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.

Report Stage

[Ruby Sahota, Liberal, Brampton North, ON]

Mr. Speaker, I have to say I definitely agree with the Conservative member across the way that the economy and the environment go hand in hand, and I want to compliment Saskatchewan for taking steps that are good for both its economic output and the environment. I think every province and everyone should take lessons from that.

In reference to the inflation comments, I would like to ask the member whether she feels Canada is in this by itself, because if we look at comparable countries in the G20, we are the ninth lowest in the G20; in the G7 we have the third-lowest inflation rate.

Does the member not think that in the global market, the illegal invasion of Ukraine by Russia plays a major impact on food prices and the inflation rates we have today?

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Mr. Speaker, the reality is that Canada is one of the breadbaskets of the world on so many levels. I am touting Saskatchewan today, there is no question, but I want to say that when I go home I talk about this entire nation, and I have a different perspective from the one I had before I became a member and found out, as I say to my communities back home that are very rural, that it is not east versus west at all.

Rural Ontarians are facing the same challenges my constituents are. They are struggling with the fertilizer requirements. They are struggling with the carbon tax, and all of the things that are impacting my constituents as farmers in Saskatchewan are impacting them there, even as far as firearms go. There is no question that as a whole nation, we are not impacted by the ongoing war. These are things that do not impact our ability to produce and share with the world.

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

Mr. Speaker, my colleague and I will agree on one thing. This is obviously not the bill of the century.

We in the Bloc Québécois focused on three key issues before the bill was introduced, and we will continue to focus on them because they are what matter the most to us. I am talking about increased health transfers, support for seniors over 65 and urgent EI reform.

Does my colleague agree with me that the government should focus on these three priorities?

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Mr. Speaker, I have to say my colleague and I agree on more than just one thing, because we serve on the veterans affairs committee together, and I really appreciate what he brings to the table there.

Are these important issues? Absolutely they are. I have to say my concern is for seniors who require assistance. It is always really important that we make that clarification. Sometimes I have trouble believing I am talking to myself about that particular age group, but the truth of the matter is that it is very important that the individuals who need the assistance in our society get it, and unfortunately a lot of those things are being put in jeopardy because of the way the government has handled the fiscal responsibility Canadians have entrusted it with.

[Lisa Marie Barron, NDP, Nanaimo—Ladysmith, BC]

Mr. Speaker, I am wondering if the member can help me to understand. I am hearing from the Conservatives who are speaking about the increased cost of living and the impacts on Canadians. I agree that there are some real issues that need to be addressed. However, around the actual asks that are coming forward from the Conservatives, for example on the carbon tax, we know that provinces and territories have their own carbon pricing, whereas if we were to look instead at removing the GST from all home heating, we would be able to provide relief for more Canadians across Canada.

I am wondering if the member could explain to me what the Conservative stance is on that, and why we are not seeing support for removing the GST from home heating and are instead looking at carbon pricing, which would benefit only a portion of Canadians.

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Mr. Speaker, my frustration is that the member opposite and her party are choosing to prop up the government. Removing the GST is one small part of what that party should be doing to ensure the government does not continue on in power.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Mr. Speaker, I am very honoured every day to stand up in the House. Today, we are talking about the fall economic statement. Before I talk about that, I just want to take a moment at the beginning of my speech to recognize that the bodies of indigenous women have been found in Winnipeg and an alleged Winnipeg serial killer has been identified.

I think collectively in the House, and hopefully across all of Canada, we are sitting with the deep horror of that reality and what that means for all of us. It is shameful that we live in a country that still does not value indigenous women and girls and our LGBT community. We see it demonstrated repeatedly. I hope all of us are carrying this in our hearts and that we continue to carry it in our hearts and our minds every day until this stops.

Coming back to the fall economic statement, I want to talk about some of the concerns I have around this economic statement. We are all hearing from constituents who are struggling every day to afford the basic necessities in their lives. We hear about the increasing use of food banks. We also hear from so many families who are eating substantially less. Parents are acting like good parents and are not eating as much so their children can go to bed with full bellies. That is something that we should all be listening to.

We know that inflation is certainly a part of the problem. However, we also know that greed is a huge part of the problem as well. In my community, I hear from a lot of indigenous elders and they consistently tell me that greed is an illness. They have a lot of traditional ways of dealing with greed, because it is seen as a sickness that will hurt our communities at large. I wish that, in this place, we could also see it as a sickness that needs moderation. It needs systems in place to stop it.

We know that Loblaws has seen record profits. It is profit like it has not seen in well over five years. It is profit that is so substantial that we hear it is making $1 million extra a day. That concerns me greatly. As we are having this discussion, it is important that we recognize that this fall economic statement does not really substantively address that issue and I hope that it will soon.

We know that the Canadians for Tax Fairness have said that the costs from inflation are more than what is passed on to consumers. That means that inflation is passed on to consumers but more is added. In my opinion, that is simply greed. We need to address that issue so that we hold the people who sell us our food accountable.

I remember a constituent once told me, “Rachel, we are not consumers; we are Canadians.” Every day when I am in the House, I really try to remind myself of that as we look at our systems and recognize some of the challenges in them.

I also did not see a substantial enough increase for housing. I know that on November 25 in my riding in Campbell River, there was a conversation on housing. Many representatives from communities throughout my region were participating. I heard again and again, like I do so often, that housing is simply a crisis. If someone has a fixed income or a low income, it is getting harder to find a place to live. A lot of people are living outside. There is a lot of snow in my area, which is fairly rare, but it is having a huge impact.

We also know that a lot of seniors are couch surfing. When I get calls from people in their eighties who are moving from friend's house to friend's house and sleeping on couches, it just means there is something substantively wrong in this country. I want to remind Canadians that the federal government really has not been part of the housing strategy in this country since 1992. I appreciate that the government has put some money into it, but if we leave a wound festering like that for so long, it is really hard to fix it. That is what we are seeing here.

I want to thank the Campbell River Community Foundation and the Campbell River and District Coalition to End Homelessness for all of their work on this particular file. We heard from small communities and indigenous communities. They are left out. The federal funding is not working. Indigenous communities are not getting the supports they need from the government and it needs to be better.

I also have concerns that we are not talking about GST on home heating. We know that this would help. It is not the biggest help, but put together with a lot of things, it would help hard-working people across this country be able to pay for their heat when we hit the cold season.

We still have not seen a meaningful windfall tax. That is such a gap. We need to have more structures in place. Again we will hear from the government on this, but it has not fixed the problem. It has done a few tweaks, but it has not taken that comprehensive look at the fact that people are making a lot of profit off the labour of Canadians and they are not paying their fair share. Ultrawealthy people are hiring accountants who can help them pay very little, but everyday people are paying all of their taxes. That is wrong and we have to fix it.

There are a few things that I am very much in support of in this bill as well. I was excited to read about the Canada recovery dividend. This is something that the NDP has been asking for. It is temporary and maybe we do not want temporary, but it is there. It is a one-time tax of 15% of taxable income over $1 billion, so it is getting at some of those profits. The other thing we know is that in this country a lot of corporations, after the pandemic, have done extremely well very quickly. In fact, many of them are making more profit than before the pandemic. We need to question that, we need to understand it and we need to make sure that they pay their fair share.

This dividend would also increase corporate income tax on banks and life insurance groups by 1.5%. That is getting some of that windfall tax and putting it back into the coffers. It is making sure that people in our communities get things like appropriate housing, dental care and a bit of support to help with their rent when they pay way more than 30% of their income on rent.

Those things will make a difference, but we also know that the Parliamentary Budget Officer has been very clear that if this Canada recovery dividend were put on big box stores and the oil and gas sector, we would see an increase of revenue to Canada of about $4.3 billion. We need to question this. Again, I keep coming back to this and the NDP will continue to keep coming back. When we see groups of people and big corporations making significant profits when other people cannot even feed their families and other people are living on the streets, Canada has an obligation to address this issue. Therefore, these are some steps in the right direction, but we still need to see more.

There is another thing that I am in support of and I am looking forward to seeing finally implemented. I know the NDP has been fighting and talking about this for many years. It is the removal of the federal portion of interest on student loans. We spend a lot of time in the House talking about young people and about the fact that they do not have enough to buy a house and that they are struggling, sometimes with several jobs in a very changing economy, to address the needs that they have and to have a future that they can believe in.

This is one step. It is not the only step that should be taken on behalf of young people. The federal government has to do more, but it is something that really would support a lot of young people and allow them not to have that burden. They go to school so that they can contribute to their community and to their country. If they have to spend all of their time trying to find a way to pay off their loans, then they do not get to do the things that will make all of us as Canadians a lot more substantive and healthy.

In closing, I want to say that I will be supporting this bill. I believe fundamentally in the fact that people need dental care, and I am really excited to see that come out the door. We know that we still have work. I am really excited to see next year that seniors finally get dental care. I do not know about the rest of the MPs in this place, but I have had a lot of seniors come to my door and talk about the fact that they cannot afford basic dental care and what the impact of that is in terms of their health and well-being.

I look forward to answering any questions.

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

Madam Speaker, I would like to comment on the member's opening comments regarding the four murdered indigenous women in Winnipeg. It is indeed a very sad thing to hear.

When I was in opposition, I raised the need for the public inquiry. Ultimately we did get the public inquiry. There are 200-plus calls for justice within that and we have the Truth and Reconciliation Commission's 94 calls for action. I believe we have to go the extra mile whenever we can in order to ensure that there is a higher sense of commitment to get to the truth of the matter and to assist where we can, because that reconciliation is of critical importance.

I want to compliment the member for starting off her comments with this because this is very important. I know she is not from Winnipeg. Her heart is in the right place in terms of indigenous people as we all try to strive to do better. The question I have is related—

[The Assistant Deputy Speaker, Carol Hughes]

Unfortunately, the hon. member's time is up. I am assuming that the hon. member for North Island—Powell River may try to read the hon. member's mind about the question.

The hon. member for North Island—Powell River.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Madam Speaker, I always do my best to read people's minds. However, my response is simply that this is more than sad. This is an everyday reality for indigenous communities across this country. Until it is an everyday reality for every Canadian in this country, it is not going to stop.

I hope this government will actually get the resources into pockets and that we will also assist in searching for the bodies of these young people, of these women and girls. That is what we need to do, and I hope that the government does it.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Madam Speaker, I am going to focus on a couple of elements of the member's speech where we have some agreement.

The member talked about the need to take the GST off of home heating, which is a great idea. I would go further and also remove the carbon tax. I would remove it altogether, but if nothing else, surely we could at least remove it from home heating. I wonder if the member would agree with me, given the concern over affordability.

Furthermore, on government culture, a system of corporate welfare has taken hold with this government. I agree with some of the concerns the member raised. The Liberals have wasted a whole lot of money over the length of their government on everything from the Infrastructure Bank to new funds that are little more than corporate welfare. Does the member agree with that and, if so, why is she supporting this government and the bill?

[Rachel Blaney, NDP, North Island—Powell River, BC]

Madam Speaker, just to clarify, in fact, the NDP offered an amendment to a motion that the Conservatives put forward in terms of the GST and the carbon tax.

Every province and territory in this country is not the same. I am from British Columbia, and our tax system for carbon pricing is overseen, rightfully, by the province. This is something our province decided when the B.C. Liberals were in power. I think they have a new name, but I do not know what it is yet. I apologize.

If we actually addressed the issue and had GST removed from home heating, it would mean that everyone would have some sort of relief, as opposed to a carbon tax, which would only focus on a few parts of Canada but not the whole of Canada. For me and for the NDP, when we do things, we want to make sure that everybody is included and nobody is left out.

[Andréanne Larouche, Bloc, Shefford, QC]

Madam Speaker, I thank my colleague.

As a member of the Standing Committee on the Status of Women, I too am thinking of the families of the victims, the indigenous women and girls who have disappeared. There was another case recently in Winnipeg. Such a tragedy.

My colleague spoke about dental care for seniors. The government often holds this up as an example of how it is helping seniors. However, how can it ignore all seniors aged 65 to 74?

Does my colleague not think that old age security should be increased for them and that this is what would truly help seniors?

[Rachel Blaney, NDP, North Island—Powell River, BC]

Madam Speaker, I thank the member for bringing up how much dignity we need to bring to the discussion around indigenous women and girls and LGBT people being lost, murdered and missing. I appreciate that.

As for the other component of the question, I do agree that a senior who is 65 has every right to have a little extra in their old age security and should not have to wait until they are 75.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Madam Speaker, I want to add my comments on the fall economic statement.

Ahead of the Liberal government's fall economic update, our Conservative team put forward two really concise proposals. One was to stop the tax increases and the other was to stop spending money we do not have. Unfortunately, the Liberals did not take our advice in either one of those areas. They are still proceeding with their planned tax hikes and they are continuing to spend at record levels.

It goes without saying that Canadians are having incredible difficulties paying their bills, rent and mortgages and putting food on the table. Seniors, students and working families are getting crushed by the dramatic rise in the cost of almost everything they purchase these days. Heating a home or business is not a luxury; it is a necessity. The Conservatives get that, but it is clear the Liberals do not. Canada was the only G7 country to raise energy taxes during this inflation crisis.

The finance minister should have used the fall economic statement to stop the plans to triple the carbon tax. It was a missed opportunity, and it is regrettable that the Liberals are failing to listen to their constituents, who are struggling to pay their bills.

Thanks to the Parliamentary Budget Officer, his recent report on the costs of the Liberal carbon tax completely debunked the Liberals' claim that people are better off under their rebate scheme. It proved what Canadians already knew about the Liberal carbon tax: It is costing them money. For months, the Minister of Environment and Climate Change has been claiming that eight in 10 Canadians get more money back from the carbon tax. The PBO report says that is not true, and most households that are subject to the Liberal carbon tax “will see a net loss”.

After years of the Liberals saying their carbon tax results in more money going into the pockets of Canadians, it is time for the Liberal government to end the charade. It needs to admit that Canadian households are in fact losing money and will continue to lose money because of the carbon tax. Every time the Liberals get up in the House and state otherwise, it is simply not accurate.

In Manitoba, winter has already arrived. The temperatures are plummeting and people’s furnaces are running non-stop. According to Manitoba Hydro, the carbon tax is equal to 9.79¢ applied to each cubic metre of natural gas that a household uses. The typical household in Manitoba will use around 2,250 cubic metres of natural gas in a year, resulting in $220 in carbon taxes. It is important to note that the carbon tax is also applied to the fuel people put in their trucks or cars.

Constituents of Brandon—Souris are disproportionately affected by the carbon tax. I have stated this a number of times in speeches in the House. I am a proud Manitoban. I am also proud to be from rural Canada. The Liberal government needs to start realizing that its policies affect rural and urban Canadians quite differently. My riding covers a span of well over 17,000 square kilometres. Unfortunately, I do not believe the government has any regard for the livelihoods and concerns of those who are from that portion of our great nation.

Many members of the Liberal government probably do not understand what life is like in rural Manitoba, or anywhere in rural Canada for that matter. People must drive long distances to get to the grocery store or to a doctor's appointment. They have to drive a long way to take their kids to school or to drop them off for hockey practice or music lessons. Many must commute to work in the next town or drive into Brandon. Many students from rural areas must drive into the city to attend either one of our great educational facilities: Brandon University or Assiniboine Community College. The Liberals are punishing these folks through no fault of their own, and none of these Canadians are buying the Liberal gaslighting that their rebates are covering the increased costs due to the carbon tax.

The other policy item our Conservative team was looking for in the fall economic statement was for the Liberals to get spending under control, which is almost an oxymoron for Liberals. Not only was there no plan to get spending under control, but the Minister of Finance is also asking for Parliament’s approval for $14.2 billion in unidentified spending in the fall economic statement. At a recent finance committee meeting, when pressed on what this money was for, the Minister of Finance flat out refused to outline what the money would be used for.

This lack of transparency is shocking. I for one will not vote in favour of giving the Liberal government a $14.2-billion blank cheque. How are we as parliamentarians supposed to scrutinize the government’s spending plans when we do not even know what it wants to spend it on.

It is the same irresponsible action that the Prime Minister took at the start of COVID, when he told the finance minister, at that time Minister Morneau, to put forward spending for 21 months, to the end of December 2021, with none of it being voted on in the House. It was completely unaccountable. This is another proof point that the Liberals have zero regard for fiscal transparency, nor do they have a plan to eliminate wasteful spending.

Every single hour the government’s debt goes up by another $6 million. That equates to $144 million per day. All of that debt is getting expensive. According to the Parliamentary Budget Officer, federal debt charges will top $53 billion by 2024. The amount of money the government will spend on the interest payments on the debt will almost be as much money as the federal government transfers to provinces for health care. The debt charges cost $20.4 billion last year alone, and according to Department of Finance, this year will total at least $34.7 billion.

During a Senate committee meeting, the Parliamentary Budget Officer said, “That will have a major impact on public finances...We’ve looked at the impact of increasing interest rates as well as the increase in the stock of debt. We estimate that in the next four years interest payments will probably double”.

In the weeks leading up to the update, the finance minister was speaking about fiscal responsibility for the first time in seven years. In a leaked internal memo, she even asked Liberal ministers to find a dollar for every new dollar of spending, exactly what Conservatives had been pushing for, for years. Unfortunately, as is so often the case, the Liberals’ words did not align with their actions. They refused to commit to cancelling any of their planned tax hikes and announced plans to increase inflationary spending by a whopping $52.2 billion over the next six years.

While the finance minister plays down the threat of inflation and spiralling government debt, the reality is that uncontrolled Liberal spending has played a role in making life less affordable. Even the Governor of the Bank of Canada confirmed that more deficit spending has resulted in more inflation. More inflation means Canadians are paying more without getting more.

Pay cheques are not going as far as they used to. Nearly one in five Canadians are skipping meals to cope with rising food costs. More than 88% of Canadians say it is more difficult to buy food. Food bank usage is at an all-time high. Housing prices have doubled.

In closing, our Conservative team has proposed several tangible ways to bring inflationary costs down for Canadians. We want the Liberals to enact a dollar-for-dollar law that requires government to find a dollar of savings for every new dollar of spending.

We want the Liberals to end wasteful spending by, for example, getting rid of the multi-billion dollar Infrastructure Bank, which has failed to build any infrastructure projects since it was created, and stopping their disastrous firearms buy back scheme, which would do nothing to stop gang violence.

We want the government to get out of the way of our farmers so they can grow more food. We want to see a plan that would spur the private sector to build more homes, which includes incentivizing municipalities to encourage home building. We want the Canadian energy sector to get more projects built so Canada could sell more LNG to our allies.

We will never stop pressing for an end to the carbon tax, which is raising the cost of gas and home heating. In a country like Canada, no one should be forced to choose between buying groceries and heating the house, especially in winter.