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.

Motions in Amendment

[Stephen Ellis, Conservative, Cumberland—Colchester, NS]

Madam Speaker, I rise here in the House of Commons to look at the economic situation that exists out there for Canadians. Certainly, to say that it is a dire, difficult and unpleasant situation is a misrepresentation.

I would like to point out the misrepresentation of the House by the members opposite. They are claiming perhaps their clairvoyant nature of understanding what the government over here might propose when we get to sit on the other side. As we all know, it is not our job as the opposition to present those cards, which we will hold very close to our chests, and we will make the economic picture much better for Canadians as we take office.

I would like to focus my remarks on the fall economic statement with respect to Atlantic Canada, and, to no surprise, the carbon tax and how it affects Atlantic Canada. I will also focus on the significant growing debt, the programs the government has introduced and perhaps try to make it a bit personal for Canadians as they try to balance their own budgets with difficulty.

When we look at Atlantic Canada in the fall economic statement there is absolutely nothing specific in there. There is really not much talk of Atlantic Canada at all. We find that very surprising given the fact that we all know that Atlantic Canada is still reeling from hurricane Fiona. I just came here this morning. There are still trees down everywhere. Multiple businesses are still affected by hurricane Fiona, and they are unable to get back on their feet again. Certainly, there are still many homes with significantly damaged roofs. How are we going to move forward?

We asked the ACOA minister to come and specifically have a look at some of the things going on in Cumberland County, which was one of the hardest-hit counties in the entire area. Sadly, that minister did not show up. When we asked the minister's office to provide information as to how the $300 million in pledged money was going to roll out to Atlantic Canadians, the answer was that it did not know yet. There were no details.

It has been a long time since the hurricane happened. For a government to not be able to roll out the pledged money, which Atlantic Canadians specifically so desperately need, is creating more problems. In fact, I had a call with the Canadian Red Cross this morning, and it was pointed out that the applications for its program are now closed, and I will get to that in a second. The Red Cross is seeing many Nova Scotians reaching out from a very difficult financial spot, hoping to get support not only with respect to the hurricane Fiona damage but also from a social services point of view. They are really struggling.

We know very clearly from words in the House that 1.5 million Canadians have visited food banks, and 20% of Canadians are cutting back on the food they consume simply for financial reasons. We know as well from my call with the Red Cross that the $31 million generously pledged by Canadians and matched by the federal government is now gone. It is $500 for about 124,000 households. That is $62 million. There is not going to be more money forthcoming from the Red Cross.

What other difficulties are we facing as we move forward in 2022? Of course, it is winter, and we know from this budget that difficulties will continue to exist. I have spoken here previously with respect to the words of the Premier of Nova Scotia. It is so bad out there with this carbon tax, which has been foisted upon Nova Scotians, that there is a petition circulating to buck the trend and attempt to not be required to succumb to the heavy burden of the carbon tax.

We know that by 2025 it is going to cost the average Canadian $2,200 and by 2030 it will cost $3,100. This is in a population that was not really mentioned in the fall economic statement at all. It is in a population that, sadly, feels the significant burden of what is going on in the world with the increasing interest rates and rising costs of everything very acutely. Imagine a provincial government starting a petition to try to get away from this burdensome carbon tax that is being foisted upon Nova Scotians.

We know that the cost of gas, groceries and home heating is continuing to increase. We know that the premier and the Government of Nova Scotia understand this clearly, but we have a government across the aisle that is continuing to spend and very sadly hoping that the budget is going to balance itself. That is a budget that has a debt of almost $1.3 trillion. We also know that this is a government that continues to spend money. It has been said in the House, perhaps somewhat tongue in cheek, that it is spending it like a drunken sailor. However, being mean to drunken sailors is no way to live.

We also know that estimates would suggest that the cost of the interest on this debt is going to be about at least $27 billion. In 2026-27, it could be as high as $42.9 billion. That is with the conservative estimates, not ours but budget expert estimates, that interest rates would perhaps stay the same as they are.

We also know that if it does not hold true and interest rates are one point higher than planned, the interest costs would move from $42.9 billion to $52.2 billion in a single year, in 2026-27, which is $9.3 billion. That is no small amount of change. In my mind it does not make any sense. Even when we look at $27 billion, we understand that is about 10% of the revenue of the federal government simply being spent on interest charges. The government continues to spend, which absolutely makes no sense.

To put it another way, over four years, the interest on this amount of debt is going to cost the government $180 billion. This is spending money as if it were water. To try to make it personal for Canadians, if I could not balance my budget, which I am thankfully able to, and there have certainly been years when my family has struggled, we would look at what we could do differently. We would cut our discretionary spending.

We would talk about maybe, in today's terminology, not getting the latest cellphone, not going out to eat, not going out to the movies and those things that everybody would say are “motherhood and apple pie” statements. People would say that if we cannot balance our budget, we are not going out to eat. We are going to stay in, buy the groceries, which are also expensive, and cook. We would not also add costs. We would not put a new front porch on our house. That really would not make a whole heck of a lot of sense when we still could not balance our budget.

However, the costly coalition across the aisle continues to add programs that add to the debt load of Canadians. I find it somewhat disconcerting and disingenuous that, across the aisle, they continue to say that over here we do not support those who are struggling. We certainly do. It is a little bit like letting the cat out of the bag about what we might do over here. We would not go at it by continuing to spend more money and throwing a $500 cheque here and a $500 cheque here and $200 there.

Imagine this. Regular Canadians are sending in their budgets for the month by email and asking me where I think they should cut or get more of their money. Obviously that is not my area of expertise. Given that, I find it absolutely incredible that people are saying that they do not know what else to do or what else they should be doing. We know, when we look at a budget from a household in a global sense, that having $500 more is really not going to help very much at all.

We know that Canadians, including Nova Scotians from my riding of Cumberland—Colchester, are continuing to struggle under the incredible burden that they feel from the reckless spending of the government. We wonder how they are going to feed their families and how they are going to heat their homes this winter. We know that the worst is yet to come. That is exceedingly disheartening for people who are already hurting. Canadians cannot afford the government anymore, and we cannot support the fall economic statement.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Madam Speaker, the member may not have had enough time, but perhaps he could comment on the government's tax policy. He got into it a little with Nova Scotia and the carbon tax.

However, the government would have us believe that adding a tax to provinces is a good thing, and people should be excited and pleased about it. I do not think that is the case in his province. We have a carbon tax that increases the cost of everything such as gasoline, groceries and home heating. We have a real estate affordability crisis.

Could the member comment on tax policy and how that affects affordability?

[Stephen Ellis, Conservative, Cumberland—Colchester, NS]

Madam Speaker, it reminds of the theory of everything when we look at this. As the learned member correctly points out, this is the tax on everything in the sense that everything goes up. We know very clearly from some of the comments from my home province of Nova Scotia that businesses will need to begin to pass on the cost of doing business to consumers.

The government would like people to believe that they will end up with more money in their pockets, that somehow the left hand pulls it out and it gets into the right hand, and there is actually more there. I feel like I am in Las Vegas and there is a magic show afoot. I wish I had the money to go there, but clearly with this tax-and-spend government, it is impossible to do so.

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

Madam Speaker, on that point, would the member not also agree that perhaps the Conservatives like to extrapolate and overdramatize a situation? The reality is that the carbon tax is not increasing until April 1, even though the Conservatives would have people believe it is happening tomorrow, and it is not going to triple, triple, triple until 2032.

Would the member like to comment on the fact that the Conservatives seem to over-embellish the truth as it relates to the narrative they are trying to purport?

[Stephen Ellis, Conservative, Cumberland—Colchester, NS]

Madam Speaker, a multitude of things come to mind.

I would like to thank the member for reinforcing the fact that, yes, the carbon tax is going to triple, triple, triple. Obviously, big government moves very slowly and it takes time for people to adjust. Therefore, the difficulty is that if we do not begin to turn the direction of this ship soon enough, the ship is going to crash into an iceberg, much like the Titanic did in spite of direct warnings.

The other thing is that to say things are not bad, we get into the scheme of superlatives and we think that things are bad, or that things are terrible or that they could be worse. They could be worse, but who would want them to be? What is the superlative of worse? Is it worser? Is it the worstest? Are they the worstest government?

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

Madam Speaker, apparently they do not teach English at medical school.

The New Democrats have been advocating for a long time to get rid of the GST on home heating. Of course, the Conservatives have instead said that they want to get rid of the carbon tax on home heating. The thing is that the federal carbon tax only applies in provinces that do not have their own provincial carbon pricing system. Therefore, it does cause one to wonder whether the Conservatives are aware of that fact or not.

I wonder if the member could confirm that he knows the federal backstop only operates in about half of the Canadian provinces and if he could name the provinces where the federal backstop is in effect.

[Stephen Ellis, Conservative, Cumberland—Colchester, NS]

Madam Speaker, certainly we know that when we have the worst government, there is nothing worse than that, so there is no superlative for the worst.

The other important part is that my province of Nova Scotia actually had a plan for carbon pricing and was trying to reduce pollution. We know, very clearly, that it cost Nova Scotians less and it actually met targets. We all know from debate in the House over the many months preceding this actual topic, that the Liberal government is not meeting its targets, that it is 58th out of 63 governments around the world, yet it continues to say how great it is in meeting targets. I guess the question that would remain is this. Why would we want to adhere to the policies of a big, bossy federal government that then will make this policy on top of Nova Scotia's, which had a better plan, was cheaper and actually met targets?

[Shelby Kramp-Neuman, Conservative, Hastings—Lennox and Addington, ON]

Madam Speaker, I am happy to rise today to speak to this year's fall economic statement implementation act.

I was hoping to see in the update a plan to address the rising costs of living. I was hoping to see a plan to combat inflation. I was hoping to see a reduction in government spending. I was hoping to see effective financial relief for rural and low-income Canadians. I was hoping to see support for our armed forces members. Unsurprisingly, instead we received more spending and higher taxes on already struggling Canadians.

The cost of putting food on the table has seen its biggest jump this year in over four decades. Home heating, oil and propane have all seen drastic increases in price and cost. The same is happening at pumps across Canada, especially in rural ridings.

One of the single largest complaints I hear about at the grocery store and through my office is about costs, the cost of living and the rising cost of everything. Unfortunately, for many struggling Canadians, it is only going to get worse thanks to the government. The carbon tax is not working.

When I am out at local events in my riding, people often say to me that standing up in question period and asking questions is all fine and dandy, but they want to know what I am actually doing to help Canadians. They ask what steps I, as the opposition, am taking to help the people of Hastings—Lennox and Addington. The answer to that question is of course tied up with the capacity of the legislative branch to put checks and balances on the executive or cabinet. In Westminster systems, those two branches are often intermingled, so it can be difficult to parse the capacity and role of either.

That being said, I want to take this opportunity to highlight two separate ways our Conservative opposition use our powers, as parliamentarians, to hold the government accountable. The first is by easing the burden on Canadian families and the second is by scrutinizing Liberal legislation at committee.

The member for Carleton, our Conservative leader, introduced a motion in the House of Commons to introduce a tax exemption on home heating. The NDP, Bloc and Liberals voted against it. The member for Regina—Qu'Appelle introduced a motion calling on a moratorium on taxes on gas, home heating, groceries and paycheques. Once again, the NDP, Bloc and Liberals voted against it. A third motion calling on the government to not implement the carbon tax was also voted against by three other parties in the House.

While the House was able to unanimously agree to a motion on high food prices, the fact remains there is only one party that is attempting to lower the cost of home heating and gas prices in a manner that would be quick and effective, and that is the Conservative Party.

It was also the Conservative Party that exposed the Liberal government's attempt to ban long guns through an amendment package at the Standing Committee on Public Safety and National Security. I want to thank my colleagues on the public safety committee for their due diligence in respecting the rights of law-abiding firearms owners. I want to let the hunters and farmers in Hastings—Lennox and Addington know that I will unequivocally vote against any attempt by the Liberal government to take their legally owned long guns.

Another area that this statement is silent on is rural broadband. I had many constituents contact my office, if they can get service, to ask me why it was taking so long for the government to deliver on its promise to increase broadband in ridings such as mine, and it is extremely frustrating not to be able to provide an answer. A number of local ISPs have also expressed a concern that they are being frozen out of funding opportunities in favour of larger companies.

I would note that in the annex there is an indication that funding under ISED is not coming this year and has only been earmarked for next. I hope the government actually gets the money out the door instead of lapsing the funding like it has done with National Defence to the tune of billions of much-needed dollars.

My colleague from Selkirk—Interlake—Eastman earlier spoke to this bill, and rightly touched on the complete lack of support for our armed forces in economic the statement. He highlighted the desperate need to start cutting steel on our surface combatants, the Type 26 variant, and pointed out that we still did not have contracts signed for our F-35s, a strategically vital piece of equipment that the government delayed by years because of playing political games with military procurement.

I also want to congratulate our friends in the United Kingdom for getting their first Type 26 in the water, the HMS Glasgow.

He also touched on what I believe to be an even bigger issue, and that is the recruitment and retention crisis. I want to reiterate to the House how much of an issue this is. Our armed forces are in crisis.

In an order issued on October 6 of this year, General Eyre instructed the entirety of the armed forces to cease all non-essential operations and focus exclusively on recruitment and retention of personnel. The general's words leave no room for interpretation. Our forces are in crisis and no area of it is left unaffected, with every single trade operating at below its effective level.

When we look at the current state of our armed forces, the reasons behind the shortage begin to become clear.

For example, the post living differential, essentially a cost-of-living adjustment based on posting location, has not been upgraded since 2008, mainly due to stingy Treasury Board regulations. This is simply unacceptable. In my previous shadow minister position for seniors, the importance of updating these allowances was made excruciatingly clear to me. The CPP is updated every January. The GIS and OAS are updated four times a year. However, we expect our armed forces members to live in an economic climate of 2008 instead of 2022. That is unacceptable.

If we do not have the necessary equipment and troops, we do not possess the capability to meet our current commitments, whether they be peacekeeping missions, protecting our Arctic or responding to evolving threats on the international stage. It also severely limits our capacity to expand our commitments into future endeavours, such as the recently announced Indo-Pacific strategy.

Our armed forces' capability commitment gap is increasing at both ends, with our commitments growing in an increasingly unstable international order and our capability shrinking through attrition.

This reconstitution of our armed forces is affecting every single trade. The general made it clear at the Standing Committee on National Defence that every single decision the CAF made was through the lens of reconstitution.

Whether it is by continually failing to provide basic services and equipment to our serving forces members or offering medically assisted suicide to them once they transition out, the government’s refusal to treat our CAF members with the dignity and respect they have earned and deserve is appalling. This cannot be allowed to continue.

I really do hope the government, with the CDS, addresses the recruitment and retention crisis in our armed forces.

I must reiterate that I pray the government listens to Canadians in their communities and takes substantive, effective and meaningful action to combat the cost of living by cancelling the carbon tax.

I do not mean to sound as though there is nothing of substance in the statement. The reality of the matter is that what is missing from the update speaks volumes as to where the government's priorities lie, and I do not believe they lie with rural Canadians. Whether the it is aware of it or not, the simple fact of the matter is that its carbon tax will add to the already astonishingly large financial burden facing everyday Canadians, and they simply cannot afford to be bled anymore.

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

Madam Speaker, on the one hand, Conservatives will stand and talk about the idea of cutting back and chopping money from the budget. Then we get Conservatives who will stand and say that we should be spending more.

The member is talking about billions of dollars of additional expenditures. She is critical of the government for expanding Internet connections in rural Canada. We have increased rural connectivity significantly compared to the former prime minister. It cost billions of dollars to do that, and we have been criticized for spending those billions of dollars.

Does the member not recognize that some might detect a little hypocrisy in the statements that are flowing from the Conservative Party today?

[Shelby Kramp-Neuman, Conservative, Hastings—Lennox and Addington, ON]

Madam Speaker, I will be quick to suggest that economic stewardship in this place, as parliamentarians, is significant. It is huge. The government has had seven years. From my perspective, it is the captain of a rudderless ship and the rhetoric that I am getting from across the aisle is not working.

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

Madam Speaker, for a rudderless ship, I would say we are doing pretty well. The reality is that even when we look at something like Canada's inflationary rate among G7 partners, we have the second best next to Japan. When we look at economic growth, before the pandemic, out of the G7 partners, we were the fastest-growing economy. We are the best positioned to come out of the pandemic. The reality of the situation is, despite the fact that Conservatives might not like to acknowledge it, we are doing quite well, especially compared to our peer countries.

Would the member at least acknowledge the fact that, looking at Canada compared to some of the other countries we compare ourselves to regularly, we are doing a pretty good job?

[Shelby Kramp-Neuman, Conservative, Hastings—Lennox and Addington, ON]

Madam Speaker, I would acknowledge there is an example of another Liberal quickly patting themselves on the back for a lack of hard work.

I would like to give some facts. This country is in trouble. Government spending is up 30% compared to prepandemic levels. Next year, debt interest payments will cost nearly as much as the Canada health transfer.

The member across the aisle has suggested their government is doing pretty well. Perhaps he has not spoken to his constituents lately.

[Claude DeBellefeuille, Bloc, Salaberry—Suroît, QC]

Madam Speaker, I know my colleague is very concerned about the needs of seniors who are feeling pressure because of inflation. Can she tell me what is missing from this economic statement? Can she tell me if she agrees that people between the ages of 65 and 74 should not be entitled to an increase in their old age security? Does she agree with the government's position?

[Shelby Kramp-Neuman, Conservative, Hastings—Lennox and Addington, ON]

Madam Speaker, it is undeniable that all Canadians are faced with an extreme amount of economic uncertainty. There is no question that seniors, business owners and families are. No new spending and no new taxes would help seniors and all Canadians across the board.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Madam Speaker, I followed the debate and I did think extraordinary the amount of patting on the back the Liberals wish to do over this economic statement. I know the member touched briefly on the debt service charges for this year, but in the years to come, according to the statement, by 2029 there will be up to $50 billion a year in interest charges with rising interest rates and endless deficits. Fifty billion dollars is way more than the current health transfer of only $36 billion. That is double the current national defence budget.

Could the member comment on how debt service charges threaten all the programs of the federal government that Canadians rely on?