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

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Madam Speaker, I will begin my remarks with a short aside about Sainte‑Adèle, a municipality in my riding. On Friday, a terrible fire destroyed the Hôtel Mont Gabriel, which is a Laurentides—Labelle institution. The hotel has been perched on the summit of Mont Gabriel since 1936. I have a personal attachment to it because, in the 1960s, my father worked at Mont Gabriel to pay for his education. I want the staff and the general manager, Martin Lavallée, to know that I am with them as they confront this calamity, which has struck just days before Christmas.

Today, I am here to speak about Bill C‑32 at report stage. This bill seeks to implement the government's economic statement. Unfortunately, as we can see, it basically amounts to some minor legislative amendments. Quite frankly, I really feel that this is an attempt to implement the budget that was tabled a few months ago. I would like to elaborate on the economic reality that Quebeckers are facing. Bill C‑32 is backward-looking. It mentions inflation 108 times, but how much attention does the issue really get? The content of this bill is not anchored in the future or in the present.

I am trying to find ways to get us through these difficult times. Some examples of the challenges we face are skyrocketing grocery bills and the inability to fill our tanks with gas while we wait to buy an electric vehicle to get to work, because in the regions, a car is essential. Unfortunately, public transportation is not available everywhere. Donations to media food drives are also down because people are struggling.

The government has identified the cause of the higher cost of living, but it has done nothing about it. It has announced that there are difficult days ahead, which we obviously are aware of, without providing a way to get through them. Still, even though the measures in Bill C‑32 are not perfect, because there are shortcomings, we can say that we are relatively satisfied with the measures presented.

However, the government should have given more consideration to the Bloc Québécois's requests. They are simple and clear, and we know that they will be effective. We have proof. These measures can directly help Quebeckers. Our three requests were to increase health transfers, provide adequate support for those aged 65 and over, and urgently reform the EI system.

The Liberal government ignored our offer of help and rejected our proposals. This is a missed opportunity to help Quebeckers. I know Quebeckers are watching, and I want them to know that we will not give up. I must admit that there are some positive elements, however, and I will mention them today.

As we know, property flipping is really driving up prices on the housing market and making it very difficult to buy a home, particularly for first-time buyers. I commend the federal government on its initiative to tax gains from property flips. I hope that will help curb real estate speculation and make it easier for people to buy a home.

Another related measure that I welcome is the creation of the tax-free first home savings account. I talked about it with my older daughter and her friends, and they say that it will definitely help them.

That measure was in the spring budget. Things have changed, and we had to adjust.

Bill C-32 is not perfect. However, we are happy to see the provision that amends the Canada Student Financial Assistance Act to eliminate the accrual of interest on student loans as of April 1, 2023, and the provision that seeks to phase out flow-through shares for oil, gas and coal activities. Obviously, we welcome that.

The pandemic made it clear just how much desperately the Quebec health care system needs help. As we speak, the three emergency rooms in the Laurentides—Labelle area are alarmingly overcrowded. I have to say it. The occupancy rate in the small municipality of Rivière‑Rouge is 80%. It is 167% in Sainte‑Agathe‑des‑Monts and 240% in Mont‑Laurier. The holidays have not even begun yet. The numbers speak for themselves. We need those transfers, and we will not give up.

In my riding, the holidays also herald the arrival of vacationers and, potentially, higher demand on our emergency services. It seems the government is trying to divide and conquer. It has been aware of this request, which has been made repeatedly, for quite some time. I get the impression it is trying to wear us down, but at what cost? Unfortunately, there may be accidents on ski hills this winter. Where are people supposed to go? There is no more room.

To take care of our people, we need our money to be transferred to our province and the other provinces. Quebec's health care system needs the means to care for Quebeckers. My sense is that the federal government is more interested in politicking. Enough is enough. I am not looking forward to rising in the House again this winter with updated occupancy rates.

Unfortunately, when Canada's health ministers met in Vancouver in November, the Liberal Party's attitude was just as condescending and disdainful as ever when it comes to provincial jurisdiction. I do not appreciate that at all. ER doctors are telling us that ERs are at a breaking point. The federal government has our money, but it is not doing anything.

The Bloc Québécois is defending the united position of Quebec and the provinces, and we are asking that the health transfers be increased from 22% to 35%. Unfortunately, taking care of people does not seem to be the Liberals' number one priority. In health care, the results are not there when it comes to ensuring the dignity of seniors with sufficient quality of life and financial support.

At the start of the pandemic, I had the opportunity to ask the former governor of the Bank of Canada, Mr. Poloz, some questions. He appeared before the Standing Committee on Finance, which was studying the COVID-19 emergency measures. When we spoke about EI as an economic stabilizer, he mentioned that it was important. We took action. In the current context, I am wondering why we cannot use what worked in the past to deal with what we are going through now. There are proposals on the table, and we will vote in favour of this update even though there are a number of things missing.

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

Madam Speaker, there was a time when the provinces and Ottawa got together on health care and the provinces would say they did not want more cash; they wanted a tax point transfer. They got a tax point transfer as opposed to receiving cash. That took out billions of federal dollars going to the provinces. Now we hear the Bloc saying that Ottawa should be nothing more than an ATM machine, and that when the provinces want cash, we should just give them cash. That does not recognize the history of what has taken place.

Does the member believe that Ottawa should never have given the tax point transfer, and that instead of giving the tax point transfer, it should have stuck strictly to giving cash?

Second, does the member not recognize that there is an obligation for the Government of Canada, through the Canada Health Act, to provide health care services, something I personally believe in?

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Madam Speaker, I thank my colleague for the question.

However, for the people watching, I would like to point out that decades ago, 50% of the tax dollars collected by Ottawa were transferred for health care. There was never any question as to whether the provinces were able to deliver services. No, the fact of the matter was that Ottawa trusted them and it had other things to manage.

The day that this government can demonstrate that it is properly managing what it is supposed to manage, we will stop saying that we need health transfers. Let the provinces do what they are good at in health care.

[Richard Lehoux, Conservative, Beauce, QC]

Madam Speaker, I thank the hon. member for Laurentides—Labelle for her presentation.

I just have one question. She talked a lot about her riding. I assume that, like me, she saw very little in the way of improvements to telecommunications and the cellular network. In my opinion, concrete action is needed to improve the cellular network as a matter of public safety.

Could the member share her thoughts on that?

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Madam Speaker, as I said earlier, this is just a rehash of the budget, but it took a pandemic for the government to say that high-speed Internet is an essential service.

Now, when we talk about public safety, the government points out that there is broadband, but if there is no electricity, what will our providers or people who live in more remote areas without cellphone coverage do? Again, we will have to wait months for the government to say that it is an essential service.

That is one of the shortcomings of the economic statement.

[Don Davies, NDP, Vancouver Kingsway, BC]

Madam Speaker, the great Canadian economist Jim Stanford just published a report through the Centre for Future Work, and he found the following:

...15 sectors...were...the source of the fastest price increases experienced in Canada since 2021. Products like gasoline, groceries, mortgage interest, home energy products, and building materials have led the acceleration of inflation—and those higher prices flow directly into the record profits recorded in those 15 sectors. Large price increases for just 8 specific products sold by those super-profitable sectors account for over half of the rise in Canadian prices in the latest 12-month period; without those 8 products, overall Canadian inflation would be one-third lower.

Does my hon. colleague agree with the NDP that unless we attack the record profits and excess profits made by these corporate sectors, we are not going to get a handle on inflation in this country?

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Madam Speaker, I thank my colleague for his question.

I am not a tax expert or an economist, but what I do know is that we need to listen to scientists, to those who are recommending measures to offset this inflation. We saw it with the key rate, which continues to rise, even though inflation is still very high. Nevertheless, I rely on science and everything that will be proven to help us deal with what is coming. We all know that winter is going to be difficult, both in terms of our health and our finances.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Madam Speaker, it is an honour to rise in the House to represent the people of London—Fanshawe and to speak to Bill C-32 today.

There are a lot of issues that have been raised in this bill that we have been talking about for a long time. We have been fighting for Londoners, of course, but fighting for a fairer economy and bringing that voice into this place.

There are a lot of pieces of this bill that we think are a good start and reasons we support this bill, but as usual there is a lot lacking. As a New Democrat, I work, I push and I continue to fight for so much more for the people of London—Fanshawe. One of the key points is that we are supporting the removal of the federal portion of interest on student loans. That could make a real difference for students.

I was formerly the post-secondary critic for the NDP in this place, and we fought for so much more. We called for the cancellation of up to $20,000 of federal debt per student and a break from that repayment. We made it retroactive. We talked about going even further. Ultimately, the government is making money off the backs of our future, off those who will contribute to our economy in so many ways through the education system, and that is very short-sighted. We could go so much further, but it is a good start.

On the windfall tax, we support some of these measures, but the government could do much more if it had the political courage to go further. Big banks, big box stores and oil and gas companies have made record profits from COVID.

If we had raised that proposed 15% and made it permanent, we would see an extra $4.3 billion in the federal coffers. We could reinvest that in people and in social programs that establish the solidity that people need. The equity that people can get from social programs is the role of government, not to play catch-up to big corporations that are at the very top.

We have concerns with this bill, because it does not go far enough. As New Democrats, we were fighting in the last Parliament to deliver supports under the CERB and the wage subsidy to handle and to deal with what people were facing with COVID-19. When the government provided those supports and said it had people's backs, people needed that and they believed it.

Now we see the government clawing that back. It is clawing back the benefits that people applied for in good faith. There are people I know, who come to my constituency office, and do not know where to turn. They count on the government to provide fairness and support, and they are not seeing that.

I was here a few weeks ago with my hon. colleague from Elmwood—Transcona. I am always awed by his ability to give a speech in this place, off the cuff. He has so much knowledge within.

Something he was talking about really stuck with me. It was the need for respect and the call for the respect that people deserve. They work so hard, play by the rules, do everything they are supposed to and do everything the government asks of them. They are paying their fair share in taxes, yet when they need the government to help them, it is not there. They become frustrated and angry. They do not know where to turn.

It is that need to show respect that is a piece of the tax fairness we talk about. The government has to find the right balance to show that respect to Canadians. It has to have the courage to ask those who make the most in this world to redistribute those excess profits and to not take advantage of people who are just trying to get by and who are just trying to feed their families. They need to pay their fair share.

I am so happy to see that my colleague from Cowichan—Malahat—Langford has championed this issue and has received unanimous support to investigate the greedflation from grocery stores that we talk about, at the agriculture committee. However, it is clear that the $1 million a day that Loblaws makes in profits, because it is taking advantage of people, is driving inflation. It has to be a part of that fair taxation.

According to the new study released by the Centre for Future Work, 15 profitable industries, including the grocery sector, are driving inflation in Canada. The combined profits of these 15 sectors are up by a whopping 89%. Nobody's salaries are up by 89%. People feel that, and they see that unfairness. They are asking for solutions from the government.

The windfall tax that we have been calling for on excess profit could go so far in systems that are now in crisis. That is because of underfunding and government cuts and because of downloading of responsibilities from the federal to the provincial government and from the provincial to municipal governments.

We are seeing that in our health care system. In my hometown of London, Ontario, hospitals have seen a surge, like so many across this country, especially in the children's hospital. Patients are waiting up to 20 hours for service.

I cannot imagine being a parent and watching my child suffer. It is one thing for parents to take that on themselves and try to deal with it, but they have to watch their child go through that, to suffer in a hallway, to wait and then to be told to go home. Surgeries are being cancelled in London, because they cannot deal with the influx of patients. People take their kid home and they are suffering. I cannot imagine what that has done to families.

Now people in London are, in an innovative way, trying to deal with those long wait times in emergency rooms. London Health Sciences Centre is trying to change how it structures its emergency room policies. It is trying to create a separate emergency room system for those dealing with mental health crises and addiction crises. It is trying to make something work.

The Doug Ford Conservative provincial government said that it is not going to fund it, and that the city needs to take the burden of that cost. It is $300 million on a city in Ontario that cannot carry a deficit, and it has to somehow figure out how to service the people in our municipality and not overburden the taxpayers.

One of the things regarding inflation that we have heard is that the government is at fault and it is overspending. Conservatives have a very simplistic view that it is just about taxes. We know that is not true. The Conservatives will not accept the fact that, even though there are studies about it now, including the one that I just referenced, this could potentially be about greed.

I will come back to the point that the member for Elmwood—Transcona was making about respect. Instead of continuing to protect big corporations, if we could implement true tax reform to make these companies that are making massive excess profits pay their fair share and to hold those wealthy friends accountable, then that would be respect. That would be showing the Canadian public that we are willing to do the work, and that we have the courage to stand up to ensure they have that fairness and they see that fairness.

One of the problems that I also see is regarding the Bank of Canada and its continuous pursuit to hit that 2% target, yet in that lies the potential of a recession. If it hits that 2% target, it could risk 850,000 jobs. There are already people desperately trying to make ends meet, and now they have to worry about losing their job and figuring that out.

London has such a proud manufacturing history. There are McCormick, Dr. Oetker, Labatt, Indiva in my riding and Environize. There is a place called the Cakery. There are so many places and I wish—

[The Assistant Deputy Speaker, Carol Hughes]

The member's time has expired. I am sure she will be able to add more during questions and comments.

Questions and comments, the hon. member for Kings—Hants.

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

Madam Speaker, my hon. colleague touched on the profits of grocers. As the chair of the agriculture committee, I had the privilege of listening to some of the testimony yesterday from corporate leaders in the grocer sector in Canada. They maintain that even during the pandemic, their margin was around 2% to 4% on food-related profits.

The member talked about excessive profits, and I can appreciate that this government has made important investments and made sure banks and insurance companies have been paying additional corporate taxes.

However, what is her definition of “excessive” as it relates to grocers? Is 2% to 4% excessive in her mind? That is an honest question so we can see where that basis might be.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Madam Speaker, I would imagine $1 million a day is pretty excessive. Grocers can talk about it being about the supply chain and so on, yet the amount of money they are making, is $1 million in profits a day. We could talk about the bread price-fixing scam and that they never really paid that money back. We could talk about the money that they were given by the government to improve their refrigerators, money that they were going to invest in their own companies anyway, but the government rushed to the rescue and gave them more taxpayers' dollars. It is the same pockets, but it is just in different ways that taxpayers have to pay.

It is not the government's job to defend companies. Its job is to equalize payments, taxes and programs to ensure equality.

[Sylvie Bérubé, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Madam Speaker, I thank my colleague for her speech. I think there may be one thing she forgot to talk about, and that is employment insurance.

As we know, EI is an economic stabilizer during a recession, and we hear there may be a recession in 2023. I am worried for the people in my riding with respect to EI, because six out of 10 workers will not be eligible for EI.

After seven years, the government still has not made a move. What does my colleague think the government should do to finally reform EI?

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Madam Speaker, I was taking too much time and that was the next point in my speech. It was about those workers and how they have given to the EI system. However, because successive Liberal and Conservative governments have used it to pay off debt and make themselves look better in terms of their bottom lines, they have taken advantage of that money and, at the same time, restricted how workers can use EI when they need it. This is a huge fear, and it is what New Democrats have been fighting for in order to ensure EI fairness.

One of the things we want to do is introduce a service guarantee that will make departments responsible for establishing and publishing binding service standards for programs like EI. That would be a start, but ensuring we strengthen it to allow more workers to access it is really key.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, at the end of my colleague's speech, she talked a bit about layoffs, and we know that in the fall economic statement the government was beginning to hint at the possibly of a recession early in 2023. However, we have not seen the government's much-promised and vaunted EI modernization.

I am wondering if the member wants to talk about the importance of EI reform as we head into a potential recession.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Madam Speaker, I thank my hon. colleague for all of his work on this file.

This is really key and something that New Democrats, for a long time, have been fighting for. We have been trying to ensure we are protecting the deferred wages that workers are putting into that system, so they know they are there and they will be allowed to access them when they need them. Those are the key things. It is not about ensuring that governments can use them to prop up what they consider is a balanced budget.