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

[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, NDP, 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, Conservative, 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.

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

Mr. Speaker, yes, you are right. I could have used other language to explain that my hon. colleague is completely out of touch. He certainly is.

He suggested that the Conservatives intend to cut health transfers. What rock did he climb out of? Nothing has ever been said about that. In fact, the Conservatives have been pushing for greater health transfers and for increased health care funding, including for mental health and addictions. On all of these things, the government seems to be lost.

[Andréanne Larouche, Bloc, Shefford, QC]

Mr. Speaker, I thank my colleague for his speech.

It is fascinating to hear the Conservatives say that for every new dollar spent, we have to find another dollar somewhere else. We agree with them. In fact, we could certainly find new revenue by fighting more effectively against tax evasion and tax avoidance. We could also collect revenue from GAFAM and other large corporations that do not pay taxes. We agree there are revenue streams to look into.

However, for the Bloc Québécois, there are also certain expenses that are essential. There are areas that we should not even think of cutting right now, such as health care, in light of the health crisis we just went through, which exposed the holes in our system. The government needs to transfer money to Quebec and the provinces. Then there is help for seniors and EI reform.

To put it plainly, if finding money and spending it on something else were already standard practice, then we would already have the money.

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

Mr. Speaker, I agree with my Bloc colleague. I think it would not take long to look at the wastefulness of the government and find not millions or hundreds of millions, but billions of dollars in absolute waste that has gone on. This is waste that could be going to health transfers and waste that could be going to dealing with the opioid crisis we have in this country and to addictions, poverty and homelessness. These are all the things we talk about. We have an Infrastructure Bank that got some $30 billion, and we do not know what projects are being done.

Plenty of dollars would be available from the government if it would rein in its wasteful spending.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Mr. Speaker, by demonstrating and trying to model respectful behaviour in this place, my hon. colleague, in his intervention, did add value to the discussion on the fall economic statement.

One area in particular that I would like to hear the member's comments on is the carbon tax. It is something we often hear slogans for, such as the “triple, triple, triple tax”.

I know how important it is to see a cost on pollution in Canada and across the world. We are facing truly catastrophic weather events across the world, and we know they are driven by climate change. We know they are driven by pollution.

The Conservative Party in the last election ran on a cost for carbon, and now we are seeing a flip-flop on that. As a matter of respect, the New Democrats, knowing this consideration and knowing that we wanted to make life more affordable for Canadians, attempted to offer an olive branch to the Conservatives. We attempted to work with the Conservatives to get GST off home heating. That is 5% off home heating, which the New Democrats have fought for for a long time.

I know the Conservatives, deep down, want to ensure there is affordability for Canadians, but why do they continue to vote against measures that are so important to getting Canadians results, such as getting the GST off home heating?

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

Mr. Speaker, I think it is important to recognize that the Conservatives want the carbon tax to be cut, obviously, and giving GST rebates is a great gesture. However, it does not go far enough. There are a lot of things the government can do to cut costs that will make a huge difference. One of them is to get rid of the carbon tax, period. It is important to recognize that we need to be pushing for technologies that are built in Canada, making a difference on climate change initiatives across the world and gaining respect across the globe for our technologies to ensure environmental friendliness in industry. That will have a huge impact globally. That is where I think we should be pushing some of our—

[The Deputy Speaker, Conservative, Chris d'Entremont]

Resuming debate, the hon. member for Sarnia—Lambton.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, I am very happy to speak to the fall economic statement, and I am lucky I got the chance before the government shut down debate, which it is doing today. In my usual format, I will look at the different sections of the fall economic update and tell members what I think about them.

To start off, the first section is called “Sound Economic Stewardship in Uncertain Times”. That sounds like something everybody would want. These certainly are uncertain times, so sound economic stewardship sounds like just what we need. The problem is the document has nothing to do with sound economic stewardship.

We have more inflationary spending, after economists and experts have said that more inflationary spending is just going to cause more inflation. We have the highest levels of inflation we have had in 40 years. I am not sure why, but I expected more from a Prime Minister who has spent more money in his term in office than all other prime ministers have spent put together. The earning power of Canadians is at the lowest point it has been in decades, and I am very concerned that we have not taken the appropriate actions in the fall economic statement to address sound economic stewardship.

Our debt is so large that we will pay $22 billion of interest on the debt next year. In two years, we will be paying $44 billion for interest on the debt. That is not the debt itself; we are not paying the debt down. Just the interest on the debt will be $44 billion. That is more than all of the health transfers to all of the provinces. I really think that was a missed opportunity.

Let us move on to the second part: “Making Life More Affordable”. Again, it sounds like a really good idea. I think Canadians would say they need life to be more affordable. However, this is what the Liberals always do: What they say sounds good, but what they actually do is not that good.

Fifty per cent of Canadians cannot pay their bills. Personal debt is at an all-time high. What do the Liberals do? They increase the tax that is going to drive up the price of groceries, gas and home heating. Is that going to make life more affordable for Canadians? No, it is not; it is just going to make it worse. I really think the government needs to listen to what Canadians are saying and understand the dire straits that many Canadians are facing in losing their houses and having to choose between heating and eating. Something needs to be done and the “something” is not what was in the fall economic statement.

There is a lot of wasteful spending going on, and I was shocked to find out about the $450 billion we pumped out the door during COVID. Some supports were definitely needed during the pandemic, but I heard the Parliamentary Budget Officer say that 40% of them had nothing to do with COVID. That is an incredible amount of money. We have to stop wasting it.

I agree that climate change needs to be addressed and I agree we need to reduce emissions, but we have spent $100 billion and the Liberal government has failed to meet any of its emissions targets. We are number 58 out of 60 on the list of countries that went to COP27 with Paris accord targets. We spent $100 billion, but what do we get for it? We get absolutely nothing.

We have to do better about spending taxpayer money to get results. Members today were saying that it is a real emergency; we have flooding and wildfires. They can ask themselves how high the carbon tax in Canada has to be to stop us from having floods or stop us from having wildfires here.

As a chemical engineer, I will say that Canada is less than 2% of the footprint. We could eliminate the whole thing and we are still going to have the impacts of floods and wildfires until the other more substantive contributors in the world, such as China, which has 34% of the footprint, get their act together. We can help them get their act together. If we replace with LNG all the coal that China is using and the coal plants they are building, it would mean jobs for Canadians and would cut the carbon footprint of the whole world by 10% or 15%. That would be worth doing, but it was not in the fall economic update.

I do not know if there are problems with math on the opposite side, but the Prime Minister ordered 10 vaccines for every Canadian. I do not know if he knew that two or three vaccines, or four or five maximum, were all we were going to take. Now all the rest of the vaccines have expired and have all been thrown away. What a huge waste that is. They could have gone to countries that do not have vaccines or that cannot afford to buy them. That is just one example of the wasteful spending.

The next section was called “Jobs, Growth, and an Economy That Works for Everyone”, and I think that sounds like something everybody would like. Every Canadian wants jobs, growth and an economy that works for everyone. However, in the fall economic statement we saw that we have only half the GDP growth we expected and predicted earlier this year, so we did not get the growth, and we have lost a lot of jobs and gotten a few jobs back, but it did not work for everyone.

If someone was unable to take a vaccine due to a medical issue or because they made a personal choice, they got fired, lost their job. Just to make the pain double, even though they had paid into an employment insurance program, paid the premium and should get the benefit, the government made sure that nobody who refused a vaccine could get that, so it does not work for everyone.

The last section is called “Fair and Effective Government”. Again, who could disagree with fair and effective government? I want the government to be fair. I want to live in a fair democracy, and I want the government to be effective. That would be wonderful, but today we have passports taking seven months to process, and there are 2.5 million immigrants caught in the backlog at IRCC. The average wait time for some of those types of permits is 82 months. We have the Phoenix pay system and the ArriveCAN app. Everything is broken all over the government. There is not any effective government happening. Yes, I think we should have it, but it is not in there.

With respect to a fair government, this is the Liberal government that brought in the Emergencies Act. We are waiting for the final word on it, but a lot of people have said there was no threat to national security and there was no emergency. The law enforcement people did not ask for it and the provinces did not ask for it, yet the government froze the bank accounts of Canadians without any warrants. That is not a fair democracy.

There is a freedom of speech war going on in our country. Bill C-11, Bill C-18 and all the bills the government brings forward whereby the government is going to get to control the speech of Canadians and the media, are not fair. We have evidence that CSIS talked to the Prime Minister and said Chinese money from Beijing was funnelled to 11 election candidates, with no transparency on who they were, and that there was interference in the 2021 election, again with no transparency. That is not a fair, democratic government.

I could go on about rental and dental, where the government has driven up the cost of housing. The average cost of housing rental was $1,000 in Canada, and now it is $2,000. With one hand the government is going to give a cheque for $500, but with the other hand its policies cost an increase of thousands of dollars, $12,000 a month on average in Canada. That is the way the government is working. It gives a little but takes a lot back, and that is not what we want to see, so I cannot support the bill that goes with the fall economic statement. I think we have to do better.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Mr. Speaker, my colleague is an engineer, and engineers think in a very rigorous fashion, so I was a bit surprised at her comment to the effect that Canada is responsible for only 2% of global greenhouse gases, and that it is not going to make a difference what we do because it is peanuts compared to what the big emitters like China are producing.

My question to her is very simple. Is she suggesting that Canada can take its foot off the gas and not do anything, because we are really peanuts compared to the big emitters?