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

[John Brassard, Conservative, Barrie—Innisfil, ON]

Madam Speaker, it has been that way for seven years: a lot of rhetoric, fine words and plans, but the plans fail.

Look at what is happening in this country. I cited some things earlier. Again, 1.5 million people are going to food banks in a G7 country. What is happening in this country, as a result of these Liberals, is broken policies everywhere.

I can go on. I can talk about passports. The list is as long as the day, of the failures of this government and the broken promises it has made.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, my hon. colleague is quite right when he references the fact that Canada raced to the bottom of industrialized countries in terms of our climate performance.

In fact, throughout the previous Conservative government and the current, since 2015, Liberal government, no federal government has gotten the direction right. They set reduction targets for carbon; however, with the exception of the 2008 financial crisis when carbon went down and the 2019-20 difference over COVID, without a pandemic or economic collapse no government has gotten the direction right to start bringing emissions down.

There are ways to reduce emissions that do not involve carbon pricing. I happen to support carbon pricing. It is a necessary but insufficient condition.

What would this member recommend that we do to reduce emissions rapidly?

[John Brassard, Conservative, Barrie—Innisfil, ON]

Madam Speaker, maybe there is a reason our emissions are not going down as quickly as we would like. I know that the hon. member, whom I have respect for, is not going to like this.

Canada represents a small portion of emissions around the world. I think the solution for Canada is to reduce emissions around the world by supplying clean Canadian energy, which has the best environmental standards, the best labour standards and the best human rights standards in the world, to those emerging democracies and those emerging countries that are carbon intensive.

If we want to help, let us help the world.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Madam Speaker, it is an honour to rise on behalf of my community in Kelowna—Lake Country.

This fall economic statement leaves people concerned about how out of touch the Liberal government is here in Ottawa. People do not understand how common sense never seems to be able to enter the thinking of the costly Liberal-NDP coalition. It insists on continuing to mismanage Canada’s finances and to make it harder for Canadians and small businesses to manage their own finances.

Less than a month ago, in Windsor, the Liberal finance minister spoke with shocking clarity about the stewardship of the economy she is managing. I will quote her exact words: “Our economy will slow. There will be people whose mortgage rates will rise. Businesses will no longer be booming.”

Where has the Liberal finance minister been? Did she just wake up from a seven-year Liberal fairy-tale slumber? Does she not see how crushed businesses are and how dire people’s finances are? Does she not read any reports on how small businesses have incurred, on average, $150,000 in debt over the last two years, or reports on how restaurants are barely hanging on and food bank usage has seen an all-time high?

It was reported this week that Kelowna has the fifth-highest rent prices in all of Canada, only behind Vancouver, Toronto, Burnaby and Victoria. Four out of the top five are in British Columbia. B.C. also consistently has among the highest gas prices in the country; just look around my community of Kelowna—Lake Country.

During the last constituency week, I met with residents and small businesses all week. People were crying. People are desperate. They are considering medical assistance in dying because they cannot afford to live. People cannot heat their homes and are at the breaking point.

After the dire warning from the Liberal finance minister, Canadians were hoping to see the Liberals reining in their spending and cutting taxes. However, now residents in my community are forced to make tough decisions. I was talking with a senior from my community last week who was devastated. He was forced make the tough decision to sell his home because he could not afford to live in it anymore. He does not know what he is going to do.

People in Kelowna—Lake Country are concerned with the possibility of a recession in 2023, yet the Liberal Party continues to spin fairy tales like this fall economic statement. This statement contains no intention of turning back years of out-of-control Liberal spending that has driven up an inflationary deficit of almost half a trillion dollars. It leaves us with the highest federal debt ever.

The fall economic statement contains no tax relief for young people, families, seniors and persons with disabilities while they struggle to afford painful increases in the price of food, gas and home heating. Instead, the Liberals are squeezing more taxes out of them. So far this year, the Liberals will be taking an extra $40.1 billion out of people’s bank accounts and putting it into the government's bank account. It has no plans to turn off the taps and end the money printing that has driven our generational-high inflation crisis.

The Liberals have a laundry list of benefits they have created that give people a little of their own money back. There are no solutions to help businesses remove the help wanted ads in their windows. There is no plan to refill shelves with essentials like children's fever and pain medication, which is a problem that has been known since July. As usual, the Liberals did nothing on important issues like this for families.

The Liberals are not focusing on what is actually important to families like reducing taxes, getting inflation under control and having basic necessities like medical supplies on store shelves.

Multiple tax increases are still coming in the New Year, such as a drastic rise in excise taxes for Kelowna—Lake Country's local wineries, cideries, breweries and distilleries, along with others across the country. The Liberals call it an escalator tax, which is really a fancy, bureaucratic word for an automatic tax hike. The worst part is that it is tied to inflation, so it will be a bigger increase than ever before, and it will trickle down to retailers, restaurants and consumers.

Conservatives were transparent with our recommendations for this fall economic statement. There is nothing different from what my constituents have been asking for every day. First, cancel all planned tax hikes, including the tripling of the carbon tax. People are already choosing between heating their homes and putting food in fridges. They do not need more tax grabs.

Second is to ensure that there are equivalent savings to match any new spending. Canadians see no benefit from a half-trillion dollar deficit caused by wasteful purchases like the multi-million dollar ArriveCAN app.

Third is to get rid of red tape so our businesses and people can thrive. Red tape is affecting businesses' ability to bring skilled workers in to fill their labour needs. Our natural resources, farmers and manufacturers are all affected. It is like everything is on hold, while the Liberals live in a fairyland.

It is not just the Conservatives that the Liberals are choosing to ignore. The arm's-length, non-partisan Parliamentary Budget Officer's report must disappear like pixie dust as soon as it comes across a Liberal office door. The PBO's latest report proves that there are clear warnings for the country.

First, the PBO estimates that the unemployment rate will increase in 2023, to 5.8%, with a significant factor being people retiring. If the predicted recession hits next year at levels that some economists are projecting, the unemployment rate could undoubtedly increase further, and we will see a move away from “help wanted” signs to companies having to downsize in some sectors, while others will still struggle to get the skilled workers they need.

Food bank usage is already at an all-time high. Food Banks Canada recorded 1.5 million visits to food banks in just one month, which is a 35% increase compared to last year. I fear what increase in usage it will see next year.

Second, the PBO lays out the estimated federal government revenue and debt levels, and states:

Despite the projected decline in the budgetary deficit, public debt charges are projected to more than double from their 2020-21 level (of $20.4 billion), reaching $47.6 billion in 2027-28 due to higher interest rates and the additional accumulation of federal debt.

The finance minister talks about how the federal debt should be lower. However, although it is the highest ever in Canada, the PBO reports that the public debt charges will be more than double. What does that mean? It means we are paying more for that debt. A comparison is like doubling the interest we would be charged on our monthly credit card bill. As we make our payments, our bill total could slowly decrease, but every dollar we put in would be worth less. As it will take much longer to pay the debt off, we will end up paying a lot more.

Third is the record-high inflation. The PBO's estimates show federal government revenues increasing yearly until 2028, and the estimated increase is more than $40 billion from 2022 to 2024. We all know inflation has been as high as 8.1% this year, with food costs being even higher, and the government's revenue increase is primarily due to higher inflation adding tax revenue. In addition, the government's increases in payroll tax, excise tax and carbon tax will all bring in more revenue.

Those increased tax dollars to the government's coffers based on inflation and tax increases do not reflect a robust economy. I spoke with a small business owner from my community last week who said that she is making the tough decision to raise her rates, as she just cannot keep absorbing the higher costs. She feels bad for her clients, but she held off as long as she could.

I spoke with a resident from Joe Rich. I attended a fundraiser last weekend for residents. These are people in our community who cannot afford food, fuel or medicine. She said people do not have money to buy wood pellets to heat their homes; they cannot afford to eat and cannot afford to buy gas to drive the half hour back and forth to buy medicine and food. She has never seen things so bad in her lifetime.

I spoke with a man in his twenties who is now helping his parents with their mortgage payment because, with the high interest rates, his parents cannot afford to pay everything on their own. This young man is now putting his own future on hold.

This is Canada. What is wrong with the Liberals? Why can they not see how serious this is?

Our Conservative team will continue to stand up for real tax relief to help Canadian seniors, families, young adults, small businesses and non-profits. People are looking for hope, and I will stand up for the people and small businesses of Kelowna—Lake Country in voting against the government's continued disregard for our cost of living crisis.

Bill C-32—Notice of Time Allocation Motion

[Bill Blair, Liberal, President of the King’s Privy Council for Canada and Minister of Emergency Preparedness]

Madam Speaker, I rise to advise that an agreement could not be reached under the provisions of Standing Order 78(1) or 78(2) with respect to the second reading stage 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.

Therefore, under the provisions of Standing Order 78(3), I give notice that a minister of the Crown will propose at the next sitting of the House a motion to allot a specific number of days or hours for the consideration and disposal of proceedings at the said stage.

The House resumed consideration of the motion 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 second time and referred to a committee, and of the amendment.

Second Reading

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

Madam Speaker, when the member and the Conservatives talk about taxes, one thing that always amazes me is they will refer to the CPP. They look at the CPP as a tax increase. Because there would be more money invested in the CPP, they are calling it a tax on Canadians. However, the money being contributed to the CPP ensures that when it comes time to retire, workers have more money in their pockets. When the Conservatives attack that issue, they are actually attacking the workers and their ability to retire with more funds.

When they talk about the price on pollution, the very thing they supported in the last federal election, they leave out the fact that there are increases in the environment fund, which is putting more money into Canadians' pockets.

Can the member explain why, on those two aspects—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Alexandra Mendes]

The hon. member for Kelowna—Lake Country.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Madam Speaker, there are many people who have referred to payroll taxes as taxes, both members in the House on the government side and people from reputable organizations in Canada.

We are referring to this because it is affecting people. We are looking at what is affecting people today. Inflation is at a 40-year high, and people cannot afford to put gas in their cars or buy food. Now is not the time for us to be increasing costs, including any taxes that people would have to bear.

Also on that front, this includes adding costs for small businesses. As I mentioned in my speech, many small businesses took on $150,000 in extra debt during the pandemic, and they have no way to pay it off. Now, by adding these payroll charges, they will have to pay an extra amount. It is taking money out of their bank accounts, and they are unable to pay off debt or spend money on anything else they want.

With respect to the carbon tax—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Alexandra Mendes]

I have to give time for one last question.

The hon. member for Joliette.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I thank my colleague for her speech.

I am shocked and outraged. As soon as the member finished her speech, the President of the Privy Council and Minister of Emergency Preparedness rose to announce that he was going to limit debate on Bill C-32. That is really shameful and offensive.

Why does the government always want to limit debate in the House, particularly when we know that this bill will be referred to the Standing Committee on Finance, when we are beginning a pre-study on it right now with a sunset clause, and when we are going to do the clause-by-clause study in a few days—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Alexandra Mendes]

Order.

The hon. member for Kelowna—Lake Country has a few seconds to answer because the time is up.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Madam Speaker, the member is absolutely right. We see the government continually bringing forth the collapse of debate in the House. There are many times when had speeches prepared to speak up on behalf of my community of Kelowna—Lake Country and my time was cancelled. The government continues to do that.

We are sent here and elected to represent our communities, bring their voices forth and bring their positions forth so that we can potentially bring them to committee.

Bill C-32—Time Allocation Motion

[Mark Holland, Liberal, Leader of the Government in the House of Commons]

Madam Speaker, I move:

That, in relation to 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, not more than one further sitting day shall be allotted to the consideration at second reading stage of the bill; and

That, 15 minutes before the expiry of the time provided for Government Orders on the day allotted to the consideration at second reading stage of the said bill, any proceedings before the House shall be interrupted, if required for the purpose of this order, and, in turn, every question necessary for the disposal of the said stage of the bill shall be put forthwith and successively without further debate or amendment.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Alexandra Mendes]

Pursuant to Standing Order 67.1, there will now be a 30-minute question period.

I invite hon. members who wish to ask questions to rise in their places or use the “raise hand” function so the Chair has some idea of the number of members who wish to participate in the question period.

The hon. member for Sarnia—Lambton.