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

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

Madam Speaker, I would like to ask the member a question. It is a question that has been asked of a lot of Conservatives and one that never gets answered. I hope the member can address the question, as opposed to just rambling on about something else, which is what every other Conservative does.

When the member ran in the last election, he ran on a price on pollution. His leader at the time, the member for Durham, put in the Conservative platform that they would have a price on pollution. How can the Conservatives, just a year later, be so critical of pricing pollution? Can he please shed some light on this question and not completely disregard it?

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

Madam Speaker, I am so glad to talk about the effect of the carbon tax on Canadians' home heating.

[Some hon. members]

Oh, oh!

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

Madam Speaker, it seems some disorder has broken out on the other side, but I am laser focused with my Conservative colleagues on making life more affordable for Canadians. We need to scrap the carbon tax. That would allow Canadians to buy more of what they need, which is fuel to heat their homes. That is what we are focused on.

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

Madam Speaker, in this bill, as in other budget bills, there is a glaring omission, namely health transfers for Quebec and Canada's provinces. This has been a glaring omission for 30 years in Canada.

Does my colleague think that it is high time Canada respected its own Constitution and its own constitutional agreements by increasing health transfers, with the understanding that increasing health transfers is a federal duty and that health transfers, in emergency situations such as a pandemic, are also a federal duty?

It is “and” not “or”.

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

Madam Speaker, the federal health transfer has been on the minds of all Canadians over the last two years with the COVID-19 pandemic, and the premiers have been asking to meet with the Prime Minister. They made some requests with respect to the Canada health transfer, and the Prime Minister refused to meet with them. It is an absence of leadership we have seen from the government on this file, and there are real consequences for Canadians across this country.

It is time for real leadership there. The Prime Minister should meet the minimum obligations of being the Prime Minister, actually sit down with the premiers and do the work.

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

Madam Speaker, it is absolute propaganda and misleading when the Conservatives rise in the House and start saying the federal government can remove the carbon tax in jurisdictions like mine in British Columbia. I have even seen Conservative MPs from B.C. suggest the same thing.

We have had carbon pricing in British Columbia since 2009. It was brought in by the B.C. Liberals and supported by all parties in B.C. Just as I said earlier, even the Conservatives supported a price on carbon in the last election, but it is not convenient for them right now.

We have been asking repeatedly whether the Conservatives will support removing the GST on home heating. It would also apply to electric heat, which millions of Canadians use. Will the Conservatives finally support the NDP's call to remove the GST on home heating?

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

Madam Speaker, there is an NDP promise from B.C. that I agree with: “B.C. NDP promises to kill carbon tax”. That is from 2009, when it was introduced in that province.

Maybe we will come full circle with my hon. colleague's party. I think the NDP of 2009 were bang on and now is the time to axe the carbon tax.

The House resumed from December 5 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, and of Motion No. 1.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Mr. Speaker, it is my pleasure to join the discussion today on the fall economic statement.

What we wanted to see is a plan for the future of all Canadians, but what we received from the Liberals in this fall economic statement is more reckless spending. We laid out two requests before the statement was delivered. One was no new taxes. The second was that if the government brought in more spending, it should find savings in the budget. That was not possible for the reckless Liberal-NDP coalition.

What we see right now is more spending and less money in the pockets of Canadians. We even heard the Governor of the Bank of Canada, Tiff Macklem, say that there is a made-in-Canada inflation problem. That is as a result of the reckless spending by the costly NDP-Liberal coalition.

I will go through a few of the spending items that we see as possibly unnecessary.

For one of them, the finance minister could not even answer a question. When asked about the $14.2-billion spend in the economic statement that is unaccounted for, she could not answer what it was earmarked for. As the finance minister of a G7 country, she should really have a better handle on where the money is going.

To add to the idea that the government right now is not in control of its spending, the Auditor General released a report today, and there are some very concerning things in it. A few of the numbers we saw today gave us a second to pause and wonder where the government is taking Canadians. One has to do with “overpayments to ineligible recipients” regarding COVID–19 spending. There was $4.6 billion in overpayments to ineligible recipients that the taxpayers of this country will never get back.

Let us not stop there. There is another one about “payments that should be investigated further” by the Auditor General. This was just released today, and there is $27.4 billion for further programs that we need to look into. One of my questions here, and I hope one of my Liberal counterparts will ask me about it, is whether the Liberals believe this needs to be investigated as well. Are they curious about where that $24.7 billion is that they said was necessary for COVID spending? I ask because we all remember the solemn hand-on-heart moment when Canadians were told by the Prime Minister that he has their backs.

Do members remember one of the last fall economic statements delivered by the current minister and the government? There was a famous line that will go down as one of my favourite quotes from the Prime Minister. He said the Liberals were going to take on debt so Canadians did not have to. How is that working for the government now?

I think Canadians across the country are wondering when exactly that is going to happen, because they have seen the government take on massive debt, more debt than all other governments combined. What I am seeing and hearing from Canadians across the country is they feel that this debt is now being passed on to them. That is how they feel. Where is this solemn pledge by the Prime Minister that the government is going to take on debt so Canadians do not have to? That is not a thing and Canadians are falling further and further behind.

I have a few examples of some of the discussions I have had.

This past weekend, I had the opportunity to speak with the Association of Canadian Custom Harvesters in Saskatoon. People from all over the country do custom harvesting. By the way, in question period, the associate minister of finance, who is from Alberta, keeps saying that there have been massive crop failures across the country, yet I did not hear that from the people who actually harvest crops. That is another one of the fabricated stories the Liberals continue to tell to make sure they have a compelling narrative to keep shovelling out dollars.

At this conference in Saskatoon, it was great to hear about some of the innovations and new technologies these custom harvesters are using to lower emissions. There were questions they kept coming back to ask me: How much is enough? For the carbon tax, what level will make the government happy? I was dumbfounded. I did not know how to answer that because I do not think it will ever be enough.

One of the custom harvesters actually does work across the border in Montana and the Midwestern states, and then comes back up. I asked him what the difference in his fuel bill is when he is harvesting down south across the border compared to when he is harvesting in Canada. He said it is between $15,000 and $20,000 a week. Could members imagine doing business in a different jurisdiction where it costs an extra $15,000 to $20,000 a week on something they have no control over? They have to fuel their vehicles. They have to fuel their harvesters and trucks. I asked him how it makes sense to keep going back and forth across the border. He said it does not. Then and there it just hit me that this is why we are becoming so uncompetitive. That is why the jobs are going south. It is because the current government is taxing businesses out of existence.

Then I remembered a quote I heard from one of the Liberal backbenchers, the member for Whitby. It all made sense when he stood in his spot and said to Canadians that they will have to go through pain. Can members imagine a government member standing up and saying that it is going to get worse? Can members imagine him saying he is not sure it is ever going to get better, but that Canadians can be sure that, as long as the Liberals are in government, it is going to continue to get worse for them, with more pain and suffering? I say “kudos” to that member because that is probably one of the first honest statements I have heard from a member of the Liberal Party in being honest with Canadians and saying that under the Liberals it will continue to get worse.

We see that situation across the country. One of the biggest things that hits me when I look at some of the statistics here is that 1.5 million Canadians are using a food bank every month in our country when we are supposed to be the breadbasket of the world. We have the food, fuel and fertilizer the world needs and we cannot feed our own people.

I opened the mail the other day when I was at home and my wife brought a letter to me. We are both U of R alumni. It was from the University of Regina. Usually people get these fundraising letters when it is for a capital project or some kind of infrastructure project. My wife said, “You will never believe this is coming from the University of Regina.” I read the fundraising letter and it was literally to feed students. It was an anonymous letter from one of the students saying that they go to bed hungry almost every night. There are 58.6% of university students at the U of R who are going to bed hungry. This is in our country now and it is shameful. From where we were to where we are now as a country, the food bank usages are up. Students are living in hostels and going to bed hungry, and they were looking for a vision from this economic statement. The government cannot spend itself out of inflation.

We are getting to another point where, if there are two more interest rate rises in this country, we are going to see a rash of bankruptcies. What is the Liberals' plan for that? Times are getting tough. I know people on variable mortgages whose mortgages have gone up $600 or $700 a month. Now it has come out that grocery bills are going to go up $1,000 to $1,500 per month. Eventually, there is nothing left.

In our country, under the current Liberal government, taxes now exceed take-home pay for people who are going to work every day. This is unsustainable in our country. We need a vision and we need a plan. We need to start making paycheques pay again. We need to make it so that people who are going to work have the ability to support their families and do not have to put water in their milk so they can make it go further for the kids. Parents are literally now scared to take their kids to the grocery store. I have constituents who have sent pictures to me of what $100 in groceries is buying for their family now, and it is sad. It is a couple of loaves of bread, maybe a jug of milk, some pasta and some pasta sauce. That is not good enough.

I will leave members with a quote. It is something Premier Wall always said when we were in government. He said that the best thing a government can and should do is leave things better than it found them. The current government has failed on that miserably.

[Kody Blois, Liberal, Kings—Hants, NS]

Mr. Speaker, I had the opportunity to read through the fall economic statement that we are here debating today, and I just want to correct the record. Canada has the lowest net debt-to-GDP ratio in the G7. We have the lowest deficit as it relates to GDP in the G7. We have seen some of the highest economic growth among our comparator countries in that category as well.

I do not disagree with the member's assertion that government needs to be mindful of spending. The Minister of Finance has alluded to that herself. However, as he talks about other members being real or candid with Canadians on screen, will the member at least acknowledge the statistics that the Department of Finance has provided, that are before us here as parliamentarians today, about Canada's true fiscal and economic record?

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Mr. Speaker, if we are being honest, I would also like that member to be honest with his constituents when they are not getting as much back from the carbon tax as they are paying. Every day in question period, we ask straightforward questions of this government, and the government members get on their feet and say that eight out of 10 Canadians are better off under their system and their carbon tax scheme, which is a tax scheme not an environmental plan. It is simply untrue.

If we are going to be honest, we should talk about controlling spending and where the $14.2 billion in this economic statement is actually going. If we are going to be honest, I would like the Liberal member to be honest with his constituents and say with hand over heart, “We have your back, but $200 billion out of the $500 billion that we spent on COVID spending, we do not know where it went.”

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I congratulate my colleague for his speech.

Some important people were overlooked in the government's economic statement. I am referring mainly to seniors. The worst inflation crisis in 40 years has left them vulnerable.

According to a study released last week by the Association québécoise de défense des droits des personnes retraitées et préretraitées, an organization that advocates for the rights of retired and pre-retired people, in collaboration with the Observatoire québécois des inégalités, an organization that monitors inequality in Quebec, one in two seniors in Quebec do not have a livable income. These people do not have enough financial support to age with dignity.

I would like my colleague to talk about this matter, because the federal government is neglecting people aged 65 to 74. It increased old age security for people aged 75 and over, but inflation does not discriminate among seniors based on age. Groceries cost the same whether the customer is 63 or 76.

I would like to hear my colleague present the Conservative Party's vision and tell us whether he is in favour of increasing old age security for people aged 65 and over.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Mr. Speaker, I agree with the statement that seniors are falling further behind. It is happening in my riding as well, especially, as the member brought up, the stories of going to the grocery stores and having to choose between paying for medications or their food.

One of the things seniors also depend on is their retirement savings plans and savings they use through retirement. One thing those are based on is the fiscal viability and health of the country and the economy. What we would like to see is getting our financial house in order, so those retirement savings actually grow instead of dwindle and inflation gets under control, especially when it comes to rental prices and the inflation on groceries. Those all go down when spending is under control and one's financial house is in order. What the Conservative Party would do, which would start to make the value of the dollar grow more in order to be able to afford more, is get our spending under control, get our fiscal house in order and make sure that our seniors who helped build this country are taken care of the way they should be.

[Matthew Green, NDP, Hamilton Centre, ON]

Mr. Speaker, we have heard Conservatives time and again stand up and, quite rightly, talk about the cost of everything. I had the opportunity to visit the hon. member's riding in Regina a few weeks back and spoke to workers on the ground. The one thing they talk about, when they talk about the cost of everything, is the symptoms of capitalism, but they never talk about the structures.

I would like the hon. member to reflect for a moment. He likes to talk about taxation. Will he have the courage today to talk about the out-of-control corporate greed that is ultimately driving up the cost of living for people from Regina all the way to Hamilton Centre? Does the hon. member have the courage to do that? Does he have the guts to actually take on big corporate greed today, or is he simply going to continue to protect the corporate class?