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

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I would be surprised if there were a province that did not agree to ask for more money.

When I was the health care critic for the Province of Manitoba, I suggested that the greatest threat to health care at that time was not necessarily an issue of financing as much as how important it was to manage the changes necessary in order to be able to afford the type of health care expectations Canadians have. I believe there is a role, through the Canada Health Act, for Ottawa to say there is an expectation that, whether someone lives in Vancouver, Winnipeg, Montreal, Halifax or anywhere in between, if they need a hip replacement, it should be available for them in a reasonable time frame.

I do not believe for a moment that the federal government should just hand out a pile of cash. I believe the federal government has a role, through the Canada Health Act, to meet the expectations Canadians have that it ensure a quality health care service coast to coast to coast. Some provinces will do better than others, but overall we need to ensure this social program is there for all of us.

[Lori Idlout, NDP, Nunavut, NU]

Uqaqtittiji, I have been noticing that the Liberals and the Conservatives seem to be on the same side when it comes to not taxing the major big box stores.

I see that they have made a small incremental tax in the Canada recovery dividend, but it does not do enough.

I wonder if the member can respond to whether the Canada recovery dividend needs to be extended to big box stores that have been showing record profits.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, in the legislation that accompanied the very first budget, from what I understand, we increased the tax bracket for Canada's wealthiest 1%.

From the very beginning to the more recent federal budget where we put in a special tax, which is due to the recovery, on banks and insurance companies, the Government of Canada wants to ensure that everyone believes, knows or understands that we all have to pay our fair share.

Over the last number of years, we have put a great deal of emphasis on Canada's middle class. The healthier our middle class is, the healthier our economy will be, and we are there to support the middle class and those aspiring to be a part of it.

[Greg McLean, Conservative, Calgary Centre, AB]

Mr. Speaker, I want to remind the House that we are debating the fall economic statement. I always notice, and I mean this in the nicest way, that the Liberal speakers know very little about the economy when we are debating economic matters like the economic statement.

I listened to the member across the way, with intent, because he did bring up some historical context here about inflation. I wonder if he knows that the rate of inflation and how it is measured in Canada is historically lower than it is in the United States because of the way we measure owners' equivalent rent.

Most Canadians are asking, “How come it is always lower in Canada than it is in the United States?"

Since he referenced some history about one time when it was actually higher in Canada, according to his interpretation, I will ask him this. Did that measurement change during those years, or did that measurement change to manipulate the inflation rate that we are showing right now?

It is an open question. I actually do not know the answer.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the stats I got were from the U.S.A., which indicated 2014-15, the last two years of Stephen Harper. The actual inflation rate in the United States was lower than in Canada. The member is right. Often, the Canadian rate is lower, as it has been here for the last number of years and continues to be, even today when the Conservatives voice their concerns about the inflation rate.

It does not mean that we should not be sensitive to those grocery costs and other expenses at the local level. We need to do more. That is why we brought forward the legislation to support Canadians, even during this difficult time. I encourage all members to recognize that Canada is doing reasonably well on a worldwide basis.

[Salma Zahid, Liberal, Scarborough Centre, ON]

Mr. Speaker, it is my pleasure to rise today during the third reading debate to support Bill C-32. I am one of the final speakers on this important legislation that would implement some of the key measures from our government’s fall economic statement and bring needed help to Canadians who need it the most, including in my riding of Scarborough Centre.

I have spoken several times in the House about inflation and the impact it is having on families in my riding. It seems like everything is more expensive. For families in Scarborough, which is one of those communities where people are working hard to join the middle class, it is not like it was easy for many families to make ends meet already.

The lack of affordable and suitable housing is a long-standing issue. Rising interest rates are not helping. Add in the higher cost of groceries and seemingly everything else, and it leaves many families having to make very difficult choices every month. With housing, transportation, groceries, school outings and clothes for children, paycheques never seem to go far enough. For too many families, it is harder than ever to get ahead.

In the spring, we were all focused on the high price of gas. It is still not cheap, but it is down substantially from its peak of over two dollars per litre. Groceries and other necessities remain more expensive than usual, and this trend is forecast to continue into the coming year.

While my friends across the way may say otherwise, inflation is not a made-in-Canada phenomenon. Groceries are not more expensive because our government stepped up during the pandemic to stop people from losing their homes and businesses from declaring bankruptcy.

In fact, our pandemic supports for Canadians, which I recall all members in the House working on together to deliver them to Canadians expeditiously, saw Canada emerge stronger from the pandemic. We were there for Canadians and we always will be.

Inflation is a global phenomenon driven by the zero-COVID policy in China, ongoing supply chain disruptions, climate change impacting the harvest of vital crops and the war in Ukraine. Canada is not immune to these global pressures.

We have done better than many of our peers. According to a report last month from CTV, Canada had the third-lowest inflation rate in the G7 at 6.9%, which is higher than only France and Japan, and faring much better than the United Kingdom, Germany, Italy and even the United States.

That said, the challenges being faced by many Canadians are very real, and Canadians expect their government to be there to help those who need it the most. You and I do not need help, Mr. Speaker. We can tighten our belts and weather the storm until it passes.

However, those families already on the edge, the seniors on a fixed income and the single mother trying to support her kids on a minimum-wage job are the people who need targeted assistance. It is those Canadians we are seeking to help with Bill C-32.

I would like to focus on a few of the ways we are already helping constituents in my riding who need help the most.

By doubling the GST tax credit for six months, we are directly helping lower-income seniors and families. Everyone below a certain income threshold is eligible for the GST tax credit, and this increased rebate is already putting money back into the pockets of Canadians who need help the most.

A single person with no dependent children can receive up to $234, and a couple with no children can receive up to $306. This goes all the way up to $628 for a couple with four children.

We are also topping up the Canada housing benefit with a $500, one-time payment. Everyone, from young people living on their own for the first time to families and seniors on a fixed income, is eligible based on their income and how much of their income they pay toward rent.

In short, whether it is a family with a net income under $35,000 or it is a single person earning under $20,000 and paying 30% or more of their income on rent, then they can qualify for this payment, but they need to apply for it. Applications open December 12, and if someone is eligible, I strongly encourage them to go online to apply.

We have also launched the Canada dental benefit for low-income families with children under the age of 12. It can provide up to $1,300 over two years to help with dental costs for eligible families. We expect this program to expand to lower-income seniors next year. I know it will make a difference for many seniors on a fixed income.

If people take care of their teeth, their teeth will take care of them. This program means that lower-income families without employer coverage do not need to neglect their oral health needs. We are also working toward a national dental care plan for all Canadians.

These are all targeted programs that are putting more money back into the pockets of lower-income families and seniors. We are building on these initiatives with Bill C-32.

To address housing affordability, we are taking a number of steps, including an anti-flipping rule to discourage people from rapidly flipping homes for profit in a short time, which is driving up housing prices. Houses should be a home, not a business. We would make it easier to save for a down payment with the new tax-free first home savings account.

We would change the rules around the tax on the value of non-resident, non-Canadian owned residential real estate that is considered to be vacant or underused. Also, we would double the first-time homebuyer's tax credit amount from $5,000 to $10,000.

I also have a lot of multi-generational households in my riding, and the multi-generational home renovation tax credit would help families make their homes more suitable to their needs.

I am particularly excited about the elimination of interest on federal Canada student loans and Canada apprentice loans, combined with no requirement for repayment at all until a graduate is making at least $40,000 per year. This would be a significant benefit for our young Canadians.

I meet with student groups every year and with individual students all the time in my community. They have long told me about the burden of graduating with major student debt that weighs them down for years. In real dollars, tuition and other expenses are so much more than when we were in school. Even working full time, it can be hard to keep up.

The elimination of federal student loan interest has been welcomed by many stakeholders. For example, the Canadian Alliance of Student Associations, which I met with last week, said:

Big news for students across Canada!

Starting on April 1, 2023, the Government of Canada will remove the interest on Canada Student Loans. This investment is welcomed by past, current, and future student loan borrowers.

The Public Service Alliance of Canada said:

We're pleased to see help to Canada's most vulnerable in today's economic update, including eliminating student loan interest payments for thousands of our members and increased funding for the services our members deliver to Canadians every day.

By eliminating interest and delaying repayments, we would make it easier for young graduates just entering the workforce to begin a family, to begin saving and to enter the housing market. Without the burden of crushing debt payments and compounding interest, they could more easily realize their career goals and contribute to society, which would enrich us all. This measure would save the average graduate more than $400 every year, and that would be a real benefit for young families saving for their first homes.

I could go on, but the sooner we pass this legislation, the sooner more help will begin to flow to Canadians who need help the most. I urge my colleagues to join me in supporting Canadians, and let us pass this bill.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Mr. Speaker, the Parliamentary Budget Officer identified $14.2 billion in unannounced spending in the fall economic statement.

In a complete lack of transparency, the finance minister has refused to say how that money would be spent. Perhaps the member for Scarborough Centre could enlighten us on how $14.2 billion of taxpayers' dollars is going to be spent?

[Salma Zahid, Liberal, Scarborough Centre, ON]

Mr. Speaker, through Bill C-32 and our fall economic statement, we are trying to provide targeted support to Canadians who need it the most, by doubling the GST tax credit, by eliminating the student debt loan and by providing a one-time $500 top-up allowance for renters who cannot afford it.

I talk to constituents in my riding every day, and they bring up these issues. Affordability is becoming a concern for many. These are measures, like the measures the members on the opposite side voted against, such as providing dental support for families with kids under the age of 12. We are lucky to have insurance, but there are many families in my community who have no insurance to take their kids to the dentist.

[Kristina Michaud, Bloc, Avignon—La Mitis—Matane—Matapédia, QC]

Mr. Speaker, my riding likely has one of the fastest-aging populations in the country.

We just learned that groceries are going to cost even more next year and that the Bank of Canada increased its key interest rate for the seventh time. Given these circumstances, it seems to me that the economic update would have been the right time for the government to finally announce that it is increasing the old age security pension for all seniors.

Regardless of whether a person is 65 or 77, I think that it would have been good news for them to find out that seniors would be getting an increase in their OAS starting at age 65. One in four people in the Lower St. Lawrence region is 65 or older.

My question is simple. Why did the government not use the economic update as an opportunity to stop creating two classes of seniors and provide financial support to all of them, regardless of age?

[Salma Zahid, Liberal, Scarborough Centre, ON]

Mr. Speaker, I thank the hon. member for her concern for seniors.

As I mentioned in my remarks, it is important that we support seniors on fixed incomes through the inflationary period. Lower-income seniors are benefiting from the doubling of the GST tax credit and from the Canada housing benefit one-time special payment.

We lowered the retirement age from 67 to 65. The Conservatives had changed it, and we brought it back down. As well, we introduced the age well at home initiative to help our seniors continue to live safely and independently in their homes. We also increased the old age security for seniors above the age of 75. We will continue to make sure we are there for our seniors.

[Randall Garrison, NDP, Esquimalt—Saanich—Sooke, BC]

Mr. Speaker, one of the things the member pointed out is that the Liberals have created a special and extra benefit for seniors over 75. While I would not at all dispute that seniors over 75 face extra costs in terms of their lives, somehow it seems to imply that those between 65 and 75 are okay, when we all know they are suffering from those same effects of inflation and those same inabilities to make ends meet when it comes to housing and associated medical costs.

I wonder if the hon. member would support the idea that the increase that went to those over 75 should have gone to all seniors.

[Salma Zahid, Liberal, Scarborough Centre, ON]

Mr. Speaker, definitely seniors need more help, and I will continue advocating to make sure we are there for seniors.

We have been there for our seniors. The increase we brought to the guaranteed income supplement was to help seniors keep up with inflation. They will benefit from the doubling of the GST tax credit. Low-income seniors will also benefit from the $500 one-time top-up allowance for housing.

We will continue raising our voices to do more for our seniors.

[Frank Caputo, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, prior to commencing my speech, I would ask for unanimous consent to split my time with the member for Coast of Bays—Central—Notre Dame.

[The Deputy Speaker, Chris d'Entremont]

Is it agreed?

[Some hon. members]

Agreed.