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

[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.

[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, not 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, 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, 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.

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

Madam Speaker, I will give a very brief answer. When it comes down to veterans, that was seven years ago. The backlog we are dealing with now, which has grown so much, is all on the shoulders of the Liberal government. When I talk about RCMP officers waiting for their pensions for 24 months, that all happened under the Liberal leadership. It has failed, in every way, our veterans in the armed forces and our veterans in the RCMP, and it is failing our current serving members in the Canadian Armed Forces.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Madam Speaker, I thank all of my colleagues who are present today for what is a very important topic: the fall economic statement.

It is important for me to preface how important this tool is for Canadians, and how important the value of respect is not just in this place but across the country. The last year was, in many ways, horrific for many Canadians. We saw some Canadians go to the food bank for the very first time. We saw some students who were unable to begin their next year of studies, because the cost of tuition was too high. We also saw workers rightfully demand increases to their wages as the cost of living crisis continued to clamp down on them. They asked for the basic respect they deserved. New Democrats stand with them, and I hope members of the House will also stand with them.

In order to do that in a way that is responsible and balanced, and to provide Canadians with a wholesome opinion on the fall economic statement, I will talk about that principle of respect throughout my speech. I will talk about some things New Democrats fought for, some things workers fought for and some things students fought for. I will talk about some great things New Democrats were able to achieve in the fall economic statement, but they were simply not enough.

I will speak to ways we can improve programs so that they help Canadians. I will talk about the big wins with which Canadians can hope to see relief. To the students, in particular, the removal of interest on student loans is a massive victory. I thank all the students from coast to coast to coast who made this possible. Their advocacy and their work to ensure that students are not left behind has been heard, and we will ensure this remains.

However, we have to also look at some areas in relation to student debt that were lacking in the fall economic statement. We know that just south of us students in the United States have a forgiveness of $20,000. This is something that, for a long time, New Democrats have fought for, but it was not mentioned in the fall economic statement. I will return to that subject soon.

I will also highlight the fact that we are seeing signals, which may not be the golden goose we all hoped for in many ways, in relation to clean tech and clean hydrogen. This is important for my province of Alberta. Regular workers do not often check into the proceedings of the House of Commons, but they will see the investments that are happening at their workplace and the investments clean hydrogen will make for them and their families. This is important for communities in Alberta. It is important for communities in places like Saskatchewan.

We also saw the doubling of the first-time homebuyers' tax credit, which is a good incentive for young people. This is a good first step, but the question for New Democrats is whether it is enough. I will speak to that in a second, as well as to ways we can hopefully find better outcomes.

We have also seen that financial institutions will be made to pay a bit more. The Canada recovery dividend is an important tool to ensure that those companies that make profits of over $1 billion pay their fair share. However, it is interim and it is not far-reaching enough. We know from the Parliamentary Budget Officer that if we were to expand this important windfall tax to other highly profitable industries here in Canada, we would see an income of over $4 billion in revenue to help Canadians who need it most.

We also see an important tax on those who are flipping houses. It is critical in a housing crisis like we are in right now to tackle those who are driving the cost of housing up. It is important that we take a real financial approach to ensure the market cannot continue to gouge Canadians. That falls to the very premise of what New Democrats have been fighting for in this place for a long time. I encourage all parliamentarians to engage in a respectful and healthy dialogue on this really important topic of differentiating between the needs of Canadians, like food and housing, and the wants.

New Democrats believe that the free market has a role in Canada, but it should not be used for goods that Canadians rely on. An example of that is something we do not have to look very far back in our history to realize. The price of bread was fixed in Canada. Imagine that. When families were struggling to pay their bills and to put food on the table so that they could have a dignified life in this country, companies were abusing the trust of Canadians and fixed the price of bread.

My friends, it is important that we talk about these issues. It is important that we talk about the difference between what Canadians actually need, which is food and housing, and what they want. We need to find a way to ensure that the government continues to play a role in ensuring that those needs are regulated in a way that all Canadians can have access to them. The compact that we make as Canadians to one another is that we will be there for each other when we need it the most on those things that matter the most. That is the calling we have today.

It is important that we tackle the issues that are present to Canadians, from the cost of living to the existing problems we are facing in our social safety net. Our cherished public health care system is crumbling right now. I remind Canadians how important our health care system is in Canada. It has not always been this way.

Our health care system in Canada was not always freely accessible and publicly administered. It was something Canadians, people from the Prairies in particular, in my home province of Alberta and our relative provinces of Saskatchewan and Manitoba, were able to fight for and they never gave up. It is something that we must continue to defend.

I am disheartened and sad about what is happening in my home province of Alberta and what could be happening in provinces across this country. The chronic underfunding of our public health care system is leading to it breaking so that it can be replaced. This is not fair to the hundreds of thousands of Canadians who rely on our public health care system to get the results they need to ensure they continue to survive. It is a matter of life and death for Canadians.

We need to ensure we have a robust public health care system in Canada that is publicly funded and publicly administered. That means the federal government needs to come back to the table, invest in the solutions we need and partner with the provinces. It is something I hope we see and continue to fight for as New Democrats in the future, but it is sorely lacking here.

We know that, in just this year alone, what we are going to see beyond the cost of living crisis is Canadians needing more support. We do not have to look any further than the food banks. The reliance on food banks in Alberta has increased 73%. That is an outrageous number and something we must truly have compassion for.

Simultaneous to this unfortunate squeeze that so many Canadians are enduring right now, we do not see the same for Canada's richest CEOs. CEOs are laughing and popping bottles in their offices right now, because they are raking in some of the largest profits on things the public needs the most in Canada. Let me mention a few.

I mentioned groceries earlier. Loblaws increased its profits by 17.2% this year. We also saw the CEO of Loblaws rake in $5.4 million in compensation. It is outrageous that Canadians can barely squeeze by while CEOs are continuing to rake in millions with no compassion for Canadians. As Canadians continue to see the cost of goods increase, they also know it is partly because these same companies are using inflation as a cover to increase prices by almost 25%, as a matter of fact.

I will conclude by mentioning the importance of workers. Workers from coast to coast to coast are battling to ensure that their collective agreements can actually withstand terrible Conservative governments, like what we have seen in Ontario with the use of the notwithstanding clause pre-emptively against workers. It is unjust, and we are here to defend workers and all Canadians.