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

[Some hon. members]

Agreed.

[Adam Chambers, Conservative, Simcoe North, ON]

Mr. Speaker, I have only been here for a year, but I have been driving all over the city and I still cannot find the money tree. I do not know where it is, but the government spent $100 billion of added debt before COVID and spent $500 billion of debt during COVID. Forty per cent of the money spent during COVID was not even related to the pandemic. That is not from us. That is from the independent Parliamentary Budget Officer.

Annually, spending is now 30% higher than it was prepandemic. The only answer that this government has to any problem is to spend, spend, spend. Every six months, its members come back to the House and say they found fiscal restraint and do not worry. However, they just keep moving the spending line up; they just shift it up on the graph. Every time they do, they say, “Wait. From here going forward, we are only going to increase spending by 1% or 2%”, but when the real tally comes in at the end of the year, spending is up 6% or 7%, as it has been for every single year.

By the way, this spending profile, the 1% to 2% by which the Liberals are saying spending will grow, does not include new money for pharmacare. It does not include new money for the disabilities act we are passing in the House. It also does not include any new money for long-term health care. After a pandemic, one would think the government would want to give provinces additional money to spend on health care. We are seeing health care systems crumbling across the country, and the Liberals campaigned in 2015 on increasing health care funding long term.

The government initially said not to worry; it can spend because interest rates are so low. The Governor of the Bank of Canada said not to worry because interest rates are going to stay low forever. It was people on this side of the House who asked what happens if interest rates go up. Now we are going to spend more next year in interest on the debt than we do on national defence. We are going to spend almost as much on interest on the debt than we are transferring to the provinces through the Canada health transfer, which is what they spend on health care. Members can let that sink in. In 2024, the government is going to spend $24 billion more, for a total of $54 billion, on interest on the debt.

This is also a government that said inflation was not going to happen. It initially said that we would have deflation. The Deputy Prime Minister even went on TV and asked for people to please send her their ideas so Canadians could spend the cash they have in their bank accounts. I wonder if she still feels the same way.

The Liberals are now slowly sleepwalking us off a cliff. We are walking into economic uncertainty, and they refuse to admit that the world has changed. They are also committed to raising taxes. In the face of economic uncertainty, we are the only country in the world to raise taxes. We are going to raise the carbon tax and are going to raise EI premiums. By the way, I hope members do not like beer, because in June of next year, the excise tax on beer is going up 6.3%, which is incredible.

All the while, the government has also been growing the size of government. It has added 10,000 to 12,000 new full-time equivalent people every single year since 2015, yet services are going down. People cannot get a passport, cannot get immigration papers and cannot get a new pilot licence. Transport Canada will not even review medicals for people who want to become air traffic controllers. It is incredible.

What is the Liberals' answer? Well, it is okay; they will just spend more money. There is $400 million more in this economic statement for the CRA to hire more people, and I hope they are going to be answering the phone. In 2017, the Auditor General said that out of 50-some-odd million phone calls that went to CRA, 27 million got a busy signal. That is incredible. I hope those new individuals are not going to be auditing small businesses and middle-class Canadians across the country to make up for the spending hole that the government put us in.

Let me talk about the interest on student debt for a minute. The government is now going to give interest relief on the debt of students, which some might think sounds like an okay idea. However, here is the issue: We are in a deficit. The government is going to spend $500 million a year on taking interest away from the debt of students who are in post-secondary education.

The government's role should be making sure that additional students go to post-secondary education, not giving people a break who are already there. The government should be playing at the margins to increase the number of people, if they can go, who can afford to go to post-secondary education. It should not be giving that money to people who are already there, as this $500 million a year is money we will not have. Do members know who gets the economic benefit of going to post-secondary education? It is the student.

In fact, Alex Usher, who is a very well-known post-secondary education expert analyst, has tracked that students graduate with about the same amount of debt as they did in the early 2000s. That number has not gone up. It has been anywhere between $23,000 and just under $30,000 every year since the early 2000s.

This is not the United States. I know the government likes to import all of the U.S.'s problems here, but we do not have a student debt problem like they do in the United States. We can surely find better uses for this $500 million. Maybe we should give grants to low-income people who are not going to post-secondary education but who could afford it if they had more support. Instead, we are just going to give it to people who are already there for a problem that does not even exist. It is also expensive.

Dental care featured quite prominently in the House in a previous debate and also in the economic statement, so it is worth spending a couple of minutes on that now.

The government is going to spend almost $100 million in administrative costs to write cheques to people. It is going to use the same process that it used to give out the CERB, which relies on a self-attestation. Two results will occur: There will be fraud or there will be very little use of the program because people will be worried given what is happening now. They are getting calls from the CRA saying they need to give money back for the CERB.

The Auditor General is reviewing the process that the government used for the CERB and has not reported back her findings. I suspect that the government wanted to rush the dental care bill through this chamber before the Auditor General had a chance to tell us what she thought about the process for the CERB. Even the Parliamentary Budget Officer has serious concerns with the fraud that can happen.

I listened to a very good podcast called All-In. There is a guy on it, David Friedberg, whom I agree with maybe the least, who always says there is room for nuance in everything. He says that everything is not black and white, it is not elite or populist and it is not left or right. He is encouraging us to embrace nuance, but the government wants people to believe that if they are against the dental care plan, they are somehow against kids getting healthy smiles. If the government was really interested in that, it would have taken the same $100 million, given it to the provinces to increase the provincial programs' eligibility criteria and used the exact same funding mechanism that already exists.

Thinking that people on this side of the House are not interested in healthy smiles is not what this is about. This is about process. This is about efficiency. We are going to spend $100 million in money we do not have to set up a cheque-writing scheme that is going to be used for a few years. It is incredible. This is all happening while service levels are going down and employee and staff costs are going up. Canadians do not have any more patience with this high-spend, high-tax Liberal government.

In closing, I would like to say that the government seems more interested in wealth redistribution schemes than it does in growing the economy. That is pretty clear. Every program is taxed more, put in a pot and then given away to Canadians at their choosing. The Liberals hold strings over the provincial governments, which is very paternalistic, and meddle in a bunch of provincial affairs, saying they have to spend money on this and have to spend money on that, instead of just getting out of the way, giving more money to the provinces and letting them do their jobs.

[Mark Gerretsen, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons (Senate)]

Mr. Speaker, I guess I am not surprised that Conservatives are against freeing up important money that students are going to be seeing as a result of not paying interest payments if the fall economic statement is adopted. However, I am surprised at the willingness and candour with which Conservatives are willing to say they are not in favour of that.

The member talked specifically about how those who are currently students are the ones who are going to see the economic benefit of going to post-secondary school. Has he thought about comparing the economic benefit of when my parents and his parents went to secondary school? Thirty or forty years ago, all someone had to do was go to secondary school and they were pretty much assured of getting a decent job that would enable them to provide for themselves and their family. They would have a good kick at the can, so to speak.

We now have a situation in which secondary school is not enough. Most people need post-secondary to come close to getting the same quality of employment that my parents and the member's parents were able to get a few decades ago.

Can he reflect on the fact that as there is more demand for people to go to post-secondary, the government should perhaps start playing a role in helping provide that education?

[Adam Chambers, Conservative, Simcoe North, ON]

Mr. Speaker, we do not have a student debt problem in this country. About 65% of the working-age population have post-secondary education. It is wrong to ask 100% of the working-age population to subsidize that 65%. The government should have taken the same amount of money or half the amount of money and put it toward grants for low-income students who are not otherwise able to attend post-secondary education. That would have been a far better use of $500 million a year.

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

Mr. Speaker, the economic update mentions inflation no fewer than 108 times. Inflation means financial hardship for most people given that wages do not keep up with rising consumer prices. Historically, high inflation has meant that a recession is on the way. One usually follows the other. A recession means that many people will lose their jobs. The economic update and the bill do absolutely nothing to improve employment insurance, which is outdated and discriminates against 60% of claimants.

I wonder if my colleague could comment on this oversight in both the bill and the economic update.

[Adam Chambers, Conservative, Simcoe North, ON]

Mr. Speaker, yes, sometimes inflationary readings indicate economic uncertainty. The government's own numbers were projecting 3.1% growth next year, and now it is projecting only 0.7% growth. There are economic challenges on the horizon. The government wants to talk about making the EI system better. We abandoned the EI system during COVID because it was inadequate. I would ask the government where the reforms are that it promised on the EI system to cover more individuals. I agree with the member's comments, and I thank her for her contribution.

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

Mr. Speaker, I have heard many of the Conservatives in today's question period speak about their concerns with the cost of living increasing and Canadians' ability to keep putting food on the table. I have also spoken about this. The concerns from constituents in my riding of Nanaimo—Ladysmith are about not being able to keep putting food on the table.

It is interesting, however, that we are not hearing from the Conservatives about the big grocery chains that are profiting. Loblaws was profiting $1 million a day at a certain point this year, as one example.

Would the member support the government's extending the Canada recovery dividend to big box stores that are clearly benefiting from people's hardship and put this money back into the pockets of those who are struggling most?

[Adam Chambers, Conservative, Simcoe North, ON]

Mr. Speaker, I do not believe that growing the size of the government is going to fix the inflation problem. I support the NDP opposition day motion, which called for a study on greedflation with respect to grocery stores. I hope we do not prejudge the end of that study. I am looking forward to that study being done, as well as the one by the Competition Bureau. It is very important work. Any companies that are price gouging should be held accountable, and we should be looking at other industries too. I would welcome the study of other industries before we start saying whether we would agree to additional taxes at this time.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Mr. Speaker, the costly coalition strikes again. The fall economic statement gave us a window into the government's ongoing spending problem and the uncertain economic future that Canadians are bracing for. Liberal-made inflation continues to be a reality for Canadians and their families, while Liberal spending continues at a record pace.

After this Prime Minister spent more than all prime ministers before him combined, the finance minister had an opportunity to get her government's spending under control, listen to Canadians, stop new taxes and cancel the tripling of the carbon tax. There was hope that the finance minister would hear the plea to follow the wisdom of the Conservative leader that a dollar of savings would be found for every new dollar spent.

This update shows that the Prime Minister's addiction to spending shut her down. What is unfortunate is that it means Canadians will continue to pay record prices for groceries, gas and home heating. It means mortgages, loans and rent will all cost more, and it means Canadians continue to fall further and further behind.

It is like our country is being pulled back into the days of Pierre Trudeau, a prime minister who also inherited an excellent fiscal position and stable economy but then spent everything in the treasury and more, adding billions to the national debt. One deficit after another increased Canada's debt by 1,000%, and the deficit in his last year in office was over $37 billion, which is roughly $90 billion in today's money and eerily like last year's deficit. Canadians were also hit with high Liberal-made inflation and high interest rates caused by that spending. As a result, it took 13 years for the federal government to be pulled out of the deficit tailspin left by that government.

We are seeing the same pattern re-emerge as this Prime Minister adds hundreds of billions of dollars to the national debt. Liberal-made inflation continues, and interest rates caused by his out-of-control spending are rising. The Liberal government took over from the Conservatives, who balanced the budget and left the finances in good shape. Conservatives shepherded Canada through the 2008 recession without record-high spending or inflation. The inflation rate under the previous government never reached 4%, despite the recession and wars in the Middle East.

In contrast, before even one COVID case was detected in Canada, the Prime Minister had already added $110 billion to the debt. He then proceeded to spend and spend and spend, to the tune of half a trillion dollars in just the last two years. Liberals told Canadians that their enormous spending spree was to protect people from COVID. We learned that almost half of the $500 billion was actually not even related to pandemic measures and supports. Even the part of those hundreds of billions of dollars that was COVID related is also very questionable.

In budget 2022, the government continued to add to the debt with a $90-billion deficit as it announced $30 billion in new spending. This was at a time when inflation was at 6.7% and climbing, and stakeholders such as the Conference Board of Canada warned that new spending on this scale would add further fuel to this inflationary fire.

Since fiscal year 2014-15 and all the way to 2020-21, the government's program expenses have increased by 113%. The bureaucracy has also grown to almost 400,000 employees, costing taxpayers $60.7 billion. The government loves to claim it was creating jobs, but it turns out it did it for its bureaucracy, using money it got from Canadians struggling with Liberal inflation. What the government's economic update does not show Canadians is how the Liberals plan to return to fiscal stability or how they will rein in their spending. It instead reannounces several billion dollars from the 2022 budget and adds over $6 billion in new spending.

The PBO, economists and the Conservative leader have all warned the government that its out-of-control spending is driving up inflation. Now Canadians are getting hit from the left with inflation, as well as being squeezed by higher interest rates hiked by the same Bank of Canada that has kept printing money for the Liberals to spend.

Hard-working Canadians and their families are not even getting by, and any support the government proposes is evaporated by inflation, taxes, and higher mortgages and rents. Grocery inflation is at a 40-year record high as prices increased 11.4% in September. That has led to one in five Canadians skipping meals and forced 1.5 million people to visit a food bank in just one month. One-third of those food bank users are children.

It is not only grocery inflation that is eating up Canadians' paycheques. Home heating bills are also soaring. Natural gas prices were hit with 37% inflation, and other fuels increased by 48.7%.

The solution proposed by the finance minister is for families to cancel their Disney+ subscription. How out of touch does one have to be to tell Canadians that billions and billions of inflationary spending is a good thing and they should not worry if they cannot afford to eat, heat their home, or go to work, because cancelling their $14-a-month subscription will fix everything.

This is from a minister who makes way more than the average Canadian, kept her job during the lockdowns, voted to keep COVID measures in place long after the rest of the world opened up, and fed the Prime Minister’s spending addiction with taxpayers’ money. People in my riding and many parts of Canada cannot even afford Internet, let alone Disney+. They choose between heating their homes, feeding their kids, and paying for rent or their mortgage.

I grew up in an immigrant family that had very little. We knew, though, that if we worked hard and kept dreaming of a better future, we could one day achieve the Canadian dream. I know that through hard work and the grace of God, I am lucky to be standing here in this place, representing the community I grew up in and knowing my family is going to be okay.

That is not a luxury that many other Canadians and newcomers have. In a developed country like Canada, it should be possible for anyone, no matter where they come from or what their last name is, to work hard and get back what they are willing to put in. Unfortunately, the reality today is that dream is gone.

Conservatives have stood in the House week after week, demanding on behalf of Canadians that the government stop new taxes and cancel its plans to triple the carbon tax. Even after the Bank of Canada's governor said the carbon tax added to inflation, and even after the inflation numbers showed home heating costs increasing by ridiculous amounts, the costly coalition voted against our motions and responded to questions with condescending statements that ignored Canadians’ pain.

Liberals insist that spending more money and raising taxes is the solution to the fire they started. The left also loves to talk about so-called greedflation, but the real greed here is the profits the government is making off the empty stomachs of Canadians. The government is now making more revenue as inflation drives up the tax dollars the government brings in.

Canadians are hurtling towards a long, cold and hungry winter, and the other side does not look encouraging, yet the minister wants everyone to believe that Canada will be fine while all the spending, inflation and high interest rates wreak havoc on our economy. The government and the Liberal insiders might be fine, sitting on all the taxpayer money, but the people who paid those taxes are already paying the price.

Even more frustrating for Canadians is that this update had the opportunity to do what is right and stop the out-of-control spending, the taxing and the virtue signalling, yet none of that was done. Savings were not found to pay for new spending. The tripling carbon tax, payroll tax, second carbon tax and inflation tax continue targeting Canadians while loading up government coffers.

It is time to stop flooding the economy with government money and create more of what Canadians’ money buys: more homes, more energy and more food here at home. With the Conservative leader as prime minister, a Conservative government will remove gatekeepers. We will build more homes and affordable energy projects and let Canada’s world-class agriculture sector grow the food the world needs. Canadians are out of money, and the costly coalition is out of touch. While the Liberals continue to fail Canadians, Conservatives will fight to restore the Canadian promise and make hard work mean something again in this country.

For these reasons and more, I move:

That the motion be amended by deleting all the words after the word “That” and substituting the following:

the House decline to give second reading to Bill C-32, 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, because the bill brings in new inflationary spending that is not matched by an equivalent saving, and does not cancel planned tax hikes.

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

The amendment is in order.

Questions and comments. The hon. parliamentary secretary to the government House leader.

[Mark Gerretsen, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons (Senate)]

Mr. Speaker, I always get a kick out of it when Conservatives say they left this House in good fiscal order at the end of Stephen Harper's reign.

They are clapping when I say I get a kick out of it, and it is really interesting, because if we actually look back over Brian Mulroney and Stephen Harper, there were only three budgets that were balanced in the entire 13 or so years that they were in power for.

More importantly, when he talks about how they balanced this budget in 2015, they did it by selling off shares of GM at bargain prices, by slashing EI and by slashing veterans services. They did all that so they could “balance the budget”. They thought that when they went into the election in 2015, that would inspire people to bring them back into power. Of course, we know that never happened, because people saw right through it.

Can the member reflect on whether he thinks it was a good idea for the government of the day to balance the budget by slashing veterans services and EI, and by selling off the shares of GM at bargain prices?

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Mr. Speaker, congratulations to the member for Kingston and the Islands. He finally admitted it. The Conservatives actually balanced the budget. Let us give him a round of applause, everybody.

I thank him for admitting that, something that his government—

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

The hon. parliamentary secretary is rising on a point of order.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Mr. Speaker, the member said “round of applause, everybody”. He should know that he cannot talk to other members in the House. He can talk only to you.

I am more than willing to accept and recognize the fact that they balanced the budget in 2015 on the backs of veterans.

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

That really is descending into debate. If we get another round, I will make sure I acknowledge that the member can ask another question or maybe a follow-up.

The hon. member for Calgary Forest Lawn.