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

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, it is unfortunate. I know it might please the member opposite and maybe some of the Conservatives in the back room. They do not necessarily like hearing the truth, so they stand in here to try to disrupt debate, which is something I find really unfortunate. Quite frankly, I think I should be allowed to start from the beginning.

Having said that, with regard to the Conservative Party and its attitude, where is it getting its mandate from? Who are the people that the Conservatives are trying to please? Let there be no doubt: The Conservative House leadership team, headed by the leader of the Conservative Party and his attitude toward the chamber, is being driven by the far right. Maybe some of the Reformers do not quite get that, but that is the reality.

That is the reason why the leader of the Conservative Party was very comfortable with walking in to the trailer of a member of Diagolon. All of my colleagues know that it is a far right, scary group. If someone does a Google search on it, they will find out. That is who is giving the marching orders, in many ways, for members of the Conservative Party. We are starting to see more and more of that coming from them virtually every day.

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

Madam Speaker, I rise on a point of order. During my speech that preceded the speech of the hon. member, or at least that it is what we are considered in this place, it was made very clear that impugning an individual's motives required an apology and a withdrawal.

Out of respect for the Chair and the institution here, I gave exactly that, yet the member has now gone on at length with these tinfoil-hat-type conspiracies, impugning the good reputation of members of this place.

I would simply ask that there be a fair application of the rules of this place to all political parties.

[The Assistant Deputy Speaker, Carol Hughes]

I am sorry. I heard it but I did not see to whom it was directed or how it was directed, so I am going to look into that and come back to the House if need be.

I do want to remind members to try to keep their speech directly to the motion that is before the House, which is on the short title. I would remind the hon. parliamentary secretary of that as well.

The hon. parliamentary secretary is rising on the same point of order.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, I think that it is highly inappropriate for members to continue to stand up on a point of order on just a 10-minute speech. I do not know how many points of order there have been. It is very disruptive and does not contribute to debate.

What the member is referring to is when I made reference to the fact that one has the leadership within the Conservative Party actually meeting with organizations like Diagolon. I think that most Canadians would see that as a bad thing. That is where the leadership is getting the advice to do the type of things that it is doing today.

[An hon member]

Oh, oh!

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

The member should not be interrupting—

[The Assistant Deputy Speaker, Carol Hughes]

We will try to get the information as quickly as we can from the Hansard. We will get back to the House if need be.

The hon. Minister of Environment and Climate Change is rising on a point of order.

Bill C-59—Notice of Time Allocation Motion

[Steven Guilbeault, Liberal, Minister of Environment and Climate Change]

Madam Speaker, an agreement could not be reached under the provisions of Standing Orders 78(1) or 78(2) with respect to the report stage and third 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 allow a specific number of days or hours for consideration and disposal of proceedings at the said stages of the bill.

The House resumed consideration 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, as reported (with amendment) from the committee, and of Motion No. 1.

Report Stage

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

Madam Speaker, a good way to conclude this is to say that the leader of the Conservative Party is behaving like an individual who is standing on a corner and gives a child a dollar to buy a chocolate bar, but every time the child takes a step, he sticks out his foot and trips the child. Then he wonders why the child is not getting anywhere. It is because the leader of the Conservative Party continues to prevent things from happening.

It is a conscious decision by the Conservative Party to prevent legislation from passing. It then blames the government for the legislation's not passing, and therefore argues that the House is dysfunctional. What is dysfunctional is the Conservative-Reform party of Canada today. At the end of the day, the people the Conservatives are hurting are the people we all represent.

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

Madam Speaker, I will highlight the hypocrisy that exists on that side. When the member was interrupted by one of his cabinet ministers, a former convicted criminal, he did not complain about the interruption, yet he certainly does not like the interventions by members on the Conservative side, because the fact is that Liberal members and their cohorts in the NDP want an audience, not an opposition.

The facts are that Canadians are hurting and are demanding change and common sense, yet under the Liberals, there is untold pain and suffering from coast to coast to coast.

Instead of the member's going on at length in this place, saying many words without saying hardly anything of substance, I would ask him to reflect upon the serious job we have, which is to represent Canadians. Canadians are certainly hurting right now, and I would sure like the member to at least acknowledge that fact.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, we have acknowledged the needs of Canadians day in and day out. That is the reason we bring forward budgets that are a true reflection of what Canadians' expectations are. We recognize that.

I would suggest to the member opposite and to all the Reform-Conservatives over there that they need to look in a mirror and ask a question. They were also given a mandate, which was not just to filibuster and kill every piece of legislation in the House of Commons. They also have a responsibility, and there are consequences to the actions they take. I would not have a problem at all debating the member or any member of the Conservative Party in front of a public school classroom about the irresponsible behaviour of the Conservative Party and how that behaviour is hurting Canadians in every region of our country.

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

Madam Speaker, we have just seen the Minister of Environment announce that there will be a gag order on Bill C-59, an omnibus bill of nearly 550 pages with 60 different measures and 31 acts and regulations. It is the implementation bill for last year's budget and the fall economic statement.

However, the government delayed introducing it in the House so that we could study it in committee. The government has organized its time poorly and here we are in May sitting until midnight with limited time to debate a subject as important as this.

Does the hon. parliamentary secretary agree with me that the government manages its priorities very badly?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, absolutely not. The Conservatives cannot make filibustering motions to try to adjourn debate in the afternoon, nor concurrence motion after concurrence motion in order to avoid debate on government legislation, and then criticize the government for not being able to get its legislation debated. Members cannot continuously filibuster legislation and then ask the government why it has not passed bills.

We need to look at what the opposition is doing. If Conservatives continue to filibuster legislation and put up roadblocks to prevent it from passing, the government has a choice. It can either admit defeat or bring in time allocation. For the sake of providing services for Canadians and being there in a real and tangible way, we have made the decision to bring in time allocation to force legislation through in order to provide the resources that Canadians need in every region.

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

Madam Speaker, the Conservatives had the opportunity to move something substantive tonight. However, what they moved was a motion to delete “fall economic statement implementation act, 2023”, the six words of the short title, at a cost of $400,000 for the course of this evening. That is nearly half a million dollars in taxpayers' money running while they are debating. That is what they decided to move: a deletion of the short title. It is embarrassing and unbelievably wasteful.

I wanted to ask my colleague why the Conservatives love wasting money so much.