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.

Fall Economic Statement Implementation Act, 2022

[Brad Redekopp, Conservative, Saskatoon West, SK]

Mr. Speaker, I believe it is not proper to call out the presence of or the absence of anyone in the House. I would also make note that it is the Liberals' job to do the work in the House, with their NDP lapdogs. It is not being done properly.

[The Deputy Speaker, Conservative, Chris d'Entremont]

Thank you. Order.

The hon. member for Kingston and the Islands.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I want to apologize for pointing out the fact that there are virtually no Conservatives here. I apologize.

[The Deputy Speaker, Conservative, Chris d'Entremont]

I know we do this in laughter. We are not supposed to point out the absence of members or whether or not members are in the chamber. The quorum call should be just that: We count the members who are here to make sure that we have quorum; it is not to underline who is and who is not here.

I am looking at the time that we need to get the number of speakers in. I know the member for Davenport was wrapping up her thoughts. She has about two minutes and 53 seconds left. I think she was starting to wrap up. She had a couple of great ideas there, so I was looking forward to the rest of her discourse.

The hon. member for Davenport.

[Julie Dzerowicz, Liberal, Davenport, ON]

Mr. Speaker, I have lots more to say, but I know I only have less than three minutes left.

The next thing I want to point out in the fall economic statement is because the residents of Davenport are very passionate climate activists. They really feel very strongly that we need to move as aggressively and urgently as possible toward meeting our net zero by 2050 targets, so the fact that there are some measures in the fall economic statement that will accelerate decarbonizing our economy and meeting our climate change goals, I think, is welcome news to them.

We were all alarmed when we heard the Secretary-General of the UN, Antonio Guterres, say this:

And the clock is ticking.

We are in the fight of our lives.

And we are losing.

Greenhouse gas emissions keep growing.

Global temperatures keep rising.

And our planet is fast approaching tipping points that will make climate chaos irreversible.

It is incumbent on all of us to take as many measures as possible, so I am pleased to say that the fall economic statement proposes major investment tax credits for clean technology and clean hydrogen, which will make it more attractive for businesses in Canada to invest in technology and to produce the energy that will help to power a net-zero global economy.

The fall economic statement 2022 proposes a refundable tax credit equal to 30% of the capital cost of investments in the following: electricity generation systems, stationary electricity storage systems, low-carbon heat equipment, industrial zero-emission vehicles and related charging or refuelling equipment, among other things. I want to note that the Department of Finance is going to consult on additional eligible technologies. We, of course, are introducing these measures not only because we want to meet our net-zero target by 2050, but also in response to the adoption of the inflation reduction act in the United States, to ensure that we remain competitive in both the current and the future economy.

Given the fact that I have only less than a minute left, I will mention two other small measures, but I think they are significant ones that are going to be helpful to individuals, to all Canadians across the country.

The first is the elimination of interest on Canada student loans and Canada apprenticeship loans. Anything we can do to help students start their lives without debt or with as minimal debt as possible is going to be helpful.

The second is the new, quarterly Canada workers benefit, which is $4 billion over six years. We are going to be issuing that Canada workers benefit quarterly, which will be helpful and put money into the pockets of low-income Canadians sooner rather than later.

I am thankful for the opportunity to speak to the fall economic statement on behalf of the residents of Davenport. I would urge my colleagues on the other side to support this bill as expeditiously as possible.

[Anna Roberts, Conservative, King—Vaughan, ON]

Mr. Speaker, there is nothing in the fall economic statement that addresses single senior women. There was a report from the CBC. I am sure colleagues have all read it. It was about two women, one in Nova Scotia and one in Toronto, who are still living in their cars and unable to afford housing.

What does the government plan to do to help single female seniors to have the retirement they so much deserve? If it were not for them, we would not be here today.

[Julie Dzerowicz, Liberal, Davenport, ON]

Mr. Speaker, there are a number of measures that we have introduced. As I mentioned as a part of my speech, we have already introduced a doubling of the GST credit for the next six months. That is going to give individuals an additional $234 and seniors an additional $225. That is one of many measures.

We also have a national housing strategy that has put billions of dollars more of investment into building more affordable housing and to make housing more affordable for Canadians. That includes all Canadians, including our seniors. The fall economic statement has some targeted measures that I do not have time to go through, but I would urge the member to review this.

The message I want to leave is that we will continue to do more for Canadians.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Speaker, I find that surprising. I have been hearing the Liberals boast about the government's economic update all morning.

I do not understand why they think it is so positive, given that there is a really important request, not only from the Government of Quebec, but from all the provinces in Canada. It may be easier for the government to be amenable to a request when it does not come from Quebec. However, since it was not just Quebec that was asking for health transfers this time, we hoped that the government would listen.

Why are they not increasing health transfers? There is no mention of it in the economic update, and yet this is a unanimous request. Everyone is calling for this. I cannot understand it.

[Julie Dzerowicz, Liberal, Davenport, ON]

Mr. Speaker, we are all concerned about our health care system. Not a day goes by that one of us does not hear stories about the backlog in our emergency systems.

I want to remind the member that we have put a massive increase of funds into the health care system over the last few years and that we have made the commitment to put more money into it. I understand that while we want to put far more money into the health care system across Canada, we are looking for some accountability from the provinces and territories to ensure that money actually goes to reducing wait times, producing more physicians and hiring more nurses as opposed to tax rebates or tax cuts that a number of provinces are engaging in right now.

[Lori Idlout, NDP, Nunavut, NU]

Uqaqtittiji, I was particularly interested in the member's comments about welcoming immigrants.

Nunavut Premier P.J. Akeeagok said in a statement recently that Nunavut was not able to welcome immigrants because there was a lack of housing. I wonder if the member agrees that there needs to be investments in housing so that Nunavut can take part in welcoming immigrants?

[Julie Dzerowicz, Liberal, Davenport, ON]

Mr. Speaker, I agree with the member 100%.

New immigrants cannot be brought in without having a housing plan and without ensuring there is sufficient support for settlement services across the country. Both of those things are absolutely necessary.

In the north, in my opinion, there is a need for additional IRCC resources in general just to support the population with respect to additional newcomers to that part of Canada.

[Andréanne Larouche, Bloc, Shefford, QC]

Mr. Speaker, I will begin by saying that I am sharing my time with my colleague from Jonquière.

I rise today to speak to Bill C‑32, on the 2022 fall economic statement. Unfortunately, this bill seems more impressive in form than in substance. Bill C‑32 contains maybe 25 various tax measures and a dozen or so non-tax measures. It may seem like a lot at first glance, but these are in fact two kinds of measures. Some are just minor amendments, like the ones this Parliament adopts on a regular basis, while others were already announced in the spring budget but had not been incorporated into the first budget implementation bill in June, Bill C‑19. In cooking we call that leftovers.

Simply put, like the economic statement of November 3, Bill C‑32 does not include any measures to address the new economic reality brought on by the high cost of living and a possible recession. This is a completely missed opportunity for the federal government. This bill will not exactly go down in history and its lack of vision does not deserve much praise either.

However, it does not contain anything “harmful” enough to warrant opposing it or trying to block it. The government often tends to bury harmful measures in its omnibus budget implementation bills, hoping they will go unnoticed, but that is not the case here. The bill contains no surprises, either good or bad.

As my colleagues can see, I am trying very hard to show some good faith. Bill C‑32 contains some worthwhile measures, but they were already announced in the last budget. I will go over them briefly.

An anti-flipping tax has been implemented to limit real estate speculation. That is a good thing. A multi-generational home renovation tax credit has also been created for those who are renovating their home to accommodate an aging or disabled parent. The Bloc has been calling for such a measure since 2015, as have many seniors' groups that have contacted me many times about this issue. I commend the government for introducing it.

There is also a first-time homebuyer tax credit to cover a portion of the closing costs involved in buying a home, such as notary fees and the transfer tax. It is hard to be against apple pie. There is also a temporary surtax and a permanent increase to the tax rate for banks and financial institutions, as well as the elimination of interest on student loans outside Quebec. Quebec has its own system, so it will receive an unconditional transfer equivalent to the amount Quebeckers would have received had they participated in the federal program.

In addition, a tax measure that supports oil extraction has been eliminated. It is just one drop in the bucket of subsidies, but it is a start. A tax measure is being implemented to promote mining development in the area of the critical minerals that are needed for the energy transition. In addition, assistance can be provided to a particular government. That is interesting. A total of $7 billion to $14 billion will be available for all foreign countries, when previously, it was $2.5 billion to $5 billion. While we are still far from the United Nations goal of 0.07% of gross GDP, the government is enhancing Canada's international aid, something the Bloc has been calling for for some time. As the status of women critic, I am regularly reminded that Canada can and must do more and better to safeguard the health of women and girls internationally.

Bill C‑32 sidesteps the big challenges facing our society, but there is nothing bad in it. It puts forward a few measures and does some legislative housekeeping that was necessary under the circumstances.

As such, I will reiterate, half-heartedly, what other Bloc members have said: We will vote in favour of Bill C‑32 even though the economic statement was disappointing. We take issue with an economic update that mentions the inflation problem 115 times but offers no additional support to vulnerable people and no new solutions despite the fact that a recession is expected to hit in 2023. The government seems to think everything will work out with an “abracadabra” and a wave of its magic wand.

Quebeckers concerned about the high cost of living will find little comfort in this economic update. They will have to make do with what is basically the next step in the implementation of last spring's budget, even though the Bloc Québécois did ask the government to focus on its fundamental responsibilities toward vulnerable people.

For the rest of my speech, I will therefore focus on the lack of increased health transfers, the lack of adequate support for people aged 65 and over, and the lack of much-needed genuine reform to EI, which, I should note, is the best stabilizer in times of economic difficulty. Sadly, the government dismissed our three requests, even though they made perfect sense. We can only denounce this as a missed opportunity to help Quebeckers deal with the tough times that they are already going through or may face in the months to come.

First, the Bloc Québécois asked the federal government to agree to the unanimous request of Quebec and the provinces to increase health transfers immediately, permanently and unconditionally. ER doctors are warning that our hospitals have reached breaking point, but the federal government is not acting. It clearly prefers its strategy of prolonging the health funding crisis in the hope of breaking the provinces' united front in order to convince them to water down their funding demand. It is the old tactic of divide and conquer.

I want to remind my colleagues that yesterday, at the Standing Committee on the Status of Women, on which I sit, during our study on the mental health of women and girls, the ministers of Women and Gender Equality and of Mental Health acknowledged that the national action plan concept, which seeks to impose national standards, was slowing down the process. Meanwhile, the women and girls who are suffering are being held hostage. The government's feminist posturing must end.

Second, people between the ages of 65 and 74 continue to be denied the increase to old age security, which they need more than ever before. Seniors live on fixed incomes, so they cannot deal with such a sharp rise in the cost of living in real time. They are the people most likely to have to make tough choices at the grocery store or the pharmacy, yet the government continues to penalize those who are less well-off and who would like to work more without losing their benefits. Unlike the federal government, inflation does not discriminate against seniors based on their age.

Currently, Canada's income replacement rate, meaning the percentage of income that a senior retains at retirement, is one of the lowest in the OECD. We cannot say that the government is treating seniors with dignity.

There is also the increase to old age security, which should prevent demographic changes from significantly slowing economic activity. Contrary to what the government says, starving seniors aged 65 to 75 will not encourage them to remain employed. That is done by no longer penalizing them when they work.

Not a day goes by that I do not receive a message from citizens about this. This morning, I again received comments from important seniors' groups such as AQDR and FADOQ, and they can be summarized in one word: disappointment. I do not even want to talk about the brilliant decision-makers who want to delay the pension process for 10% of seniors.

Third, let us remind the government that employment insurance is an excellent economic stabilizer in the event of a recession. While more and more analysts fear the possibility of a recession in 2023, the Canadian government seems to be backtracking on the comprehensive employment insurance reform that they promised last summer.

Essentially, the system has been dismantled over the years. Currently, six of 10 workers who lose their jobs do not qualify for EI. That is significant, it is a majority, it is 60%. Seven years after the government promised reform, time is running out. We must avoid being forced to improvise a new CERB to offset the shortcomings of the system if a recession hits.

During the pandemic, we saw that improvised programs cost a lot more and are much less effective. Above all, the government's financial forecasts show that it does not anticipate many more claims. In fact, the government is forecasting a surplus of $25 billion in the employment insurance fund by 2028, money that will go to the consolidated fund rather than improve the system's coverage. As for the 26 weeks of sick leave, the measure was in Bill C‑30 to update budget 2021, passed 18 months ago, even before the last elections. All that is missing is the government decree to implement it, but those who are sick are still waiting.

One last important thing: Last weekend, I attended the Musicophonie benefit concert for a foundation in our area, the fondation Louis-Philippe Janvier, which helps young adults suffering from cancer. I was told that the organization does indeed have to make up for the government's lack of financial support. That adds to the unimaginable stress on those who are sick, who should instead be focusing on healing with dignity. Even 26 weeks is inhumane. A person cannot recover properly in that time frame.

In closing, the government is acknowledging the rising cost of living without doing anything about it. It is warning of difficult times ahead this winter without providing a way to get through them. It makes some grim economic predictions without ever considering any of the opposition's proposals as to how to prepare ourselves.

As a final point, I want to talk about supply chains. We learned how fragile they are during the pandemic. Last spring's budget document mentioned the problem 71 times. The budget update mentioned it another 45 times. Neither one includes any measures to tackle the problem, leaving business owners in limbo. The new Liberal-Conservative finance minister missed the opportunity to send a clear message of leadership and instead raised fears about potential austerity. The government is rehashing past measures, implementing what it already announced in the April budget, but there is no indication that it has a clear sense of direction, leaving the people who really need it out in the cold.

For those who lose their jobs, we need EI reform. For those who are sick, we need to increase health transfers. For our seniors, we need to give them more money so they can age with dignity.

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

Mr. Speaker, I understand that the Bloc is supporting the legislation and that it has concerns with regard to health care. When I reflect on health care, it is important to recognize that there is a strong role in health care coming from Ottawa, whether it is through the Canada Health Act or through recognizing things from the pandemic such as long-term care, mental health and so forth.

I am wondering if the member could provide her arguments as to why she believes the federal government should not play more of a role in health care. I would ultimately argue that a vast majority of Canadians want a national government that is there for health care and in more ways than just being an ATM.

[Andréanne Larouche, Bloc, Shefford, QC]

Mr. Speaker, I thank my colleague from Winnipeg North for his question, and I will ask him the same question I asked the Minister of Mental Health yesterday.

How is it that he knows more about the health care system than anyone working in Quebec's health department? What does he know about running a hospital that they do not?

In the meantime, patients are being held hostage and waiting on stretchers. Do not talk to me about the debate at the federal level. The federal contribution was originally 50%, and it has dropped to 20% or 21%. That is a huge loss. The government needs to give back what it owes to the Quebec health system.

[Michelle Ferreri, Conservative, Peterborough—Kawartha, ON]

Mr. Speaker, I really enjoy working with my hon. colleague on the status of women committee.

My question is on a lot of what she spoke about and what we work for at the status of women committee in particular. In the fall economic statement, the words “mental health” were only mentioned three times. The Liberal government continues to say that it cares, but its actions show the complete opposite. It continues to solve problems with the problem of inflationary spending.

I am curious to know her thoughts on that aspect of the fall economic statement.