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

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I must admit that this morning I am feeling a bit frustrated. I am sick and tired of seeing the Liberal government drop their little announcements here and there to get positive media coverage.

The Liberals tell us that they are handing out $500 for rent and then complain that the opposition parties think it is not enough.

Of course it is not enough. Of course we agree when they say that it is better than nothing. We will take the $500, but that is a ridiculous amount when we consider the real cost of housing. What we need is a massive investment in social housing.

It is the same thing when they say that this year people will receive roughly $400. Of course we will take it, but these are not meaningful measures. When I talk about meaningful measures, and I am sick of pointing this out every time I stand up, I am talking about an increase to old age security starting at 65.

I think this shows a serious lack of respect for our seniors, who are struggling to buy groceries. The Liberals merrily make their little announcements and then they will tell me they have helped seniors. I want a real answer.

When will they increase old age security starting at age 65?

[Gary Anandasangaree, Liberal, Scarborough—Rouge Park, ON]

Mr. Speaker, I find it hard to believe that the member opposite is suggesting we have not made structural changes.

I can assure members that the Canada child benefit is the single biggest contributor to the reduction of poverty among young people. I can assure him that the introduction of the $10-a-day child care, although it has existed in Quebec for many years, will be a game changer in Ontario. The elimination of interest on the federal student loan program is critical. Dental care for young people is critical.

I would ask my friend opposite to rethink his perception of the things we have done.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Mr. Speaker, I want to make an important comment in relation to labour, which I think would benefit all members of the House. There is no question that there is in fact a war on workers. We are seeing it in Ontario, and it is going to be happening soon in Alberta.

Labour was happy to see the government move on the demands of the New Democratic Party in relation to anti-scab legislation and to the UTIP program, which benefits training centres across union halls in the country. However, one area that is a massive deficiency within this fall economic statement is EI reform. The labour movement has been pushing for this for a long time.

In the fall economic statement, we saw comments about an upcoming recession. Now is the most important time for Canadians who are contributing to EI. They need to see that working for them. That program needs to be enhanced. The government promised to do it; it has not done it yet. When will it?

[Gary Anandasangaree, Liberal, Scarborough—Rouge Park, ON]

Mr. Speaker, I want to thank my friend for his hard work on a number of files.

I had the opportunity to meet with members of Unifor a couple of days ago, and many of the issues the member identified were brought up, including the anti-scab legislation, which is coming forward from the Minister of Labour, and the need for EI reform.

One thing we have to look at is that during the pandemic, during the worst economic crisis our country faced, our government was there for Canadians every step of the way. As we go forward, I can assure all members in the House, particularly my friend from the NDP, because there is consensus on how we need to support workers, that we will work with him and his party to achieve what is right for workers.

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

Mr. Speaker, we are here today to discuss the government's Bill C‑32.

Regular people will probably have a better idea of what I am talking about if I refer to it as the economic update. For most people, “Bill C‑32” does not mean much at all.

Typically, an economic update tweaks the budget tabled earlier that year. Early in the year, in March, the government announces measures for the coming year. Over time, it becomes clear some small adjustments are needed. That is why we get an economic update in November. We expect those announcements to be on a smaller scale than those in a budget.

The Bloc Québécois brought up three major priorities it wanted to see in the economic update. One of these priorities was an unconditional increase in health transfers; it is not there. Another priority was an increase in old age security for people aged 65 and over; it is not there. The third was a comprehensive reform of employment insurance because, as we know, people suffered immensely during the pandemic and because there were already problems with the program before COVID-19. That is not there, either, and yet we are slipping into a recession.

It is sad to see how the government was unable to hear these three major priorities put forward by the Bloc Québécois, priorities on which the vast majority of Quebeckers agree. However, there is something else I will focus on. In the economic update we see yet another example of the federal level's contempt or arrogance in an area of infrastructure that is very important to Quebec.

I will give a brief overview. The federal budget announced last spring contained a little line of text that went virtually unnoticed. A budget often has 300, 400 or 600 pages. It takes a long time to read. When we need to comment on the document, we obviously focus on the key elements. Afterwards, we look at the details to see whether something was missed.

That may very well have been the government’s intention. In fact, that little line in the budget has big consequences for Quebec. This part of the text essentially says that, under the investing in Canada infrastructure program, the deadline for submitting projects, initially March 31, 2025, is brought forward to March 31, 2023. That means two years less to submit important infrastructure projects that are a priority for Quebec and the other provinces—except that, in the case of Quebec, there is something more.

The federal government and the Government of Quebec signed a bilateral agreement. The parties negotiated how this money would be allocated, since 90% of infrastructure assets belong to Quebec and its municipalities. It is clearly a Quebec jurisdiction, and that is why an agreement had to be negotiated.

These few words in the budget made us realize that the federal government could decide not to honour the agreement it negotiated with Quebec. We then went fishing and talked to the Bloc Québécois’s research department. We were told that it was probably not true, that the federal government would not do that, since it had a signed agreement with Quebec. We were told that it must apply to the other provinces, but that, since the federal government had a signed agreement with Quebec, it would surely honour it.

Despite everything, we still had concerns, and we wanted to know more. It is important to understand that this is an infrastructure agreement worth $7.5 billion, which is a lot of money. When we found out about the deadline change, $3.5 billion in the total envelope had not yet been spent, and we knew that an election was coming. With the fall election, we would end up in November, and there would be only a few months to submit billions of projects. That would be virtually impossible. It is a bit like having a gun to one's head.

Since the federal government and Quebec had an agreement, we figured that it must not be true. We asked the minister some questions in parliamentary committee. I asked the Minister of Intergovernmental Affairs, Infrastructure and Communities what the deal was. We were concerned.

He told us quite candidly that he would take the money back if it had not been spent and the projects were not submitted to the federal government by March 31, 2023. He said that, in any case, other provinces wanted the money and that they too had projects. If Quebec did not submit the documents on time, that would be too bad, it would lose billions of dollars. That is what the minister told us in committee.

The worst part is that there was another component. There was still $342 million unspent in phase 1 of the agreement. According to the agreement, if the money for public transit was not spent in phase 1, it could be used in subsequent phases. I asked the minister what would happen with the $342 million, since the signed agreement says that we can use the phase 1 money in subsequent phases. He said that it would be returned to the consolidated fund.

The money was returned to the consolidated fund, and $342 million was essentially stolen from Quebec, without a word. If we had not seen those few words hidden in a corner of the budget, no one would have ever known. Unbelievable. That is how the hypocrites across the aisle work.

When we learned of this, we were obviously livid. We contacted the Quebec office in Ottawa so that it could notify minister Sonia LeBel. We spoke to our mayors, who were very upset. I must say that they could not get over the fact that the federal government had done something so disgraceful. We also spoke to the Union des municipalités du Québec, or the UMQ. Everyone was angry, everyone said that it was outrageous. The UMQ made a public statement asking the federal government to honour its word, to honour its signed agreement with Quebec. I spoke about this to Sonia LeBel, who was then the minister responsible for government administration and chair of the Conseil du trésor. She told me that she would continue to negotiate with Ottawa. She was hopeful that we could reach an agreement by working together. She told us she would not back down.

The same thing is happening again with the economic update. Despite all that was said by the Union des municipalités du Québec, the Bloc Québécois, the Quebec government and our municipalities, which will lose billions of dollars for infrastructure projects, the federal government arrogantly says that it is going ahead and that the municipalities will lose the money.

That attitude is completely mind-boggling, and I do not understand the reasoning behind it. I am certainly eager to hear what explanation the government gives me in the question and answer period that is coming up later, because I really cannot imagine what it could be. The only possible explanation I can see is that the government is basically on a power trip.

It wants to prove that it is the boss. Everyone else can drop dead. They have to do what the federal government tells them to do. It is going to show them who is in charge and put them in the corner.

That attitude is simply disgusting. An agreement was signed. Two partners sat down at a table and made a commitment after hours or days of negotiations. They signed an agreement and shook hands to seal their commitment to that agreement. Then the federal government ditched the agreement and did as it pleased, because it is the boss. That is the message the federal government is sending. It takes the money that is paid by Quebec taxpayers and intended for Quebec infrastructure projects, and then it threatens to send the money elsewhere.

I am sorry, but Quebeckers pay income tax like everyone else, so they are entitled to their share. This type of behaviour is totally unacceptable. In my eyes, it is theft. The federal government is acting like the mafia, like gangsters. There is a word for what it is doing, and that word is racketeering, meaning extortion through threats. That is what it amounts to.

The government told Quebeckers that they had two years left to submit projects, but now they only have six months and they just have to deal with it, because the federal government is the boss. That is the message the federal government wants to send, despite the fact that municipal infrastructure falls under the jurisdiction of Quebec and its municipalities, and the federal government has nothing to do with it. Why does the federal government persist in sticking its nose where it does not belong? Why is it incapable of sticking to its own jurisdictions?

If we Quebeckers cannot get our own money, the money that is due to us because we pay income tax like everyone else, the only way to get our money and our share is to control the funds ourselves, and that means forming our own country. I hope Quebeckers will remember this. I hope the municipalities will remember this. I hope the federal government will finally listen to reason.

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

Mr. Speaker, there is a fundamental flaw, which the member started to highlight at the very end, and that is the fact that the member is a separatist. He does not want Canada. He wants to see Quebec separate from the rest of Canada. He does not recognize that the national government does play a role, even though a majority of the people in Quebec, Manitoba and Canada believe that the federal government has a role in infrastructure, health care and many other areas in which we work alongside the stakeholders.

That is the difference. We recognize that to build a healthy, strong, united Canada, one needs a national government that reflects the interests of the population as a whole. That is why we continue to work, day in and day out, with provinces, indigenous communities, municipalities or other stakeholders in the best interest of all.

Does the member opposite not recognize that even his own constituents, a very large percentage of them, want federal participation in many of the programs that the member just spoke out against?

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

Mr. Speaker, it is interesting to hear the parliamentary secretary's comments. What he basically said is that my speech, my opinion, my point of view are not valid because I am a separatist, some shady character who is dangerous. They refuse to listen. No matter what we say, it will be rejected.

Well, I say to him that his actions actually fuel separatism and the desire to be independent. My colleague asked what my constituents want. What they want is to get their money from Ottawa. That is what they want. What Ottawa is doing is unacceptable, and my constituents will not forget it.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, as an Albertan, I agree with some of what the hon. member says. Many Quebeckers and Albertans have the same problem with the federal government. The federal government thinks that it has all the good ideas and that no good ideas come from our provincial capitals.

With respect to health transfers, the provincial ministers of health and the federal Minister of Health are always fighting over who has control over our health systems. As an Albertan, I believe that my province is best equipped to manage our health care system.

I would like to hear more from the hon. member from Quebec.

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

Mr. Speaker, I would like to thank my colleague for his very pertinent question.

Basically, he is asking about health transfers. That is interesting, because my speech was about infrastructure and what the federal government is doing, sticking its fat nose in other people's business and blackmailing us with a gun to our head.

The exact same thing is happening with health transfers. It is exactly the same situation. It will undoubtedly be the same story in all sorts of other files, because the federal government wants a central government where it controls everything and where the provinces have no say. Quebec will end up being entirely sidelined, and that is exactly what we do not want.

[Lori Idlout, NDP, Nunavut, NU]

Uqaqtittiji, there are 16 Northern stores in northern Quebec. Northern showed profits of $13.2 million, and it is subsidized by the nutrition north program.

I wonder if the member agrees that the Canada recovery dividend proposed in this bill needs to be extended to the profits of grocery stores, which are in the millions of dollars.

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

Mr. Speaker, I heard my colleague's question, but I must say that it did not have much to do with my speech.

However, I know that my colleague is from the riding of Nunavut. It is useful to point that out, because we are jealous of the Canada-Nunavut infrastructure framework agreement. Interestingly, the earlier deadlines apply to the provinces, but not to the territories.

Perhaps a member from across the aisle can tell me why the government decided to push up the deadlines for the provinces and not for the territories. I am okay with the fact that it did not push up the deadlines for the territories, but why did it not do the same for the provinces?

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

Mr. Speaker, it is an honour to rise to speak to Bill C-32, the fall economic statement implementation act.

At the outset, one of the things I find extremely confusing, and I heard the Bloc say it this morning, is that the government has not tried to help Canadians during such a difficult time to deal with inflation, the inflation we are seeing not just in Canada but indeed throughout the world.

I will speak to that, but before I do, I want to read a quote. It says, “government is ruining the Canadian dollar, so Canadians should have the freedom to use other money, such as Bitcoin.” Are there any guesses where that quote came from?

[An hon. member]

Is it Donald Trump?

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

Mr. Speaker, no, it was not Donald Trump, but his protege in Canada. That would be the member for Carleton, the official Leader of the Opposition.

He actually said those words. He said Canadians do not have faith in the Canadian dollar, so they should be able to use other forms of money. From his position of leadership, he was encouraging people to not trust the Canadian dollar, but to instead trust cryptocurrency, such as Bitcoin. I do not have to tell anyone what has happened to Bitcoin, not just over the last several months but indeed what we have seen in the last week.

Not only have we seen the collapse of cryptocurrencies, but now there is the new revelation of FTX and the games it was up to in order to create liquidity within its business, the experiences of bank runs that occurred as a result of that, and the collapse of their coin, seeing as much as $1 billion to $2 billion go missing. We are seeing what happens when there is no government control or government-backed currencies. That is exactly what we are seeing with the collapse of cryptocurrency and the revelations that are coming about as a result of the businesses that were heavily involved in cryptocurrency and investing in it.

This is where we are today. The member for Carleton has his famous video of when he bought that shawarma and paid for it with cryptocurrency. Let us assume he bought that Bitcoin in order to make that purchase. Who knows what he bought that Bitcoin for. Did he buy $10 worth of Bitcoin to make that purchase? What would that have cost him today? How much more Bitcoin would it have cost him to buy that shawarma today? It probably would have been about four or five times as much Bitcoin.

If we want to talk about inflation, the shawarma that he bought so famously and proudly using non-government-backed currency would cost him about four or five times as much today.

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

Mr. Speaker, on a point of order, are we debating a Conservative fall economic statement or are we debating the Liberals' fall economic statement?