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

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

Madam Speaker, I do believe I agree with the Bloc.

We have major problems coming here. To my point about the government needing to have a bit more action and look at the basics, we do have an inflationary problem, and our solution is very simply to create more of the stuff money buys. We create more of the stuff money buys by having workers who can work in businesses.

A report that came out last week said the lack of workers in Quebec is costing the Quebec economy $9 billion, and this was just last year. The reason was that manufacturers, and they are short about 16,000 manufacturers in Quebec, could not fulfill contracts or sign new contracts, and those contracts were worth $5 billion and $2 billion. Obviously, and the Governor of the Bank of Canada is mentioning this, the lack of workers is contributing greatly and mostly to inflation. We need to fix immigration, train more people and get more workers.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Madam Speaker, winter is coming, and many Canadians are worried they will not be able to afford to heat their homes.

Conservatives suggest removing the carbon tax from home heating as a way to make life more affordable for Canadians. The New Democrats know that in provinces and territories that have their own carbon pricing, like in British Columbia, and the carbon tax in B.C. was brought in by the right-wing B.C. Liberals, the carbon tax does actually apply to home heating. Removing the GST on home heating would be a better way to offer Canadians financial relief from coast to coast to coast. We have suggested amendments to Conservative motions to this effect, and they have rejected those amendments.

Why are the Conservative gatekeeping mechanisms that would help Canadians heat their homes this winter with their own litmus test on climate policy?

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

Madam Speaker, it sounds like he agrees with us that removing unneeded tax on home heating is one way to alleviate Canadians' struggles, and we certainly have always stated that. We believe that we need to eliminate taxes, which is a great way to help Canadians, and to ensure we stop excessive spending.

At the end of the day, Canadians need to heat their homes. Someone in my riding I talked to on the weekend went from paying $2,500 a month in home heating to $5,000. The triple increase of the carbon tax is going to hurt them, so we are certainly pushing to eliminate that. We will make things more affordable, and then we will fix the other problems when we get to them.

[Mike Lake, Conservative, Edmonton—Wetaskiwin, AB]

Madam Speaker, it is a pleasure to rise and take part in this conversation. I had the opportunity last week to engage in some of the questions and answers. It was interesting to see emotions rise a little on the Liberal side when I talked about the Trudeau legacy.

In our part of the world, when we talk about the Trudeau legacy, emotions rise as well. Of course I was talking about the Pierre Trudeau legacy, but confusion arose because, when we are talking about incompetent Liberal governments, it is hard to distinguish one from the other. I think that was the difficulty on the Liberal side.

When I made those comments, it was interesting because the Liberal MP to whom I was asking a question actually answered or responded. There are not a lot of answers coming from over there these days. The member responded, clearly reading from the Prime Minister's Office talking points.

I will read a couple of quotes from her answer. She said that Canada is the third-largest triple economy in the world. I am not sure exactly what that means. She referred to the Moody; she said that the Moody has reaffirmed, just after the statement, the AAA rating deficit.

Certainly the government's recent deficits deserve a AAA rating. I think she might have been misreading the PMO talking points she had. However, it is an important point.

Credit ratings are AAA until the time that they are not, and when they are not, governments and countries get in trouble. We saw that with the Trudeau legacy. It is important to talk a little about that legacy, as it seems that many members of the Liberal Party today have virtually no understanding, no recollection, of what happened during those years.

During the 15 years that Pierre Trudeau was the prime minister of this country, Canada ran deficits in 14 of those 15 years. Coming into that time frame, there was almost no debt in Canada, very low debt. The Trudeau government ran deficits in 14 out of 15 years.

Then we came to 1984 and a Conservative government. The Liberals like to point out that the Mulroney deficits were, at the time, the highest in Canadian history, but what they do not point out is that because of rising interest rates, because of inflation similar to what we are seeing right now, the deficits the Mulroney government ran were basically interest on the Trudeau government debt, the debt that Trudeau ran up in 14 of the 15 years he was here.

If we fast-forward about 15 years, we get to another Liberal government, and that is where the lesson on credit ratings comes in. We get to the Chrétien-Martin government in the mid to late 1990s, and suddenly Canada's credit rating was lowered. The government was faced with a really difficult decision. Of course at the time, it had to slash $35 billion from transfers to the provinces for things like health care, social services and education, $35 billion slashed because the Trudeau government had run up deficits or debt in 14 out of its 15 years over time.

This is exactly the situation we are facing right now. If I were to talk about the Trudeau legacy of an inflation crisis, a housing crisis, an energy crisis, there would be lots of confusion. Lots of members on the other side would stand up and say, “Quit talking about us.” I would be talking about the Pierre Trudeau government when I am talking about the Trudeau legacy; however, it is almost indistinguishable from the Liberal government we have right now.

Let us take a look at the interest right now on our debt. We are going to spend almost $20 billion more in interest alone in 2023-24 than we were spending in 2021-22, just two years earlier. It is almost $20 billion more. We are going to be spending almost as much on interest as we spend on the Canada health transfer, and we all know the challenges the health system is having in Canada. We cannot afford to be spending that much on interest, but we are going to be because of decisions the government has taken over the past few years.

We stand up in question period day after day and talk about the fiscal crisis facing the country. What we get in terms of responses is absolutely meaningless language, mind-numbing references to having Canadians' backs as Liberals talk about spending money as though the current Prime Minister is writing cheques from his own personal bank account. However, that is not the case. That money all comes from Canadians. It does not just come from Canadians now; it is actually coming from Canadians in the future. There is a mind-numbing reference to that.

There is a reference to tax refunds and tax rebates, which is basically that the government is collecting tax and then it is blessing Canadians by giving back to them their own tax dollars that the Liberals have spent.

There are references and a lot of criticism from the other side. When we talk about the amount of spending the government is doing and the lack of fiscal responsibility, there is a lot of criticism from the other side. The Liberals will list off yet another new spend the government is doing and then demand why Conservatives cannot support it.

I will tell them why Conservatives cannot support that. It is because, right now, in 2022, if we look back seven years and talk to our constituents, and I am sure those on the other side who were here in 2015 talk to their constituents as well, it is very rare, almost non-existent, to have a conversation with a constituent who says, “My life is better off today than it was in 2015 from a financial standpoint.”

We are facing crisis after crisis, and when we take a look at program expenditures from the government, in 2022-23, post-COVID, which is our hope, at least post-COVID massive spending, we are going to be looking at 72% more in program expenditures than the 2014-15 budget put forward by our Conservative government, a budget in which we balanced the finances of the country. Now we are spending 70% more and we are obtaining fewer results. Conservatives are just not going to give a blank cheque to this government to spend even more with the results it has gotten over time.

I am really looking forward to hearing questions from the other side. It is questions and comments, so maybe folks might decide to comment on how they have come to a realization. Maybe they will make a commitment to go back and take a look at the record of the Pierre Trudeau government of the 1970s and 1980s. Maybe they will go back and ask their government, with all of the spending they are doing and the fiscal situation we are in right now, how they cannot even find the $4.5 billion the Liberals promised in their election campaign for a Canada mental health transfer. Where is that $4.5 billion? With all of this spending, the Liberals cannot even find the money to pay for things they promised in their election platform a year ago.

I will conclude with that. I really look forward to hearing some thoughtful questions from the government side, hopefully.

[Han Dong, Liberal, Don Valley North, ON]

Madam Speaker, I listened closely to the hon. member's remarks, and he talked about history.

The Harper government began with a surplus. The previous Liberal government left, I think, $13 billion at the time. Therefore, it started off really well with a surplus to manage. Also, I checked the record. Under Harper, for the nine years that the Conservatives were in government, not a single year's unemployment rate went below 6%. However, we saw the constant dropping of the unemployment rate under the Trudeau government prior to the pandemic, and now we are seeing five point something per cent as a new norm for Canada. I think we have done quite well.

By the way, the real debt-to-GDP ratio for the federal government is 31%, which was just released in the public accounts.

Which program is the hon. member proposing to cut, perhaps in an amendment, that he thinks is a waste of money—

[The Assistant Deputy Speaker, Carol Hughes]

I will let the member answer because I have to put more questions through.

The hon. member for Edmonton—Wetaskiwin.

[Mike Lake, Conservative, Edmonton—Wetaskiwin, AB]

Madam Speaker, I love the opportunity to stand up and talk about the Harper legacy, if we want to talk about that.

First of all, we cut virtually every tax Canadians could pay. I think over 60 different taxes were cut under our government. We dealt with a global economic meltdown in a world-leading way—

[Some hon. members]

Oh, oh!

[The Assistant Deputy Speaker, Carol Hughes]

The hon. member had an opportunity to ask a question, and I do not think he needs to try to answer it. I would also remind the hon. parliamentary secretary as well that I did not recognize him, so at this point he should wait if he has questions and comments.

The hon. member for Edmonton—Wetaskiwin

[Mike Lake, Conservative, Edmonton—Wetaskiwin, AB]

Madam Speaker, I get as equally excited as they do talking about the Harper record.

When the world dealt with the global economic meltdown, we laid out a seven-year plan, we followed that plan to a tee, and by 2015, we balanced the budget. In contrast, as this government faced a significant global challenge, what it did was bring out the chequebook and responded by just cutting cheques with no eye toward and no signal in any way that we would ever talk about getting back to balance. In fact, the Prime Minister talked about it being an opportunity, and the Liberals have experimented with all sorts of new things that they never ran on as we went through that.

[Andréanne Larouche, Bloc, Shefford, QC]

Madam Speaker, I thank my colleague for his speech.

It is interesting to talk about the economy, and we can see that next year will be full of uncertainty. The Bloc Québécois is concerned that this is being used as an excuse to bring in austerity measures in essential sectors. I am talking here about the Bloc Québécois' three priorities.

First there are the health transfers, which are not negotiable. Budget cuts by the Liberals and the Conservatives are what got us into this situation in the first place. More than ever, the government needs to reinvest in our health care system, despite the year of uncertainty that lies ahead.

Then, we are calling for a major reform of employment insurance. During times of crisis, that is how we protect people who lose their jobs. This reform is important, because far too few people are eligible for EI. In fact, most people cannot access the program.

I will end with help for seniors. They are directly affected by inflation, because they are on a fixed income. They are deeply concerned about next year.

What does my colleague think of these three priorities and—

[The Assistant Deputy Speaker, Carol Hughes]

The hon. member for Edmonton—Wetaskiwin.

[Mike Lake, Conservative, Edmonton—Wetaskiwin, AB]

Madam Speaker, I have a couple of comments. First of all, during the Harper era, we increased health transfers by about 6% per year for almost every year that we were in government.

In the plan that our leader has laid out, he has simply said that, after a 70% increase in program spending over the last eight years, and an endless succession of spending plans and massive deficits, we would have a sensible plan that, for every dollar spent, we would find a dollar of savings.

We did that when we were in government. I sat on a cabinet committee charged with looking at ways we could find efficiencies so we could get back to balance in 2015, and that is a sensible way for a government to approach fiscal planning.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, with regard to the Harper era, I had an independent study done by the Library of Parliament on the bringing in of the HST. It was $6 billion in expenditures. That was required for a couple of provinces. If it were to be paid over 10 years, it would actually cost $10 billion.

I would like the member's thoughts about that. Was that a good idea, in the sense that we are still paying debt on bringing in the HST?

[Mike Lake, Conservative, Edmonton—Wetaskiwin, AB]

Madam Speaker, I am not familiar with the specific study the member is talking about. I would be glad to talk to him afterward.

I would reiterate that, during our time in government, we cut virtually every tax that Canadians pay, and I think that is a plan that is prudent for this country, as we take a look at responsible spending moving forward.