Bill C-19

Budget Implementation Act, 2022, No. 1

An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures

Part 1 implements certain income tax measures by
(a) providing a Labour Mobility Deduction for the temporary relocation of tradespeople to a work location;
(b) allowing for the immediate expensing of eligible property by certain Canadian businesses;
(c) allowing the Children’s Special Allowance to be paid in respect of a child who is maintained by an Indigenous governing body and providing consistent tax treatment of kinship care providers and foster parents receiving financial assistance from an Indigenous governing body and those receiving such assistance from a provincial government;
(d) doubling the allowable qualifying expense limit under the Home Accessibility Tax Credit;
(e) expanding the criteria for the mental functions impairment eligibility as well as the life-sustaining therapy category eligibility for the Disability Tax Credit;
(f) providing clarity in respect of the determination of the one-time additional payment under the GST/HST tax credit for the period 2019-2020;
(g) changing the delivery of Climate Action Incentive payments from a refundable credit claimed annually to a credit that is paid quarterly;
(h) temporarily extending the period for incurring eligible expenses and other deadlines under film or video production tax credits;
(i) providing a tax incentive for specified zero-emission technology manufacturing activities;
(j) providing the Canada Revenue Agency (CRA) the discretion to accept late applications for the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and the Canada Recovery Hiring Program;
(k) including postdoctoral fellowship income in the definition of “earned income” for RRSP purposes;
(l) enabling registered charities to enter into charitable partnerships with organizations other than qualified donees under certain conditions;
(m) allowing automatic and immediate revocation of the registration of an organization as a charity where that organization is listed as a terrorist entity under the Criminal Code ;
(n) enabling the CRA to use taxpayer information to assist in the collection of Canada Emergency Business Account loans; and
(o) expanding capital cost allowance deductions to include new clean energy equipment.
It also makes related and consequential amendments to the Excise Tax Act , the Children’s Special Allowances Act , the Excise Act, 2001 , the Income Tax Regulations and the Children’s Special Allowance Regulations .
Part 2 implements certain Goods and Services Tax/Harmonized Sales Tax (GST/HST) measures by
(a) ensuring that all assignment sales in respect of newly constructed or substantially renovated residential housing are taxable supplies for GST/HST purposes; and
(b) extending eligibility for the expanded hospital rebate to health care services supplied by charities or non-profit organizations with the active involvement of, or on the recommendation of, either a physician or a nurse practitioner, irrespective of their geographic location.
Part 3 amends the Excise Act, 2001 , the Excise Act and other related texts in order to implement three measures.
Division 1 of Part 3 implements a new federal excise duty framework for vaping products by, among other things,
(a) requiring that manufacturers of vaping products obtain a vaping licence from the CRA;
(b) requiring that all vaping products that are removed from the premises of a vaping licensee to be entered into the Canadian market for retail sale be affixed with an excise stamp;
(c) imposing excise duties on vaping products to be paid by vaping product licensees;
(d) providing for administration and enforcement rules related to the excise duty framework on vaping products;
(e) providing the Governor in Council with authority to provide for an additional excise duty in respect of provinces and territories that enter into a coordinated vaping product taxation agreement with Canada; and
(f) making related amendments to other legislative texts, including to allow for a coordinated federal/provincial-territorial vaping product taxation system and to ensure that the excise duty framework applies properly to imported vaping products.
Division 2 of Part 3 amends the excise duty exemption under the Excise Act, 2001 for wine produced in Canada and composed wholly of agricultural or plant product grown in Canada.
Division 3 of Part 3 amends the Excise Act to eliminate excise duty for beer containing no more than 0.5% alcohol by volume.
Part 4 enacts the Select Luxury Items Tax Act . That Act creates a new taxation regime for domestic sales, and importations into Canada, of certain new motor vehicles and aircraft priced over $100,000 and certain new boats priced over $250,000. It provides that the tax applies if the total price or value of the subject select luxury item at the time of sale or importation exceeds the relevant price threshold. It provides that the tax is to be calculated at the lesser of 10% of the total price of the item and 20% of the total price of the item that exceeds the relevant price threshold. To promote compliance with the new taxation regime, that Act includes modern elements of administration and enforcement aligned with those found in other taxation statutes. Finally, this Part also makes related and consequential amendments to other texts to ensure proper implementation of the new tax and to ensure a cohesive and efficient administration by the CRA.
Division 1 of Part 5 retroactively renders a provision of the contract that is set out in the schedule to An Act respecting the Canadian Pacific Railway , chapter 1 of the Statutes of Canada, 1881, to be of no force or effect. It retroactively extinguishes any obligations and liabilities of Her Majesty in right of Canada and any rights and privileges of the Canadian Pacific Railway Company arising out of or acquired under that provision.
Division 2 of Part 5 amends the Nisga’a Final Agreement Act to give force of law to the entire Nisga’a Nation Taxation Agreement during the period that that Taxation Agreement is, by its terms, in force.
Division 3 of Part 5 repeals the Safe Drinking Water for First Nations Act .
It also amends the Income Tax Act to exempt from taxation under that Act any income earned by the Safe Drinking Water Trust in accordance with the Settlement Agreement entered into on September 15, 2021 relating to long-term drinking water quality for impacted First Nations.
Division 4 of Part 5 authorizes payments to be made out of the Consolidated Revenue Fund for the purpose of addressing transit shortfalls and needs and improving housing supply and affordability.
Division 5 of Part 5 amends the Canada Deposit Insurance Corporation Act by adding the President and Chief Executive Officer of the Canada Deposit Insurance Corporation and one other member to that Corporation’s Board of Directors.
Division 6 of Part 5 amends the Federal-Provincial Fiscal Arrangements Act to authorize additional payments to the provinces and territories.
Division 7 of Part 5 amends the Borrowing Authority Act to, among other things, count previously excluded borrowings made in the spring of 2021 in the calculation of the maximum amount that may be borrowed. It also amends the Financial Administration Act to change certain reporting requirements in relation to amounts borrowed under orders made under paragraph 46.1(c) of that Act.
Division 8 of Part 5 amends the Pension Benefits Standards Act, 1985 to, among other things, permit the establishment of a solvency reserve account in the pension fund of certain defined benefit plans and require the establishment of governance policies for all pension plans.
Division 9 of Part 5 amends the Special Import Measures Act to, among other things,
(a) provide that assessments of injury are to take into account impacts on workers;
(b) require the Canadian International Trade Tribunal to make inquiries with respect to massive importations when it is acting under section 42 of that Act;
(c) require that Tribunal to initiate expiry reviews of certain orders and findings;
(d) modify the deadline for notifying the government of the country of export of properly documented complaints;
(e) modify the criteria for imposing duties in cases of massive importations;
(f) modify the criteria for initiating anti-circumvention investigations; and
(g) remove the requirement that, in order to find circumvention, the principal cause of the change in a pattern of trade must be the imposition of anti-dumping or countervailing duties.
It also amends the Canadian International Trade Tribunal Act to provide that trade unions may, with the support of domestic producers, file global safeguard complaints.
Division 10 of Part 5 amends the Trust and Loan Companies Act and the Insurance Companies Act to, among other things, modernize corporate governance communications of financial institutions.
Division 11 of Part 5 amends the Insurance Companies Act to permit property and casualty companies and marine companies to not include the value of certain debt obligations when calculating their borrowing limit.
Division 12 of Part 5 enacts the Prohibition on the Purchase of Residential Property by Non-Canadians Act . The Act prohibits the purchase of residential property in Canada by non-Canadians unless they are exempted by the Act or its regulations or the purchase is made in certain circumstances specified in the regulations.
Division 13 of Part 5 amends the Parliament of Canada Act and makes consequential and related amendments to other Acts to, among other things,
(a) change the additional annual allowances that are paid to senators who occupy certain positions so that the government’s representatives and the Opposition in the Senate are eligible for the allowances for five positions each and the three other recognized parties or parliamentary groups in the Senate with the greatest number of members are eligible for the allowances for four positions each;
(b) provide that the Leader of the Government in the Senate or Government Representative in the Senate, the Leader of the Opposition in the Senate and the Leader or Facilitator of every other recognized party or parliamentary group in the Senate are to be consulted on the appointment of certain officers and agents of Parliament; and
(c) provide that the Leader of the Government in the Senate or Government Representative in the Senate, the Leader of the Opposition in the Senate and the Leader or Facilitator of every other recognized party or parliamentary group in the Senate may change the membership of the Standing Senate Committee on Internal Economy, Budgets and Administration.
Division 14 of Part 5 amends the Financial Administration Act in order to, among other things, allow the Treasury Board to provide certain services to certain entities.
Division 15 of Part 5 amends the Competition Act to enhance the Commissioner of Competition’s investigative powers, criminalize wage fixing and related agreements, increase maximum fines and administrative monetary penalties, clarify that incomplete price disclosure is a false or misleading representation, expand the definition of anti-competitive conduct, allow private access to the Competition Tribunal to remedy an abuse of dominance and improve the effectiveness of the merger notification requirements and other provisions.
Division 16 of Part 5 amends the Copyright Act to extend certain terms of copyright protection, including the general term, from 50 to 70 years after the life of the author and, in doing so, implements one of Canada’s obligations under the Canada–United States–Mexico Agreement.
Division 17 of Part 5 amends the College of Patent Agents and Trademark Agents Act to, among other things,
(a) ensure that the College has sufficient independence and flexibility to exercise its corporate functions;
(b) provide statutory immunity to certain persons involved in the regulatory activities of the College; and
(c) grant powers to the Registrar and Investigations Committee that will allow for improved efficiency in the complaints and discipline process.
Division 18 of Part 5 enacts the Civil Lunar Gateway Agreement Implementation Act to implement Canada’s obligations under the Memorandum of Understanding between the Government of Canada and the Government of the United States of America concerning Cooperation on the Civil Lunar Gateway. It provides for powers to protect confidential information provided under the Memorandum. It also makes related amendments to the Criminal Code to extend its application to activities related to the Lunar Gateway and to the Government Employees Compensation Act to address the cross-waiver of liability set out in the Memorandum.
Division 19 of Part 5 amends the Corrections and Conditional Release Act to restrict the use of detention in dry cells to cases where the institutional head has reasonable grounds to believe that an inmate has ingested contraband or that contraband is being carried in the inmate’s rectum.
Division 20 of Part 5 amends the Customs Act in order to authorize its administration and enforcement by electronic means and to provide that the importer of record of goods is jointly and severally, or solidarily, liable to pay duties on the goods under section 17 of that Act with the importer or person authorized to account for the goods, as the case may be, and the owner of the goods.
Division 21 of Part 5 amends the Criminal Code to create an offence of wilfully promoting antisemitism by condoning, denying or downplaying the Holocaust through statements communicated other than in private conversation.
Division 22 of Part 5 amends the Judges Act , the Federal Courts Act , the Tax Court of Canada Act and certain other acts to, among other things,
(a) implement the Government of Canada’s response to the report of the sixth Judicial Compensation and Benefits Commission regarding salaries and benefits and to create the office of supernumerary prothonotary of the Federal Court;
(b) increase the number of judges for certain superior courts and include the new offices of Associate Chief Justice of the Court of Queen’s Bench of New Brunswick and Associate Chief Justice of the Court of Queen’s Bench for Saskatchewan;
(c) create the offices of prothonotary and supernumerary prothonotary of the Tax Court of Canada; and
(d) replace the term “prothonotary” with “associate judge”.
Division 23 of Part 5 amends the Immigration and Refugee Protection Act to, among other things,
(a) authorize the Minister of Citizenship and Immigration to give instructions establishing categories of foreign nationals for the purposes of determining to whom an invitation to make an application for permanent residence is to be issued, as well as instructions setting out the economic goal that that Minister seeks to support in establishing the category;
(b) prevent an officer from issuing a visa or other document to a foreign national invited in respect of an established category if the foreign national is not in fact eligible to be a member of that category;
(c) require that the annual report to Parliament on the operation of that Act include a description of any instructions that establish a category of foreign nationals, the economic goal sought to be supported in establishing the category and the number of foreign nationals invited to make an application for permanent residence in respect of the category; and
(d) authorize that Minister to give instructions respecting the class of permanent residents in respect of which a foreign national must apply after being issued an invitation, if the foreign national is eligible to be a member of more than one class.
Division 24 of Part 5 amends the Old Age Security Act to correct a cross-reference in that Act to the Budget Implementation Act, 2021, No. 1 .
Division 25 of Part 5
(a) amends the Canada Emergency Response Benefit Act to set out the consequences that apply in respect of a worker who received, for a four-week period, an income support payment and who received, for any week during the four-week period, any benefit, allowance or money referred to in subparagraph 6(1)(b)(ii) or (iii) of that Act;
(b) amends the Canada Emergency Student Benefit Act to set out the consequences that apply in respect of a student who received, for a four-week period, a Canada emergency student benefit and who received, for any week during the four-week period, any benefit, allowance or money referred to in subparagraph 6(1)(b)(ii) or (iii) of that Act; and
(c) amends the Employment Insurance Act to set out the consequences that apply in respect of a claimant who received, for any week, an employment insurance emergency response benefit and who received, for that week, any payment or benefit referred to in paragraph 153.9(2)(c) or (d) of that Act.
Division 26 of Part 5 amends the Employment Insurance Act to, among other things,
(a) replace employment benefits and support measures set out in Part II of that Act with employment support measures that are intended to help insured participants and other workers — including workers in groups underrepresented in the labour market — to obtain and keep employment; and
(b) allow the Canada Employment Insurance Commission to enter into agreements to provide for the payment of contributions to organizations for the costs of measures that they implement and that are consistent with the purpose and guidelines set out in Part II of that Act.
It also makes a consequential amendment to the Income Tax Act .
Division 27 of Part 5 amends the Employment Insurance Act to specify the maximum number of weeks for which benefits may be paid in a benefit period to certain seasonal workers and to extend, until October 28, 2023, the increase in the maximum number of weeks for which those benefits may be paid. It also amends the Budget Implementation Act, 2021, No. 1 to add a transitional measure in relation to amendments to the Employment Insurance Regulations that are found in that Act.
Division 28 of Part 5 amends the Canada Pension Plan to make corrections respecting
(a) the calculation of the minimum qualifying period and the contributory period for the purposes of the post-retirement disability benefit;
(b) the determination of values for contributors who have periods excluded from their contributory periods by reason of disability; and
(c) the attribution of amounts for contributors who have periods excluded from their contributory periods because they were family allowance recipients.
Division 29 of Part 5 amends An Act to amend the Criminal Code and the Canada Labour Code to, among other things,
(a) shorten the period before which an employee begins to earn one day of medical leave of absence with pay per month;
(b) standardize the conditions related to the requirement to provide a medical certificate following a medical leave of absence, regardless of whether the leave is paid or unpaid;
(c) authorize the Governor in Council to make regulations in certain circumstances, including to modify certain provisions respecting medical leave of absence with pay;
(d) ensure that, for the purposes of medical leave of absence, an employee who changes employers due to the lease or transfer of a work, undertaking or business or due to a contract being awarded through a retendering process is deemed to be continuously employed with one employer; and
(e) provide that the provisions relating to medical leave of absence come into force no later than December 1, 2022.
Division 30 of Part 5 amends the Canada Business Corporations Act to, among other things,
(a) require certain corporations to send to the Director appointed under that Act information on individuals with significant control on an annual basis or when a change occurs;
(b) allow that Director to provide all or part of that information to an investigative body, the Financial Transactions and Reports Analysis Centre of Canada or any prescribed entity; and
(c) clarify that, for the purposes of subsection 21.1(7) of that Act, it is the securities of a corporation, not the corporation itself, that are listed and posted for trading on a designated stock exchange.
Division 31 of Part 5 amends the Special Economic Measures Act and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) to, among other things,
(a) create regimes allowing for the forfeiture of property that has been seized or restrained under those Acts;
(b) specify that the proceeds resulting from the disposition of those properties are to be used for certain purposes; and
(c) allow for the sharing of information between certain persons in certain circumstances.
It also makes amendments to the Seized Property Management Act in relation to those forfeiture of property regimes.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you, Chair, and thank you to all our witnesses for sharing their testimony today. It's been very informative and very interesting. It's my very first time attending this committee, and I look forward to participating.

I'm going to follow up on some of the very brief testimony that we heard from Mr. Mangin and hopefully talk a bit about some of the issues around Bill S‑216 and the BIA.

The reason I want to do this is that we didn't get the opportunity to hear from Mr. Mangin, but this is an issue that's very, very important to me. I know it's very important to many members of Parliament, but I come at it from a bit of a special perspective, I guess, which is that I have been working on changing the direction and control legislation in this country since 2005. We have known that this is a paternalistic and a colonial piece of work within CRA that has needed to be changed for a very long time and has impacted the ability of the charitable sector to actually do the work they are mandated to do. It is in no way reflective of participatory, democratic good practice in charities. It needed to be changed.

When Senator Omidvar came to me and to many other parliamentarians to speak about the changes to direction and control within her bill, Bill S‑216, we of course were all delighted. We were all on board. We were all working with her. The sector has worked very closely with her, and legal experts have worked very closely with her and her team to develop a really strong piece of legislation.

Of course, when we saw in the BIA that it was named and that the spirit of Bill S‑216 was going to be implemented, I think many of us within the House of Commons and many more within the charitable sector were delighted. When we saw what was actually being proposed, the delight turned a bit to disappointment.

I'm going to read from a few different places for you, and I'd like to put some of this testimony into the record. Then I'm going to pose some questions to Mr. Mangin that he can respond to in writing, bilingually, when he's able to do so.

First of all, I want to start with a letter that was written to the government by Cooperation Canada. For those who don't know, Cooperation Canada is an organization that represents many of the charitable sector groups that work in Canada. It's a very long-standing organization that has been in place for over 50 years. It is very well respected and knowledgeable on this file and has certainly taken a lead on it.

In the letter they addressed to the government, they say:

...the BIA reinforces the colonial and paternalistic approach to the relationship between charities and the partner organizations supporting their charitable purposes. It makes the current regime more challenging for organizations to fulfill their charitable purpose by embedding a rigid and prescriptive approach to funding non-qualified donees inside and outside Canada in legislation. It makes the system more confusing, risky and challenging for registered charities and non-qualified donees to work together, and as such, impedes philanthropic and charitable resources flowing to communities that need them the most.

The serious concerns that the sector has with the BIA and that we would like to see changed within the BIA are the proposed definition of a qualifying disbursement, the proposed language relating to directed gifts and the prescribed conditions for qualifying disbursements to grantee organizations.

I know that this committee has received information from Imagine Canada; I wanted to make sure that that information from Cooperation Canada was also included.

I also wanted to give a little bit of insight into what this looks like on the ground. For example, if you're looking at perhaps an indigenous partnership and perhaps there is a requirement to work with indigenous groups that do not, for whatever reason, have charitable status, what we have in the BIA impedes the ability for charities to support indigenous groups that are doing the work within their communities. I think that's something that no Canadians want as we deal with truth and reconciliation in this country.

There's another example when we look at working internationally. Right now, we have an incredible crisis that is happening in Ukraine. I think it's really important that everyone on this committee recognizes that if we don't get this BIA right, if we don't get the direction and control right, those organizations that can do the best work in Ukraine and can do the best work with refugees who have fled Ukraine, Romania, Poland and other countries won't be able to work with Canadian charities because of the aspect of direction and control that we have in this BIA.

As Mr. Mangin was, I suspect, going to tell us, we need to amend the language on direct giving. This would allow Canadian charities to contribute to pooled funds and support non-qualified donees.

We need to remove the reference to disbursements meeting prescribed conditions and replace it with a requirement that the charity instead takes reasonable steps to ensure that the resources are disbursed and used exclusively in furtherance of a charitable purpose. We need to delete proposed regulation 3703 in its entirety. This would allow for regulations to remain in the CRA guidance documents.

Thank you, Mr. Chair.

[Jean-Denis Garon, Bloc, Mirabel, QC]

I understand.

Mr. Lasnier, you have approximately 1 minute and 20 seconds left.

As you know, we're considering Bill C‑19. Bills may be amended in committee. At the end of your opening remarks, you stated three very pragmatic demands to the committee. Would you please repeat them to the members of the Standing Committee on Finance?

[Jean-Denis Garon, Bloc, Mirabel, QC]

Do you think we should amend Bill C‑19 to apply the new tax solely to wine, the product at issue in the dispute?

[Jean-Denis Garon, Bloc, Mirabel, QC]

I understand.

One of the factors that may explain the potentially mistaken application of this new tax is that the federal government has no expertise in wine. In Quebec, for example, we have the Société des alcools du Québec, and the regulations respecting cider, which for a long time was illegal, have been amended.

Do you think that this was a good-faith error resulting from a lack of expertise and that it could be corrected by an amendment to Bill C‑19?

[Jean-Denis Garon, Bloc, Mirabel, QC]

So I understand that apples are classified in the same category as grapes under federal regulations, which have been in force for some time. Your response shows just how obsolete those regulations are.

I'm quite familiar with these businesses. There's a lot of talk about processing and value-added products, and people say our resources must be processed in order to create employment and wealth, and that's exactly what these businesses do.

Do you know if the federal government did a study to assess the impact of this new tax before so quickly introducing the measures we now see in Bill C‑19?

[Leah Nord, Senior Director, Workforce Strategies and Inclusive Growth, Canadian Chamber of Commerce]

Good morning and thank you, Mr. Chair, vice-chairs and committee members. It's a pleasure to be here this morning to make an appearance regarding certain divisions of part 5 of Bill C-19.

I'm speaking today from Ottawa, the traditional unceded territory of the Algonquin Anishinabe peoples. I go by the pronouns “she”, “her” and “elle”. Today I am wearing a light blouse, grey sweater and grey glasses. My hair is pulled back and I am attending virtually with a blurred background.

I'm speaking on behalf of the Canadian Chamber of Commerce, which is the voice of Canadian business. We represent 200,000 businesses across the country, across sectors and across sizes, including our network of 450 local chambers and boards of trade from coast to coast to coast.

Today, I have two interventions to make and the first is with regard to division 26.

It's very important to remind ourselves that the EI program is estimated to have a debt of $29 billion for fiscal year 2022-23, and that is as it is, before we add any additional pressures into the system. The eligibility expansion for support measures and employment services within division 26 is no doubt well intended and might not look like much in and of itself. However, what has happened continually over the years—in fact, the past eight decades—is recurring drops in the bucket that have a cumulative burdensome impact on the program.

As the Government of Canada is starting phase two of its EI modernization consultations tomorrow, we at the Canadian Chamber have urged that this be a truly comprehensive review, not more nibbling at the edges, as it were. We have said that this is our once-in-a-lifetime opportunity to really look at the program and set it—and future generations of Canadians—up for success.

Importantly, this includes part II of the EI program, referred to as active measures, which involves the over $2 billion transferred to the provinces and territories annually for employment services and skills training, alongside a plethora of pan-Canadian programs and initiatives. This is not to say that we don't think skills, education and training aren't important. It's quite the opposite.

When I appeared in front of this committee in the early days of the pandemic, back in May 2020, I stated, “we need to identify the reform needed to build a system that can respond to current and future workforce needs to ensure Canadians remain connected to the labour force, and that includes strong upskilling and reskilling training components.” It's not the importance that we're questioning; it's the suitability and efficacy of having support measures and employment services funded by EI dollars. EI doesn't need to—and can't—fund everything, and if it does continue, the business community, which contributes seven-twelfths to the program, would like greater transparency and input into how that funding is spent.

The second intervention I have this morning is with regard to division 32 and the EI board of appeal. Our recommendation is to remove division 32 from Bill C-19 for a separate and focused review. This is not the first time you have heard this and it likely won't be the last. Importantly, you have heard this from labour and business representatives. The institutional structures that underpin the EI system are critical for a well-functioning system that meets the needs and expectations of Canadians.

The employment insurance board of appeal would be complex, and the changes proposed in Bill C-19 are significant and do not necessarily align with the tripartite principles and framework that had been agreed upon before the onset of the pandemic. The changes included in division 32 are not the ones we thought we would see, and they need to be examined and discussed in a more deliberative manner.

Thank you, and I look forward to answering any questions.

[The Chair (Mr. Robert Morrissey (Egmont, Lib.)), Liberal, Bobby Morrissey]

I call the meeting to order.

Welcome to meeting number 27 of the House of Commons Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities. Today's meeting is taking place in a hybrid format. Given the ongoing pandemic situation, I expect anyone who is attending in person to follow the proper procedures.

To ensure an orderly meeting, I would like to make a few comments for the benefit of the witnesses and members. Before speaking, please wait until I recognize you by name. For those participating by video conference, please click on the microphone icon to activate your mike. For those in the room, your mikes will be controlled in the room.

I would like to advise you that you have the option of speaking in the official language of your choice. For interpretation, go to the bottom of your screen to choose the language of your choice. If there is an issue with interpretation, please get my attention and I will suspend the meeting until it's corrected. You can do that by using the “raise hand” icon at the bottom of your screen.

I would also like to advise witnesses that you will be given the opportunity to make a five-minute prepared statement to the committee, after which we'll go into questions. I would also advise that I will indicate to you when you have 10 seconds left in your time, and then I will move to the next speaker.

Today, as you are aware, we are meeting pursuant to Standing Order 108(2) and the motion adopted by this committee on Monday, May 16, 2022, that the committee resume its study of the subject matter of part 5, divisions 26, 27, 29 and 32 of Bill C-19, an act to implement certain provisions of the budget tabled in Parliament on April 5, 2022, and other measures.

I would like to welcome the witnesses. From the Canadian Chamber of Commerce, we have Leah Nord, senior director of workforce strategies and inclusive growth. From the Centrale des syndicats démocratiques, we have Luc Vachon, president. From Centrale des syndicats du Québec, we have Luc Beauregard, secretary-treasurer.

We will start with Ms. Nord for five minutes.

You have the floor.

[Marc-Antoine Lasnier, President, Producteurs de cidre du Québec]

Good morning.

Thank you very much for welcoming us and allowing us to state our position on Bill C‑19.

My name is Marc-Antoine Lasnier, and I am the president of Producteurs de cidre du Québec. I'm also the owner of Cidrerie Milton, which is located in the Eastern Townships.

I am accompanied by Catherine St‑Georges.

[Jean-Marc Mangin, President and Chief Executive Officer, Philanthropic Foundations Canada]

Mr. Chair, members of the committee, thank you very much for this opportunity to discuss the serious and unintended consequences of Bill C‑19 for the charitable and non-profit sector.

Like many other organizations in the sector, Philanthropic Foundations Canada, which is the largest national network of private and public foundations in the country, welcomed the government's budget announcement that it would adopt the spirit of Bill S‑216, the purpose of which is to treat organizations that contribute to the common good on an equitable basis even if they do not have official charitable status.

However, Bill C‑19 does no such thing. In fact, if passed in its present form, it would undermine the operational environment by adding more complexity and risk through overly prescriptive statutory measures. I believe that the government and opposition parties are fully aware of the problems involved and that there is a common willingness to correct these unintended effects.

With Imagine Canada, Cooperation Canada and leading charitable lawyers, we have provided three simple amendments that would remove the worst of these unintended consequences. These have already been submitted to the clerk of this committee. Together, we continue to offer our co-operation to fix Bill C-19.

Given the vast and complex set of urgent challenges facing our communities, our collective focus must be to encourage adaptive, learning-oriented results management, not to impose, in law, seven narrow and mandatory measures on all forms of partnership.

The former—that is, Bill S-216—offers real accountability to funders and communities alike who work across a myriad of partnerships. The latter—that is, Bill C-19 in its current form—is a straitjacket that will hinder social innovation, continue the damaging colonial practices of de facto direction and control, and ultimately restrict the flow of charitable dollars to those who need them the most. Let's focus on outcomes—

[Matt Poirier, Director, Trade Policy, Canadian Manufacturers and Exporters]

Thank you, Mr. Chair, and good morning, everyone. It's my pleasure to be here on behalf of Canada's 90,000 manufacturers and exporters and our association's 2,500 direct members to discuss Bill C-19.

The manufacturing industry is 10% of Canada's GDP, produces two-thirds of Canada's value-added exports and employs 1.7 million people in high-paying jobs across the country.

In the lead-up to the budget, CME issued its 2% challenge. That is, the federal government should attract 2% of OECD manufacturing investment into Canada, up from our current 1%, by instituting a national industrial strategy. Doubling that investment to 2% would revolutionize Canadian manufacturing, create hundreds of thousands of jobs, and increase our GDP and standard of living.

To get there, we must address our most pressing challenges: labour shortages, supply chain disruptions and declining investment and export performance. While there's a sprinkling of help in all those areas in budget 2022, we believe more must be done to help Canadian manufacturing grow. I will outline that plan now.

First, on labour shortages, manufacturers big and small are struggling to fill the 81,000 vacancies across Canada. All this is happening even though our sector is one of the highest-paying industries in the country.

We can tackle this problem in many ways, but the main drive should be to plug our labour shortages through immigration. Budget 2022 talked about processing backlogs, but we encourage the government to dedicate more resources to the problem. We must also speed up the introduction of a trusted employer stream to the temporary foreign worker program and reduce the administrative burden on companies applying to the program. Ultimately, however, the temporary foreign worker program is merely a pressure release valve. We need to aggressively increase our immigration intake targets to 500,000 per year in the economic stream alone. We need workers.

Second, on supply chain bottlenecks, according to a CME survey, nine out of 10 Canadian manufacturers report encountering supply chain issues. The added challenge for Canadian manufacturers is their lower position in the pecking order for critical components. We currently have the situation in Canada whereby a company can have an increase in customer orders and a workforce ready to go, but nothing to build because it's waiting on parts. The national corridors fund to facilitate the movement of goods and other initiatives announced in the budget will help, but in addition to long-term investments and modernizing our trade infrastructure, we must address the short-term problem by providing temporary financial assistance to manufacturing companies still feeling supply chain disruptions.

Lastly, on investment and exports, Canada lags behind other OECD countries in non-residential business investment, and this is leading to deterioration in our international competitiveness. On the net-zero transition, Canada's manufacturing industry has already started, but smaller companies are falling behind. On trade, while we enjoy some of the best free market access of any country on earth, our goods exports are stuck in neutral.

To respond to all of these challenges, the budget announced some measures that CME has long called for. The Canada growth fund and tax changes for SMEs are positive, as are the promises to look into adopting a patent box regime and SR and ED reform. A tax credit for investments in clean technology and a refundable tax credit for carbon capture will support manufacturers as they work to decarbonize their industrial processes.

While these are all positive developments, we worry that the money allocated to these measures may not be sufficient, so we urge the government to put up the money necessary to make these changes have a real impact. We also need to better incorporate SMEs into the design of these programs so they can qualify for them and be helped through the process of using them, particularly on the net-zero transition and growing exports front.

Before I conclude, I want to register our concern with the proposed luxury tax on planes, boats and autos. I echo all the others who have spoken out against this tax. We understand the allure of such policies but they are a siren's song, as they do a lot of damage to domestic manufacturing. Manufacturers and organized labour are united in their calls for this tax to go, and we urge the government to do just that.

In conclusion, while CME is pleased to see many policies we have long championed included in the budget, this is just the starting point. We look forward to working with you all to tackle our industry's challenges and ensure our economic prosperity for years to come.

Thank you for inviting me. I look forward to the discussion.

[The Chair, Liberal, Peter Fonseca]

I call this meeting to order. Welcome to meeting number 51 of the House of Commons Standing Committee on Finance.

Pursuant to the order of reference of May 10, 2022, the committee is meeting on Bill C-19, an act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures.

Today's meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2021. Members are attending in person in the room and remotely using the Zoom application. Per the directive of the Board of Internal Economy on March 10, 2022, all those attending the meeting in person must wear a mask, except for members who are at their place during proceedings.

I'd like to make a few comments for the benefit of the witnesses and members.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike. Please mute yourself when you are not speaking.

There is interpretation for those on Zoom. You have the choice, at the bottom of your screen, of floor, English or French audio. Those in the room can use the earpiece and select the desired channel.

I'll remind you that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can. We appreciate your patience and understanding in this regard. I request that members and witnesses mutually treat each other with respect and decorum.

I would now like to welcome today's witnesses.

For our first panel, from 10:00 a.m. to 12:00 p.m., as an individual, we have Vass Bednar, executive director, Master of Public Policy in Digital Society program, McMaster University. I believe Ms. Bednar will be with us only until 11:40 a.m. this morning.

From the Canadian Dental Association, we have Lynn Tomkins, president, and Aaron Burry, acting chief executive officer. From the Canadian Manufacturers and Exporters, we have Matt Poirier, director of trade policy. From the National Marine Manufacturers Association Canada, we have Sara Anghel, who is the president.

From the Philanthropic Foundations Canada, we have Jean-Marc Mangin, president and chief executive officer; and from Les producteurs de cidre du Québec, we have Marc-Antoine Lasnier, president, and Catherine St-Georges, director general.

Our other witness is from Wine Growers Canada. We have Dan Paszkowski, president and chief executive officer. Mr. Paszkowski is in the room, members.

We'll now begin with Ms. Bednar, with her opening remarks for up to five minutes.

[Soraya Martinez Ferrada, Liberal, Hochelaga, QC]

Thank you, Mr. Chair.

I want to share my time with my colleague Wayne Long.

I want to come back to division 32 of part 5 of Bill C‑19.

Ms. Legault‑Thuot, you referred earlier to a few elements from division 32 of part 5, which have surely been discussed or heard about during consultations.

Could you tell us what those elements from division 32 of part 5 are right now?

You also brought up a new system, which is more effective, faster and more transparent. I would also like to come back to that quickly, as I am sharing my time with my colleague.

[Alexandre Boulerice]

Thank you very much, Mr. Chair.

I'd like to thank the witnesses for being with us this afternoon. My first question will be for Mr. Bolduc and Ms. Legault‑Thuot.

You both emphasized the right of workers to an in‑person hearing before this new appeal board and to regional representation, so that access to rights isn't limited by burdensome transportation and accommodation costs, for example. I don't know if you had a chance to listen to the people who were with us in the last hour, but I asked this question and was told that there would be these opportunities. Is an opportunity a right? I'm a bit skeptical.

Based on what you've heard, does this give you some comfort, or do you still have concerns with Bill C‑19?

I would ask Mr. Bolduc to answer first. Then I'd like to hear from Ms. Legault‑Thuot.

[Pierre Laliberté, Commissioner for Workers, As an Individual]

Thank you, Mr. Chair.

My name is Pierre Laliberté and I've been a commissioner for workers at Employment Insurance Commission since 2016. I was therefore present for many of the deliberations on this issue. Having followed all of this quite closely, I have to say that it's a bit disappointing to be here conveying our concerns to you about what is being introduced in Section 32 of Part 5 of Bill C‑19, rather than celebrating the creation of the new board of appeals. It's too bad, but it is what it is.

I really like the remarks that have been made before me. I think they do a good job of pointing out the concerns and issues in connection with this reform.

The reform was announced in 2019 after a long process of study and consultation. Here, I will respond to Mrs. Kusie's comment about whether consultations took place. Consultations were held across Canada. They were facilitated by KPMG, which was mandated by the government to do a field investigation. I attended the seven or eight meetings held at the time.

Based on KPMG's observations, which were absolutely terse about the performance of the Social Security Tribunal, the minister at the time, Mr. Duclos, convened a working group that brought together stakeholders from the business community, the labour community, the community in general and the department, of course, to come up with a compromise and find something that could work.

The objectives were clear. The first was to reinstate a fast, unencumbered process that would meet people's needs. It must be said that at the time, the backlogs were horrible, in the style of what Mr. Boulerice mentioned earlier. Next, they wanted to bring back a peer justice system with the participation of community members. Finally, they wanted to bring back community-based justice by facilitating in-person hearings.

While cost was not central to the exercise, but it was an underlying issue. They discovered that, despite the fact that the Social Security Tribunal was created to save money, exactly the opposite was true. Right now, a decision by the Social Security Tribunal, which operates much more efficiently today than it did four years ago, still costs $4,000. When we had the boards of referees, which were local tripartite groups, it cost about $700 per decision. You can do the math. As you can see, even though the objective was to reduce costs, they didn't succeed.

Among all the organizations involved in this issue, I have not found a single one aligned with what's being recommended here. My colleague Nancy Healey, who is the commissioner for employers, and I sent a letter to Minister Qualtrough to voice our concerns. My colleague also made an effort to consult with her stakeholders and found that they did indeed have concerns about this. This led us to recommend that Section 32 be removed from Part 5 of the bill, rather than trying to amend it on the fly, and get the job done appropriately.

I'm not going to go into everything that has already been said. But I will talk about one thing in particular, and that is the role of the Employment Insurance Commission.

[Camille Legault-Thuot]

In closing, we too are calling for reform to be addressed in a separate bill. In other words, we would like Section 32 in Part 5 of Bill C‑19 to be removed. If passed in its current form, it will undermine any opportunity for meaningful review with stakeholders, and it stands in the way of achieving the goals set forth by Minister Duclos in summer 2019.