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

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

moved that Bill C-32, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 3, 2022 and certain provisions of the budget tabled in Parliament on April 7, 2022, be read the third time and passed.

[The Deputy Speaker, Chris d'Entremont]

Pursuant to order made on Tuesday, November 15, the House will now proceed to the consideration of Bill C-32 at the third reading stage.

[The Speaker, Anthony Rota]

It being 3:18 p.m., pursuant to order made on Thursday, June 23, the House will now proceed to the deferred recorded division on the motion at report stage of Bill C‑32.

Call in the members.

The House resumed from December 6 consideration of Bill C‑32, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 3, 2022 and certain provisions of the budget tabled in Parliament on April 7, 2022, as reported (without amendment) from the committee, and of Motion No. 1.

Post-Secondary Education

[Randy Boissonnault, Liberal, Minister of Tourism and Associate Minister of Finance]

Mr. Speaker, I thank my colleague from Dorval—Lachine—LaSalle for her question and her hard work.

With the increase in the cost of living, our government has been quick to act and provide support to Canadians who need it. We are continuing this support with our fall economic statement and Bill C‑32 by including the elimination of interest on student loans. This will help students and new graduates. We will ensure that Canadians have money in their pockets.

The Conservatives can support us here within the hour by voting in favour of Bill C‑32.

Carbon Pricing

[Terry Duguid, Liberal, Parliamentary Secretary to the Minister of Environment and Climate Change]

Mr. Speaker, all of us, on all sides of the House, are concerned about the affordability challenges of Canadian families, except on this side of the House we are doing something about it. The Conservatives can redeem themselves in just a few short minutes by voting for Bill C-32.

As the hon. member will know, as the price on pollution increases, so does the climate rebate. Unfortunately, the hon. Leader of the Opposition does not support that. He supports investing in cryptocurrency. Canadians are losing their shirts, and that is very unfortunate.

Auditor General

[Diane Lebouthillier, Liberal, Minister of National Revenue]

Mr. Speaker, the only thing this party is good for is regurgitating what their leader tells them and repeating the word “triple”.

Imagine what would happen if, instead of singing from the same hymn sheet, they took a look at real issues such as tackling global challenges, supporting Canadians, supporting families, supporting seniors and protecting the environment. Then again, in order to do that, they would have to take on some real problems, and they are not capable of doing that.

I urge them to vote for Bill C-32 this afternoon.

Finance

[Diane Lebouthillier, Liberal, Minister of National Revenue]

Mr. Speaker, I want to thank the Auditor General and her entire team for her important work and for tabling her report in the House yesterday. I want to say that I have the utmost respect for the Auditor General, her role and her independence. As we have said before, we appreciate the fact that she has confirmed that our COVID-19 benefits were effective.

We will not be distracted. Canadians have given us a mandate and we will continue to be there to support them. I urge my colleagues to do the right thing and vote in favour of Bill C-32 this afternoon.

The Economy

[Randy Boissonnault, Liberal, Minister of Tourism and Associate Minister of Finance]

Mr. Speaker, we greatly respect the efforts that working men and women are making to build a prosperous Canada. We know that Canadians are going through a difficult time during this global inflationary cycle. That is why, here in Canada, the Bank of Canada is independent. Its role is to reduce inflation to a 2% target rate. As the government, we take action to put money in the pockets of Canadians who need it, when they need it.

That is why it is essential that every member of the House vote in favour of supports for Canadians and help us by voting for Bill C‑32.

[Randy Boissonnault, Liberal, Minister of Tourism and Associate Minister of Finance]

Mr. Speaker, as the hon. leader of the New Democratic Party knows, the Bank of Canada is an independent institution that has been tasked, since December of last year, to get inflation back down to 2%.

The bank is doing its job. We are doing our job, which is making sure that we have the fiscal firepower to face what is to come, investing in Canadians and supporting the Canadians who need it the most. That is why we are helping Canadians to buy a new home, advancing the payments for workers' benefits and making sure that student loan interest gets removed forever.

This is the right thing to do. It is the responsible thing to do. It is why we hope that all parties vote with us on Bill C-32 today.

[Randy Boissonnault, Liberal, Minister of Tourism and Associate Minister of Finance]

Mr. Speaker, the member opposite knows very well that the Bank of Canada is an independent institution.

It is true that this is a difficult time for Canadians. It is not true that the investments that we made in Canadians have caused inflation. One need only look at the report of the former governor of the Bank of Canada, Stephen Poloz, which indicates that our investments prevented a period of deflation.

Within the hour, the Leader of the Opposition will have the opportunity to help Canadians by supporting Bill C-32 to implement the support measures set out in the fall economic statement.

Fall Economic Statement Implementation Act, 2022

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Madam Speaker, unfortunately, my speech will have to be curtailed, which is something that should have been thought of before the Liberals came up with Bill C-32.

The fall economic statement, which could have done so much to help people in need, does absolutely nothing to address the real crises that Canadians are facing, like inflation, the cost of living and more taxes. Where it could have stopped new taxes and tax hikes and stopped new spending and wasteful spending, it fails to do so and only adds to the inflationary economy. The people of Saskatchewan cannot afford these out-of-touch policies that take their hard-earned money out of their pockets and put it into government coffers.

Each and every household in this country is feeling the effects of the Liberal incompetence when it comes to managing inflation and the cost of living. This year alone, government revenues have increased to $41.1 billion. Where is that money coming from? It is coming from the single mother who is skipping meals to make sure that her kids have enough to eat each week. It is coming from the families who have to pick between putting gas in their cars or keeping the lights on that month, because they are all paying higher taxes.

These are things the Prime Minister does not worry about and has never had to spare a thought for in his entire life. He is completely out of touch with his inflationary deficits, which are now at half a trillion dollars. It is clear that he has no problem profiting off the backs of Canadians and leaving the issues for future generations to deal with. He does not have their backs. He is profiting off their backs.

As we all know, this is Christmastime and a festive season for many. People are trying to get out, celebrate and help where they can. However, they are concerned, especially when a report that came out yesterday said that the cost of their food is escalating and, in 2023, prices will be 5% to 7% higher. Families will pay $1,065 more for groceries in 2023.

My wife goes out of her way yearly to assist with baking for hospitals, charities and people who have lost loved ones, as well as my family. Yesterday, she was making some cookies and went to buy some supplies. One box of graham cracker crumbs, two small cans of Eagle Brand condensed milk, two oranges, two lemons, a small 125-millilitre bottle of artificial vanilla and two 450-gram sticks of butter, which fit into one bag, was a total cost of $82.54. That is a lot of money for cookies, and next year it is going to be closer to $100.

The Liberals are killing rural communities and are doing it without even batting an eye. Measures like the carbon tax are killing businesses both small and large, including farming operations that have stood the test of time for generations. It is a tragedy to see family farms having to sell off their operations just so they can pay the bills. Many ranchers and farmers are close to walking away from the industry because of these escalating input costs.

As we all know, the Prime Minister has a pattern of promising something and doing the complete opposite. Many years and many billions of dollars ago, he said that he would not exceed $10 billion of debt. How soon people forget. The Prime Minister has now added more debt than all previous prime ministers combined. Furthermore, an alarming 40% of all new spending measures, roughly $205 billion, has nothing to do at all with COVID.

Ultimately, it is going to come down to what I call the “heat or keep” principle. In Saskatchewan, winters get brutally cold with temperatures dropping down into the minus forties multiple times during the season. In fact, as I speak today, it is below -30°C. Thanks to measures like the carbon tax for the last few years, people have been wondering if they can afford to heat their homes, a concern that no Canadian should have to grapple with. Now, because of the ever-rising interest rates and inflation, they are wondering if they will be able to keep their homes. The Prime Minister could never begin to imagine the stress that is felt by those who have to decide to heat or keep, but this is what it has come down to.

If we take a look at the numbers, the outlook is grim. Families who are financially on the brink who bought a typical home five years ago with a typical mortgage that is now up for renewal will pay $7,000 more a year. This is completely unsustainable and has the potential to financially devastate many hard-working homeowners who are just trying to live the life that they have earned and deserve. For example, someone with a mortgage of $400,000 amortized over 25 years with a monthly payment of $2,400 is not eligible for the relief that the Liberals are touting as the solution to the problem.

Speaking of the carbon tax, this could be a great opportunity for the government to actually help Canadians who are struggling to make ends meet. The Liberals could make the decision to cancel the tripling of the tax, but they will not.

Another big issue that I have with this economic update is that it fails to adequately address the Inflation Reduction Act that the U.S. passed in August, specifically with respect to investment in emissions reduction technology here in Canada.

The fact is that the Liberals have missed every single emissions reduction target they have set, yet they are still not doing enough to incentivize investment in clean technology. That is shameful. The United States has a 45Q tax credit that is straightforward, easy to understand and provides industry with certainty over things like regulation prices and timelines. By contrast, the measures created by the Liberal government are largely ineffective due to the high level of bureaucracy involved, with a mess of programs and credits layered on top of each other that create confusion and lack clarity.

We have already seen projects worth billions of dollars choose to operate in Texas over Alberta because of the ease of doing business in the U.S. The Liberals are choosing not to listen to industry experts who are prepared to assist and advise on clean tech like carbon capture and storage, or CCUS, because they do not want to be associated with the word “coal”. Is it the industry they are trying to kill, or is it the emissions?

Surely it is the emissions and the fact that CCUS can do it is something that we should be investing in. It is something that this economic statement does not move forward on and assist all Canadians by investing with private money, not public money.

[Richard Lehoux, Conservative, Beauce, QC]

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

I think that there are far too many problems with Bill C-32 for us to support it. With regard to all the money the government plans to spend, I think the government is just serving up leftovers, because these amounts were already allocated in previous budgets.

I wanted to raise one of my concerns today. The Liberal Party says that it supports supply management but, because of the measure that came into effect on Friday regarding Ukraine, we are now coming under heavy scrutiny from many countries around the world.

[Francis Drouin, Liberal, Parliamentary Secretary to the Minister of Agriculture and Agri-Food]

Madam Speaker, I would like to thank my hon. colleague, with whom I am fortunate to sit not only on the Standing Committee on Agriculture, but also on the Standing Committee on Official Languages from time to time.

I heard him talk about supply management and how important it is to him. I hope he is convincing his colleagues of the importance of the amounts announced in the fall economic statement. I hope we can count on his support. I hope he will be able to convince all his colleagues, because that is what the dairy farmers have been asking us for.

This bill will provide $1.7 billion for the entire supply-managed sector, and I hope my colleague will stand up in the House and tell us that he will absolutely support this.

My question for him is this: Will he support Bill C-32, yes or no?

[Richard Lehoux, Conservative, Beauce, QC]

Madam Speaker, it is a pleasure for me to rise in the House today to speak to Bill C‑32, which seeks to implement the government's fall economic statement.

To be clear, let me just say that my pleasure stems not from the content of the bill, but rather from the fact that I get to stand up and be the voice of Canadians and the people of Beauce regarding what should have been included in the bill.

To begin with, I would like to take a moment to denounce the inflation created by the Liberal government itself. With punitive policies like the carbon tax, this government is destroying local businesses while at the same time driving up grocery prices. This out-of-touch government has also imposed an equally disastrous fertilizer tariff on farmers. Even as our country grapples with the worst food inflation in 40 years, the worst since the days of Pierre Elliott Trudeau, as I recall, the government is still looking to line its pockets with new taxes. Ours is the only G7 country to have imposed a tariff on fertilizer during the most difficult time in recent years.

Food bank use is growing so quickly that organizations in my riding, such as Moisson Beauce, are struggling to meet demand. In Beauce, a third of new food bank users are children. This government refuses to look in the mirror and admit its shortcomings. The Conservatives have been fighting for months against these taxes and tariffs, but this NDP-Liberal coalition has a hidden agenda, so it refuses to do the right thing. As a country, we should be taking care of the things that we can control. Everything starts in our own backyard. We need to help farmers lower production costs so that, by the time the food they produce gets to store shelves, people can afford to feed their family. Currently, one in five Canadians is skipping meals to stay afloat financially. That is shameful. This needs to change.

In this budget, agriculture is not even a minor priority for this government. We would think that after seven years, the Prime Minister would understand that feeding our population is essential and that it starts at the farm. Farmers have been ignored long enough. It is time to give them the tools they need to grow our economy and produce affordable food for everyone. This is a powerful economic driver for our country, and we have to exploit its full potential. We just need a leader who can open his eyes and see that.

Similarly, I would like to draw members' attention to another failed Liberal plan, the plan to open our Canadian borders to all Ukrainian meat products. The Conservatives are all for supporting Ukraine in its war against Russia, but there are much better ways of doing it. On Friday, in a press release, the government authorized import permits for unlimited quantities of chicken from Ukraine, without even conducting an impact analysis to see how that would affect the Canadian markets. To top it all off, the Liberals did not even consult stakeholders before signing this agreement.

Our American counterparts put off accepting Ukrainian meat for food safety reasons, and I cannot blame them. We could provide Ukraine with financial support while helping famine-hit countries closer to it by sending them those products. This is not just about taking care of our country's food system first. It is also a matter of global food safety. The last time the Canadian Food Inspection Agency inspected a chicken factory in Ukraine was in 2019, yet the government expects sanitary conditions to have remained the same in a war-torn country. How can this government be so naive?

Furthermore, given that this government promised to protect supply management, why did it sign this agreement to open up the market after stating over and over that it would make no further concessions with respect to supply management? The Liberal government is playing with fire at a time when we must be extremely vigilant.

Avian flu is becoming more prevalent in North America, and the problem is just as bad in Europe. Countries such as Poland, one of Ukraine's neighbours, have had several cases of avian flu in recent months. How can we have any assurance that imported meat is safe if we have no protective measures in place?

I would now like to move on to another topic, that of immigration in this country.

Canada's immigration system is broken. The Liberal minister rises in this place, makes bold promises and uses the same talking points every day, but nothing is happening in that department.

Every day, my two offices in Beauce receive multiple requests for updates from people who need help and from business owners about the system backlog. According to recent studies, there is a backlog of 2.3 million applications. Whether we are talking about applications for permanent residence, work permits or sponsorship, everything is at a standstill because of the government's poor management. Businesses in my riding are losing contracts and threatening to move abroad because they cannot get the temporary foreign workers they need in time.

Doctors are waiting for work permits and documents when they could be working in local hospitals and helping my constituents. It is shocking. It is not just the immigration system in this country that is broken. Name any department and there is a good chance that it is broken as well. Whether it is Service Canada with pensions, the guaranteed income supplement or the passport fiasco, the list of failures goes on and on.

When my staffers talk to employees on the phone, it is clear that things are disorganized and there does not appear to be any direction from the top. Employees are bouncing from department to department, burning the candle at both ends.

Training has slowed to a crawl, and most officers are too junior to help with complex cases. Some employees are still working from home. When is the government going to get its public servants back in the office and on track to better serve our communities?

The workers cannot be blamed for the government's incompetence. I sincerely respect these officers and the tough job they do, but something has to change. There is only so much they can do with the tools they have been given.

Now I want to touch on some issues that my colleagues have often heard me talk about here in the House. Rural Canadians are being left in the lurch. My riding does not have public transportation. We have to drive to get to work and take our kids to their activities. The people of Beauce are hard-working, as evidenced by our 2.1% unemployment rate, which I believe is among the best in Canada. Unfortunately, the carbon tax is eating up Canadians' paycheques. Cell service and high-speed Internet are not even close to what they should be in 2022, but there is nothing in the budget to fix that problem either.

Now, this government also wants to prohibit my law-abiding constituents from owning certain hunting weapons. Many Canadians make their living in part from hunting. This is one way we feed our families, but the government wants to eliminate that option too.

I could go on and on, but since I am running out of time, I have a message for Canadians. The Conservative Party of Canada will continue to be there for them and fight for what Canadians need, which is more money in their pocket at the end of the week and healthy, affordable food on the table for our families this holiday season.

A Conservative government would have made much more tangible changes if we, the Conservatives, had had the opportunity to introduce our own budget. I hope that Canadians are taking note of what this NDP-Liberal government is doing to our country. The time for change is approaching, and I hope that the Liberal government will be held accountable for the disastrous choices it has made.

I will continue to defend the people of Beauce and all Canadians by condemning this inflationary government in the House at every opportunity.