Bill C-47

Budget Implementation Act, 2023, No. 1

An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023

Part 1 implements certain measures in respect of the Income Tax Act and the Income Tax Regulations by
(a) enabling the Canada Revenue Agency (CRA) to use electronic certification of tax and information returns and requiring taxpayers to file electronically in certain circumstances;
(b) doubling the maximum deduction for tradespeople’s tools from $500 to $1,000;
(c) providing that any gain on the disposition of a right to acquire Canadian housing property within a one-year period of its acquisition is treated as business income;
(d) excluding from a taxpayer’s income certain benefits for Canadian Forces members, veterans and their spouses or common-law partners;
(e) exempting from taxation any income earned by the Band Class Settlement Trust in accordance with section 24.05 of the Settlement Agreement entered into on January 18, 2023 relating to the attendance of day scholars at residential schools;
(f) providing an additional payment of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit equal to double the amount of the regular January 2023 payment;
(g) providing for automatic, quarterly advance payments of the Canada Workers Benefit;
(h) allowing divorced and separated spouses to open joint Registered Educational Savings Plans and increasing educational assistance amounts under those plans;
(i) extending, by ‚three years, the ability of a qualifying family member to be the plan holder of an individual’s Registered Disability Savings Plan and expanding the definition of “qualifying family member” to include a sister or a brother of the individual;
(j) allowing defined contribution registered pension plans to correct contribution errors and requiring that the contributions or refunds are reported to the CRA for the purpose of correcting the RRSP deduction limit;
(k) modifying reporting requirements in respect of reportable transactions, introducing reporting requirements for notifiable transactions and providing reporting requirements with respect to uncertain tax treatments, as well as extending the reassessment periods applicable to those transactions and creating or modifying penalties for non-compliance with those requirements;
(l) allowing the CRA to share taxpayer information for the purposes of the Canadian Dental Care Plan;
(m) expanding the definition of “dividend rental arrangement” to include “specified hedging transactions” carried out in whole or in part by registered securities dealers;
(n) implementing the Model Reporting Rules for Digital Platforms developed by the Organisation for Economic Co-operation and Development;
(o) requiring annual reporting by financial institutions of the fair market value of registered retirement savings plans and registered retirement income funds;
(p) expanding the permissible borrowing by defined benefit pension plans; and
(q) implementing a number of technical amendments to correct mistakes or inconsistencies and to better align the law with its intended policy objectives.
It also makes related and consequential amendments to the Excise Tax Act , the Tax Rebate Discounting Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , Part 1 of the Greenhouse Gas Pollution Pricing Act and the Electronic Filing and Provision of Information (GST/HST) Regulations .
Part 2 implements certain measures in respect of the Excise Tax Act and a related text by
(a) clarifying that the international transportation of money benefits from Goods and Services Tax/Harmonized Sales Tax (GST/HST) relief and other special rules in the same manner as a service of internationally transporting other kinds of freight;
(b) permitting a pension entity, in specific circumstances, to claim the pension entity rebate or an input tax credit, or to make the pension entity rebate election, after the end of the two-year limitation period;
(c) specifying that cryptoasset mining is generally not considered a supply for GST/HST purposes; and
(d) ensuring that payment card clearing services are excluded from the definition “financial service” under the GST/HST legislation.
Part 3 amends the Excise Act , the Excise Act, 2001 and the Air Travellers Security Charge Act in order to implement two measures.
Division 1 of Part 3 amends the Excise Act and the Excise Act, 2001 in order to temporarily cap the inflation adjustment for excise duties on beer, spirits and wine at two per cent, for one year only, as of April 1, 2023.
Division 2 of Part 3 amends the Air Travellers Security Charge Act to increase the air travellers security charge that is applicable to air travel that includes a chargeable emplanement after April 2024 and for which any payment is made after April 2024.
Part 4 enacts and amends several Acts in order to implement various measures.
Division 1 of Part 4 amends the Bank Act to strengthen the regime for dealing with complaints against banks and authorized foreign banks by, among other things, providing for the designation of a not-for-profit body corporate to be the sole external complaints body. It also makes consequential amendments to the Financial Consumer Agency of Canada Act and related amendments to the Financial Consumer Protection Framework Regulations .
Division 2 of Part 4 amends the Pension Benefits Standards Act, 1985 to, among other things, provide for variable life benefits under a defined contribution provision of a pension plan and amends the Pooled Registered Pension Plans Act to, among other things, provide for variable life payments under pooled registered pension plans. It also makes a consequential amendment to the Canadian Human Rights Act .
Division 3 of Part 4 contains measures that are related to money laundering and to digital assets and other measures.
Subdivision A of Division 3 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to, among other things,
(a) require persons or entities referred to in section 5 of that Act to report to the Financial Transactions and Reports Analysis Centre of Canada information that is related to a disclosure made under the Special Economic Measures Act or the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) ;
(b) strengthen the registration framework for persons or entities referred in paragraphs 5(h) and (h.1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act , which are often referred to as money services businesses;
(c) create two new offences relating to persons or entities who engage in activities for which they are not registered under that Act and the structuring of financial transactions undertaken to avoid reporting obligations under that Act, as well as a new offence relating to reprisals by employers against employees who fulfill obligations under that Act;
(d) facilitate the sharing, between the Minister of Finance, the Office of the Superintendent of Financial Institutions and the Financial Transactions and Reports Analysis Centre of Canada, of information that relates to their respective mandates; and
(e) authorize the Minister of Finance to issue directives to persons and entities referred in section 5 of that Act in respect of risks relating to the financing of threats to the security of Canada.
Subdivision A also amends the Budget Implementation Act, 2021, No. 1 in relation to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act .
Subdivision B of Division 3 amends the Criminal Code to provide for a new warrant authorizing a peace officer or other person named in the warrant to search for and seize digital assets, including virtual currency, as well as to expand the list of offences on the basis of which an examination of information obtained by the Minister of National Revenue under various tax statutes may be authorized. The subdivision also makes related amendments to other Acts.
Division 4 of Part 4 amends the Customs Tariff to extend the expiry date of the General Preferential Tariff and Least Developed Country Tariff to December 31, 2034 and to create a new General Preferential Tariff Plus tariff treatment that will expire on the same date. The Division also aligns direct shipment requirements for tariff treatments under that Act with those that apply to free trade agreements.
Division 5 of Part 4 amends the Customs Tariff to remove Belarus and Russia from the List of Countries entitled to Most-Favoured-Nation tariff treatment.
Division 6 of Part 4 allows the Bank of Canada to apply, despite sections 27 and 27.1 of the Bank of Canada Act , any of its ascertained surplus to its retained earnings until its retained earnings are equal to zero or the ascertained surplus applied to its retained earnings is equal to the losses it incurred from the purchase of securities as part of the Government of Canada Bond Purchase Program.
Division 7 of Part 4 enacts the Canada Innovation Corporation Act . That Act continues the Canada Innovation Corporation, which was established under another Act, as a parent Crown corporation, sets out the Corporation’s purpose to maximize business investment in research and development across all sectors of the economy and in all regions of Canada to promote innovation-driven economic growth and includes transitional provisions. The Division also makes consequential and related amendments to other Acts.
Division 8 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to authorize additional payments to the provinces and territories.
Division 9 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to renew the authority to make Equalization and Territorial Formula Financing payments for another five-year period beginning on April 1, 2024 and makes a technical change to improve the accuracy of the programs. It also makes a technical change to the calculation of fiscal stabilization payments. Finally, it provides for the publication of the details of all amounts authorized to be paid under that Act.
Division 10 of Part 4 amends the Special Economic Measures Act , the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) to strengthen Canada’s ability to take economic measures against certain persons.
Division 11 of Part 4 amends the Privileges and Immunities (North Atlantic Treaty Organisation) Act to, among other things, enable the Paris Protocol to be implemented in Canada.
Division 12 of Part 4 amends the Service Fees Act to, among other things, clarify the definition “fee”, exempt certain fees from the application of that Act, make certain exceptions in that Act applicable only with the approval of the President of the Treasury Board, make certain changes to the annual adjustment provisions and provide authority for the President of the Treasury Board to amend the regulations made under section 22 of that Act by taking into account the factors established by regulations.
It also amends section 25.1 of the Canadian Food Inspection Agency Act to provide for the application of sections 16 to 18 of the Service Fees Act to low-materiality fees, within the meaning of the Service Fees Act , that are fixed under section 24 or 25 of the Canadian Food Inspection Agency Act .
Division 13 of Part 4 amends the Canada Pension Plan to allow the Minister of National Revenue to make available information to the Minister of Employment and Social Development that is necessary for the purpose of policy analysis, research or evaluation related to the administration of that Act.
Division 14 of Part 4 amends the Department of Employment and Social Development Act to grant the Minister of Employment and Social Development the authority to collect and use Social Insurance Numbers for the purposes of administering or enforcing any Act, program or activity in respect of which the administration or enforcement is the responsibility of the Minister.
Division 15 of Part 4 amends the Canada Labour Code in respect of leave related to the death or disappearance of a child to, among other things, increase the maximum length of that leave from 104 weeks to 156 weeks and to repeal paragraph 206.5(4)(b) of that Act.
Division 16 of Part 4 amends the Immigration and Refugee Protection Act to provide that a claim for refugee protection made by a person inside Canada must be made in person and, with regard to a claim made by the person other than at a port of entry, that the Minister of Citizenship and Immigration may specify the documents and information to be provided and the form and manner in which they are to be provided.
Division 17 of Part 4 amends the Immigration and Refugee Protection Act to clarify that the Minister of Citizenship and Immigration may give instructions in respect of an application to sponsor a person who applies for a visa as a Convention refugee, within the meaning of that Act, or as a person in similar circumstances.
Division 18 of Part 4 amends the College of Immigration and Citizenship Consultants Act to, among other things,
(a) provide that the College of Immigration and Citizenship Consultants may seek an order authorizing it to administer the property of any licensee of the College who is not able to perform their activities as an immigration and citizenship consultant;
(b) extend immunity against proceedings for damages to directors, employees and agents and mandataries of the College, among others;
(c) authorize the College to enter into information-sharing agreements or arrangements with any entity, including federal or provincial government institutions; and
(d) expand the areas in respect of which the Governor in Council may authorize the College to make by-laws.
The Division also makes related amendments to the Citizenship Act and the Immigration and Refugee Protection Act to clarify that any person who is the subject of a notice of violation issued under either of those Acts has the right to request a review of the notice or the administrative monetary penalty set out in the notice.
Division 19 of Part 4 amends the Citizenship Act to, among other things,
(a) grant the Minister responsible for the administration and enforcement of that Act the power to collect biometric information from persons who make an application under that Act — and to use, verify, retain and disclose that information — in accordance with the regulations;
(b) authorize that Minister to administer and enforce that Act using electronic means, including by using an automated system; and
(c) grant that Minister the power to make regulations requiring persons who make an application or who provide documents, information or evidence under that Act to do so using electronic means.
Division 20 of Part 4 amends the Yukon Act to authorize the Minister of Northern Affairs to take any measures on certain public real property that the Minister considers necessary to prevent, counteract, mitigate or remedy any adverse effect on persons, property or the environment.
Subdivision A of Division 21 of Part 4 amends the Marine Liability Act to, among other things,
(a) increase the maximum liability for certain claims involving a ship of less than 300 gross tonnage;
(b) establish the maximum liability for claims involving air cushion vehicles;
(c) remove all references to the Hamburg Rules;
(d) extend the application of the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 to non-seagoing vessels;
(e) provide for public notice requirements relating to the constitution of limitation funds under that Act;
(f) clarify that the owner of a ship is liable for economic loss related to fishing, hunting, trapping or harvesting suffered by an Indigenous group, community or people or suffered by a member of such a group, community or people; and
(g) expand the compensation regime of the Ship-source Oil Pollution Fund to include certain future losses.
Subdivision B of Division 21 amends the Canada Shipping Act, 2001 to, among other things,
(a) expand the application of Part 1 of that Act in relation to certain pleasure craft;
(b) expand the exemption powers of the Minister of Transport and the Minister of Fisheries and Oceans;
(c) allow the owner of a Canadian vessel to enter into an arrangement with a qualified person under which that person is the authorized representative of the vessel;
(d) give the Marine Technical Review Board jurisdiction to make decisions on applications for exemptions from interim orders;
(e) authorize the Governor in Council to incorporate by reference in certain regulations material that the Minister of Transport produces;
(f) broaden the Governor in Council’s power respecting fees, charges, costs or expenses to be paid in relation to the administration and enforcement of matters under that Act for which the Minister of Transport is responsible;
(g) increase the maximum amount of fines for certain offences;
(h) provide authority, in certain circumstances, for the Chief Registrar to refuse to issue a certificate of registry and for the Minister of Transport to refuse to issue a pleasure craft licence;
(i) authorize the Governor in Council to make regulations respecting emergency services;
(j) authorize the Minister of Transport to, among other things,
(i) direct a master or crew member to cease operations,
(ii) authorize the Deputy Minister of Transport to make interim orders in response to risks to marine safety or to the marine environment, and
(iii) direct a port authority or a person in charge of a port authority or place to authorize vessels to proceed to a place selected by the Minister; and
(k) permit designating as violations the contravention of certain provisions of Parts 5 and 10 of that Act and the regulations made under those Parts.
The Subdivision also makes a related amendment to the Oil Tanker Moratorium Act .
Subdivision C of Division 21 amends the Wrecked, Abandoned or Hazardous Vessels Act to, among other things, establish the Vessel Remediation Fund in the accounts of Canada and provide the Minister of Fisheries and Oceans with certain powers in relation to the detention of vessels.
Division 22 of Part 4 amends the Canada Transportation Act to, among other things,
(a) allow the Governor in Council to require air carriers to publish information respecting their performance on their Internet site;
(b) permit the sharing of information to ensure the proper functioning of the national transportation system or to increase its efficiency, while ensuring the confidentiality of that information;
(c) allow the Minister of Transport to require certain persons to provide certain information to the Minister if the Minister is of the opinion that there exists an unusual and significant disruption to the effective continued operation of the national transportation system;
(d) establish a new zone in Manitoba, Saskatchewan and Alberta, in which any interswitching that occurs is subject to the rate determined by the Canadian Transportation Agency, for a period of 18 months; and
(e) broaden the scope of the administrative monetary penalties scheme.
Division 23 of Part 4 amends the Canada Transportation Act to, among other things,
(a) broaden the authority of the Canadian Transportation Agency to set fees and charges to recover its costs;
(b) replace the current process for resolving air travel complaints with a more streamlined process designed to result in more timely decisions;
(c) impose a greater burden of proof on air carriers where it is presumed that compensation is payable to a complainant unless the air carrier proves the contrary;
(d) require air carriers to establish an internal process for dealing with air travel claims;
(e) modify the Agency’s regulation-making powers with respect to air carriers’ obligations towards passengers; and
(f) enhance the Agency’s enforcement powers with respect to the air transportation sector.
Division 24 of Part 4 amends the Customs Act to, among other things,
(a) allow a person arriving in Canada to present themselves to the Canada Border Services Agency by a means of telecommunication, if that manner of presenting is made available at the customs office at which they are presenting themselves; and
(b) subject to the regulations, require that the operator of a commercial aircraft arriving in Canada ensure that baggage on board the aircraft is transported without delay to the nearest international baggage area.
The Division also makes a related amendment to the Quarantine Act .
Division 25 of Part 4 amends the National Research Council Act to, among other things, provide that the National Research Council of Canada may procure goods and services, including goods and services relating to construction and to research-related digital and information technology. It also establishes a new Procurement Oversight Board.
Division 26 of Part 4 amends the Patent Act to, among other things,
(a) authorize the Commissioner of Patents to grant an additional term for a patent if certain conditions are met;
(b) authorize the Governor in Council to make regulations respecting the number of days that is to be subtracted in determining the duration of an additional term; and
(c) authorize the Commissioner of Patents and the Federal Court to shorten the duration of an additional term if the duration as previously determined is longer than is authorized.
Division 27 of Part 4 amends the Food and Drugs Act to extend measures regarding therapeutic products to natural health products in order to, among other things,
(a) strengthen the safety oversight of natural health products throughout their life cycle; and
(b) promote greater confidence in the oversight of natural health products by increasing transparency.
Division 28 of Part 4 amends the Food and Drugs Act to, among other things, prohibit
(a) the sale of a cosmetic unless its safety can be established without relying on data derived from a test conducted on an animal that could cause pain, suffering or injury, whether physical or mental, to the animal, subject to certain exceptions;
(b) the conduct of a test on an animal that could cause pain, suffering or injury, whether physical or mental, to the animal if the purpose of the test is to meet a legislative requirement that relates to cosmetics; and
(c) deceptive or misleading claims, on the label of or in an advertisement for a cosmetic, with respect to testing on animals.
Division 29 of Part 4 enacts the Dental Care Measures Act .
Division 30 of Part 4 amends subsection 41(1) of the Canada Post Corporation Act , in response to the decision in R. v. Gorman , to limit the Canada Post Corporation’s authority to open mail other than letters.
Division 31 of Part 4 expresses the assent of the Parliament of Canada to the issuing by His Majesty of a Royal Proclamation under the Great Seal of Canada establishing for Canada the applicable Royal Style and Titles.
Division 32 of Part 4 amends the Public Sector Pension Investment Board Act to provide that the Public Sector Pension Investment Board may incorporate a subsidiary for the purpose of providing investment management services to the Canada Growth Fund Inc. It also amends the Fall Economic Statement Implementation Act, 2022 to increase the amount that may be paid out of the Consolidated Revenue Fund on the requisition of the Minister of Finance for the acquisition of shares of the Canada Growth Fund Inc. and to provide that the Canada Growth Fund Inc. is not an agent of His Majesty in right of Canada.
Division 33 of Part 4 amends the Office of the Superintendent of Financial Institutions Act , the Trust and Loan Companies Act , the Bank Act and the Insurance Companies Act to, among other things,
(a) expand the mandate of the Office of the Superintendent of Financial Institutions to include the supervision of federal financial institutions in order to determine whether they have adequate policies and procedures to protect themselves against threats to their integrity or security; and
(b) expand the Superintendent of Financial Institutions’ powers to issue directions to, and to take control of, a federal financial institution in certain circumstances.
It also makes a consequential amendment to the Winding-up and Restructuring Act .
Division 34 of Part 4 amends the Criminal Code to, among other things, lower the criminal rate of interest calculated in respect of an agreement or arrangement and to express that rate as an annual percentage rate. It also authorizes the Governor in Council, by regulation, to fix a limit on the total cost of borrowing under a payday loan agreement. Finally, it provides for transitional provisions.
Division 35 of Part 4 amends the Employment Insurance Act to extend, until October 26, 2024, the increase in the maximum number of weeks for which benefits may be paid in a benefit period to certain seasonal workers.
Division 36 of Part 4 amends the Canadian Environmental Protection Act, 1999 to, among other things,
(a) establish an account in the accounts of Canada to be called the Environmental Economic Instruments Fund, for the purpose of administering amounts received as contributions to certain funding programs under the responsibility of the Minister of the Environment; and
(b) replace references to “tradeable units” with references to “compliance units”.
It also makes consequential amendments to the Canada Emission Reduction Incentives Agency Act .
Division 37 of Part 4 amends the Canada Deposit Insurance Corporation Act to clarify that the Canada Deposit Insurance Corporation may administer any contract related to deposit insurance entered into by the Minister of Finance and to allow the Minister to increase the deposit insurance coverage limit until April 30, 2024.
Division 38 of Part 4 amends the Department of Employment and Social Development Act to, among other things,
(a) establish the Employment Insurance Board of Appeal to hear appeals of decisions made under the Employment Insurance Act instead of the Employment Insurance Section of the General Division of the Social Security Tribunal; and
(b) eliminate the requirement for leave to appeal decisions relating to the Employment Insurance Act to the Appeal Division of the Tribunal.
It also makes consequential amendments to other Acts.
Division 39 of Part 4 amends the Canada Elections Act to provide for a national, uniform, exclusive and complete regime applicable to registered parties and eligible parties respecting their collection, use, disclosure, retention and disposal of personal information.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

If members or witnesses don't have their microphones on when they start speaking, the interpreters can't do their job. I just want us to make sure that our mike is on before we speak. That was my point of order, Mr. Chair.

I want to thank all the witnesses again. This is a really fascinating panel. Unfortunately, we only have a certain amount of speaking time. That said, just because we haven't been able to ask you all our questions doesn't mean we haven't listened carefully or that we're not taking your testimony and the measures you're proposing into account.

For my last turn, I will address Mr. Robertson and Mr. Brock.

Mr. Robertson, you said that mining activities require a geat deal of computational ability, but artificial intelligence requires even more. We're developing expertise in Quebec and in Canada through businesses that have that computational ability. If Bill C‑47 passes as is, it will hinder the development and future of this key business sector.

In the few minutes I have left, I'd like to hear what you have to say about this or about other factors related to your requests.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Mr. Robertson, in Bill C‑47, there seems to be some confusion regarding services and businesses, how it's done in Canada and how it's done elsewhere. You suggested an amendment to the bill that would solve the problems, but I believe you ran out of time before you could present it.

You have a solution, so I'm listening.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

First of all, I'd like to welcome all the witnesses, who are most interesting.

As you can see, we work long hours, and sometimes things can get a little heated. However, I find the questions interesting.

My questions will be for Mr. Brock and Mr. Robertson. However, first I have a comment for Mr. Hannah and Ms. Mason.

I recognize that Canada's banking and financial system is one of the most stable in the world, and I salute that. However, I'm very critical of Bay Street banks, particularly with regard to the assets and activities they report in tax havens. If we want a fair and reliable ecosystem, we need stability, predictability and justice. To my mind, bringing in retroactive legislation against court rulings is worthy of a banana republic. Your views have been heard, and I hope the committee will be able to take your suggestions into account. On that I do agree with you. Thank you.

Now, Mr. Brock and Mr. Robertson, thank you for being here and for your testimony. You raise a lot of concerns.

I want to tell the committee that I'm really not a fan of cryptocurrency. It's not very attractive to me. However, as I said to Mr. Hannah and Ms. Mason, I am in favour of a fair tax system and stability. As you've clearly demonstrated, what we have in Quebec and elsewhere in Canada are companies with big servers, big computational abilities and high-speed fibre-optic Internet access. I know a bit about that ecosystem. What do these companies do? They sell their computational abilities to the highest bidder. I studied economics. One of my former professors worked with companies in Boston, where he could often rent computational abilities. The same goes for the pharmaceutical sector.

Bill C‑47 is telling companies in this sector that when they sell their services to foreign mining companies, we'll treat them differently than companies in all other sectors of the economy. Under the rules, we'll let them deduct taxes, but other companies will no longer be able to deduct them. I have a problem with that.

The second problem relates to the point you raised about companies that create good jobs and bring in expertise. We have some in Quebec. Quebec businesses benefit from the cold weather and hydroelectricity, and therefore from green energy. So if Bill C‑47 passes as is, for those businesses, the integrated sales tax will be 15%, whereas in Alberta, where hydrocarbons produce electricity, it will be 5%. Since it will be cheaper in Alberta, future activities will shift to that province. That's economy 101.

I would like to hear your comments on that.

What can the committee do to resolve the situation and even out the playing field again?

[Daniel Brock, Law Partner, Fasken, Digital Asset Mining Coalition]

Thank you, Chair, and thank you, committee members, for having us here to speak with you today.

My name is Daniel Brock. I'm a partner at the Canadian law firm Fasken. I'm joined by David Robertson from EY Law. Together, we are advising an industry coalition representing more than 23 companies and organizations, all participating in Canada's growing digital asset and blockchain ecosystem. The coalition came together last spring to address a surprise legislative proposal published by the Department of Finance in February 2022, which would increase our members' costs of carrying on business in Canada by 5% to 15%. It is about this proposal as it appears in Bill C-47 that we are here to speak with you today.

In 2017, Canadians might have been using their computers in their basement or garage to mine for Bitcoin. Today, almost all digital asset mining is big business. Companies are using industrial-scale computing to verify and secure transactions that occur on a public blockchain. At today's market rate, the transaction fees and subsidies for adding a single block to the Bitcoin network have a value of almost $200,000.

More than 1,000 blocks get added to the Bitcoin blockchain every week. That's more than $200 million in potential revenue per week for mining pool companies that mine for Bitcoin. There are, however, no major mining pool companies in Canada. All are non-residents to Canada, based primarily in the U.S.A., Asia and Europe.

Canada's role in this emerging industry is not in mining for Bitcoin. Instead, Canadians are the suppliers of high-performance computing power that makes Bitcoin mining possible. Canadian companies take advantage of our cooler climate, our skilled workforce and our excess hydroelectric energy to produce and export clean computing power as a commodity like wheat or precious metals. Canadian computing companies are quickly becoming industry leaders in the supply of the clean computing power that international blockchain mining pool companies want.

Since 2018, this high-performance computing sector has brought in more than $2 billion in revenue to Canada. It has paid millions of dollars in corporate property and payroll taxes. It has invested $1.5 billion in the rural and resource communities in which they operate, and it has created 1,500 well-paying high-tech jobs in these communities. The average age of employees in most of these companies is under 35 years old.

Our main concern with the Finance proposal on crypto-asset mining is that this early success and the potential for future growth in Canada are being put at risk. There are several problems with the proposed GST changes. Let me highlight three.

First, proposed new section 188.2 declares that a Canadian company that (a) allows its computing resources to be used by foreign non-resident mining pool companies for crypto-asset mining, and (b) shares in the proceeds of that mining, is not engaged in commercial activity and will not be able to receive input tax credits. By contrast, all other companies that allow their computing resources to be used by non-residents are entitled to input tax credits, regardless of how that computing power is used or how their fees are calculated.

Second, by denying input tax credits to Canadian computing companies, these new rules make them less competitive in the international marketplace. The GST replaced the old federal sales tax in 1991, specifically to remove Canadian sales taxes as an input cost for Canadian businesses. The GST is to encourage investment both in Canada and in Canadian exports, and to make our goods and services more competitive in international markets. Proposed new section 188.2 does the exact opposite.

Third, the GST proposal creates a competitive disadvantage for computing companies across Canada, depending on the province in which they reside. The GST proposal creates an incentive for companies operating, for example, in Quebec, or in Newfoundland, where the embedded sales tax cost will be 15%, to move their operations to Alberta, where the sales tax cost will be only 5%, or outside of Canada altogether. The GST should never lead to this type of competitive imbalance for businesses within Canada.

What's the solution? We think there is a simple solution that is consistent with good GST policy. We are asking this committee to add a clear and unambiguous exception to the GST proposal.

What's the solution? We think there is a simple solution that is consistent with good GST policy. We are asking this committee to add a clear and unambiguous exception to the GST proposal. This exception should state that if a Canadian company supplies its computing power to a mining pool operator that is a non-resident of Canada, then proposed subsection 188.2(2) does not apply to them and, instead, ordinary GST rules will apply.

We look forward to your questions.

[Darren Hannah, Vice-President, Personal and Commercial Banking, Canadian Bankers Association]

Good morning. Thank you for the invitation to speak at the House of Commons Standing Committee on Finance on Bill C-47, the budget implementation act.

My name is Darren Hannah. I'm the vice-president of personal and commercial banking with the Canadian Bankers Association. I'm joined by my colleague, Angelina Mason, general counsel and vice-president, legal and risk.

The CBA is the voice of more than 60 domestic and foreign banks that help drive Canada's economic growth and prosperity. The CBA advocates for public policies that contribute to a sound, thriving banking system to ensure that Canadians can succeed in their financial goals.

While Bill C-47 is extensive and the committee is studying numerous provisions, our remarks will be focused on part 2, clauses 114 to 116, which retroactively amend the Excise Tax Act. This is a very small component of the budget implementation act, but it has profound implications on how businesses, entrepreneurs and investors, both domestic and international, view the opportunities and risks of doing business in Canada.

Simply put, the government is attempting to legislatively override a decision by the Federal Court of Appeal and to retroactively change the GST treatment of payment card clearing services, literally back to the introduction of GST in 1991, by expressly overriding the general legislative limitation periods under section 298 of the Excise Tax Act. The effect is, therefore, to retroactively tax transactions that happened as long as 30 years ago. In doing so, the government is ignoring widely accepted positions among taxpayers and tax professionals, as well as its own published guidelines for the appropriate and exceptional use of retroactive legislation. The government's position is inconsistent with its own treatment of payment card network services as financial services for the purposes of regulatory oversight by the Financial Consumer Agency of Canada. Moreover, through this proposed measure, the government is adding this tax burden at the very time the government is claiming to lower the cost of card acceptance fees for small businesses. Increasing taxes on card issuers and acquirers will inevitably impact the cost of card acceptance for merchants.

Retroactively taxing past transactions, especially in the face of court rulings to the contrary, erodes investor confidence in Canada, period. This is a concerning signal to investors, entrepreneurs and business owners. Core to the decision-making criteria of where to invest are certainty and predictability, not only in the rule of law and in its application but also in the ability to ensure that I, as an investor, can access the legal system to get fair treatment if I feel the law is being applied incorrectly. Indeed, this proposed measure fundamentally challenges the traditional understanding of tax law. This approach not only raises serious questions about fairness and legal certainty but also potentially inhibits future economic activity.

Imposing such a retroactive burden undermines the trust in the certainty of the tax system. While it might seem like an easy fix for fiscal shortfalls, it's important to consider the long-term implications of such a precedent-setting move. The retroactive tax measures in part 2 contradict these principles and, in doing so, undermine investor confidence in Canada at the very time we need to be attracting new investment, both from at home and from abroad. A recent study by RBC indicated that Canada will need an estimated $2 trillion over the next 30 years to finance the transition to a low-carbon economy.

These are large, long-term investments that Canada is seeking from investors to pivot our economy to a low-carbon future. An investor will make that type of commitment only if they are certain that the terms, conditions and business environment upon which they make their investment decision will be respected, that the government will not suddenly seek to retroactively revisit those conditions, and that they will have recourse to the legal system should they need it. That's why we strongly encourage MPs to take action to restore investor trust in the Canadian economic and legal environment by removing the retroactive provisions of part 2.

I thank the committee for your invitation and look forward to your questions.

[Luke Chapman, Vice-President, Federal Affairs, Beer Canada]

Mr. Chair and honourable members, thank you for the invitation to appear this morning as part of the committee's study of the subject matter of Bill C-47.

My name is Luke Chapman. I'm the vice-president of federal affairs for Beer Canada, the only inclusive national trade association for Canadian beer companies. Our membership includes 48 small, medium and large-sized breweries, which when combined account for 90% of all beer produced in our country.

Domestic brewers are heavily invested in Canada. Last year, 88% of all beer purchased and consumed here was made here by some of the 20,000 Canadians directly employed by brewing companies.

The value chain for brewing, packaging, distributing and selling beer in Canada is long and interconnected. For a pint of beer to reach your glass, brewers depend on western Canadian barley farmers, can and bottle manufacturers in central Canada, and truck drivers and restaurant and retail staff from across the country.

When all the steps in the production, distribution and retail process are considered, the production and sale of beer in Canada supports 149,000 jobs, generating over $13 billion in economic activity and $5.7 billion in taxes. Currently, federal and provincial taxes and markups account for almost half of the retail price of beer, giving Canada the title of having the highest beer taxes among G7 countries.

I think we can all agree that beer is a social beverage. Enjoying a beer with family or friends at a backyard barbeque or sports event, an outdoor summer concert or a neighbourhood pub provides great social and community benefit. In a typical preCOVID year, restaurants, bars, concerts, sporting events and other public venues accounted for nearly a quarter of all beer sold in Canada.

It's not surprising, then, that the restrictions placed on social gatherings over the past few years due to the COVID pandemic had a dramatic impact on the Canadian beer market, with the total volume of beer sales declining by 6% over the past three years. Draft beer sales, which primarily occur at restaurants and bars, are still 25% below where they were prepandemic, in 2019.

As brewers were grappling with where and how they were allowed to sell their beer during the pandemic, inflation began to take hold, presenting a new set of difficulties and challenges.

For brewers, the concerns were twofold. First, in 2021 and into 2022, the cost of producing, packaging and distributing beer started to rise rapidly, with key inputs like barley and packaging materials up by as much as 60%. Second, the impact of rising inflation on the annual and automatic federal beer excise duty rate increases—which are determined using a formula that is tied to inflation—was also a concern that was front and centre.

Since the automatic indexing of federal beer excise duties was included in the 2017 federal budget, beer taxes have increased every year. While we continue to be concerned over this automatic approach to beer taxation and its negative impacts on the Canadian beer and hospitality sectors, we recognize that CPI inflation was relatively stable for most of the period between 2017 to 2022. As a result, the annual increases amounted to an average of around 2% over that period.

While the past automatic increases were not inconsequential, as we monitored CPI inflation throughout 2022 we reached the conclusion that this year's increase was likely to exceed 6%, making it the largest federal tax increase on beer in the last four decades.

As a result of the effort and support of MPs from across parties—some of whom are in this room today, so thank you—we were pleased to see the government address our immediate concern by including in the 2023 budget a 2% cap on the 6.3% excise duty rate increase that would otherwise have gone into effect this past April 1.

While this temporary one-year cap was not all that our coalition of barley farmers, unionized brewery workers, restauranteurs, consumers and breweries had been advocating for, and while our position remains that the continued use of automatic excise increase is neither appropriate or effective—particularly in an era defined by high inflation and declining beer sales—we do view a temporary 2% cap as a fair compromise. We certainly welcomed and appreciated that it was included in the 2023 budget.

In this respect and in conclusion, we encourage the adoption of section 124 of the budget implementation act to reduce the scheduled increase in federal beer excise duties from 6.3% to 2%, retroactive to April 1.

We thank the members of the finance committee for the opportunity to provide our perspective, which we hope will be helpful as they review and consider Bill C-47.

I'm happy to answer any questions after the other witnesses. Thank you.

[The Chair, Liberal, Peter Fonseca]

I'm calling the meeting to order.

Welcome to meeting 89 of the House of Commons Standing Committee on Finance.

Pursuant to the order of reference on Tuesday, May 2, 2023, and the motion adopted on May 16, 2023, the committee is meeting to discuss Bill C-47, an act to implement certain provisions of the budget tabled in Parliament on March 28, 2023.

Today's meeting is taking place in a hybrid format pursuant to the House order of June 23, 2022. Members are attending in person in the room and remotely using the Zoom application.

I'd like to make a few comments for the benefit of the witnesses and the members.

Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike, and please mute yourself when you are not speaking. For interpretation for those on Zoom, you have the choice at the bottom of your screen of floor, English or French audio. For those in the room, you can use the earpiece and select the desired channel.

I will remind you that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function.

The clerk and I will manage the speaking order as best as we can. We appreciate your patience and understanding in this regard.

Before I welcome the witnesses, I want to thank the witnesses for graciously accepting our invitation.

I know you had very short notice to be with us today, to get your opening remarks ready and to be able to take questions from all the members. On behalf of all of us on the committee, thank you very much.

With us today we have Beer Canada and its vice-president of federal affairs, Luke Chapman. We also have with us the Canadian Bankers Association and Darren Hannah, vice-president, personal and commercial banking, and Angelina Mason, general counsel and vice-president of legal and risk. From the Canadian Canola Growers Association, we have president and CEO Rick White, and Dave Carey, vice-president of government and industry relations.

From the Canadian Chamber of Commerce, we have with us Alex Gray, the senior director of fiscal and financial services policy. From the Digital Asset Mining Coalition, we have Daniel Brock, a law partner with Fasken, and with Daniel we have a partner from EY Law, David Robertson. From the Hotel Association of Canada, we have with us Susie Grynol, who is the president and chief executive officer.

Welcome, everybody. It's great to have you here.

We're going to start off by hearing opening remarks from Beer Canada.

Go ahead, please, Mr. Chapman.

[Alexandre Plourde]

Of course.

Consumer associations in Canada have been waiting for this measure for a long time. For a long time now, we have been calling for a single body to handle complaints in the banking sector. In our view, it is essential to have an effective complaints mechanism that is impartial for consumers and inexpensive for them when they have a dispute with a bank.

It is important to remember that banks are among the most profitable businesses in Canada. They have a great deal of ability to advance their interests. Obviously, when a consumer is alone in asserting their rights against these companies, it can be very difficult. It can be a lengthy court process. So we think it's important that the process be absolutely impartial and that there be no doubt about the independence and integrity of the body.

The fact that banks can choose from a number of organizations creates all kinds of potential conflicts of interest and biases. Bill C‑47 closes a loophole in the complaints system.

However, we still have a request, and that is that the decisions made by this single body be binding.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

My question is about air transportation and is for Ms. De Bellefeuille or Mr. Plourde.

As for consumer protection in the airline industry, we have such a long way to go that it is important to applaud what Bill C‑47 proposes, as you have done.

In your opinion, could the government have gone even further, for example by comparing Canadian standards to those in effect in the European Union? Do you believe that amendments to the bill should or could be proposed?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Like you, I would like to thank all the witnesses for accepting our invitation on such short notice and with so little time to prepare. It's very much appreciated, and I thank you for it.

I would like to say hello to Mr. Kelly and tell him that an all-party caucus is currently working on entrepreneurship with his organization and a number of his colleagues. For my party, Sébastien Lemire is co-hosting the event with several of my colleagues at the moment.

My questions will be for the representatives from Option consommateurs. I would like to thank Ms. De Bellefeuille for her presentation and Mr. Plourde for being here.

Ms. De Bellefeuille, you raised three very important topics that are addressed in Bill C‑47: air transportation, banks and usurious credit. I will have a few brief turns to speak and I will try to come back to these three elements.

I'll start with the banks. There will be changes, and you told us that Bill C-47 will put an end to banks' ability to choose the external body that will handle complaints against them.

Can you give us an example of what that means and what it changes? Could you then explain to us why that organization's recommendations will remain non-binding?

[Greg Northey, Vice-President, Corporate Affairs, Pulse Canada]

Thank you, Mr. Chair.

I want to thank the committee for the invitation tonight to speak to you.

My name is Greg Northey, and I'm the vice-president of corporate affairs with Pulse Canada.

Pulse Canada is a national association representing over 25,000 pulse growers, as well as the processors and exporters of Canadian pulse crops, including peas, lentils, chickpeas, dry beans and fava beans. Canadian pulses are among the most sustainable sources of protein in the world. In 2021 alone, Canadian pulses, thanks to their nitrogen-fixing capabilities and the modern agricultural practices of pulse growers, removed 3.6 million tonnes of carbon dioxide from the environment. This is the equivalent of taking 1.1 million cars off the road in a single year.

In addition to our environmental contributions, the pulse industry is a significant economic driver, accounting for roughly 26,000 Canadian jobs and delivering $6.3 billion in annual economic activity. This is in part thanks to the fact that Canada is the world's largest exporter of pulse crops. We send billions of dollars' worth of pulses to over 120 markets around the world.

To do this economically, Canada's pulse industry and the entirety of Canadian agriculture rely on timely and predictable rail service.

In its final report, the national supply chain task force identified the key persistent issue that consistently threatens the competitiveness, productivity and growth of Canadian agriculture exporters. It says, “Railways are the only source of transport for many shippers, giving rail companies pricing and service discretion that is not balanced by normal market forces.” Simply put, railways are monopolies, and the lack of competition between them results in unreliable and unpredictable service for shippers.

That is why Pulse Canada was pleased to see important transportation measures that explicitly focus on incenting and improving a competitive dynamic within the rail sector included in Bill C-47. Key among these measures is the proposal to implement a pilot on extended, regulated interswitching. It is extremely positive that the government has recognized the pro-competitive value of extended interswitching and the positive economic benefits that competition delivers.

Competition unlocks the full potential of Canadian shippers, improves innovation and collaboration among Canada's class 1 railways and supports Canada's overall economic growth. When extended interswitching was in place from 2014 to 2017, it was the first time that competitive forces were introduced to a monopoly rail market ever. Even in this limited sample, the results were positive as shippers adjusted to the new market dynamic.

How could they not be? It is well known that competitive forces improve economic outcomes and productivity.

The previous extended interswitching period was also beneficial for the overall rail system. Railway operating ratios remained low, system average train speeds, car velocity and yard productivity increased in that time, and dwell times decreased. Importantly, movement of Canadian grain on both CN and CP also increased.

Extended interswitching has proven to be a vital tool for Canadian shippers, and Pulse Canada and our allies urge this committee and all members of Parliament to look to the successes of the last pilot as the foundation on which to build a more permanent extended interswitching program that will benefit Canada for decades to come.

In fact, to further strengthen this pro-competitive policy, the Government of Canada can improve it by setting the extended interswitching distance to 500 kilometres to ensure competitive market forces are available to a large group of captive shippers, which is only fair; ensuring that extended interswitching is available to all North American railways with operations subject to the Canada Transportation Act to further integrate our North American market and shorten the distance goods need to travel; promoting investment in rural rail infrastructure so that interchanges can accommodate larger trains and further unlock productivity and efficiency gains; and assuring that the pilot lasts a minimum of five years to unlock the full potential of competition.

This five-year extension is key, as presently shipments can be booked for up to 12 months in advance, meaning two-thirds of the pilot may expire with the 18-month pilot that's proposed now before a shipper can make use of the new competitive regulations.

To close, extending the interswitching is a policy that works for Canadian shippers, railways and consumers. We urge this committee to move this proposal through to completion and consider improvements in needed competition for Canadian rail shippers.

Thank you.

[Sylvie De Bellefeuille, Lawyer, Budget and Legal Advisor, Option consommateurs]

Good evening, Mr. Chair.

Good evening, committee members.

We thank you for the opportunity to present to you today.

My name is Sylvie De Bellefeuille. I have been a lawyer with Option consommateurs for 13 years. I'm accompanied by my colleague Alexandre Plourde, who is also a lawyer.

Established in 1983, Option consommateurs is a non-profit association whose mission is to help consumers defend their rights. As such, we receive thousands of legal information requests every year from people experiencing difficulties with merchants, including financial services and travel. We also provide budget consultations to people who are struggling with debt and credit.

In our view, Bill C‑47 introduces a number of measures that will benefit Canadian consumers. Our remarks today will focus on three themes addressed in this bill: air transportation, the complaint process in the banking sector and usurious credit.

In recent years, there have been countless delays and cancelled flights by airlines, which have led to tens of thousands of consumer complaints. While changes have been made to the air transport regulatory framework to strengthen consumer protection, efforts still need to be made to provide adequate protection for Canadian travellers. We think Bill C‑47 responds to several of the requests we have made over the past few years.

First, the bill removes the three categories of flight disturbances so that only exceptional circumstances can justify a lack of compensation for passengers. This will then allow us to amend the air passenger bill of rights so that passengers can benefit from better protection.

Second, it closes certain loopholes in Canadian regulations that benefited airlines. This will put the onus on the carrier to prove that the delay or cancellation of a flight is not attributable to the carrier, rather than putting the burden of proof on the consumer. In addition, the bill requires airlines to compensate consumers for late luggage, not just lost luggage.

Finally, this bill makes it easier for air passengers to have recourse by requiring airlines to provide a decision to the consumer within 30 days and by creating a more effective complaints regime for the Canadian Transportation Agency, as well as requiring airlines to cover the cost of handling complaints filed with the Canadian Transportation Agency.

In short, we believe that the proposed amendments to the Canada Transportation Act are positive for consumers and should be adopted.

In the banking sector, we are pleased to see that Bill C‑47 finally puts an end to the ability of banks to choose the external body that will deal with complaints made against them by their clients. This is something that consumer associations have been waiting for for a long time.

In the current version of the act, a bank can choose between two external complaints bodies that are currently approved by the government. Needless to say, this situation raises serious questions about the independence of the handling of consumer complaints and, more importantly, about the appearance of bias in the process.

While we welcome the amendment in the bill to create a single external complaints body, we regret that the body's decisions remain non-binding on the banks, which could choose not to abide by them. To ensure full consumer protection, we believe that this bill should make the body's decisions binding on the banks.

Finally, Option consommateurs welcomes the initiative to lower the usury rate set out in the Criminal Code. The current rate, set at 60%, was introduced in the early 1980s, when the economic situation was significantly different and the Bank of Canada rate was around 20%.

That said, we have a number of reservations about the bill.

First, rather than the fixed rate proposed in the bill, we believe that a variable interest rate would make it possible to adapt to the economic situation. In a number of countries, the limit fluctuates based on the rates set by the central bank or the average market rate.

Second, contrary to what the bill proposes, we believe that no regulatory exceptions should be allowed for consumer loans. We therefore believe that exceptions such as the one concerning payday loans should be abolished.

Without this appropriate usury rate framework, lenders can easily take advantage of consumers and make them even more vulnerable.

Thank you.

I look forward to your questions.

[Peter Davis, Associate Vice-President, Government and Stakeholder Relations, H&R Block Canada Inc.]

Thank you, Mr. Chair and other committee members, for the opportunity to appear before you this evening on behalf of H&R Block Canada and our broader industry.

I also serve as co-chair of the board of directors for Tax-Filer Empowerment Canada, the national industry association for Canada's tax preparation and software industry, so I am pleased to also provide their perspective along with my company's this evening.

I'll give you a little background on H&R Block Canada. We are the largest assistant tax preparation firm in Canada. During tax season we have nearly 1,000 service locations across the country, with nearly 10,000 associates operating coast to coast to assist Canadians with their filing obligations year-round.

I am going to provide some brief commentary on Bill C-47 specifically and then finish up with some more general remarks on budget 2023.

Bill C-47 contains some very important legislative provisions that will enable our industry to better serve Canadians with their taxes. Specifically, these provisions include amendments to the Income Tax Act and the Tax Rebate Discounting Act. These will permit approximately 60% of tax filers who do work with tax preparers and accountants to use electronic signatures on certain key tax forms. If these changes pass, that will open the door for Canadians to file their taxes virtually with their preparers and also to potentially receive refund advances in a timely manner, all without having to leave their homes.

We believe the innovations through this legislation could incent more Canadians to file their taxes as we make the process easier for them and could also ensure that they are able to receive their benefits as soon as possible. H&R Block Canada and our industry have long advocated for electronic signatures, and we fully support the timely passage of these amendments in their current form within Bill C-47.

I would like to switch gears a little bit and talk about budget 2023 and take this opportunity to raise some significant concerns with the budget's proposals to expand the role of the CRA to include filing taxes on behalf of millions of Canadians.

I'd like to first touch on how taxpayers would be negatively impacted by the prospect of government directly preparing and filing their taxes. In Canada, we have what's called a voluntary tax compliance system. This system ensures a clear separation of roles between the tax collector and the tax preparer, for the benefit of Canadians. This gives Canadians the right to independently prepare their taxes in order to maximize their benefits and reduce their tax liability to government.

How would this work if the CRA were to start filing taxes for some Canadians? For starters, the CRA would find itself in a major conflict of interest on two fronts. How can the CRA successfully balance maximizing government revenue while also ensuring Canadians get the most back from government coffers?

H&R Block Canada's independence from government tax collection allows us to remain impartial and to fully dedicate our efforts to maximizing refunds and benefits for Canadians, even in the many instances when the CRA feels that they are entitled to less. In fact, our tax professionals frequently advocate for our clients by opposing CRA rulings that seek to reduce the benefits claimed on their tax returns. If the CRA were to file our taxes, would any of us feel confident that the agency would ever advocate against itself with determination equal to that of an independent third party to ensure that we receive all of our benefits and deductions?

Second, how can the CRA function as an effective impartial regulator when it introduces government products and services to market that are in direct competition with the industry it regulates?

The Government of Canada's policy decision to directly file Canadians' taxes runs counter to the successful partnership between our industry and the CRA, which has served Canadians well for decades. While we don't believe that government tax filing can best assist Canadians, we are very supportive of ensuring that low-income Canadians file their taxes in order to get their benefits. This is why our industry offers several low- and no-cost options to Canadians who need them most.

One quick example is that at H&R Block Canada we have our annual Returning Hope program, which supports Canadians who live below the poverty line and who may be experiencing homelessness. These individuals tend to miss out on government benefits or tax refunds because they're unable to file and often do not have a fixed address or bank account. We have been able to partner with 15 non-profit organizations across Canada to prepare tax returns for over 800 Canadians in need and found over $715,000 in missed refunds and credits.

In-depth tax interviews with Canadians in need, conducted by tax professionals at H&R Block Canada, help determine whether these individuals could qualify for the significant disability tax credit and other applicable related benefits. This is something that automated and telephone government tax filing will not be able to achieve and, therefore, a loss of economic benefits to Canadians who need them most would result.

With that, we would conclude by saying that, instead of embarking on more large-scale government IT projects to create automated tax filing and to expand government telephone tax filing, Canadians' needs would be far better served by the CRA meaningfully working with industry to create the conditions needed to support and expand initiatives like H&R Block Canada's Returning Hope program.

Thank you very much. On behalf of H&R Block Canada and our product industry, we're looking forward to questions.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

I would first like to remind my esteemed colleagues that the historic compromise of the federation was to establish a federation, not a legislative union. It was decided that the provinces would manage certain powers, and the delivery of health care is one of them. I want us to have better health care in Quebec. When I vote in National Assembly elections, I make sure that I vote for a party that will work towards that.

According to the Constitution, the federal government's role here when it comes to health care, the historic compromise, is to properly fund it. That's not happening right now; it's a matter of fiscal imbalance. That's why my party is fighting tooth and nail to resolve this issue. Thank you, Mr. Chair.

Having said that, I want to thank my colleagues for letting us have a few meetings like this to hear from witnesses, who are raising very important issues. At the end of parliamentary sessions, I always get the impression that the government is in a bit of an ivory tower. It's good to face reality and the heart-wrenching testimony we're hearing today. I'd like to thank the witnesses for accepting our invitation on such short notice. I also tip my hat to the clerk, who organized all of this. It's a remarkable job done in an incredibly short amount of time. I'd also like to thank the whips of the various parties for clearing up the schedule so that we could hear from the witnesses, as we are doing this afternoon.

My questions will be for Mr. Céré.

Thank you for accepting our invitation on short notice, for running to get a headset and for being here with us. Your testimony was very much appreciated.

I'd like to discuss four topics with you. I'm going to have more than one round; I don't think we're going to get to all four in one round.

First, I'd like to come back to the long-awaited and much-promised reform that's not happening. That was the purpose of your testimony.

Second, there were significant deficits during the pandemic. The government was there and paid down the deficits, except for the deficits in the EI fund. Because the law requires that the EI fund be balanced every seven years, the workers who pay into it are being forced to eliminate the deficit. The government is taking $17 billion out of their pockets. In my opinion, if that doesn't change, it will be impossible to reform the system. Something should have been included in Bill C‑47 to deal with that. However, there's nothing there.

So I'd like to hear your comments on those two things, but I want you to know that I'll be asking you later about two things in Bill C‑47. First of all, it's just an extension of the EI spring gap pilot project, which you talked about. That's in part 4, division 35. Next is part 4, division 38. I don't know if you've had time to look at the reform of the Social Security Tribunal, but it's essentially what had already been proposed and what's being repeated here.

However, first, let's talk first about the obligation to balance the EI fund and the government's refusal to pay down the deficit resulting from the pandemic, and then about the long-awaited reform that's not happening.

I'm listening.

[Kate Walsh, Director of Communications, Canada's Building Trades Unions]

Thank you, Chair. It's good to be here.

Thanks for the opportunity to address the committee on the recent federal budget and Bill C-47.

My name is Kate Walsh, and I'm the director of communications with Canada's Building Trades Unions. I may or may not be joined by my colleague, Rita Rahmati, who is the government relations manager for CBTU.

CBTU represents 14 international construction unions, with over 600,000 skilled trades workers from coast to coast.

Budget 2023 provided some significant support for middle-class workers, and I appreciate the opportunity to highlight some of these policies here today.

Last year's budget included the labour mobility tax deduction for tradespeople, which has helped tradespeople this tax season, allowing them to travel to where the work is and to deduct those related travel expenses from their income. It's a policy that was welcomed by our industry and something that makes a meaningful difference to Canada's skilled tradespeople.

Included in this year's budget, and the subsequent implementation act, is the doubling of the tradespeople tool deduction, from $500 to $1,000. Again, that's putting money right back into the pockets of the skilled tradespeople who build our country. We support this measure and hope that all parties will vote in favour of this component of the budget.

Also committed to in budget 2023 are five investment tax credits to support the economy's transition to net zero, which are linked to one of the strongest definitions of “prevailing wage” in Canadian history. In order to receive the highest level of these investment tax credits, employers will need to provide good labour conditions for workers, which includes paying the prevailing wage and meeting apprenticeship requirements.

The definition of “prevailing wage” will be based on union compensation, including benefits and pension contributions from the most recent and most widely applicable employer collective bargaining agreements in that region or corresponding project labour agreements. Additionally, 10% of the tradesperson hours worked must be performed by registered apprentices in Red Seal trades in order to receive the maximum credits. Tying these incentives to a prevailing wage that includes union compensation will raise the standard of living for all workers, maximize benefits for the entire economy and create a legacy of good-paying, middle-class jobs throughout this transition.

When the United States passed the Inflation Reduction Act, which includes over $300 billion in clean energy tax incentives for energy infrastructure projects and increased tax credits of up to five times more where certain labour conditions are met, we knew that Canada needed to respond with strong investments of its own. With commitments first announced in the fall economic statement and expanded on in budget 2023, Canada is now on a similar path.

The building trades look forward to continuing to work with the federal government to operationalize the prevailing wage and apprenticeship requirements tied to these monumental credits. We'll also continue to advocate for these credits to further incentivize good jobs by increasing the delta when good job requirements are met and decreasing them when these workforce requirements are not met, so that the public dollars spent on these credits go back into good jobs and supporting working families.

As Canada transitions to net zero and we move away from our reliance on fossil fuels, Canada's energy demands could double by 2050. We need to build clean energy infrastructure in Canada that grows our manufacturing base and creates opportunities to grow our middle class, all while meeting our net-zero goals. Many of the commitments in budget 2023 will help us do this, but there's more to be done.

We need just transition legislation tabled and the launch of the sustainable job secretariat to map out our energy needs and the needs of the workforce so that no worker is left behind. We need to ensure we have appropriate labour market information data to plan the transition. We need to continue to address labour availability through investments in training—for instance, through the union training and innovation program and programs to recruit and retain equity-deserving groups—and make changes to our immigration system to bring in more skilled trades workers.

Budget 2023 includes significant policies that support our economic transition and building trades workers across Canada.

On behalf of our 14 affiliated international unions, thanks for the opportunity to present. We look forward to any questions you may have.