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

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

Madam Speaker, earlier we heard the member for Renfrew—Nipissing—Pembroke say she believed the climate crisis that the world faces is a climate emergency that was manufactured by the Prime Minister. I wonder if the member would agree that the climate emergency is all a hoax that is being put on by the Prime Minister, as the member from Pembroke has alluded to.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Madam Speaker, I would ask the member across the way a question in return: Why did he not ask about how we can help northerners stay warm and buy groceries?

[Andréanne Larouche, Bloc, Shefford, QC]

Madam Speaker, I thank my colleague for his speech. He talked about two things that caught my attention: the situation of seniors and food banks.

The government often answers that it helps seniors by helping food banks. I think it is an absolutely degrading shortcut to tell seniors that all they need to do is line up at the food bank.

That is a fact. Food bank workers in my riding are reaching out to me to say that the number of seniors requesting food hampers is growing. Is it not time the government realized that something needs to be done to improve their financial situation?

I do not want to get into the issue of the carbon tax because what seniors' groups in Quebec are asking for in the way of help is for the government to improve old age security, which has not been increased for long enough. They also want the Liberals to do away with their proposal to increase the OAS only for those aged 75 and up.

The government is essentially failing half of seniors. All those between the ages of 65 and 74 have to go to food banks because they too are being affected by rising inflation.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Madam Speaker, seniors are impacted even more so, especially during these trying times with Liberal inflation and the lack of respect and attention they have been given in Bill C-32. When we look at the visits to food banks, in the territories we are getting close to the 10% mark. Seniors are part of that group. It is sad to say that the government simply does not respect them.

[Lori Idlout, NDP, Nunavut, NU]

Uqaqtittiji, the member neglected to mention the profits that were being made by grocery stores in the north, so I will mention very quickly that The North West Company, which is a grocery store in the north, including in the northern communities he mentioned, has had increases in sales of 2.4%. It profited by $13.2 million, or 63.9% more than prepandemic figures. It also reported an increase in the dividend payments it will be giving to its shareholders.

Does the member agree that the Canada recovery dividend needs to be extended to these big box stores that are clearly contributing to the hardships people are facing?

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Madam Speaker, the member sees the reality of the expenses that the people in Nunavut incur simply to buy groceries. I was up there and I saw the numbers.

I think the question really should be directed to the government, because it delivers the nutrition north program. It needs to look into some of the allegations and the facts the member noted. I absolutely respect that the funds that are supposed to be going to nutrition north should actually make it to the people who need the food, rather than to the companies that profit from it. However, it is a good question to put to the government, and I hope it will answer the member's question.

[Michael McLeod, Liberal, Northwest Territories, NT]

Madam Speaker, I appreciate that the member came to the Northwest Territories and the other territories to visit us. I would encourage more MPs to come and see our part of the world.

I would point out to the member that there is more to the Northwest Territories than just Yellowknife and Inuvik. He should go into some of the smaller communities, where he would see the many houses that are being erected.

Would he recognize that for the first time in our history, indigenous housing is supported through our government? During the 10 years that the Conservatives were in power, the dark decade of no housing was established. Does the member recognize how that has contributed to the crisis we have experienced over the last while with housing?

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Madam Speaker, the fact remains that 1,400 more individuals in the Northwest Territories are visiting food banks than they did the year before. That is on the member and the government he belongs to. I would challenge him with this: He really needs to talk to the person who sits down in the chair opposite and he needs to do more for northerners, especially in his own territory.

[Andy Fillmore, Liberal, Parliamentary Secretary to the Minister of Innovation]

Madam Speaker, it is a pleasure to rise today to speak to the fall economic statement presented earlier this month by the Minister of Finance and Deputy Prime Minister. The statement comes at a critical moment when we know Canadians are already deeply concerned about the accelerating realities of a changing climate, they are already deeply concerned by the economic fallout of a pandemic and they are also now worried about the impact of the international phenomenon of inflation impacting their monthly budgets.

In short, inflation is a global phenomenon caused by COVID-related supply issues and Putin's illegal invasion of Ukraine, and it is making the goods and services Canadians rely on more expensive. Those rising costs have meant that people are having a difficult time making decisions on how they are going make ends meet each month. Our government recognizes these concerns, and we are not waiting to act on those.

Our affordability plan is already under way, and earlier this month Canadians began receiving double GST credit payments, support that is making a difference for over 11 million households in need. There is up to $234 more for singles without kids, $467 for a typical family of four and $225 more on average for seniors. That is money in their pockets right now to help them put food on the table and pay their bills. Additionally, our legislation to extend dental care to kids and to provide rent support to renters is making its way through Parliament as we speak.

The fall economic statement now goes further, introducing measures to help Canadians in need, and today I would like to share some of the key initiatives in that statement that I believe will support my constituents back home in Halifax and, indeed, the constituents of all members in the House.

The first of those is eliminating interest on student loans. My city is home to many students and higher education students at universities like Dalhousie University, Saint Mary's University, the University of King's College, NSCAD University, the Atlantic School of Theology and the Nova Scotia Community College. In fact, in 2021, Halifax boasted 35,556 students across all of its educational institutions.

These are young people who have made the decision to get an education so that they can pursue a career of their choice, one that keeps them inspired and employed and allows them to build the future they want for themselves and for their community. However, the cost of tuition has risen steadily over the years. The current generation is in the position where paying tuition has sadly become a prohibitive burden at a time when their careers should be all about opportunity, not about the cost of living and certainly not about debt.

We know some students are fortunate enough to have families that can cover the cost of their education, but there are many more who are not able to rely on their families to cover that expense. That is where federal student loans come in. They are a way for the government to ensure that, if a young person wants to go to college or university, they can do so. This is a necessary support the government ought to extend in the pursuit of levelling the playing field for Canadians of all backgrounds, yet we know the interest that accrues on these student loans means that paying them back can take a very long time and the cost grows the longer they take to pay it back.

That raises an important moral question: Why should the government profit off the backs of middle- and low-income students through student loan interest payments that other more fortunate students do not need to take on?

Beyond the moral question, it is also simply poor economic policy. The government should not be holding back our young graduates at a time when we need to be growing our workforce and getting these young people launched productively into the economy. Therefore, the fall economic statement is permanently cancelling interest on federal student loans, including those currently in repayment. How about that? This change will help recent graduates who have been facing the prospect of paying back their loans with interest in a time when many people are struggling to make ends meet.

When this was announced, I received a number of letters from recent grads in my riding. I have the permission of the authors of just two of those to read them here to illustrate what this means for the folks on the ground in the beautiful city of Halifax. Here is the first one: “I am writing to express my—

[The Assistant Deputy Speaker, NDP, Carol Hughes]

The hon. member will have to save that and keep the House in suspense.

The hon. member will have five minutes the next time this matter is before the House.

The House resumed from November 14 consideration of the motion that 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, be read the second time and referred to a committee, and of the amendment.

[Andy Fillmore, Liberal, Parliamentary Secretary to the Minister of Innovation]

Mr. Speaker, I will be splitting the remainder of my time with the member for Sackville—Preston—Chezzetcook.

I will pick up where I left off. I was talking about the importance of cancelling the federal portion of interest on student loans. When this was announced, I received a number of letters from recent grads in my riding. I have permission from the authors of two of them to read them to illustrate what the cancellation of interest meant on the ground for folks in Halifax.

The first letter reads, “I am writing to express my wholehearted support for the plan to make student loans permanently interest free. This makes sense on so many levels. Interest rates are way too high for recent graduates to be expected to pay. It's a poor tax. Personally, me and my family are super relieved to hear about this. I just graduated in September and we had our first child this summer. Budgets are tight, we are lucky enough to have an affordable apartment for the time being.... The announcement today is a much needed reprieve from the way things have been going. Please keep it up!”

Another reads, “I just heard about the federal government's proposal to permanently eliminate interest on the federal portion of student loans and I just had to reach out to say THANK YOU!!!!!!!! You have absolutely no idea how much of a burden has been lifted from my shoulders by this announcement. This will be so helpful for myself and all Canadians struggling to pay back their loans, I simply can't thank you enough. I actually burst into tears when I read the announcement, I was so stressed out about my payments going up again in the spring. Things are so hard for a lot of people right now and this move shows that the liberal government truly cares about Canadians. So thank you so much for this incredible move!”

I would now like to move on to the fall economic statement's revamp of the Canada workers benefit.

The Canada workers benefit has filled in a gap in our social safety net. We recognize that many of our support systems have been directed at families, seniors and students, but one refrain I hear often is this: What about single, hard-working folks out there who also need help, the lowest-paid workers who are slipping through the cracks? That is what the Canada workers benefit is all about: topping off the income of three million of our lowest-income workers.

In last year’s budget, we increased the benefit by up to $1,200 for singles and by $2,400 for couples. We are now ensuring that these payments are delivered on a quarterly basis rather than once a year, as they are now, so those who rely on the benefit can access it when they need it.

Next I want to talk about credit card fees and the pledges made in the economic statement to reduce the burden on our small businesses.

Small businesses, as we all know, are the backbone of our local economies, employing the vast majority of Canadian workers. The pandemic has hit them hard. We delivered critical financial supports for them through COVID, which is why we had an economy to return to, but we cannot stop there.

With rising credit card fees, small businesses are feeling the pressure. This is something that has been frequently raised to me by my local chamber, the Halifax Chamber of Commerce, and by business organizations such as the Halifax Partnership. I am pleased to say that in the fall economic statement, we are moving forward with our plan to help lower credit card transaction fees for small businesses. This way they are not forced to choose between lowering their profit and passing on fees to customers. That benefits both the businesses and the customers themselves.

The fourth measure I would like to highlight from the fall economic statement is all about housing.

Halifax has seen remarkable population growth in the last decade, and as such has experienced growing pains. The availability of affordable housing options has become increasingly scarce, and people are looking for the government to act.

The fall economic statement implements many of the housing commitments we ran on in the last election. For example, it creates a tax-free first home savings account that will allow Canadians to more quickly save a down payment to buy a home. Also, because we know closing costs on houses are increasing, we are doubling the first-time homebuyers' tax credit. Next, because we know homes are for living in, the fall economic statement cracks down on house flipping, slowing the rising cost of homes and giving more people the opportunity to buy their own.

The last example I will give, which is one I advocated for for a long time as a city planner well before my time in politics, is support for secondary suites. If a grandparent or family member with a disability wants to move back in, Canadians are now eligible for a multi-generational home renovation tax credit so they can afford to build a granny suite, laneway housing or whatever else to allow family members to live with them while maintaining independence.

I would like to address one more set of measures in the fall economic statement, and they are about climate change. As COP27 has made clear, if it was not already, we need to be moving further and faster in the fight against climate change. That is why I am really glad to see that the statement includes new tax incentives for companies adopting clean technologies. This means a refundable tax credit equal to 30% of the capital cost of investments in electricity generation systems such as solar, wind and hydro; stationary electricity storage systems that run on non-fossil fuel energy; low-carbon heat equipment such as solar heating or air-source and ground-source heat pumps; and industrial zero-emission vehicles.

All this and so much more is included in the fall economic statement. I believe that it provides the necessary support to some of the most urgent challenges facing Canadians, including those back home in Halifax. I look forward to working with colleagues to ensure it passes through Parliament in a timely fashion, as I know that all of our constituents will benefit from the measures that it contains.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Madam Speaker, my hon. colleague talked about secondary suites, and they are near and dear to my heart. I was in municipal council and we tried to push for more secondary suites. What we found is that if we are going to create more secondary suites, we need more workers. We need more skilled workers who are able to go into homes and build either a coach house or a secondary suite.

Can the member please give the House some ideas on how we can get more skilled trades into the workforce? We are short about a million skilled jobs in the country and part of that is skilled trades. How do we get more skilled trades so we can build more secondary suites?

[Andy Fillmore, Liberal, Halifax, NS]

Madam Speaker, at home in Halifax, we need to be building about 10,000 units a year. We have a complicated machine composed of tradespeople, supply chains, building inspectors, people who grant permits and people who provide the appliances that go into homes, and we can only deliver about 3,000 homes a year. It is clear that we need help across that continuum, that big machine that builds housing, not just in Halifax but across the country.

A critical piece of that, of course, is the talented workforce. We are seeing the Minister of Immigration focus, with great precision, on creating streams that would bring talented and skilled tradespeople into the country.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, the fall economic statement includes a bunch of measures the NDP pushed really hard for that are going to help make life easier for Canadians during these challenging times. However, one pretty large omission is any sort of help with the cost of home heating, which is going to skyrocket this winter.

We have been pushing for the federal government to remove the GST from home heating, which of course would help not only the people who heat with fossil fuels but also the 40% of Canadians who heat with electricity.

Could my colleague from the Liberals speak to why so far his government has not chosen to remove the GST from home heating?