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

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Madam Speaker, in the Parliamentary Budget Officer's review of the fall economic statement, Bill C-32, he categorized $14.2 billion as unannounced spending. I am just wondering if, before we go to actually vote on this bill, the member would tell us what the details of that spending are.

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

Madam Speaker, I will be completely honest. I am not fully versed in the Parliamentary Budget Officer's report, but I would say that every member of Parliament gets the information from the government at the exact same time.

The member assumes that I am going to somehow have access to that before him, but that would be against the rules of the House. I am allowed to see what is tabled when he is allowed to see it. He knows that. To suggest that there is some kind of information that I have that he does not have is simply not the truth.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, I am wondering if the hon. member for Kingston and the Islands has any comment on this as we debate Bill C-32. I understand his point that other members have spoken. It was almost getting to be like The Twelve Days of Christmas with how many members have spoken. I expected it to move into music. I ended up being the one Green who spoke.

There are other thoughts and comments that we would like to make, but we do not want to prolong debate unnecessarily.

The fundamental point is that we have rules and procedures in this place. We have time allocated for debate. If that is truncated on a routine basis continually, what does that mean for the future of this place as a place that is the heart of democracy, where debate takes place and where we do not truncate and bring down the bâillon every time?

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

Madam Speaker, I think that the member brings up a very good point. It is unfortunately the reality of the place where we are now. It is an inevitable cycle. Conservatives are just using every single tactic they have, not only to slow down legislation that they are against, but also to slow down every piece of legislation of the government.

It is almost as though they want to force the government to use time allocation so they can say we are being undemocratic. The cycle continues so they can say that we did it 50 times, 60 times, 70 times and so on. Perhaps the member is on to something, in that we need to look at our Standing Orders and how we deal with this kind of stuff.

I will be completely honest. Before I got here, when I used to hear of Stephen Harper bringing in time allocation and terminating debate, I used to think it was an egregious thing to happen, until I realized, when I am sitting here, exactly how this place functions.

When Canadians actually figure out how this place functions, I know they will understand why it is necessary to do this and why it is necessary to end the games.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, I want to get back into more of the substance of the debate. The member has mentioned the student relief and interest payments.

One of the things that we also see compounding is that students are graduating with fewer opportunities to be in a job for a longer period of time, with benefits and pensions. I wanted his thoughts about that. I see a lot of young people simply getting buried and falling behind, and that has caused significant problems for them starting families.

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

Madam Speaker, the member makes an excellent point.

Back in the sixties and seventies, one could graduate from high school in Kingston and go and work at DuPont or Alcan. One could have an entire career there, have a pension at the end and have benefits with that pension. The reality is that those jobs are becoming fewer and fewer.

We do not see the ability for individuals to have one job. I think that the average person now has seven or eight jobs throughout their employment time.

To answer his question, what is important now is that the government needs to recognize that the labour force has changed. We cannot rely on these companies to be providing these pensions and long-term strategies for retirement. It is becoming more onerous, quite frankly, for the government to provide those strategies and to make sure that people are prepared for their retirement because the opportunities this member mentioned, and that I mentioned at the beginning of answering the question, just do not exist anymore.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Madam Speaker, it is an honour to speak to Bill C-32, the government's fall economic statement.

With inflation at record highs, interest rates rising and tax hikes on the way, Canadians are paying more attention to the government's spending now more than ever. They expect their government to be fiscally responsible with their tax dollars, and Canadians expect their government to make outcome-based investments and things that matter to them.

Unfortunately, since the Liberals took office in 2015, rural Canadians have been neglected by the government. I wish the government had spoken to rural Canadians and listened to their priorities and concerns before introducing the fall economic statement. Clearly, it failed to listen to rural Canadians.

Missing from the fiscal update is a plan to address rural crime. Rural crime is a pressing issue for Canadians who live in rural and remote regions. Unfortunately, the Liberal government has been silent on this issue.

Statistics Canada has reported that the crime rate in rural Canada has increased at a much higher rate than in urban Canada. The data shows that rural crime rates are 30% higher than in urban communities. Rural Canadians are vulnerable, and criminals are deliberately preying on the individuals and families in rural areas, knowing that the RCMP response times are highly delayed.

I spoke with a woman who lives just outside of the small community of Ethelbert, Manitoba last summer. She told me how her home was broken into multiple times in one year. Her home was invaded, her personal belongings were stolen and her safety was threatened. It took hours for the RCMP to respond, not because the police officers did not care but because they were so busy dealing with other responses.

Like many rural Canadians, the dream of living in a peaceful and tranquil region of our nation has turned into a reality of fear for one's safety. This is just one story, but I can assure members that nearly every Canadian who lives in rural Canada has, or heard, a similar one.

However, now the Liberals want to use the very limited policing services in rural Canada to implement their politically driven buyback program to confiscate legally acquired firearms. Even the provinces and territories are speaking out against this. New Brunswick, Alberta, Saskatchewan, Manitoba and Yukon oppose this wasteful use of police resources.

The provincial minister of public safety in New Brunswick said:

New Brunswick’s bottom line is this: RCMP resources are spread thin as it is...We have made it clear to the Government of Canada that we cannot condone any use of those limited resources, at all, in their planned buyback program.

The Liberals would rather use RCMP resources to enforce a firearm ban, which will do nothing to address rural crime, than use RCMP resources to protect the vulnerable families that live in rural Canada.

I should remind Canadians that violent crime has increased by 32% since the Prime Minister took office, and gang-related homicides have increased by 92%. Clearly, the Liberals' plan is not working. The Prime Minister has no plan to address the 30% higher crime rate in rural Canada, and that is very concerning.

The fiscal update did include new measures to support the victims of hurricane Fiona, and while I applaud the support, I want to raise an issue that was not addressed.

I was recently in P.E.I., meeting with Atlantic Canadians who feel neglected by their federal government, particularly the rural Canadians who feel their government is ignoring their needs.

Access to reliable, high-speed Internet and cellular service is critically important to rural Canadians from coast to coast to coast. When hurricane Fiona hit Atlantic Canada, cellular towers were down for days. The inadequate backup capacity on cellular infrastructure meant that Atlantic Canadians could not make a phone call in times of need.

Thousands of Atlantic Canadians waited weeks before they could reliably make a call on their cellphone. Imagine a single mother who does not know if she can contact local emergency services after a storm. Imagine seniors knowing they may not be able to call their loved ones in times of trouble.

While some cellular towers had backup generators, many did not have sufficient capacity and others had no redundancy at all. I found this very troubling. However, what I found even more troubling was the fact that this issue was raised by Atlantic Canadians to the Liberal government less than three years earlier after hurricane Dorian.

Atlantic Canadians called on the Liberals to address cellular redundancy in Canada, but their request fell on deaf ears. The Prime Minister failed to address cellular backup capacity in disaster-prone areas, and Canadians once again felt the impact of his neglect to this issue.

Even after the premier of Nova Scotia wrote to the Liberals urging them to address this issue, nothing was mentioned in the fall economic statement. Canadians deserve access to reliable cellular service.

If we want to connect Canadians with high-speed, reliable internet and cellular services, we need to increase competition in Canada. The only way to get lower prices and better service is to increase competition, enabling more innovation and choice.

Canada has among the highest, if not the highest, wireless prices in the world, according to a report by Rewheel/research. The minimum monthly price for a 4G smartphone plan that includes at least 20 gigabytes of data is higher in Canada than in Greece, New Zealand, South Africa, Norway, Germany, China, the United States, Finland, Sweden, Japan, Australia, Spain, the United Kingdom, India, Brazil and Italy, and the list goes on and on.

The Liberals think they can solve the problems with big government spending, but a lot of solutions emerge when we remove the government gatekeepers.

I think of Starlink, for example, a private company that provides internet through low earth orbit satellites. This is a company that is not reliant on government funding, that entered the Canadian market on its own, and has probably connected more rural and remote Canadians in one year than the government has since it took office. That is the power of innovation. That is the power of competition.

We should be encouraging private sector growth and innovation, not discouraging it.

Before I conclude, I want to point out one more thing. I noticed that there was a heading in the fall economic statement entitled “A Fair Tax System”. This reminded me of an encounter I had with a local taxi driver this year.

I was heading to the airport at four in the morning. A taxi driver had picked me up from my hotel and he told me he would only work for another two hours. I asked him why. He said that if he worked too much overtime, the increase in his tax rate would not make it worth his time. He would be working to put more money in the government’s coffers than in his own pocket. We should let that sink in.

Our tax system is discouraging Canadians from working. The government is discouraging seniors who want to top up their pensions. It is discouraging students who want to work for their tuition. It is discouraging parents who want to work a little extra to pay for Christmas presents. This is heartless and in no way a fair tax system. We should always be rewarding those Canadians who want to work.

Canadians are concerned with the rising cost of living. They are concerned with the irresponsible government spending. They are concerned with the neglect displayed by the government. They are concerned with what the future holds. I will continue to stand up for these Canadians.

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

Madam Speaker, the Conservative members always express concern with respect to the government spending. I do not know to what degree they recognize the true value of some of the spending that has taken place. We can talk about child care from coast to coast to coast. We have seen massive reductions for the first time with the national child care program. We have seen historic amounts of health care transfers to support provinces and address the needs of Canadians and their expectations on health care. In fact, we brought in a national dental program for children under the age of 12.

Would my colleague not recognize these are the types of programs on which Canadians expect their national government to deliver?

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Mr. Speaker, one thing the member talked about was spending. I will point to the Auditor General's report. The Auditor General found, “Employment and Social Development Canada established performance standards by focusing solely on the speed of payment”, and identified at least $32 billion in overpayments and suspicious payments that required further investigation. We are focused on that kind of spending.

[Lori Idlout, NDP, Nunavut, NU]

Uqaqtittiji, I am going to ask the member a similar question I have asked other members. Given the context that, as we all know, some major corporations are making major profits, windfall taxes on corporations like Loblaws and oil companies need to happen, because the people he talked about are the ones who are suffering the most. Revenues from windfall taxes could go upward of $4.3 billion, if this kind of windfall tax was put on corporations like Loblaws and oil and gas companies.

Does the member agree these major corporations need to pay their fair share of taxes?

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Madam Speaker, when it comes to taxes, it was one of our asks in this fall economic statement. We were looking for the Liberals to stop increasing taxes, in particular the carbon tax. Eliminating the carbon tax on home heating immediately would at least cut the costs for people to heat their homes, not sometime when we pass a bill, not sometime when we happen to get the House in order and not when we start to tax someone else. The government would immediately stop taxing Canadians who work so hard to heat their homes.

[Richard Lehoux, Conservative, Beauce, QC]

Madam Speaker, I want to congratulate my hon. colleague on his excellent speech.

He talked a lot about rural areas across Canada. I wonder if he could elaborate on what he would have liked to see in this budget statement. I agree with him that there is not much in this statement for rural areas.

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Madam Speaker, the one thing that really stood out to me was that it did not address Canada's needs at all, especially when it comes to rural crime. Today we talked about things that happened a long time ago and we said it should never happen again. In rural Canada, crime is 30% higher. There was not even a breath spent on that, not even on how we would address it or how we would take those sacred resources from the RCMP and apply them to rural Canada so we could look after rural Canadians. The government has totally blown up that whole idea.

[Martin Champoux, Bloc, Drummond, QC]

Madam Speaker, I thank my hon. colleague for his speech.

Earlier the member for Winnipeg North praised the government's actions in the area of health transfers with all kinds of conditions. Health care systems in Quebec and the provinces are in a critical state. Now is not the time to dither and try to set standards with absolutely no knowledge of exactly what they entail.

My colleague did not seem to respond as nervously as I did on this issue. I would like to hear his comments on this.

Why is the federal government so determined to impose standards for health transfers? Does my colleague agree that there should be no standards and that health transfers should be increased, as the provinces and Quebec have unanimously called for?

[Dan Mazier, Conservative, Dauphin—Swan River—Neepawa, MB]

Madam Speaker, I am sorry that I did not answer the question about health care.

Health care squarely belongs in the realm of the provinces especially, but the key for the federal government to keep our country together is to work with the provinces, respect their power and work as a team. as a country, and not to divide us and take us in different directions. It needs to work as a true leader. A Conservative government will do that.