's taxes. The government cannot ultimately spend any money that it does not tax, either by taking it out of the pockets of people today or by forcing them to pay interest on debt tomorrow. That interest, by the way, is going to rise by one-third over the next five years under the government's plan, from about $25 billion to $32 billion. That is an increase of $7 billion or $8 billion in the amount Canadian taxpayers will give wealthy bondholders. That is another wealth transfer, by the way, from the working class to the super-rich. That always happens through higher taxes.

What do we know about the government's record already on taxes? According to the Fraser Institute, which conducted an objective and scientific analysis of the taxes paid by middle-class Canadians, 80% are already paying higher taxes under this government, on average $800 more. With other projected tax increases, those the government has already legislated or committed to, it will be about 90% of Canadian taxpayers, and they will pay, on average, over $2,000 more in taxes once the government's full plan is implemented.

Taxpayers are already contributing more to feed the government's insatiable, uncontrollable spending. However, the government is just getting started. It has an additional carbon tax it wants everyone to pay. That tax is laid out in a 206-page section of the budget bill we are now debating. Let us step back a minute and ask ourselves what we were told about this carbon tax.

First, we were told that it would be revenue neutral, that the government would cut taxes as much as it raised them. While people might pay more for gas, groceries, electricity, and other basic essentials, they would get an income tax break or perhaps a consumption tax break. As a result, it would be a strictly neutral transaction shifting taxes from what we earn to what we burn. That was the promise. However, nowhere in these 206 pages of legislation on the federal carbon tax is there any mention of a tax reduction to offset the new burden to be paid by Canadian taxpayers for the carbon tax.

Second, we were told that the carbon tax would be simple. There would be a wholesale levy, and then the marketplace would do its work. The government would put a price on something we do not want, and people would therefore consume less of it, that being carbon-intensive goods, and the problem would solve itself. We would not need all this bureaucracy: regulators, administrators, rules, and accountants to administer the tax on the end of the small business or household. That would all be behind us.

We now have the legislation, and it is 206 pages long. There are permits. There are credits that could be traded between provinces, and there are different rates of taxation for different kinds of carbon products, all of which will have to be sorted out through endless paperwork by high-priced accountants and lawyers who will then administer this scheme.

This carbon tax, as established by this legislation, would benefit some. It would benefit those who are wealthy and well-connected and who have the ability to get their hands on the resulting revenue.

Ontario already has a carbon tax, and while it takes one-third more of the income of a low-income household than that of a rich household, it provides benefits to people who can afford to buy a $150,000 electric Tesla. If someone is a millionaire and can buy a Tesla, that person will get $15,000 as a bonus, but a low-income single mom trying to keep the lights on or pay for gas to get to work will pay more so that the rich guy can have his fancy electric car. It is another wealth transfer to the privileged elite using government as the delivery mechanism to move money from those who earned it to the privileged few who did not.

Herein lies the worst part of the carbon tax, and it is the cover-up, the carbon tax cover-up. For the last two years, I have asked the Liberal government what it would cost the average family to pay the $50-a-tonne carbon tax. The good news is that the government has that information. I know, because I submitted access to information requests for which it released the information. However, it released the information with some black ink over the numbers. We are not allowed to know the numbers. We know there is a cost, and we know that the government knows the cost, but it does not want us to know the cost.

This is the first time in my parliamentary career that a government has imposed a tax without telling people what it will cost them. The basic principle of parliamentary democracy is that the commoners must approve any tax the common people must pay, but we cannot approve what we do not know. If the government is so proud of its carbon tax, why does it not tell people what it will cost them?

Finally, the government will not tell us how much greenhouse gases will be reduced. We do not know the cost and we do not know the benefit, yet we are supposed to judge the cost-to-benefit analysis.

This budget costs too much and will achieve too little, so I am moving a motion to amend the budget bill. I move:

That the motion be amended by deleting all the words after the word “That” and substituting the following: the House decline to give second reading to Bill C-74, an act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures, since the Bill: (a) fails to address the cost of the government's carbon tax to the average Canadian Family; (b) neglects to implement, or to even mention, the government's promise of a balanced budget; and (c) will continue on the path of adding debt at twice the rate foreshadowed by the Minister of Finance.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

The motion seems to be in order.

Questions and comments, the hon. member for Whitby.

[Celina Caesar-Chavannes, Liberal, Parliamentary Secretary to the Minister of International Development]

Mr. Speaker, the hon. member took me back to my fourth grade days when he mentioned that debt was the numerator and GDP was the denominator and that if, for example, we got into a fiscal crisis, we would need to cut services to maintain our debt-to-GDP ratio.

I am wondering if my hon. colleague remembers the days before the last election, when that is exactly what his government did. It cut services and essential programs needed by Canadians to create a fictional surplus before the last election. During the election, his government then ran on an austerity budget at a time when the economy was stagnant, such that at this time, we would not see Canada as the fastest growing country in the G7, we would not see the job creation we have seen so far, and we would not see the economy booming as we do.

I am wondering if the hon. colleague can speak to that.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, I certainly can, as a matter of fact. She said we would not have seen Canada as the fastest job-creation jurisdiction in the G7 if Conservative policies were in place. Actually, that is exactly what we saw. When the great global recession struck here in Canada, we had the best job record anywhere in the G7. In fact, we were the last country to go into deficit and the last country to go into recession, and we were the first to come out of recession. That was the result of careful planning in the good times.

In the years leading up to that great global recession, which originated outside our borders, our previous finance minister, Jim Flaherty, paid off $40 billion in debt so that we had a cushion and could absorb those external shocks. We then quickly recovered and turned that short-term, externally caused deficit into a surplus so that when the next worldwide shock struck, the 70% drop in oil prices in late 2014, we were once again insulated against its effects, and we were able to move forward with a solid economic position. That is a good reminder that when times are good, we should squirrel away everything we can so that we are prepared for the bad times that may come ahead.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Mr. Speaker, I like the hon. member, and he is certainly very articulate, but I really have to ask where he was over the past decade, particularly under the Harper government. We saw the worst deficits in our nation's history under the Conservatives, and we saw the highest family debt load in Canadian history. It has gotten worse under the Liberals.

He mentioned in his speech the question of transferring money to the privileged few. This was a practice started by the Harper government, and it has been amplified by the Liberals, particularly when we look at overseas tax havens. We lose anywhere from $10 billion to $40 billion each and every year. No one knows how much, because the Liberals, up until a few weeks ago, refused to give the figures to the Parliamentary Budget Officer, as the Conservatives did before them. We lose billions and billions of dollars a year that could go to job creation, building social programs, and providing the things Canadians really need. What we have seen is the Liberals continuing the practice of signing these tax treaties with notorious tax havens.

My question to the hon. member is very simple. Does he think it is bad, as I do, that the Liberals are continuing the practice of signing these agreements with overseas tax havens and allowing tens of billions of dollars to leave the country untaxed, when they could be serving to build job creation, build a better economy, and build programs for Canadians?