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

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Madam Speaker, it is always amusing to hear from our Liberal government friends across the way.

When it comes to health care, the federal government does not run a single hospital, train a single doctor or pay a single nurse. However, it claims to know how health care works and tells the provinces and Quebec to do this or that in order to get money.

The passport crisis has shown us just how unbelievably incredible, outstanding and exemplary the federal public service is. Oh, the lessons it could teach, but it is not going to. Last week in Vancouver, the Minister of Health said that, unless there were conditions in place, there would be no cheques.

If my Conservative friends were in power, would they agree to the demands of all the provinces in Canada and Quebec to increase health transfers from 22% to 35%?

[Melissa Lantsman, Conservative, Thornhill, ON]

Madam Speaker, the member opposite raises some very valid points. Canadians cannot get a passport in this country. Those who want to come to Canada cannot come here, because we have a 2.8-million backlog in immigration. The basic government services that the government purports to run are all broken. Everything is broken in this country, and now we see the interest on the debt going up, with our payments in Canada exceeding the current Canada health transfer by next year. That should be concerning to every member in the House; that should be concerning to every Canadian, and until the government gets everything in order, we cannot commit to anything.

[Lori Idlout, NDP, Nunavut, NU]

Uqaqtittiji, the member asked where families are to get this money from and mentioned that there is no meaningful solution. I would say that there is a meaningful solution in the Canada recovery dividend, which will gain $1 billion over five years.

Although this is not enough, does the member agree that this windfall tax needs to be extended to major corporations reporting record profits, like Loblaws, which has been showing $1 million a day in profits?

[Melissa Lantsman, Conservative, Thornhill, ON]

Madam Speaker, Conservatives believe everybody should pay their fair share of tax in this country. We also believe we need a responsible plan to go forward, whereby cheap cash is not flooding the market and cheques are not going to prisoners or corporations who have not made good on their tax payments.

We know the government has flooded the market with cash. Its members talk about cheques in mailboxes. Well, guess what? There is also a credit card bill. They said they would take on debt so Canadians did not have to, and now Canadians are there to pay the debt they have incurred.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Madam Speaker, it is always a pleasure to rise on behalf of Canada's number one riding, Mission—Matsqui—Fraser Canyon. I am pleased to share some initial thoughts on the fall economic statement.

The economic update released by the costly coalition fails to address the cost-of-living crisis created by the out of control spending government. The Prime Minister's inflationary deficits, to the tune of half a trillion dollars, have sent more dollars chasing fewer goods. His inflationary scheme is hiking up the price of groceries, gas and home heating. Canadians have never paid more in taxes, because of the Prime Minister, and have received less.

To reduce inflation and improve the cost-of-living crisis that Canadians are living with each day, the Conservatives had two very simple and clear demands: first, stop new taxes; and, second, stop new spending. None of our demands were met in the fall economic statement. For that reason, the Conservatives will not support this irresponsible economic statement put forward by the government.

The cost of government spending right now is driving up the cost of living and Canadians have had enough. As the member for Thornhill just mentioned, we have a government that is focused on the power of government, of extending the reach of government. The Conservatives want to put power back into the hands of Canadians, back into the hands of people who can create things, produce things, pay taxes and be responsible citizens. However, because the government continues to spend more, to infringe upon our rights and into our day-to-day lives, it is taking away the power of people to live the type of life they want to live. I am opposed to that.

Before I go on, I would be remiss if I did not mention one line item in the fall economic statement that relates solely to my riding of Mission—Matsqui—Fraser Canyon, and that is the promise made in June of this year regarding the $77 million put forward in good faith by the Government of Canada to rebuild the community of Lytton. I have yet to receive an answer other than to say that by transferring the funds from Pacific Economic Development to Infrastructure Canada, the village of Lytton would have more flexibility.

What I am concerned about, and what I hope I get an answer very soon from the government on, is why it has decided to extend that unique and historical payment over a five-year term. Right now, my community is without a village office and some core services, and debris removal is still taking place. The constituents of Mission—Matsqui—Fraser Canyon need that $77 million and the flexibility to build in the upcoming spring. Having that money spent over five years, I am afraid, will delay even further the necessary construction work that needs to take place.

Lytton has been waiting long enough. The government came forward in good faith with a response. Let us move forward and let us get that money to Lytton sooner rather than later.

Turning back to the fall economic statement and the other measures included within it, I would be remiss if I did not mention a few points regarding small businesses.

One key item that has broad support across the country is addressing credit card transaction fees. Canadian small businesses pay some of the highest credit card transactions in the world. To the government's credit, in budget 2021, it agreed to address this issue. In budget 2022, it agreed again to address this issue. Now, in the fall economic statement of 2022, it says that if the private sector does not address this issue by December then it will do something about it.

While small businesses are struggling with a very challenging recovery in a post-pandemic economy, the government is dragging its feet on an area that there is broad consensus that needs action right away. My point is that it should take action now to get this problem fixed and help small businesses.

The second point I would like to address is CEBA loans. Over the last number of weeks, industry associations and small business organizations have been coming to Ottawa and speaking about the challenges they are facing.

I met a number of restaurant owners from Vancouver who are dealing with some very big challenges. They have said that in December next year, they are going to have to start repaying their loans. Right now, if they break it out on a month-by-month basis, they are going to have to pay approximately $10,000 to the Government of Canada to meet their loan payments. Small business owners want to pay back that money. They took it in good faith and took responsibility for that, but they asking the Government of Canada to give them some more flexibility, perhaps extending the timeline.

I mention this in the context of what is taking place in British Columbia. On the front page of the Vancouver Sun just a few weeks ago, it said there was lawlessness in Vancouver, that Canadians felt a sense of lawlessness. Property crime has never been higher. Businesses are not only dealing with smaller revenues and labour shortages, but also with property crime that is impacting their ability to produce goods and create money, like they were before the pandemic. My plea is that the government extend CEBA business loans and give our small business owners a break. We all need them, and we need to stand behind them.

The third item I would like to address is the ever-ongoing housing crisis. In budget 2022 and during the election campaign, the government talked in grandiose terms about a housing accelerator fund that would help the private sector build 100,000 new homes by next year. The government is not talking about that anymore because it has not done anything about it. It has done nothing to address red tape or work with municipalities to get housing built. We all need new housing, even in this affordability crunch, that will reduce the cost of living for Canadians. We all agree in the House of Commons that we need more housing. Let us move to do it right now. The government is not, and that is a failure.

The fourth point I would like to make is with regard to tax increases. On January 1, small business owners are going to have to pay more taxes to the Government of Canada. I recently mentioned that a small business owner with, say, 15 employees making over $60,000 will be paying over $20,000 every year to the Government of Canada just on employment insurance premiums. At a time when everyone in the country knows that small businesses are holding on by a thread, why is the government choosing to increase employment taxes on them right now? That is irresponsible and it will not help wealth creation or job creation in our country.

I would be remiss if I did not mention the elephant in the room, and that continues to be overspending by the government. Why is this a problem? It is a problem because in the very near future we will be paying more for debt than we are for health care. That is a sad reality for a country as wealthy and as prosperous as Canada. We have a health care crisis and we need to put more money into health care, not into debt payments. However, we cannot do that because the government overspent when it did not need to, and that is hurting Canadians across the country.

The final point I would like to make relates to government operations. In the fall economic statement, there is a special line item fund for $135 million to provide shelter to asylum seekers coming into Canada. During the COVID-19 pandemic, the Government of Canada shut down the illegal crossings across Canada. Why did it open them up again and why is it putting forward $135 million?

People across the world want to come to Canada, want to be productive citizens and want to have a fair chance to do what my grandparents did and what many members of the House of Commons did, which is to make a fair go of it in Canada, to pay taxes and be a productive member of society. However, with this $135 million, the government is saying that asylum seekers can break the rules and it will still support them. Shame on the government for not taking real action to address our border crisis and support the people who have followed the rules and who have waited for years, in good faith, to have the opportunity just to become a Canadian. We can do better.

We also need to address the brokenness of the federal public service. I was near the Service Canada office in my riding very recently and about 60 people were lined up outside. They could not access government services in a timely manner. Despite the growth in the public service by 24% since 2015, despite more spending than every other government in the history of Canada combined, people cannot get passports, seniors cannot get timely information on CPP and the guaranteed income supplement, and we cannot even give our hospitals enough money to give people the operations they need.

The government needs to get its house in order. This fall economic statement is irresponsible and, frankly, it is damaging to the well-being of Canada.

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

Madam Speaker, many aspects of the member's speech somewhat contradict the way he will be voting.

Let me give an example. He talks about housing being important, and it is important. If we look at what is being proposed, we have the doubling of the first-time home buyers' tax credit, the multigenerational home renovation tax credit and the 1% annual tax on underused housing being put into place. These are some of the initiatives taking place, yet the member says Ottawa needs to do more on housing.

We are taking actions that deal with some of the things the member is talking about, yet he is voting against it. That is consistent with the Conservatives. They say they want to see this, but when they see it happen, they end up voting against it.

Does the member not recognize that many would see that as a sign of hypocrisy?

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Madam Speaker, the only hypocrisy in the House of Commons right now is for a government to call an unnecessary election during a pandemic, to make pie-in-the-sky promises about addressing housing, and a year later doing absolutely nothing.

Shame on the government for making it harder for young families to have a home. Shame on the government for spending too much. Shame on the government for putting so many Canadians into a position where they cannot afford their variable rate mortgages because the government overspent.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Madam Speaker, I listened closely to my colleague's speech. We disagree on so many things, but there is one thing we do agree on. In Canada, Quebec and the provinces are of one mind when it comes to increasing health transfers. This sanctimonious government, which professes to be doing good things in certain areas, such as health, but is not capable of doing anything good in areas that are actually within its purview, is trying to tie conditions to a health transfer increase. Let me reiterate that this is a unanimous request to increase transfers from 22% to 35%.

Would my colleague please state, for the record, whether the Conservative Party supports increasing health transfers from 22% to 35% as soon as possible with no strings attached?

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Madam Speaker, I will be very clear on this. The federal government needs to leave health care powers to the provinces, be it for British Columbia or Quebec. I would add that, if the Government of Canada were not such a big spender, there would be more money left for the provinces and for health care services.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Madam Speaker, I want to thank my hon. colleague for a very impassioned speech on the very important need to address the cost of living for Canadians. Hopefully members of the House heard it.

I want to contribute to the conversation in a way, and I hope the Conservatives can, in their response, that highlights the importance of the employment insurance program and the Canadian pension plan.

EI is not a tax. Nor is the Canada pension a tax. I offer this in the most respect to the workers, the men and women who continue to contribute to their EI and their Canada pension plan. EI is a program that helps folks when they are unemployed. Workers pay into that and they also work for that. The same goes for their pension. These are two important programs to our social safety net.

Could the member speak to the importance of EI and the Canada pension plan?

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Madam Speaker, that is a very legitimate question.

On employment insurance, when an employer hires people, those employees are required to pay 1.6%, I believe, of their insurable earnings, up to $60,000, into the general revenue fund of Canada toward their employment insurance contributions. The employer is required to pay 1.4% of the employee contribution into the general revenue fund of Canada. The employee and the employer contributions are mandatory.

As it relates to the Canada pension plan, employees are required to pay a portion of their salary, up to a threshold, into the Canada pension plan. The employer is also required to pay a contribution into the Canada pension plan.

On employment insurance specifically, both Conservative and Liberal governments have taken money designated for employment insurance from the general revenue fund to pay for government deficits—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

We have to resume debate.

The hon. member for Châteauguay—Lacolle.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Madam Speaker, I would like to inform you that I will be sharing my time with the member for Cowichan—Malahat—Langford.

I am pleased to rise today in support of Bill C‑32. The economic statement presented by my colleague, the member for University—Rosedale, the Deputy Prime Minister and Minister of Finance, earlier this month once again demonstrates how committed our government is to helping those most in need, to helping Canadians deal with the rising cost of living and the housing crisis, just as we are helping Canadian businesses. This is exactly the kind of bill my constituents want from our government.

It is actually a bit like a bill I introduced in the House, namely Bill S‑207, which sought to change the name of my riding from Châteauguay—Lacolle to Châteauguay—Les Jardins-de-Napierville. Some members in the House told me that they understood my constituents' frustration and they supported my efforts to change the name. Then they voted against the motion, for reasons that I will never understand. They voted against the very will of the people of my region. Others claimed that I was not using my time wisely by wanting to correct a mistake that was affecting my constituents, and that I should have introduced different legislation.

It is not just the fact that I was elected here to represent—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

I must interrupt the hon. member. There is a point of order.

The hon. member for Jonquière.

[Mario Simard, Bloc, Jonquière, QC]

Madam Speaker, I totally understand my colleague's frustration, but I do not think the defeat of her bill has anything to do with what we are debating today.