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.

Second Reading

[Rosemarie Falk, Conservative, Battlefords—Lloydminster, SK]

Madam Speaker, the overall quality of life in Canada is in significant decline under the NDP-Liberal government, and we have the evidence all around us. Government is costing Canadians more while achieving less. Violent crime rates are increasing under the Prime Minister. Food inflation, as has already been said in the House today, is at a 40-year high. The cost of living crisis is ballooning, and basic necessities are becoming more and more out of reach for far too many Canadians. In fact, a record number of Canadians used food banks this past year alone, and reports are telling us that one in five Canadians are skipping meals. Those records are truly shameful.

The fall economic statement was yet another opportunity for the NDP-Liberal government to take meaningful action to tackle inflation. It was an opportunity to course correct and help the growing number of Canadians who are struggling to make ends meet. Instead, this costly coalition is continuing with its out-of-control inflationary spending and activist-driven policies that are hurting Canadians.

At the most, the NDP-Liberal government doled out more platitudes and offered remarkably out-of-touch budgeting tips to Canadians. Unlike this costly coalition that thinks it can keep spending and spending and that the budget will balance itself, Canadians already understand that they have to have a budget. The one in five Canadians skipping meals to help make ends meet certainly do not need advice about cancelling a Disney+ subscription from the out-of-touch finance minister and her government. They need a government that is going to stop pouring fuel on the inflationary fire with endless deficit spending and stop hiking taxes. Canadians need a government that is not going to keep making it harder and harder for them to pay their bills, heat their homes or put food on the table.

The reality is that Canadians are getting hit on all sides. A paycheque is not going nearly as far as it once did. Not only is the value of the dollar in their pockets decreasing as costs of basic necessities soar, but taxes are also going up. In fact, Canadians have never paid more in taxes. Quite frankly, Canadians are out of money.

That is why the Conservatives put forward two clear demands ahead of this fall economic statement: stop the taxes and stop the spending. There should be no new taxes on Canadians. This costly coalition should not be profiting off the empty stomachs of Canadians just so it can spend those dollars on its activist-driven agenda. It needs to keep those dollars in the pockets of Canadians so they can spend it on their own families' priorities.

This costly coalition’s plan to triple the carbon tax is cruel. The cost of home heating is expected to be double this winter, and they want to triple the carbon tax on that bill as well. It is a carbon tax, I might add, that has no meaningful impact on the environment, has failed to help the NDP-Liberal government meet a single one of its climate targets and has only succeeded in hurting Canadians, especially those living in rural and remote areas.

This costly coalition wants to triple the hurt. Cold winter weather has already arrived, and those higher home heating bills are already a reality. Basic necessities like home heating should not be out of reach for Canadians. In a country with an abundance of natural resources, affordable energy should be a reality for all Canadians, but it is far from a reality when we have an NDP-Liberal government that is so dead set on keeping our energy in the ground.

This is the same NDP-Liberal government that seems to have no problem at all importing energy from foreign countries with lower environmental and human rights standards. Only a Conservative government will remove the obstacles that it has put in place to strangle our resource sector. Not only Canada but the world needs more Canadian energy. Never has that been more obvious than in this last year as Putin wages war in Ukraine. Canada's failure to meet its energy potential is actually failing our allies.

Just the same, food insecurity is a growing concern globally. Adding insult to injury, the finance minister had the audacity to stand up in front of Canadians and proudly say that we grow food to feed the world while she knows full well that the government is destroying the viability of our agricultural sector.

Their fertilizer reduction plan not only threatens global food security but also food security here at home in Canada, not to mention its impact on food production and the cost of groceries.

When it comes to their failed carbon tax, our farmers and our producers are some of the hardest hit. Their excessive tax bills are in no way offset by the government’s measly tax credit. It is truly a slap in the face to our farmers, who are not only producing high-quality and nutritious food but are also doing far more to help the environment than the failed NDP-Liberal carbon tax.

There are obvious solutions to reversing the decline in the quality of life in our country, but the NDP-Liberal government cannot keep doing more of the same. To tackle the cost of living crisis that we find ourselves in because of the Prime Minister’s out-of-control spending, we have to bring government spending under control. It is one of the reasons Conservatives called on the government to cap government spending.

We asked the government to commit to matching any new spending with equivalent savings, just as, I am sure, many Canadians have to balance their own household budget. This fall economic statement continues down the path of spending beyond their means, at the expense of Canadian taxpayers and future Canadian taxpayers.

The members on that side of the House will be very quick to stand up in this place and try to tell Canadians that all of their deficit spending was and is necessary, and that they did it to support Canadians. The non-partisan PBO has already said that more than a third of the government’s spending had nothing to do with the pandemic.

The long list of wasteful spending continues to grow. Whether it is the overpriced arrive scam app, luxurious hotel stays exceeding $6,000 a night, CERB cheques that were issued to prisoners or wage subsidies given to corporations paying out dividends, there is obvious wasteful spending under the government’s watch.

The reality is that the NDP-Liberal government’s wasteful spending does nothing to support Canadians, but it does make more Canadians vulnerable and in need of support.

Only Conservatives are committed to stopping the inflationary deficit spending and to stopping the funding of government programs with printed cash. The potential for growth is immense, but we need to cut red tape and remove the gatekeepers that are standing in the way of our economic drivers. Instead of more cash chasing fewer goods, we need more goods.

The Prime Minister will find every and any excuse to lay blame elsewhere for the current cost of living crisis, but his failed and costly policies have directly contributed to the challenges that Canadians are facing today. The bills for his activist-driven policies are due and, unfortunately, it is Canadians who are left to pay for it.

The fall economic statement is inflationary, and it fails to address the challenges that Canadians are facing because of the NDP-Liberal government.

[Kody Blois, Liberal, Kings—Hants, NS]

Madam Speaker, my hon. colleague certainly talked about her concerns around the price on pollution, but what I have asked members of His Majesty's loyal opposition is why they ran on a platform to price carbon.

Just over a year ago, the member ran on a Conservative platform that would have established a price on pollution for a plan that would have rewarded those who were emitting more. She did run on it. I find it a little facetious for her, a year later, to stand in the House and say what a terrible idea it is.

Can the member explain to her constituents, and indeed to all Canadians, why there has been such a change over the last year in her position?

[Rosemarie Falk, Conservative, Battlefords—Lloydminster, SK]

Madam Speaker, if we look in Hansard, I have always been against a carbon tax. This carbon tax has done nothing for the environment. The Liberals and the NDP have not met the targets they have set over and over. I have seen bills from my farmers of $10,000 and $20,000 to dry their grain. I have seen the GST being collected on the carbon tax.

A great question for the government is this. Why is it collecting GST on the carbon tax? This tax on a tax is hurting Canadians.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, I was listening to my colleague's speech, and throughout it she talked about inflation. There was no mention of the fact that corporations in Canada avoided paying $31 billion in tax last year. There was no mention of the obscene profits that the oil and gas companies, Loblaws or the big grocers are making. When it comes to talking about inflation, the Conservatives will never, ever, with all their might, talk about obscene corporate profits. It is like their kryptonite.

In the United Kingdom the Conservative government not only has a windfall profit tax on oil and gas companies but also raised it to 35%. It realized those companies were making too much money and it was time to level the playing field for the British people. Through you, Madam Speaker, why is it that the United Kingdom Conservatives have the courage that Canada's Conservatives are so obviously lacking?

[Rosemarie Falk, Conservative, Battlefords—Lloydminster, SK]

Madam Speaker, I am very disappointed in the member for that question. I am here because the people of Battlefords—Lloydminster sent me here, and these damaging NDP-Liberal policies are destroying their lives. I spoke with constituents who cannot get their kids to the hospital because it is two and a half hours away. I spoke with seniors who cannot afford their medication because they have to pay obscene tax to get—

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

You voted against pharmacare.

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

Can we allow the hon. member to answer the question that was asked?

The hon. member for Battlefords—Lloydminster.

[Rosemarie Falk, Conservative, Battlefords—Lloydminster, SK]

Madam Speaker, I am talking about the ability of my constituents, who live in small, remote, rural communities, to get to a bigger centre to get their prescriptions, to get their kids in sports, to get groceries or to even get the mail. The carbon tax is hurting the people I represent. I would prefer that the government take its hands out of the pockets of these families, let them spend the money they need to on their families and not have the middleman tell them where it goes.

[Mario Beaulieu, Bloc, La Pointe-de-l'Île, QC]

Madam Speaker, I would like to hear from my colleague.

Bill C-32 is notable for what it does not contain. Old age security was increased for people 75 years and older. This created a two-tiered system for old age security, because those between 65 and 75 got nothing.

In my colleague's opinion, should there be just one benefit? Should the benefit not be increased for all seniors, not just those 75 and over?

[Rosemarie Falk, Conservative, Battlefords—Lloydminster, SK]

Madam Speaker, one thing I noticed is that the current Prime Minister is great at turning people against one another. He found a way to have two tiers of seniors, just as with child care. There are a lot of people in my constituency who cannot access this $10-a-day child care because they do not qualify. They do not work nine to five. They work shift work. Some of them work all the time and they cannot access it.

The current government is very good at railroading the provinces, not having discussions with them, doing whatever it wants and pitting Canadians against one another.

[Brendan Hanley, Liberal, Yukon, YT]

Madam Speaker, I am very pleased today to take part in the debate on the Government of Canada’s fall economic statement. We live in very uncertain times. Canadians and all the citizens of the world are struggling not just with one crisis but with multiple crises. Our world is struggling with an inflationary crisis and with an increasingly devastating and costly climate crisis. Canada and its allies are trying to combat the rise of extremism, of isolationism and of the aggression in authoritarian countries like Russia, China and Iran.

Members of the opposition may wish to minimize the climate crisis or misrepresent the inflationary crisis as being caused by Canada's leader, by Canada’s efforts to combat climate change or by our government’s efforts to support Canadians through the COVID–19 pandemic. However, Canadians, including those of my constituency in the Yukon, know that these issues have a much further reach and a more complex origin than any message bottled into a TikTok video.

Canadians of all ages are dealing with a host of crises simultaneously that have not been seen before, and stress, in particular, our children and our grandchildren. They are the younger generations whose very futures are at stake. They face a radically changing planet, because older generations have waited too long to listen to our scientists and elders who pleaded that our climate was changing. They face unsustainably high costs of living. They face a growing tidal wave of right-wing populism channelled out of frustration with the status quo and directed against the very measures that would help alleviate that discontent.

Lester B. Pearson once said, “The choice...is as clear now for nations as it was once for the individual: peace or extinction.” Although his words are somewhat chilling when we reflect on Russia's current illegal war in the Ukraine, I would also add today that the choice now includes addressing this climate crisis or facing extinction.

Baby boomers and generation Xers, like me and many of my colleagues, have been particularly blessed in generations of global stability, high standards of living and mostly peace and prosperity. However, despite all we have been given, the future is increasingly uncertain. Our children, grandchildren, younger parliamentary colleagues, candidates, staff, activists and constituents are the ones who have to face that incertitude, that uncertain future, a future fraught with the destiny of our planet.

The fall economic statement that we are now debating is well positioned to address the times and the challenges, as well as the opportunities that we are presently living. One of the key components of the economic update is to give younger Canadians a helping hand by making Canada student loans and Canada apprenticeship loans interest free. Thirty per cent or more of what a government student or apprenticeship loan borrower in Canada repays to the government is interest. More than half of Canadian students utilize Canadian student loans.

Someone from Dawson City who travels to Victoria, Edmonton or Ottawa for an undergraduate degree and takes out a $40,000 loan for that degree will currently pay an additional $13,000 in interest alone. This says nothing of the cost of pursuing a graduate degree or professional degree like engineering or medicine. With the passage of this bill, that is money they can reinvest in the economy now, or save for a down payment on a home. This is a big step forward for Canada and for our younger Canadians.

I returned from my riding after a long day of travel yesterday. Many people spoke to me to tell me how much they welcomed this support. Young people are not alone in feeling the brunt of rising costs and an uncertain future, which is why our affordability plan is already in place. That includes increasing the Canada workers benefit, cutting average child care fees by 50% and increasing old age security pensions by 10% for those over age 75, and more.

Rising costs of living are felt particularly in northern and remote communities like those in the Yukon. This has hit families across the Yukon hard. Now, while our government is working hard to help those at the lowest income levels, our middle class is also struggling. The government is building an economy that works for all Canadians. Contrary to what we sometimes hear from across the aisle, there is no magical solution to the pinch of inflation, including removing the price on pollution, which would literally be robbing Peter now to pay much more to Paul later.

Times are indeed tough. According to Statistics Canada, in the past year alone the cost of heating oil in Whitehorse has increased as much as 80¢ a litre, and it currently sits at almost 60¢ a litre more than it did last fall with a similar increase in the price of diesel and regular gasoline.

Since 2019, the price on pollution has increased about 13¢ a litre. Though, due to the fluctuations in oil and gas prices in September 2021, Yukoners were actually paying less per litre than they were in January 2019, the year the price on pollution was introduced. The increase in the price on pollution earlier this year was about three to four cents, while the price per litre overall has increased 60¢ to 80¢. Our price on pollution, which some refer to as the carbon tax, represents less than 5% of that overall increase.

The Yukon government offers its own climate action rebate program. Much of the increase in fuel prices and the cost of living is tied to inflation, higher oil prices and global pricing decisions made by OPEC, along with the global economic impact of Russia’s brutal invasion of Ukraine and the lingering supply chain impacts of the COVID-19 pandemic.

Pricing pollution is the most responsible and economical way to reduce emissions in the long run, and while it has increased, it is not having the dramatic impact on inflation and rising prices that the opposition accuses it of. They are more focused on suggesting that devastating forest fires, melting permafrost and more severe storms are not happening because of anthropogenic global warming, and on suggesting that climate change is not wreaking havoc on our infrastructure, people and economy, rather than either coming up with alternatives to combat climate change or proposing concrete measures to support Canadians with these rising costs.

Not only does Canada and Yukon offer rebates on the price on pollution, putting more money in the pockets of the average citizen than the price on pollution costs, but we are working to implement measures that would support Canadians through these difficult times. Our government has not only introduced measures such as the doubling of the GST tax credit for six months to help Yukoners struggling the most with higher prices, but also invested in a net-zero emission that runs on clean energy so we would not be beholden to the decisions of OPEC.

For Yukoners who rely on home heating fuel and are looking for an alternative, I hope they will explore the Canada greener homes initiative, which offers grants of up to $5,000 and low-interest loans of up to $40,000 to help transition homes and lower their emissions.

Our government is investing in the jobs of tomorrow, as demonstrated by our fall economic statement, and is working to build the economy of tomorrow with investments in the sustainable jobs training centre and launching the Canada growth fund. The CGF is Canada’s low-carbon financing initiative, which would attract private sector investment in Canadian businesses and projects to help reduce emissions and deploy clean technologies that drive growth, achieve climate targets and capitalize on Canada’s natural resources and critical supply chains.

Our fall economic statement also introduces a competitive clean technology tax credit of 30% of the capital cost of investments to ensure that Canada can compete with the United States in attracting clean technology developments. This credit would be critical for business, communities and individuals in the Yukon, as we look to green our economy and our energy grid, which is heavily reliant on fossil fuels.

I just came from Yukon Geoscience Forum, where our government's critical ministerial strategy and our investments in moving to clean energy were welcomed enthusiastically. Clean energy needs mines, and mines need clean energy sources. The Yukon has a great future in both.

The clean tech tax credit would be available for investments in electricity generation and storage systems, including run-of-the-river, tidal, and small modular nuclear reactors, all of which are potential components of long-term efforts to green the Yukon’s energy grid.

It would also be accessible for low-carbon heat equipment and zero-emission industrial vehicles, such as those used in mining and construction. As one of the strongest economies in the G7, with an excellent international credit rating, and a debt-to-GDP ratio that continues to decline, we are facing headwinds in a strong economic position.

Our communities in Yukon deal with long winter nights every year, but we know that spring, summer and the sun await us all, as they await all Canadians. Our government will be there to continue to help Canadians through what could be a dark winter.

We will continue to base our decisions on data and facts. We will continue to build an economy that works for all Canadians.

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.

Fall Economic Statement Implementation Act, 2022

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

Mr. Speaker, in the fall economic statement, there are a lot of supports to assist Canadians at a time when we recognize inflation is having a profound impact, even though Canada, relatively speaking in comparison to other countries, whether it is the U.S. or the many countries in Europe, is doing quite well, as our inflation rate is lower than the rates in those countries. Still, we need to understand and appreciate the difficult time that many Canadians are having with inflation.

Would my colleague not agree that the quicker we pass this legislation, the better it will be, as it will provide the supports Canadians need at this time?

[Brendan Hanley, Liberal, Yukon, YT]

Mr. Speaker, I thank my colleague for bringing up the question of timing and the importance of coming to a vote and an agreement on moving forward with this fall economic statement and the implementation thereof.

We know that people need help right now. We know that we are in an affordability crisis as we move toward a new economy. Therefore, time is definitely of the essence.

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

Madam Speaker, my question has to do with increasing the old age security pension for people 65 to 74. I want to know whether my colleague is aware that the people the most affected by the two classes of pensioners, are women, those who earn lower incomes their entire life to be able to feed or support their family. It is mainly women 65 to 74 who are suffering the adverse consequences of the government's refusal to increase their pension.

Does my colleague realize that? Will he commit to pressuring his colleagues to ensure that people 65 to 74 are finally included in the pension increases?