Bill C-19 (Historical)

Appropriation Act No. 3, 2020-21

An Act for granting to Her Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2021

This enactment grants the sum of $6,038,435,084 towards defraying charges and expenses of the federal public administration for the fiscal year ending March 31, 2021 that are not otherwise provided for.

Canada Business Corporations Act

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, what do the Panama papers, the Pandora papers and the Paradise papers all have in common? They are leaks that revealed who was hiding behind shell corporations in tax havens, those anonymous companies for which it would be otherwise impossible to determine actual ownership. Without those leaks, it was only possible to identify the names of the administrators, typically a big corporate law or accounting firm.

By lifting the corporate veil, these leaks helped identify wealthy fraudsters hiding money from the tax man or criminals hiding dirty money out of sight. When it is impossible to identify who is hiding behind a shell company, that opens the door for profiteers and fraudsters of all kinds, people who refuse to pay their fair share of taxes at the expense of everyone else, people who recirculate ill-gotten gains in the real economy by hiding behind secret companies. It is not normal to need to rely on leaks, whistle-blowers, hackers or journalists to find out what is behind these companies. That information should be public.

There is nothing like transparency for combatting fraud. That is essentially what Bill C-42 addresses. It amends the Canada Business Corporations Act to force the directors of federally incorporated businesses to report their real owners to Corporations Canada. Then, Corporations Canada can create a registry of the real company owners, a public registry that anyone can consult. Bill C‑42 will introduce a bit of transparency, which is a good thing. The Bloc Québécois supports the principle of Bill C‑42, and I encourage all parliamentarians to do the same.

Before I get into the details of the bill, I want to tell members a secret. When I saw that the government had introduced a bill to amend the Canada Business Corporations Act, I was worried. As members know, business ownership and property rights fall under provincial jurisdiction. In Quebec, these things are governed by the Civil Code. Every province has its own securities commission. In Quebec, we have the Autorité des marchés financiers.

However, over the last several years, Quebec and the provinces decided to coordinate and harmonize their respective laws. Since they all have very similar legislation, registration with the Autorité des marchés financiers is automatically recognized by all of the provinces. That means that a Quebec company can easily raise capital and do business outside Quebec through mutual recognition under what is known as the passport system.

Since this works well, Ottawa has no reason to interfere, there is no need for federal securities regulations, and Quebec's jurisdiction over financial matters would be respected. Without that respect, we would likely see Toronto become the centre of financial activity at the expense of Quebec, particularly Montreal's financial sector.

However, this is viable only if governments continue to work together and essentially harmonize their laws. That is why I was concerned when I saw that the government wanted to change the Canada Business Corporations Act. If Ottawa acts unilaterally, as this government all too often does, if it has not aligned its efforts with Quebec and the Canadian provinces, if the laws are no longer similar, the mutual recognition system will not be as successful. Ottawa will then have the excuse it is looking for to justify its desire to centralize everything, as it has been trying to do for three decades.

However, I did breathe a huge sigh of relief when I saw Bill C-42. As I mentioned earlier, Bill C‑42 will establish a searchable public registry of the real owners of businesses. This commitment to transparency reflects a unanimous decision made at the G20. It has been implemented properly in Canada in a manner that respects each party, so I say bravo. The federal government and the finance ministers of Quebec and all the provinces have coordinated their efforts and agreed to work together, while respecting one another's independence.

In 2017, they all independently agreed to change their respective laws to require companies to collect, in their own registries, the data needed to identify the real owners. At the federal level, this was done in June 2022 with the passage of Bill C-19, a budget implementation bill. This data is beginning to be collated and made available to the authorities in the event of suspected fraud.

In 2018, they came to an agreement on how companies were to share this data with their respective governments and how the governments were to make the data public. That is what we are debating today. There was no need for federal standards where Ottawa would put itself in charge and tell Quebec what to do. Everything was done respectfully.

The National Assembly of Quebec passed Bill 78 in June 2021. This legislation reflects the agreements made in 2017 and 2018. Quebec was the first government in America to pass such legislation. It is interesting that this debate is being held today, on March 31, 2023, because Quebec's Bill 78 goes into force today. Since nine o'clock this morning, the registry of real owners can be consulted in Quebec on the site of the Enterprise Registrar.

Since not all businesses have provided their information as yet, the search engine is not yet active, but it will be soon. It will be operational within the year. With the passage of Bill C‑42, the federal government will do the same for federally incorporated businesses. The provinces have passed or are preparing to pass similar legislation.

I see that members' statements will commence momentarily. I will continue my speech once we resume debate on this bill.

Opposition Motion—Tax Increase on Beer, Wine and Spirits

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I will be sharing my time with the hon. member for Abitibi—Témiscamingue.

As members know, unlike sales tax, which represents a percentage of the value of a product, the excise tax on alcohol is a fixed amount by volume as set out in the Excise Tax Act. Traditionally, that amount was occasionally reviewed and adjusted to inflation through an amendment to the act. However, since 2017, the act has included an automatic indexing formula, which means that the amount of the excise tax goes up every year based on inflation. That is why the excise tax on alcohol is going to increase by 6.3% on April 1 to reflect the high level of inflation we have seen over the past year.

Today's motion will not actually have a very big impact. We are talking about 1¢ per can of beer. This motion is not a real response to the increased inflation that is driving up the price of food in particular. This is a clear example of the populism of the Conservatives who are more interested in coming up with gimmicky slogans than they are in developing serious public policy.

Furthermore, when it comes to beer, only large breweries will benefit from the adoption of today's motion. Given that microbreweries only pay a fraction of the excise tax, they will benefit far less from a freeze on the tax rate. Of the 1,200 breweries in Canada, including the more than 300 in Quebec, only 12 pay the full amount of the excise tax on the majority of their production. Most of these 12 breweries are owned by foreign multinationals.

The decision to apply a different tax rate to microbreweries, the artisans who are passionate about agri-food living in every region, was implemented in the 2006 budget after the Bloc Québécois advocated for it for years. The Bloc Québécois has been fighting for our microbreweries for a long time. That decision would give them the opportunity to compete against the giants of the industry, whose production costs are much lower thanks to economies of scale. Since the implementation of the preferential rate, the number of microbreweries has skyrocketed and increased eightfold to our great pleasure. For a small artisanal microbrewery, indexing the amount of the excise tax might only represent a 0.1¢ or 0.2¢ increase per can. We are talking about that very small amount today. This means that when we buy a 12-pack of beer, we would pay an additional amount of just a little over 1¢.

In budget implementation Bill C‑19 from spring 2022, the Bloc Québécois managed to extend to cider and mead producers the same support that had been extended to microbreweries 15 years ago. They are now completely exempt from the excise tax. Our support for small local producers is not limited to microbreweries. Unfortunately, since the government has a very restrictive definition of cider and mead, the producers who flavour their products with berries and aromatics continue to pay the tax. That is something we really hope to see resolved in the next budget, just like the application of the tax on wine made from other fruit such as pears, blueberries or even maple, which showcases our land. They should be treated the same way as our apple cider producers.

For hard alcohol, we are talking about an increase of roughly 25¢ for a 750-millilitre bottle. Again, we are not talking about a catastrophic increase, but it adds to the overall price increases.

With respect to spirits, frankly, the Bloc Québécois would have preferred that the Conservatives propose applying to microdistilleries the model that is already in place for microbreweries and impose only a fraction of the tax that is required of the industry giants. That would have a much greater impact. It would come down to about $3 per bottle rather than the meagre 25¢ that is being discussed today, but it would apply only to our small local producers. We hope the government listens carefully to what the Bloc Québécois is saying and will take it into account in its budget next Tuesday.

Our small producers are suffering, struggling to compete with the industry giants. As I said before, they would benefit greatly from a more targeted measure. Unfortunately, that is not what today's motion proposes. It has very little impact on consumers.

On every one of their opposition days, the Conservatives come back with their mantra: We need to lower taxes, cut EI by lowering the premium rate, cut retirement income by lowering the pension contribution—which also has an impact in Quebec, because the Canada pension plan and the Quebec pension plan are harmonized. They keep coming back to the idea of eliminating pollution pricing to pander to the oil companies.

Today's motion, while not intrinsically bad, is along the same lines and does not represent a real plan to fight inflation. We are talking about 1¢ for a can of beer or 25¢ for a $40- or $50-bottle of spirits. This is not the end of the world, especially considering that alcohol represents only 4% of the average household's market basket.

Skyrocketing housing and food prices are crushing Quebeckers and Canadians, especially those living on modest or fixed incomes. Measures that address the causes and effects of inflation would be much more useful than today's motion, which will have an essentially marginal impact on consumers. However, we do recognize that it could have a greater impact on restaurant and bar owners, who have been profoundly affected by the COVID‑19 crisis.

As members are well aware, the Excise Act does not just determine the amount of the excise tax. It also determines the terms and conditions for the sale of alcohol. Along with the Importation of Intoxicating Liquors Act, it states that only the government of a province can import or distribute alcohol. Quebec or the province can delegate that responsibility to a private importer or distributor by granting them a licence, but the province holds the exclusive power to govern the importation and trade of liquor on its territory. The fact that international trade is an area of federal jurisdiction is incongruous, and I am going to talk briefly about the history behind that.

Canada's first referendum took place in 1898. In the late 19th and early 20th centuries, many Protestant churches, particularly Baptist churches, were strongly advocating for the prohibition of alcohol. These prohibitionist movements were active in the United States and English Canada, just like in Lucky Luke.

The Canadian plebiscite on the prohibition of alcohol, which was held on September 29, 1898, was on the passage of a law prohibiting the importation, production and sale of alcoholic beverages across Canada. This law on prohibition would have taken the form of an amendment to the Criminal Code.

The yes camp won by 51.2% to 48.8%. It was a tight vote, but the yes camp won. However, the referendum exposed an important cultural divide in Canada. Every province except Quebec voted yes, but opposition to prohibition in Quebec was massive: 81.2% of the population voted against it, as they did in the case of conscription. The opposition was not only massive, but it was also very acrimonious. The members from Quebec in the House of Commons stated that they could not vote for a prohibition law because their families and communities would never forgive them.

The prime minister at the time, Wilfrid Laurier, noted that there was a cultural divide between Quebec and English Canada on this issue. He felt that the federal Parliament did not have the legitimacy to legislate, which would amount to imposing the decision of the majority on the minority that wanted nothing to do with it—the French Canadians at that time—even though it had the constitutional power to do so.

I hope the government is taking notes. It must not take unilateral action, and it should tell every province and Quebec to manage their own jurisdiction. That is how it was during the first years of Confederation. Instead of introducing legislation imposing prohibition across Canada, it chose to amend the laws on the importation and trade of alcohol and leaving it up to the provinces to regulate.

That is why still today that responsibility falls to the provinces. Of course, this creates some inconsistencies, such as the ban on transporting alcohol from one province to another, which prohibits a resident of Ottawa from bringing home a bottle that he may have purchased at the liquor store in Quebec. However, the principle is interesting: If there is a difference between Quebec and Canada on a given topic, then the federal Parliament should refrain from imposing a blanket solution that applies indiscriminately from coast to coast to coast.

I hope that the government and my colleagues from English Canada are listening carefully to this history lesson. I hope they will draw from it and stop imposing the will of Canada on Quebec when there is a difference of opinion, and delegate the powers. To my colleagues, I would say, “a word to the wise”.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

It is possible that the CRA could adopt the same regulation as is identified in Bill C-19 as a way of interpreting what's in Bill C-241.

In terms of minimum required distance, I think that one's pretty straightforward. There is a slight difference in the distance, but we're talking about a 30-kilometre difference.

Another main characteristic is the distance calculation method. In the table, it says that, under the existing law, it's calculated on the one hand between the ordinary residence and each temporary work location or, on the other hand, between each temporary lodging and each temporary work location, whereas in Bill C-241 it's calculated between the ordinary place of residence and the job site.

Are there any practical implications for those differences?

[Mark Maxson]

I guess I can give a first answer, but others may wish to jump in.

In terms of practical differences, it's challenging to lay out the concrete implications. One of the difficulties in terms of lacking some definitions is that essentially it means that the Canada Revenue Agency will be required to put forward interpretation and guidance as to what the different terms mean, and that's not something that we can do ourselves.

As an example, Bill C-19 defines “construction activities” and Bill C-241 does not, so in the case of Bill C-241, the CRA would have to put forward guidance in terms of exactly what that means. Whether it ends up being different in certain cases is hard for us to say, and that would be true of certain other undefined terms as well. That's a potential confusion for the taxpayer question—

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much, Mr. Chair.

I don't think there's a lot to say that hasn't already been said, but I do think that one of our tasks here is to try to appreciate the differences between what was passed in Bill C-19 and what's proposed in Bill C-241.

Thank you to our committee analysts, who prepared a pretty decent table that lays them side by side. I want to walk through that table while we have the government's own tax experts here so they can give us a sense of what these differences in the table will mean practically for folks who are filling out a tax return.

In terms of characteristics to compare between the two acts, first in the table are conditions related to the taxpayer. In the Bill C-19 version, you have to be an eligible tradesperson—earn employment income as a tradesperson or apprentice in the construction activities referred to—and then there's a regulation that defines that. In Bill C-241, you have to be employed as a qualified tradesperson or an indentured apprentice for construction activities at a job site.

Is there any real practical difference in those two definitions that the committee should be aware of?

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you, Chair.

This is a very interesting discussion and an interesting bill to hear about. Coming from a small island, I know that travel for work is really important. I think it's important for all parties, as it was put in the BIA, which is extremely important. I was very glad to see that.

I want to continue on somewhat with what Mr. Lawrence said with regard to the larger corporations or the employers. Maybe I'll go to Mr. Leblanc.

In your opening remarks, you spoke about the differences between Bill C-241 and the existing labour mobility deduction that was implemented through Bill C-19. One area that I'm particularly concerned about is the lack of protections that would prevent possible double-dipping by those corporations, by receiving compensation through an employer and via the tax credit. I guess my concern—in line with Mr. Lawrence's on the opposite side—in particular is that employers may choose to cut back on their compensation pre-emptively on the assumption that workers will access this benefit as well.

Am I understanding the legislation correctly? If so, could you elaborate?

Interim Supply

[Jean-Yves Duclos, Liberal, Québec, QC]

moved that C-19, An Act for granting to Her Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2021, be read the third time and passed.

[Jean-Yves Duclos, Liberal, President of the Treasury Board]

moved that Bill C-19, An Act for granting to Her Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2021, be concurred in at report stage.

[Jean-Yves Duclos, Liberal, President of the Treasury Board]

moved for leave to introduce Bill C-19, An Act for granting to Her Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2021.

(Motions deemed adopted, bill read the first time and printed)