Bill C-30 (Historical)

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

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.

[The Chair, Liberal, Wayne Easter]

Thank you, both.

Before I turn to Mr. Ste-Marie, I just want to throw in a question to Ms. Kennedy.

I know you're in the Gros Morne area, Ms. Kennedy. You did mention the wage subsidy, and we had people on the previous panel on the emergency wage subsidy. How important is it to your industry and your area that changes be made to Bill C-30 with regard to the wage subsidy?

Second, I know you're in a national park. What difference does the national park in Gros Morne make to your region?

[Stephen S. Poloz, Special Adviser, Osler, Hoskin and Harcourt LLP]

Thank you very much, Chair.

Good afternoon to you and to the committee. Thanks for asking me to participate in this study of Bill C-30.

I would offer three points by way of introduction. The first point concerns the context in which we find ourselves. The impact of COVID-19 on people and our economy has been massive. There will be some permanent damage. However, the damage has been mostly limited to sectors that have been shut down. In a typical recession, bad news in one sector usually infects the other sectors through lower confidence. This has not happened this time. I think this is the main reason that the economy has significantly outperformed most forecasts during the past year.

This economic strength has generated a debate around the appropriateness of fiscal stimulus. It has given the government far more fiscal room to manoeuvre than previously expected. However, any major economic trauma will scar the economy. These scars will run deeper the longer it takes for the economy to heal. Scarring manifests itself as a level of national income that would be lower than it otherwise could be—literally forever—and so I therefore subscribe to the view that it makes sense to push the economy harder during the early stages of recovery, because this will encourage business investment and create new economic growth.

My second point concerns fiscal sustainability. A credible fiscal plan in which the level of government debt relative to national income stops rising and debt service costs are manageable meets the minimum—or, we should say, perhaps technical—standard of sustainability. I draw your attention to the table on page 328 of the budget, which shows that these criteria are met. By the way, comparing this table with a similar one from the 2019 budget two years ago demonstrates that this budget does not represent a sharp turn toward big government, as many have said. The planned budgetary expenditure trend line returns to about 15% of national income, just as it was pre-COVID. The budgetary revenue trend line does exactly the same.

There is a legitimate concern that this minimum standard of fiscal sustainability would leave the economy vulnerable to future shocks. Well, that issue is for broader political debate, a debate that I think should acknowledge the challenging fiscal situation in our provinces. When we combine federal and provincial debt together, as we should when considering Canada's future resilience, our fiscal picture is not very different from that of other major economies.

My third point is that there are many ways to build future resilience without government austerity or higher taxes. If we put our minds to it, we can grow out from under our COVID debt burden, just like we grew out from under our World War II debt when I was young. There are many ways in which we could boost our long-term economic growth rate and grow our way out of our indebtedness.

First of all, immigration is Canada's most important economic growth engine, just as it was in the 1950s and 1960s. Anything we can do to make that process more efficient will be a good investment in future growth.

Second, a national child care program, as announced, can also help boost labour force growth. I do hope it can be deployed without delay. This is the sort of program that can literally pay for itself. If we can boost the level of national income by a mere 2% in this way, which amounts to $40 billion to $50 billion more national income every year, then $6 billion to $8 billion will automatically land in government coffers, also every year.

Third, as I've argued before in this committee, one of our biggest untapped sources of future economic growth is to harmonize provincial regulations across the country to reduce interprovincial business frictions. This initiative has about twice as much economic growth potential as the child care proposal, and in fact would cost nothing to implement. It seems to me that finding innovative ways to boost economic growth and avoid raising taxes should be at the top of our list, at this most precarious time, at both the federal and provincial levels.

Thank you, Chair.

[David Macdonald, Senior Economist, Canadian Centre for Policy Alternatives]

I have indeed. Thanks so much for the invitation to come back to speak to you today about Bill C-30 and Budget 2021.

The last time I was at the committee, I presented you with the results of our 2020 child care fee survey in the context of the fall economic update. I was pleased to see those child care figures appear in Budget 2021 as the starting point for the government's ambitious national child care plan.

Parents have two main complaints about child care in Canada. First is that fees are high, and second is that wait lists are long. Targeting a reduction in fees, particularly with quick and substantial reductions by 2022, will have a noticeable impact and make a big difference for parents with young children. However, the expansion of spaces at the same time will be an important corollary to fee reductions to ensure that we don't trade lower fees for longer wait lists. I look forward to specific targets on space increases, as well as reductions in fees.

When it comes to building a recovery from COVID-19, affordable and accessible child care is in a unique position. It certainly supports women as they return to the labour force after they have been harder hit than men during the pandemic due to job loss, but it also provides improved productivity due to higher female labour force participation, thereby driving long-term real GDP growth. Moreover, it pays higher tax dividends than other programs do.

The reduction in child care fees so far has been largely driven through provincial expenditures—certainly in Quebec, but also in Manitoba, Prince Edward Island and Newfoundland, which all have set fee programs, although at a higher rate than Quebec.

The higher income tax that results from higher female labour force participation goes disproportionately to the federal government, despite the provinces being the ones that support it. This makes the federal government an ideal partner on this file, as it is also the main beneficiary of that increased tax revenue.

Budget 2021 is relatively limited in its focus on new revenue generation. I'm not overly concerned about deficits, but now is the time to start to consider new measures so that they can be properly implemented in the future. In the short term, I would encourage the committee to consider a CEWS clawback for profitable companies. In the initial months of the rollout of the wage subsidy, the barriers to entry fell quickly. The upside was easy access for businesses that needed it to continue to operate. The downside was that businesses might squeak by on the rules, but that the subsidy, in the end, would boost profits.

While the CRA has aggressively pursued CERB recipients, there is no corresponding effort on the business side. Recent media reporting has highlighted publicly traded companies successfully receiving the CEWS all the while declaring substantial profits. I would encourage the committee to consider a CEWS payback regime, whereby companies that received it but also declared profits pay it back.

Given that more support has gone to business than to jobless Canadians during the pandemic, it only makes sense that profitable companies that don't need the wage subsidy send it back to support other recovery efforts.

In the longer term, I would encourage the committee to consider other revenue options. The federal government could build on its closure of the stock option deduction scheduled for July through an examination, for instance, of the capital gains inclusion rate. Given its immense cost, this could provide additional funds for the recovery, as could a more thorough review of tax expenditures given that many of those tax loopholes go to a very small slice of the upper end of the income spectrum.

The proposed digital services tax at 3% of revenue provides a model for how profit-shifting by international corporations can be tackled. The 3% of revenue is a sort of minimum corporate tax for foreign companies, although it could certainly be expanded far beyond digital services, which is its starting point.

It is clear from American disclosure that many multinational companies regularly employ profit-shifting strategies to declare profits in tax havens instead of in the countries where those profits were generated. Examining a minimum corporate tax, possibly based on the 3% revenue rule, would go a long way to avoiding corporate freeloading on Canadian infrastructure done by foreign multinationals, all while levelling the playing field for Canadian companies that do pay those corporate income taxes.

Finally, like the government, I have limited concern about federal deficits and new federal debt. Interest paid on the federal debt has fallen to historic lows when adjusted for GDP. This is true even when one includes the record pandemic deficits and new spending over the next five years. Incredibly, we would have to look to before the First World War to see the federal government paying less to service its debts, adjusted for GDP, compared with today. Those low rates make this an ideal time for the federal government to invest in short-term pandemic economic recovery but also in long-term issues, like much-needed changes to avoid the impact of the climate emergency.

For members concerned about interest rate increases, it's important to remember that those increases would hit all sectors, not just the federal government. Including the pandemic spending, the federal government's debt-to-GDP ratio now sits at roughly 50%. Household debt-to-GDP stands at more than twice that, at 112%. The corporate equivalent is at 130% of GDP.

The debt of these portions of the private sector, household and corporate, have jumped 10 points during the pandemic, so even small changes in the interest rate brought about by, say, the Bank of Canada's increasing the overnight rate would have big impacts on the private sector. The impacts would not only be because they are more leveraged but also because they pay a higher interest rate to start with. In that sense, heavy indebtedness of the private sector will protect the federal government from interest rate increases.

I thank you for your time and look forward to your questions.

[The Chair, Liberal, Wayne Easter]

We will reconvene the committee.

Welcome to meeting number 45 of the House of Commons Standing Committee on Finance. We are continuing our prestudy on the subject matter of Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on April 19.

With that, we'll go to presentations by the witnesses. We'll start with Mr. Macdonald from the Canadian Centre for Policy Alternatives.

Welcome, David. You've been here before.

[Matthew Jelley]

Thank you, Mr. Chair.

Timing is critical. We're one month after the budget, and we don't really know much more about the hiring credit. When I'm doing my calculations, I have to take the most favourable view of how it may work.

With regard to the wage subsidy and the rent subsidy, for businesses like mine that are trying to ramp up.... You know, we've committed to opening our business, at least all of the maintenance expense and that lead-up. We couldn't wait any longer. We had to do that part. However, whether we bring on our next wave of staff.... We're in a holding pattern right now. That means that every business around us is in a holding pattern, and many are struggling to make decisions right now. Therefore, it's critical that we come out and even give some guidance—whether it's for smaller, under 1,000, or for privately held or whatever the distinctions are—that we're going to make some adjustments to Bill C-30, that we're going to make some adjustment to the regulations, and that we're going to be there.

Last year, adjustments came midsummer and in the fall and, in some cases, after periods had already started, and do you know what? Last year, we were all figuring it out. We were opening on a hope and a prayer. However, now we have the hard financials from last year. We know that without this assistance there's no feasible way for us to open, so the sooner we know, the better it is for everybody—the better it is for our employees, the better it is for our communities.

Therefore, I would certainly urge that we get to that discussion of how we can strengthen it, how we can keep it intact, not how we can make it disappear when we're still in a third wave and when we're still below two-dose vaccinations.

[Brian Santos, Chair, Government Relations Committee, Ontario Real Estate Association]

Thank you, Chair.

Good morning, members of the committee. My name is Brian Santos. I'm a broker with Peak Realty in the Waterloo region, about an hour southwest of Toronto. I'm here as the chair of the government relations committee of the Ontario Real Estate Association.

By way of background, OREA is the trade organization that represents Ontario's 80,000 realtors and 37 local real estate boards across the province.

We are here today to speak in support of Bill C-30, the budget implementation act, and the measures that will help remove dirty money out of the real estate market, encourage more green energy retrofits and connect more Ontarians with broadband Internet. These measures will help hard-working Canadians and our economy bounce back from COVID-19 and set the stage for future economic growth, job creation and recovery.

I'd like to start by outlining our support for specific measures in Bill C-30.

First, it aims to get dirty money out of the real estate sector. It commits to creating a national beneficial ownership registry, something that OREA has advocated for for quite some time. Money laundering is a multi-billion dollar problem in our housing market and contributes to the crowding out of hard-working families looking to achieve their dream of one day owning a home. Ontario realtors do not want to see a single dollar of dirty money competing against hard-working young families in our housing market. That is why OREA commends the government and its commitment to create a national beneficial ownership registry. A registry will help make it harder for illicit funds to enter the country through the purchase of real estate by removing the anonymity of perpetrators of money-laundering crimes. By giving law enforcement and our government an important tool to keep dirty money out of Canada's housing market, those who are pushing home ownership away from hard-working Canadians can be identified and held accountable.

OREA is also pleased to see the government's plans to help make homes more energy efficient through investment in the Canada Mortgage and Housing Corporation over the next five years. Providing Canadian homeowners with interest-free loans will help them make their homes more energy-efficient by completing home retrofits, such as insulating their home, installing solar panels or replacing old windows and doors. OREA wants to ensure that the housing sector is doing its part in reducing our country's GHG emissions. Encouraging green home renovations will not only reduce the housing sector's contribution to these emissions, but will also help Canadians lower their energy bills, allowing them to put their hard-earned money elsewhere or save for retirement.

The proposed program will also encourage clean growth by establishing an industry for energy-efficient retrofits, generating economic spinoff activity, helping to kick-start the economy and creating new jobs.

Finally, as many Canadians look to move to more rural and smaller communities, having access to reliable high-speed Internet has become more essential than ever. One of the top questions realtors are asked by their clients when looking for a new home is about the quality of the Internet. The commitment to increase broadband investment over six years through the universal broadband fund will support a more rapid rollout of broadband projects in collaboration with the work currently being done in provinces and territories to ensure that every corner of the country is connected. The investment will help Canada reach its goal of having 98% of the country connected through reliable Internet service by 2026. Investing in broadband across the country will help address the infrastructure and competitive gap in our smaller communities. This new investment will ensure that more Canadians will be able to work remotely, creating jobs and reversing outmigration in more rural communities in Canada. In a modern economy where remote work is increasingly more common, especially now with the onset of the pandemic, Canada cannot compete globally if its people and businesses can't access good Internet service.

I would also like to take this opportunity to highlight other measures within Bill C-30 that OREA was pleased to see included.

The proposed GST new housing rebate will allow homebuyers to recover 36% of the GST paid on the purchase of a new home priced up to $350,000, for a maximum rebate of $6,300. Applying this rebate to lower and middle-income Canadians will make home ownership more accessible and affordable for more Canadians.

Additionally, with the pandemic creating a decrease in demand for retail and office space, expanding the rental, construction and financing initiative will support the conversion of vacant commercial property into new housing. This funding will assist in the development and conversion of commercial property space across Canada into hundreds of units of rental housing.

Last, the support of public transit projects across Canada will bring forward new subway lines, LRTs, electric buses, active transportation infrastructure and improved rural transit. The proposed new permanent funding will provide communities with the opportunity to plan for new transportation projects, which will encourage the creation of greater housing supply and make more desirable places to call home.

As Canada continues to look to get our economy back on track, Ontario realtors believe that housing has the potential to lead the recovery. OREA is pleased to see that Bill C-30 proposes support for the housing sector in a number of ways to help the government's efforts in putting Canada on the path to recovery.

Thank you, Chair and members of your committee, for your time. I am happy to answer your questions, should there be any.

[Toby Sanger, Executive Director, Canadians for Tax Fairness]

Thank you very much, Chair, and good morning members.

There are a lot of positive measures in Bill C-30, and I'd like to commend the government for introducing them. These include the $15-an-hour minimum wage, extension of COVID and EI benefits, funding for child care, funding for infrastructure, funding for health care and much more. We're glad the federal government will finally apply the GST, starting July 1, to imports of digital services, short-term rentals through digital platforms and goods supplied through fulfillment warehouses like Amazon. This is long overdue but still appreciated, and it is one step towards levelling the digital playing field.

For far too long, Canada has given foreign digital giants—some of the largest companies in the world—generous tax preferences at the expense of Canadian companies and producers. This has contributed to hundreds of business closures, thousands of jobs lost and billions in revenue foregone. Since the pandemic began, it has only gotten worse, as sales by companies like Amazon have exploded while main street businesses across Canada have suffered enormously. The government should eliminate the tax deduction for advertising on foreign Internet platforms. This has contributed to billions in advertising flowing to Google and Facebook, and loss to Canadian media outlets.

We're glad to see the government commit to introducing a digital services tax on the revenues of foreign e-commerce giants starting next year, but the proposed tax will only apply to a small number of companies in specific sectors. Because a digital economy can't be ring-fenced, the Canadian government must also support fundamental international corporate tax reforms at the OECD negotiations now taking place, including support for a global minimum corporate tax at 21% or higher, as U.S. President Joe Biden has proposed; treating multinational enterprises as unitary enterprises for tax purposes; and allocating the profit of multinational enterprises among countries using real economic factors, just as we do among provinces in Canada.

We're glad the government has also finally taken some action on restricting a number of corporate tax loopholes and the stock-option deduction loophole. However, we believe the stock-option deduction loophole should be completely closed instead of just partially closed.

This government should also take inspiration from U.S. President Joe Biden, who is planning to eliminate lower tax rates on capital gains for the wealthiest. It's unconscionable that the wealthiest in society pay a lower tax rate on their investment income than ordinary working people pay on their employment income. This is something that wealthy investors, such as Warren Buffett, Bill Gross and Bill Gates agree with eliminating.

Speaking of the wealthy, inequalities of wealth have only gotten worse during the pandemic, with Canada's billionaires increasing their fortunes by about $80 billion over the past year. A mildly progressive wealth tax on fortunes of over $10 million could raise about $20 billion a year. I'm glad that this government has committed to identifying ways to tax extreme wealth in its throne speech, but disappointed that there was nothing about it in the budget. A large majority of Canadians, including Conservative supporters, support having a wealth tax. Even the IMF and OECD both recently called for countries to introduce and expand inheritance and wealth taxes. I hope to see them in a number of different election platforms soon.

Just as Canada's billionaires have become much wealthier during the pandemic, many large corporations have made record profits. The study we released yesterday revealed that 50 of Canada's large corporations made record profits last year, with a number of them also collecting the CEWS wage subsidy and paying low rates of tax. When the CEWS program was first introduced more than a year ago, I was the first to call for much stronger conditions. This would have prevented the type of misuse and wastage of public funds that we've seen with this program. We should now do what we did during the world wars and what the IMF recently suggested and introduce an excess profits tax and pandemic surtaxes on those who have profited excessively during the pandemic, to recover some of those public funds.

We're glad the government is making carbon incentive payments more visible. We've advocated for this for many years. However, the federal carbon pricing framework also needs to be significantly strengthened by ensuring that large emitters pay the full carbon price and by applying carbon tariffs and rebates on imports from and exports to countries without carbon pricing so that Canadian industry and jobs aren't adversely affected. We also need to finally eliminate the federal fossil fuel subsidies. It's long overdue that we end this climate hypocrisy.

Finally, I'd like to commend the finance Minister for committing to introduce a public registry of the real owners of companies. This will help reduce money laundering, tax evasion, and other criminal activities.

The federal government should also increase transparency and accountability in other ways, including strengthening whistle-blower protections, and requiring that large multinational corporations publish country-by-country reports of their sales, profits and taxes paid.

Thanks very much, and I look forward to a further discussion and questions.

[The Chair, Liberal, Wayne Easter]

We will call the meeting to order.

Welcome to meeting number 45 of the House of Commons Standing Committee on Finance.

Pursuant to Standing Order 108(2) and the committee's motion adopted on Tuesday, April 27, the committee is meeting to study the subject matter of Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures.

Today's meeting is taking place in the hybrid format pursuant to the House Order of January 25. On your screen you will see everyone, but the system only shows the person who is speaking. That's the system we're operating under.

With that, we'll go immediately to witnesses. I want to thank everyone for coming, some of whom I know on short notice, as we're trying to pile a lot of witnesses in this week. I would ask if you could keep your remarks to about five minutes. That will give us more time for rounds of questions.

We will start with the Association of Day Care Operators of Ontario and Ms. Hannen, executive director.

Andrea, go ahead.

[The Chair, Liberal, Wayne Easter]

We'll recall the meeting to order.

For those on the new panel, this is meeting number 44 of the finance committee. As you know, we're meeting on Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on April 19.

First of all, my apologies to witnesses for having you sit in the wings for, probably, an hour of your time, or 45 minutes. We were late starting here. We were trying to finish the other panel.

In any event, all the witnesses here, I believe, are from the Department of Employment and Social Development. We'll deal with part 4, divisions 21, 22, 23, 24, 25, 29, 30, 32, 34, 35 and 36.

I would ask whoever is speaking on each section, to introduce yourself, tell us your position and introduce whatever colleagues may be here to assist you.

We'll start with division 21, which is the Social Security Tribunal, SST. Ms. Pelot, go ahead.

[The Chair, Liberal, Wayne Easter]

I call the meeting to order.

Welcome to meeting number 44 of the House of Commons Standing Committee on Finance. Pursuant to Standing Order 108(2) and the committee's motion adopted on Tuesday, April 27, the committee is meeting to study the subject matter of Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures.

Today's meeting is taking place in a hybrid format, pursuant to the House order of January 25. Therefore, members are attending in person in the room and remotely using the Zoom application. The proceedings will be made available via the House of Commons website. The webcast shows only the person speaking rather than the entirety of the committee. We ask that screenshots of the total committee or its witnesses not be taken.

With that, I will go the agenda. We're looking at 10 different departments in this panel. We have 23 witnesses all on video, although Mr. Xavier, I believe, is available via voice. We'll deal with part 4, divisions 10, 14, 17, 18, 19, 26, 27, 28, 31, 33 and 37.

Rather than me getting into the introduction of all the witnesses, I'd ask that when the spokesperson for each division comes forward, they introduce themselves, their department, their position and any other colleagues they may have with them.

I want to thank all the witnesses for coming.

We will start with division 10, which is the First Nations Fiscal Management Act.

Ms. Dwivedi, you may go ahead. Then we will go to questions, as we've done in the previous panels.

[Marie-Hélene Cantin]

Recently, there have been some delays in setting up the panels, especially those that were going to work on resolving softwood lumber disputes. Setting up the panels always takes a while, because the governments involved have to evaluate the availability of members who are on the roster as well as any disclosures of a conflict of interest. Each government has the right to use up to four vetos on candidates nominated by another country, which also generates its fair share of delays.

Nonetheless, as is the case for any tribunal, the parties involved in the dispute continue to file their legal documents within the prescribed timelines. Once the panels are set up, they simply have to organize sittings, analyze information and make a decision. That part happens rather quickly.

The changes proposed in Bill C-30 will not directly impact the time needed by public servants to nominate candidates for Canada. We find that the delays that have happened over the past few years were regrettable. That said, we hope that there will be a return to a more efficient way of organizing panels as per the terms of CUSMA.

[Marie-Hélène Cantin, Senior Economist, International Trade Policy Division, International Trade and Finance, Department of Finance]

Hello. I am Marie-Hélène Cantin and I am a senior economist with the international trade policy division of the Department of Finance.

The amendments contained in division 20 are technical and administrative clarifications to support Canada's long-standing approach in the selection of candidates for rosters, panels and committees for disputes concerning antidumping and countervailing duties lodged under NAFTA, the North American Free Trade Agreement, or CUSMA, the Canada—United States—Mexico Agreement.

Chapter 19 of NAFTA provided for a dispute resolution mechanism for antidumping and countervailing duties that was used to replace domestic judicial reviews. Chapter 10 of CUSMA leaves this mechanism intact, which was a key objective for Canada in the negotiations. Chapter 19 of NAFTA provides that the responsibility for choosing candidates for rosters, panels and committees is shared between the Minister of International Trade and the Minister of Finance.

This shared responsibility was in keeping with the fact that the Minister of Finance is responsible for the antidumping and countervailing duties regime in Canada according to the Special Import Measures Act, as well as the fact that the Minister of International Trade is responsible for defending Canadian interests in American or Mexican investigations into dumping and subsidies.

Bill C-30 proposes changes to the Canada—United States—Mexico Agreement Implementation Act to reestablish the requirement of obtaining the consent of the Minister of Finance when the Minister of International Trade selects candidates for rosters, panels and committees as per the terms of Chapter 10 of CUSMA.

My colleagues from Global Affairs Canada, John Layton and Raahool Watchmaker, are here with me and ready to answer your questions.

[Suzanne Kennedy]

I'm sorry. I can only speak to the measures that are in Bill C-30 today.

[The Chair, Liberal, Wayne Easter]

We are reconvening. We'll call the meeting to order.

We're resuming meeting number 43 of the Standing Committee on Finance on the subject matter of Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures.

We've a number of officials from the Department of Finance with us, and we'll be dealing with them in this section on part 4, divisions 6, 7, 11, 12, 13, 15, 16 and 20.

All the officials who are here are with the Department of Finance, and there are quite a number of them. I'll not go through a list of names at this early stage, but I will ask officials, when you start your presentation, if you'd state your name and your position. I believe it would be easier that way.

We will start with division 6 of part 4, changes to the Justice for Victims of Corrupt Foreign Officials Act, better known as the Sergei Magnitsky Law.

Who's taking that one on?

Mr. Brown, do I see you smiling? Go ahead. Welcome. Introduce yourself, Justin.

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

That's fine.

I would like to welcome and thank all the public servants here with us today.

Thank you for your presentation, Ms. O'Brien. My first question is for you.

If I understood correctly, in the consultation document of 2017, the intention was to protect consumers against non-authorized use or errors, except in cases of fraud. In Bill C-30, this idea is rather vaguely expressed in sections 17, 18 and 19, under the concept of “Operational Risk Management and Incident Response”, where they are talking about the provider's risk management framework, which must comply with regulations.

Am I to understand that the protection will be set out in regulations? If so, why wasn't it included in the act?