Bill C-208 (Historical)

An Act to amend the Income Tax Act (transfer of small business or family farm or fishing corporation)

This enactment amends the Income Tax Act in order to provide that, in the case of qualified small business corporation shares and shares of the capital stock of a family farm or fishing corporation, siblings are deemed not to be dealing at arm’s length and to be related, and that, under certain conditions, the transfer of those shares by a taxpayer to the taxpayer’s child or grandchild who is 18 years of age or older is to be excluded from the anti-avoidance rule of section 84.‍1.

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

Thank you, Mr. Chair.

I echo Mr. Baker's words about our commitment to Ukrainians, and it's not about roots, but first about justice. I congratulate you on your commitment to that, Ms. Freeland. We want a just peace as soon as possible.

As my time is limited, I will ask you two questions in quick succession.

The first is about the Canada Community Revitalization Fund and the programs through which the federal government funds municipal infrastructure programs.

Given the shortage of labour and the number of companies that can carry out work under these programs, turnaround times can often be very long. In addition, municipalities may find it burdensome to enforce the deadline for completion of the work, which is usually March 31. The government shows little flexibility with respect to this date.

Can the government commit, in general, and in particular with respect to the Canada Community Revitalization Fund, to showing more flexibility in extending the date that municipalities must meet?

I'll ask my second question right away. It concerns a bill that was passed before the last election. It is Bill C‑208, on the transfer of family businesses. The bill was passed and came into force. Yet, in Quebec, tax specialists and accountants do not want to use these legislative provisions, because they are still waiting for guidance from the government or institutions on how to apply them properly.

Is the government committed to producing the guidelines or proposing a new bill that will spell out how it will be applied, as soon as your economic update, which is expected this fall?

[Mathieu Lavigne]

Indeed, it shouldn't be referred to anymore as Bill C‑208, since it's now an act.

In our opinion, it's a matter of fairness for business owners who want to transfer their business to family members. This is a very important issue because there are a lot of owners in Quebec who are nearing the end of their careers. There's a pool of young people, often within the same family, who are ready to take over. However, the current tax rules penalize people in this situation, both those transferring the business and those taking over.

It's essential to relax the tax rules immediately. We're pleased that the government at least mentioned it in its last budget, but we'd have liked for it to move much faster on this issue and make that relief a reality.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you very much, Mr. Chair.

Good afternoon, honourable members.

Good afternoon to those taking part in this meeting. Your comments are very interesting.

I'll begin with Mr. Lavigne from the Fédération des chambres de commerce du Québec.

Mr. Lavigne, I'd like to address several points with you. First, I want to point out that Bill C‑208 was passed and is ready to come into effect. It just hasn't yet.

In your opinion, what would be the benefits of the legislation coming into effect immediately?

[Mathieu Lavigne, Director, Public and Economic Affairs, Fédération des chambres de commerce du Québec]

Mr. Chair, members of the committee, good afternoon.

My name is Mathieu Lavigne, and I am the director of public and economic affairs with the Fédération des chambres de commerce du Québec, or FCCQ. I'm here today with my colleague, Ms. Audrey Langlois, adviser, workforce and economic affairs.

Thank you for the opportunity to appear today by video conference from Montreal.

The FCCQ, which some of you know well, is an organization that comprises 125 chambers of commerce and 1,200 member businesses, for a total of over 50,000 businesses. Our members operate in all sectors of the economy in every region of Quebec. As the largest network of business people and businesses in Quebec, the FCCQ is also a provincial chamber of commerce and defends the interests of its members with respect to public policy.

We thank you for inviting us to take part in this study on the labour shortage and the productivity of our small and medium-sized enterprises, or SMEs. It's a topic that is obviously at the heart of our work at the FCCQ.

I'll quickly share a few observations and, above all, some recommendations on the various elements included in the study, but rest assured that we can discuss other topics in response to your questions, if time permits.

First and foremost, I'll begin with the labour shortage. It's clearly the main concern in the economic sector in Quebec. For example, in March, there were 259,170 job vacancies in Quebec, double the number there were at the end of 2019, before the pandemic.

There are many causes for the shortage, hence the importance of deploying a wide range of measures. I'd like to draw your attention to some of those, beginning with attracting foreign skilled workers.

Our members are very concerned about the slow processing of applications of would‑be immigrants. While the processing time for a skilled worker is 32 months in Quebec, the wait time for a similar program in another province in Canada will soon be set at six months. Accelerating the processing of immigration applications and the issuing of work permits should be a top priority for the federal government. I want to take this opportunity to second what the rector of the Université du Québec en Abitibi-Témiscamingue said earlier. We're on the same page.

Obviously, immigration is not the only answer to the labour shortage. There's also a need to better train current and future workers on an ongoing basis, and encourage the unemployed to quickly return to work and experienced workers to remain on the labour market longer if they wish to do so.

That's why we are proposing that the federal government create a voluntary lifelong learning savings plan, based somewhat on the registered education savings plan model. We also suggest that the government undertake a real overall review of the employment insurance system to refocus it on its primary mission, temporary income support with support measures to promote a quick return to work. Finally, we recommend that the government increase the income threshold at which guaranteed income supplement benefits are reduced.

The regulatory and administrative tax burden is another major obstacle to growth for our SMEs. Here again, the federal government can and must act, beginning by bringing former Bill C‑208 into force quickly. The bill promotes the transfer of business ownership within a family. The current tax rules make things difficult for SME owners and hinder the transfer of family businesses to the next generation. The bill must come into effect.

Another source of obstacles for business owners is the duplication of reporting requirements under similar federal and Quebec laws. We've been asking the federal government for several years to undertake discussions with the Quebec government to come to an agreement regarding a single income tax return; we recommend the pragmatic and innovative approach of focusing the process solely on the interests of taxpayers.

We then suggest that the federal government learn from its Quebec counterparts, who have brought forward an omnibus bill on regulatory relief measures for the second year in a row. There's no doubt that, every year, some of the many federal laws and regulations could be eliminated, and others, streamlined, to make life easier for business owners.

In closing, I thank you for taking a serious look at the productivity and labour challenges that our SMEs face.

We would be glad to answer your questions.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

Mr. van Raalte, last spring the committee conducted a study on competitiveness in Canada. In June 2021, parliamentarians took part in a historic vote on a bill that later received royal assent. By the end of June, it'll have been a year since this historic vote took place. By passing Bill C‑208, parliamentarians corrected a tax injustice long-tolerated within the federal government. The bill grants small businesses, particularly family farms and fishing corporations, the same tax rate on the sale of their business whether it is sold to a family member or to a third party.

However, on June 30 and July 19, 2021, the Minister of Finance issued a press release announcing her intention to delay the entry into force of these changes until January 1, 2022, due to concerns with the wording of the bill. It is now June and there has been no update. Ms. Freeland committed to providing further clarification, yet when we asked her about the matter at the Standing Committee on Finance, she was unable to provide an answer.

Can you tell us if you have any clarification on the implementation of this legislation? People are awaiting news. When will that happen?

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

Thank you, Mr. Lobb, for the attention you have paid again to our farm community. I want to thank you for bringing this very important issue forward to our agriculture committee.

Last year, when I was on the finance committee, we passed Larry Maguire's Bill C-208, which allowed farmers to successfully transition their farms to their children with the same favourable tax treatment as selling it to a third party. A lot of these transitions to the next generation still mean that the second generation has to be highly leveraged.

I'm wondering if you considered the impact of highly leveraged young farmers when you presented your idea in this private member's bill.

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

Thank you, Mr. Chair.

I want to say that I know how difficult these conversations can sometimes be, and I do like the tenor, the tone, that we have all embraced as members of Parliament. We are all sent here to try to work together.

I will disagree with some of the things my honourable colleague MP Dzerowicz said earlier, but I'll save that for a moment other than to say that I appreciate that these meetings are not only important to our constituents, but they can be long because you can't put a price on democracy. There are rules that have been enshrined in this place to allow committees to function as independently as possible, as MP Chambers said earlier.

There are obviously other tools the government can use such as a House order. It, in fact, directed the study of Bill C-19 to this committee. Ultimately this committee was created to serve the House, but without having further instructions, we have a responsibility to set our own sail.

While the original programming motion that was put forward by MP Beech as the parliamentary secretary was received in good faith by MP Ste-Marie, who I admire very much for his passion for his constituents, for the questioning he's had and the lack of answers he's been able to receive when it comes to the luxury tax and the occasional intervention by my honourable colleague from the NDP, what has happened is that he put that forward, and now we've had a further subamendment to his amendment, which was to try to make sure that there was a proper process.

The government—let's be mindful, Mr. Chair—at the very beginning tried to apply its direction to what is supposed to be an independent committee. Right off the bat, I believe I made it known that it was an issue. I believe I made some arguments about how there were promises by this government to not have parliamentary secretaries on committee. They would occasionally sit down in the corner and listen in thoughtfully so that they could report back to their ministers the goings of this committee, which is a very august body, and I've always enjoyed being on it.

Again, this is a bill, 468 pages, I believe, because when I put it to the minister when she came in for the hour, I said 421. Again, Mr. Chair, you might be mindful that there are a number of pages we did not know about. The government didn't even give us the courtesy in their courtesy copies to say that there's more on the website, even just a note to go along with it, so there are missing pages, which I raised earlier.

As I open my comments today, I go back to the tone that Mr. Chambers presented earlier. In fact, he made a little bit of a joke saying someone had to listen to him, and when he said thank you for staying, they said, “No, I'm the next speaker.” That was very funny. It reminds me of a very similar joke I used to give when I first set out in politics. I said that my goal in any speech or presentation was three things: to be bold, to be brief and then to be gone. Actually, I think it wasn't to be bold. I think it was to be brilliant.

I'm going to let everyone now know that I used to joke that at least you'll get two out of three. I have become a little bit more of a realist, so I'm going to let everyone know not to expect any of the three today.

I'd like to start with why we should be concerned about the programming motion put forward by the parliamentary secretary, and I have already touched on it. Governments are tethered to this institution. They are not the ones who tell us as members of Parliament to have confidence. They're the ones who have to put forward bills that show confidence. In this case, we have a motion that is directly telling us how many presentations we can have. I guess it just gives us a time limit, and it also puts in when we should have clause-by-clause.

The very thoughtful motion by MP Ste-Marie does actually propose that we divide this up, because in those 460-odd pages there are many clauses that pertain to areas of expertise in other committees, and committees like international trade, industry and technology, the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities, the Standing Committee on Citizenship and Immigration, and the Standing Committee on Justice and Human Rights—all very important bodies.

When we send something to them, the very premise should be that we are in good faith seeking their responses. Now if you harken back to our last meeting, Mr. Chair, I believe it was confirmed that clause-by-clause would be done only by this committee. Regardless of what those members on those other committees think, ultimately they will not be able to substantially do what we do, which is to put forward amendments and to debate them. I don't think that is fair.

I should also point out that there is going to be a bit of a challenge, because I don't think independent members are being taken into account under this particular motion by the parliamentary secretary, or even in his amendment. Don't worry, though. I'll save that for closer to the end.

What I think is important to note is that when you offer someone something in good faith, the idea is that it's a legitimate offer. Now for those committees to suddenly decide whether or not they can meet at the time that has been listed here by the parliamentary secretary...and let's note that it is today, Thursday, May 12. When this was first tabled, obviously it was earlier in the week. Already days have slipped by, and while I do understand that MP Baker and MP Dzerowicz had both raised the idea that politics is the art of compromise, compromise means thoughtful discussion and give and take. It does not necessarily mean overriding other members without having some sort of thoughtful process.

As you can see, Mr. Chair, that leaves the Conservatives with very few options other than to say that we do not believe that this particular motion or its amendment.... Actually, I should say that the amendment seems to improve upon it, but the subamendment by the parliamentary secretary is not being done in good faith. Why? Because time has already been whittled away.

We already had to say no to those witnesses who came here on Monday ready to present. I presented a motion to try to see if we could speed that up. The importance of having witnesses cannot be overstated. Why? It's because obviously this is a very large omnibus bill and I find it lamentable that the Minister of Finance, the deputy prime minister, spent only an hour with the committee. I would have preferred a second hour, because I would have asked several other questions that pertained directly to Bill C-19.

I don't see any provision here in the subamendment for having the minister come back. In fact MP Chambers had expressed his desire to have the Minister of Industry come and speak to the competition components, the Competition Act amendments. I do enjoy Minister Champagne. I think he's a very thoughtful individual. If it is the will of the committee to have him come in for an hour, I would certainly make the time in my schedule for that. I think this particular subamendment that Mr. Beech has put forward has neither the Minister of Industry nor the Minister of Finance.

What worries me as time cuts away at this is that ultimately we're going to have less and less time, because the Liberals have not tried to work co-operatively with all members. I think that's really at the heart of this. I don't blame the Bloc or the NDP for playing ball because maybe their preferences have been met.

Maybe they see a different reality from the one I do, but this particular subamendment of Mr. Beech does not necessarily meet those needs from our perspective. Again, while we know the saying that politics is all about compromise, it's usually referred to as the art of the possible.

Do you know what, Mr. Chair? What's possible isn't always probable.

What's probable is where you make.... You don't think you should speak to other members and try to get them on board. Instead, we have motions, amendments and subamendments that do not have the consent of each and every party or member. Obviously, there's a way to have a democratic debate about this and, eventually, a vote, but I am not going to be keen to give that until we have had a thorough venting of some of the issues with this particular motion.

Let me go into some of my concerns.

In the last Parliament—I'm going to give a personal example—I was on the environment and sustainable development committee. It's a very good committee. Much like in this body, I got a chance to work within a group where we may have had distinct views on policy. I felt that the people around the table were generally respectful and understood that we were all here to represent our constituents and to have an exchange of views. Where we might have disagreements, we would talk them out until either we found some consensus or compromise, or we put it to a democratic vote.

We went to a bill called C-12, and there's something very similar between Bill C-12, the net-zero bill presented by the minister of the environment—at that time, it was MP Wilkinson of North Vancouver, a fellow British Columbian.... Similarly, in that particular bill and study, the parliamentary secretary put forward a programming motion. Unfortunately, the member of Parliament for the NDP at the time decided that they would opt into that programming motion. Again, I don't want to prejudice or call into question anyone's character, including the previous member of Parliament or the current NDP representative at this table, who I'm sure is here in good faith.

What ended up happening was, in my mind, remarkable. We had witnesses come forward and we listened to the testimony. All parties, the Bloc, even the Green individual.... My colleague MP May from Saanich—Gulf Islands brought amendments, as did the Liberals, the New Democrats and the Conservatives. We brought forward a number of meaningful amendments that we felt would have improved the bill, even though we opposed the bill in the House due to some issues over the net-zero advisory committee. I will not get into that discussion of what happened in the House. I will say it was rather unfortunate how that shut down.

What ended up happening was that they jammed through such a tight process that we were literally hearing witnesses when the period for submitting amendments to the bill had already expired.

Think of this. You get a call from the Standing Committee on Environment and Sustainable Development. You have dedicated your professional career or your voluntary hours and expertise to writing up a brief. In fact, one witness told me that the moment he got the letter, he started furiously typing up his presentation, but by the time he got on the schedule, all of the suggestions that he had presented in his report and in his remarks were moot.

Why were they moot? It certainly wasn't because of bad faith by that individual, but because of the way the committee had jump-started the process and programmed in that there was only going to be a certain amount of time to get amendments in. That person was deeply disappointed, as were others.

The government probably never heard from those individuals in person, but I can say that MP May attested at committee that she heard the same thing. Why? Many groups want to be invited back and they want to keep the government, at least, in a somewhat neutral, positive state.

In that case, I have to say that the environment committee process—a committee ably chaired by one of your colleagues, MP Scarpaleggia—was so bad that we ended up jamming through witnesses after the period for amendments had already closed. People felt that process was not in good faith. I see many of the same hallmarks—many of the same markers—in this process, in fact, and I will say that I did speak up at the time. I did very much what I'm doing today. I said to other members, “If we adopt this process, we are jamming witnesses.” We are going to end up with a process that does not lead to a better outcome than Bill C-12 did.

Unfortunately, that's exactly what transpired. In fact, when we look at the amendments, it was such a bad process. Some amendments were supported by certain witnesses, but others, effectively.... The NDP joined up with the Liberal members and voted down pretty much every single amendment, except for a Bloc Québécois motion that established a five-year review. There are some real parallels that I'm starting to see between that process and now. Where did we end up? We ended up where committee members were at each other's throat. It wasn't very good. Witnesses felt bad and, at the end of the day, the government got what it wanted. I see many of the same things happening here.

I would say that it probably wasn't a lot of fun for Mr. Scarpaleggia, but let me tell you what was even worse. Your former colleague, Mr. Scott Simms, said publicly.... He was on Michael Geist's podcast, Law Bytes, where he talked about what was known as Bill C-10 and the shenanigans that ended up happening there.

Why? Well, there is a direct connection with what has happened here with MP Beech's subamendment. The process and timelines were so tight in the original programming motion that, at one point, during clause-by-clause, because of a programming motion, the committee members, in many cases, did not know what they were voting on. In order to meet the programming motion set out by the government, which happens to be the same government here, they ended up voting on amendments without even knowing what they were voting on. The chair would call out a number, and what's even worse, for the people.... There were stakeholders there, obviously, from industry and cultural groups—artists, etc.—who all had a real concern about this. These were people who study the Internet and freedom of expression—those kinds of legal constitutional concerns. All of them were horrified because they didn't even know what the members were voting on. They just heard numbers being shouted out, and that brought the whole committee process into disrepute.

What's even worse is that Conservatives had to appeal to the Speaker in the chamber regarding such a bad process. Do you know what ended up happening? The Speaker said that was not how Parliament was intended to work and ordered the committee to restart the process. The government did end up getting its way, but, for the people who were following along, the parliamentary committee process was in question.

I would say to all members here that the same issues the environment and sustainable development committee had, and the standing committee on heritage had with Bill C-10.... There are certainly parallels with what we have here today—a large omnibus bill, where the witness time is being dictated by the government.

Again, this particular bill is much larger than traditional ones, Mr. Chair.

On one of the things that MP Chambers pointed out—because there will be some arguments that say, if the Conservatives are so serious about not proceeding on this side, there are tax measures that can affect Canadians and that they will not be able to take advantage of—was that for the ways and means process, actually, the government can table ways and means motion tax measures and the CRA will treat those as having been passed, even if that is not the case. Many Canadians, as I was explaining to one of my constituents the other day on Bill C-8, would be quite surprised.

Now, obviously, during a minority, I would surely hope that they would be very careful around those measures. I know, for example, that Bill C-208 in the last Parliament, Larry Maguire's bill, was a change in law. That was actually passed by Parliament, and they still have not put out the regulations. Most people would say, wait a second, when Parliament passes an actual law that allows that if you're a farmer or you have a fish operation, you could transfer that intergenerationally to your family without having to pay extra costs associated with it.... If CRA and the Department of Finance can hold back on those provisions, how in heck...? Pardon the language. I'll repeat: How on earth, Mr. Chair, can it be that CRA can take a proposed law and start acting like it is a law?

Budget Implementation Act, 2022, No. 1

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Madam Speaker, my colleague spoke a lot about investigations into money laundering and recovering money. We agree with all that.

However, there is something that really bothers me. How does my colleague explain the fact that his government is not doing anything at all about tax havens? They are perfectly legal and everyone is aware of them. It is estimated that the government is losing at least $7 billion a year to tax havens.

Also, is the member not the least bit embarrassed that his government is creating uncertainty about the coming into force of the farm succession act, on the pretext that our farmers are fraudsters rather than honest people who put food on our tables? I think that is completely shameful, and I encourage him to put pressure on the government from the inside to quickly dispel this uncertainty.

Economic and Fiscal Update Implementation Act, 2021

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Madam Speaker, I will begin by saying that I will be sharing my time with my colleague from Kingston and the Islands. This is a pleasant surprise for me. I am happy to share something with this colleague. Perhaps this is the beginning of something. We do not usually see eye to eye.

I am going to talk about Bill C-8. The main problem that we have with it is the underused housing tax, which is yet another jurisdictional encroachment.

Allow me to clarify that, fundamentally, everyone agrees on the basic principle that something needs to be done about the housing shortage and foreign speculation. On the substance, we are in perfect agreement. The problem is how to go about it.

The Standing Committee on Finance heard from constitutional expert Patrick Taillon, who explained that the tax was legal, but that the problem lies in using the tax as a way to regulate the sector. We agree, so we think this must be done in collaboration with the municipalities, and especially with the provinces and Quebec. We are seriously concerned about this, and it is going to be a big stumbling block for us when it comes time to vote.

As usual, as the party that believes in constructive, positive, sensible opposition, the Bloc Québécois suggested adding a clause requiring the agreement of the cities involved. Our suggestion was rejected, so we have no choice but to oppose the measure.

There are other things missing from Bill C‑8, such as measures to address the labour shortage. Everyone knows that I am a good sport in Parliament, because I am willing to acknowledge the positives. I will acknowledge that there are things in the budget that will help, particularly when it comes to immigration. However, this is an urgent matter, and I do not think that enough is being done to address it.

The number of calls we are getting about delays is absolutely staggering. Money has been announced, of course, along with a lot of good intentions, but something needs to be done quickly. Processing times are atrocious. The government is all smiles as it makes big announcements to the media, promising to do this or that, which sounds good, but, months later, nothing has changed.

Take, for instance, the increase in the cap on temporary foreign workers in the agri-food industry, which was announced in August but did not end up being implemented until late January. That is too long. The government needs to be more efficient.

We have other ideas for measures to address the labour shortage, such as tax credits for people aged 65 and over. I see that as a simple measure that everyone would support right away. I look forward to seeing that implemented, but it has not happened yet.

We can be creative. Why not bring in a tax credit that would apply once a certain threshold of hours is exceeded in a given week? Let us sit down and get to work, because our entrepreneurs need these workers.

There is also the whole issue of the supply chain. I am willing to believe that Bill C-8 was prepared some time ago, since it has been around for a while now. On this point, I agree with my Liberal friends. However, we can always improve things, especially in the next Parliament, in order to do something to help our farmers.

There has been a lot of talk about agriculture today, particularly about an additional credit for the carbon tax, but now we have other problems, such as the fact that fertilizer from Russia is now subject to a 35% tax. This will have repercussions on all of eastern Canada, which gets its fertilizer from Russia.

We had meetings with the parliamentary secretaries and ministers to explain the situation, and they told us that they would always be there, that they would monitor the situation and act accordingly.

We need to do something, because our constituents are sounding the alarm. We raised the issue in question period last week, because this is ultimately going to have an impact on the cost of groceries, and that affects everyone.

There is nothing about tax havens either; it boggles my mind. Every time that we talk about the budget or the money available to deliver services to the public, I am sorry, but I cannot not talk about tax havens. It is estimated that at least $7 billion is lost to tax havens every year. These amounts are rather fuzzy because nobody is sure of what is really going on.

At the same time, the government is dragging its feet on bills such as Bill C-208, which deals with the next generation of farmers. This is about agriculture. If we respect our farmers and want to provide for the next generation, we have to get rid of the vagueness surrounding this bill. I just quickly touched on this, but I hope that the government will hear my message.

I did not bring up compensation for people in supply managed industries either. Wherever it is paid out, we will be happy, but it has to be paid somewhere.

Let us talk about health transfers. How can we not talk about them? We are being praised for bringing in a dental plan. Again, the same principle applies as to the underused housing tax. We all agree on the substance, but there are areas of jurisdiction in this federation, and they are the responsibility of the provinces. Why not increase health transfers to the provinces and Quebec, which is something they have been calling for?

When we talk about health transfers, we are talking about increasing the federal portion to 35% of expenditures, or $28 billion per year, which represents $6 billion for Quebec alone. That needs to be ongoing funding, not just a sexy press announcement about a one-time shot of $2 billion to show just how generous the fine Canadian government is. That is smoke and mirrors. The pandemic was temporary, but the problems with the health care system have long been an issue and they are not going away.

Of course, then there are seniors. Those 65 and older suffered the most during the pandemic. The government still has its head stuck in the sand.

I see people are looking at me with interest. Earlier, when I was being asked questions, I was expecting to hear that they were there for seniors, that they increased old age security starting at age 75 and that they handed out $500. Those are all temporary measures. We want to see an increase to old age security starting at age 65 so that we do not have two classes of seniors. That is important.

There are other measures in Bill C‑8, including the underused housing tax. We have expressed our reservations about who would implement it and how it would work. Essentially, will a 1% tax actually be effective, considering countries like France have taxes as high as 12% or 13% the first year and 25% the second year? That may be more effective. Why not go a bit further? Again, it is all in the execution.

As far as help for businesses is concerned, we also agree. It is good that the deadline for repaying Canada emergency business account loans has been pushed back, but that is not enough. We have proposed other measures.

The Canadian Federation of Independent Business has also sounded the alarm, saying that its members are struggling. They have taken on heavy debt loads, and the concern is that many of these businesses will not weather the crisis.

For example, why are we not providing more support to brick-and-mortar businesses facing unfair competition from e‑commerce? That could be a solution. We could also decide to make a larger share of the loan non-refundable. Why not help businesses set up online purchasing and electronic marketing so they can compete?

There is also the issue of shipping costs. I do not understand why it only costs $2.50 for a Chinese company to send a package to Canada when it costs me $20 to send a package to Lac‑Saint‑Jean. Something is not right. Can we help businesses with shipping?

There is also the $2 per book to help bookstores.

These are all Bloc Québécois proposals. These are suggestions we have made, and we will be there to collaborate if the government wants to make improvements.

Some members have given speeches about agriculture and education and a tax credit for electronic devices. These are good measures, but they are too small. Let us get serious and provide appropriate support to our farmers and teachers.

Financial Statement of Minister of Finance

[Andréanne Larouche, Bloc, Shefford, QC]

Madam Speaker, today I want to talk about budget 2022. I would like to thank my colleague from Berthier—Maskinongé for sharing his time with me.

Budget 2022 is, ostensibly, “a plan to grow our economy and make life more affordable”. I doubt anyone will be surprised to hear me heave a sigh of exasperation. As I will show in my speech, there are still far too many who are not getting any help to make life more affordable.

Only one of our five unconditional demands was met: housing for indigenous communities. The government is planning to invest $4 billion over seven years starting in 2022-23 through Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada to accelerate work on housing.

I applaud this initiative because I know it is essential to put an end to violence against indigenous women and girls. I was just at a meeting of the Standing Committee on the Status of Women, where we discussed this issue. There is no way we will be able to extricate these women from the cycle of poverty without providing them with adequate, affordable housing.

That said, the government does not understand that Canadians gave it a minority mandate, that they did not want to give it a blank cheque, and that they did not want to let it scatter money willy-nilly and in areas of jurisdiction that are none of its business.

I am forced to see the glass as half empty today and criticize what is not in the budget. In particular, I want to talk about seniors, our health care system, and economic development in areas still affected by the pandemic and recovering from the crisis. As the critic for seniors, I will begin by highlighting the complete lack of help for seniors.

We had made help for seniors one of the five prerequisites for passing this budget. To add insult to injury, in addition to not announcing anything new, they included a chart to tell seniors that they do not need any additional help. The government should tell them that while looking them straight in the eye and trying to explain why they are still being discriminated against based on their age.

For the rest of this part, I will let our seniors speak. Here are the words of those I have met over the past few weeks who are not happy: “Why do the Liberals insist on dividing us?” “I may get sick before I'm 75”; “My car will soon give out on me and I won't be able to get around. How will I maintain my independence?”

Take Michel and his wife Josée, or even France, for example. These three retirees feel penalized by the lack of federal government assistance for people between the ages of 65 and 75. They tell us that they want to enjoy life, that they have needs and that they want to help restart local economies.

An organization in my riding, SOS Dépannage, told me that there has been a sharp rise in the number of seniors relying on food assistance. Do we really want to reduce seniors to standing in line for food hampers?

Contrary to what the NDP-Liberal alliance is saying, it is not dental insurance that seniors want to talk to me about. Besides, this dental plan comes without any transfers to Quebec and it would not cover seniors until 2023.

Seniors need more money in their pockets now. It is not to invest in tax havens; rather, it is simply to be able to age with dignity. It is nice to have great teeth, but that means nothing if you cannot afford groceries at the end of the month. It is not a year from now that seniors will be hungry. They are going hungry now.

As I said, poverty does not wait until people reach the age of 75. In fact, a petition is currently being circulated calling on the government to reverse its decision to increase the pension of those aged 75 and over, known as older seniors, by 10%. Instead, petitioners are asking for an increase of $110 per month in the old age security pension beginning at age 65.

People lined up at the Tim Hortons restaurant across from my office in Granby last week. People do not want this unfair two-tier senior system. I also had some nice conversations with seniors in Drummond. The meeting was organized by the Centre‑du‑Québec branch of the Association québécoise de défense des droits des personnes retraitées et préretraitées. That was also where I heard many of these first-hand accounts.

Many people feel passionate about signing this petition, which I am sponsoring and which was initiated by Samuel Lévesque. Petition e‑3820, which can be found on the House of Commons website, aims to support the the Bloc Québécois's demand for a permanent and lasting increase in old age security benefits for everyone 65 years of age and older.

The FADOQ also said that the government broke its own election promises. There is no additional credit for home support, no tax credit for experienced workers, nothing at all. There is no increase in the old age security pension for seniors 65 and older in the budget. In fact, there is nothing. The government instead proposes the creation of a panel tasked with studying the idea of an allocation for seniors wishing to grow old at home.

Once again, if the Liberals truly wanted to help seniors stay in their homes, they would have increased health transfers.

In the second part of my speech, I will talk about another major omission in this budget: health transfers. There is no increase in transfers to 35% of costs as requested by Quebec and the provinces. “Any conversation between the federal government and the provinces and territories will focus on delivering better health care outcomes for Canadians”. That does not mean anything. There is no commitment to the unanimous request of Quebec and the provinces to increase health transfers to 35%. This request also has the support of many seniors groups.

Quebec and the provinces do not need to be told what to do by know-it-all Ottawa. There is nothing on the increase to health transfers yet the government keeps repeating and boasting about the same points.

In the third part of my speech I want to talk to my colleagues about the recovery for some sectors that are still very much affected, because the government missed some perfect opportunities.

I know that my colleague from Berthier—Maskinongé cares a great deal about the agricultural sector, because this sector is also very important to Shefford's economy. There is not much in the budget for this sector, however.

When I travel around my beautiful riding of Shefford, people often bring up the agricultural sector. People wanted to see some innovative and bold measures. At the very least, the government should have considered improvements to existing programs like AgriStability and AgriInvest. My colleague has already spoken extensively about that.

The agricultural sector also wants something like the agri-green program, which would help producers and processors improve their operations and compensate them for good environmental practices. Aside from the second investment, the government is proposing other types of investments, but it is not going far enough. The Bloc Québécois is therefore disappointed with this announcement, on which it had pinned much hope. We will see what producers and processors have to say about it. For the time being, compensation is a long time coming. The government wrote that compensation for CUSMA will be included in the fall 2022 update. As my colleague from Berthier—Maskinongé stated, it seems that there are further delays for those hard hit by the repercussions of the last three trade agreements signed by Canada.

The situation is dragging on. I was told about this recently at the Agristars gala. The young people I met spoke to me about farm transfers and controversial Bill C-208, which would facilitate intergenerational transfers. The government is satisfied once again with conducting consultations and creating delays. It is a major step backwards for farm transfers, even though the bill was passed in the final days of the previous Parliament, after the Liberals dithered. Now, the government is delaying its coming into force. The Bloc Québécois co-sponsored Bill C-208. It is a an extremely important issue for farm succession.

[Richard Lehoux, Conservative, Beauce, QC]

Madam Speaker, I rise in the House today to discuss the first NDP-Liberal budget in Canada.

What a year it has been. As COVID‑19 continues to devastate the Canadian economy and our supply chains, many people in this country will struggle for many years to recover from the losses suffered over the past two tough years.

People are wondering what this budget does for Canadians. Well, it proposes higher interest rates, higher taxes, and more and more spending. At a time when Canadians could use a break, the bad news keeps piling up.

Liberal MPs will likely use the same talking points as usual when debating this subject, but they will probably not ask any questions about the following topics that I was very much hoping would be included in budget 2022.

First, I would like to discuss the rural-urban divide that seems to be growing in this country. My riding of Beauce is located in rural Quebec. It is a entrepreneurial and agricultural hub. Unfortunately, the latest budgets from the current government only make us feel further and further away from seeing any meaningful change in our region.

Why does the government continue to ignore rural Canada?

I was hoping to see some funding for public transit or additional funding for community infrastructure in this budget, but once again, we have been forgotten. Municipalities in my riding are trying to implement public transit, but they need financial support. This is something that needs to be addressed, but until the federal government is prepared to put money on the table this will remain a distant dream.

Cell connectivity in rural Canada is another issue that matters to rural Canadians and that was not mentioned once in the budget. How hard is it for the government to recognize that this is not only a matter of fairness but also of public safety?

Many municipalities in my riding do not have reliable cell coverage. This not only increases the probability of public safety disasters but also causes lost productivity for our businesses.

The government needs to sit down with the CRTC and the large telecom companies and find a way to finally provide affordable service to rural Canadians. There has to be a way to set a baseline for minimum coverage and a fair and equitable scale of payment for these services.

In my riding, cell phone bills are among the highest in the country even though we get some of the spottiest service. We must tackle this problem and improve high-speed Internet service at the same time, because they are both equally important in our regions.

Another issue I would like to tackle, which is probably the biggest problem in my riding, is the labour shortage. Beauce has one of the lowest unemployment rates in Canada and is constantly struggling to attract workers. In our case, the only option for many years has been to use the temporary foreign worker program. Unfortunately for us and for many other Canadian business owners, this system is broken. In recent months, the government has made some promises and some supposed changes to the program, but nothing has changed on the ground.

Let us be frank. Our country has a lot of red tape. There is paperwork upon paperwork to be done. Departments that should work together blame one another for the delays. They also blame the provinces.

The immigration department really needs to wake up. These files should be processed much more quickly. It is simple. Many businesses wait months and months to get workers. They spend thousands of dollars in government and administrative fees only to be told that the workers may never arrive or that their arrival will be considerably delayed because of problems that the government itself has created.

Many proposals with respect to agricultural and seasonal workers were brought forward at the Standing Committee on Agriculture and Agri-Food, of which I am a member, and elsewhere, but the situation has improved only slightly since we tabled our report.

We are also seeing numerous issues with non-agricultural workers, yet there does not seem to be any urgency on the part of this government to bring them in when they are needed.

I believe that one of the most effective ways to speed up this process would be to get rid of the labour market assessment for areas of the country where the unemployment rate is below 5%. As I have said many times, both here and in committee, this is a solution that would be fairly easy to implement. I will continue to hammer this point home until the government understands that this is a serious problem that needs to be addressed as quickly as possible.

A total of 60% of the businesses in my riding are looking for workers. At the same time, they are accelerating automation and robotics because they also need to stay competitive in the marketplace. The problem is that their margins are already very thin, and it is very difficult to invest in new technology right now.

I believe the government needs to implement better programs and incentives to help these companies modernize their production. However, until the government keeps its promises on high-speed Internet and steps up its fight to improve cell coverage, advancing robotics will remain difficult in rural ridings like mine.

The last thing I want to talk about is how this government has tragically failed our agriculture and agri-food sector. There is no money in the budget to improve and secure our country's food supply. I have always said that the agricultural sector is an economic driver just waiting to be optimized. Instead of helping Canadian farmers, the government continues to create programs that plunge them further into debt. Canadians are struggling to put food on the table, yet we are importing more and more of our food products.

The government also decided to impose a 35% tariff on fertilizer from Russia without a clear understanding of whether orders placed before the beginning of the conflict in Ukraine will be exempt from the tariff or not. Spring seeding is upon us, and farmers cannot bear the burden of these tariffs alone. Obviously consumers will have to pay the additional cost.

What is more, this government continues to refuse to bring into force Bill C‑208, which was passed in the previous Parliament. This bill provides for the fair transfer of a family farm or small business to a family member, rather than charging the seller unreasonable taxes that they would not have to pay if they sold the business to a third party.

This government will do everything it can to collect as much tax as possible, even at the expense of losing our family farms and SMEs, which are so important to the development of our regions. The creation of a round table for discussing this bill, which has already passed and received royal assent, will still not force the hand of these greedy Liberals.

How can a government unilaterally decide not to bring legislation into force, when the majority of parliamentarians voted in favour of it? That is not how democracy works.

In closing, this is another budget and another complete failure by this government.

I am here once again debating with my colleagues, but I cannot help but wonder when this Prime Minister will descend from his throne and finally listen to the opposition's proposals. I can only imagine that his MPs from rural ridings feel the same way.

We are all here to do a job, to represent our constituents. The government has to focus on the divide between rural and urban regions. The time where there were two classes of citizens is over.

We must unite and make Canada the economic superpower it should be. I will continue to provide a glimmer of hope for the Beauce community. I simply hope that this government will listen to me for once.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Madam Speaker, I enjoyed my colleague’s speech. He appears to be attuned to the issues of youth and the next generation of farmers. I will ask him about Bill C-208. I am assuming he is familiar with this bill, which was democratically passed in the last Parliament and should now be in effect.

The Liberal government, however, announced in its budget that it would review the nature of the bill, which would put a freeze on the transfer of family businesses. Financial advisors are telling our farmers to wait before transferring their businesses, since no one knows what the Liberal government is going to do.

That is not helping the next generation of farmers, and I would like to hear what my colleague has to say about it.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Madam Speaker, I thank my colleague for his intervention. I would like to know what he thinks of the agricultural component of this budget. In his speech, he stated that people need to know where they are going and they need a certain predictability. That is what the farming community needs, but unfortunately the government continues to disappoint with respect to the NAFTA compensation. The government keeps announcing that the compensation is coming within the year. People have been waiting a long time. This issue must be resolved.

This type of unwarranted insecurity is affecting the next generation of farmers. It was announced that Bill C-208 would be reviewed. This bill was democratically passed in the House. This creates insecurity in the sector and, as a result, tax experts are recommending—and this is important—that our farmers delay transfers, because they are concerned about what the Liberals will do. I would like to hear what my colleague has to say about that.

[Kim G. C. Moody]

In my notes, yes, just very quickly.

Amend the tax on split income regime; lots of people have appeared before you on that. On those rules, while there may be a compelling policy argument to have an anti-income splitting regime, this regime just needs a complete rethink.

Number five is to repeal the journalism tax incentives. Those are just very poor policy.

Number six, which MNP did comment on, is to release the amendments to Bill C-208. That's very important.

Lastly, abandon the so-called luxury tax on automobiles, airplanes and boats. In my notes what I said is if that's good policy—which it's not, it's good politics—if a luxury tax on planes, automobiles and boats is good policy, then why not a luxury tax on handbags, expensive cellphones, jewellery, furniture, appliances, homes, etc.

There's too much politics in the Income Tax Act already, and in the Excise Tax Act, we don't need more.

[Amanjit Lidder, Senior Vice President and Partner, Tax Services, MNP LLP]

Thank you, Mr. Chair and honourable members, for the invitation to share our thoughts with you today in advance of budget 2022.

As you said, my name is Am Lidder. I'm the senior vice president of tax at MNP, and I'm joined today by my colleague Kim Drever. As the largest professional services firm headquartered in Canada, we proudly serve over 280,000 clients, and we've worked side by side with Canadian businesses for over 60 years in 125 communities of all sizes across the country.

It's with the experience of our clients in mind that we provided the committee a copy of “Unleashing Canada's Potential”. In this document that was shared with you is a summary of policy considerations that we've developed by canvassing our national network of professionals.

Over the last two years, our partners have had hundreds of thousands of conversations with Canadians about their lives and businesses, and supported them as they navigated the impacts of the pandemic, as well as managed through wildfires, floods, labour challenges and supply chain disruptions. Whether it's a blueberry farm in the Fraser Valley, a flower shop in Brandon or a fabrication shop in Halifax, each of our clients has been impacted in some way.

Our submission provides several policy considerations along three key themes that we believe, when addressed, can bolster Canada's economic standing and ensure that we build a resilient and sustainable economy. These three themes are building Canadian confidence, fostering innovation and achieving Canadian excellence.

While there are many potential topics contained within those themes, our remarks today will focus on one specific challenge for Canadian farm, fishing and private businesses, which is making sure that family businesses stay family businesses.

Previously, a long-standing rule in the Income Tax Act treated intergenerational transfers of a business as a dividend, rather than a capital gain. Bill C-208 changed that rule to allow access to the lifetime capital gains exemption, and provided positive changes around the division of a family business among siblings. Although our time today focuses on the transition aspect of Bill C-208, we believe that the ability to divide a family business amongst siblings granted in the legislation is necessary and that it should be maintained.

Because of how our tax rules are currently structured, transitioning a farm, fishing or small business from a mother or father to their children or grandchildren has been punitive, compared to selling that same business to a third party. The introduction of Bill C-208 provided for the intergenerational transfer of certain family businesses to receive the same tax treatment as businesses sold to a third party. Bill C-208 represents a significant positive change to support family business succession in Canada.

Prior to this bill passing, when a business owner sold or transferred their shares of their business to either their adult child or grandchild, they were taxed at an average dividend rate of up to 46%. However, if that same business was instead sold to a non-family member, the seller would be taxed at the lower capital gains rate of up to 26% and they would be able to use their capital gains exemption to reduce their tax.

We believe families should not be disincentivized from selling their businesses within their family due to tax policy. Bill C-208 represents a good start to addressing the disadvantage families face.

On July 19, the Government of Canada suggested that amendments would be forthcoming in the fall of 2021. However, businesses have yet to see this draft legislation. In the press release, the Government of Canada laid out four potential hallmarks to define a bona fide succession, and we agree that the tax treatment outlined in Bill C-208 ought to be used in the process of a true business transition.

It's important to remember that no two family business transitions are the same, and overly prescriptive hallmarks have the potential to create different barriers that hinder the succession of family businesses. For example, in the sale of a business to a third party, the Government of Canada does not limit the involvement of the seller in the future activities of the business following the sale. However, the government has indicated that they would limit the level of ownership and involvement that a parent can maintain after the transfer. In our experience, it's common in the succession of many businesses for the seller to remain engaged for a transition period, though the length and nature of that transition period should be driven by what is best for the business and not mandated by tax law.

As the Government of Canada contemplates amendments, we would encourage intergenerational transfers to be broadened to include, for example, the sale of businesses between siblings. In addition, the capital gains treatment on the sale of shares should be maintained where the lifetime capital gains exemption is not available.

Also, Bill C-208 restricts the use of the capital gains exemption for capital-intensive businesses like farming or manufacturing. The taxable capital limit was introduced in 1989 and has not been adjusted nor kept pace with inflation.

We welcome any questions you might have related to what we have provided in our submission or presented today.

Thank you.