Debates of Nov. 6th, 2018

Bill C-86—Time Allocation Motion

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

In my opinion the yeas have it.

And five or more members having risen:

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

Vote #928

Budget Implementation Act, 2018, No. 2

[The Speaker, Liberal, Geoff Regan]

I declare the motion carried.

The House resumed from November 2 consideration of the motion that Bill C-86, A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures, be read the second time and referred to a committee, and of the amendment.

Second Reading

[The Speaker, Liberal, Geoff Regan]

I wish to inform the House that because of the proceedings on the time allocation motion, government orders will be extended by 30 minutes.

There are five minutes remaining in questions and comments following the speech of the hon. member for Edmonton West.

The hon. parliamentary secretary to the government House leader.

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

Mr. Speaker, it is always a wonderful opportunity to ask a question related to the budget implementation act.

Over the last few years, we have had consecutive budgets that have contained a lot of policy initiatives for the benefit of Canada's middle class and those aspiring to be part of it. What I find interesting is that the Harper Conservatives across the way seem to be quite content on being critical of all aspects of this government's budget priorities, aspects that include things such as tax breaks and enhancements to child benefits and the guaranteed income supplement. There are a lot of positive things in the budget.

One thing I personally recognize in this budget implementation act deals with increasing the annual allotments for the Canada child benefit. Could my colleague provide his thoughts on the importance of the increase to the Canada child benefit?

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Speaker, if anyone is sitting at home wondering what we are doing, this is a continuation from my speech on Friday.

The basis of my speech was built around an Athenian philosopher named Demosthenes. He is famous for a quote that says, “The easiest thing in the world is self-deceit; for every man believes what he wishes, though the reality is often different.” This is very much the world the Liberals are living in, a world of self-deceit.

Earlier we heard the finance minister, when discussing bringing closure or time allocation to the budget bill, talk about all the wonderful things the Liberals were doing for seniors, including the GIS.

I have a report from the Library of Parliament that shows, under the Liberal government, all three measures: the low income measure after tax; the low income cutoffs after tax, 1992 base; the market measure, 2011 base. Under every measure, seniors are worse off now than they were in the past.

The government talks about the middle class. The Parliamentary Budget Officer put out a report recently that showed the middle class income growth was stagnating. The government is living in a world of self-deceit.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, it is so important for us as members of political parties, as people in the world in general, to be willing to challenge our assumptions, to be self-critical, to ensure we are not subject to self-deception.

The question we have asked the finance minister repeatedly is whether the Liberals have a timeline in mind to balance the budget.

Members will recall from the last election a Liberal promise to have the budget balanced in the final year of their majority mandate, the 2018-19 fiscal year. Now there is absolutely no timeline set on balancing the budget. If I remember correctly, even the Kathleen Wynne Ontario Liberals at least had a theoretical date in mind for when they said they would balance the budget, however much skepticism there may have been about that date.

Could my colleague reflect on the problem and the inappropriateness of having absolutely no plan to ever balance the budget?

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Speaker, the member brings up a great point about the government's refusal to even address this.

If we look at the famous Liberal mandate tracker, it actually shows balancing the budget, which was promised by 2019, is in progress with difficulty. The difficulty we see is that there is no end in sight to the Liberal debt being added on. The Parliamentary Budget Officer is forecasting something like $40 billion a year, just in interest payments. We are going to be paying foreign nationals and rich Bay Street bankers to borrow money, because the government cannot get its house in order on spending.

Every province across the country, with tax-and-spend governments like the NDP in Alberta and the Wynne Liberals, can commit to when they will actually balance the budget. With the the federal Liberal government, it is dead silence, talking points and further self-deceit.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Mr. Speaker, I would first like to inform you that I will be splitting my time with the hon. member for Guelph.

I am pleased to rise today to speak to Bill C-86, the budget implementation act, 2018, no. 2. I want to talk about what I consider one of the most important aspects of the bill, which is the environment and climate action.

Canadians know that pollution has a price. Pollution has an impact on the health of our communities, the strength of our economy and the well-being of Canadians. The evidence is clear. There were floods in my region, the Outaouais, and more specifically in my riding of Hull—Aylmer and the neighbouring riding of Gatineau. Forest fires are causing more and more devastation, and storms are becoming increasingly violent. I repeat: six weeks ago, six tornados hit my riding, and they caused a lot of damage. This was unprecedented.

Climate change is real, and its costs are high. Studies show that climate change is expected to cost our economy $5 billion a year by 2020. Canadians want polluters to pay for this. This is the right thing to do for our children and grandchildren, which is why our government has promised action.

Putting a price a pollution is an effective way to reduce greenhouse gas emissions and help Canada meet its international commitments with regard to this extremely important issue. This means that the price of goods and services will reflect the amount of greenhouse gases that are associated with them. The more we pollute, the more we pay. It is simple. The less we pollute, the more we benefit.

Our government sincerely believes that it is important for business owners and businesses to make more money, but if they pollute, they have to pay. That is all. It is important that our economy better reflect the true cost of pollution and that is what this carbon pricing will do.

It is in that context that the federal government developed the pan-Canadian framework on clean growth and climate change together with the provinces and territories and in consultation with indigenous peoples.

This plan includes a pan-Canadian approach to pricing carbon pollution and measures to reduce emissions across all sectors of the economy. It gives the provinces and territories the flexibility they need to use the system that suits them best, either a price-based system, or a cap and trade system, or a combination of both.

Our government has also committed to implementing a backstop in every province and territory requesting one, as well as in any province that does not adopt a regime consistent with the pan-Canadian framework. I would remind members that the provinces and territories had until September 1 of this year to announce their intentions. Our government was very transparent. We stated from the outset that the federal backstop would have two components. First, there is a charge on fossil fuels such as gas, diesel, natural gas or oil. Second, there is an output-based pricing system for large industrial emitters.

I am very pleased that several provinces have developed their own pricing system for carbon pollution. As Canadians, all of us must take action to reduce pollution, and these governments will be able to do so with a plan that is in keeping with their regional reality. To maintain the pan-Canadian approach to pricing carbon pollution, the federal carbon pollution pricing system will apply as planned in the other provinces and territories.

We recently announced the next steps in our environmental action plan. Some provinces have voluntarily decided to adopt the federal system to varying degrees and work hand in hand with Ottawa. Governments that did not implement the necessary measures will have to comply with the federal system. That is unfortunate, but we made our intentions perfectly clear to the provinces.

Let me be quite clear: in all cases, direct proceeds from the federal price on pollution will flow back to the provinces and territories in which they were collected. Let me repeat that: in all cases, direct proceeds from the federal price on pollution will flow back to the provinces and territories in which they were collected. I really want to emphasize that, because putting a price on carbon pollution is not about filling the federal government's coffers; it is about encouraging cleaner growth and a more sustainable future across this great land.

Provincial and territorial governments that joined the fight against climate change by voluntarily adopting the federal system will receive the direct proceeds and can use that money as they wish. For the four provinces that chose not to put a price on pollution, the federal government will put most of the direct proceeds back in the pockets of families in those provinces.

The government is also in the process of developing options for direct support to sectors of the economy that will be particularly affected in backstop jurisdictions. That includes small and medium-sized businesses, municipalities, non-profit organizations and indigenous communities.

Direct proceeds from the carbon price collected in New Brunswick will remain in New Brunswick. Direct proceeds collected in Ontario will remain in Ontario. Direct proceeds collected in Manitoba will remain in Manitoba, and direct proceeds collected in Saskatchewan will remain, as one might guess, in Saskatchewan. The climate action initiative payments made to individuals and families will help offset the increased costs associated with the price on pollution and will reward families that make cleaner, more sustainable consumer choices.

Since residents of small communities and rural regions have higher energy requirements and more limited access to alternative transportation options, they will receive a supplement to the base amount of 10%. Implementing this formula requires legislative changes.

Bill C-86, the budget implementation act, 2018, no. 2, would give us the tools we need to implement this important initiative. The bill proposes the changes required to enable the Canada Revenue Agency to offer this rebate to eligible taxpayers when they file their income tax returns.

In closing, we must all do our part to reduce greenhouse gas emissions. The pricing of carbon pollution is the most effective and efficient means of achieving that. For that reason, I am pledging my support for this bill and these measures, which I truly and very enthusiastically support.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, the member, in his remarks, spoke a fair bit about the government's environmental policy, or, we might say, its tax policy masquerading itself as environmental policy, yet the government also has a policy of giving a significant break in terms of the carbon tax to Canada's largest emitters. People in my riding certainly have a hard time understanding the differential treatment of large emitters and everyday consumers, who use a relatively small amount of energy resources in their daily lives but still very much need those resources to take the kids to soccer practice, pick up groceries and heat their homes.

I wonder if the member could share, from his perspective, why the government is providing special treatment for large emitters yet is putting the brunt of the pressure on everyday consumers, moms and dads, and small businesses in my riding and his.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Mr. Speaker, I thank my colleague from Alberta for his question. Before answering, I would like to look at the premise for his question.

First, he said that this is a tax and that the revenues will go into government coffers. That is not at all the case.

What we announced is very clear and I mentioned it in my speech. I know that the hon. member listened carefully to my comments. I clearly explained, as is set out in black and white in Bill C-86, budget implementation act, 2018, no. 2, that all revenues from pollution pricing will be returned to the provinces and territories where they were collected.

I am sorry for taking a little too much time to answer the question, but I guarantee the member that it is not a tax. It is a pricing measure that we will subsequently return to the province or territory where the tax was applied.

[William Amos, Liberal, Pontiac, QC]

Mr. Speaker, I greatly appreciate this opportunity to debate with my colleague from the Outaouais about his thoughts on the federal budget. He is very good at expressing just how progressive his riding of Hull—Aylmer really is. It is quite clear that his constituents support putting a price on pollution, and I appreciate how articulate he is in communicating our government's perspective.

I want to ask the member a question I often hear when I am going door to door in the Plateau and in northern Aylmer, which are areas I represent in Pontiac. Many of my constituents support the historic investments in infrastructure, in particular with respect to light rail in western Gatineau, because we need to reduce greenhouse gases and make our public transportation services more affordable and more effective.

Can the member talk about how these historic investments in infrastructure in Gatineau are making it possible to look at light rail in the region?

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Mr. Speaker, I want to start by apologizing to my esteemed colleague from Pontiac. He is doing a fabulous job of representing the people of Pontiac, Quebec, the riding next to mine. In my speech, I mentioned the tornado and how it affected Hull and Aylmer, but I forgot to mention Pontiac, which also suffered serious damage. I want to recognize the member for Pontiac for all the work he has done to help his constituents.

I would like to thank him for his question about investment in infrastructure. My colleague and I have been working side by side on an innovative project that will directly reduce our region's greenhouse gas emissions. I am referring to the plans to bring light rail to Gatineau, especially the west end in phase one. The train will run right through his riding.

All this is possible thanks to our government's green investments, the last budget's historic investments in infrastructure. For these environmental reasons, and for the sake of our constituents' well-being, I am delighted to be working with my colleague on this project and I want to commend him for his leadership.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, to have an economy that works for everyone, we need a tax system that is fair and we need all Canadians to pay their fair share. After all, the taxes we pay build the infrastructure that gets our goods to market. Taxes help create good, well-paying jobs and they fund the programs and services that enable Canadians to have a decent standard of living and an equal chance to succeed.

For the past three years, tax fairness has been a cornerstone of the government's promise to grow a stronger middle class. To that end, one of the government's first actions was to cut taxes for the middle class and to raise them on the top 1%. This measure is leaving more than nine million Canadians with more money in their pockets.

The government has also acted to support small businesses in Canada. They are, after all, the key driver of our economy, accounting for 70% of all private sector jobs. To enable small businesses in Canada to reinvest in their companies and create jobs, the government reduced the small business tax rate from 10.5% to 10% this year. As of January 2019, this rate will be further reduced to just 9%. Once this reduction to the rate of 9% is fully in effect, the average Canadian small business will have an additional $1,600 per year to reinvest in the business and to help the Canadian economy to thrive even further.

As our economy grows, we need to ensure that the benefits of that growth are felt by more and more people. This means ensuring that more people have the opportunity to work and to earn a good living from that work. That is why the bill we are considering today takes a major step toward fulfilling the government's commitment to ensure that all Canadians receive the tax benefits and credits to which they are entitled, so that they and their families have the resources they need to succeed.

In budget 2018, the government introduced the new Canada workers benefit, CWB. This is a strengthened version of the working income tax benefit and will put more money in the pockets of low-income workers, giving people a little extra help they need as they transition to work. The new CWB will encourage more people to join the workforce and will offer help to more than two million Canadians who are working hard to join the middle class. It will also raise some 70,000 Canadians out of poverty by 2020.

Starting in 2019, the government proposes to make it easier for people to access the benefit they have earned by enabling the Canada Revenue Agency to calculate the CWB for any tax filer who has not claimed it. That would make the process automatic. Allowing the CRA to automatically provide the benefit to eligible filers would be especially helpful to people with reduced mobility, people who live far from service locations and people without Internet access. With the passage of the bill, an estimated 300,000 additional low-income workers would receive the new Canada workers benefit for the 2019 tax year.

By improving access to the Canada workers benefit and providing for more generous benefits under the program through the first Budget Implementation Act of 2018, the government proposes to invest almost $1 billion more in new funding for this benefit in 2019, compared to the year before. This will be a very good investment since we estimate that the new and enhanced Canada workers benefit will directly benefit more than two million working Canadians. It can then contribute to our economy even further.

Mr. Speaker, another important part of the bill is the measures it contains to improve tax fairness in Canada. In this budget implementation act, no. 2, the government is following through on a commitment to allow charities full ability to pursue their charitable purposes by engaging in non-partisan political activities and the development of public policy. Charities play a key role in Canadian society and provide a valuable service to all Canadians. They also provide perspectives that enrich public debate and help shape the formulation of public policy.

Under these proposed changes, charities would have a much broader scope to engage in public policy advocacy that advances their charitable aims. The proposed amendments accomplish this by removing the existing limits on non-partisan political activities from the Income Tax Act, including quantitative limits.

In the first Budget Implementation Act of 2018, the government stood up for our men and women in uniform. We extended tax relief automatically to all members of the Canadian Armed Forces and police officers deployed on international operational missions, determined by the Minister of National Defence, regardless of the level of risk associated with their mission.

In recent years, Canadian police officers have increasingly been deployed on international missions that are independent of missions overseen by the Department of National Defence. Accordingly, in this act, the government is now proposing to allow the Minister of Public Safety and Emergency Preparedness to determine international police missions that would qualify for the tax deduction for Canadian Armed Forces members and police officers. Allowing international police missions to qualify for the tax deduction would ensure the same tax treatment for Canadian police officers deployed on international peace and stability missions as for those who are internationally deployed on missions determined by the Minister of National Defence.

I would now like to talk about other measures from this bill that would improve tax fairness by ensuring that everyone pays their fair share. The bill contains an amendment to the Income Tax Act that would preserve the integrity of Canada's tax base by ensuring that non-residents cannot use partnerships or trusts for tax planning techniques to inappropriately extract profits from their Canadian subsidiaries free of Canadian withholding tax. No one should be able to inappropriately extract profits from Canadian corporations tax-free and move the money offshore.

It is also known that taxpayers have engaged in aggressive tax planning in which they artificially combine their investments or activities with those of other taxpayers into one offshore entity, in order to inappropriately reduce or defer paying Canadian income tax. Taxpayers who use such tax planning strategies seek to artificially avoid having legal control of their investments or activities or to artificially satisfy a requirement for a minimum number of employees. This act proposes two new amendments that close two separate loopholes and ensure that the taxpayers' investment income is reported accurately. By restricting this tax planning, we would ensure that everyone gets appropriately taxed on their investment income and activities and contributes to Canadian society.

These amendments are directed at aggressive tax planning used to avoid or defer Canadian tax. Their aim is not to interfere with legitimate investments, but to prevent unjustified tax avoidance and to clarify the intended policy for both taxpayers and tax practitioners.

Finally, tax fairness is a key pillar of a growing economy. It instills confidence in Canadians and helps to create opportunities for everyone. The proposed tax measures contained in this legislation are important steps in the government's plan for achieving tax fairness and ensuring opportunities for all Canadians to succeed. I urge my honourable colleagues in this House to support this bill.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, during the time allocation debate, I expressed concerns about the fact that I would not be able to have a chance to speak to this budget implementation act.

What I would like to ask my colleague is this. This is a big bill. It is a complex bill and in division 4, section 19 there is an addition to reserve policy. Can my colleague tell us with regard to that addition to reserve policy what is being changed from what it was previously and why that change is necessary?

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, we have heard comments from the other side that this is too big a bill to be debated and that maybe we are doing too much for Canadians in this bill. My speech was focusing on tax fairness and on the working tax benefit, which is something I am sure the NDP would be very interested in and want to explore further.

I am limiting my comments today to tax fairness and tax planning, in order to help raise people out of poverty into the middle class.

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

Mr. Speaker, I would like to read a quote from Teamsters Canada:

For now, the government must continue their efforts to crack down on tax evasion. Teamsters also urge the government to eliminate the tax credit on stock options.... The write-off disproportionately benefits Canada's richest CEOs, who already earn over 193 times the average worker's salary.

I am interested in the member's comments on why the tax credit on stock options was not included in the budget. We have been asking for quite some time to have this eliminated.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, it is great to have the member for Kootenay—Columbia in the House. He was in China a few days ago and has been travelling extensively on behalf of the House. I would like to thank him for the good work that he is doing.

The bill in front of us addresses a lot of our tax issues. We will need to look at a comprehensive tax review of all of Canada's tax laws in the future. This 800-page document does not address every tax eventuality that needs to be addressed.

I am sure that we will continue to work with Teamsters and with labour to make tax fairness an ongoing discussion in future debates around taxes.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, my colleague, our shadow minister for indigenous affairs, just asked an important specific question about measures in the budget dealing with indigenous issues. That was obviously not the focus of my colleague's speech, but it is part of the bill that we are debating today.

The member for Guelph did not answer that question. I want to give him a chance to answer that question again and if he does not want to answer this specific question, it might be worth asking if he has read this 800-page bill and if he is familiar with the indigenous provisions in it.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, I am very proud of the investments that Canada is making in our indigenous communities. We have made investments in mental health and in education. We have also made water advisory investments with indigenous peoples. We are working side by side with indigenous peoples and making the appropriate investments as we go forward with them. We are working on the new relationship recognizing the rights that indigenous people have and reflecting those in our budget documents.

I am really proud with what we are doing in this budget. I hope to see further advances in investments in indigenous communities in the years ahead.