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.

Report Stage

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

Madam Speaker, the Conservative Party supported the government when it spent billion and billions to support Canadians during the pandemic, whether it was wage subsidies, loans to small businesses or supporting Canadians with CERB. Then, all of a sudden an election goes by, and even during the election the Conservatives had said they supported the price on pollution. Now, all that is gone, and they do not support that. Now they say, “Well, we have to cut, cut, cut”, or “chop, chop, chop”, as the Minister of Revenue would say.

What about the billions that are being spent on programs such as child care, record-high amounts on health care and the 10% increase for seniors over 75? Does the Conservative Party today support initiatives such as supporting seniors, child care and health transfers?

[Larry Maguire, Conservative, Brandon—Souris, MB]

Madam Speaker, speaking of pollution, there is perhaps a bit of dilution there as well from my colleague.

I am glad the member raised the issue of the COVID spending because I had it in my speech. The Liberals did not want to have any accountability for 21 months. Imagine, an endless amount of spending with no accountability or bringing in any of the parties in opposition to vote on it, but we stopped that.

I did not say that in my speech, and so I am really glad that he had the opportunity to ask me that question. We did put a stop to that. They did have to bring it to the House. We did agree on the spending that needed to be there, but the Parliamentary Budget Officer has now pointed out that, of the $500 billion they spent, $200 billion of that had nothing to do with the COVID spending.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Madam Speaker, I heard my colleague talk about removing the carbon tax. I am from British Columbia where the carbon tax was brought in by the B.C. Liberals, a right-leaning party, and was supported by all parties in British Columbia, just like the carbon tax here federally in the last election, which was supported by all parties represented here in the House. It is funny how the Conservatives changed their mind after an election. However, the Conservatives are calling for the removal of a carbon tax in jurisdictions such as where I live, where they do not actually have the authority to remove it.

The carbon tax applies to liquids and gaseous fuels. It does not apply to electric heat. We put forward a proposal to remove the GST on home heating, which includes electricity, and the Conservatives voted against it. Will they stop misleading Canadians and start supporting proposals that can be implemented to help Canadians tackle the affordability crisis they are facing?

[Larry Maguire, Conservative, Brandon—Souris, MB]

Madam Speaker, I want to thank my hon. colleague from the NDP for his support of the Liberals and keeping the carbon tax going in his area.

We want to get rid of the carbon tax because it has proven not to reduce greenhouse gases, and it is costing people money out of their own pockets. What we are wanting to do, I think, is very responsible. We would like to leave that money in people's pockets to start with so they can make their decisions and then get our industries to use technology to reduce the greenhouse gas emissions that are out there today, and they are doing it.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Madam Speaker, the environment is vital to our lives. Without the environment, we would not be able to eat, breathe or build ourselves a shelter.

I understand that oil is a major source of energy and revenue in my hon. colleague's region. That said, we must consider the situation as a whole. Any attack on the environment is an attack on people's health. Does my colleague believe that it is important to implement better transition measures for workers, youth and industries in his region and others to ensure an adequate, healthy energy transition for all?

[Larry Maguire, Conservative, Brandon—Souris, MB]

Madam Speaker, I am happy that the member raised that as well because I am very concerned about it. Seven of my 14 years in the Manitoba legislature were spent as either the critic for the environment or conservation, and I have farmed all my life. Therefore, I am very concerned about it.

However, we have a situation here where the government is completely unaccountable for the situation it is faced with. It keeps taking money out of people's pockets, and it would be one thing if the greenhouse gases were going down, but they are not.

I think that the provinces that have made their own decisions on the greenhouse emissions and carbon tax are something that we are looking at. We will work with those provinces. The government continues to force the provinces to follow its rule in all of those particular areas, and with $54 billion of new spending, we need more accountability.

[Ted Falk, Conservative, Provencher, MB]

Madam Speaker, it is a great pleasure and honour to rise in the House and share my views on this fiscal budget update and bring forward the views of the constituents of Provencher.

As our leader and many others have articulated here today, the Conservatives had two very simple conditions to gain our support for this fiscal economic update: no new taxes and no new spending. These were two very simple and reasonable requests. To my colleagues who disagree, I note that one of the few fiscal details contained in the minister's speech was that government revenues have increased by $40 billion, twice what the deficit was in 2019. That does not sound like the government should be hurting for cash, and if it is, it would be as a result of overspending.

That number 40 rings a bell: 40% of the COVID money spent was not spent on COVID but on everything else. That is $200 billion the government did not need to spend but chose to spend. That $200 billion is now driving the inflation that is crippling Canadians and driving up the cost of everything from food to fuel to home heating. Rather than providing real relief by reducing taxes, the government wants to smack Canadians one more time with even more new taxes: taxes on EI and CPP, the tripling of the carbon tax and new taxes on fuel, costing families an additional $1,200 per year.

All Canadian families are struggling to buy groceries for their kids and heat their homes. It is wintertime and it is cold out there. In my province, it will go down to -30°C tonight. Given the current plight of Canadian families and the government's direct responsibility for the current inflation and the cost of living, this was not an unreasonable demand we had.

It is likewise for the no new spending. To be clear, we are not saying that the government cannot spend money on anything and that it should freeze all spending. What we are saying is that if it is going to spend money in a new area, it has to look for a cost saving somewhere else. It is quite simple. If the Liberals wants a new program, they should look for a cost saving. They have increased the size of government by 30%. Surely, there has to be some savings to be found there somewhere.

Instead, they continue to spend. They continue to add to the size and cost of government. Every time they add to the cost of government, they need to tax, borrow or print money, which is what caused the state of inflation we are now in and what caused the cost of living crisis in the first place, just as we said it would.

The Liberals laughed at us. They rolled their eyes. They said that it would never happen. Well, it did happen. It is happening as we speak, and Canadians have to bear the brunt of it. The Bank of Canada has confirmed it too. Now, instead of taking responsibility for their actions, admitting they were wrong and taking real steps to help Canadian families, they are just throwing more fuel on this inflationary fire. The definition of insanity is doing the same thing over and over again and expecting a different result, and Canadian families continue to pay the price for these failed Liberal experiments.

As I look at the fall economic statement, I see an exercise in out-of-touch self-congratulation, with the government saying, “Look what we've done to make Canadians better off.” In fact, it is hard to tell sometimes what is more inflated, the economy or the Liberals' egos. We can see that throughout the front benches. To listen to the finance minister speak, it is as if she cannot understand why Canadians are not lined up around the block to thank her and the Prime Minister for all their new-found prosperity.

The government is out of touch and Canadians are out of money. The fall economic statement shows it spent $400 million to pay for its COVID–19 border testing regime. That is $400 million to ensure that border communities remain in limbo, families remain separated and local economies along the border are destroyed. It is $400 million to cause unprecedented delays at our airports and discriminate against Canadians who used their own judgment or who chose to keep their personal medical choices private. That is hardly money well spent.

Then there is another $42 million to the CBC. Canadian parents are skipping meals so their kids can eat. They cannot pay their bills. They are worried that they will not be able to heat their homes all winter. They are very concerned about rising interest rates, hoping that they will not push their mortgage payments out of reach. What is the government's response? Let us give the CBC another $42 million.

The CBC received over $1 billion last year, and $1 billion the year before. Do members know how the CBC chose to spend that money? It spent it on bonuses. It was on $30 million in bonuses. Averaged across the employees, that is $14,300 for each employee. Last year, it took the money that the federal government gave it and it paid out $156 million in bonuses. It did that while everyday Canadians are suffering, while everyday Canadians saw their bank accounts shrink and businesses were forced to close their doors.

Our public broadcaster has long ceased to represent everyday Canadians. The government has been in the business of subsidizing that media for way too long.

Those are a few things that are in the statement. Let us talk about what is missing. First is health care. Where is the $4.5 billion in mental health transfers the government promised? Mental health care was a huge issue in Canada before COVID. The government response, the isolation, the fearmongering and the shame have only served to exacerbate the problem. The number one issue in high schools these days is mental health and depression.

The government promised $4.5 billion of new health care spending over five years. That is spending that we agreed was needed. However, where is it? It was missing from the budget. It was missing from the fall economic update. The government dropped $200 billion on everything but health care, but it cannot fulfill a vital election promise for $4.5 billion.

Did the Liberals just forget about health care, about the mental health of Canadians, or did their deal with the NDP mean that they had to repurpose those funds to buy their support? The $4.5 billion tagged for mental health is nowhere to be found, but suddenly the Liberals have been able to come up with an unbudgeted $5.3 billion to buy off their buddies in the NDP with a new national dental program. That number seems way too close to just be coincidental.

If so, it marks one of the most callous and craven displays of political self-interest that I have ever seen. Do Canadians need dental care? Of course they do. We recognize dental care is an important aspect of overall health. We also recognize that two-thirds of Canadians already have coverage and access to good dental care.

Do members know how long the wait to see a psychiatrist is in Manitoba? It is two years. For a child or a youth, it can take even longer. One ER doctor told my office that, prior to COVID, mental health cases made up about one out of seven ER walk-in patients. Post-COVID, that number is one in three. The ratio was one to seven before COVID, and it is one to three after COVID. Where are the mental health dollars? They are nowhere to be found.

One in three Canadians cannot get the mental health services they need. They have nowhere else to go. We wonder why our ERs are overwhelmed. COVID restrictions led to huge upswings in mental health and addictions issues, especially among our young people. Our health care system is at the breaking point because they cannot cope with the demand.

We need to fund health care, and mental health care is health care. Before its members even start, the government always claims that Conservatives want it both ways, saying that one day we say to spend more money and the next day we say to cut. That is just not true. We just recognize there is a limit to what can be done.

Despite what the government and their purchased partners in the NDP seem to think, we recognize there is a limited number of government dollars to go around. That means that we need to choose what we are going to prioritize.

I have lots more here, and I could go on for a long time yet, talking about—

[The Assistant Deputy Speaker, Carol Hughes]

The member will be able to add more during questions and comments.

Questions and comments, the hon. parliamentary secretary to the government House leader.

[Mark Gerretsen, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons (Senate)]

Madam Speaker, we have continually heard the Conservatives talk about inflation and how Canada is performing with regard to inflation, but what we never hear about is how they measure up to comparator countries. The reality is that inflation hurts and is hurting a lot of Canadians right now, but this is not a uniquely Canadian thing. This is going on throughout the world right now, not only as a result of the pandemic and supports that came out during the pandemic, but also as a result of the war going on in Ukraine, which is really feeding into inflation.

I wonder if the member would like to reflect on that and the realities of what the world is going through, as opposed to just what we are seeing in Canada.

[Ted Falk, Conservative, Provencher, MB]

Madam Speaker, the Liberals' next leader, Mark Carney, said this was a homegrown problem. He is a pretty smart guy, so if he says this is a homegrown problem, it must be a Liberal problem.

We are listening to Canadians and we are in tune with our constituents. We are in tune with the kitchen table issues. These are the issues: home heating, fuel for cars, groceries for the kids and interest rates on mortgages. Those are the issues that have been exacerbated in our country. All Canadians are feeling the impacts, and it is because of failed Liberal policies.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Madam Speaker, there are many things missing from this bill. I like it when we can see both what is missing and what is good. I make the effort to do that, even when it is not so easy and there is something in a bill that I do not like very much.

I would ask my colleague to do this exercise. What is in this bill that is good for his riding, even if the bill could arguably be improved?

[Ted Falk, Conservative, Provencher, MB]

Madam Speaker, that was a very relevant question. We need to look at the good, the bad and everything. I have tried to do that with regard to the fall economic statement.

I have had an opportunity to point out and articulate what I think are some of the failings and shortcomings of the statement. When I look at it, I have to ask myself what is good about it. What is good about it is that it is not worse.

[Lisa Marie Barron, NDP, Nanaimo—Ladysmith, BC]

Madam Speaker, I heard the member talk about listening to people and wanting to make sure we are putting in place real solutions. I cannot seem to wrap my head around and understand why we would not all be on board with taking away the GST from home heating instead of pushing for the carbon tax to be removed, which would only benefit a small portion of Canadians.

I am trying to look at this from a practical perspective. Why would we be pushing for a solution that benefits a few when we could be looking at a solution that benefits many, so they can keep food on the table, heat their homes and get by? Those are all things the member was talking about just now.

[Ted Falk, Conservative, Provencher, MB]

Madam Speaker, why would we not support GST on just home heating? That is a very narrow ask and it would not benefit everybody.

What if we remove the carbon tax? The carbon tax affects absolutely everything in our economy. The carbon tax does not just drive up the cost of driving a vehicle from home to a place of work or to our kids' schools. It affects the cost of the farmers heating their grain and of the transport trucks delivering goods and services across the country, and it adds to the cost of groceries. The carbon tax is only a tax. It is not an environmental policy at all. It is just an additional tax grab. I think the Liberals are even starting to see the errors of their ways.

The carbon tax should be reduced. It affects absolutely everything in our economy.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Madam Speaker, it is a pleasure to join in this important discussion about the future of Canada, the finances of this country and the economic update as part of the Liberals' costly coalition with the NDP.

This makes the price of goods that Canadians buy and the interest that Canadians pay unaffordable. The cost of the Liberal government is driving up the cost of living. The more the Prime Minister spends, the more everything costs. There are inflationary deficits that the government continues to pursue unabashedly, and it has driven inflation, particularly food inflation, to 40-year highs.

For two years, in spite of what the Governor of the Bank of Canada said, Conservatives, including the leader of the Conservative Party of Canada, the hon. member for Carleton, said that we would see a period of inflation that many Canadians had not seen in their entire lifetimes. At the same time, the finance minister and the Governor of the Bank of Canada said the real risk was deflation.

The votes are in, and it looks like the member for Carleton was right. We are in a period of inflation that is going to make it a really tough winter for a lot of Canadians. We have a few solutions that the Liberals can pursue, which are very straightforward. They are only going to need to use the front side of a piece of paper when they write these down as they diligently take notes. First is to stop the taxes. Second is to stop the spending.

There should be no new taxes when Canadians are having a tough time managing the day-to-day and week-to-week household costs. When Canadians are making choices about heating their homes or feeding their families, the government is planning to raise taxes. What is the government's plan? It is not just to raise them, but to triple them.

Canadians are getting their home heating set up for the winter. They are filling their oil tanks. They are filling their propane tanks. They are getting their first natural gas bills, and it does not look good. They are really worried about what it is going to look like in January, when they need a refill. They are not going to be able to fill the tank all the way back up.

These are scary times, especially when food prices are skyrocketing. I hear the members opposite giggling and laughing. Canadians are having a tough time. They are not able to pay. Grocery prices are going to be $1,000 more for the average Canadian family next year. They are not going to see wage growth to match that on top of all the other rising prices.

We knew before the pandemic that half of Canadians were teetering on the brink of personal bankruptcy and teetering on the brink of insolvency. They are going to have no emergency or rainy-day funds. It is a question of whether or not they can buy a week's worth of groceries. Are they going to put a full tank of gas in their car to get to a job site?

The carbon tax is one that punishes Canadians. The Prime Minister said it was designed to change Canadians' behaviours. They use their cars to drive to work. That is a behaviour we want Canadians to continue; we want people to work. They use their cars to go to medical appointments, to go to school and to take their children to sports, like hockey, dance or basketball.

These are not behaviours to be corrected. It is a way of life. Imagine Canadians driving to the hunt camp as part of their annual tradition, part of our Canadian culture, to go hunting. They are going to drive their cars to get there. The carbon tax is going to hammer Canadians at a time when they can afford it the least.

The Prime Minister has not shown that he is serious in addressing the housing supply crisis, and this is evidenced in the fall economic statement. The price of homes has doubled under the Liberal government. For the price of rent, we are looking at $2,600 per month for a one-bedroom apartment in Vancouver and $2,300 for the same in Toronto. Meanwhile, six out of 10 renters do not qualify for the inflationary cheques that the Liberals are sending out. Those few renters who are eligible will see that $500 vaporized by the effects of Liberal inflation.

Let us think about what the challenges look like on a day-to-day basis for Canadians. Grocery prices are up 10.8%, the highest in 40 years. What does that look like?

Eggs are up 10%. Margarine is up 37.5%. Dry and fresh pasta are up 32%. Fresh fruit is up 13%. Soup is up 19%. These are staples that people depend on. They are not able to stock the cupboards for a rainy day.

The impact the inflationary policies of the government are having on Canadians is affecting businesses as well. We know, from the Canadian Federation of Independent Business, that one in six businesses are considering closing their doors. Sixty-two percent of small businesses still carry debt from the pandemic. They are feeling the effects of inflation as well. All of their operating costs continue to rise.

The carbon tax, again, is one that affects every business. It does not matter what service they are providing. All of their inputs are going up.

These Liberals have put these hard times on Canadians. We look at the legislation they present in this place, and they want to say one thing and implement legislation that does another. They say that they have Canadians' backs, but that is not reflected here.

It is much like when they say they are not going to ban hunting rifles and shotguns used by farmers and hunters, which are not a risk to public safety, as they are in the hands of well-vetted, law-abiding, trusted firearms owners. The government says that it is not going after them but introduces legislation that does just that. It targets them instead of targeting gangs, criminals and weapons smuggling. It is like a bait and switch, which is what we can expect from it nearly every single time.

Instead of creating more cash, which is the plan that the Liberals have, they should focus more on how we can create more of what cash buys. Fuel is a great example. We see that, in western provinces, we have ubiquitous natural resources that are the cleanest, most ethically produced in the world, but instead, these Liberals would prefer to get dirty dictator oil.

To say nothing of the environmental impact of bringing it across the ocean, the actual extraction process does not match the environmental standards that we have here in Canada, the environmental stewardship that is shown by natural resource companies in this country and the Canadians who work in that resource production, the human rights protections and standards that are in place for these companies that are extracting natural resources in Canada.

I appreciate having the opportunity to speak to this very important issue, and I hope there are some good questions.