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

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Speaker, I will say at the outset that I am splitting my time with the fabulous member for Haldimand—Norfolk.

We are debating the fiscal update, or the fall economic statement, and when we look at the update, it is important that we have some context for the environment it was put into. Let us go back seven years to when the government was elected.

At that time, the soon-to-be Prime Minister said there would be a tiny deficit, one so small that we could not even see it: a measly $10 billion that would disappear by the end of his first term. At the end of his firm term, there was $100 billion in pre-COVID deficit spending. That is literally thousands of dollars of burden that he put on the backs of Canadians. During COVID, there is no doubt there was some good money spent to support Canadians. The Conservatives supported programs like the wage subsidy, but we wanted controls on the wage subsidy to make sure multi-billion dollar corporations were not buying back shares or giving dividends at the same time they were receiving government money.

In addition to that COVID money, $200 billion, according to the Prime Minister's own Parliamentary Budget Officer, went out the door in non-COVID-related dollars. That equates to $5,400 for every woman, man and child in Canada. That is $5,400 for non-COVID-related spending. For a family of four, that is $20,000.

I spend a lot of time, as I am sure all members in the House do, with Canadians when travelling. Of course, we had the unnecessary, unneeded and very expensive election, but I did have the great opportunity during that time to spend my time talking to constituent after constituent. Not one of them had an extra $20,000 in their bank account because of this excess spending, so I question the value of that money spent.

The reality of an extra $200 billion, $400 billion or $500 billion in spending is that the government does not have the money. The government has three ways of raising money. One is by going to the markets and asking for a loan, and it did not have the fiscal framework or the ability to borrow $500 billion from the markets. The second is by raising taxes. Even the current government did not have the stomach to raise taxes that much that quickly. Finally is by printing money. That is through a fancy term called quantitative easing, where the government sells bonds and buys them back itself. In reality, it has the same effect as printing money.

For the last more than 2,000 years, we know what happens in this story, from the ancient Romans to the Weimar Republic to Yugoslavia shortly after War World II to Argentina, to name just a few examples. Actually, there is one right here in Canada. There was a prime minister here by the name of Pierre Elliott Trudeau who engaged in the same type of money printing, and guess what we got. We got inflation.

There was one individual who stood up over and over again and said that we would get inflation and that we should be worried about inflation. That was the member for Carleton, who was to become the official opposition leader. He said that inflation was on the way, and I heard heckles and people saying no. In fact, I cannot believe this is not the biggest news headline every day as we sit in perhaps the biggest monetary crisis of my lifetime.

We had a deputy leader saying that there was going to be no inflation, none. The Liberals said we should not worry about it and that the real problem was deflation. Talk about getting it wrong. Holy mackerel. Then we heard the Prime Minister say in public, not just in the quietness of his own home, that he did not think about monetary policy. Well, that is obvious.

As we see now, inflation is out of control. The inflation numbers will be coming out again and we will see what they are, but I guarantee they will not be in the Bank of Canada's target rate of 1% to 3%. Inflation is not just the numbers, it is not just the spreadsheets, it is not just the statistics; it is having a real impact on the lives of Canadian.

Parties on the other side of the spectrum like to say that the Conservatives are heartless. What is heartless is releasing a fall economic statement in the throes of one of the greatest affordability crises, with high inflation rates, and not addressing it. That means we will continue to see record use of food banks. In one month alone, in this great country that I love so much, 1.5 million Canadians went to food banks, a third of which were children. Five hundred thousand children in our great land were forced to go to a food bank, because the Prime Minister does not think about monetary policy. He should think again. Canadians are really struggling. Twenty per cent more than ever before are using food banks because the Liberals have failed Canadians over and over again.

What was the response in the fall economic statement to the affordability crisis, such as single moms not being able to feed their children; seniors not being able to make it to the end of the month, not being to pay their rent; young adults not being able to afford houses? We are going to have a 2% tax on share buybacks. I have had a number of constituents, neighbours and friends come to me saying they are having a tough time. They are having challenges. What we really need is a 2% tax on share buybacks, because that will create greater amounts of capital incorporation, which will create economic prosperity for all. Is this for real? Is this serious? This is a real document.

As we go on in this document, a document prepared by the Liberals, here is what it says. The bad news is that we are going to have high inflation. The bad news is we are going to have high interest rates. The topper is that we might be going toward a recession. The way the government assembled this document would be funny if it were not so sad. In their economic projection, the Liberals have said that we will have one-quarter of negative growth at baseline and the other one at 0%. Two negative quarters make a recession. It was like my nine year old changed his homework a little so he did not have to call it a recession. By the way, somehow inflation rates, which will come out tomorrow, will drop to 3.5% in 2023, less than 50 days from now. I am not going to buy some swamp land from the Liberals and I am certainly not going to accept that ridiculous notion.

With the fall economic statement, the government had a real opportunity to do something great to help Canadians with the affordability crisis to get them back on their feet by getting off their backs. It could have reduced the carbon tax. We are the only country in the G7 that did not do that. The Liberals had the opportunity to truly help Canadians by reducing the payroll tax, but they seem intent on penalizing, not rewarding, all those Canadians who are working so hard. They take more and more. Their greed knows no end. The government is out of ideas and it needs to be taken out of its misery.

[Peter Fragiskatos, Liberal, Parliamentary Secretary to the Minister of National Revenue]

Mr. Speaker, it is always interesting to hear the member opposite.

One thing I have noticed is that he and his colleagues continue to criticize the federal government for introducing COVID-19 emergency programs. I understand the criticism, but I do not agree with it. If they have that criticism, why did they support those programs? Why did they vote in favour of them?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Speaker, I may have to repeat my speech for the member as he must have not heard it or he was not here.

It is not the money that was put toward the COVID relief, which we did support; it is the $200 billion in non-COVID dollars and the $100 billion in deficit spending prior to COVID. That $300 billion is more than $20,000 for a family of four. It is that money we want back in the pockets of Canadians.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Mr. Speaker, my Conservative friends will be pleased because I am going to triple my question. This morning, I asked my Conservative colleagues the same question twice, but I did not get an answer, so I am going to ask it a third time.

The Liberal government opposite refuses to provide proper funding for the health care system, funding that is sorely needed, especially in Quebec. There is no way that my Quebec colleagues here have not seen the pictures of Quebec's emergency rooms. It is truly outrageous.

The Liberal government is saying no. If the Conservative Party were to take office tomorrow, which is not necessarily something we want to happen, would the Conservatives agree to increase health care funding from 22% to 35%, yes or no?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Speaker, what we can all agree upon is that a strong balance sheet helps us with all of our priorities, regardless of what they are. In 2023, we are forecasted to spend $43 billion in interest payments. That is more than the health transfers to all the provinces. What we can do is get our balance sheet, just as it was underneath Stephen Harper, under control and then we have more money to spend on all our priorities, including health care.

[Lori Idlout, NDP, Nunavut, NU]

Uqaqtittiji, Food Banks Canada said that nearly 1.5 million visits were made to food banks this year. This is a 15% increase from the previous year. At the same time, the revenue of Loblaws was $12.12 billion. I say these two figures because I wonder where the food banks got their groceries. I am sure they bought them from Loblaws.

Does the member not agree that the Canada recovery dividend needs to be extended to these kinds of for-profit corporations?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Speaker, the institution whose revenue has raised higher than Loblaws and higher than any oil and gas company is the federal Government of Canada. If anyone needs to give a refund or a dividend back, it is the Canadian government. It is called tax relief. It is called not tripling the carbon tax. It is called reducing the payroll tax and incentivizing workers entrepreneurs instead of penalizing and demonizing them.

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

Mr. Speaker, I wondering if the member can explain to Canadians why the Conservative Party continues to vote against measures that would give breaks to Canadians in all regions. In this legislation, for example, we have interest relief. Students who go to post-secondary facilities will not have to pay interest if the legislation passes.

Why does the Conservative Party consistently vote against supporting Canadians?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Speaker, the Liberals just do not get it. Their seven years of tax and spend have put students in a difficult position. They are having to go to food banks. They are giving up the dream of home ownership. They want more. They want a Conservative government.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Mr. Speaker, it is a pleasure to rise to speak to the fall economic statement implementation act, 2022.

There is an adage that is found in the Book of Proverbs, written by one of the wisest men who ever lived. King Solomon wrote, thousands of years ago, “A good man leaves an inheritance to his children’s children.” It is a statement that reminds us that the decisions we make today impact on the future. They can impact, and do impact, on future generations to come.

How much more is this true of leaders who are in charge of our nation’s finances. This proverb teaches us that if we want to be truly good, if we want to be wise and if we want to leave an inheritance for our children's children, we must conserve. We cannot just spend. We must save and invest in our future.

As elected leaders, we have been entrusted with a profound responsibility to be stewards of our democracy and to preserve our Canadian way.

I am very concerned about the direction of Canada and about the short-sightedness of the government. Canadians want clarity about the social contract that they have engaged in with the government. They know what they are giving, but they do not know what they are getting back. Often their questions are dismissed, laughed at and mocked by the government.

Canadians want answers to simple questions like: How can we buy an electric car to save the environment, when we can barely afford food to eat? Why does the government raise taxes on home heating, fuel and groceries, only to refund us a pittance of what has taken in the first place?

Canadians just want to be able to fill up their gas tanks, to have a roof over their head, to not have to skip meals and to be able to take their children to school and to soccer practice.

Canada is almost $1.3 trillion dollars in debt. The government has spent more than all other governments combined in the history of this nation. Right now, Canadians owe $56,000. That is their share of the national debt, and it is increasing by the day. Next year, interest payments alone will be nearly as much as the Canada health transfer to all provinces combined. That is at a time when people are literally dying in emergency rooms because they cannot be seen within a reasonable time by doctors.

Just a few years ago, the Prime Minister promised to never go over $10 billion deficit. According to the Parliamentary Budget Officer, 40% of all new spending measures have had nothing to do with COVID. That is over $205 billion dollars.

The Liberal government used COVID as a cover for its non-essential, wasteful spending. The Prime Minister cannot be trusted with our finances. His government cannot be trusted. Things are falling apart.

The government spent $54 million on an unnecessary app, the ArriveCan app, that discriminated against seniors without smart phones and accidentally sent thousands of vaccinated Canadians into quarantine. One developer replicated this $54 million project in one weekend and said that it should not have cost more than $250,000. Several contractors said that they never worked on the app and that they never received the millions of dollars the government said it paid them.

Millions of dollars are missing for which the Liberals just cannot account. The Liberals’ out-of-control has led to inflation, which has caused an increase in the cost of living.

The price of food has seen double-digit price increases, and 1.5 million Canadians visited the food bank last month, which is an increase of over 35% from last year. People are worried that they will have to choose between food and heating their homes this winter.

The cost of housing has become unaffordable. Even for people who do not have mortgages on their property, it is difficult to pay the utilities bills and the cost of heating. Young people cannot afford to move out of their parent’s homes. Seniors and those on disability do not have the ability to earn extra money to supplement their income. People on fixed incomes are living an unaffordable existence.

I met a lady named Hilary this weekend in my riding. She told me that to buy half a tank of oil it cost $1,100, of which $300 was government taxes, and this will only heat her home for one month. I receive calls from farmers, manufacturers and small businesses that are desperate for workers, yet we see massive backlogs at Immigration and Citizenship Canada. Despite this, the government still plans to triple the carbon tax on home heating, gas and food.

We are seeing billions of dollars of spending in this fall economic statement, yet the same problem of lack of transparency still exists. The Liberals have announced the Canada growth fund in the fall economic statement, which is found in part 4 of the act. The fund will largely give corporations money to undertake projects in the area of climate change with investments toward a net-zero economy. While I and most Canadians support protecting the environment, it must be done in a transparent way that yields accountability and reduces emissions.

Under the growth fund, we see a reference to ESG, “Environmental, Social, and Governance”, stated on page 30 of the fall economic statement. While the government has embraced this vague term, the average Canadian does not know what it means, but we have seen these types of pet projects before, like the growth fund, that have resulted in outrageous waste. The $35-billion Canada Infrastructure Bank has not finished one project that the Liberals announced in 2016, six years ago.

The whole approach has been a failure. It was supposed to attract private sector investments, but has repeatedly failed to do so. Instead, the Liberals are spending millions on bureaucracy, overhead, operations and executive termination packages that yield no financial benefit to the taxpayer. Now we are expected to trust the government with billions of dollars in this Canada growth fund, a taxpayer-funded investment fund that, just like the Canada Infrastructure Bank, will subsidize experimental corporate private business projects.

Despite the failure of the Infrastructure Bank in getting a single project completed, the Liberal government wants to invest $15 billion under the promise of a net-zero economy in a similar scheme, but Canadians have questions about the Canada growth fund and about ESG. Here are some of the questions that came to my office.

Since we know that businesses will have to register their products and services and that all transactions will be digitally recorded and tracked under ESG, environmental, social and governance, does that mean that the spending of Canadians will also be tracked?

How will this accounting for the entire emissions life cycle of a project affect small and medium-sized business owners? Will small and medium-sized business owners endure more red tape, and thereby have to spend thousands of dollars on lawyers, accountants and environmental, social and governance consultants in order to comply with this ESG requirement?

Since the goal is to reduce the carbon footprint and reach net zero, will there be limits on what Canadians can buy, where they can go and how much fuel and products they can consume? These are natural questions that Canadians are asking.

There is so much that is broken in our system, and we are not going to fix it with more Liberal policies and continued spending that lacks transparency and accountability. We cannot move forward when questions that Canadians are asking about policies, like environmental, social and governance and how this will affect their lives are left unanswered and mocked by the Liberal government.

This is not about politics. This is about the future of Canada. This is about making sure that we leave a good inheritance for our children's children. That is why, in good conscience, I cannot vote in favour of this reckless, inflationary bill that lacks transparency.

[Han Dong, Liberal, Don Valley North, ON]

Mr. Speaker, for the past couple of days, during the debate of this bill, all I have been hearing from the Conservatives' side are highly partisan campaign-style slogans.

The hon. member opened up her debate by talking about the future. Today, we know that the world population has surpassed eight billion. There is no bigger issue for the world right now other than climate change.

That is why the government came up with the carbon pricing system, where the provinces can come up with their own systems or they can adopt the federal system. With that, we offer rebates, growing from $300 plus to $700 in the province of Ontario. I think it is working to reduce emissions and combat climate change.

Does the hon. member have any substantial, real suggestions or possible amendments to this bill that would help us fight climate change?

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Mr. Speaker, I remind the hon. member that I have a master's in environmental studies. I do not focus on slogans. The environment is something that I do not believe is a partisan issue. It is a very important issue that we should not be using to advance our political agenda.

What I see from the Liberals is that they are making life more unaffordable by tripling the taxes on home heating, gas and fuel. The Liberals are not serious about protecting their environment. They have not even met their targets under the Paris accord. They are not serious. It is a slogan for them and they know the meaning of a slogan.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Mr. Speaker, I do not necessarily agree with the environmental strategy that the Conservatives have, but it is very spectacular that the government is number 58 out of 64 and bragging about its environmental record. I think we can agree on that.

Coming back to the motion that we are talking about right now, three hospitals in my riding have had their emergency rooms shut down repeatedly. In fact, in October, in Port Hardy, for 28 days of the month there were no emergency services offered for the whole evening and night.

I am wondering if the member shares my concern about the reality that we are seeing no investment from the federal government to support provinces in being better able to deliver these services.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Mr. Speaker, indeed, Conservatives do share that concern about our failing health care system. One of the reasons the health care system is failing is that the government has spent more than all other previous governments in the history of this country combined.

By next year, we will be paying more on our interest payments on our loans than we are paying in the health care transfer. This is the reason we have a failing health care system. We need to get our finances in order and stop wasteful spending.

The House resumed from November 15 consideration of the motion that 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, be read the second time and referred to a committee, and of the amendment.