Bill C-59 (Historical)

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.

Motions in Amendment

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Madam Speaker, I am proud to represent the heart of the Canadian energy sector, about 2.5% of Canada's economy, which contributes to the equalization that benefits the member's province specifically.

Let me suggest this: A prosperous Canada benefits everybody. For a member of a party that claims to stand up for jurisdictional rights and responsibilities within this country, I would suggest his party adopt an attitude that encourages prosperity and economic advancement, as opposed to trying to bankrupt part of the country, which would have not only a devastating effect on the people I represent but the entire country.

Instead of punishing people, let us build a country that actually builds a prosperous future for all Canadians. That is how we make a rich middle class in this country. It is regrettable that we have a coalition among three left-wing parties that refuse to do so.

[The Assistant Deputy Speaker, Carol Hughes]

I just want to again apologize.

I thought it was a Conservative member who had risen in the corner. I wanted to make sure I had respected party parity. I am sorry.

I just want to reiterate to members to stay within the motion. I know it is large, but please mention the motion every once in a while. That way we can avoid points of order.

Resuming debate, the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons.

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

Madam Speaker, I can assure you I will remain very relevant. In fact, the person who moved the motion—

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Madam Speaker, I rise on a point of order. I believe if you look deep into the recesses of Bosc and Gagnon, it says that if a member gets over 10 million interventions, they are cut off.

[The Assistant Deputy Speaker, Carol Hughes]

I know that is not a point of order. I think the hon. member should mention a standing order next time.

The hon. parliamentary secretary to the government House leader, your time starts now.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, it is truly amazing. We have the Conservative Party of Canada, which many would call the Reform Party, because it is, for all intents and purposes, more the Reform Party than it is the Conservative Party, and I will try to explain to those who might be attempting to follow the debate.

We are talking about the fall economic statement, which is something that was introduced late last year. The Conservative member who moved this motion is criticizing the government for taking so long to get this legislation passed, which is truly amazing, because it is the Conservative Party that is preventing the legislation from passing by filibustering the legislation, and today is an excellent example.

What is the member actually moving? He is moving a motion to delete the short title of the legislation. What is the short title of the legislation? It is the “Fall Economic Statement Implementation Act, 2023”. This is a relatively large piece of legislation, and this member, who I hope did not require AI assistance this time around, comes up with an amendment to delete that short title. Then he says that not doing this, not passing this legislation, has a consequence. Well, the member is somewhat right, even though he does not admit that the Conservative Party, or the Reformers in the Conservative Party, are the problem in terms of why it is not passing, and many of them are rural members of Parliament.

Within this legislation is action that would double the rural top-up for the carbon rebate. This means that the Reformers across the way, the Conservative Party, are in fact keeping money away from rural communities in Canada, because they made the decision that they do not want this legislation to pass. To amplify that, they bring in a silly motion meant for one purpose, which is purely obstruction.

Then the member asks who the Liberals are talking to, and he is critical of some of my caucus colleagues. Let me frame it in a different way. After all, the member himself said, “The buck stops with the one who is in charge”, implying the Prime Minister. Let me reverse this on the member opposite. He is trying to ask who we are talking to versus who the Conservatives are talking to, so let us talk about the leaders.

The Prime Minister of Canada came to Winnipeg one day, and we were talking about child care. He came to Stanley Knowles School in my riding, and we talked about the importance of $10-a-day child care. What is wrong with talking to child care workers?

The next time the Prime Minister came to Winnipeg, we went to the Grace Hospital. It was the premier, the provincial minister of health, the Prime Minister and the federal Minister of Health. They talked about the $200-billion transfer for a generation of providing services in health care on issues such as mental health, family doctors and so forth. We were surrounded by the real VIPs, which were the health care workers who were there. These are the people we are listening to.

In fact, the last time the Prime Minister came to Winnipeg, we met again with the premier and the provincial minister of housing. We also had the mayor of Winnipeg, and along with the Prime Minister was the Minister of Housing. We talked about the issue of housing and, again, we had stakeholders there.

When we think of the budget or the fall economic statement, what we will see is that they are a reflection of what Canadians are telling us.

Whether it is the member for Avalon, me or the member from Surrey, we take the ideas and the thoughts that constituents and Canadians tell us and bring them here to Ottawa. The budget and the fall economic statement are a reflection of Canadian values and what they are—

[The Assistant Deputy Speaker, Carol Hughes]

I have a point of order from the hon. member for Battle River—Crowfoot.

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Madam Speaker, while I am concerned that no other Liberal seems to be allowed to speak, I would ask for a quorum call. On an issue as important as this, I would hope we could find quorum in this place.

[The Assistant Deputy Speaker, Carol Hughes]

I am sure the hon. member already knows we cannot do quorum calls during these debates. This is something that has been stated before.

The hon. member for New Westminster—Burnaby also has a point of order.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Madam Speaker, we are debating six words, “Fall Economic Statement Implementation Act, 2023,” the short title. The Conservatives moved, at a cost now of $70,000 to Canadian taxpayers, to delete those six words. That is what the Conservatives have put on the table. It is unbelievable.

I would ask my colleague from Winnipeg North, through you, Madam Speaker, to stick to those six words the Conservatives want to spend $70,000 to delete.

[The Assistant Deputy Speaker, Carol Hughes]

The hon. member did mention the short title.

I will also note that a previous Speaker, on March 21, 2023, indicated that there is some latitude. However, members should be making their comments relevant to the motion that is before the House and should also avoid the repetition of points that have already been made. I just want to say there is some latitude, but I hope the members will reference the title from time to time.

The hon. parliamentary secretary has the floor.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, before the interruption, I was talking about how Liberal members are out connecting with Canadians and reporting back.

When we think of the amendment being proposed today, it is absolutely ridiculous. I believe there are very few outside of the Reformers who would actually support such a silly amendment, because they would understand it is nothing more than a filibuster or an obstruction tactic from the Conservatives.

I was reflecting on how the Prime Minister and members of the Liberal caucus do their consulting. Who do the Conservative Party members consult with? Who gave them the idea to continue the filibustering we are seeing? I have a fairly good sense. It is the MAGA right, the far right element in the Conservative Party today, the individual who wants to demonstrate, even though it is not true, that the institutions we participate in are dysfunctional. The Conservatives bring in amendments of this nature and then say the government cannot pass legislation, when they are the ones who are going out of their way to prevent legislation from passing.

This is a Donald Trump type of tactic from the MAGA right and that has seeped into the leader of the Conservative Party today. It is that far right element trying to take away the validity of what takes place on the floor of the House of Commons.

I pointed out who the Prime Minister is meeting with, but who is giving advice to the Conservative leader? Do we remember Diagolon? It is a pretty far right group of people, and we have the leader of—

[The Assistant Deputy Speaker, Carol Hughes]

We have another point of order from the hon. member for Battle River—Crowfoot.

Can he maybe state the standing order he is rising on first?

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Madam Speaker, when it comes to the quorum call, certainly the pretense under which the bill appears to debated, the unconstitutionality—

[The Assistant Deputy Speaker, Carol Hughes]

I want to remind members that we are not doing quorum calls, and I will not entertain any further points of order if the hon. member continues with regard to that.

If the hon. member for Battle River—Crowfoot has other questions on that, I would say that he can try to raise them during questions and comments, but, again, there are no quorum calls during this debate.

The hon. parliamentary secretary has the floor.