Budget Implementation Act, 2021, No. 1

An Act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures

Sponsor

Status

This bill has received Royal Assent and is, or will soon become, law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

Part 1 implements certain income tax measures by

(a) providing relieving measures in connection with COVID-19 in respect of the use by an employee of an employer-provided automobile for the 2020 and 2021 taxation years;

(b) limiting the benefit of the employee stock option deduction for employees of certain employers;

(c) providing an adjustment for payments or repayments of government assistance in determining capital cost allowance for certain zero-emission vehicles;

(d) expanding the scope of the foreign affiliate dumping rules to further their objectives;

(e) providing change in use rules for multi-unit residential properties;

(f) establishing rules for advanced life deferred annuities;

(g) providing for an option to deduct repaid emergency benefit amounts in the year of benefit receipt and clarifying the tax treatment of non-resident beneficiaries;

(h) removing the time limitation for a registered disability savings plan to remain registered after the cessation of a beneficiary’s eligibility for the disability tax credit and modifying grant and bond repayment obligations;

(i) increasing the basic personal amount for certain taxpayers;

(j) providing a temporary special reading of certain rules relating to the child care expense deduction and the disability supports deduction for the 2020 and 2021 taxation years;

(k) providing flow-through share issuers with temporary additional time to incur eligible expenses to be renounced to investors under their flow-through share agreements;

(l) applying the short taxation year rule to the accelerated investment incentive for resource expenditures;

(m) introducing the Canada Recovery Hiring Program refundable tax credit to support the post-pandemic recovery;

(n) amending the employee life and health trust rules to allow for the conversion of health and welfare trusts to employee life and health trusts;

(o) expanding access to the Canada Workers Benefit by revising the applicable eligibility thresholds for the 2021 and subsequent taxation years;

(p) amending the income tax measures providing support for Canadian journalism;

(q) clarifying the definition of shared-custody parent for the purposes of the Canada Child Benefit;

(r) revising the eligibility criteria, as well as the level of subsidization, under the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS), extending the CEWS and the CERS until September 25, 2021, providing authority to enable the extension of these subsidies until November 30, 2021, and ensuring that the level of CEWS benefits for furloughed employees continues to align with the benefits provided through the Employment Insurance Act until August 28, 2021;

(s) preventing the use by mutual fund trusts of a method of allocating capital gains or income to their redeeming unitholders where the use of that method inappropriately defers tax or converts ordinary income into capital gains;

(t) extending the income tax deferral available for certain patronage dividends paid in shares by an agricultural cooperative corporation to payments made before 2026;

(u) limiting transfers of pensionable service into individual pension plans;

(v) establishing rules for variable payment life annuities;

(w) preventing listed terrorist entities under the Criminal Code from qualifying as registered charities and providing for the suspension or revocation of a charity’s registration where it makes false statements for the purpose of maintaining registration;

(x) ensuring the appropriate interaction of transfer pricing rules and other rules in the Income Tax Act;

(y) preventing non-resident taxpayers from avoiding Canadian dividend withholding tax on compensation payments made under cross-border securities lending arrangements with respect to Canadian shares;

(z) allowing for the electronic delivery of requirements for information to banks and credit unions;

(aa) improving existing rules meant to prevent taxpayers from using derivative transactions to convert ordinary income into capital gains;

(bb) extending to a wider array of eligible automotive equipment and vehicles the 100% capital cost allowance write-off for business investments in certain zero-emission vehicles;

(cc) ensuring that the accelerated investment incentive for depreciable property applies properly in particular circumstances; and

(dd) providing rules for contributions to a specified multi-employer plan for older members.

It also makes related and consequential amendments to the Excise Tax Act, the Air Travellers Security Charge Act, the Excise Act, 2001, the Greenhouse Gas Pollution Pricing Act, the Income Tax Regulations and the Canada Disability Savings Regulations.

Part 2 implements certain Goods and Services Tax/Harmonized Sales Tax (GST/HST) measures by

(a) temporarily relieving supplies of certain face masks and face shields from the GST/HST;

(b) ensuring that non-resident vendors supplying digital products or services (including traditional services) to consumers in Canada be required to register for the GST/HST and to collect and remit the tax on their taxable supplies to consumers in Canada;

(c) requiring distribution platform operators and non-resident vendors to register under the normal GST/HST rules and to collect and remit the GST/HST in respect of certain supplies of goods shipped from a fulfillment warehouse or another place in Canada;

(d) applying the GST/HST on all supplies of short-term accommodation in Canada facilitated through a digital platform;

(e) expanding the eligibility for the GST rebate for new housing;

(f) expanding the definition of freight transportation service for the purposes of the GST/HST;

(g) extending the application of the drop-shipment rules for the purposes of the GST/HST;

(h) treating virtual currency as a financial instrument for the purposes of the GST/HST; and

(i) clarifying the GST/HST holding corporation rules and expanding those rules to holding partnerships and trusts.

It also makes related and consequential amendments to the New Harmonized Value-added Tax System Regulations, No. 2.

Part 3 implements certain excise measures by increasing excise duty rates on tobacco products by $4.‍00 per carton of 200 cigarettes along with corresponding increases to the excise duty rates on other tobacco products.

Part 4 enacts an Act and amends several Acts in order to implement various measures.

Division 1 of Part 4 amends the Canada Deposit Insurance Corporation Act to, among other things,

(a) specify the steps that an assessor must follow when they review a determination of the Canada Deposit Insurance Corporation with respect to the payment of compensation to certain persons;

(b) clarify that the determination of whether or not persons are entitled to compensation is to be made in accordance with the regulations;

(c) prevent a person from taking certain actions in relation to certain agreements between the person and a federal member institution by reason only of a monetary default by that institution in the performance of obligations under those agreements if the default occurs in the period between the making of an order directing the conversion of that institution’s shares or liabilities and the occurrence of the conversion;

(d) require certain federal member institutions to ensure that certain provisions of that Act — or provisions that have substantially the same effect as those provisions — apply to certain eligible financial contracts, including those contracts that are subject to the laws of a foreign state;

(e) exempt eligible financial contracts between a federal member institution and certain entities, including Her Majesty in right of Canada, from a provision of that Act that prevents certain actions from being taken in relation to those contracts; and

(f) extend periods applicable to certain restructuring transactions for financial institutions.

It also amends the Payment Clearing and Settlement Act to

(a) specify the steps that an assessor must follow when they review a determination of the Bank of Canada with respect to the payment of compensation to certain persons or entities; and

(b) clarify that systems or arrangements for the exchange of payment messages for the purpose of clearing or settlement of payment obligations may be overseen by the Bank of Canada as clearing and settlement systems.

Finally, it amends not-in-force provisions of the Canada Deposit Insurance Corporation Act, enacted by the Budget Implementation Act, 2018, No. 1, so that, under certain circumstances, an error or omission that results in a failure to meet a requirement of the schedule to the Canada Deposit Insurance Corporation Act will not prevent a deposit from being considered a separate deposit.

Division 2 of Part 4 amends the Bank of Canada Act to authorize the Bank of Canada to publish certain information about unclaimed amounts.

It also amends the Pension Benefits Standards Act, 1985 with respect to the transfer of pension plan assets relating to the pension benefit credit of any person who cannot be located to, among other things,

(a) limit the circumstances in which such assets may be transferred and specify conditions for the transfer; and

(b) specify the effects of a transfer on any claims that may be made in respect of those assets.

Finally, it amends the Trust and Loan Companies Act and the Bank Act to

(a) include amounts that are not in Canadian currency in the unclaimed amounts regime; and

(b) impose additional requirements on financial institutions in connection with their transfers of unclaimed amounts to the Bank of Canada and communications with the owners of those amounts.

Division 3 of Part 4 amends the Budget Implementation Act, 2018, No. 2 to exclude certain businesses from the application of a provision of the Bank Act that it enacts, which allows certain agreements that have been entered into with banks to be cancelled.

Division 4 of Part 4 amends the Trust and Loan Companies Act, the Bank Act and the Insurance Companies Act to extend the period during which federal financial institutions governed by those Acts may carry on business to June 30, 2025.

Division 5 of Part 4 amends the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) to

(a) provide that the entities referred to in that Act are no longer required to disclose to the principal agency or body that supervises or regulates them the fact that they do not have in their possession or control any property of a foreign national who is the subject of an order or regulation made under that Act; and

(b) change the frequency with which those entities are required to disclose to the principal agency or body that supervises or regulates them the fact that they have such property in their possession or control from once a month to once every three months.

Division 6 of Part 4 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to

(a) extend the application of Part 1 of that Act to include persons and entities engaged in the business of transporting currency or certain other financial instruments;

(b) provide that the Financial Transactions and Reports Analysis Centre make assessments to be paid by persons or entities to which Part 1 applies, based on the amount of certain expenses incurred by the Centre, and to authorize the Governor in Council to make regulations respecting those assessments;

(c) amend the definitions of designated information to include certain information associated with virtual currency transactions and widely held or publicly traded trusts that the Centre can disclose to law enforcement or other governmental bodies;

(d) change the maximum penalties for summary conviction offences;

(e) expand the list of persons or entities that are not eligible for registration with the Centre; and

(f) make other technical amendments.

Division 7 of Part 4 enacts the Retail Payment Activities Act, which establishes an oversight framework for retail payment activities. Among other things, that Act requires certain payment service providers to identify and mitigate operational risks, safeguard end-user funds and register with the Bank of Canada. That Act also provides the Minister of Finance with powers to address risks related to national security that could be posed by payment service providers. This Division also makes related amendments to the Canada Deposit Insurance Corporation Act, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, the Financial Consumer Agency of Canada Act and the Payment Card Networks Act.

Division 8 of Part 4 amends the Pension Benefits Standards Act, 1985 to establish new requirements and grant new regulation-making powers to the Governor in Council with respect to negotiated contribution plans.

Division 9 of Part 4 amends the First Nations Fiscal Management Act to allow First Nations that are borrowing members of the First Nations Finance Authority to assign their rights to certain revenues payable by Her Majesty in right of Canada, for the purpose of securing financing for that Authority’s borrowing members.

Division 10 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to, among other things, increase the maximum amount of a fiscal stabilization payment that may be made to a province and to make technical changes to the calculation of fiscal stabilization payments.

Division 11 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to authorize additional payments to the provinces and territories.

Division 12 of Part 4 authorizes payments to be made out of the Consolidated Revenue Fund in relation to Canada’s COVID-19 immunization plan.

Division 13 of Part 4 authorizes payments to be made out of the Consolidated Revenue Fund in relation to infrastructure and amends the heading of Part 9 of the Keeping Canada’s Economy and Jobs Growing Act.

Division 14 of Part 4 authorizes amounts to be paid out of the Consolidated Revenue Fund, to a maximum total amount of $3,056,491,000, for annual payments to Newfoundland and Labrador in accordance with the terms and conditions of the Hibernia Dividend Backed Annuity Agreement.

Division 15 of Part 4 amends the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act to authorize the Minister of Finance to make an additional fiscal equalization offset payment to Nova Scotia for the 2020–2021 fiscal year and to extend that Minister’s authority to make additional fiscal equalization offset payments to Nova Scotia until March 31, 2023.

Division 16 of Part 4 amends the Telecommunications Act to provide that decisions made by the Canadian Radio-television and Telecommunications Commission on whether or not to allocate funding to expand access to telecommunications services in underserved areas are not subject to review under section 12 or 62 of that Act but are subject to review by the Commission on its own initiative. It also amends that Act to provide for the exchange of information within the federal government and with provincial governments for the purpose of coordinating financial support for access to telecommunications services in underserved areas.

Division 17 of Part 4 amends the Canada Small Business Financing Act to, among other things,

(a) specify that lines of credit are loans;

(b) set a limit on the liability of the Minister of Small Business and Tourism in respect of each lender for lines of credit;

(c) remove the restriction excluding not-for-profit businesses, charitable businesses and businesses having as their principal object the furtherance of a religious purpose as eligible borrowers;

(d) increase the maximum amount of all loans that may be made in relation to a borrower under that Act; and

(e) provide that lesser maximum loan amounts may be prescribed by regulation for loans other than lines of credit, lines of credit and prescribed classes of loans.

Division 18 of Part 4 amends the Customs Act to change certain rules respecting the correction of declarations made under section 32.‍2 of that Act, the payment of interest due to Her Majesty and securities required under that Act, and to define the expression “sold for export to Canada” for the purposes of Part III of that Act.

Division 19 of Part 4 amends the Canada–United States–Mexico Agreement Implementation Act to require the concurrence of the Minister of Finance when the Minister designated for the purposes of section 16 of that Act appoints panellists and committee members and proposes the names of individuals for rosters under Chapter 10 of the Canada–United States–Mexico Agreement.

Division 20 of Part 4 amends Part 5 of the Department of Employment and Social Development Act to make certain reforms to the Social Security Tribunal, including

(a) changing the criteria for granting leave to appeal and introducing a de novo model for appeals of decisions of the Income Security Section at the Appeal Division;

(b) giving the Governor in Council the authority to prescribe the circumstances in which hearings may be held in private; and

(c) giving the Chairperson of the Social Security Tribunal the authority to make rules of procedure governing appeals.

Division 21 of Part 4 amends the definition of “previous contractor” in Part I of the Canada Labour Code in order to extend equal remuneration protection to employees who are covered by a collective agreement and who work for an employer that

(a) provides services at an airport to another employer in the air transportation industry; or

(b) provides services to another employer in another industry and at other locations that may be prescribed by regulation.

Division 22 of Part 4 amends Part III of the Canada Labour Code to establish a federal minimum wage of $15 per hour and to provide that if the minimum wage of a province or territory is higher than the federal minimum wage, the employer is to pay a minimum wage that is not less than that higher minimum wage. It also provides that, except in certain circumstances, the federal minimum wage per hour is to be adjusted upwards annually on the basis of the Consumer Price Index for Canada.

Division 23 of Part 4 amends the provisions of the Canada Labour Code respecting leave related to the death or disappearance of a child in cases in which it is probable that the child died or disappeared as a result of a crime, in order to, among other things,

(a) increase the maximum length of leave for a parent of a child who has disappeared from 52 weeks to 104 weeks;

(b) extend eligibility to parents of children who are 18 years of age or older but under 25 years of age; and

(c) limit the exception that applies in the case of a parent of a child who has died as a result of a crime if it is probable that the child was a party to the crime so that the exception applies only with respect to a child who is 14 years of age or older.

Division 24 of Part 4 authorizes the Minister of Employment and Social Development to make a one-time payment to Quebec for the purpose of offsetting some of the costs of aligning the Quebec Parental Insurance Plan with temporary measures set out in Part VIII.‍5 of the Employment Insurance Act.

Division 25 of Part 4 amends the Judges Act to provide that, if the Canadian Judicial Council recommends that a judge be removed from judicial office, the time counted towards the judge’s pension entitlements will be frozen and their pension contributions will be suspended, as of the day on which the recommendation is made. If the recommendation is rejected, the judge’s pension contributions will resume, the time counted towards their pension entitlement will include the suspension period and the judge will be required to make all the contributions that would have been required had the contributions never been suspended.

Division 26 of Part 4 amends the Federal Courts Act and the Tax Court of Canada Act to increase the number of judges for the Federal Court of Appeal by one and the number of judges for the Tax Court of Canada by two. It also amends the Judges Act to authorize the salary for the new Associate Chief Justice for the Trial Division of the Supreme Court of Newfoundland and Labrador and the salaries for the following new judges: five judges for the Ontario Superior Court of Justice, two judges for the Supreme Court of British Columbia and two judges for the Court of Queen’s Bench for Saskatchewan.

Division 27 of Part 4 amends the National Research Council Act to provide the National Research Council of Canada with the authority to engage in the production of “drugs” or “devices”, as those terms are defined in the Food and Drugs Act, for the purpose of protecting or improving public health. It also amends that Act to provide authority for the incorporation of corporations and the acquisition of shares in corporations.

Division 28 of Part 4 amends the Department of Employment and Social Development Act in relation to the collection and use of Social Insurance Numbers by the Minister of Labour.

Division 29 of Part 4 amends the Canada Student Loans Act to provide that, during the period that begins on April 1, 2021 and ends on March 31, 2023, no interest is payable by a borrower on a guaranteed student loan.

It also amends the Canada Student Financial Assistance Act to provide that, during the period that begins on April 1, 2021 and ends on March 31, 2023, no interest is payable by a borrower on a student loan.

Finally, it amends the Apprentice Loans Act to provide that, during the period that begins on April 1, 2021 and ends on March 31, 2023, no interest is payable by a borrower on an apprentice loan.

Division 30 of Part 4 confirms the validity of certain regulations in relation to the cancellation or postponement of certain First Nations elections.

Division 31 of Part 4 amends the Old Age Security Act to increase the Old Age Security pension payable to individuals aged 75 and over by 10%. It also provides that any amount payable in relation to a program to provide a one-time payment of $500 to pensioners who are 75 years of age or older may be paid out of the Consolidated Revenue Fund.

Division 32 of Part 4 amends the Public Service Employment Act to, among other things,

(a) require that the establishment and review of qualification standards and the use of assessment methods in respect of appointments include an evaluation of whether there are biases or barriers that disadvantage persons belonging to any equity-seeking group;

(b) provide that audits and investigations may include the determination of whether there are biases or barriers that disadvantage persons belonging to any equity-seeking group; and

(c) give permanent residents the same preference as Canadian citizens in external advertised appointment processes.

Division 33 of Part 4 authorizes the making of payments to the provinces for early learning and child care for the fiscal year beginning on April 1, 2021.

Division 34 of Part 4 amends the Canada Recovery Benefits Act to, among other things,

(a) provide that the maximum number of two-week periods in respect of which a Canada recovery benefit is payable is 25;

(b) reduce the amount of a Canada recovery benefit for a week to $300 in certain circumstances;

(c) provide that certain persons who were paid benefits under the Employment Insurance Act are eligible to be paid a Canada recovery benefit in certain circumstances;

(d) provide that the maximum number of weeks in respect of which a Canada recovery caregiving benefit is payable is 42; and

(e) provide that the Governor in Council may, by regulation, on the recommendation of the Minister of Employment and Social Development and the Minister of Finance, amend certain provisions of that Act to replace the date of September 25, 2021 by a date not later than November 20, 2021.

It also amends the Canada Labour Code to provide that the maximum number of weeks of leave for COVID-19 related caregiving responsibilities is 42.

Finally, it repeals provisions of the Canada Recovery Benefits Regulations and the Canada Labour Standards Regulations.

Division 35 of Part 4 amends the Employment Insurance Act to, among other things,

(a) facilitate access to unemployment benefits for a period of one year by

(i) reducing the number of hours of insurable employment required to qualify for unemployment benefits to a national threshold of 420 hours,

(ii) reducing the amount of earnings from self-employment that a self-employed person is required to have to be eligible to access special unemployment benefits,

(iii) providing that only a claimant’s most recent separation from employment will be considered in determining whether they qualify for unemployment benefits,

(iv) ensuring that earnings paid to a person because of the complete severance of their relationship with their former employer do not extend the person’s benefit period, and

(v) providing for an increase in the maximum number of weeks for which regular unemployment benefits may be paid to a seasonal worker if certain conditions are met; and

(b) extend the maximum number of weeks for which benefits may be paid because of a prescribed illness, injury or quarantine from 15 to 26.

It also amends the Canada Labour Code to, among other things, extend to 27 the maximum number of weeks to which an employee is entitled for a medical leave of absence from employment.

It also amends the Employment Insurance Regulations to, among other things, ensure that, for a period of one year, earnings paid to a person because of the complete severance of their relationship with their former employer do not extend the person’s benefit period or delay payment of benefits to the person.

Finally, it amends the Employment Insurance (Fishing) Regulations to, among other things, reduce, for a period of one year, the amount of earnings that a fisher is required to have to qualify for unemployment benefits.

Division 36 of Part 4 amends the Canada Elections Act to provide that the offences related to the prohibition on making or publishing certain false statements with the intention of affecting the results of an election require that the person or the entity making or publishing the statement knows that the statement in question is false.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Votes

June 23, 2021 Passed 3rd reading and adoption of Bill C-30, An Act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures
June 21, 2021 Passed Concurrence at report stage of Bill C-30, An Act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures
June 21, 2021 Failed Bill C-30, An Act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures (report stage amendment)
June 14, 2021 Passed Tme allocation for Bill C-30, An Act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures
May 27, 2021 Passed 2nd reading of Bill C-30, An Act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures

Budget Implementation Act, 2021, No. 1Government Orders

June 22nd, 2021 / 4:05 p.m.
See context

NDP

Randall Garrison NDP Esquimalt—Saanich—Sooke, BC

Madam Speaker, I know that in the member's riding lots of workers in tourism have not been able to get back to work yet. I would like to know if the member supports the cut in CRB by 40% that is going into place on July 1. What kind of incentive does it provide for those people? They have not been able to get jobs. There are no jobs available, so why cut their benefits?

Budget Implementation Act, 2021, No. 1Government Orders

June 22nd, 2021 / 4:05 p.m.
See context

Liberal

Larry Bagnell Liberal Yukon, YT

Madam Speaker, I thank the member for his very thoughtful work in Parliament which I am well aware of.

I answered that question for a colleague yesterday. What I forgot to say was that in all the tourism supports to get people back to work was the new $700 million fund for small businesses. I also mentioned that 80% of jobs lost in Canada during the pandemic are back now, but as people move back, the various supports for businesses and individuals will start to go down.

Budget Implementation Act, 2021, No. 1Government Orders

June 22nd, 2021 / 4:05 p.m.
See context

Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the President of the Queen’s Privy Council for Canada and Minister of Intergovernmental Affairs and to the Leader of the Government in the House of Commons

Madam Speaker, I know my friend has been a long-time, passionate advocate for the north. Even when I was in opposition, I can recall having discussions with him. The environment is very important to him. He made reference to that.

Could he expand upon why, from his perspective, the environment is so critically important to northern Canada?

Budget Implementation Act, 2021, No. 1Government Orders

June 22nd, 2021 / 4:05 p.m.
See context

Liberal

Larry Bagnell Liberal Yukon, YT

Madam Speaker, it is especially important for the north because the north, as I have been saying for two decades now, is experiencing climate change three times more than the rest of the world. Some of the species our indigenous people depend on are moving or dying out.

New pests and diseases are coming in, such as spruce budworm, which hurts the forests. It is very important for the north to have adjustments and innovation related to climate change. There are some specific funds that first nations are involved in. A couple of days ago we announced some great projects where they are adding traditional knowledge to scientific knowledge to come up with a plan for the future, so they can adapt to these critical changes to the environment that are happening in the north.

Budget Implementation Act, 2021, No. 1Government Orders

June 22nd, 2021 / 4:10 p.m.
See context

Conservative

Pierre Poilievre Conservative Carleton, ON

Madam Speaker, the Prime Minister thinks he has discovered a cornucopia of cash. In the last fiscal year he ran a deficit of $354 billion. From February 2020 until February 2021, the Bank of Canada increased the money supply by, guess what, $354 billion. The Prime Minister thinks this is great: It is easy money. He is starting to get addicted to this idea of cash flying out of printing machines and new coins being machine-gunned off the top floor of the Bank of Canada building, only a few minutes from where we stand.

I raise this today because there is a very interesting debate that is not happening, for which the deadline is quickly approaching, about the Bank of Canada's inflation target. Starting in 1991, the bank and the government signed a deal that inflation would be targeted between 1% and 3%. They called it the “monetary policy framework”: These are sleepy, boring words that may impact the financial health of Canadians more than anything else that happens here in Parliament. That deal to target inflation renews every five years. It comes up for renewal on October 24 of this year. The Prime Minister has made it clear he is going to call an early election during the summer, meaning that if he were to win he would be able to impose a brand new rule about inflation without Canadians having anything to say about it. I suspect that 99% of Canadians do not even realize this is up for debate, but here is why it matters.

If the Prime Minister were to change the bank's mandate this coming October, he could begin to permanently fund larger shares of government spending with printed Bank of Canada cash even if it leads to above 3% inflation, as we have right now. That would have been impossible prior to the pandemic. Based on agreements with the bank, we as Canadians were protected from undue price increases and unacceptable and unjustifiable money creation, but with the renewal of this agreement, about which there has been absolutely no debate in the House of Commons or at the finance committee, the Prime Minister may be able to carry out the biggest unapproved tax increase in Canadian history: the inflation tax.

What is the inflation tax? It is very simple. When the Bank of Canada creates cash to fund the government, it provides the government with a new revenue source. Last year, cash newly created by the Bank of Canada was the single-greatest source of revenue for the government. It was not income tax, the GST, tariffs or even borrowing from private sector lenders, but new cash creation that constituted a $303 billion source of revenue for the current government. The Prime Minister might like to see this go on into the future. The problem is that, like all taxes, it increases costs for Canadians. This tax would be paid in the form of higher prices. The price of housing went up by 30%. The prices of food, lumber, automobiles and transportation have all broken recent records. That is naturally what we can expect when the government floods the marketplace with cheap money. When money is cheap, everything else suddenly gets expensive.

We might ask if it is viewed as a tax by the experts. Let me quote the experts. I will go through them one at a time.

In a 1978 lecture, Nobel prize-winning economist Milton Friedman stated:

There has never been in history an inflation that was not accompanied by an extremely rapid increase in the quantity of money. There has never in history been an extremely rapid increase in the quantity of money without inflation....

This is why Dr. Friedman wrote, in his exhaustive study entitled “A Monetary History of the United States, 1867-1960”, that “inflation is everywhere and always a monetary phenomenon”. He also said that “inflation is taxation without legislation”, thereby violating the basic principle that Parliament should approve every single tax before government is able to apply it.

Some might say that this is just a classical economist view. Let us take a look at John Maynard Keynes, who is obviously not a classical economist. He said:

By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some.

This has been demonstrably proven. Inflation does benefit the extremely wealthy. That is why, in the last year of inflationary money printing, we saw a large increase in economic disparity between the rich and the poor. In the first six months of the central bank's money-printing bonanza, the 28 richest Canadians got 32% richer. That happened while our economy was tumbling by $120 billion.

Where did they get all the money from? The bank created cash, which inflated the assets of the super-rich while devaluing the wages of the working poor. This is one of the reasons we have the principle of no taxation without representation: It is not simply to approve the quantity of taxes, but the composition of taxes. Quantity refers to the dollar value. Of course, that was gargantuan last year, but composition refers to who pays it.

We know that the poor overwhelmingly pay the inflation tax. In fact, the governor of the Bank of Canada conceded that point to me when he came before the finance committee. He said the poor pay more in inflation because they deal more in cash. They are not able to hold their limited wealth in inflation-proof assets, like gold, land, stocks, bonds, etc. Therefore, the very small amount of money they have gets nibbled away by this silent thief we call inflation.

No one in this chamber would be able to get re-elected if they stood in their place and voted for an increase in taxes on the working poor and used the money disproportionately to inflate the wealth of the super-rich. That is why no such vote was held. The government simply passed that process on to the Bank of Canada to let money creation do the dirty deed on its behalf.

I will return to Dr. Milton Friedman, a Nobel Laureate, who said, “Inflation is the only form of taxation that can be levied without any legislation.” He was, of course, speaking as an economist. I will show the deliberate choice that the inflation tax has made and that has done so without the parliamentary approval of Canadians. I will show it by referring to the undeniable empirical evidence that Dr. Friedman produced.

He showed that, in the United States, the United Kingdom, Japan, Germany and Brazil, there was a perfect correlation between the rise in the consumer price index and the increase in the money supply for each unit of economic output. In other words, in all five of those countries on four continents, inflation rose almost perfectly in line with the growth in the money supply. That is empirical evidence proving beyond a doubt that when we create cash, we raise prices to the benefit of the rich and at the expense of the poor.

Modern financial sector experts say the same. HSBC's senior economic adviser, Stephen King, wrote in The Financial Times last year that “inflation and taxes are, in many ways, simply two sides of the same coin”. He further said that this is because “higher-than-anticipated inflation serves to redistribute wealth away from private creditors, pensioners for example, to public debtors. At this point, we come full circle: the distinction between the printing press and taxes begins to break down.”

Warren Buffett, the greatest investor of all time, said:

The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislature. The inflation tax has a fantastic ability to simply consume capital. It makes no difference to a widow with her savings in a 5 percent passbook account whether she pays 100 percent income tax on her interest income during a period of zero inflation, or pays no income taxes during years of 5 percent inflation. Either way, she is “taxed” in a manner that leaves her no real income whatsoever. Any money she spends comes right out of capital. She would find outrageous a 120 percent income tax, but doesn't seem to notice that 5 percent inflation is the economic equivalent.

Let us say that a widow has $100,000 of savings. If she earns 5% on that, and if inflation is 5%, then she gains nothing. All of her savings income is vaporized by inflation. That would be the equivalent of the Parliament of Canada passing a bill effectively taxing her at a rate of 100% on all of her savings income, something we would never do but yet something that ultimately happens because the central bank does it without politicians being held accountable.

Mr. Buffett's business partner, the famous Charlie Munger, said:

I think democracies are prone to inflation because politicians will naturally spend excessively, they have the power to print money and will use money to get votes. If you look at inflation under the Roman Empire, with absolute rulers, they had much greater inflation, so we don't set the record. It happens over the long-term under any form of government.

Onward to John Kenneth Galbraith, a famous Canadian economist on the left, who said, “Nothing so weakens government as persistent inflation.”

Other international economists, Nouriel Roubini and David Backus, wrote, “Note that since the government, by printing money, acquires real goods and services, seigniorage is effectively a tax imposed by the government on private agents. Such a seigniorage tax is also called the inflation tax.” They go on to explain what impact that tax has, particularly on the poorest people.

This is not simply an opinion. This is a mathematical fact backed up by some of the most renowned economists on planet earth, many of them winning the Nobel Prize for their work, many of them having done hundreds of years of empirical research that proves the taxation effect of inflation. These are the insights of some of the world's best-ever investors. They all concur that inflation, when created by central bank money creation, is nothing more than a tax.

This kind of a tax has been mostly done by the worst possible leaders. We think of Henry VIII, for example. They used to call Henry VIII “Old Coppernose”, and that is because, despite the fact that he inherited a monstrous fortune from his father, and I do not know if that reminds members of anybody, he spent the cupboard bare. He kept running out of money, and the British pound, which was literally a pound of silver, was becoming more and more scarce to him.

He needed more coins, but he did not have enough silver to make them all, so what he did was melt down the existing coins and reconstitute them by making them of copper but putting a tiny, thin layer of silver around the outside. He had his face, of course, on the coin because he was an egomaniac, and his face pointed outward from the coin; it was not a profile picture. Because his nose protruded on the coin, it would rub against the inside of pockets and money sacks and the silver would rub away, leaving nothing but a red copper nose. Everybody would know that King Henry had given them a fraudulent, fake silver coin by virtue of the fact that his nose was red. We often say politicians' fibs can be exposed through the length of their nose. In the case of Henry VIII, it was the colour of his nose.

In fact, he did undergo the mass debasement of the currency. Originally, when he took reign, the British pound was 92% silver. It dropped to 75%, then 50%, then 33% and finally to 25% by 1551. His successor brought it down further. The result was, ultimately, that the amount of silver in each coin dropped by about 87%, and guess what happened to the prices. They rose by about 75%. Things got more and more expensive. Life got better for him. Of course, he was known for having the king's disease, gout, which people get from massive self-indulgence, orgies of food and drink. Therefore, life was very good in the king's court because he had created all of this fake cash that enriched him and his friends, but it was terrible for the peasants and the common people who actually did the work of the land. They got poorer and poorer as their money got more and more worthless.

That is the inflation tax, so this Prime Minister of ours teaches us nothing new. This is not a new concept. In fact, if we look throughout history on these matters of economics, we see that leaders make the same mistakes over and over again. As Kipling would say:

That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire—

Therefore, we get burned again and again by making the same mistakes of our predecessors.

That brings me back to the Bank of Canada. The bank recently has been talking about all kinds of different things that have nothing to do with its mandate. For example, the former governor Stephen Poloz regularly commented on things that were completely out of his domain, inappropriately commenting on social policy when he proposed government takeover of child care. That is well out of the realm of the Bank of Canada's mandate. We have seen recent comments by governors and deputy governors of the Bank of Canada on everything from fiscal policy to environmental policy to a whole plethora of things that find their place nowhere within the bank's mandate. Even on the bank's website, Paul Beaudry, a deputy governor, talks about, in his words, “the great reset”, whatever that means. He believes this is part of the Bank of Canada's mandate, and of course it is not.

The worry is that the bank will simply become a political instrument for the agenda of a left-wing government, trying to do undemocratically what it could never convince Canadians to support democratically.

Canadians would never support a massive tax increase on the poor in order to fund the ideological fantasies and the enrichment of the super rich and the super elite. That is why we in Parliament have to reclaim our powers, the powers that have been invested in this chamber and in its predecessor chambers in the mother Parliament for 800 years: that governments, including central banks, cannot tax what the commoners have not approved; that the principle of responsible government remains; that Parliament reigns supreme; that citizen goes before state and commoner ahead of Crown.

Budget Implementation Act, 2021, No. 1Government Orders

June 22nd, 2021 / 4:30 p.m.
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Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the President of the Queen’s Privy Council for Canada and Minister of Intergovernmental Affairs and to the Leader of the Government in the House of Commons

Madam Speaker, it is almost like déjà vu. I have heard this before from the member because it was not that long ago when he was up on a matter of privilege, arguing why it was a privilege issue. I responded in part by saying that it was not a matter of privilege, but that in fact the member could be talking about it on Bill C-30. Voila, here we are on Bill C-30 and the member is at least relevant to the debate.

Would my friend across the way not acknowledge, at the very least, that his theory is based on the fact that the government had a need to support Canadians during a pandemic by investing billions of dollars into direct support through programs like CERB and the wage subsidy program, along with a number of other programs? Is he advocating on behalf of the Conservative Party that we should not have done that?

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June 22nd, 2021 / 4:30 p.m.
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Conservative

Pierre Poilievre Conservative Carleton, ON

Madam Speaker, once again, we have an example of a Liberal judging his success by how expensive he can be. If we look at the other countries that responded to COVID, they managed to deliver better results. They managed to deliver better COVID outcomes and lower unemployment with significantly smaller deficits. In fact, we have the largest deficit, as a share of GDP, anywhere in the G20. In fact, we had a bigger deficit last year, as a share of GDP adjusted for inflation, than we did in World War I, in the Great Depression and in the great global recession.

What the government is building us toward is a debt crisis. It has massively inflated the housing market by flooding the mortgage system with printed cash. It is now creating consumer price inflation, and our $8.6 trillion of household, corporate and government debt will “debtonate” if interest rates rise before our debt ratios come down.

Budget Implementation Act, 2021, No. 1Government Orders

June 22nd, 2021 / 4:30 p.m.
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Bloc

Caroline Desbiens Bloc Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC

Madam Speaker, I would like to thank my colleague for his statement. There was a lot packed into it.

After the pandemic and a major global crisis that has affected much of the world, the economy is obviously destabilized. There is therefore a temporary imbalance and adjustments to be made.

I think that we are entering a period of adjustment. There are not that many ways of addressing this imbalance and trying to make adjustments. We can inject new money, hoping to stimulate the creativity of our country, of our Quebec and our Canada. We can invest in innovative economies to find our balance in the national and international economy. We can also apply austerity measures to limit fluctuations as much as possible.

Contrary to what you said, if the government did things wrong, does that mean that you support austerity measures?

Budget Implementation Act, 2021, No. 1Government Orders

June 22nd, 2021 / 4:30 p.m.
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Conservative

Pierre Poilievre Conservative Carleton, ON

Madam Speaker, I thank the hon. member for her question.

The problem is that all of the other parties measure success as a function of how much it costs. Personally, I measure results based on people’s quality of life. For example, Taiwan, Singapore and Australia spent far less than Canada and had far fewer COVID-related deaths. Moreover, their unemployment rates are far lower than Canada's.

It is true that the Liberals’ approach is the most expensive among all the G7 countries, but that does not mean that we received the best product. If someone pays more for a car, that does not mean that it is a better car. Personally, I want value for our taxpayers; I want the best outcome for the lowest price. That is the Conservatives’ approach.

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June 22nd, 2021 / 4:30 p.m.
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NDP

Matthew Green NDP Hamilton Centre, ON

Mr. Speaker, while 53% of Canadians are $200 away from being unable to pay their bills, Canada's 44 billionaires have accrued close to $80 billion in pandemic profiteering, and 87 families have hoarded more wealth than 12 million Canadians. Since 2015, the CRA's program to combat tax evasion by individuals worth more than $50 million has resulted in zero prosecutions and zero convictions, despite having 6,000 audits, yet this member and his Conservative colleagues joined the Liberals to vote down our NDP wealth tax.

Does the member, having referenced the working poor in relation to tax fairness, not agree that the government needs to finally close the flagrant tax loopholes and finally begin to aggressively prosecute those who hide their wealth offshore in tax havens in order to avoid paying their fair share to Canadians right here today?

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June 22nd, 2021 / 4:35 p.m.
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Conservative

Pierre Poilievre Conservative Carleton, ON

Madam Speaker, yes, we do support going after people who do not pay what they owe, especially the richest. The member is quite right: The richest are making off like bandits when it comes to tax evasion in this country, despite the rhetoric from the other side.

However, I would point out that it is actually not profits that are most enriching the wealthy; it is capital gains. It is the monstrous increases in capital gains that have resulted from flooding the economy with $350 billion of new Monopoly money. That money has gone into asset price inflation, making the rich vastly richer and creating a kind of aristocratic feudal economy, as opposed to a free market, bottom-up economy.

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June 22nd, 2021 / 4:35 p.m.
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Conservative

Tracy Gray Conservative Kelowna—Lake Country, BC

Madam Speaker, I thank my colleague for his very informative and well-researched intervention on inflation. From meeting with manufacturers, importers and retailers, I have heard a lot about a number of new regulatory burdens that have either just come into effect or are about to come into effect and concerns about pricing, product availability and Canada's competitiveness.

I am wondering if the member could speak to how regulatory burdens may affect inflation.

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June 22nd, 2021 / 4:35 p.m.
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Conservative

Pierre Poilievre Conservative Carleton, ON

Madam Speaker, they can affect it very drastically. For example, I think the member has been looking into new appliance regulations that would make the appliances that Canadians buy far more expensive than the same appliances that are available south of the border, even though we live in an integrated market for those same products.

By the way, big corporations do not pay the cost of regulations; they pass it all on to their workers in reduced wages and on to consumers in higher prices. In fact, many of the biggest companies love regulation, because they can use it to shut out their competition by making it more and more difficult and more and more expensive for other entrepreneurs to get into the field.

What does that mean? Less competition always means higher prices for consumers and lower wages and fewer career opportunities for workers.

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June 22nd, 2021 / 4:35 p.m.
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Bloc

Sébastien Lemire Bloc Abitibi—Témiscamingue, QC

Madam Speaker, I enjoyed the historical part of the speech made by my colleague from Carleton, the part where he spoke about the value of currency under Henry IV, if I remember correctly.

I see that my colleague has some appreciation for history. Sovereignists were teased a lot about the “Lévesque dollar”, which was supposedly worth 70 cents. However, in recent decades, there were times when we would happily have taken that 70-cent dollar.

I would like to know what my colleague thinks about today’s “Trudeau dollar”. Can he tell me how much the “Poilievre dollar” would be worth if he were minister of finance?

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June 22nd, 2021 / 4:35 p.m.
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Conservative

Pierre Poilievre Conservative Carleton, ON

Madam Speaker, the member did not use my name. He simply mentioned the official name of the currency that I am going to create in the future. If the Bloc Québécois opposes that currency, then I will be able to say that it was a Bloc member who suggested that the Conservatives create a currency bearing my last name. It would be a currency that maintains its value, that workers would appreciate and that would enable them to buy more. That is the best idea I have ever heard here in the House.