Bill C-97 (Historical)

Budget Implementation Act, 2019, No. 1

An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2019 and other measures

Part 1 implements certain income tax and related measures by
(a) providing a temporary enhanced first-year capital cost allowance rate of 100% in respect of eligible zero-emission vehicles;
(b) removing the requirement that property be of “national importance” in order to qualify for the enhanced tax incentives for donations of cultural property;
(c) providing a temporary enhanced first-year capital cost allowance rate in respect of a wide range of depreciable capital properties, including a temporary first-year capital cost allowance rate of 100% in respect of
(i) machinery and equipment used for the manufacturing or processing of goods, and
(ii) specified clean energy equipment;
(d) ensuring that social assistance payments under certain programs are non-taxable, are not included in income for the purposes of determining entitlement to income-tested benefits and credits and do not preclude an individual from being considered a “parent” for the purposes of the Canada Workers Benefit;
(e) repealing the use of taxable income as a factor in determining a Canadian-controlled private corporation’s annual expenditure limit for the purpose of the enhanced scientific research and experimental development tax credit;
(f) providing support for Canadian journalism;
(g) introducing the Canada Training Credit;
(h) amending the Income Tax Act to reflect the current regulations for accessing cannabis for medical purposes;
(i) eliminating the requirement that sales be to a farming or fishing cooperative corporation in order to be excluded from specified corporate income for the purposes of the small business deduction;
(j) extending the mineral exploration tax credit for an additional five years;
(k) ensuring that business income of a communal organization retains its character when it is allocated to members of the communal organization for tax purposes;
(l) increasing the withdrawal limit under the Home Buyers’ Plan and amending how it applies on the breakdown of a marriage or common-law partnership;
(m) extending joint and several liability for tax owing on income from carrying on business in a TFSA to the TFSA’s holder and limiting the TFSA issuer’s liability for such tax;
(n) supporting employees who must reimburse a salary overpayment to their employer due to a system, administrative or clerical error;
(o) expanding tax support for electric vehicle charging stations and electrical energy storage equipment;
(p) allowing joint projects of producers from Canada and Belgium to qualify for the Canadian film or video production tax credit; and
(q) ensuring appropriate pension adjustment calculations in 2019 and subsequent tax years for registered pension plans that reference the enhanced Canada Pension Plan.
Part 2 implements certain goods and services tax/harmonized sales tax (GST/HST) measures proposed in the March 19, 2019 budget
(a) to provide GST/HST relief in the health care sector by relieving the GST/HST on supplies and importations of human ova and importations of in vitro embryos, by adding licenced podiatrists and chiropodists to the list of practitioners on whose order supplies of foot care devices are zero-rated and by exempting from the GST/HST certain health care services rendered by a multidisciplinary team of licenced health care professionals; and
(b) by introducing amendments to ensure that the GST/HST treatment of expenses incurred in respect of zero-emission passenger vehicles parallels the income tax treatment of those vehicles.
Part 3 implements certain excise measures proposed in the March 19, 2019 budget by changing the federal excise duty rates on cannabis products that are edible cannabis, cannabis extracts (including cannabis oils) and cannabis topicals to $0.‍0025 per milligram of total tetrahydrocannabinol contained in the cannabis product.
Part 4 enacts and amends several Acts in order to implement various measures.
Subdivision A of Division 1 of Part 4 amends the Bank Act to, among other things, provide members of federal credit unions with different methods of voting prior to meetings and provide additional exceptions to the requirement that a proxy circular be sent in order to solicit proxies. The Subdivision also makes a technical amendment to An Act to amend certain Acts in relation to financial institutions.
Subdivision B of Division 1 of Part 4 amends the Canadian Payments Act to allow the term of the elected directors of the Board of Directors of the Canadian Payments Association to be renewed twice, to extend the term of the Chairperson and Deputy Chairperson of that Board and to allow the remuneration of certain members of the Stakeholder Advisory Council.
Subdivision A of Division 2 of Part 4 amends the Canada Business Corporations Act to require a corporation, on request by an investigative body that has reasonable grounds to suspect that certain offences have been committed, to provide to the investigative body a copy of its register of individuals with significant control or information in that registry that is specified by the investigative body. It also requires those investigative bodies to keep certain records in relation to their requests and to report annually in respect of those requests.
Subdivision B of Division 2 of Part 4 amends the Criminal Code to add the element of recklessness to the offence of laundering proceeds of crime.
Subdivision C of Division 2 of Part 4 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to, among other things,
(a) allow the Governor in Council to make regulations defining “virtual currency” and “dealing in virtual currencies”;
(b) require the Financial Transactions and Reports Analysis Centre of Canada (“the Centre”) to disclose information to the Agence du Revenu du Québec and the Competition Bureau in certain circumstances;
(c) allow the Centre to disclose additional designated information that is associated with the import and export of currency and monetary instruments;
(d) provide that certain information must not be the subject of a confidentiality order made in the course of an appeal to the Federal Court; and
(e) require the Centre to make public certain information if a person or entity is deemed to have committed a violation or is served a notice of a decision of the Director indicating that a person or entity has committed a violation.
Subdivision D of Division 2 of Part 4 amends the Seized Property Management Act to authorize the Minister to, among other things,
(a) provide consultative and other services to any person employed in the federal public administration or by a provincial or municipal authority in relation to the seizure, restraint, custody, management, forfeiture or disposal of certain property;
(b) manage property seized, restrained or forfeited under any Act of Parliament or of the legislature of a province; and
(c) dispose of property when it is forfeited to Her Majesty in right of Canada and, with the consent of the government of the province, when it is forfeited to Her Majesty in right of a province, and share the proceeds.
The Subdivision also makes consequential amendments to the Criminal Code, the Crimes Against Humanity and War Crimes Act and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
Division 3 of Part 4 amends the Employment Equity Act to require federally regulated private-sector employers to report salary information that supports employment equity reporting beyond salary ranges, including making wage gap information by occupational groups more evident.
Division 4 of Part 4 authorizes payments to be made out of the Consolidated Revenue Fund for climate action support and in relation to infrastructure as well as to the Federation of Canadian Municipalities and to the Shock Trauma Air Rescue Service.
Division 5 of Part 4 amends the Bankruptcy and Insolvency Act to, among other things,
(a) require all parties in a proceeding under the Act to act in good faith; and
(b) allow the court to inquire into certain payments made to, among other persons, directors or officers of a corporation in the year preceding insolvency and imposes liability on the directors for those payments.
The Division amends the Companies’ Creditors Arrangement Act to, among other things,
(a) limit the relief provided in an order made under section 11 to what is reasonably necessary and limit the period staying all proceedings that might be taken in respect of the company to 10 days;
(b) allow the court to make an order to disclose an economic interest in respect of a debtor company; and
(c) require all parties in a proceeding under the Act to act in good faith.
The Division also amends the Canada Business Corporations Act to, among other things,
(a) set out factors that directors and officers of a corporation may consider when acting with a view to the best interests of that corporation; and
(b) require directors of certain corporations to disclose certain information to shareholders respecting diversity, well-being and remuneration.
Finally, the Division amends the Pension Benefits Standards Act, 1985 to clarify that a pension plan is not to provide that, among other things, a member’s pension benefit or entitlement to a pension benefit is affected when a plan terminates. It also authorizes a pension plan administrator to purchase an immediate or deferred life annuity for former members or survivors in order to satisfy an obligation under the plan to provide a pension benefit arising from a defined benefit provision.
Division 6 of Part 4 amends the Canada Pension Plan to authorize the Minister of Employment and Social Development to waive the requirement for an application for a retirement pension in certain cases.
Division 7 of Part 4 amends the Old Age Security Act to provide, starting in July 2020, a new income exemption for the purposes of calculating the Guaranteed Income Supplement. The new exemption excludes the first $5,000 of a person’s employment and self-employment income as well as 50% of their employment and self-employment income greater than $5,000 but not exceeding $15,000.
Division 8 of Part 4 amends the Canadian Forces Superannuation Act, the Public Service Superannuation Act and the Royal Canadian Mounted Police Superannuation Act to increase the surplus limit that applies to the Canadian Forces Pension Fund, the Public Service Pension Fund and the Royal Canadian Mounted Police Pension Fund, respectively, to 25% of the amount of liabilities.
Subdivision A of Division 9 of Part 4 amends the Bankruptcy and Insolvency Act to permit trustee licensing fees to be paid on a date to be prescribed by regulation and to permit trustees to maintain electronic records instead of retaining original documents.
Subdivision B of Division 9 of Part 4 amends the Electricity and Gas Inspection Act to allow for the addition, by regulation, of units of measurement for electricity and gas sales and distribution.
Subdivision C of Division 9 of Part 4 amends the Food and Drugs Act to improve safety and enable innovation by introducing measures to, among other things,
(a) allow the Minister of Health to classify certain products exclusively as foods, drugs, cosmetics or devices;
(b) provide oversight over the conduct of clinical trials for drugs, devices and certain foods for special dietary purposes;
(c) provide a regulatory framework for advanced therapeutic products; and
(d) modernize inspection powers.
Subdivision D of Division 9 of Part 4 amends the Importation of Intoxicating Liquors Act to limit the application of the Act to intoxicating liquors imported into Canada.
Subdivision E of Division 9 of Part 4 amends the Precious Metals Marking Act to provide that exemptions made by regulation can be either conditional or unconditional.
Subdivision F of Division 9 of Part 4 amends the Textile Labelling Act to provide that exemptions made by regulation can be either conditional or unconditional.
Subdivision G of Division 9 of Part 4 amends the Weights and Measures Act to authorize, by regulation, the use of new units of measurement and to update the definitions of the basic units of measurement in accordance with international standards.
Subdivision H of Division 9 of Part 4 amends the Hazardous Materials Information Review Act to streamline the process for reviewing claims for exemption, to allow for the suspension and cancellation of exemptions and to harmonize the provisions of the Act that allow for the disclosure of confidential business information with similar provisions in other Department of Health Acts.
Subdivision I of Division 9 of Part 4 amends the Canada Transportation Act to authorize the electronic administration and enforcement of Acts under the Minister of Transport’s authority and to promote innovation in transportation by authorizing the granting of exemptions for the purpose of research, development and testing.
Subdivision J of Division 9 of Part 4 amends the Pest Control Products Act to, among other things, allow the Minister of Health to
(a) expand the scope of a re-evaluation of, or a special review in relation to, a pest control product rather than initiating a new special review; and
(b) decide not to initiate a special review if the aspect of a pest control product that would otherwise prompt such a review is being, or has been, addressed in a re-evaluation or another special review.
Subdivision K of Division 9 of Part 4 repeals the provisions of the Quarantine Act that relate to the laying of proposed regulations before Parliament.
Subdivision L of Division 9 of Part 4 repeals the provisions of the Human Pathogens and Toxins Act that relate to the laying of proposed regulations before Parliament.
Division 10 of Part 4 amends the Royal Canadian Mounted Police Act to establish the Management Advisory Board, which is to provide advice to the Commissioner of the Royal Canadian Mounted Police on the administration and management of that police force.
Division 11 of Part 4 amends the Pilotage Act to, among other things,
(a) set out a clear purpose and principles for that Act;
(b) transfer the responsibility for making regulations from the Pilotage Authorities, with the approval of the Governor in Council, to the Governor in Council, on the recommendation of the Minister of Transport;
(c) transfer responsibility for enforcing that Act and issuing and charging for licences and certificates from the Pilotage Authorities to the Minister of Transport;
(d) set out an enforcement regime that is consistent with other Department of Transport Acts;
(e) provide that regulatory matters for the safe provision of compulsory pilotage services not be addressed in service contracts between the Pilotage Authorities and pilot corporations;
(f) allow the Pilotage Authorities to impose charges other than by making regulations;
(g) require that service contracts between pilot corporations and the Pilotage Authorities be publicly available; and
(h) prohibit pilots, or users or suppliers of pilotage services, from sitting on the board of directors of a Pilotage Authority.
The Division also makes consequential amendments to the Arctic Waters Pollution Prevention Act and the Transportation Appeal Tribunal of Canada Act.
Division 12 of Part 4 enacts the Security Screening Services Commercialization Act. That Act, among other things,
(a) authorizes the Governor in Council to designate a body corporate incorporated under the Canada Not-for-profit Corporations Act as the designated screening authority, which is to be solely responsible for providing aviation security screening services;
(b) authorizes the Canadian Air Transport Security Authority to sell or otherwise dispose of its assets and liabilities to the designated screening authority;
(c) regulates the establishment, imposition and collection of charges related to the provision of aviation security screening services; and
(d) provides for the dissolution of the Canadian Air Transport Security Authority.
The Division also makes consequential amendments to other Acts.
Division 13 of Part 4 amends the Aviation Industry Indemnity Act to authorize the Minister of Transport to undertake to indemnify
(a) NAV CANADA for acts or omissions it commits in accordance with an instruction given under an agreement entered into between NAV CANADA and Her Majesty respecting the provision of air navigation services to the Department of National Defence; and
(b) any beneficiary under an insurance policy held by an aviation industry participant.
Division 14 of Part 4 amends the Transportation Appeal Tribunal of Canada Act to clarify that the Transportation Appeal Tribunal of Canada has jurisdiction in respect of reviews and appeals in connection with administrative monetary penalties provided for under the Marine Liability Act.
Division 15 of Part 4 enacts the College of Immigration and Citizenship Consultants Act. That Act creates a new self-regulatory regime governing immigration and citizenship consultants. It provides that the purpose of the College of Immigration and Citizenship Consultants is to regulate immigration and citizenship consultants in the public interest and protect the public. That Act, among other things,
(a) creates a licensing regime for immigration and citizenship consultants and requires that licensees comply with a code of professional conduct, initially established by the responsible Minister;
(b) authorizes the College’s Complaints Committee to conduct investigations into a licensee’s conduct and activities;
(c) authorizes the College’s Discipline Committee to take or require action if it determines that a licensee has committed professional misconduct or was incompetent;
(d) prohibits persons who are not licensees from using certain titles and representing themselves to be licensees and provides that the College may seek an injunction for the contravention of those prohibitions;
(e) provides the responsible Minister with the authority to determine the number of directors on the board of directors and to require the Board to do anything that is advisable to carry out the purposes of that Act; and
(f) contains transitional provisions allowing the existing regulator — the Immigration Consultants of Canada Regulatory Council — to be continued as the College of Immigration and Citizenship Consultants or, if the existing regulator is not continued, allowing the establishment of the College of Immigration and Citizenship Consultants, a new corporation without share capital.
The Division also makes related amendments to the Citizenship Act and the Immigration and Refugee Protection Act to double the existing maximum fines applicable to the offence of contravening section 21.‍1 of the Citizenship Act or section 91 of the Immigration and Refugee Protection Act.
In addition, it amends those Acts to provide the authority to make regulations establishing a system of administrative penalties and consequences, including of administrative monetary penalties, applicable to certain violations by persons who provide representation or advice for consideration — or offer to do so — in immigration or citizenship matters.
Finally, the Division makes consequential amendments to the Access to Information Act and the Privacy Act.
Division 16 of Part 4 amends the Immigration and Refugee Protection Act to
(a) introduce a new ground of ineligibility for refugee protection if a claimant has previously made a claim for refugee protection in another country;
(b) provide that if the Federal Court refuses a person’s application for leave to commence an application for judicial review, or denies their application for judicial review, with respect to their claim for refugee protection or their application for protection, the date of that refusal or denial is the first day of the period that must pass before a request or application referred to in section 24, 25 or 112 of that Act may be made; and
(c) authorize the Governor in Council to make an order regarding the processing of applications for temporary resident visas, work permits and study permits made by citizens or nationals of a foreign state or territory if the Governor in Council is of the opinion that the government or competent authority of that state or territory is unreasonably refusing to issue or unreasonably delaying the issuance of travel documents to citizens or nationals of that state or territory who are in Canada.
Division 17 of Part 4 amends the Federal Courts Act to increase the number of Federal Court judges.
Division 18 of Part 4 amends the National Housing Act to allow the Canada Mortgage and Housing Corporation to acquire an interest or right in a housing project that is occupied or intended to be occupied by the owner of the project and to make an investment in order to acquire such an interest or right.
Division 19 of Part 4 enacts the National Housing Strategy Act. That Act provides for, among other things, the development and maintenance of a national housing strategy and imposes requirements related to the mandatory content of the strategy. It also establishes a National Housing Council and requires the appointment of a Federal Housing Advocate. Finally, it requires the submission of an annual report by the Advocate on systemic housing issues and the submission of periodic reports by the designated Minister on the implementation of the strategy and the achievement of desired housing outcomes.
Division 20 of Part 4 enacts the Poverty Reduction Act, which provides for an official metric and other metrics to measure the level of poverty in Canada, sets out two poverty reduction targets in Canada and establishes the National Advisory Council on Poverty.
Division 21 of Part 4 amends the Veterans Well-being Act to expand the eligibility criteria for the education and training benefit in order to make members of the Supplementary Reserve eligible for that benefit.
Division 22 of Part 4 amends the Canada Student Loans Act and the Canada Student Financial Assistance Act to extend the interest-free period on student loans by six months and to provide for transitional measures in respect of individuals to whom student loans were made and who ceased to be students at any time during the six months before the amendments come into force.
Division 23 of Part 4 amends the Canada National Parks Act to establish Thaidene Nene National Park Reserve of Canada and to decrease the hectarage of certain ski areas.
Division 24 of Part 4 amends the Parks Canada Agency Act to provide that, starting on April 1, 2021, any balance of money appropriated to the Parks Canada Agency that is not spent by the Agency in the fiscal year in which it was appropriated lapses at the end of that fiscal year.
Subdivision A of Division 25 of Part 4 enacts the Department of Indigenous Services Act, which establishes the Department of Indigenous Services and confers on the Minister of Indigenous Services various responsibilities relating to the provision of services to Indigenous individuals eligible to receive those services.
Subdivision B of Division 25 of Part 4 enacts the Department of Crown-Indigenous Relations and Northern Affairs Act, which establishes the Department of Crown-Indigenous Relations and Northern Affairs, confers on the Minister of Crown-Indigenous Relations various responsibilities relating to relations with Indigenous peoples and confers on the Minister of Northern Affairs various responsibilities relating to the administration of Northern affairs.
Subdivision C of Division 25 of Part 4 makes amendments to other Acts and repeals the Department of Indian Affairs and Northern Development Act.
Subdivision D of Division 25 of Part 4 makes amendments to the First Nations Land Management Act, the First Nations Oil and Gas and Moneys Management Act and the Addition of Lands to Reserves and Reserve Creation Act.
Division 26 of Part 4 enacts the Federal Prompt Payment for Construction Work Act in order to establish a regime to provide prompt payments to contractors and subcontractors for construction work performed for the purposes of a construction project in respect of federal real property or federal immovables and a regime to resolve disputes over the non-payment of that construction work.

Budget Implementation Act, 2019, No. 1

[The Assistant Deputy Speaker, Anthony Rota]

The hon. member will have 10 minutes for questions and comments when the House resumes debate on this bill.

It being 5:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

The House resumed consideration of the motion that Bill C-97, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2019 and other measures, be read the third time and passed.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, maybe to the chagrin of my Liberal colleagues across the way, this is not my farewell statement. They will have to put up with me a little longer. I listened to a lot of the statements made by retiring members and, again, I offer a heartfelt thanks for their service to Canada.

There are some members like the member for Victoria, whom I appreciated working with on several committees. I know that many of us will miss him. Even though he was a New Democrat, he was one we could have a decent argument with and come away still friends at the end of the day.

There is a Yiddish proverb that says, “If you want to know what God thinks of money, look at the people he gives it to.” That is what I want to start with. I know I have a 20-minute statement on the budget with questions and answers. I am not splitting my time. I do not want to do that, but I want to talk about this Yiddish proverb because the government has spent a prodigious amount of money over the last four years. We know that today's debt is tomorrow's taxes.

The government now has a total debt of $705 billion. If one includes Crown corporation debt, it is over $1 trillion. I know there will be Liberal MPs who will say to look at the previous government, which increased the national debt as well. The counter-argument is that they had the Great Recession in 2008-09. As I remember it, the Liberal Party members clamoured for more spending. They actually wrote a coalition document with the New Democrats and the separatist Bloc Québécois, demanding even more spending. The government of the day decided that it would find a middle ground and not spend us off a cliff, but that it would do what the House of Commons was indicating, which was to spend cyclically into the economy.

Budget 2019, which this bill tends to introduce and make real in the lives of people, I call it a distraction budget. Last year, I called it the refrigerator budget. There is an extra $41.3 billion of new spending over five years. The campaign promise of the Liberal Party was that there was supposed to be a surplus of $1 billion this year. It is a $19.8-billion deficit instead, $19.7 billion the year that follows, $14.8 billion in the year after, and $14.1 billion the year after that. It is successive years of deficits.

If we look at the financial statements on the—

[The Assistant Deputy Speaker, Anthony Rota]

I would ask the hon. member for Calgary Shepard to pause for a second.

I will ask the Sergeant-at-Arms to maybe just check on the outside. There is some clamouring going on. I am sure they are not doing it on purpose. It sounds like a very good conversation, but I am really not interested in hearing what they have to say.

We will concentrate on what the hon. member for Calgary Shepard has to say.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I am usually the one rising on points of order about too much noise in this new interim chamber, which is beautiful but not very functional, as I like to remind members. I have been quoted in the Hill Times as having said that.

To return to budget 2019, as I mentioned, successive budgets have increased spending. I went back to previous years' budget documents. I went all the way back to budget 2016. I looked at budget 2015. There is actually a gap in this year's spending. What budget 2015 expected to spend this year was $302.6 billion. Instead, what the government is intent on spending is $329.4 billion, which is a gap of $27 billion between what the government expected to do in 2015 and what it is now expecting to do in 2019.

One of the great problems of the current government is its inability and maybe disinterest in controlling spending. Every solution requires gobs of new spending. Every problem requires gobs of new spending. Every single year, Canada's GDP growth keeps being revised downward. In the economy, there is a cycle of 10 to 12 years and we reach a recession. Sometimes they are short recessions; sometimes they are prolonged recessions.

Again to my Yiddish proverb, if we want to know what God thinks of money, we look at the people he has given it to and look at what they have done with it. The Liberals have achieved far too little for the money that they have spent.

I want to talk about the housing proposals inside the budget and some of the housing policies and ideas the government has put forward. The Liberals are far lacking in both what they should be trying to achieve for first-time homebuyers and the damage they have done by introducing the B-20 stress test and the Minister of Finance's stress test on insured mortgages. It is an issue I have raised in the House repeatedly. I have raised it at the finance committee repeatedly. I had Liberal MPs vote me down twice on a request to do a study of the B-20 stress test. The first time it was without saying a single word. They did not rebuff my argument on why it should be done. The second time, they did have an argument but it was not very strong.

In budget 2019, the first chapter of the budget that the BIA would implement is on housing. I am glad the Liberals have a chapter on housing because young first-time homebuyers across my riding deeply care about being able to achieve the dream of home ownership.

When I lived in Edmonton and purchased my first condo, for my wife and me it was one of the great achievements in our lives that we had put aside enough money and were able to qualify for a mortgage. We got a longer amortization of 35 years. Some people say that there are now 25-year amortization periods for insured mortgages, but there are still 30 years for the uninsured market, and there is a difference between the two.

Taxes have gone up. It is harder for people to accumulate savings over time in order to have a down payment. Now we have a successive series of government decisions, with policy direction being given to the CMHC, policy direction being given to chartered banks and lenders on insured mortgages, and the B-20 stress test, an OSFI rule that is given the blessing of the government, that are hurting opportunities to get into housing, especially for young people.

What I want to avoid is a situation where we eliminate an entire generation, a cohort of people, from being able to get into the type of home that suits their needs. That is different for different people at different times in their lives. When people are younger and starting a family they need a bit more space. When they are getting toward retirement, they want to downsize so they need to sell their house and move into something smaller that suits their needs.

When the government begins to introduce different policies and legislation, that starts to gum up the workings of the real estate markets. I say “markets”, plural, because there is no such thing as a single real estate market in Canada. We do not compare a home in Vancouver to a home in Calgary, to a home in Halifax, to a home in Ottawa. Those real estate choices are very local. They are things such as schools, access to public transit or perhaps there is a baseball diamond near a home as there is near mine so my kids can go and play there. Those are the choices that really matter to people.

The decision the government made with the B-20 stress test has heavily impacted the market. I am going to be referencing a TD Canada report and a CIBC economics report to make my point. There are defects inside the BIA. There are defects inside the budget and how the Liberals are trying to address the housing problem for young people, especially for first-time homebuyers.

Approximately 20% to 30% of first-time home buyers have been pushed out of the market by the B-20 stress test. The statistics have shown this, whether we use Statistics Canada, CREA, the Canadian Real Estate Association, or Build Canada. Build Toronto has shown there is a 100,000 unit gap in the last 10 years of built dwellings in the Toronto area.

When the B-20 was introduced, two reasons were given for it. OSFI said that the reason for introducing these much harsher stress tests, 2% to qualify for a mortgage, was to ensure the stability of the banks. What happened, according to TD, was that by introducing this rule, over the past year, 2018 and now into 2019, it had pushed lending to the B market, the B lending. That is not to say monoline lenders are bad, they just typically have higher interest rates, they offer different terms, and it is actually a 2% increase. In Toronto, in the GTA area, it is far higher.

What the government has done is it has moved into the unregulated market by introducing the B-20 stress test.

The second reason was given by the Minister of Finance in January. He said publicly that the reason was to reduce prices. That is not the reason this Parliament allows OSFI to regulate insurance, securitization and lending. The reason for that is the stability of chartered banks and large lenders.

OSFI regulations are not supposed to be used to manipulate prices in different real estate markets. That is mission creep. That is policy creep. It is far beyond the scope of what Parliament intended when it gave the government the ability to set regulations through this independent, autonomous regulator.

I always remind people that regulators are arm's length but within arm's reach. That is something I learned when I worked for the finance department in Alberta. They still have to abide by the wishes of the government and the general direction. The decision-making, the individual regulatory tools they have are truly up to the regulator to decide. However, this one in particular, the B-20, we know from TD Economics that the side effect was that a lot of people were pushed into mono lenders, B lenders, the unregulated market, which defeats the purpose of OSFI having introduced it.

Ahead of B-20, we know that mortgage origination started to soften well before. If we look back, and this is a CIBC economic report, going all the way back to the third quarter of 2013, we saw an increase in mortgage origination to about the first quarter of 2015, and then it started to slide downwards. It is proof apparent that this rule did not have to be introduced, because mortgage origination, people taking out new mortgages, was on its way down for well over a year before the Minister of Finance introduced his stress test on insured mortgages.

I have no idea why he would introduce a 2% stress test on insured mortgages, when it is on a fixed term. There was always a stress test on variable mortgages, because, reasonably put, if the government is offering insurance through the CMHC, or through Canada Guaranty or Genworth, two private providers, taxpayers are on the hook, because they are backing up that policy.

On variable rates, it makes sense to ensure that the lendee can actually pay it back in case something happens in the market, such as the interest rates go up. On a fixed rate, five-year mortgage, there is absolutely no reason to do that. Over a five-year period, on average, and Statistics Canada will bear this out, people's incomes go up, their ability to pay goes up, their circumstances change, but typically it is for the better.

We can look at CIBC Economics, and it is called “Mortgage stress test: the operation was a success, but” and then it goes into all the side effects of having introduced this rule. It is by Benjamin Tal.

I have another graphic about which I want to talk. One of the things I heard, and it is in the chapter in the budget, where it talks about housing, is the a worry about affordability. It is also a worry about Canadians taking on too much debt.

I sit on the Standing Committee on Finance, and I heard this repeatedly at committee from officials, Liberal members of Parliament and the CEO of CMHC, whom I will speak more of later. They worried that Canadians were taking out mortgages that were too big and were taking on too much debt. Chart 5 of the CIBC report notes that in 2012, in the third quarter, just under 50% of people had an average credit score of 751, which is an excellent credit rating. If a person's credit report says 751 or above, that is excellent.

The number has been creeping up as well. Well before B-20, it started to creep up to 50%, 51% and then to 52%. It is not that people were being irresponsible. In fact, the average credit score of those seeking a mortgage loan is going up. Nevertheless, the government has done nothing for unsecured loans. It is still just as easy to get a credit card.

Bank of Canada officials came to my office to explain the Bank of Canada's financial statements. I told them that if I got unsecured loan and spent $30,000 on a boat, the government would pat me on the back for consumer spending. If I then crashed the boat and claimed it on my insurance, the government would be extremely happy again because I might replace it with a new boat. That is $60,000 spent. However, the government is worried about mortgage debt.

In Canada, because of our culture, people are pretty conservative when it comes to borrowing, especially on their homes, delinquency rates are at historic lows. I think it is 0.15% in British Columbia and 0.23% in Ontario. Every statistic I can find from the major chartered banks and every trend line I see from economic shops show that although there was a lending problem, the lending problem was not directly related to the mortgages people were taking out; it was related to unsecured debt, such as credit cards, personal lines of credit and home equity lines of credit.

In fact, when the government introduced B-20, which is also in a report, there was a sudden spike in reverse mortgages, as people were taking more equity out of their homes. Interestingly, this number has been going up for about 10 to 15 years. It is a tool people use. Their homes are their savings so they take money out of them. There was a spike in January 2018. As soon as everybody knew the new stress test was coming, the number went up.

An interesting report came out of Toronto asking about housing. It asked what young people and their parents were doing. A third of parents admitted that they had given their kids an early inheritance gift of, on average, $50,000. This speaks to the problem of pricing in the greater Toronto area and the greater Vancouver area.

What the government and the Minister of Finance did was impose a one-size-fits-all policy, the B-20 stress test, across the board and across the country, as though every real estate market in the country has the exact same problems. Instead of introducing variants and designing a policy tool for specific problems, they went around whack-a-mole and hit everybody.

I know I have to be careful. I hear the parliamentary secretary got in trouble with Premier Doug Ford when he called for him to be whacked, although I did say “whack-a-mole”.

This is a policy tool. I am not saying people in housing should not be worried about what the government is doing in budget 2019, because the government has now given an answer to the problem. Its answer to the problem was to introduce shared equity mortgages. In the BIA, it is introducing a mechanism by which the CMHC will be a Crown agent acting on behalf of the government.

For those listening at home this late in the evening, who perhaps have insomnia, the Crown borrowing program will allow the government to borrow $1.25 billion to buy shared equity stakes between 5% and 10%, depending on whether a house is new. A new home gets 10% and one that already exists gets 5%. The government says this will help 100,000 first-time homebuyers.

When I asked Department of Finance officials where they got this number, they said from CMHC. When I asked CMHC officials where they got this number, they said from the Department of Finance. Nobody could explain to me where this 100,000 number came from. The CEO of CMHC gave it his best shot. The only way this number makes sense is if we look at insurance mortgages and assume that over the next three years, we will only be able to help about 30,000 to 40,000 people. Actually, the Minister of Finance said the same thing in Toronto.

Then I went to MLS listings online to find what kinds of properties were out there. In the greater Toronto area, I found about 500 properties out of 20,000 listings that these shared equity mortgages could potentially apply to, and I specifically excluded those with parking spots, which are very expensive in the greater Toronto area, especially downtown. They are quite expensive to get, but that is not the goal of this. We do not want anybody living in a parking spot in a tower in downtown Toronto. That is not our goal.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

They are. They're called homeless people.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

I hear the parliamentary secretary saying they are.

This tool is not the answer to it.

When I questioned people at Mortgage Professionals Canada how long it would take the brokerages to get their IT systems ready to go, because they need IT systems to do their underwriting, securitization, double-check loans and all the details that need to be figured out, the said eight to 10 months. That is eight to 10 months on a program the government wants to be effective in September.

When I asked the Department of Finance officials about the details of the program, the terms and conditions, the fees, if there would be a premium on these shared equity mortgages, they told me they did not know those details because they had not been decided yet.

When I asked the CEO of CMHC, I was told it had not decided yet what those details would be. When I asked when the board of CMHC was informed that it would be handling the shared equity mortgages on behalf of the Government of Canada, he told me the night of the budget. That means the board of CMHC had no idea it would be administering this large-scale program.

If we want to know what God thinks of money, we should look at the people he has given it to, what they have done with it and how badly they have mismanaged it. With a problem like housing, the policy tools chosen to address it are completely inadequate.

I will not be supporting this bill and I encourage all members not to support it.

[Anthony Housefather, Liberal, Mount Royal, QC]

Madam Speaker, it is always a great pleasure to hear from my friend from Calgary Shepard. He is definitely the champion in the House on Yiddish proverbs. However, I also go to the same Yiddish proverb Twitter page that he does in order to get Yiddish proverbs. The one right before the one he gave was, a nation's treasure is its scholars.

I am so proud that in this budget we are investing in science, research, innovation, education and scholars across Canada. We are investing in space, the lunar exploration accelerator program, the strategic science fund, the strategic innovation fund and the research science and innovation fund. We have brought back science, brought back academics and brought back university.

There is another Yiddish proverb that says investing in people is more important than anything. Does my hon. colleague not think that many of the investments in this budget have brought Canada back into the realm of science and space exploration?

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Madam Speaker, I do not want to start a Yiddish proverb battle on the floor of the House of Commons. I do appreciate the member because he is thoughtful and an adept chair of committees. He stickhandled the last committee he was assigned quite nicely.

However, this is an issue of debt and deficits. While the member is telling us to look at the wonderful investments the Liberals have made, it is all with borrowed money. Part of a responsible government is ensuring that it has the means to provide these investments. It cannot just be looking at borrowing on the markets, passing the bill to future generations and hoping the investments actually work out.

I met with the Coalition for Canadian Astronomy. It is deeply disappointed by these so-called investments the government is putting through. The people there want to see more put toward basic research. A lot of what the government is putting the investments toward is engineering work instead of basic scientific research. It is a disappointment.

If we want to know what God thinks of money, we should look at the people he has given it to.

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

Madam Speaker, I have a question for my colleague about his favourite topic, mortgages and home ownership.

He already raised some points that came up in committee about the new first-time home buyer incentive, which will allow the CMHC to take on 5% to 10% of the mortgages of Canadians participating in the program. I was surprised to hear experts say that this program would not help anyone get a mortgage from a financial institution, since the program will only apply if the person has already qualified for a mortgage with their financial institution.

Could my colleague talk about this point, which has been ignored? The government is implying that this program will help more Canadians buy homes, but witnesses in committee said the complete opposite. Only Canadians who have already qualified for a mortgage will be able to participate in this program.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Madam Speaker, the member for Sherbrooke is correct.

Witnesses at the Standing Committee on Finance said that the government will be playing the stock market with part of people's homes. We have no details on how this will work or how much it will cost. The president and CEO of the CMHC said that this measure would have a marginal impact, while some Liberal members in committee described it as transformative. They said that this would change everything.

Even reports from the CIBC and TD Bank say that the impact on the market would be 0.2% to 0.4%, at most. This is a marginal impact. Furthermore, the government wants to spend $1.25 billion on this project, when it could be doing something else with the money. This is a big failure for the government in this budget.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Madam Speaker, my colleague does excellent work in this place and in the finance committee. I appreciate his drawing attention to the issues with home ownership. This is something that I hear about often in my constituency.

It is an interesting perception that, in some cases, government policy is aimed at making home ownership harder to access, with things like the stress test that was piled on. The perception, certainly in my constituency, was that these policies were not taking into consideration the reality of the real estate market in most of the country, but they were responding only to specific situations in specific regions. At the same time, there was another policy brought in that, as the member has pointed out, does not deal with the reality in those same places.

It is striking that we have, on the one hand, policies that are aimed at making home ownership harder, and in other cases, policies that purportedly make accessing home ownership easier. There is a contradiction in the objectives, never mind the policy.

I wonder if the member can comment on what we should make of this incongruity between policies like the stress test, which are making home ownership more inaccessible, and claims that other policies are going to make home ownership more accessible.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Madam Speaker, one of the things we heard from stakeholders who presented at committee was that 200,000 Canadians will not see a job created because of these changes by 2021.

We know that the residential construction market is one of the areas where a lot of people work. We can imagine all the trades that go into building a home, whether it is a condo, a row house, a duplex or whatever it is. We heard that 147,000 first-time homebuyers were unable to get into the type of home they wanted. The Canadian Home Builders' Association said that. According to the Canada Mortgage and Housing Corporation, the number of new mortgages coming out dropped by 11.9%. Then there is the government overreaching with the B-20 stress test, the Minister of Finance's stress test, and then panicking, I think, and being unwilling to admit it made a mistake.

Even at committee, the Liberals would not admit they had made a mistake, so now they are trying shared equity mortgages, throwing it up there to see if it will work. That is not the right way to be doing policy-making in this country. It is okay to admit a mistake and then dial it back. That is what all the big banks have been asking for.

I will mention one last thing. I asked every single stakeholder whether shared equity mortgages would offset the impact of B-20, and not a single one said they would.

[Adam Vaughan, Liberal, Parliamentary Secretary to the Minister of Families]

Madam Speaker, I am most interested in the comments that the hon. member made regarding breaking up the mortgage structure of the country to regionalize it, instead of having a one-size-fits-all set of policies, which has been the policy of every federal government since CMHC was founded.

Does he see those regional delineations along provincial lines or along urban-rural lines? How would the member opposite configure a regionalization of mortgage rules, a regionalization of mortgage stress tests and also assessment of risks in the market?

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Madam Speaker, that is one of the matters I would have liked the finance committee to consider.

If it were not for the member's Liberal colleagues on the committee voting it down twice and then being unwilling to negotiate a reasonable study of the issue, we could have looked into what type of regionalization is reasonable and whether it is even reasonable or not. We already do it for employment insurance and for several other government programs. CMHC actually tracks the cost of mortgage premiums by province. Would that be a better way of doing it?

We could not get to any of that expert testimony, expert information, because the Liberal MPs on the committee were so unwilling to even entertain the idea of looking at a B-20 stress test study. That would have given us the ability to call in people from CMHC and outside stakeholders to give us the answers on what is reasonable, what is not reasonable, what is doable, what is not doable.