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

[The Assistant Deputy Speaker, NDP, 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, NDP, 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.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Madam Speaker, it is a pleasure to stand today, as we get to the dying minutes of debate on the bill, to critique the fall economic statement. We have a lot of concerns about the fall economic statement because the Liberal-NDP coalition government failed to address the concerns of Canadians, who are asking how we are going to control the cost of living, how we are going to get inflation under control and how we are going to get government spending under control. We did not see any of that in the fall economic update, and that is why we will not be supporting this bill.

We know that the government, under the Prime Minister, has run up more deficits than every prime minister before him. The Prime Minister and the Deputy Prime Minister, as finance minister, have increased our national debt by over half a trillion dollars. Today's national debt sits at over $1.1 trillion. In my opinion, that is child abuse of the next generation. Our kids and grandkids and our great-grandkids are going to be saddled with a debt because of the orgy of spending we have witnessed from the government.

We know that, whenever we run high deficits, inflation gets out of control because there is too much money in circulation. The Bank of Canada then has to intercede. Of course, what does it do? It jacks up interest rates. We are seeing interest rates from the Bank of Canada go up, which is impacting mortgage rates and lending rates, so it is impacting every Canadian, whether they own a business, own a home or are trying to get a job, because the cost of government continues to accelerate the cost of living crisis right across the country. We have not seen this type of inflation since the government of Pierre Elliott Trudeau. I have always wondered why Liberal times are tough times for Canadians, but I think, like father, like son.

We have the tripling of the carbon tax, which will impact every Canadian's life in a negative way because everyone has to eat. We continue to witness the cost of food escalating out of control. With respect to the net cost of the carbon tax, in my riding in Manitoba, they are going to be paying $1,145 per year per Manitoban more than what they get back in rebate cheques from the government.

Not everyone has the opportunity to take a train or jump on a bus, and this is because they live in rural parts of the country. They have to drive to get to work. Maybe they are retired, living on a fixed income, and need to drive to see their doctor in the city. Maybe they want to retire out at the lake. I have in my riding the beautiful shores of Lake Winnipeg and Lake Manitoba. Canadians, and especially people in Winnipeg, want to move out there and enjoy their retirement time.

It is going to cost them more just to commute back and forth to the city, to visit their doctors and do their shopping, and the government seems to callously not care. This is hurting those seniors. It is hurting rural Canadians who are driving around to get their kids to hockey, soccer or other sporting events. Sometimes they want a drive to school. It is not like they can just jump on a bus to get there. They have to drive since there is no other option.

There is also the idea that everybody is going to be able to switch to electric vehicles, which still have not been tested in the severe climate we have during the winter months in Canada. They have not actually taken a hard look at how we would go long distances, especially in rural areas where they do not have rapid charge stations, or how the electricity to charge these vehicles would be generated. Would it be clean hydro, like we have in Manitoba, or would it come from thermal-fired generation plants, using either natural gas or, even worse, coal? We have to look at the overall carbon footprint that it would be creating.

No one is getting hurt more by this, though, than farmers producing food, and the cost is impacting food inflation. I have to remind Liberals of this all the time, but they put a carbon tax on the price of growing that food. Thankfully, we just recently passed a bill from the Conservatives that would reduce the carbon tax being paid by farmers, especially on heating their buildings and drying their grain, but still, after that food is grown on the farm, it has to go on a truck and hauled to a processing facility. Often it gets put on a train after that, and every time they haul it, there is carbon tax.

That will continue to increase the cost of production. It will increase the price of that food stock. Whether it is bread, beer or vegetables, every time it goes through an energy system of transportation or processing, the cost of food will increase disproportionately.

I want to talk a little about national defence. As the shadow minister of national defence, I am concerned that some of the spending in the fall economic statement does not recognize the threat environment we are currently in, not just because of the war of Ukraine, with Russian's aggression and its genocidal war atrocities being committed by Putin's war machine in Ukraine, but also because we are seeing a lot of sabre-rattling coming out of China these days, out of Beijing, with President Xi talking about Taiwan and trying to take Taiwan into that system by force. We need to make sure that Canada, through our Canadian Armed Forces, is prepared to protect Canada, in our Arctic, on the Pacific and on the Atlantic.

We are seeing, again, this year, that the Liberals are allowing defence spending to lapse. At over $2.5 billion, this is the biggest lapse of spending we have seen since they took office. Last year, it was $1.24 billion. Since they introduced their defence policy, SSE, they have allowed over $6.8 billion to lapse.

They said that they would never allow a cent to lapse, but here is money that should be invested, in an expedient manner, in our Canadian Armed Forces to buy equipment and deal with the recruitment crisis, yet we are not seeing that turn into assets for our forces to use to defend Canada and protect our interests around the world while we fight beside our allies against adversaries, as we are witnessing happening in Ukraine today. Because of their slow investment and inability to invest in the proper procurement, we do not have our surface combatants yet, or even the design finalized.

We are not seeing NORAD modernization done in an expedient manner. We know that NORAD is critical to continental security. It is critical to our relationship with the United States and we still have not seen how we are going to update our North Warning System. We are not seeing how we are going to make sure that we have submarines that can go under the ice and other monitoring systems, whether they are unmanned vehicles or not, to monitor what is happening in our Arctic sea.

We are not seeing the investment in that continental security, no only in the Arctic but also in making sure that we are getting more of our assets to our borders to help with our continental security.

The case in point is that, in this economic statement, they announced they are going to extend the lease on the auxiliary offshore replenishment ship we have, the Asterix, which is privately owned with federal leasing, but it ends in 2025. We still do not have our first joint supply ship in the water. Why would we only want to have one vessel when we are trying to project our abilities beyond our shores?

If we want to have a blue water fleet, then we better have offshore oil replenishment capabilities in the Atlantic and in the Pacific. We need to make sure that we have the ability to also deal with things like maintenance on those vessels once they are out to sea. Having one on each coast is not enough. We need to have at least one more ship to deal with the need to provide that scheduled maintenance, which happens throughout their life cycle. We need to have that extra ship to sail, and we have to think long term on why we need another AOR.

We still have not signed the lease on our F-35s. The government has been sitting on its hands instead of signing the contract to make sure that we buy the F-35s. The surface combatants need to get in the water to get built.

There is no money in here to deal with the real crisis happening today in the Canadian Armed Forces, which is recruitment. Chief of the Defence Staff General Wayne Eyre has said that this is a crisis. I say that it is a catastrophe, and we need to deal with that very quickly.

We have a lot of needs, but we are getting no vision. It seems like everything these Liberals touch, they break.

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

Madam Speaker, I tried to follow my hon. colleague but, at times, I got caught between spending and investing. He is saying we are spending too much. We are investing in our country. That, by itself, is definitely a different approach between our government and the opposition, because we are investing in Canadians. We invested in improving our CPP, for example.

Let us look at the economic situation today. We have the lowest unemployment in 40 years. We have over 400,000 new jobs since the pandemic, which was a major increase. We have the AAA rating, so we have a strong economy. We have been there through the pandemic. We are there now with affordability.

I am having trouble because he is saying that we are spending too much, and then he is saying to cut. Which one is it? Which areas are the Conservatives going to cut as we move forward?

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Madam Speaker, if we look at things the Liberals touched and broke, one of the things they broke is Veterans Affairs. We already have a bunch of our veterans who are waiting not weeks, not months, but years before they get any pensions. One RCMP veteran contacted me. He has been waiting for over two years to get his pension from Veterans Affairs.

How is that compassionate? How is that management that people can rely upon? It comes down to these Liberals, despite throwing money right, left and centre, never having been able to provide the services Canadians expect under their leadership. During their time in government, things have gotten worse not better.

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

Madam Speaker, I hear what my colleague is saying about the national shipbuilding strategy, or NSS.

Since 2015, Davie has made extraordinary improvements to its workforce, so much so that it won the North American Shipyard of the Year that year.

Despite all of the promises made in 2019 and all of the announcements regarding the umbrella agreement, things keep getting delayed.

Does the member agree with my colleague that, if Davie had been included in the NSS without delay, then the costs of the strategy would be much lower than they are now?

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Madam Speaker, I am a big fan of the Davie shipyard. I believe it proved itself as being able to deliver on time and on budget when it delivered the Asterix. We campaigned in the last election on having that shipyard also deliver the Obelix so that we could have two offshore auxiliary replenishment ships, one on each coast, plus have the joint supply ships that are being built at Seaspan in Vancouver.

We think that is the right mix of ships we need to maintain our navy in both the Atlantic and the Pacific, and to have the ability to deploy all of the assets we have within the navy. I do believe that Davie has a role to play, and it is one we need to investigate even further. There is no plan in this economic update for where we are going with our surface combatants or where we are going to get submarines. We need to deal with the proliferation of submarines by our adversaries, and the best way to fight a submarine is with a submarine. We need to get some new submarines.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

We have time for a brief question.

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

Madam Speaker, I do appreciate my colleague talking about lapsed spending and ensuring the men and women who serve in Canada's military get the right equipment. When he talks about lapsed spending, I remind my colleague that the Conservatives left $1.2 billion unspent that was dedicated to veterans. He just scolded the Liberal government when it was the Harper government that cut a third of Veterans Affairs, which led to the backlog today. The Liberals are just as guilty for not fixing the mess the Conservatives created.

My question is about young people and students. This legislation includes a framework for removing the interest on the federal portion of student loans, which is something New Democrats have been fighting for. Can the member explain to—

[The Assistant Deputy Speaker, NDP, Carol Hughes]

I am sorry to interrupt, but I did ask for a brief question.

The hon. member for Selkirk—Interlake—Eastman has the floor.