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

Sponsor

Status

This bill has received Royal Assent and is, or will soon become, law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

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.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.

Votes

May 28, 2024 Passed 3rd reading and adoption of Bill C-59, 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 (Clauses 323 to 341)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, 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 (Clauses 320 to 322)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, 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 (Clauses 318 and 319)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, 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 (Clauses 273 to 277)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, 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 (Clauses 219 to 230)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, 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 (Clauses 145 to 167, 217 and 218 regarding measures related to vaping products, cannabis and tobacco)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, 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 (Clauses 197 to 208 and 342 to 365 regarding amendments to the Canada Labour Code)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, 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 (Clauses 137, 144 and 231 to 272 regarding measures related to affordability)
May 28, 2024 Passed 3rd reading and adoption of Bill C-59, 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 (Clauses 1 to 136, 138 to 143, 168 to 196, 209 to 216 and 278 to 317 regarding measures appearing in the 2023 budget)
May 28, 2024 Failed Bill C-59, 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 (recommittal to a committee)
May 21, 2024 Passed Concurrence at report stage of Bill C-59, 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
May 21, 2024 Failed Bill C-59, 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 (report stage amendment)
May 9, 2024 Passed Time allocation for Bill C-59, 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
March 18, 2024 Passed 2nd reading of Bill C-59, 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 (Clauses 323 to 341.)
March 18, 2024 Passed 2nd reading of Bill C-59, 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 (Clauses 320 to 322; and)
March 18, 2024 Passed 2nd reading of Bill C-59, 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 (Clauses 318 and 319;)
March 18, 2024 Passed 2nd reading of Bill C-59, 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 (Clauses 273 to 277;)
March 18, 2024 Passed 2nd reading of Bill C-59, 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 (Clauses 219 to 230;)
March 18, 2024 Passed 2nd reading of Bill C-59, 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 (Clauses 145 to 167, 217 and 218 regarding measures related to vaping products, cannabis and tobacco;)
March 18, 2024 Passed 2nd reading of Bill C-59, 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 (Clauses 197 to 208 and 342 to 365 regarding amendments to the Canada Labour Code;)
March 18, 2024 Passed 2nd reading of Bill C-59, 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 (Clauses 137, 144 and 231 to 272 regarding measures related to affordability;)
March 18, 2024 Passed 2nd reading of Bill C-59, 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 (Clauses 1 to 136, 138 to 143, 168 to 196, 209 to 216 and 278 to 317 regarding measures appearing in the 2023 budget;)
March 18, 2024 Failed 2nd reading of Bill C-59, 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 (reasoned amendment)

Joanne Thompson Liberal St. John's East, NL

Thank you.

Welcome to committee.

I'm going to switch and speak about bereavement and pregnancy loss, if I could. I'm not sure which team it is for this shift.

Clearly, this is very important to many people. Certainly, having experienced both, I was very grateful to see some of the changes.

Could you discuss how the changes in Bill C-59 better support parents with parental benefits not available to those who experience pregnancy loss, what the current leave options are, and what benefits they're currently using in place of the specific pregnancy loss benefit?

The Chair Liberal Peter Fonseca

They're approved. Thank you for that.

For Thursday, I know we had sent out an invitation letter to the DPM to appear. The DPM has accepted and will be appearing before our committee this upcoming Thursday.

I do see your hand, MP Dzerowicz. I'll just go through a few opening remarks quickly first, so that we can get all our officials set up.

Today, to discuss part 5 of Bill C-59, we welcome 36 departmental officials. I know many of them were outside the room, going through security. I hope everyone has made it in. They are from the departments of finance, employment and social development, environment, health, industry, justice, Canada Border Services Agency, Financial Transactions and Reports Analysis Centre of Canada, Treasury Board Secretariat, and the Office of Infrastructure of Canada and Service Canada.

Please note that all these individuals cannot sit at the table. A number of them are at the table. The rest are here in this room.

For the officials, as the members ask their questions, if the question pertains to your department within part 5, we would ask that you come to the table to answer those questions. We need you before a mic to be able to do that, so we may have some rotating chairs in the room as we go through today's questions from the members.

We do not have any opening remarks today from our officials, so we will go right into questions from the members.

If someone is not in the room yet and you have a question for that particular department, we'll have to get that in another round as it comes up, and then maybe one of those officials can come up to the mic.

Now I will go to MP Dzerowicz.

The Chair Liberal Peter Fonseca

I call this meeting to order.

Welcome to meeting 132 of the House of Commons Standing Committee on Finance.

Pursuant to the order of reference on Monday, March 18, 2024, and the motion adopted on Monday, December 11, 2023, the committee is meeting to discuss only part 5 of Bill C-59, 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

Today's meeting is taking place in a hybrid format, pursuant to Standing Order 15.1. Members are attending in person in the room and remotely using the Zoom application.

I would like to make a few comments for members.

Although this room is equipped with a powerful audio system, feedback events can occur. These can be extremely harmful to interpreters and cause serious injuries. The most common cause of sound feedback is an earpiece worn too close to the microphone. Therefore, we ask all participants to exercise a high degree of caution when handling the earpieces, especially when the microphone or your neighbour's microphone is turned on. In order to prevent incidents and safeguard the hearing health of the interpreters, I invite participants to ensure that they speak into the microphone into which their headset is plugged and to avoid manipulating the earbuds by placing them on the table away from the microphone when they are not in use.

As a reminder, 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 we can. We appreciate your patience and understanding in this regard.

Members, before we get to our witnesses today, there are a couple items.

One is that you would have received a couple of budgets. I'm looking around for approval for those budgets.

Opposition Motion—Carbon TaxBusiness of SupplyGovernment Orders

March 19th, 2024 / 10:45 a.m.


See context

Milton Ontario

Liberal

Adam van Koeverden LiberalParliamentary Secretary to the Minister of Environment and Climate Change and to the Minister of Sport and Physical Activity

Mr. Speaker, I am proud to be sharing my time with the member for St. Catharines.

I am thankful for the opportunity to once again clarify how having a price on carbon is the most effective way of addressing climate change and curtailing its devastating effects on the health and safety of Canadians. I have had an opportunity to go on television a couple of times with my colleague, the failed Conservative leader, the member for Regina—Qu'Appelle. He and I have had a couple of debates on this issue, and I am proud to say that Canadians deserve action that addresses the horrific costs associated with climate change.

Also, today in the news, inflation numbers are in, and inflation is down around 2.8% from the high of at 8.1% in June 2022. Over the last three months, food and goods inflation have actually been negative. Groceries are going back down to normal. This is a really encouraging trend, and it is worth noting that it is happening in the context of our fighting climate change and lowering our emissions at the exact same time.

In 2023 we saw a record wildfire season here in Canada. More area was burned, more than double the historic record, and hundreds of thousands of Canadians were evacuated from their homes as a result. I remember that when I was kid, we used to talk about global warming, and there were always images of polar bears and the Amazon rainforest. However, climate change is not in some far-off place; it is right here. It was in the skies of Ottawa last summer when we were working here. There were people with asthma who could not come to work. People were not leaving their homes. There were respiratory distress alerts. In total, the area burned was 18 million hectares, which is two and a half times the previous record set in 1995 and more than six times the average over the past 10 years.

The Insurance Bureau of Canada also concluded that the average annual severe weather claims paid by insurers in Canada could cost more than double over the next 10 years, increasing from $2.1 billion a year, which is what they are at right now, to over $5 billion a year, and that must be accompanied by an increase in premium income. Climate change is not free, and pollution should not be free either. There are very real costs associated with having one's house burn down or having to flee one's home and job due to an evacuation order.

We also know from experts and research that the most effective and efficient way to address climate change is to put a price on carbon pollution emissions, which are the chief cause of man-made climate change. The Conservatives on the other side might bellow at me and deny the existence of climate change, as they always do, but it does not change the fact.

Emissions are on their way down in Canada. We have reversed the disastrous Harper legacy of rising emissions up until 2015. We have done that by putting a price on carbon pollution. We have reduced our emissions, and that encourages reductions right across the economy while giving households and businesses the flexibility to decide what changes they are going to make. It also creates incentives for Canadian businesses to develop and adopt new low-carbon products, processes and services.

However, members do not have to believe me that it is being done right, as we are doing here in Canada. There is a gentlemen, William Nordhaus, who has a Nobel prize in economics that he was awarded in 2018 for his work on carbon pricing and macroeconomics. He said that Canada is getting carbon pricing right, that it is both effective and affordable for consumers and it lowers emissions right across the economy.

This is because the bulk of proceeds from the federal pollution pricing system go straight back into the pockets of Canadians. In provinces where the fuel charge applies, eight out of 10 households continue to get more money back through their quarterly Canada carbon rebate payments than they pay as a result of the federal pollution pricing system. For the fiscal year starting on April 1, a family of four will receive, under the Canada carbon rebate, $1,800 in Alberta, $1,200 in Manitoba, $1,120 in Ontario, $1,504 in Saskatchewan, $760 in New Brunswick, $824 in Nova Scotia, $880 in Prince Edward Island and $1,192 in Newfoundland and Labrador.

When I was on one of the TV programs I mentioned earlier with the failed Conservative leader, the member for Regina—Qu'Appelle, I asked the member whether he had cashed his cheque, which would have been around $1,300 as he has a family of more than four in Saskatchewan, and he refused to answer. The Conservatives repeatedly refuse to acknowledge that the rebate program is an effective way to combat the affordability crisis and it is an effective way to lower our emissions. More importantly, for eight out of 10 households, these amounts represent more than they will pay as a result of the federal pricing pollution system. Remember, the federal government does not keep any proceeds from the federal fuel charge. They are all returned to the jurisdiction in which they are collected.

Carbon pricing works and climate change is real. It does not matter how much the Conservatives yell and repeat their slogans and lines written by their campaign team; we know that there are many ways to make affordability a reality in Canada. That is why we have seen the inflation numbers come down. We have seen groceries become a bit more affordable in the last couple of months. That is really positive news.

According to economists, the inflation on food and other goods, like telecommunications, was actually negative over the last couple of months. This is in the context of pricing carbon. If Conservatives are going to say that pricing carbon leads to inflation, then how have we seen a rising price on pollution over the last three years associated with a decrease in our inflation? We know that there are many ways to make life more affordable, and affordability has been a top concern of the government since we got elected in 2015. Serious governments need to have a plan to fight for affordability, the environment, reducing emissions and to fight climate change at the same time.

Conservatives have been talking about food banks a lot lately, which is important. I volunteer at food banks. I support a lot of poverty reduction and poverty elimination agencies, and I meet with officials from those organizations on a frequent basis. They have a lot of really good recommendations for our government. They have recommendations for a universal basic income and how to expand programs like the Canada child benefit. They have recommendations such as making sure that child care is affordable. Pharmacare is on their agenda. They want to make sure that Canadians can access their vital health care without having to make a decision between paying their bills and paying their medical expenses.

That is why we have been there. None of those food banks, food rescue organizations, poverty elimination experts or economists have pointed to a price on pollution as a cause for inaffordability or inflation, so we are delivering the support where it is most effective, to those who need it most.

People who live in rural communities, like many of my constituents in Milton, face unique realities. The measures we have introduced help to put even more money back into the pockets of families dealing with higher energy costs because they live outside large cities and have more expensive home heating and transportation costs. We have been very clear that we will continue to implement our pollution pricing system while ensuring that we continue to put more money into the pockets of Canadian households.

Most recently, through Bill C-59, the fall economic statement implementation act, which we voted on last night, we introduced measures to advance the government's fiscally responsible plan to build a cleaner, stronger economy. It introduces measures to create well-paying jobs, generate growth and build a cleaner economy that works for everyone by advancing Canada's plan to both fight climate change and lower our emissions, as well as to ensure that families can pay their bills. Making life affordable for Canadians while protecting the environment will always be a priority for our government, and it remains a priority today.

I would like to talk about two things. The first is about following through on a campaign commitment. The government was elected three times on a commitment to fight climate change and lower our emissions. Three times we campaigned on a promise to price pollution. In the hypocrisy of Conservatives, in their 2021 platform they planned to put a price on carbon with their then leader Erin O'Toole, but their failed Conservative leader, the member for Regina—Qu'Appelle, went back to his 2019 campaign promise of saying that Canada should be allowed to increase its emissions. He said it again yesterday on television. He has repeatedly said that Canada should be allowed to increase its emissions, which would make climate change worse; it would make sure that Canada is not a leader in fighting climate change on a global scale.

Integrity requires us to follow through on our commitments, and all of the Conservatives ran on a commitment to price carbon. Unfortunately they have taken their jackets off, flipped them inside out, tossed Erin O'Toole to the curb and are back to their 2019 campaign commitment of the failed leader of the Conservative Party, the member for Regina—Qu'Appelle, to ignore climate change altogether.

The second issue I want to address is political maturity. In 2015, emissions were on their way up. We campaigned on a commitment to reverse that trend, lower our emissions and be a leader in fighting climate change around the world. Conservatives, on the other hand, ran on a commitment to do nothing on the environment. They do absolutely nothing on the environment. Their party's official statement on climate change is that there is no human cause for inflation. It requires us to look in the mirror and ask what our plan is.

For two and a half years, Conservatives have said they would like to axe the tax. They have made bumper stickers and hoodies. It is their brand now: Axe the tax. Political maturity requires them to come up with an idea or a plan to replace it with something. If they want to axe the tax, then what are they going to replace it with? I would ask Conservatives what their plan is to tackle climate change.

Fall Economic Statement Implementation Act, 2023Government Orders

March 18th, 2024 / 11:40 p.m.


See context

NDP

The Assistant Deputy Speaker NDP Carol Hughes

I declare these clauses carried.

The House has agreed to the entirety of Bill C-59, 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, at the second reading stage.

Accordingly, the bill stands referred to the Standing Committee on Finance.

(Bill read the second time and referred to a committee)

It being 11:44 p.m., pursuant to order made earlier today, the House stands adjourned until tomorrow at 10 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 11:44 p.m.)

Fall Economic Statement Implementation Act, 2023Government Orders

March 18th, 2024 / 9:40 p.m.


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NDP

The Assistant Deputy Speaker NDP Carol Hughes

Pursuant to order made earlier today, the House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C‑59.

The question is on the amendment. May I dispense?

The House resumed from January 31 consideration of the motion that Bill C‑59, 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, be read the second time and referred to a committee, and of the amendment.

Leah Gazan NDP Winnipeg Centre, MB

I do think that we require a written answer, but I also think that it's very timely, because if you're not willing to change legislation when you're talking about child welfare systems that will essentially exclude 90% of the kids in care, it's probably not a very effective piece of legislation.

I know that the government currently has a bill in place—I believe it's Bill C-59—around adoptive care. I'm wondering if the government has any plans to ensure that they uphold the rule of law and make sure it's consistent with Bill C-15 and articles 19, 20 and 21 in terms of adoption care. Are there any plans for that?

Gabriel Ste-Marie Bloc Joliette, QC

Thank you, Mr. Chair.

Good morning, everyone.

I agreed to sign the letter requesting that this meeting be held pursuant to Standing Order 106(4). I'll be supporting the proposed motion, because the situation is deeply concerning.

However, the committee is short on time. We need to study Bill C‑59. I urge my colleagues to take the time to do the job properly, even though closure was invoked. We must take the time to listen to witnesses and improve the bill implementing last year's budget and last fall's economic statement. Later this spring, we need to study the other budget implementation bill coming up on April 16. That alone will keep us fully occupied. Furthermore, there are many other extremely important files. I would particularly like to know the status of the study that we began on green finance.

The situation currently under discussion was foreseeable. As Jasraj Singh Hallan said, while referring to the Equifax report, high interest rates and continually rising real estate prices are starting to lead to skyrocketing mortgage and credit card delinquency rates, along with an increase in bankruptcies. It's deeply concerning. However, it was foreseeable.

During our two weeks in our constituencies, I think that we should hold at least one meeting a week to discuss this deeply concerning matter. We can invite the experts, as proposed in the motion, to find out whether the situation is as alarming as reported. We can ask the experts. We can make a plan. Given the continually high interest rates, increasing property prices and the current situation, we can ask the government about its response and strategy. We must also have the chance to suggest proposals. I obviously don't agree with the analysis of Mr. Hallan or the Conservative members of Parliament regarding the carbon tax. However, the issue raised here, meaning the increasing delinquency rates and rising number of bankruptcies, is deeply concerning. It significantly affects the economy. We can try to see what can be done.

In short, we must focus on analyzing and improving the budget implementation bills, meaning Bill C‑59 and the bill associated with the budget in April. I also support the idea of reviving our study on how inflation and interest rates affect mortgages. The situation is changing. We need to look at the next steps.

I agree that we should hold at least one meeting a week during the last week of March and the first week of April, when we'll be in our constituencies. That way, we can study the matter.

Bill C‑59—Notice of Time Allocation MotionFall Economic Statement Implementation Act, 2023Oral Questions

February 29th, 2024 / 3:15 p.m.


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Gatineau Québec

Liberal

Steven MacKinnon LiberalLeader of the Government in the House of Commons

I would like to advise that an agreement could not be reached under the provisions of Standing Order 78(1) or 78(2) with respect to the second reading stage of Bill C-59, 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.

Under the provisions of Standing Order 78(3), I give notice that a minister of the Crown will propose at the next sitting a motion to allot a specific number of days or hours for the consideration and disposal of proceedings at the said stage.

Business of the HouseOral Questions

February 29th, 2024 / 3:15 p.m.


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Gatineau Québec

Liberal

Steven MacKinnon LiberalLeader of the Government in the House of Commons

Mr. Speaker, I have good news today. We have announced a whole bunch more homes being built in Canada. We have reduced taxes on the middle class and increased them on the one per cent, and those guys voted against it. The budget is the best in the G7, and we have a great record on reducing poverty. All these things are well in hand without the bad track record of the previous government.

Later today, we will have the final vote on the motion regarding the Senate amendment to Bill C-35, an act respecting early learning and child care in Canada. Tomorrow will be an allotted day.

When we return following the constituency weeks, we will resume second reading debate of Bill C-59, the fall economic statement implementation act, 2023. On Wednesday of the same week, we will continue debate on the motion relating to the Senate amendments to Bill C-29, an act to provide for the establishment of a national council for reconciliation. Tuesday, March 19, and Thursday, March 21, shall be allotted days.

Gabriel Ste-Marie Bloc Joliette, QC

Thank you very much, your answer was very clear. If I understood it correctly, you could tell the psychoeducators who are asking us today whether they are covered by Bill C-59 that it will depend on how Revenu Québec's guidelines are interpreted.

Gabriel Ste-Marie Bloc Joliette, QC

Thank you, Mr. Chair.

First of all, I'd like to welcome all the officials and thank them for being here. It's rather awkward that we've had to suspend our work for half an hour, as we have a lot of questions to ask them and we're running out of time. I would also like to thank them for the documents they have provided. The briefing book on Bill C-59, which is some 800 pages long, is very useful, as are the other documents they have provided us with and those provided by the analysts. It's high-quality work that helps us a great deal in our work.

Since I have a lot of questions to ask and I'm running out of time, I'm going to hurry, even though it's difficult for elected officials.

First of all, I'd like to know if there's been an update of the table you provided when you appeared before us on March 30, 2023, which showed a breakdown by year and by item of the $83 billion granted in the form of environmental tax credits. I had also asked you to provide a breakdown of these expenditures by province. If the data has changed from the table you provided, I would like you to send a written update to the committee, and I would be very grateful if you could provide a breakdown of these expenditures by province, if possible.

Lindsay Gwyer Director General, Legislation, Tax Legislation Division, Tax Policy Branch, Department of Finance

Thank you, Mr. Chair.

I'm Lindsay Gwyer, director general, legislation, at the Department of Finance. I'm here to talk about part 1. A number of my colleagues are also here to answer questions on part 1.

Part 1 contains the income tax measures in the bill. There are about 20 measures, so I won't be able to describe them all, but I'll just do a very high-level summary of several of the key ones.

First, there are a number of integrity measures in part 1. The first two relate to recommendations from the OECD's base erosion and profit shifting project. The first would limit the deductibility of net interest and financing expenses by certain corporations and trusts to a fixed ratio, which in most cases would be equal to 30% of tax EBITDA. The second OECD-related measure would implement rules to deal with hybrid mismatch arrangements, which are cross-border tax avoidance structures that exploit differences in income tax laws between two countries.

The bill contains other integrity measures, including an anti-avoidance rule to prevent private corporations from avoiding the refundable tax on passive income, as well as new rules to facilitate true intergenerational transfers, stemming from Bill C-208. Bill C-59 also includes a change to deny the deduction for dividends received by Canadian financial institutions on certain shares held as mark-to-market property, as well as changes to strengthen the general anti-avoidance rules. In addition, the bill will introduce a 2% tax on the net value of equity redemptions by certain Canadian corporations, trusts and partnerships whose equity is listed on a designated stock exchange.

The bill also includes a number of incentives and changes to tax credits. First there are two new refundable investment tax credits. The first would be available to taxable Canadian corporations on investments in eligible equipment used in carbon capture, utilization and storage projects. The second is another refundable credit available to taxable Canadian corporations and real estate investment trusts for investments in certain clean technology.

Other incentives and credits in part 1 of the bill include changes to the flow-through share rules to allow expenditures incurred in the exploration and development of all forms of lithium to qualify for the critical mineral exploration tax credit, changes to extend the phase-out by three years and to expand eligible activities for the reduced tax rates for zero-emission technology manufacturers, and changes to facilitate the creation of employee ownership trusts. Part 1 would also double the rural supplement for the Canada carbon rebate tax credit.

Those are the major measures in part 1. There are also a number of other more technical measures.

My colleagues and I would be happy to provide more detail on those or any of the measures I mentioned.

The Chair Liberal Peter Fonseca

I call this meeting to order.

Welcome to meeting number 130 of the House of Commons Standing Committee on Finance.

Pursuant to Standing Order 108(2), the committee is meeting only to discuss parts 1 to 4 of the subject matter of Bill C-59, 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 5 will be studied at a future meeting of the committee. Just for members' sakes, we're doing parts 1 to 4 today, and we'll do part 5 at a future meeting.

Today's meeting is taking place in a hybrid format, pursuant to Standing Order 15.1. 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 members. Although this room is equipped with a powerful audio system, feedback events can occur. These can be extremely harmful to interpreters, causing serious injuries. The most common cause of sound feedback is an earpiece worn too close to a microphone. Therefore, we ask all participants to exercise a high degree of caution when handling the earpieces, especially when your microphone or your neighbour's microphone is turned on. In order to prevent incidents and to safeguard the hearing health of the interpreters, I invite participants to ensure that they speak into the microphone into which their headset is plugged and avoid manipulating the earbuds by placing them on the table, away from the microphone, when they are not in use.

I will remind you that all comments should be addressed through the chair. Members in the room, if you wish to speak, raise your hand. Members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best we can, and we appreciate your patience and understanding in this regard.

Now I'd like to welcome our witnesses today for the study of the subject matter of Bill C-59, 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. We have a number of officials from the Department of Finance who are joining us. Please note that all of these individuals will not be able to sit at the table. If questions arise for those individuals who are not at the table, they will be called and will exchange seats with those who are at the table to answer those questions.

I request that all officials clearly state their name and department before answering a question, please.

At the table, we do have a few individuals who will give us some opening remarks, and those will be on the different parts that we will be looking into today. We have Lindsay Gwyer, who will be addressing part 1; James Greene, who will be addressing part 2; and Amanda Riddell, who will be addressing parts 3 and 4.