Bill C-32

Fall Economic Statement Implementation Act, 2022

An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 3, 2022 and certain provisions of the budget tabled in Parliament on April 7, 2022

Part 1 implements certain measures in respect of the Income Tax Act by
(a) providing that any gain on the disposition of a Canadian housing unit within a one-year period of its acquisition is treated as business income;
(b) introducing a Tax-Free First Home Savings Account;
(c) phasing out flow-through shares for oil, gas and coal activities;
(d) introducing a new 30% Critical Mineral Exploration Tax Credit for specified mineral exploration expenses incurred in Canada and renounced to flow-through share investors;
(e) introducing the Canada Recovery Dividend under which banks and life insurers’ groups pay a temporary one-time 15% tax on taxable income above $1 billion over five years;
(f) increasing the corporate income tax rate of banks and life insurers’ groups by 1.5% on taxable income above $100 million;
(g) providing additional reporting requirements for trusts;
(h) providing rules applicable to mutual fund trusts listed on a designated stock exchange in Canada with respect to amounts that are allocated to redeeming unitholders;
(i) providing the Minister of National Revenue with the discretion to decline to issue a certificate under section 116 of the Income Tax Act in certain circumstances relating to the administration and enforcement of the Underused Housing Tax Act ;
(j) doubling the First-Time Homebuyers’ Tax Credit;
(k) expanding the eligibility criteria for the Medical Expense Tax Credit in respect of medical expenses incurred in Canada related to surrogate mothers and donors and fees paid in Canada to fertility clinics and donor banks;
(l) introducing the Multigenerational Home Renovation Tax Credit;
(m) allowing access to the small business tax rate on a phased-out basis up to taxable capital of $50 million;
(n) modifying the computation of income as a result of the adoption of a new international accounting standard for insurance contracts;
(o) introducing a new graduated disbursement quota rate for charities;
(p) providing that the general anti-avoidance rules can apply to transactions that affect tax attributes that have not yet been used to reduce taxes;
(q) strengthening the rules on avoidance of tax debts;
(r) modifying the calculation of the taxes applicable to registered investments that hold property that is not a qualified investment;
(s) modifying the tax treatment of certain interest coupon stripping arrangements that might otherwise be used to avoid tax on cross-border interest payments;
(t) clarifying the applicable rules with respect to audits by Canada Revenue Agency officials, including requiring taxpayers to give reasonable assistance and to answer all proper questions for tax purposes; and
(u) extending the capital cost allowance for clean energy and the tax rate reduction for zero-emission technology manufacturers to include air-source heat pumps.
It also makes related and consequential amendments to the Canada Deposit Insurance Corporation Act , the Excise Tax Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , Part 1 of the Greenhouse Gas Pollution Pricing Act and the Income Tax Regulations .
Part 2 amends the Excise Act, 2001 and other related texts in order to implement changes to
(a) the federal excise duty frameworks for cannabis and other products by, among other things,
(i) permitting excise duty remittances for certain cannabis licensees to be made on a quarterly rather than a monthly basis, starting from the quarter that began on April 1, 2022, and
(ii) allowing the transfer of packaged, but unstamped, cannabis products between licensed cannabis producers; and
(b) the federal excise duty framework for vaping products in relation to the markings, customs storage and excise duty liability of these products.
Part 3 amends the Underused Housing Tax Act to make amendments of a technical or housekeeping nature. It also makes regulations under that Act in order to, among other things, implement an exemption for certain vacation properties.
Division 1 of Part 4 authorizes the Minister of Finance to acquire and hold on behalf of His Majesty in right of Canada non-voting shares of a wholly-owned subsidiary of the Canada Development Investment Corporation that is responsible for administering the Canada Growth Fund and to requisition the amounts for the acquisition of those shares out of the Consolidated Revenue Fund.
Division 2 of Part 4 amends the Bretton Woods and Related Agreements Act to increase the maximum financial assistance that may be provided in respect of foreign states.
Subdivision A of Division 3 of Part 4 enacts the Framework Agreement on First Nation Land Management Act .
Subdivision B of Division 3 of Part 4 contains transitional provisions in respect of the enactment of the Framework Agreement on First Nation Land Management Act and makes consequential amendments to other Acts. It also repeals the First Nations Land Management Act .
Division 4 of Part 4 amends the Government Employees Compensation Act in order to fulfil 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.
Division 5 of Part 4 amends the Canada Student Loans Act to eliminate the accrual of interest on guaranteed student loans beginning on April 1, 2023.
It also amends the Canada Student Financial Assistance Act to eliminate the accrual of interest on student loans beginning on April 1, 2023.
Finally, it amends the Apprentice Loans Act to eliminate the accrual of interest on apprentice loans beginning on April 1, 2023 and to clarify when the repayment of apprentice loans begins during the interest suspension period from April 1, 2021 to March 31, 2023.

The House proceeded to the consideration of Bill C-32, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 3, 2022 and certain provisions of the budget tabled in Parliament on April 7, 2022, as reported (without amendment) from the committee.

Speaker's Ruling

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Alexandra Mendes]

There is one motion in amendment standing on the Notice Paper for the report stage of Bill C-32. Motion No. 1 will be debated and voted upon.

Motions in Amendment

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

moved:

That Bill C-32 be amended by deleting the short title.

Madam Speaker, normally if a Canadian wanted to know what was happening with their federal government and what the federal government was doing for them, one would think it would be natural to look at the fall economic statement or a federal budget. My advice to Canadians is, if they want to know what is really going on in this country, they should not read the budget put out by the Liberal-NDP alliance. What they instead need to look at is not what has been said and talked about, but the realities of what is actually getting done. In many cases, the government did not follow through on what it said it would do.

Canadians need to read more than the budget to know what is going on. They need to read the reports of the Auditor General of Canada. They need to read the reports of the Parliamentary Budget Officer, who audits and calls out far too many times, sadly, the number of failures the government has had when it comes to operating the federal government and its programs efficiently. In the budget document, one reads: “we will”, “proposes” or that they want to do certain things. There are a lot of word salads, platitudes and generalities.

After reading the dozens of pages, one would think one never had it so good in this country. One would think the government is going to solve, and is about to solve, every single problem that we face with wording like, “the billions of dollars” in new proposed spending and the paragraphs of promises that would affect everything this country is facing. However, the truth, when it comes to the economic record of the government and its coalition alliance with the NDP, is that the Liberals will talk about solving the problem by spending more money than ever before. They are going to spend a billion here and a billion there, yet they never follow through on delivering better results. Sadly, we have seen billions of dollars being spent, while little progress has been made. The situation is actually getting worse.

In all fairness, someone might say that I am a bit biased about the performance of the government. I would tell Canadians not to take my word for it. Take the Auditor General of Canada's word, an independent officer of Parliament who is very busy calling out the government for its numerous failures these days.

Back in June, in my interaction at the public accounts committee with the Auditor General, she said that the government is spending more money and getting fewer results for it. Karen Hogan, the Auditor General of Canada, said, “it's not about spending more money but about spending it in a more intelligent or creative way that actually targets the barriers.” In her words, not mine, we are spending more money and getting fewer results. We are seeing that.

Conservatives are standing up to call this out. The government is spending more money. Things are now costing more. In many cases the situation is getting worse and the government is making the situation worse. Look no further than the fact that the government cannot even deliver a passport in a reasonable period of time. My constituency office has heard from numerous frustrated Canadians who, after waiting months and months, are trying to get a basic service such as a new or renewed passport.

The list from the Auditor General of Canada goes on. With respect to Indigenous Services Canada, the audit came in about drinking water in rural and remote indigenous communities, and the government failed to keep its promise to eliminate all of those issues. It now has no plan or timeline of how it is actually going to complete that promise. That was called out by the Auditor General.

When it comes to housing, a recent report indicated that the Liberals have spent an extra $1 billion specifically on homelessness, but they cannot keep track of how many homeless people there are in Canada. They have no idea what the results are after spending all of that money. On top of that, through the transparency we advocated for, we were able to call out the fact that the Canada Mortgage and Housing Corporation, which is responsible for affordable housing in this country, gave their staff $40 million in bonuses as housing prices have doubled and, as the audit confirmed, the service levels at that organization left something to be desired.

Regarding the environment, the Auditor General, on the greening government strategy, says, “government decision makers, parliamentarians, and Canadians do not...know...whether the government will meet its...target”. The tripling of the carbon tax is coming ahead, and the government cannot even see if its plan is going to meet its targets.

We can look back in history and see, for every single target the Liberals have set for themselves for environmental emissions and standards, they have failed to meet it, and they have not even come remotely close. It continues. We should not take a look at the budget, with all its aspirational sayings. We should look at the records of all this.

As we talk about the fall economic statement, the financial plan of the government, here is the reality that is hitting home for millions of Canadians watching the news these past few days. When it comes to veterans' service levels, the Auditor General of the country says:

[Veterans Affairs'] actions did not reduce overall wait times for eligible veterans. The department was still a long way from meeting its service standard. Implementation of initiatives was slow. Data to measure improvements was lacking. Both the funding and almost half of the employees on the team responsible for processing applications were temporary. As a result, veterans waited too long to receive benefits to support their physical and mental health and their families’ overall well-being.

I would not know that if I had read the Liberals' budget, but when I read the Auditor General of Canada, who is actually calling out not only intentions and words, but also actions and results, it certainly leaves something to be desired from the Liberal-NDP alliance.

I want to spend some time talking about the carbon tax. The last time I rose in the House to speak to the carbon tax, it was on an environmental bill, Bill S-5. I was shouted down and interrupted with points of order in the House of Commons, while I was talking about environmental legislation, by members saying the carbon tax was not relevant to a debate on the government's environmental priorities, and I now want to apologize to the government. I was wrong, and I should not have talked about the carbon tax during an environmental debate because the carbon tax plan the government has is not an environmental plan. It is a tax plan.

Now, I am here. I cannot be interrupted by a point of order, and I cannot be stopped from talking about the carbon tax, because it is a tax plan, and I am happy to spend some time on that. I can acknowledge my faults and shortcomings, and I will in this case.

Let us talk about it. Let me take the independent Parliamentary Budget Officer's analysis of the carbon tax's impact on families:

Most households under the backstop will see a net loss resulting from federal carbon pricing under the HEHE plan in 2030-31.

Household carbon costs...exceed the rebate and the induced reduction in personal income taxes arising from the loss in income.

Here is the thing that the Liberals, the NDP, the Bloc Québécois and the Green Party fail to understand about the carbon tax: taxpayers do not even get back in the rebate what they pay into it directly. I want to talk about who does not get a rebate at all in this country when it comes to the increasing and punitive carbon tax. It is small businesses and farmers.

They get nailed with the full bill each and every time. What happens is that when our favourite restaurant, bakery or retail store gets hit with its utility bill, and just as a senior gets a utility bill with a GST, HST and carbon tax portion, every business gets those same utility bills. They are seeing their gas bills go up. They are seeing their cost of transportation go up, and they do not get any sort of subsidy or break.

What do they do at that restaurant? With no pun intended, they bake it into the price of one's favourite pizza or favourite food. That price is then passed on to the restaurant customer and to the grocery store customer. It is not a line item of a tax they are charged on top of that, per se, but it is added in to the inflationary prices we are seeing in this country.

The Liberals, the New Democrats and other parties consistently advocate the budget document, which confirms they want to triple the carbon tax in the coming years, and all that is doing is adding to the inflationary pressure. Food price listings for 2023 have risen. They are expected to go up in many cases by double digits again. Enough is enough.

The carbon tax is driving up the price and the cost of living in our country. One thing we need to call out is that it was supposed to lower emissions. Every year since the Liberals and NDP put the carbon tax in, it has gone up. Enough is enough. The Conservatives are proud to stand and say that we will not take it anymore.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, what the member does not tell Canadians is that in the last federal election, every Conservative member supported the Conservative election platform that clearly indicated to Canadians that a Conservative government would support a price on pollution. That means a carbon tax. On the one hand, during an election campaign, the Conservatives made a commitment to Canada, saying they supported a price on pollution. Today, they have reversed their position. Now they say they do not support a price on pollution.

I wonder if the member would be transparent and apologize to Canadians for making a promise then and now saying the Conservatives no longer support what they told Canadians.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

Madam Speaker, I will not apologize, but I will stand up proudly and say that Canadians across the country understand the damage and inefficiency of the carbon tax. Not only do they believe it should not increase, but it should not triple.

If we want to talk about broken promises under the Liberal government tabling legislation, former environment minister, Catherine McKenna, who is no longer a member of the House, promised Canadians, under the Prime Minister, that the carbon tax would not go above $50 a tonne. The Liberals have broken their promise and will triple it to over $170 a tonne.

The government should be apologizing for breaking its promise and raising the cost of living on Canadians. The Conservatives are standing on the right side of the issue and we are seeing that in the momentum we are getting across the country with this message.

[Claude DeBellefeuille, Bloc, Salaberry—Suroît, QC]

Madam Speaker, I listened carefully to my colleague's speech. I agree with him. There are a number of things missing from this economic statement. I would like him to comment on the absence of the health transfers that are so important for all provinces, which are currently under a lot of pressure to meet needs and provide services. The money is in Ottawa, but the needs are in the provinces.

Does my colleague also think that there is something major missing with regard to health transfers?

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

Madam Speaker, I thank my Bloc Québécois colleague for her question and the opportunity to practise my second language this afternoon.

I agree with the question in general. On the health file, there is a major crisis in every province and every region of this country. We need leadership from the federal government and the Minister of Health. The government made a commitment to put more money into Canada's health transfer system. Every province will need more money and a five- to 10-year plan to increase health care services. Yes, a lot of things were missing from this economic statement, health transfers in particular.

[Mike Morrice, Green, Kitchener Centre, ON]

Madam Speaker, the member for Stormont—Dundas—South Glengarry spent quite a bit of his speech speaking about a price on carbon, so I will spend some time on that.

What the member did not mention is that the economic cost of the wildfires in B.C. alone, let alone the deaths, is estimated between $10.6 billion to $17.1 billion. He is right to point out that emissions continue to go up, so obviously more needs to be done to address the climate crisis. Ending subsidies to fossil fuels should be part of that plan.

I would like to hear if the member is opposed to a carbon tax, which economists say is the most efficient way to address the climate crisis, one of many measures we need. We need to get more funds to those who are impacted the most by it. I would like to hear more from the member on what he would like to see done to have Canada step up and do its part to address the climate crisis.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

Madam Speaker, no, the Conservatives do not believe that the failed carbon tax is working. If we look at the metrics that the Green Party has itself, we have a carbon tax that has been increasing every year since it came into effect. We were told that emissions would drop when the carbon tax came in. Emissions have gone up every year and they will continue to do so. The government still has not tabled a plan to meet any of the targets it has set.

We can make progress on lowering emissions through removing gatekeepers and by enabling technology, not taxes, to be the solution. There is a lot—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Alexandra Mendes]

Resuming debate, the hon. parliamentary secretary to the government House leader.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, there is a significant difference between the government and the official opposition when it comes to budgetary and legislative measures. We have a government that understands the importance of having the backs of Canadians, whether it is during a pandemic or at a time when Canadians are concerned about inflation.

The member made reference to a couple of issues, and I want to pick up on that because it amplifies the contrast. We, on this side of the House, believe in an economy that works for all Canadians. We do not believe in the trickle down theory of the Conservatives, which is to cut, or as the minister of revenue would say, “chop, chop.”

That is the approach of the Conservatives. They do not necessarily tell us where they are going to cut; they are just going to cut. It is because they do not want to be honest with Canadians and tell them what they want to cut. I often refer to this as the Conservative hidden agenda. Will we find out that hidden agenda if, heaven forbid, they form a government?

We get a sense of the contrast. If we look at the last federal election, when we think of policy, what does the Conservative Party really stand for? In the last federal election, 338 Conservative candidates from coast to coast to coast accepted the Conservative election platform, meaning they campaigned on it. Within that document, it says that the Conservative Party of Canada supports a price on pollution, which in essence is the carbon tax.

The Conservatives have been raising this issue day after day, coming up with the stupid thing of “triple, triple, triple”. It does not make any sense and the Conservatives do not make any sense on this issue. First, they supported it during the last election and now they have reversed their position. Then one of their members says that Canadians are a lot worse off because of the price on pollution and quotes the Parliamentary Budget Officer.

I will quote the Parliamentary Budget Officer, who has said that 80% of Canadians who are part of the backstop for the price on pollution are receiving more than they are actually spending. There is a net gain. That means 80% of the residents of Winnipeg North are benefiting from the price on pollution. When Conservatives say that it is going up, so is the rebate. My constituents are benefiting from that.

Are the Conservatives being honest on this issue? They are not, and they are spreading misinformation. We know that. We knew that shortly after the last national election, when they said that they would support it. Now saying they are not going to support it and are spreading misinformation about it.

Policy matters and leadership on major issues matter. That is why we wait with bated breath for the Conservative leader to stand and apologize to Canadians on his position on cryptocurrency. I and others have raised this issue in the past, when the leader of the Conservative Party, Canada's official opposition, was being provided the opportunity to apologize to Canadians for encouraging them to invest in cryptocurrency to fight inflation. Those who would have followed that advice would have incurred a loss of more than 60% of their revenue. Imagine being a senior on a fixed income and following the advice of the leader of the Conservative Party.

When it comes to the issue of inflation, the Conservative Party would have us believe that the Government of Canada, the Prime Minister, is responsible for inflation in Canada and, in fact, beyond. Yes, we play a role, and we recognize the pain and hurt in our communities as a result of inflation, but let us put it in proper perspective.

Let us compare Canada's inflation rate to the U.S.A., Great Britain, most of the European countries and the G20 countries. When we look at the averages, Canada's inflation rate is below theirs. It fluctuates depending on provinces, but, generally speaking, our inflation rate is under control in comparison to other countries.

However, that is not good enough for us. We on the government benches recognize that Canadians are hurting when they buy groceries, require services or are putting fuel in their cars. We understand and appreciate that, which is why we have the fall economic statement. It is why we have brought forward legislation to provide relief to Canadians, measures that will put money in the pockets of Canadians and, in many ways, help Canadians get through this time of higher inflation.

For example, there is the doubling of the GST credit for six months. Remember, the Conservatives originally opposed that. They had to be shamed into supporting it. After all, it put money in the pockets of Canadians. After a little shaming, they came on side and supported that legislation. However, we did a lot more than that, and some high-profile things.

Just last week, Canadians, depending on eligibility and income, were provided dental care services for children under the age of 12. Many of those children, if they do not get that dental service, end up in our emergency hospitals. The Conservative Party, still today, is saying no to that. When it came time for the Conservatives to vote on it, they voted no for children under the age of 12 receiving dental care benefits.

There is the rental support, which, again, is direct money to support Canadians who are having a difficult time meeting rental payments. The Conservatives will say that it could have been more money, but the bottom line is that we are spending hundreds of millions of dollars to assist Canadians with their rent. Again, the Conservative Party voted against that.

What about students? Interest on federal student loans is being forgiven. Again, the Conservative Party is voting against it.

I am a big fan of the multi-generational home renovation tax credit. It is a fantastic program. It will make a difference for many Canadians, for moms, dads and adults with disabilities, by providing a credit to add a secondary unit for those individuals. It is a significant credit, but the Conservatives are voting against that too.

There is a litany of things that the government is doing to provide Canadians the support they need during this difficult time, and time and again, the Conservatives have voted against them. As we continue to build an economy that works for all Canadians, we will do what we can to ensure that happens.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Madam Speaker, the member for Winnipeg North likes to come up here and cast aspersions upon us as Conservatives. The Liberal Party always stands for “tax and spend”. I need to remind the member for Winnipeg North that these tax dollars are not the money of the Liberal Party of Canada. They belong to Canadians. The best place to leave that money is in the pockets of Canadians. For the member to get up and pontificate and slander the Conservatives is unbecoming of any parliamentary speech. It is common for the member to do.

The member often tells me he likes to come up to my riding where he has a cabin. He should spend some time talking to rural Manitobans. They know the carbon tax, which is tripling, will cost $1,145 more per Manitoban than what they get back from the government. Those Canadians who live in rural areas know the carbon tax is hurting them, especially those who live on fixed incomes, like seniors.

He needs to talk to real Canadians outside the Ottawa bubble so he knows exactly what is happening in the real world.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, the member made reference to seniors. We brought in increases to the GIS that brought tens of thousands of seniors out of poverty and made a 10% increase for our seniors who are 75 and over. If the member wants to accuse me of upsetting a lot of Conservatives because of the words I say, I can assure the member that every word I say is, in fact, accurate. I think it is important that Canadians have a right to know what the Conservatives are saying. When the Minister of National Revenue says the words “chop, chop, chop”, she is right. The Conservative Party does have that mentality and the member opposite just demonstrated that in part. Canadians have a right to know.

[Mario Beaulieu, Bloc, La Pointe-de-l'Île, QC]

Madam Speaker, the things that stand out about Bill C-32 are the things that are missing, and that includes a very important request from Quebeckers and my constituents.

I am talking about the two-tier pension system. The government increased pensions for people aged 75 and up, but it seems to think that seniors aged 65 to 75 do not need a pension increase.

I think they do need one, particularly with inflation being what it is right now. I would like my colleague to share his thoughts on that.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, there are a number of things I could say. One would be the fact that the Liberal Party made a campaign commitment to seniors who were 75 and over in the 2019 election that if we were elected into government, we would increase, by 10%, payments for seniors over 75. We are fulfilling an election campaign commitment.

If I were to have leave of the chamber to expand on that, I would be happy to explain why it is so critically important. I am disappointed that opposition members do not seem to want to recognize that seniors 75 and over often incur additional expenses. There are factors that need to be taken into consideration. That is why a caring government would do what we have done to support seniors in general.