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

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Madam Speaker, I thank my esteemed colleague for his comment, which gives me a chance to finish my speech.

The economic statement contains nothing in the way of impactful, innovative measures. At best, it rehashes things we have seen before, such as the FHSA. Worse still, the Government of Quebec has to make up for Canada's lack of vision. This economic statement is just like the government that issued it: weak and ill adapted to the changing economic reality. If Canada does nothing, there is no doubt it will miss the boat.

[Greg McLean, Conservative, Calgary Centre, AB]

Madam Speaker, one of the things I liked about my colleague's speech was her reference to the lack of an industrial strategy in the government's plan.

Does my colleague know that the government wants to spend more and more money, money that apparently grows on trees? That is what we see when we look at the government's spending. Is that a good strategy for Canada's future?

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Madam Speaker, I thank my colleague for his question.

If I understood correctly, he is asking me what I think about the current government's industrial policy. In fact, it is almost non-existent. As I said, the key or strategic industries are totally ignored, unfortunately. There are plans and promises, but sadly, there is nothing concrete.

I think that, when it comes to investments, we have to do our best with fewer resources. The important thing is to make government spending more efficient.

[Kristina Michaud, Bloc, Avignon—La Mitis—Matane—Matapédia, QC]

Madam Speaker, I thank my colleague for her speech.

I think she knows that my riding is home to many seasonal workers. The Gaspé and the Lower St. Lawrence are very popular tourist areas. During the pandemic, temporary measures were put in place for people who had to stop working for mainly pandemic-related reasons. I have to say that those temporary measures were fairly decent. They could have opened the door to employment insurance reform, but in the end, the government did away with those programs, went back to the old program and thus abandoned all of the workers that did not accumulate a sufficient number of insurable hours.

Does she think that the fall economic update or economic statement would have been the right time to announce something for seasonal workers in the regions of Quebec?

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Madam Speaker, I thank my hon. colleague for her wonderful question, which gives me an opportunity to talk about a third measure that was conspicuously absent from the economic statement, and that is a major EI reform.

The government is saying that we are entering a recession, so why has it not already reformed the EI system to make seasonal workers eligible? Why has it not helped those who are receiving EI sickness benefits? We need EI reform. It was promsed a long time ago, but the government still has not done anything about it. That was conspicuously absent from the economic statement, the budget and the federal government's policy measures.

[Don Davies, NDP, Vancouver Kingsway, BC]

Madam Speaker, it is an honour to rise to speak to the fall economic statement, legislation that has been introduced in this House. New Democrats are supporting it because there are some important measures in the legislation that we think will help Canadians, and I will canvass a few of them.

This legislation would introduce a Canada recovery dividend, under which banks and life insurance groups would pay a temporary, one-time, 15% tax on taxable income above $1 billion over five years.

I should pause and seek the unanimous consent of the House to split my time with the member for Skeena—Bulkley Valley.

[The Assistant Deputy Speaker, Carol Hughes]

Does the hon. member have unanimous consent to split his time?

[Some hon. members]

Agreed.

[Don Davies, NDP, Vancouver Kingsway, BC]

Madam Speaker, this legislation would increase the corporate income tax rates of banks and life insurance groups by 1.5% on taxable income above $100 million. It would eliminate interest on the federal portion of student loans and apprentice loans. Finally, it would enact the framework agreement on the First Nations Land Management Act. All of those are positive steps that are worthy of support in this legislation.

While New Democrats are pleased to see advancement on these measures, we believe there is much more that the fall economic statement should have offered Canadians struggling with the rising cost of living. We know many Canadians are struggling to pay their bills. We also know many corporations are making record profits at the same time. We know inflation is crippling. The price of food, in particular, has skyrocketed across this country. The costs of utilities, insurance and fuels are all up, making it really tough for many Canadians in every corner of this country to make ends meet.

That is why New Democrats would have welcomed a windfall tax, like the one this legislation already applies to banks and life insurers, being expanded to other corporations that are making even higher profits than those sectors are, like food companies, including Loblaws, and like the oil and gas sector. The revenue the government could recoup from applying this tax to big box stores and oil and gas companies alone would total over $4 billion. That is money New Democrats believe would and should be used to help Canadians mitigate the rising costs they are facing, including the cost of heating their homes. New Democrats have long called for the elimination of the GST on home heating in times of struggle like this, particularly as we enter the winter season.

Eliminating the interest on the federal portion of student loans would offer loan holders an average of $4,000 of savings over the lifetime of their loan, and this is important. For years New Democrats have called for the elimination of interest on student debt. We should not be making money off the debt that students are incurring to get an education. Frankly, I have long believed that post-secondary education should be free, at least the first four years, whether it is an apprenticeship, community college or university, whatever it is, so that we encourage and facilitate our younger generation to become more educated. I believe higher-educated societies are more prosperous societies, and it is an investment. Just like public school is free until grade 12, there is no reason we should not extend that to 16 years of public education.

What is not in this legislation is what will have the largest impact on people. It has been estimated that the cost of home heating could go up by as much as 30% in some places in Canada, so eliminating the GST on that would be a simple way to offer Canadians respite in an immediate way.

Food bank usage has drastically increased as the grocery chains that supply Canadian consumers with the food they need to survive are recording profits of $1 million extra a day.

Health care systems across this country are in chaos. There is no new money and no progress after the recent meeting of health ministers for improving health care and ensuring that the federal government increases its share of spending to better approach the fair deal that historically is the underpinning of the Canadian health care system.

The economic policy being used in this legislation is a good start, but it is not broad enough. If we expanded some of these good concepts in a much more broad, targeted and intelligent manner, we could generate billions of dollars that could be used for these very valuable social and economic development programs.

Once again, when we educate our young people, it is not merely good for them. These are people who will generate the ideas, economic activities and professional skills that will generate income into the future, so it is an important economic basis as well.

[Stephen Ellis, Conservative, Cumberland—Colchester, NS]

Madam Speaker, I rise on a point of order. Certainly, the member for St. Catharines had a lot to say earlier, and we would like to request a quorum call.

[The Assistant Deputy Speaker, Carol Hughes]

I will ask the clerk to count the members present.

And the count having been taken:

We have a quorum.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, just for clarification, in order to have quorum, does it require only one Conservative or more than one Conservative?

[The Assistant Deputy Speaker, Carol Hughes]

On a point of clarification for the hon. parliamentary secretary, as long as there are 20 members in the House, there is quorum, no matter how many from each party.

Again, I want to remind members that we want to get on with the business of the day.

Questions and comments, the hon. member for Waterloo.

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, I really appreciated the member's comments, not only with respect to the different programs and how we can support Canadians, but also on students and student loans.

In the riding of Waterloo, we have three post-secondary institutions, the University of Waterloo, Wilfrid Laurier University and Conestoga College. All students have been asking for the removal of interest from the federal portion.

I would like to ask the member to perhaps elaborate on the difference between paying back the principal versus charging students a ridiculous amount of interest, which is really stopping them from pursuing their future and having that financial opportunity. I would love to hear some more comments from the member on that issue.

[Don Davies, NDP, Vancouver Kingsway, BC]

Madam Speaker, I would like to thank my hon. colleague for that great question and her concern for students and making sure we facilitate the education of Canadian students.

When I went to university in the 1980s, I and many of my friends came from working-class homes. We could go to university and work part-time jobs. Tuition was low, and we could get an education without going horrendously into debt. That is no longer the case.

I do not see why getting a university, apprenticeship or community college education should cause people to go into debt, when we do not expect that for grades 11 or 12. I think this is a really good start by the government, and I congratulate my colleagues in the Liberal Party for recognizing that we can start by eliminating interest, because we should not be profiting from the debt of students. Then I think we need to take that next step and make sure students do not go into debt at all to get an education.