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

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Mr. Speaker, I want to thank my colleague for an excellent speech.

The major subject missing from this economic statement is tax havens. We know that the Liberals are letting more than $30 billion of taxpayers' money leave Canada every year. That money should be going toward all kinds of things, like helping seniors, families and students. There are plenty of things we could do with that $30 billion to solve the problems and challenges facing Canadians.

This economic statement allows us to recover only 2% of that $30 billion. At the end of the day, only $600 million of the $30 billion will be recovered.

My question for my colleague is quite simple. Why are the Liberals encouraging tax havens, as the Conservatives did before them? Why are they letting large sums of money leave Canada instead of closing these tax loopholes so that everyone can benefit from this money and Canadians can get help?

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

Mr. Speaker, I would really like to answer my colleague, but it will be complicated, since I do not think like a Liberal or a Conservative.

That being said, when I invest in something, I expect a significant, worthwhile return. For example, the Liberals invested $1 billion to combat tax havens, but in the end, they were forced to create a law in order to be able to collect $600 million. I do not think that is a very cost-effective program that was properly administered, even if the government says that this issue is dragging on in court. There is a way of doing better for all citizens and for everyone's well-being.

[Andréanne Larouche, Bloc, Shefford, QC]

Mr. Speaker, I thank my colleague from Beauport—Limoilou for her excellent speech.

I would like to follow up on the question asked by my colleague from Winnipeg North. I always find it fascinating to hear him talk about seniors. It is really something else. It is all well and good to talk about a credit for a multi-generational home, but if seniors do not have the income necessary to stay at home, that will not happen.

In her speech, my colleague talked about the lack of support for seniors between the ages of 65 and 74. I am concerned because the statistics are worrisome. Last week, the major media fundraising drive did not meet its goal because people are even having a hard time donating to such a cause. This fundraising drive needed donors to give generously because needs are greater. Needs are greater mainly because seniors on a fixed income are having a hard time getting enough to eat.

A study showed that at least half of seniors will be affected by the increase in inflation next year. It is more important than ever to help seniors on a fixed income that does not go up.

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

Mr. Speaker, I could not agree more with my colleague. It is high time the government stopped discriminating against our seniors so much and start giving them the support they need. In my riding, I see seniors rummaging through the garbage. That is unacceptable. It seems obvious to me.

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

Mr. Speaker, it is an honour and privilege today to have an opportunity to rise to speak to Bill C-32 on the fall economic statement. We know people are struggling. The cost of goods and inflation are skyrocketing. The rising interest rates are having a huge impact on people's budgets and to families in our communities, especially in my riding of Courtenay—Alberni.

We are pleased to see some of the things that are in this budget, such as the Canada recovery dividend and the elimination of interest on student loans, which is something that we have been fighting to get for a very long time. We believe there is a lot more the fall economic statement should have offered and did not offer. I am going to speak to that as well.

We know that while people are struggling, there are many big corporations that are having record profits. Whether it is oil and gas, the big banks, or Loblaws and the others of three big grocery store chains, they have had record profits.

We would have welcomed a windfall tax, but we did see there was a small 1.5% tax on banks and insurers that have profits over $100 million. We would have liked to see that expanded to include those other sectors that are having windfall profits right now.

The government could have used that money to eliminate the GST on home heating or could have gotten rid of the surcharge on Canada Post being implemented right now. During this holiday season, that is having a huge impact on small businesses. Natalie Weekes, a friend of mine, just wrote me about that. As well, consumers are trying to get presents to their families.

Members have heard me speak about mental health and the disastrous effects of the government not implementing a mental health transfer. It promised $875 million of new money that it has not spent so far to date, and that is creating backlogs in our health care system.

Members have heard me talk about the substance use assistance program, with the Liberals only funding 14% of the applications that are coming in when we know there is a toxic drug crisis happening.

Members have heard me speak many times about the need for co-op housing. As someone who grew up in co-op housing, I know how critically important it is to have safe, secure housing. When the Liberals got out of the national housing strategy in the early nineties, they were developing and building 25,000 units a year. They are now building a measly 6,500 units, and we are in a housing crisis.

We know the free market will not solve the crisis, and 10% of our housing in the seventies and eighties was non-market housing. We are now below 4%. Europe is at 30%. It understands that housing is not just a commodity, which is the way it is being treated here. It is a critical for people to have a safe, secure home.

Members have heard me speak about those many issues. One area and one group that we do not talk enough about are our first responders. We have a crisis there too with our volunteer firefighters, our search and rescue volunteers and the people who are out there day in, day out. They work jobs, and they are doing this as a volunteer job.

They go out in the rural communities where I live and where many of my colleagues live. We all know the value of those first responders and the sacrifices they make to make sure we are safe. This week, we have the Canadian Association of Fire Chiefs here, and they are lobbying right now.

I am going to read a quote from an op-ed by Chief Ken McMullen and Chief Tina Saryeddine that was in the Hill Times this morning. They said, “The climate crisis, health-care crisis, and personnel shortages in Canada's fire departments are converging, causing increasing strain on Canada's fire-fighting capacity.”

They continued, “This year, 629 fire departments [are] providing services to 24 million Canadians”. They have seen the number of firefighters drop from what was 156,000 to 126,000. Their crisis is a labour market shortage and attraction. We know the inflation crisis is impacting everybody, but it is impacting volunteer firefighters too.

I tabled a bill, Bill C-201, calling for the federal government to increase the tax credit for those who volunteer over 200 hours from $3,000 to $10,000. They would basically get $450 in their pocket if they did 200 hours today, and that would expand to over $1,200 if we went for the $10,000 amount.

The cost to the coffers right now in Canada is $10 million to support all of these volunteer firefighters right across the country and that includes 8,000 search and rescue volunteers. That are a lot of people who would be impacted. I know it does not sound like a lot, but I will provide an example.

The Qualicum Beach fire chief, Peter Cornell, who is in a recruitment drive right now, just like almost every volunteer fire department in this country, said that it would be a game changer. He said it would be so important and would help keep those firefighters in the community, making sure that they meet their requirements and their hours.

That is not why they do it. We know why they do it. They do it to protect us and because they love their communities. Also, not only do they put their lives on the line, but also they put in time for training. This would also help small communities and take the pressure off them.

We know that volunteerism is decreasing and volunteer fire departments in my riding, from Ucluelet, Tofino, Beaver Creek, Cherry Creek, Sproat Lake, Errington, Coombs, Cumberland, Parksville, Qualicum, Bowser, Denman Island, Hornby Island, Lasqueti Island and Cumberland, just to name a few in my riding, tell us that this is a big deal, and it is important. I wanted to raise that because far too often our heroes fall through the cracks.

I hope the government will listen to this pitch today because it is something first responders have said will make a difference. I know it is not in the fall economic statement, but I hope the government will consider it for the upcoming budget. I have many quotes from many of the fire chiefs, but I do not think we have time for me to go into all of them.

Another thing is that the FCM has their reps here from British Columbia with respect to climate adaptation, and we know the government just made an announcement. They welcomed the release of Canada's national adaptation strategy just two weeks ago and the news of a one-time transfer of $530 million to the green municipal fund.

From my riding I have Will Cole-Hamilton, who is a councillor for the City of Courtenay, and Daniel Arbour, who is a local area director from Hornby Islands. They are here calling on the government to increase that. They cite that it is going to be $25 billion in losses relative to a stable climate scenario because of the impact on climate emergencies. They want to be partners but they say that it is going to cost $5.3 billion per year in shared costs to ensure that they can avoid the worst impacts of climate change. I wanted to raise that because they are here and they are calling for that.

Another small thing that just does not get talked about is seaweed. The Speaker is from the coast and knows how important seaweed is. It is a great opportunity for economic development, but the current wait time in B.C. for an aquaculture licence is three to five years.

The government could have helped support fast-tracking that. It is just too long for B.C. businesses and farmers to build a thriving seaweed enterprise and sector that would compete with the global sector, so the renewing of these licences is too slow. They need DFO to ensure that its staff are there to so we can move this forward.

This is not just important to the ecosystems and coastal communities, but to indigenous communities as well, so it is a really incredible opportunity for both the environment and the economy. Many indigenous nations are looking at seaweed as an opportunity for economic development, but they need to make sure this is moving forward. It is a great opportunity, which I wanted to flag here.

In my riding right now we have aging infrastructure. In Port Alberni, our pool is aging. Parksville wants a new pool. Out on the west coast in Tofino, Ucluelet, Ahousaht, Tla-o-qui-aht, Yuu-cluth-aht, Toquaht and Hesquiaht, they want to build a pool out at the Long Beach Airport. However, the investing in Canada infrastructure program and British Columbia partnership is tapped out right now, so they want to see the government replenish that because we know how important it is to live, work and play in our communities. Also, when we have recreation facilities, that lowers our health care costs. It is good for tourism in a place like the west coast, especially in my riding, which everybody should come to visit because it will change their life. It is a great place. These facilities desperately need funds so they can advance this. It is really good for people who have been injured in the workplace so they can rehabilitate themselves.

Therefore, I urge the government side to look at and consider these things. They were missing in this fall economic statement, and I have not had an opportunity to raise these really important asks from our riding of Courtenay—Alberni.

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

Mr. Speaker, it is important to recognize that this is a fall economic statement. When we get to the full budget, no doubt many of the issues that the member raises will be addressed.

I also look at infrastructure as so important to all of our communities. Whether it is a world-class tennis court, an outdoor basketball court, a walking path or splash pad, they are all important community activities that the federal government supported last summer with municipal leadership on those files.

However, this legislation is meant to try to, at least in good part, be there to support Canadians in a very real and tangible way. The member could reference the dental supports for children under the age of 12. We could talk about the rental support. We could talk about the elimination of interest for students on federal student loans, which would, in my opinion, make post-secondary education that much more affordable.

There are many things within the legislation that are there to support Canadians during this time. Could the member provide some specific thoughts in regard to that aspect of the legislation?

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

Mr. Speaker, I wanted to raise those important items because they were not in the budget, and they were not in the fall economic statement. They are missing.

Those are opportunities to help our communities and to help keep our first responders active, making sure they are protecting our communities and making sure we have economic development.

One thing that was missing, that we have been calling for, is the removal is the GST on home heating. It was a huge opportunity that the government missed. It could have increased the excess profit tax and covered that off. It also could have removed the surcharge at Canada Post, which is having an impact on people, on Canadians from coast to coast to coast, especially in rural and remote communities, and most especially in Nunavut, where the cost of shipping is extremely high. They are competing with Purolator, which does not even pay tax in Canada. It is a huge opportunity missed.

I hope the government is listening and that it can make these adjustments now to help support Canadians immediately.

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

Mr. Speaker, there was one point towards the end of the member's speech that I found especially interesting and that was on the issue of seaweed. The member was talking about getting that approval taking three to five years.

We see that across multiple sectors, whether it is in the mining sector or others. However, for those trying to get jobs and people who want to get to work back to work, speeding up those approvals would definitely be one way to get it done. I am wondering if the member would like to elaborate on that point maybe just a little more.

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

Mr. Speaker, that is an excellent question, as there are economic development opportunities being missed.

It is simply just staffing at DFO when it comes to seaweed. It is the same with the shellfish sector. They are having a hard time because they get caught up with the Canadian Food Inspection Agency, environment and DFO. They just need dedicated staff. I was out in Nova Scotia. For wave energy, they could not get a project off the ground because of staffing. That was a big issue.

This is a problem right across our country, and it is inter-agency. It requires staff to ensure we have economic development. It actually is not a lot of money when it comes to the public coffers. It is just staffing to move forward with applications so we could get economic development going and attract investment. Right now, we are not attracting investment when there are huge delays like that. It is also really important for reconciliation.

[Luc Desilets, Bloc, Rivière-des-Mille-Îles, QC]

Mr. Speaker, I thank my colleague for his presentation. It is always a pleasure to listen to him. I understand that there is a whole host of needs in his riding, as there is in mine, none of which are addressed in Bill C-32, despite the 25 tax measures and so on. How does my colleague explain that?

In principle, we are here to vote on bills that are designed for our constituents. How does he explain the fact that there is nothing in this bill to help them?

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

Mr. Speaker, it is extremely frustrating. Again, there is some stuff we liked. We liked seeing that they were getting rid of interest on student loans. That is really important. It is something that we have been fighting for. We liked seeing that there is an excess tax at 1.5% on big banks and insurance companies over $100 million.

However, there is a lot missing. There was an opportunity to go after the excess profits of oil and gas, of the three big grocery stores, and that money could have been returned to Canadians. It could have funded removing the GST on home heating and ensuring that people are not paying a surcharge for Canada Post. It was a missed opportunity to help people immediately. As well, on taking care of first responders, which I talked about at great lengths, the government has not done enough for the people who put their lives on the line, who were there for us through COVID, and who are there for us every day and night.

[The Deputy Speaker, Chris d'Entremont]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Leeds—Grenville—Thousand Islands and Rideau Lakes, Taxation; the hon. member for Shefford, Sports; the hon. member for Nanaimo—Ladysmith, Oil and Gas Industry.

[Rachael Thomas, Conservative, Lethbridge, AB]

Mr. Speaker, the fall economic update in and of itself likely does not capture a whole lot of hoopla in this place or outside this place. However, I believe this statement is meant to be visionary in nature, or at least a budget is, and then the fall economic statement is meant to check in on the budget and see how the government is doing with regard to its vision and how it is serving the Canadian people. Are Canadians truly better off because the government is in place? That is really the question. That is what we are checking in on.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

The answer is yes.

[Rachael Thomas, Conservative, Lethbridge, AB]

Mr. Speaker, sadly, no.

We repeatedly hear from the Liberal government that it has Canadians' backs. We hear this phrase quite often in this place and outside this place. It is a term the Prime Minister likes to use almost incessantly. The question is, does it really have their backs? That is what I want to explore in my time today.

The reality is that many Canadians are finding life difficult. They are dumfounded by the Liberals' lack of care, lack of concern and lack of wisdom. Food prices continue to rise, energy prices continue to skyrocket and Canadians continue to need to beg to receive some sort of positive difference. That should not be the case.

In preparation for this fall economic statement, we asked for two things on this side of the House. We asked that there be no new taxes applied to workers or seniors. We also asked that there be no new spending and that every dollar committed to would have an equal dollar in savings; there would be a match. Sadly, these two requests were entirely ignored.

The Liberals' inflationary scheme will triple the carbon tax, which means the cost of home heating, gas and groceries will continue to rise. During question period, when my Conservative colleagues and I have asked the members opposite if they would demonstrate a wee bit of compassion and perhaps relent on tripling their carbon tax, the folks across the way have pulled out these crazy talking points and obscure studies to try to convince Canadians they are better off. It is as if to say that Canadians do not understand the reality that is happening to them. It is as if to say they can be demeaned and that it should somehow help them. How heartless is that?

I have heard from many constituents who are struggling to meet their daily needs. They are hopeless and they are desperate. The Liberals can continue to use their tired talking points, but at the end of the day, the senior who is turning her thermostat down to 17°C to afford her heating bill will not be comforted by a Liberal talking point. The 1.5 million Canadian families that are accessing a food bank in a single month will not be comforted by a Liberal talking point. The one in five Canadians skipping meals to try to make ends meet will not be comforted by a Liberal talking point.

These are realities. This is the reality Canadians face each and every day. Make no mistake: The Liberal carbon scheme is not an environmental plan; it is simply a tax plan. It is punitive. It goes after the Canadian people who are working to put fuel in their vehicles so they can continue working. It goes after individuals who need to heat their homes because they live in Canada. It goes after individuals who continue to produce food for us despite the attacks of the government, because they care deeply for their land and the people who live here.

The government is forcing the Canadian people to pay a whole lot to get a whole lot of nothing in terms of environmental impact. Canadians are struggling to get ahead and are asking for help, not help in the sense of a government handout but help in asking the government to please back off.

We are living in a credit card economy. We are consuming more than we produce, we are buying more than we sell and we are borrowing from the world to buy from the world. We are sending money and jobs to foreign countries, and we are bringing goods back in. Others get the job, others get the investment and others get the savings. Canadians get left with the debt.

Governments do not have money of their own. What they have comes from taxation and borrowing, and that is it. The less revenue that is brought in through taxation, the less the government has to spend on things like social programs, health care, infrastructure or education, unless it chooses to borrow, and we know this government has chosen to borrow a whole lot.

When the Liberals shut down the development of natural resources and drive investment out of our country, it is individual people, including moms, dads, seniors and workers, who have to pick up the bill. They are the ones who have to carry an astronomical tax burden placed on them by the government. It is therefore perplexing why the government chooses to drive industry out of our country and chooses not to develop agriculture, not to develop manufacturing and not to develop natural resources.

Let us talk about our superpowers. By halting energy development and penalizing farmers, the government is choosing to restrain two of our country's superpowers. Instead of focusing on the economic prosperity and the security of our country, the Prime Minister has advanced anti-energy policies such as the carbon tax, Bill C-69 and Bill C-48, proving that he is far more interested in his own plan and agenda than he is in looking out for the well-being of Canadians.

Canada has the third-largest oil reserves and we are the fifth-largest producer of natural gas. The world needs more energy and we have the answer; we just need the political will. We could be stepping up and taking our place as a leader on the world stage to meet the demand. We could displace the reliance on dictators' oil. However, the Liberals have done all they can to block our own energy sector and prevent us from thriving within this market space. The Liberals instead insist that Canadians as individuals should be picking up the tax burden, and hence the cost of living continues to rise.

Let us talk about agriculture. The production of food is another one of our superpowers. It is incredible. Canada has been blessed with abundance. In my constituency of Lethbridge, the bounty is incredible. We send produce all over the world. However, instead of being proud of our producers and farmers, we have a government that wants to be punitive toward them by implementing a carbon tax on their ability to produce food and implementing reductions in fertilizer use, which reduces the amount of food that can be produced. This ridiculous policy will certainly not save the planet, but it will definitely cost Canadians a whole lot more because it will drive up the cost of groceries. This means Canadians will get punished too, and the cost of food is already significant.

The Liberals have added more debt to our country than did all former governments combined. If we let that sink in for a moment, it is pretty scary. They say they did it in the name of COVID, but we know that 40% of their spending had nothing to do with COVID. They are spending a whole of money just for the sake of spending, and of course why would they not? They spent $54 million on the arrive scam app, which could have been purchased for $250,000 and built over a weekend. They spent $6,000 on a hotel room that included a butler. The Liberals are able to spend like this because they know that at the end of the day, they do not foot the bill; Canadians do. This is the type of government we are staring at.

I am calling for a government that puts the Canadian people first. Ronald Reagan famously said, “The greatest leader is not necessarily the one who does the greatest things. He is the one who gets the people to do the greatest things.”

Frankly, Canadians are tired of being told by the Liberals to sit down and shut up. They are tired of being put on the benches. What coach benches his best players? Canadians are the problem-solvers, the solution makers and the wealth generators that this country needs for getting back on track. It is time to put Canadians back in control of their lives.