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

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, I enjoyed working with my colleague on the right to repair legislation.

I will take issue with the Harper administration, which, propped up by the then Liberal Party minority, used closure on debate numerous times. The Harper government used it over 100 times when it had a majority.

My question is quite simple. Is it the Conservative Party's position to end this practice forever in the House of Commons? Is it the position of the Conservative Party not to have closure of any debates, and why did the member participate in the votes at the time when the Conservatives were propped up by the Liberal minority, with a Conservative majority?

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Madam Speaker, my time in this House began only in 2019. I definitely do not enjoy having to debate closure motions. It is my hope that the government and the NDP will put an end to this practice in this Parliament, so we can move forward on adequately using the time that we have to debate important pieces of legislation, like the one the member mentioned on the right to repair issue.

We are here today on the government's economic update. There are so many gaps in it that we could drive a truck through them, leaving a lot of people behind. There is a lot of virtue signalling from the government, and we are not able to get the results for Canadians because it is ramming through this piece of legislation, like it has other ones in the past.

[Gerald Soroka, Conservative, Yellowhead, AB]

Madam Speaker, I am pleased to rise in the House today to speak to Bill C-32, the fall economic statement implementation act, with a particular focus on how the NDP-Liberal government claims to put Canadians' interests first, yet continues to push forward with its uncontrolled, insatiable inflationary spending.

We have two simple demands of the NDP-Liberal government to address the affordability crisis: Stop the taxes and stop the spending.

The cost of living crisis did not come without fair warning. We Conservatives have a long record of warning the NDP-Liberal government of the consequences of its actions. Needless to say, the direction it has demonstrated has been one of irresponsibility, mismanagement and carelessness. Skyrocketing inflation and the affordability crisis are likely to be mishandled yet again unless the NDP-Liberal government continues to listen to common-sense, realistic Conservative solutions to truly support Canadians across the country, so this is what we have to say.

The economic update does nothing to remedy the homegrown affordability crisis, and there is a running theme of deflecting the blame altogether. Whether it be the war in Ukraine, the pandemic or inflation being a problem around the world, the Liberal government chooses to blame everything else but its inflationary spending.

The inflationary deficits, totalling about half a trillion dollars, have sent more money chasing fewer goods. These inflationary practices are hiking the cost of everything while leaving Canadians with band-aid solutions that provide them with no long-term support. The Liberals' tax-and-spend agenda is completely unsustainable, and Canadians deserve better than choosing between eating or heating this winter. Seniors deserve better than barely scraping by with the cost of groceries. Families deserve better than paying the ever-climbing carbon tax. Students deserve better than facing a bleak housing market post graduation.

Canadians have never paid so much into taxes as they are because of this government. With record-breaking price hikes for gas, groceries and home heating, it is no wonder that more Canadians are turning to food banks for extra support once they have exhausted everything else they could possibly have saved money on.

The Prime Minister has managed to pack on more debt for Canadians than all the past prime ministers combined. That is why we Conservatives are championing the interests of hard-working Canadians by advancing two demands of the government: Stop the tax hikes and stop the inflationary spending.

The government loves to masquerade its inflationary spending as “helping Canadians” but tends to neglect saying that it is adding more debt and hiking inflation with its so-called affordability measures. If the NDP-Liberals were sincere about supporting Canadians through the cost of living crisis, then they would cancel all planned tax hikes, including the tripling of the carbon tax. Canadians are already struggling with inflation. My constituents have been talking about how much it costs to heat their homes nowadays. Since when has heating during the winter become a luxury?

Canadians work hard. They have demonstrated resilience and hard work to support their families and help their neighbours throughout the pandemic, even now, when the price of everything drifts further out of reach. Ironically, this coincides directly with the NDP-Liberal government's drifting further out of touch with how much it costs to live under its inflationary nonsense. Canadians deserve better than choosing between heating their homes for the winter or putting food on the table for themselves and their families.

Furthermore, we Conservatives are calling on the NDP-Liberal government to stop the inflationary spending and strongly consider reinvesting that back into the Canadian economy by creating more things that money can buy: more Canadian energy, more Canadian products and more Canadian jobs.

We are also calling on the government to manage its inflationary spending for once, by matching new spending with equivalent savings elsewhere to rein in inflation as well as to stop the inflationary deficits that drive the costs of everything up. It is no lie that Canadians' paycheques are no longer going as far as they used to and their dreams of a brighter future are fading.

None of our practical solutions to curb inflation were reflected in the fall economic statement, and for that reason, we Conservatives cannot stand by the inflationary updates outlined in Bill C-32. The NDP-Liberal government had every opportunity to understand that its approach does nothing to serve Canadians, yet it moved forward with its problematic plan anyway.

From the lengthy lineups at airports, to the painfully slow passport processing, the wasteful ArriveCAN app and, even now, Bill C-32, the NDP-Liberal government has proven that it is incapable of addressing inflation and meeting the basic needs of Canadians. The cost of government is driving up the cost of living for Canadians. The Liberals are out of touch and Canadians are out of time. Winter is here and the government should do everything better to prevent Canadians from choosing between eating or heating this winter.

This government likes to pretend that there was no other choice than to double the debt. While the Prime Minister spends $6,000 a night on the most expensive hotel room in London, Canadians are barely able to afford home heating or a roof over their heads. When Canadians are struggling to pay for groceries, this government tells them to tighten their belts and, further, to cancel their Disney+ subscriptions. The Liberal government likes to call the carbon tax a price on pollution while its members are chauffeured everywhere they go. Canadians on the other hand have to pinch pennies at the pumps.

This government once stated that the country's debt would not exceed $10 billion. It lied. In fact, over 40% of new spending was not related to the pandemic at all. That is $205 billion of inflationary spending. On top of that, interest rates are skyrocketing at an unprecedented pace. Mortgage payments are becoming unaffordable and most young people do not even think about buying a home at all any more. Canada is one of the largest, richest, most proudly diverse countries in the world, yet Canada has had the second most inflated housing bubble.

Canadians deserve better than just being able to afford to get by. They deserve security, opportunity and a fiscally responsible government. Instead of printing more and more cash to throw around, we Conservatives believe in creating more of what cash buys, bolstering our economy and making more quality jobs and opportunities for Canadians.

We are lucky enough to be in a country so full of resources, so why are we not investing more proudly in Canadian products, such as food and energy, instead of importing oil from other countries? The NDP-Liberal government loves to claim environmental protection for the tripling carbon tax, but it chooses to import oil from other countries, which costs more in funds and emissions to ship, trains and trucks into Canadian households.

Instead of providing people with one-time rent support cheques, which only helps a fraction of Canadians, we Conservatives urge this government to cut the red tape, quit the gatekeeping and get shovels into the ground to build more affordable housing for Canadians. It is time that the Liberals understand the real consequences of their wasteful spending and listen to Conservative solutions. It is time for the government to show more compassion and stop the inflationary recklessness. It is time for the government to stop spending and stop the tax hikes.

[Jenica Atwin, Liberal, Fredericton, NB]

Madam Speaker, considering Canadian inflation is lower than that of our neighbours to the south, the U.K., Italy and Germany, and that our inflation rate went unchanged last month from the month previous, yet the work of government continues, would the member finally admit to Canadians that inflation is, in fact, a global crisis fuelled by pandemic shutdowns, disrupted supply chains, Russia's invasion of Ukraine? Will they finally get on board in a collaborative, honest approach to help Canadians weather this storm?

[Gerald Soroka, Conservative, Yellowhead, AB]

Madam Speaker, well, that is a very nice response to a question.

I have to admit that the Liberals talk about how it is a global phenomenon as though they had nothing to do with it. It is no wonder those members talk about removing the Disney+ channel because I think they live in a fantasy world where they say they have no control over the finances or the inflation of the country.

It is shameful that the Liberals stand here and compare us to other countries. It is not about other countries. It is about Canadians and how they are suffering with the high inflationary rate. They are saying, “Well, we have done nothing, but you say that it is our fault.” It is funny how they always talk about the inflationary crisis not being their fault, but when there is a positive, they always say, “Well, that's because of our programs.”

Once again, I am sorry, but that is a bad statement and a bad question.

[Martin Champoux, Bloc, Drummond, QC]

Madam Speaker, I congratulate my Conservative colleague for his comments and his speech.

The Bloc Québécois expected three things from this economic statement. First, we wanted health transfers with no strings attached, as Quebec and the provinces have been unanimously calling for for quite some time. There is still a consensus on that.

Second, we asked for an increase in seniors' pensions that is not based on age, because the increase is presently only for those 75 years of age and older. Those aged 65 to 74 are wondering why they are being left behind. The third item is the much-anticipated reform of employment insurance.

These are the Bloc Québécois's very simple demands. However, there is nothing in the Liberal Party's proposal on that.

If my Conservative colleague would like to share his thoughts on that, I would be very pleased to listen.

[Gerald Soroka, Conservative, Yellowhead, AB]

Madam Speaker, it is very true that there are many things in the House that the Liberals have brought forward that are not helping Canadians. The member brought up a prime example of the three points the Bloc had wanted. It is a very good point.

The Liberals talk about how much money they keep spending and how much they are helping Canadians. If that were the case, why are seniors under age 75 in my riding asking why they did not get an increase. They are asking why they are suffering and how it is their fault, and they are saying that their costs have gone up just as much as those of the people who are 75 and older. It is quite surprising that once again the Liberals have failed to help our seniors or help health care.

There are many problems in health care right now. Alberta is going through that now provincially, trying to find out how they can make improvements. Is the federal government going to be there to help Alberta? It probably would not because it is not in the fall economic update either.

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

Madam Speaker, this afternoon the Conservative speeches made me nostalgic for a time when Conservatives were as interested in solutions as they were in slogans. Does the member for Yellowhead realize that taking the carbon tax off home heating fuel would do nothing for people in my province of British Columbia, the province of Quebec or the Atlantic provinces? Why have the Conservatives rejected our idea to take the GST off home heating fuels of all kinds during this winter, for those who heat with electricity as well as with fossil fuels? Are the Conservatives really interested in solutions? Would they drop the rhetoric on the carbon tax and support the NDP plan to take the GST off home heating?

[Gerald Soroka, Conservative, Yellowhead, AB]

Madam Speaker, I do not think that we were against taking off the GST. The problem was that it is such a small part of the carbon tax. Most people are telling me that the carbon tax on their utility bills is almost the same amount as they are paying in fuel. Therefore, the GST is not going to amount to as much as the New Democrats had hoped.

That is why we are asking for the carbon tax to be off home heating. That would have a direct impact on many Canadians right across this country. The member is right that certain provinces do have their own climate crisis or their carbon pricing in effect, but the point is that they could look at that as well in those provinces. To have a better solution—

[The Assistant Deputy Speaker, Carol Hughes]

Resuming debate, the member for Medicine Hat—Cardston—Warner has the floor.

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

Madam Speaker, it is always a privilege to rise in the House to represent the incredible people of Medicine Hat—Cardston—Warner.

Today, as we debate the fall economic statement, Bill C-32, I find it challenging to speak to the government's financial priorities. The priorities of the Liberal government differ dramatically from the priorities of Canadians and the official opposition. We have fundamentally different beliefs, and we generally disagree on the role government should play in the lives of Canadians.

This is a politically charged financial statement with two objectives: first, for the Liberals to spend enough money to buy the support of the NDP so their Liberal-NDP political love story can continue; and, second, to divide Canadians based on an ideological framework regardless of the financial or political consequences.

Canadians are tired. We have been stretched emotionally and spiritually, and now we have been physically pushed beyond our limits, especially over the last two and a half years. Like an overworked body, we need time to rest and recover. We need a sense of normality and hope, but that is not what is happening here. Canada is facing a cost of living crisis brought on by years of overspending, excessive borrowing and money printing, though the government will say it is quantitative easing, which has created the highest rates of inflation in decades.

Of late, the Bank of Canada has been raising interest rates at an unprecedented pace, and it is not done yet, all in an effort to curb the inflationary trend. The government has doubled Canada's debt in the last seven years, and the Prime Minister, as has been said many times before, has added more debt than all prime ministers in the history of Canada combined. For those trying to keep track of that at home, that is over half a trillion dollars.

The Liberals would have us believe that they had no choice, given the pandemic. However, 40% of all new spending and measures has nothing to do with COVID. That is over $200 billion. The resulting national debt interest payment costs have doubled, and next year those interest payments will be nearly as much as the Canada health transfers to the provinces. Let us just think of the impact of that.

I am sure that members of the House recall the Prime Minister, the current finance minister and the previous finance minister touting how inexpensive it was for the government to borrow money. This is no longer the case. Now Canadians are stuck repaying their bills at these new and much higher interest rates.

The only person with any fundamental financial understanding back then and now is the Conservative leader. He warned the finance minister back in December of last year. She was asked what impact a 1% average increase on interest rates would have on Canada's national debt. She was unable to provide any number. The crushing part is that rates did not go up 1%. They are up 3.5%. A finance minister who could not fathom a 1% increase when questioned was clearly unprepared for that eventuality.

Now we are in a situation where the reality is substantially worse than that, yet the finance minister remains equally as oblivious to the situation and as arrogant to her colleagues as she was a year ago. In her fall update, she should have been singing the praises of the Leader of the Opposition. After all, he was clearly the only one with both the foresight and understanding that interest rates would not remain at historic lows forever and the conviction to ensure that the government had a plan.

During this time of self-induced financial uncertainty, the government needs to partner with Canadians and not continue to punish them. Let us take small business owners, for example. They are the unsung heroes of Canada's economy. They employ nearly two-thirds of workers across the country and take on incredible risk to provide the necessary goods and services to our communities, yet under the Liberal government, small businesses are being punished with rising payroll taxes, an increasing carbon tax, labour shortages and staggering inflation, which is driving up the cost of everything.

This fall economic statement was the Liberals' chance to let Canadians know that the Government of Canada is a strong and stable partner, and they failed. It was the Liberals' chance to rein in spending and focus on getting the country's financial house in order, but they failed there, too. It was their chance to acknowledge that a carbon tax only hurts Canadians who are struggling to make ends meet, but Liberals let Canadians down there, too.

Sadly, the Liberal plan does nothing to address the cost of living crisis and government overspending. Rather, it shows that government revenues have increased by $40 billion this year alone. This not only means that inflation is increasing the cost of everyday essentials, but it also means there is an increase in taxes while the Liberal government is profiting from increased inflation on the backs of already struggling Canadians.

Canada's Conservatives had two clear expectations and demands of the government, as did Canadians: stop the taxes and stop the spending. Stopping the taxes means no new taxes and includes cancelling all planned tax hikes and the increasing of the carbon tax. Stopping the spending means no new spending and that any new spending by ministers must be matched by an equivalent saving. None of those demands were met in the fall economic inflationary update.

As I stated recently in the House, all that Canadians really need to thrive and survive is individual freedom and good government. I believe a good government is for the people, not of the people, and is transparent. It acknowledges that every time a dollar is given away, it must first be taken from a Canadian who went to work to earn it. It is a government that makes life more affordable for Canadian, not by creating more cash but by creating more of what cash can buy, and understands that ethically produced and environmentally responsible Canadian energy helps fuel our economy and should fuel the world. It is a government that knows carbon taxes will not tackle climate change and that focuses on promoting Canadian technology to the world, making alternative energy cheaper, not making Canadian energy more expensive. It is a government committed to reforming the tax and benefit system so that those who work can keep more of what they earn, and one that offers Canadians hope and creates an environment to succeed and prosper.

Freedom and good government are exactly what the Conservative leader, my Conservative colleagues and I are intent on providing Canadians. Buckle up folks. The fight to get Canada back on track has started.

It starts with removing the carbon tax, which is further burdening already struggling Canadians. It starts by helping the finance minister understand that her plan to print, borrow and spend on political pet projects needs to end. It starts by voting down this misguided and hyperpartisan fall economic statement. I ask my colleagues to please join me in ensuring that this bill does not pass.

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

Mr. Speaker, many aspects of the Conservative Party's positioning on this fall economic statement are quite upsetting, and I am sure a vast majority of Canadians would concur with that if they only knew what the Conservatives were proposing.

When the Conservatives talk about wasteful spending, what they are really talking about are the record-high transfers to health care, the establishment of a national child care program, investing in dental care for children under the age of 12, providing rental support and providing a GST credit rebate for the next six months. Many measures are permanent and others are temporary, but all are for helping Canadians deal with the inflation we are experiencing today.

Why does the Conservative Party not want to support Canadians on health care and through this inflationary situation?

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

Mr. Speaker, I think the member fell on his head one too many times. He is missing the point. What is happening here is we have a government that thinks if it does not spend and spend recklessly, it is not helping Canadians.

Canadians do not need more taxes. They do not need more inflation. What—

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

Mr. Speaker, on a point of order, I have been listening to the debate and the comments made on both sides. Most of them have been pretty constructive, but the member used language that I do not think is respectful or suitable for the House.

[The Deputy Speaker, Chris d'Entremont]

I did hear what the member had to say. When we are talking about other members of the House, we have to be respectful.

The hon. member for Medicine Hat—Cardston—Warner.