Bill C-59

Fall Economic Statement Implementation Act, 2023

An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and 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) limiting the deductibility of net interest and financing expenses by certain corporations and trusts, consistent with certain Organisation for Economic Co-operation and Development and the Group of Twenty Base Erosion and Profit Shifting project recommendations;
(b) implementing hybrid mismatch rules consistent with the Organisation for Economic Co-operation and Development and the Group of Twenty Base Erosion and Profit Shifting project recommendations regarding cross-border tax avoidance structures that exploit differences in the income tax laws of two or more countries to produce “deduction/non-inclusion mismatches”;
(c) allowing expenditures incurred in the exploration and development of all lithium to qualify as Canadian exploration expenses and Canadian development expenses;
(d) ensuring that only genuine intergenerational business transfers are excluded from the anti-surplus stripping rule in section 84.1 of the Income Tax Act ;
(e) denying the dividend received deduction for dividends received by Canadian financial institutions on certain shares that are held as mark-to-market property;
(f) increasing the rate of the rural supplement for Climate Action Incentive payments (CAIP) from 10% to 20% for the 2023 and subsequent taxation years as well as referencing the 2016 census data for the purposes of the CAIP rural supplement eligibility for the 2023 and 2024 taxation years;
(g) providing a refundable investment tax credit to qualifying businesses for eligible carbon capture, utilization and storage equipment;
(h) providing a refundable investment tax credit to qualifying businesses for eligible clean technology equipment;
(i) introducing, under certain circumstances, labour requirements in relation to the new refundable investment tax credits for eligible carbon capture, utilization and storage equipment as well as eligible clean technology equipment;
(j) removing the requirement that credit unions derive no more than 10% of their revenue from sources other than certain specified sources;
(k) permitting a qualifying family member to acquire rights as successor of a holder of a Registered Disability Savings Plan following the death of that plan’s last remaining holder who was also a qualifying family member;
(l) implementing consequential changes of a technical nature to facilitate the operation of the existing rules for First Home Savings Accounts;
(m) introducing a tax of 2% on the net value of equity repurchases by certain Canadian corporations, trusts and partnerships whose equity is listed on a designated stock exchange;
(n) exempting certain fees from the refundable tax applicable to contributions under retirement compensation arrangements;
(o) introducing a technical amendment to the provision that authorizes the sharing of taxpayer information for the purposes of the Canadian Dental Care Plan;
(p) implementing a number of amendments to the general anti-avoidance rule (GAAR) as well as introducing a new penalty applicable to transactions subject to the GAAR and extending the normal reassessment period for the GAAR by three years in certain circumstances;
(q) facilitating the creation of employee ownership trusts;
(r) introducing specific anti-avoidance rules in relation to corporations referred to as substantive CCPCs; and
(s) extending the phase-out by three years, and expanding the eligible activities, in relation to the reduced tax rates for certain zero-emission technology manufacturers.
It also makes related and consequential amendments to the Excise Tax Act and the Excise Act, 2001 .
Part 2 enacts the Digital Services Tax Act and its regulations. That Act provides for the implementation of an annual tax of 3% on certain types of digital services revenue earned by businesses that meet certain revenue thresholds. It sets out rules for the purposes of establishing liability for the tax and also sets out applicable reporting and filing requirements. To promote compliance with its provisions, that Act includes modern administration and enforcement provisions generally aligned with those found in other taxation statutes. Finally, this Part also makes related and consequential amendments to other texts to ensure proper implementation of the tax and cohesive and efficient administration by the Canada Revenue Agency.
Part 3 implements certain Goods and Services Tax/Harmonized Sales Tax (GST/HST) measures by
(a) ensuring that an interest in a corporation that does not have its capital divided into shares is treated as a financial instrument for GST/HST purposes;
(b) ensuring that interest and dividend income from a closely related partnership is not included in the determination of whether a person is a de minimis financial institution for GST/HST purposes;
(c) ensuring that an election related to supplies made within a closely related group of persons that includes a financial institution may not be revoked on a retroactive basis without the permission of the Minister of National Revenue;
(d) making technical amendments to an election that allows electing members of a closely related group to treat certain supplies made between them as having been made for nil consideration;
(e) ensuring that certain supplies between the members of a closely related group are not inadvertently taxed under the imported taxable supply rules that apply to financial institutions;
(f) raising the income threshold for the requirement to file an information return by certain financial institutions;
(g) allowing up to seven years to assess the net tax adjustments owing by certain financial institutions in respect of the imported taxable supply rules;
(h) expanding the GST/HST exemption for services rendered to individuals by certain health care practitioners to include professional services rendered by psychotherapists and counselling therapists;
(i) providing relief in relation to the GST/HST treatment of payment card clearing services;
(j) allowing the joint venture election to be made in respect of the operation of a pipeline, rail terminal or truck terminal that is used for the transportation of oil, natural gas or related products;
(k) raising the input tax credit (ITC) documentation thresholds from $30 to $100 and from $150 to $500 and allowing billing agents to be treated as intermediaries for the purposes of the ITC information rules; and
(l) extending the 100% GST rebate in respect of new purpose-built rental housing to certain cooperative housing corporations.
It also implements an excise tax measure by creating a joint election mechanism to specify who is eligible to claim a rebate of excise tax for goods purchased by provinces for their own use.
Part 4 implements certain excise measures by
(a) allowing vaping product licensees to import packaged vaping products for stamping by the licensee and entry into the Canadian duty-paid market as of January 1, 2024;
(b) permitting all cannabis licensees to elect to remit excise duties on a quarterly rather than a monthly basis, starting from the quarter that began on April 1, 2023;
(c) amending the marking requirements for vaping products to ensure that the volume of the vaping substance is marked on the package;
(d) requiring that a person importing vaping products must be at least 18 years old; and
(e) introducing administrative penalties for certain infractions related to the vaping taxation framework.
Part 5 enacts and amends several Acts in order to implement various measures.
Subdivision A of Division 1 of Part 5 amends Subdivision A of Division 16 of Part 6 of the Budget Implementation Act, 2018, No. 1 to clarify the scope of certain non-financial activities in which federal ‚financial institutions may engage and to remove certain discrepancies between the English and French versions of that Act.
Subdivision B of Division 1 of Part 5 amends the Trust and Loan Companies Act , the Bank Act and the Insurance Companies Act to, among other things, permit federal financial institutions governed by those Acts to hold certain meetings by virtual means without having to obtain a court order and to permit voting during those meetings by virtual means.
Division 2 of Part 5 amends the Canada Labour Code to, among other things, provide a leave of absence of three days in the event of a pregnancy loss and modify certain provisions related to bereavement leave.
Division 3 of Part 5 enacts the Canada Water Agency Act . That Act establishes the Canada Water Agency, whose role is to assist the Minister of the Environment in exercising or performing that Minister’s powers, duties and functions in relation to fresh water. The Division also makes consequential amendments to other Acts.
Division 4 of Part 5 amends the Tobacco and Vaping Products Act to, among other things,
(a) authorize the making of regulations respecting fees or charges to be paid by tobacco and vaping product manufacturers for the purpose of recovering the costs incurred by His Majesty in right of Canada in relation to the carrying out of the purpose of that Act;
(b) provide for related administration and enforcement measures; and
(c) require information relating to the fees or charges to be made available to the public.
Division 5 of Part 5 amends the Canadian Payments Act to, among other things, provide that additional persons are entitled to be members of the Canadian Payments Association and clarify the composition of that Association’s Stakeholder Advisory Council.
Division 6 of Part 5 amends the Competition Act to, among other things,
(a) modernize the merger review regime, including by modifying certain notification rules, clarifying that Act’s application to labour markets, allowing the Competition Tribunal to consider the effect of changes in market share and the likelihood of coordination between competitors following a merger, extending the limitation period for mergers that were not the subject of a notification to the Commissioner of Competition and placing a temporary restraint on the completion of certain mergers until the Tribunal has disposed of any application for an interim order;
(b) improve the effectiveness of the provisions that address anti-competitive conduct, including by allowing the Commissioner to review the effects of past agreements and arrangements, ensuring that an order related to a refusal to deal may address a refusal to supply a means of diagnosis or repair and ensuring that representations of a product’s benefits for protecting or restoring the environment must be supported by adequate and proper tests and that representations of a business or business activity for protecting or restoring the environment must be supported by adequate and proper substantiation;
(c) strengthen the enforcement framework, including by creating new remedial orders, such as administrative monetary penalties, with respect to those collaborations that harm competition, by creating a civilly enforceable procedure to address non-compliance with certain provisions of that Act and by broadening the classes of persons who may bring private cases before the Tribunal and providing for the availability of monetary payments as a remedy in those cases; and
(d) provide for new procedures, such as the certification of agreements or arrangements related to protecting the environment and a remedial process for reprisal actions.
The Division also amends the Competition Tribunal Act to prevent the Competition Tribunal from awarding costs against His Majesty in right of Canada, except in specified circumstances.
Finally, the Division makes a consequential amendment to one other Act.
Division 7 of Part 5 amends the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to exclude from their application prescribed public post-secondary educational institutions.
Subdivision A of Division 8 of Part 5 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to, among other things,
(a) provide that, if a person or entity referred to in section 5 of that Act has reasonable grounds to suspect possible sanctions evasion, the relevant information is reported to the Financial Transactions and Reports Analysis Centre of Canada;
(b) add reporting requirements for persons and entities providing certain services in respect of private automatic banking machines;
(c) require declarations respecting money laundering, the financing of terrorist activities and sanctions evasion to be made in relation to the importation and exportation of goods; and
(d) authorize the Financial Transactions and Reports Analysis Centre of Canada to disclose designated information to the Department of the Environment and the Department of Fisheries and Oceans, subject to certain conditions.
It also amends the Budget Implementation Act, 2023, No. 1 in relation to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and makes consequential amendments to other Acts and a regulation.
Subdivision B of Division 8 of Part 5 amends the Criminal Code to, among other things,
(a) in certain circumstances, provide that a court may infer the knowledge or belief or recklessness required in relation to the offence of laundering proceeds of crime and specify that it is not necessary for the prosecutor to prove that the accused knew, believed they knew or was reckless as to the specific nature of the designated offence;
(b) remove, in the context of the special warrants and restraint order in relation to proceeds of crime, the requirement for the Attorney General to give an undertaking, as well as permit a judge to attach conditions to a special warrant for search and seizure of property that is proceeds of crime; and
(c) modify certain provisions relating to the production order for financial data to include elements specific to accounts associated with digital assets.
It also makes consequential amendments to the Seized Property Management Act and the Forfeited Property Sharing Regulations .
Division 9 of Part 5 retroactively amends section 42 of the Federal-Provincial Fiscal Arrangements Act to specify the payments about which information must be published on a Government of Canada website, as well as the information that must be published.
Division 10 of Part 5 amends the Public Sector Pension Investment Board Act to increase the number of directors in the Public Sector Pension Investment Board, as well as to provide for consultation with the portion of the National Joint Council of the Public Service of Canada that represents employees when certain candidates are included on the list for proposed appointment as directors.
Division 11 of Part 5 enacts the Department of Housing, Infrastructure and Communities Act , which establishes the Department of Housing, Infrastructure and Communities, confers on the Minister of Infrastructure and Communities various responsibilities relating to public infrastructure and confers on the Minister of Housing various responsibilities relating to housing and the reduction and prevention of homelessness. The Division also makes consequential amendments to other Acts and repeals the Canada Strategic Infrastructure Fund Act .
Division 12 of Part 5 amends the Employment Insurance Act to, among other things, create a benefit of 15 weeks for claimants who are carrying out responsibilities related to
(a) the placement with the claimant of one or more children for the purpose of adoption; or
(b) the arrival of one or more new-born children of the claimant into the claimant’s care, in the case where the person who will be giving or gave birth to the child or children is not, or is not intended to be, a parent of the child or children.
The Division also amends the Canada Labour Code to create a leave of absence of up to 16 weeks for an employee to carry out such responsibilities.

Fall Economic Statement Implementation Act, 2023

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I was just heckled, and it was not parliamentary.

However, I would tell members that we are creating opportunities that would not be there if the government was not prepared to get involved. I am thinking about the tens of thousands of direct and indirect jobs, green jobs, dealing with things such as Volkswagen, Honda and Stellantis, and that is just here in Ontario, in eastern Canada. This industry is being highly motivated to expand because of, in part, the Douglas Ford provincial government, which is a Progressive Conservative government, and I underline the word “progressive” as opposed to the Conservative reform we have here in Ottawa. Working with the government, we are creating those types of opportunities because we are committed to working for Canadians and to having their backs, building a stronger, healthier economy. We have a government that genuinely cares and that is not focused, like the Conservatives are, on cuts.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Speaker, I want to congratulate the member for Winnipeg North on his inaugural speech in the House. I laugh because he talks so much about delaying legislation, but I do not think anyone has delayed more legislation in the history of the House than the member has with the amount of time he takes up when speaking.

The member talked about foreign direct investment. Today, at the government operations and estimates committee, also known as the mighty OGGO, we heard testimony that one of the problems Canada is facing is that for every dollar of foreign direct investment, we are seeing two dollars to three dollars flee the country in divestment. I wonder if the member opposite can tell us what the Liberals are doing that has damaged the country so badly that for every penny coming in, the government is scaring three pennies out of the country.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, one has to always be somewhat careful when talking about statistics. Let me give an example. Stephen Harper was prime minister for 10 years of government, and just under a million or maybe a million jobs were created. We have created over 2.1 million jobs in the same amount of time that Stephen Harper did. That is more than double in the same amount of time as Stephen Harper had in government. That is a pretty important stat, I would suggest.

It is also important to ask why. If we are number one on a per-capita basis in the first three months last year, there has to be a reason. I would suggest that, at least in part, it is because Canada is recognized as a real leader when it comes to trade. No other government in the history of Canada has signed off on more trade agreements with countries than this government. We see the value and the benefits of trade. The Conservatives, on the other hand, were the only ones who voted against the Canada-Ukraine Free Trade Agreement, interestingly enough.

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

Mr. Speaker, Bill C-59 includes more than $12 billion for carbon capture by western oil companies. It also includes $18 billion to help oil companies buy nuclear power plants, known as small modular reactors, to replace the natural gas used to heat the oil sands with polluted water, so that they can save the gas and export it instead, particularly through the Coastal GasLink pipeline.

Bill C‑59 gives the oil industry about $30 billion. Is that the Liberals' environmental plan?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, one thing we have recognized since 2015 is that we need to, as an economy, look at ways to build greener jobs and to make those types of investments. The Government of Canada has done astronomical work in being successful at doing that, in terms of investing money. In working with different levels of government and with different stakeholders, there are so many examples I could give to demonstrate that.

Having said that, there are things today that we need to at least respect, to continue to develop and to work on going forward. When we look at the oil and natural gas industry, I believe we are in fact on the right track. We provided a lot of subsidies, for example, for orphaned wells, cleaning up the environment. Do Bloc members consider cleaning up the environment and dealing with orphaned wells a subsidy? If so, would they then say that we should not be cleaning up orphaned wells? I think it is healthy for the environment to do that and to invest in that sort of thing.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Mr. Speaker, I heard the member mention many investments. I am happy to talk about housing at all times. There is a rapid housing initiative breaking ground in Richmond, British Columbia, and I would like to know if the member can talk a bit more about what the impacts of housing investments will be across Canada.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I started to talk about how important it is, as members of Parliament, that we get a sense of what is happening in our communities and that we bring those concerns here to Ottawa. I appreciate that it is exactly what the member has done on the issue of housing. As a result, what we see is a government that is looking at not only supporting one area but also supporting a multitude of areas where we recognize housing as being an issue.

We need to work in our communities to bring in programs such as the accelerator fund. We need to be able to ensure there is affordable housing. We need to ensure there is infrastructure being built. We do this, in good part, by working with the different levels of government and by looking at communities, like the City of Winnipeg, which I think is investing around $122 million to help the city to look at zoning and look at ways in which it can make modifications to hopefully build homes faster.

The government is looking at ways we can use federal land banks to build homes faster and looking at ways we can provide purpose-built rentals that are GST-free so that more apartments can be built. These are the types of things being done because we have members like the one who just asked the question and raised this very important issue.

[Laurel Collins, NDP, Victoria, BC]

Mr. Speaker, the member mentioned orphaned wells. When a company goes under, I can understand potentially helping communities clean that up. However, I am curious why the government decided to give out money to companies that are actually making record profits right now and that could be cleaning up their own orphaned wells and why it has also refused to put in the conditions that would make polluters pay. Making polluters pay is a principle the government should stand behind, but instead, it actually pays polluters. It hands out billions of dollars to profitable oil and gas companies. The government is not getting support for the oil and gas industry right. It is buying pipelines, handing out fossil fuel subsidies and missing every single target.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I probably do not have enough time to answer the question in the detail I would like, with regard to having a price on pollution and so forth, but I will pick up on the point about orphaned wells. We all need to recognize that there are orphaned wells and that it is very damaging to our environment. These wells have been there for generations. It is a question of whether we collectively, here in Ottawa, want to take some sort of action that is going to ensure that those orphaned wells are being addressed. If that means the federal government needs to be able to contribute in order to make that a reality, I think it is money well spent. There does need to be a higher sense of accountability from some of our oil companies. I have full confidence in our ministers, whether it is the natural resources minister or the Minister of Environment, to ensure there is a higher sense of accountability going forward on issues such as orphaned wells and the ways in which we can continue to diminish emissions.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Speaker, I thought the member for Victoria said “Orson Welles”, and I found a quote from Orson Welles on politics, which reminds me of the member for Winnipeg North: “I have all the equipment to be a politician. Total shamelessness.” I think that is my colleague across the way.

Coming back to the actual issue being debated, Bill C-59, the Parliamentary Budget Officer, in his commentary about the fall economic statement, commented about the lack of transparency from the Liberal government being a concern. One issue I have noticed in the departmental results, which are part of the estimates process, which is eventually part of the statement, is that we see various departments such as the Department of Indigenous Services did not have 67% of its goals set for its priorities. For Veterans Affairs, it was 70%, and for Environment, it was 40%. I wonder if the member could comment on the lack of transparency from his own government on this important issue.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I appreciate the question but I am going to deviate from it and talk about how important it is that the Conservatives actually reflect on just why it is that they feel the particular piece of legislation before us should never see the light of day. They continue to filibuster it endlessly, and I am very grateful that we have some opposition parties that recognize the importance of getting the legislation through the House so Canadians could benefit by its passage.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Mr. Speaker, it is a pleasure to be able to rise tonight to talk about the fall economic statement. I came in here actually prepared to talk about the question of privilege. I am shocked that the government would shut down debate in the House on a question of privilege over the partisan activities of the Speaker. Our House of Commons, our institution, is being discredited and undermined by the Chair, the Speaker of the House of Commons. We have to continue to have a fulsome discussion on that, so I am disappointed that the government would use its power to force debate on Bill C-59, the fall economic statement. Last time I looked, it was May 27, and here we are talking in the summer about the fall economic statement from 2023.

I am going to be splitting my time with the member for Pitt Meadows—Maple Ridge.

As Conservatives, we have said all along that we want to make sure that we build the homes, axe the tax, fix the budget and stop the crime. The government has no intention of doing any of that. We know that housing in this country is in a desperate situation, that in the nine years under the Liberal-NDP coalition, the cost of rent has doubled, the cost of mortgages has doubled and the number of housing starts is below that of what we did in 1976.

We say we want to axe the tax, and that is very important to my riding. I was just meeting with some cattle producers from Manitoba, including from my riding, and they were telling me over and over again that every time they have to pay the carbon tax, every time the carbon tax is hidden in all the supplies they buy, it all trickles down, and that means that they are getting less and paying to the government more. Of course when they sell their cattle, for which right now, thankfully, the price is at record highs, people are complaining about the price of beef on the store shelf.

One has to remember that the coolers that store shelves have their beef in are often powered through thermal electricity or natural gas, We know that this adds an extra cost to the price of beef. We know that in the transportation of that beef from the farm to the packer and from the processor to the retailer, it all gets added in and consumers are paying more. Of course, they cannot afford it.

We are going to fix the budget because the government continues to run up huge national debt and larger-than-ever deficits that are actually going to hurt each and every one of us. We know that the Governor of the Bank of Canada has said that this has not been helpful in controlling inflation. It has not been helpful in its being able to bring down interest rates. Of course every time we have a Trudeau as prime minister, we pay record-high interest rates.

With my first farm, which I bought back in 1984 under the former Trudeau, the interest rate on my mortgage was 21%, which was pretty high and pretty impossible, almost, for a 19-year-old young farmer to get going. I had to eat that at the bank because of the out-of-control spending by the Liberal government at the time, from 1980 to 1984. Our young people today are paying the cost because of out-of-control spending and little care for the economic performance of the country under the Liberal-NDP coalition.

Of course, we have to stop the crime. The government has, for nine years, ignored the plight of Canadians who are dealing with increasing criminal activity, including violent crime, which has gone up by over 32% across the country, including in my riding of Selkirk—Interlake—Eastman and including in the city of Winnipeg, where the member for Winnipeg North resides.

We see, over and over again, repeat offenders generating 90% of the crimes that are being committed against Canadians. We want safer communities, and that is why as Conservatives under the leadership of our leader, the member for Carleton, we will implement jail, not bail, and keep violent repeat offenders, those who are perpetrating crimes, behind bars and actually reduce crime across the country.

As members know, I am the shadow minister for national defence. I am very concerned by the way the government has ignored our Canadian Armed Forces and how it has gone from a proud, honoured institution to where it is now, again, in a decade of darkness, which occurred, of course, under the Chrétien era. We are living that again. Members and veterans of the armed forces have told me that they are actually in a decade of disaster because of the dithering and delays being carried out by the current government.

We know for a fact that the world has gotten much more dangerous. We know, and it is not just because of Russia's invasion in Ukraine, that we are seeing increased sabre-rattling by the Kremlin with NATO members in the Baltic region, which we just witnessed this past week with its redrawing of boundaries along Estonia and Russia and between Finland, Sweden and other Baltic nations with Russia. That type of aggression and provocation by President Vladimir Putin and his kleptocrats in Moscow continues to undermine our security.

We know that the Communist regime in Beijing and the People's Liberation Army continue to sabre-rattle with Taiwan. The rhetoric coming out of Beijing this past week after the inauguration of Taiwan's new president was deplorable. We know that its ongoing aggression against the Philippines in the South China Sea and around the Second Thomas Shoal continues to undermine security co-operation and peace and prosperity within that region. We know that Japan, South Korea and other Indo-Pacific countries are more and more concerned about China's growing disturbances in the region.

We know that the government has failed to make the investments in the Canadian Armed Forces to meet our NATO target, and the Washington Summit is coming up. There has been a lot of concern expressed by our allies, especially since the defence policy update came out, that there is no plan to meet the NATO target.

The Minister of National Defence has said that the Canadian Armed Forces is in a death spiral. He has said that our equipment is worn out and unsustainable. At committee today, the Minister of National Defence said that our Victoria-class submarines are no longer serviceable. We know that the greatest proliferation of weapons systems in this country outside of air-breathing missiles, which are hypersonic; intercontinental ballistic missiles; and the advancement of more cruise missiles and drones, outside of that domain, the next biggest growing proliferation of weapons is submarines. The best way to defend against a submarine is to have a submarine, and the minister is saying today, essentially, that we no longer have serviceable submarines to defend Canada in our maritime approaches.

We have to make sure that we are standing up for our troops. The minister said that we are short 6,700 housing units. We hear stories of members of our Canadian Armed Forces living rough. They are living in cars, tents and campers. They are couch-surfing in places like Halifax, Esquimalt and Toronto. We know that they need to have proper housing.

We cannot recruit because the government, under the NDP-Liberal coalition, has not put the troops first and foremost in its minds, making sure they get the kit they need. The government will say that it gave a recent raise, but in giving that raise it also increased the rent of military housing. We actually passed a motion here just two weeks ago calling on the government to reverse that decision. Of course, the Minister of National Defence and the Liberals voted against it. This has affected our recruitment capabilities, and that is why we are still short 16,000 troops.

We know that readiness continues to be undermined. All of us remember Gen. Andrew Leslie, a former army commander who was also the whip for the Liberals for some time. He has come out and stated that he is “not aware of any other [NATO] army, which will be deploying troops to the front line of a possible confrontation with Russia, who are not 100 per cent trained according to a variety of battle test standards.”

He is saying that the defence policy update, the most recent budget by the Liberals and the main estimates that we are dealing with at committee have undermined our overall readiness. We are now at only 61% standing ready. We are not training our troops like we are supposed to be at CFB Wainwright in Alberta before we deploy to places like Latvia. We are no longer doing fighter pilot training in this country. We have farmed that out to places like the United States and Italy. We do not have base training here. We do not even have enough pilots in the Canadian Air Force to fly our current fleet of fighter jets.

I would just say that based upon the comments we heard just this past week from multiple U.S. senators and from the ambassador, Canada is an outlier in NATO. Eighteen percent of the countries will meet the 2%, and 13% have a plan to get to 2% within the next couple of years. Canada is the only country that will never make it, and that is because we have a Prime Minister who actually said that we will never be at 2%.

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

Mr. Speaker, in Bill C‑59, the government is creating a new department, the department of housing, infrastructure and communities. None of those areas fall under federal jurisdiction. This means the minister can interfere more, impose conditions on the provinces and municipalities, and cause more bickering and delays.

Pierre Elliott Trudeau already tried this in 1971. He created a similar department, and it was a total failure. During the department's existence, there was nothing but bickering until it was shut down in 1979.

Does my colleague agree that when the Liberals do the same thing over and over again, it really seems like a farce?

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Mr. Speaker, I agree with my colleague that everything the Liberals have done on housing has been a joke. They have not built any new homes. We have seen that housing starts across this country have failed. They continue to reward gatekeepers rather than getting them out of the way. They refuse to work with provinces, and they continue to tread on provincial jurisdiction. The one place where they can actually make investments is in military housing on military bases, which is on federal land. They have not done that.

In the budget that we have before us right now, the government says that we are short 6,700 houses. The government has built only 38 military homes in the last two years, and the budget has zero dollars for military homes. In the forecast for the next budget, under the DPU, there are zero dollars for building military housing. We know that, going forward in the next five years, the government has only $8 million to build houses. How would $8 million over five years build 6,700 homes? We will be lucky if it builds 20 houses. It is a joke.

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

Mr. Speaker, I wonder whether the member could reflect on his comments. He said that we have not used military land to build houses. There was something called Kapyong barracks in the city of Winnipeg that he may want to reflect on. That was on military land.

He talks about a government that is not investing in housing. That is mind-blowing in terms of the degree to which we have invested in housing. He also said that we do not work with other governments. I cannot believe the member said that, as we have had so many announcements with municipalities and provinces. Where has the member been sleeping? There has been an incredible amount of work and cooperation that we have been getting from different levels of government.

Why should Canadians believe what the member is saying if he is so factually incorrect in a very short answer?