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

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

Mr. Speaker, I was so pleased to hear our colleague's remarks on Bill C‑215, an initiative he put forward together with the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup.

I would like to hear his version. Why is this bill moving so slowly? It might be naive of me to ask, but I thought the NDP was very supportive of the bill. The Bloc Québécois certainly is, and it is even on the Conservatives' agenda.

Why does he think this is happening? It is such a great bill.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

I thank my colleague for this excellent question.

At present, the ball is in the Liberal government's court. The entire House voted for the bill and the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities voted unanimously in favour of the bill.

We are at third reading stage. However, this bill must have a royal recommendation from the Prime Minister or the Minister of Finance. We all know that it is up to the government. I hope that the government will get onside before the holidays so that the bill receives royal recommendation. This would provide financial relief for those who are sick and financial protection to all Canadians for generations to come. It has taken 50 years to get to this point. In the next few days, let us seize the opportunity to provide protection for the next 50 years.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Mr. Speaker, I really enjoyed what the hon. member had to say in his speech, particularly the value of the principle he mentioned, about making sure all parliamentarians support Canadians in a non-partisan way. I really appreciate the member for his comments, because I believe he is sticking up for his constituents, albeit all of us are here to do that.

However, one important piece of that is making sure we have a strong revenue source for our national revenue. Numerous times we heard the leader of the Conservative Party rail against the banks and against the profits of the banks. The fall economic statement offers a 15% tax by way of the Canada recovery dividend, something New Democrats pushed for and something we support, which would ensure that Canada has a revenue from those who have grossed proportionately a profit of over $1 billion.

Why are the Conservatives now backing down, when we have a chance to tackle the problems with the banks?

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Mr. Speaker, I thank my colleague for his question.

As I said in my speech, with regard to the money the government spends, we want to ensure that no money is wasted, and that the goods and services we buy are paid for at fair value. We want to avoid what happened with the ventilators, for example. Their purchase price was $403 million too high. We cannot find anyone to give them to or sell them to. Does that seem right?

It is vitally important that Canadian families are able to work and that they have money left in their pockets so they can support themselves. Unfortunately, I cannot say any more because my time is running out, but we could debate this issue for a very long time.

[Marc Dalton, Conservative, Pitt Meadows—Maple Ridge, BC]

Mr. Speaker, the NDP and the Liberals are patting themselves on the back for this fall economic update. They should not. This is a fall update. Canadians are falling, and the NDP-Liberal government is failing. Canadians are seeing their standards of living erode and the cost of living skyrocket because of inflation.

If one wants to get depressed, they should go grocery shopping. Basic food costs are way up: bread, apples, cereal up 17%; lettuce is up 21%; chicken, 11%; cheese and bacon, 10%; pasta is up 22%. For those who want to cook from scratch because they think they are going to save, flour is up 24%.

The Abacus poll that came out earlier this month said that 50% of Canadians are finding it a lot more difficult and 38% a little more difficult. That means almost nine out of 10 Canadians are feeling the impact of inflation at the grocery store. One in five Canadians are saying they are having to reduce meal sizes or meals altogether in order to save money. This is Canada.

More people are going to the food banks now than in history, 1.5 million in October alone. I know this has been repeated by a number of speakers, but I think we cannot just accept it as just another statistic. These are Canadians who are facing tremendous difficulty. I talked with the local food bank where I live, in Pitt Meadows—Maple Ridge, and they said they have never seen anything like it.

The Liberals just shrug their shoulders and do not take responsibility for this mess. They blame it on Ukraine, on COVID, on anything but themselves. Going back to the polls, 56% say the Liberal policies on inflation are making things worse, while only 7% say it has helped. The summary of the Abacus poll is this, right here: Inflation is making life difficult for millions and is the number one political issue in Canada. The biggest impacts are felt in food, but millions are finding it difficult to cope with their energy and housing costs.

On the issue of inflation, Liberals are like a deer caught in the headlights, stunned and dangerous. I have seen deer sometimes in traffic. They can bounce around anywhere. What we are seeing are the Liberals making poor decisions that are causing a serious accident in Canada.

I wish I could just say it was an accident. Let me explain. They have printed hundreds of billions of dollars that they put into the economy over the past three years. Nearly half of that money that they have pumped into the economy has had nothing to do with COVID. The money supply has increased by 25%. What does that mean? It means there is a lot more money around for the same goods than there was a few years ago. That just makes everything more expensive. It is like Canadians have had a big pay cut. They may not have seen the number of dollars on their paycheques go down. As a matter of fact, it may have even gone up a little, but because the dollars do not go as far, it is essentially a significant pay cut.

It seems that the Liberals have seen this pandemic as a time to be silly with Canada's economy. That is a nice way of saying stupid. The finance minister said it was no big deal to print money or to borrow money. She said, listen, it is half a percent. It is at only half a percent. Let us just borrow, borrow and borrow and spend, spend and spend. They said it was going to be like this for years to come. In the past few months it has gone up 750%. Yikes. That is how much interest rates have gone up: 750%.

Now there is trouble. The cost of interest rates on the deficit is going to be as much as what the government is spending on health care. In this very dangerous time, when we are seeing war in Ukraine and threats elsewhere, it is going to cost more than the government spends on National Defence, which, I will say, is not a priority for the Liberals at all. This is very significant.

Canadians are very concerned about energy costs to heat their homes and keep fuel in their cars so they can go to work, go to the supermarket and take their kids to sports. Seventy-five per cent of Canadians say this is an important issue. The Liberals are absolutely oblivious to our call to axe the carbon tax, which is making everything more expensive, from transportation and food costs to everything else.

I must admit it is very challenging for me, and I am sure for my colleagues, to listen to the Liberals brag and pontificate about their plan to save the world by tripling home heating costs. They have a tax plan, but not a climate change plan. The Liberals' plan is just to promote. We are number 50 out of 63 countries on the greenhouse gas reduction target. The Liberals have not met any of their targets. What they are doing is ridiculous and, yes, full steam ahead toward the iceberg.

I live in the Vancouver area where there are the highest gas costs in North America. It has been up to $2.50 a litre. Something has to give, but the Liberals are basically saying to have no fear, the Liberal government is here, and it has bags full of money to scatter. The Liberals have tremendous causes, each one of them. They put those causes in there for talking points to say they are helping these people and these people for the bad policy they brought in.

The Liberals have lit an inflationary fire, and they are pretending they are trying to put it out. They have doubled the national debt. They recognized that inflation is not great for them politically, so what did they do? They said, “How can we take care of inflation? Let us ramp up interest rates.” That is causing real problems for people who are renewing their mortgages. In the Vancouver area, people having $500,000, $600,000 and $700,000 mortgages are quite common. People are now going to be paying hundreds and thousands of dollars more each month and each year.

The Liberals are just saying that they are going to invest. They keep on talking about investing in this and in that, and that they are going to put money in here and in there. I always hear this word “invest”. First of all, it is not the Liberals' money to invest; it is taxpayers' money. Second, it is not just how much they spend, but how effective they are when they are spending. It should not just go to more bureaucracy. We have a lot bigger bureaucracy with worse results. It should not be there just to pad their friends' wallets, whether it be former MP Frank Baylis with a $250-million contract for ventilators, who charged twice the amount, or the ArriveCAN app.

The finance minister wrote a letter and said that they had a meeting with Chancellor Scholz to get Germany to buy hydrogen. The Liberals did not say anything about Scholz's asking if they could get LNG to Germany. There is a war happening. The Prime Minister said there is no business case.

They are now producing this in Germany. They are now building these LNG plants and they are getting the LNG from other countries. Those could have been Canadian jobs. That could have been money to go towards health care. It could have helped National Defence and in other ways. The Liberals talk about a war on climate change. It is actually a war on the resource sector, which means that our Canadian dollar is not as strong and Canadians cannot purchase as much as they used to be able to.

[Darrell Samson, Liberal, Parliamentary Secretary to the Minister of Veterans Affairs and Associate Minister of National Defence]

Mr. Speaker, for the last 10 minutes my colleague was talking about the economy. I have to say that I have been listening all day. In one breath the Conservatives are saying we are investing too much in Canadians, and in another they are saying we are not spending enough.

They are saying they are the party of compassion. Let us look at which side is compassionate. When we brought forward the child care investment, the Conservatives voted against it. When we brought forward dental, they voted against it. When we wanted a top-up for housing, they voted against it. When we talk about removing the interest from student loans, they are against that. They were against the doubling of the GST for six months, but finally saw the light and backed off.

I would like the member to explain why, if the Conservatives are so compassionate, they are voting against all of these bills to help Canadians with affordability.

[Marc Dalton, Conservative, Pitt Meadows—Maple Ridge, BC]

Mr. Speaker, I would say it is the Liberals' policies that have caused the problems in the first place and that they should go back to the source, to the root, and take care of their spending. It is fine to help, but they should find some savings in other places. They have not. They still have a $37-billion deficit and it is accumulating.

[Mike Morrice, Green, Kitchener Centre, ON]

Mr. Speaker, I want to start by thanking Climate Action Network International for its work on the climate change performance index that was referenced by the member for Pitt Meadows—Maple Ridge, which ranks Canada 58 out of 63. It is a deplorable record. One reason that is the case is that we continue to add new subsidies to the fossil fuel sector. One example is the new $8.6-billion tax credit for carbon capture and storage at a time when oil and gas companies are making record-breaking profits.

I wonder if the member could comment on whether he is similarly concerned with the wholesale margins in the oil and gas industry right now. The reason why Canadians are feeling the pinch at the pumps is that those margins are up 18¢ a litre. Is he concerned about that and would he support a windfall tax on those profits so we can do more with respect to taking action on the crisis we are in?

[Marc Dalton, Conservative, Pitt Meadows—Maple Ridge, BC]

Mr. Speaker, I agree that companies need to be paying their fair share. I will make note that this year the Alberta government is seeing a massive amount of revenue coming in, and a lot of that is because of the incentives to help in Fort McMurray. That is now going to the government and making a tremendous difference.

[Andréanne Larouche, Bloc, Shefford, QC]

Mr. Speaker, I think that my colleague from Mirabel asked the question earlier. We have entered a new era of magical thinking by the Conservatives who imagine that an exact amount of money will be taken from somewhere and invested elsewhere, as though this can be done with a snap of the fingers. Where do they suggest these revenues be collected?

I mentioned the issue of taxing GAFAM, as did my colleague from Drummond. There is also the issue of tax evasion and tax avoidance. Could the money that is being invested in the oil companies not be invested elsewhere to help other sectors that will be more economically vulnerable in the tough year ahead, such as seniors and health transfers? Where could the government collect this money to be reinvested?

[Marc Dalton, Conservative, Pitt Meadows—Maple Ridge, BC]

Mr. Speaker, it is not up to the government to decide where investments will be made. For resource or other projects, it is up to the companies and investors to make that decision. What is happening now is that there are no investments because projects are not getting approved in Canada to our detriment.

[Dean Allison, Conservative, Niagara West, ON]

Mr. Speaker, I want to thank my constituents once again for giving me the opportunity to be here and represent them.

One of the things I heard a lot about this past summer was not so much about the billions of dollars being spent, although people do talk about that, but the level of competence of the government. That is one of the things we should focus on here. The government loves to talk about all the money it is spending everywhere on all kinds of things, usually not getting value for money. My colleagues have mentioned that already. As we see a number of different initiatives, what a lot of my constituents realized this summer was that the government is broken. Conservatives have talked before about getting some of the most basic services, such as a passport, which used to be received in a few days and is now taking literally weeks and months. Some people were waiting six months. It was unbelievable.

We talk about this lofty immigration goal of 500,000 people, but what we are not talking about are the two and a half million people who are waiting to get into this country. We need workers in a big way. The Liberal government likes to talk about things, but not look at what is being delivered. That is one of the things we should be focusing on. What are the deliverables? What has happened? We have all heard stories from people who have called us about visitor visas, immigration issues, work issues and people trying to get workers in this country. We know we have a major labour shortage, yet the government has been incompetent or does not have the ability to deliver the most basic goods and services for Canadians.

This economic statement promises to deliver more money. It is going to deliver another $40 billion. One thing my colleagues have mentioned over and over again is that this has been driving inflation. If we look at what is happening with a number of things, we see that, as we continue to have too few goods being chased by too much money, it is a major issue.

We also know that the Prime Minister has added more debt than all previous prime ministers combined. I want everyone to think about that for one second. I will repeat that. The Liberal Prime Minister has added more debt than all previous prime ministers combined. If we think about that, the money spent in the last 100-plus years has now been spent very quickly. The government will talk about how all these things were so important. The Auditor General and the Parliamentary Budget Officer have said, as a matter of fact, 40% of all this new spending actually had nothing to do with COVID. Once again, the high-level story is that we had to spend all this money on COVID, but then we find out that only 40% of it had anything to do with COVID. That is absolutely a challenge.

We know that our country's debt interest is going to double this year. We are going to see interest payments go up and more money spent on interest payments than the Canada health transfer. That is somewhat troubling. As interest rates continue to climb, people's mortgage payments are going to double, some up to $7,000 a year. The Bank of Canada has basically said that it is going to continue to hike interest rates as it tries to deal with inflation.

There is a major housing crisis in this country. We have seen what has happened in major markets like Vancouver and Toronto, some of the most overpriced markets, not only here in Canada but in the world. We have seen the money spent on the homelessness initiative, and it is pretty timely. We see that in the Auditor General's report that just came out in the last little while. I will read part of the summary, which states:

As the lead for Reaching Home, a program within the National Housing Strategy, Infrastructure Canada spent about $1.36 billion between 2019 and 2021—about 40% of total funding committed to the program—on preventing and reducing homelessness. However, the department did not know whether chronic homelessness and homelessness had increased or decreased since 2019 as a result of this investment.

That is a direct quote from the Auditor General. I will read one more paragraph, as follows:

For its part, the Canada Mortgage and Housing Corporation, as the lead for the National Housing Strategy, spent about $4.5 billion and committed about $9 billion but did not know who was benefiting from its initiatives. This was because the corporation did not measure the changes in housing outcomes for priority vulnerable groups, including people experiencing homelessness. We also found that rental housing units approved under the National Housing Co-Investment Fund that the corporation considered affordable were often unaffordable for low-income households, many of which belong to vulnerable groups prioritized by the strategy.

Let us think about this. The government wants to brag about how much money it has spent on homelessness, yet we have no way of knowing if it has gone to the people who need it the most. That is one of the things we need to look at and have a conversation about.

We have talked about the cost of what has gone up. We have many Canadians within $200 of insolvency, not being able to pay their bills because of the high amount of inflation. Thirty-one per cent of Canadians say they do not make enough money to pay their bills and debts. This is certainly worrisome. We know that paycheques do not go as far as they used to. We also have Canadians cutting their diets, and seniors who have to choose between heat and food. Winter is coming. We live in a northern country and have to deal with that very issue.

We can look at food bank usage. We have seen the Canadian record of 1.5 million visits, with an increase of 35%, and we know that 33% of those using food banks are children. That is somewhat troubling given that children normally make up 18% to 19% of the population.

We keep talking about the tripling of the carbon tax because it is causing everything to go up in price. We can look at what is going on with that. Those who in live in cities have the option of public transit. Although I do represent a rural riding, it is not the most rural in Canada. I would say a lot of places in northern B.C., northern Alberta, northern Ontario or northern Quebec are more rural.

We have limited public transportation in my riding, but I can assure members that the moms, dads and families there need to drive everywhere. They need to drive to take their kids to school. They need to drive to take their kids to sports like hockey. They have to drive their car just about everywhere, so when they are told they have to pay more money in a carbon tax, it is not an option for them because of their way of life. We do not have the option of being able to use public transit all the time in every situation.

My friends talked about the availability of day care. I will not hit that again, but as we look at these things, we also have to consider the fact that we live in a northern climate. We do not have the option of whether we heat our homes or not. It is something we have to do. The Liberal-NDP coalition fails to recognize the fact that individuals have to heat their homes. This is not a luxury good.

We could talk about farming next. One of the things about farming that I find troubling is the tariff on fertilizer coming from Russia. What a tariff means is that farmers will have to pay more. However, the tariff was not to punish Russia in any way, shape or form. I have had farmers reach out to me and say they could not believe it. They pre-ordered their fertilizer, the government decided to put a tariff on the fertilizer and it has done nothing but drive the cost of our food up.

Let us think about that for one second. A tariff means that Canadians are going to pay more for something they had no control over. Farmers were not given six months or a year to try to change where to get it from. It is problematic when we look at those kinds of things.

Here is a government telling Canadians how much it cares about them. Here is a government telling them to look at all the money it is spending. Here is a government telling them that the carbon tax is good for them and that they need to pay it because it will make all things better. However, the reality is that it is costing everyone more money and food prices have gone up.

I could talk about restaurants that have reached out to me. Chicken has gone up almost 100%, and the oil they cook in has gone up over 100%. That is not 8%, 9% or 10%. Those are major numbers.

When governments are talking about how much money they are spending, I would ask this: Are people's lives better off? Do people have access to more services? Do they feel like the government is more competent? Do they feel that as a result of the money and taxes they are paying, their life is better?

I guarantee that if asked these questions, Canadians would realize the government is not delivering on what it is talking about. It is not delivering on what it is promising. I will leave it at that.

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

It being 6:45 p.m., pursuant to an order made earlier today, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the second reading stage of the bill now before the House.

The question is on the amendment.

If a member of a recognized party present in the House wishes that the amendment be carried or carried on division, or wishes to request a recorded division, I would invite them to rise and indicate it to the Chair.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

Mr. Speaker, I request a recorded division.

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

Pursuant to order made on Thursday, June 23, the division stands deferred until Tuesday, November 22, at the expiry of the time provided for Oral Questions.