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

[Brendan Hanley, Liberal, Yukon, YT]

Madam Speaker, I thank my colleague for her question, and I thank her for standing up for seniors.

As I explained in my speech, our government is focused on helping Canadians who need it most right now. This includes one-time initiatives such as increasing GST credits, support for renters and larger programs such as child care and dental care. All of this is designed to make life more affordable during this difficult time.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Madam Speaker, I have a direct question about the opportunity the fall economic statement could have provided Canadians in relation to the drug poisoning crisis. The member knows very well the need to address the drug poisoning crisis across Canada. Families across the country, from coast to coast to coast, are being affected by this. It was absent in the fall economic statement.

What measures will the government take to ensure we have a plan to help save lives?

[Brendan Hanley, Liberal, Yukon, YT]

Madam Speaker, I thank my colleague across the floor for his advocacy on an issue very important to my heart and that we need to move forward on in continuing to address the mental health crisis and the opioid crisis. A critical part of that is continuing with the discussions with the provinces and territories on the $4.5-billion mental health transfer, which continues to be committed to by the government. Those discussions, in addition to the health care discussions, will be continuing.

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

Madam Speaker, it is my pleasure to rise today as we debate the—what is it now?—18th or 19th time allocation motion so far.

It is hard to keep track because this habit has become so ingrained in how we operate. It is time allocation after time allocation. Maybe people will start using that expression. Time allocation used to be the exception, but now, since the pandemic, since the advent of the hybrid Parliament, it seems to have become common practice, and I think that is a shame. I think it is a shame to shut down democratic debate and take away what really matters in a Parliament: time and space to debate and air contrasting views.

That is why I am pleased to share some of my thoughts on Bill C‑32.

Before the economic statement, the Bloc Québécois had great expectations. We really wanted a conversation about health transfers. We were hoping for a sign that the government wanted to give Quebec and the provinces the health transfers they have been asking for so they can fulfill their responsibilities.

In Quebec, that means addressing the aging population and the significant issues with mental health services, which are lacking in number and scope to meet the demand. Unfortunately, there is nothing in the economic update about that.

My colleague from Shefford has said this, and the Bloc Québécois has said it, and it is one of our priorities. We do not understand how the government does not consider those between the ages of 65 and 74 to be people who need to regain a certain amount of purchasing power, especially with the inflation crisis. If there was ever a segment of the population that needed a helping hand, it is them. Increasing old age security would have really been good news, a sign that the government is listening to seniors, those who built the Quebec of today.

In the economic update, we really wanted to see the government's desire and firm resolve to overhaul employment insurance. Today, I will use the minutes at my disposal to speak in greater detail about the EI program and the need to reform it.

Today, as we speak, barely 40% of workers have access to EI.

That is sad because, as we know, the EI fund is an insurance program. That means that workers pay premiums on their paycheque and employers pay premiums, and the money goes to build the EI fund, an important reservoir for workers who need it. Unfortunately, although the fund is quite healthy at the moment, it does not actually serve the people who really need it. Access is restricted.

I am very committed to this cause. The Bloc Québécois has been asking for EI reform for years, and we do not understand the government's resistance.

As I like to remind everyone, I decided to run again in 2015, the year the Liberals campaigned on a promise of comprehensive EI reform. In 2019, they promised it again, and then again in 2021. It is promise after promise, but nothing ever happens. The government had included $5 million in its budget to conduct extensive consultations across the provinces and Canada to understand and gauge the needs of workers, employers and civil society, and yet, 18 months later, we still have nothing. There has been no proposal and no plan to reform EI, even though my colleague from Thérèse‑De Blainville made it a subject to be studied by her committee. The committee heard from many witnesses who expressed the needs and shortcomings of the current system, which, as we all know, really needs to be modernized and updated to be tailored to today's labour market.

Of course, we have a number of demands. Workers who have paid premiums all their lives but find themselves in a difficult situation, like if their business is forced to shut down and they have to rely on EI, receive benefits equivalent to 55% of their income. The Bloc Québécois believes that, in the overall reform, that percentage really needs to increase to 60%. I think this is reasonable, and the rate was 60% prior to 1993. I remember very clearly when it was reduced to 55% of income. This demand remains permanent and is also being made by all the stakeholders who support the unemployed and others.

In its overhaul of EI, we would also like the government to eliminate the one-week waiting period. I do not know the reason behind the one-week period, but it is in addition to the system's bureaucratic delays for those who lose their jobs. People do not choose to go on EI. They do so because they lose their jobs as a result of the closure of a business, layoffs or any number of other reasons. Because of this long waiting period, which really should not happen, claimants only receive their first payment after six weeks. At least, that was the waiting period before the government system was paralyzed, back when it was working well and the performance and service standards were met. That was in the old days. Now, someone who loses their job in early or mid-June will not receive a cheque until late September or early October, because the system is completely paralyzed.

Our demands for the reform are important, and we were hoping to see them reflected in the economic update. We wanted people with a serious illness to be able to get 50 to 52 weeks of special EI sickness benefits in the event they are unable to return to work.

As members know, in the last Parliament, I introduced a bill that proposed that. What is more, as we speak, Bill C‑215 has been studied in committee, and the majority of the members who sit on that committee voted in favour of ensuring that people who have a serious illness can take the time they need to fight the illness and recover their health without having to worry about their financial circumstances.

As things stand now, it pains me to see people get to the end of their 15th week of special benefits when they have not finished their cancer treatments, their chemotherapy or their radiation. By the next week, they will have nothing left to pay their bills.

The minister seems to be sympathetic to the situation, but I think it is unacceptable when she promises this will arrive in the summer, then in fall, then at Christmas. She keeps pushing the date back further and further. Although she has the budget to do this, she refuses to give a specific date that would give hope to those who are starting chemotherapy or radiation today or who are taking long-term sick leave to take care of themselves, so they can regain their strength and go back to work.

We have talked a lot about Marie-Hélène Dubé, a woman who had cancer a few years ago and who decided to fight to have EI sickness benefits increased to 52 weeks, because she had to re-mortgage her house to meet her responsibilities and take care of herself.

Unfortunately, in committee two weeks ago, she said that her cancer is back and she will not have time to heal before the end of her 15 weeks. She is reliving the nightmare she went through a few years ago. To my mind, that is unacceptable.

The Bloc Québécois will vote in favour of Bill C‑32, because it does contain some good measures, but I implore the government to take a step in the right direction by quickly agreeing to reform EI and to implement the special benefits program for sick workers as soon as possible.

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

Madam Speaker, I am glad the Bloc has decided to support the fall economic statement. It is really encouraging to see that.

In regard to the gist of the member's comments today on employment insurance and benefits, the minister has been very clear in talking about the importance of reforming and making changes to the EI system. We often overlook the fact that during the pandemic, EI and programs such as CERB were brought to the table to ensure that supports would be there for Canadians going through the pandemic, and there have been modifications to the EI system over the last number of years. I am wondering if the member could provide her comments.

I can appreciate that the member wants to see an overall reform, but that is going to take some time as we continue to move forward. However, at the very least could she acknowledge that there have been significant modifications and changes over the last number of years?

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

Madam Speaker, I thank my colleague for his question.

During the pandemic, the government reacted quickly and implemented special benefits through EI. These benefits ended recently, leaving a lot of workers and people in need in a tight spot. The EI program already needed to be changed and reformed before the pandemic. People have been calling for that for many years because it is an old program that needs to be modernized.

I know that the Minister of Employment has shown a real interest in this and that she is running up against an outdated computer system, which is preventing her from being able to listen to workers and employers and come up with a modern EI program that is better at meeting people's needs. She also said that she is really limited by the people she works with in her department, because they need training and supervision.

Quite honestly, I do not think those are good reasons for delaying or not—

[The Assistant Deputy Speaker, Carol Hughes]

I am sorry to interrupt the hon. member, but I need to leave time for other questions.

The hon. member for Bay of Quinte.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Madam Speaker, the member spoke about health care and the lack of investment in health care as one of the primary concerns of the Bloc, so I am fascinated as to why the member is supporting the bill. There is really nothing to address further health care, specifically in terms of people. We are missing, in Canada, 60,000 nurses and 14,000 doctors, midwives and professionals, everything from cardiologists to dermatologists. We have a big problem with people. What are the member's solutions to fixing the people side, and how should we be driving the government, as our side believes we should, on fixing our health care system?

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

Madam Speaker, I think we all know the solution. It is what the premiers of every province and territory have been asking for.

The solution is enough money in health transfers so that each province can make appropriate, high-quality services available to its citizens based on their priorities, their circumstances and their needs. The solution is health transfers with no strings attached because every province is different and has different social issues to deal with.

I agree with my colleague that the solution is health transfers, and I hope the government will listen to Quebec and the provinces.

[Niki Ashton, NDP, Churchill—Keewatinook Aski, MB]

Madam Speaker, I thank my colleague for sharing her thoughts.

I would like to know if she thinks the government should do a lot more to make sure that rich Canadians pay their taxes. We know there is a measure in this bill, but I think much more should be done to tackle inequality in our country.

What are my colleague's thoughts on that?

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

Madam Speaker, I share my colleague's concerns. The measures announced in this economic statement are thin, flimsy and unambitious when it comes to preventing so much money from going to tax havens.

We urge the government to be a true world leader and do everything it can to prevent tax avoidance.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Madam Speaker, Liberals are driving the government like a rental. They do not drive it as if it is Canadians' money or savings. They drive it like they stole it, buying the flashiest items without taking care of the tires, the engine or the oil. Today, with the government moving closure on debate, it is just returning the rental car with smoke pouring from the hood and the tank empty.

The Conservative plan for Canadians and the skyrocketing inflation is quite simple: Invest in Canadians by fixing the basic problems; stop spending an excessive amount of money, and stop the tax increases to Canadians. For every item of spending, we propose that the government must find an item to save. It must stop the triple increases on gas, home heating and groceries and ensure that we give Canadians back control of their lives once again.

The car is broken. Inflation is at a 40-year high. We have immigration problems, a big, broken system that is resulting in a lack of workers. There is a lack of 1.03 million workers in this country, costing this economy upward of $30 billion. We have a housing crisis. We are over 1.65 million homes short in this country, and from that we have a homelessness problem. In my region there are over 500 homeless at this point, and there are homeless in every single area of this country. We have a health care problem: Canadians cannot find a doctor, nurse practitioner or midwife. Canadians are guaranteed universal health care under our system, but they cannot get the health care they need.

We have massive problems right now with the cost of everything. Canadians pay the highest cellphone bills in the whole world. No one else pays higher cellphone bills per month, and we have a problem even getting passports in Canada.

Canadians are hurting. Twenty per cent of Canadians right now are using food banks. Some Canadians are using food banks while they work 40 hours a week. We have problems with just getting basic services in Canada. When we talk about the economic update, we are really looking for solutions that are going to help Canadians, the most basic of solutions that can give Canadians the most basic needs they should have in this G7 nation.

We are looking, first of all, at what is driving this budget. This budget has $20 billion more in new spending than was in the budget that was passed in March. Why? It is because the price of oil has gone up, because oil itself is driving our country's economy. The 585,000 workers who work in that field, the fact that we have inflation and because of the war in Ukraine, we have had a $20-billion windfall, and that $20 billion has gone in this economic statement. However, nowhere in this statement are we fixing the basic problems: the housing problem, health care, immigration and Canadians' bills, which are the highest in the world.

Looking at the immigration system and where the biggest flaws are, I am going to focus specifically on housing. When we talk to the Canadian Construction Association and builders in my riding, skilled labour is the biggest gap that we find when it comes to housing. Yes, we have problems with regulations from the provinces and with municipalities getting homes up, but it always comes down to the most basic of needs, which are skilled builders and workers. When it comes to the immigration system, we are short at least 1.2 million, but right now we have a backlog of close to two million workers. We have 2.4 million workers in a backlog in our immigration system, and one million of those applicants are waiting longer than the IRCC service standard.

There is nothing more important than housing in Canada. More Canadians are homeless than at any time in the history of this country. More Canadians are on precarious footing with their rent and mortgage payments as interest rates rise, and every month we see more people fall through the cracks and end up homeless. The Auditor General this week released a report on homelessness, stating that the accomplishments of the government have been grossly exaggerated. The federal agencies leading the government's efforts to reduce homelessness by 50% by 2027-28 do not know if their efforts have even reduced homelessness. The CMHC has spent $4.5 billion and committed another $9 billion, but cannot tell Canadians who benefited from that money.

Infrastructure Canada spent $1.4 billion between 2019 and 2021, yet it cannot say whether homelessness increased or decreased as a result. The CMHC, which is overseeing the majority of the $78.5 billion of the national housing strategy, takes the position, as the Auditor General stated, that it is not directly accountable for the targeted 50% reduction in homelessness. If it is not, the question is, who is? Here we thought the government was good at convening. Spending money and thinking that alone gets results is ludicrous. Canadian taxpayer dollars are a means, not an end.

The labour shortage is, without any doubt, one of the biggest barriers to housing. It is also one of the biggest barriers to our health care system and is contributing to inflation. The Governor of the Bank of Canada, Tiff Macklem, stated as much last week, when he said that labour shortages are contributing to inflation. However, in this economic update we are not dealing with the problems in immigration, meaning the backlogs and the fact that we are not getting enough workers, health care workers, or anyone we need to help lift this country out of this inflationary problem.

We talk about health care and the shortage of 60,000 nurses and 15,000 doctors. Another of the biggest problems we have is that we are not allowing trades, nurses or doctors to move from province to province. We have a military family resource centre at CFB Trenton in my riding, and a lot of our military personnel move around to postings from base to base. For their spouses, who normally are trained as nurses, paramedics or doctors, it can sometimes take from six to eight months for their qualifications to be transferred from, say, Nova Scotia to Ontario. We are not addressing those biggest targets when we need paramedics, nurses and professionals in our health care system.

When we look at the legislation we need when we are talking about the budget, that should be something that is included in what we are looking at.

With respect to the costs Canadians are paying right now, in Canada we have the highest cellphone bills on the whole planet. When we look at carriers across the world, of the 121 telecommunications carriers, Rogers, TELUS and Bell are the first, second and third priciest in the world. The results are quite something. Canadians are paying triple what Australians are paying for cellphones, for 25 gigabytes of data and unlimited text and talk, and almost double what Americans pay.

The reason for that is a lack of competition. We allow the big three to dominate the market, which is what we are seeing play out at the Competition Tribunal right now, and Canadians simply do not have a choice. The government has had six years, and it made a promise. This year, the Prime Minister stated in April that the government had reduced Canadian cellphone costs by 25%. What actually happened was this. If people had two gigabytes of data, that went down 25%, yet no one uses two gigabytes anymore. It is like having a VCR or a Blackberry Pearl. Technology evolves and when it comes to the data that Canadians use and we see that evolution, they are certainly not seeing that savings.

The Liberal government is forcing Canadians to live in a haze, to stay in the shade. Canadians are forced to sit around and wait for better days. They could use a break; they could use an “amen”, but all they can do is sit around and wait for better days.

There is nothing wrong with this country that cannot be fixed. We might have a party that has driven government like a rental, like it stole it, but we can right those wrongs with a government that knows it is not a rental, that looks at it like it is the Canadian family's minivan that needs investments into its tires, its engine and its oil to ensure that Canadians can get from point A to point B, can heat their homes, can take care of their families and can make sure they get back to doing what they do best, which is living in the best country in the world.

We can do a lot of great things for Canadians. We can invest in them. We can make sure we get the labour, the nurses and the doctors. We can make sure we build homes. When it comes to homelessness, we need to make sure we invest in putting roofs over Canadians' heads to ensure they have shelter. We can make sure we take care of Canadians, but it starts with spending money correctly and making sure we take care of their lives, their savings, their pocketbooks and their paycheques.

[Darrell Samson, Liberal, Parliamentary Secretary to the Minister of Veterans Affairs and Associate Minister of National Defence]

Madam Speaker, my colleague underlined a few very crucial areas that Canadians are concerned about and that our government has moved forward with in the fall economic statement. Various decisions have been taken lately. One is with respect to housing. We brought forward the first national housing strategy, and we are seeing the rapid housing initiative move forward very quickly as well.

He talked about immigration, so I would like him to talk a bit about the opening up of the express entry, which will help identify the needs of Canadians to be able to fill the gap. Of the people coming in through immigration, 60% are already based on the needs of Canadians. There are some good measures in the fall economic statement. One that I would like the member to talk about is immigration.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Madam Speaker, talking is one thing, but action is another. The economic statement states we need this, but we have a million immigrants backlogged right now. When we talk about bringing in 500,000, let us be clear about that number. Two hundred thousand of those are skilled. We have about 75,000 for refugees, and we have about 75,000 for family reunification, but we are backlogged a million.

We need these workers today, and although the budget has had a 30% increase of money in the last three years and an extra 2,500 employees for Immigration, Refugees and Citizenship Canada, or IRCC, we are not seeing immigrants coming into this country. Employers right now are screaming, and the cost of that is about $30 billion.

It is nice to have it in the budget, but what we need is action. We need to make sure we think a little differently, get workers here and get them working.

[Luc Desilets, Bloc, Rivière-des-Mille-Îles, QC]

Madam Speaker, I thank my colleague for his speech. I agree with him that this bill has no colour, no taste and no vision.

I would like his opinion. The bill includes roughly 108 references to the problem of inflation, without ever offering solutions for vulnerable people, especially while we are heading into a recession.

Does my colleague agree with the Bloc Québécois on this?