Bill C-59

Fall Economic Statement Implementation Act, 2023

An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023

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

Fall Economic Statement Implementation Act, 2023

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

Mr. Speaker, I want to highlight one of the aspects that is very important for us to take into consideration. The Minister of Finance and Deputy Prime Minister made reference to it in presenting the budget, and that was the degree to which we are getting direct foreign investment. If one takes a look at the first three quarters of last year, we were number one on a per capita basis in the G7 and, in fact, the G20. When a worldwide comparison is done, I believe we were somewhere around number three.

Foreign investment does matter. It creates all forms of jobs and opportunities. I wonder whether the member could provide some thoughts on that particular issue.

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

Mr. Speaker, I appreciate the member opposite.

I would suggest that what the NDP believes in is stimulating investment here at home. This is something we believe very strongly in. It is the partnering of public investment and private investment. This is something we have lost sight of over the last few decades. The Federation of Canadian Municipalities has pointed out that the infrastructure deficit in this country is now approaching a quarter of a trillion dollars, for sewage plants, bridges, roads that need to be reconstructed, schools and hospitals.

After the Second World War, there was a fair taxation system that asked the rich to pay their fair share and asked the profitable corporations to pay a certain level of tax. As a result of that, we were able to build a society that had massive infrastructure and allowed us to build schools, roads and hospitals. We have moved away from that. It was eroded by Conservatives, including the Harper Conservatives, and was unfortunately not picked up by the Liberals. After the 2015 election, they should have put in place a fair tax system that would have allowed for the public investments, partnering with private investments, to have allowed our economy to really take off.

These are all reasons why an NDP government would be the best choice for Canada.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, there is much in my colleague from New Westminster—Burnaby's speech that I want to support, but I was particularly drawn to his reminiscences, believe it or not, of a better time that I think of quite often: the degree of co-operation that happened in this place during COVID.

I distinctly remember the work we did. There were all of the finance critics from every party, including me for the Green Party and the hon. member for New Westminster—Burnaby representing the NDP as finance critic. The member for Carleton was, at the time, finance critic, but he is doing something different now.

We all met on a regular basis with a former colleague, the hon. Bill Morneau, who was minister of finance. We met every other week. We brought news from the ground of what was not working for our businesses locally, and what was working. As we could not vote in this place, every bit of the $80 billion in emergency spending to help Canadians was passed unanimously every time.

I want to stop for a moment and thank all of our colleagues for the ability to pull together to help Canadians in crisis. Please, let us do it again.

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

Mr. Speaker, I thank my colleague, who is a good friend, for raising that point.

It is true that during COVID we saw the best of parliamentarianism in this country. All members of Parliament were working together. We will recall that we did not have the virtual Parliament to start. We had a scant number of MPs in the House because of social distancing. At the same time, we were able to agree on a variety of supports that made a big difference in the lives of Canadians.

I would suggest, and I think my colleague would agree with me, that the climate crisis now calls upon that same level of co-operation. We need to work together. There are the wildfires in northern Canada. The fire season is starting earlier than ever. In British Columbia, we lived through the heat dome that killed 600 people, including 60 people in my riding. Atmospheric rivers have cut off portions of Canada from other portions of Canada. There is absolutely no doubt that the climate crisis is at hand. We all need to work together, and I would hope that we would find a renewed sense of co-operation among all members of Parliament to combat this crisis that requires a degree of co-operation never seen before in our country's history.

[Frank Caputo, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, it is always a pleasure to rise on behalf of the people of Kamloops—Thompson—Cariboo.

It is interesting to hear my hon. colleague speak, because even during question period today, his leader rose and talked about greedy CEOs. He got quite a reaction, because it is fairly well known that, despite the fact that the NDP leader constantly speaks about Loblaw and the connections that he makes, his brother is lobbying on behalf of Metro.

NDP members, particularly their leader, take shot after shot at the Liberal Party. Then what do they do? They vote with the Liberals time after time. They have not seen a single solitary thing, in my view, that the Liberals themselves have not taken credit for. At what point will the member start providing the opposition that I have seen him provide in the House to the Liberals, in the form of tangible opposition, and by that I mean voting against them when they are providing poor governance?

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

Mr. Speaker, I think the member errs in one respect. I go to Kamloops quite often, and I know that the people of Kamloops now are benefiting from the NDP's dental care program. In fact the member should be talking with his constituents. There are hundreds of them who have already received the support in Kamloops, which is wonderful.

Now, of course, I would hope that the member would vote for the NDP pharmacare plan, because there are about 18,000 people in his riding who would benefit from the diabetes medication and about 25,000 people in his riding who would benefit from the contraception.

However, when the member says that we vote with the Liberals, I think it is actually the contrary: When we are talking about pharmacare, dental care and anti-scab legislation, the Liberals have been forced to vote with us, and I think that is a very good thing.

[Lori Idlout, NDP, Nunavut, NU]

Uqaqtittiji, my colleague's intervention was excellent.

I will ask the member about the Competition Act and Bill C-59, particularly because it is the NDP that is the only party that is fighting corporate greed. I would like to give a specific example.

I am a member of the indigenous and northern affairs committee, and it was my motion that got the North West Company, a grocery company that is subsidized by the Liberal government, to offer subsidies to alleviate poverty. However, instead of using the subsidy to alleviate poverty, the North West Company is helping to feed corporate greed. For example, the CEO, Dan McConnell, would not answer my questions regarding his salary, his benefits or the bonuses that he gets. Instead, he said that he would give me the responses in written form, which he has now provided. That CEO, in 2023, earned $765,000 and in the same year received a bonus of just over $1 million.

How would the Competition Act and Bill C-59 help to address that kind of corporate greed?

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

Mr. Speaker, I want to thank my colleague, the member for Nunavut, who is an extraordinary voice for Nunavut, for northern Canada and for indigenous peoples. She brings so much to the floor of the House of Commons and has been such a remarkable fighter for her constituents and for people right across this land.

It is appalling to me to hear these figures. The member is talking about nearly $1.8 million dollars paid in salary and bonuses to the CEO of a company that has been part of what can only be described as massive food price gouging in northern Canada and Nunavut. I have been to Nunavut, and I have seen the prices, which are unbelievable for any regular family to try to afford to put food on the table. If it were not for country food, people simply would not be able to survive. This is why it is so important to have NDP MPs in the House, and ultimately to have an NDP government.

Simply, Liberals and Conservatives will never take on the corporate CEOs who gouge Canadians. NDP MPs and an NDP government will.

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

Mr. Speaker, it is always a pleasure to be able to address the issue of budgetary measures, because I like to think there is a lot of contrast, a big difference, between Conservatives and Liberals. Maybe one of the ways I can highlight the difference is to talk about some of the things that a caring government does.

I can say that, virtually from the very beginning, in 2015, the government in essence recognized the valuable role Canada's middle class and those people aspiring to be a part of it play in giving us a healthier and stronger economy. All the way through there were tax breaks to the middle class, enhancements to child care programs and increases to the guaranteed income supplement, programs that literally lifted hundreds of thousands of people out of poverty. Carried into a worldwide pandemic, we were developing programs to support Canadians at a time when the government may have needed to step up.

Fast-forward to what we see today. I believe, when we do a comparison, we get a really good contrast in terms of what type of government we have and what type of government we would see if, heaven forbid, Conservatives were to win the next election. I think of the types of programs and investments we have put in that demonstrate very clearly that we want to have an economy that works for all Canadians. We recognize the importance of fairness. Think of generation X and the millennials, and the issues they have to face.

The budget we are talking about today is really and truly a reflection of what the values of Canadians are and what their expectations are of the national government. We know this because the Deputy Prime Minister and Minister of Finance, the Prime Minister and my colleagues within caucus who work within their constituencies are bringing the feedback that is so critically important here to Ottawa so that the budget reflects the interests of the constituents we represent. I do not say that lightly, because I believe it is a reflection of what we have been told as parliamentarians. That is why what we see in this budget and have seen over the last couple of years is serious investments in people in a very real and tangible way.

It is interesting to look at who it is the leader of the Conservative Party is talking to. Contrast that with who it is the Prime Minister is talking to. I have made reference to some of the events that have taken place in my home province of Manitoba. Just last week, the Prime Minister was in The Maples in Winnipeg. We were talking about the budget and how, in this budget, we would be spending money to support 400,000-plus children in all regions of the country by ensuring there would be a nutritional program for children who need food when they are going into the classroom.

We were at a school with the provincial minister of education, who was a former principal, from what I understand. It was a great opportunity to be in front of children, child care providers, teachers and educators to see first-hand the benefits of providing nutritional foods. The Province of Manitoba also saw the value of the program and is investing, I believe, about $30 million itself.

What our constituents want to see is governments working together, which is what we saw just last week with respect to the national food program for children. It is hard for a child to learn on an empty stomach. It is an issue that has existed for many years. When I was first elected in 1988, as I made reference to in my comments, Sharon Carstairs was talking, as a former teacher herself, about how difficult it was for a child to learn on an empty stomach.

The government is actually delivering on a program that is going to have a real, tangible impact. The Prime Minister is working with the provincial minister, highlighting and amplifying how valuable that program is going to be. We listen to the Conservatives, and they do not support the program. It is unfortunate, but it is not the only thing.

We invested $198 billion over 10 years in health care for future generations. I would tell every member of Parliament to talk to their constituents. We love our health care system. This is a commitment from the Prime Minister and the government to ensure that we have quality health care. We talk about mental health care and long-term health care. We talk about all sorts of needs to be met, with family doctors and so forth, and this is materializing in a substantive way.

It was not that long ago, a number of months ago, that the Prime Minister was at the Grace hospital with the premier of the province, who was saying how Ottawa's financial contributions were going to make a tangible difference in terms of staffing, whether doctors or nurses, as well as wait times and so forth. As a government, not only did we commit the billions of dollars to preserve the health care that Canadians love, but we also made health care agreements with the different provinces and territories. There has to be a higher sense of financial accountability. Canadians have an expectation. Again, the Conservative Party opposes it; Conservatives believe that Ottawa does not need to play a role in health care. We saw that during the Harper years, when the current leader was part of that cabinet.

Last year, the Prime Minister was with me in Tyndall Park, where—

[The Deputy Speaker, Chris d'Entremont]

The member for Mégantic—L'Érable on a point of order.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Speaker, I thank my colleague for allowing me to make this little special request to the members of the House.

I am seeking the unanimous consent of the House to change the votes from the members for Calgary Midnapore, Perth—Wellington and King—Vaughan, which were votes against the amendment to Motion No. 39, to votes in favour.

I would also ask to add a vote against the main motion from the member for Perth—Wellington.

[The Deputy Speaker, Chris d'Entremont]

I have received notice from all recognized parties that they are in agreement with this request.

Is it agreed?

[Some hon. members]

Agreed.

[The Deputy Speaker, Chris d'Entremont]

It is agreed.

The hon. parliamentary secretary to the government House leader.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, we should think of the progressive programs that the government has put in place over the years, including in the current budget, to support Canadians, as well as why the Conservative Party continuously and consistently votes against those programs.

I referred to health care and $10-a-day child care. In Tyndall Park, the Prime Minister talked with child care workers about the benefits of that particular program. All provinces are on board, working with the federal government.

We can talk about housing. The Prime Minister, again not that long ago, was in Manitoba with not only the premier but also the mayor of Winnipeg. They talked about investing hundreds of millions of dollars, recognizing the important role that the government plays in providing housing. The leader of the Conservative Party was minister of housing; we barely need two hands to count the number of houses that were built when he was in that role. He built six units.

At the end of the day, as a government, we are working on building a substantial number of houses. Over the next number of years, it is going to total close to four million homes. The Conservatives will laugh at the premiers, the mayors and the other municipalities that are working with the government, but at the end of the day—