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

[Michael Kram, Conservative, Regina—Wascana, SK]

Mr. Speaker, the Conservative Party is in favour of a one-for-one policy when it comes to government spending. For every new dollar of government spending we should find one dollar of savings somewhere else. I do not think that is very difficult to do when one considers that the Canada Infrastructure Bank cost $30 billion but has not delivered a single project, and when one looks at the ArriveCAN app that cost $54 million.

I am sure, with a little effort, we could find savings elsewhere in government to fund a very worthwhile program like CIPSRT.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Mr. Speaker, discussions about investing in mental health, especially for first responders, always resonate with me. There are reasons why mental health deteriorates. It may be a lack of support, for example. Over the past 30 years, there has been a lack of support from the federal government. It is time to admit it and do something about it.

Health transfers have been inadequate and, as a result, governments across Canada have had to cut spending to ensure the sustainability of services, which has had an impact on first responders.

I would like to hear my colleague's comments on the importance of health transfers and the fact that the federal government should not interfere in the jurisdictions of the provinces and Quebec and should look after its own affairs instead.

[Michael Kram, Conservative, Regina—Wascana, SK]

Mr. Speaker, my view is that it is the role of provincial governments to deliver and implement a lot of these programs. The federal government's focus should be on research into new treatments and technologies that can be used across the country and across the world. That is where I think CIPSRT is in a unique position, in that it does not just talk about the problem, but it has actually developed solutions. It is asking for a rather modest funding allocation of several million dollars to scale up its research and make it available across the country to benefit first responders and everyone.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Mr. Speaker, the member focused a lot on rising crime. I was in the House, as were many members, when the former Harper government destroyed the network of national crime prevention centres. That made no sense at all because, as we know, one dollar invested in crime prevention saves six dollars in policing costs, court costs and prison costs, yet the Harper government, reprehensibly, absolutely destroyed the network of national crime prevention centres that did such good work in preventing crime across the country.

The Conservatives would be right to criticize the Liberals for not re-establishing those crime prevention centres, but the reality is that Conservatives wear the fact that they destroyed the bulwark against crime in this country.

Why did the former Harper government and the Conservatives destroy the national crime prevention network that did such great work in preventing crime in our communities?

[Michael Kram, Conservative, Regina—Wascana, SK]

Mr. Speaker, the member's question is quite a bit beyond the scope of my intervention. There will always be violent crime, sadly enough, and there will always be earthquakes and car crashes. I hope there will always be first responders to help people when they are suffering some sort of tragedy or crisis. The mental health challenges will always be there as long as we have first responders doing their jobs. It would be nice if we could provide some more support for our first responders, as I outlined in my intervention.

[Gary Anandasangaree, Liberal, Parliamentary Secretary to the Minister of Justice and Attorney General of Canada]

Mr. Speaker, it is an honour to speak in support of the fall economic statement. Let me begin by acknowledging we are all gathered here on the traditional unceded lands of the Algonquin people.

I want to acknowledge that yesterday the mayor of the city of Toronto appointed my municipal colleague, Dr. Jennifer McKelvie, as the deputy mayor for the city of Toronto. I want to congratulate her on this enormous responsibility she has. I have every confidence she will serve the people of Scarborough—Rouge Park as well as the people of the city of Toronto exceptionally. I look forward to working with her and the mayor as he starts his third term.

There are a number of things in the fall economic statement, but the most glaring issue I see is the current economic situation faced by Canadians. Inflation, although it has tapered down a bit from its high, is at 6.9% and has been persistent for the last couple of months. We had our constituency week last week, and many of us in the House were able to speak to families, individuals and students about some of the challenges they have. Many spoke to me about the increasing cost of living, the increasing cost of housing, transportation and gasoline. They talked about some of their anxieties, especially students who attend the U of T Scarborough in my riding, as well as Centennial College.

Canadians have been struggling a great deal over the last several months, but I want to assure them that, as a government, we are here to support them. We are here to ensure affordability remains front and centre in the work we do and to make sure we are there for them every step of the way. In fact, this is the reason we brought forward several months ago, and the cheques went out two weeks ago, the doubling of the GST credit. This has a significant impact on millions of Canadians who need the support.

We have also adopted dental care for young people with family incomes of less than $90,000. There is no question that it is a critical component of what is required for the health and well-being of Canada's youth. Unfortunately, many families simply are not able to afford it, and this is a very important step in ensuring young people have dental care.

We have been building supports for Canadians since 2015. The Canada child benefit, for example, supports young people and families across Canada. In my riding alone, it has had a significant impact on addressing the issue of poverty among our young people, and that is something we can all take pride in. As a government, we work very hard and diligently to make sure we target supports to those who need them and not give cheques to millionaires and those who really do not need them. It is a means-tested approach, one that is very smart and has had a significant impact on addressing the issue of poverty.

The adoption of $10-a-day child care in Ontario is a game-changer for many families. Look at how we are supporting, for example, someone with two kids in child care. We are talking about thousands of dollars in savings on an annual basis. It is something that is going to change our workforce. More women will enter the workforce, and they will be supported by the government. With the introduction of $10-a-day child care in Ontario, this year alone child care expenses will be reduced by 50%, with a goal of it being reduced to $10 a day. That too is a very important aspect of addressing the issue of affordability.

The national housing strategy is another perfect example of how we are addressing a number of things, including chronic homelessness, the need for transitional housing as well as affordable housing within the market space. We know there are many different players.

In Scarborough—Rouge Park, for example, we have a number of initiatives, one that we just announced several months ago with Fred Victor. We have modular housing being built, which will be available, with the proper supports, for those who need it. In fact, that is being replicated across not just the city of Toronto, but across Canada. It is also supplemented. We have a project called 250 Brenyon Way, which the national housing strategy and the CMHC are intricately involved in providing those supports.

Given the limited time I have, I would like to speak to a key aspect of the fall economic statement, namely the elimination of interest on student loans, the Canada student loan program as well as the Canada apprenticeship loan program.

I have always said, and I have repeated it many times in the House, that education is the ultimate equalizer in society. If we look at it, whether through history, youth, people in the House, or my personal lived experience, education has certainly given me the tools to do the things I do. Whether as a lawyer, someone who was previously in business or working with youth, it has given me those skills.

We know that the youth of today need that formal education. Whether they go to college, university or enrol in apprenticeship or trade programs, they need that education to compete in this world. We have seen some phenomenal successes whether in AI or health care. We have seen an enormous amount of young people rising to the challenge with respect to COVID–19 or developing state-of-the-art technologies.

I cannot tell members the number of times I have met people, whether during Christmastime or the summer, who have gone from Canada to the Silicon Valley or to other countries, such as Germany. Very recently I spoke with someone who went to Finland to work in a high-tech firm. However, oftentimes young people are very apprehensive of going forward with such a huge debt, if they or their families do not have the means to support it. We know that programs such as law and medicine, in particular, have a very high cost of tuition, with the assumption that once students finish the program they have the ability to earn a higher income.

The challenge, and this is very true for many racialized first generation or indigenous peoples, is that the burden of the high level of debt they would have to incur to pursue a specialized program, or any program, can be a deterrent to them being able to pursue post-secondary education or training. Therefore, the elimination of the federal interest portion on the student loan program is a game-changer.

I was able to drop by the University of Toronto's Scarborough campus, as well as Centennial College, to speak with some of the students. They are very happy about this elimination. I have also spoken with some people who have already graduated and are working. They also feel this is a very important measure that will allow them to be more secure and save some money over the next few months. I am really pleased to support that.

With that, I look forward to questions and comments from my friends.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, the Parliamentary Budget Officer identified $14.2 billion of new spending in the fall economic statement that had no details attached to it. Effectively, it is a blank cheque for $14.2 billion that the government is asking parliamentarians to accept.

Why is that member supporting more inflationary spending when we know that Canadians are hurting? The right thing to do would be to not give a blank cheque for $14.2 billion to the federal government?

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

Mr. Speaker, I have spoken to a number of people who are well versed in economics, more so than myself, and I can assure members that the measures we have put in place are very measured. They would allow Canadians to have support without contributing to inflation.

I am very confident, as is the Minister of Finance, that this fall economic statement is prudent and is one that reflects the current needs as well as the current realities of inflation.

[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.