Bill C-19

Budget Implementation Act, 2022, No. 1

An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures

Part 1 implements certain income tax measures by
(a) providing a Labour Mobility Deduction for the temporary relocation of tradespeople to a work location;
(b) allowing for the immediate expensing of eligible property by certain Canadian businesses;
(c) allowing the Children’s Special Allowance to be paid in respect of a child who is maintained by an Indigenous governing body and providing consistent tax treatment of kinship care providers and foster parents receiving financial assistance from an Indigenous governing body and those receiving such assistance from a provincial government;
(d) doubling the allowable qualifying expense limit under the Home Accessibility Tax Credit;
(e) expanding the criteria for the mental functions impairment eligibility as well as the life-sustaining therapy category eligibility for the Disability Tax Credit;
(f) providing clarity in respect of the determination of the one-time additional payment under the GST/HST tax credit for the period 2019-2020;
(g) changing the delivery of Climate Action Incentive payments from a refundable credit claimed annually to a credit that is paid quarterly;
(h) temporarily extending the period for incurring eligible expenses and other deadlines under film or video production tax credits;
(i) providing a tax incentive for specified zero-emission technology manufacturing activities;
(j) providing the Canada Revenue Agency (CRA) the discretion to accept late applications for the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and the Canada Recovery Hiring Program;
(k) including postdoctoral fellowship income in the definition of “earned income” for RRSP purposes;
(l) enabling registered charities to enter into charitable partnerships with organizations other than qualified donees under certain conditions;
(m) allowing automatic and immediate revocation of the registration of an organization as a charity where that organization is listed as a terrorist entity under the Criminal Code ;
(n) enabling the CRA to use taxpayer information to assist in the collection of Canada Emergency Business Account loans; and
(o) expanding capital cost allowance deductions to include new clean energy equipment.
It also makes related and consequential amendments to the Excise Tax Act , the Children’s Special Allowances Act , the Excise Act, 2001 , the Income Tax Regulations and the Children’s Special Allowance Regulations .
Part 2 implements certain Goods and Services Tax/Harmonized Sales Tax (GST/HST) measures by
(a) ensuring that all assignment sales in respect of newly constructed or substantially renovated residential housing are taxable supplies for GST/HST purposes; and
(b) extending eligibility for the expanded hospital rebate to health care services supplied by charities or non-profit organizations with the active involvement of, or on the recommendation of, either a physician or a nurse practitioner, irrespective of their geographic location.
Part 3 amends the Excise Act, 2001 , the Excise Act and other related texts in order to implement three measures.
Division 1 of Part 3 implements a new federal excise duty framework for vaping products by, among other things,
(a) requiring that manufacturers of vaping products obtain a vaping licence from the CRA;
(b) requiring that all vaping products that are removed from the premises of a vaping licensee to be entered into the Canadian market for retail sale be affixed with an excise stamp;
(c) imposing excise duties on vaping products to be paid by vaping product licensees;
(d) providing for administration and enforcement rules related to the excise duty framework on vaping products;
(e) providing the Governor in Council with authority to provide for an additional excise duty in respect of provinces and territories that enter into a coordinated vaping product taxation agreement with Canada; and
(f) making related amendments to other legislative texts, including to allow for a coordinated federal/provincial-territorial vaping product taxation system and to ensure that the excise duty framework applies properly to imported vaping products.
Division 2 of Part 3 amends the excise duty exemption under the Excise Act, 2001 for wine produced in Canada and composed wholly of agricultural or plant product grown in Canada.
Division 3 of Part 3 amends the Excise Act to eliminate excise duty for beer containing no more than 0.5% alcohol by volume.
Part 4 enacts the Select Luxury Items Tax Act . That Act creates a new taxation regime for domestic sales, and importations into Canada, of certain new motor vehicles and aircraft priced over $100,000 and certain new boats priced over $250,000. It provides that the tax applies if the total price or value of the subject select luxury item at the time of sale or importation exceeds the relevant price threshold. It provides that the tax is to be calculated at the lesser of 10% of the total price of the item and 20% of the total price of the item that exceeds the relevant price threshold. To promote compliance with the new taxation regime, that Act includes modern elements of administration and enforcement 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 new tax and to ensure a cohesive and efficient administration by the CRA.
Division 1 of Part 5 retroactively renders a provision of the contract that is set out in the schedule to An Act respecting the Canadian Pacific Railway , chapter 1 of the Statutes of Canada, 1881, to be of no force or effect. It retroactively extinguishes any obligations and liabilities of Her Majesty in right of Canada and any rights and privileges of the Canadian Pacific Railway Company arising out of or acquired under that provision.
Division 2 of Part 5 amends the Nisga’a Final Agreement Act to give force of law to the entire Nisga’a Nation Taxation Agreement during the period that that Taxation Agreement is, by its terms, in force.
Division 3 of Part 5 repeals the Safe Drinking Water for First Nations Act .
It also amends the Income Tax Act to exempt from taxation under that Act any income earned by the Safe Drinking Water Trust in accordance with the Settlement Agreement entered into on September 15, 2021 relating to long-term drinking water quality for impacted First Nations.
Division 4 of Part 5 authorizes payments to be made out of the Consolidated Revenue Fund for the purpose of addressing transit shortfalls and needs and improving housing supply and affordability.
Division 5 of Part 5 amends the Canada Deposit Insurance Corporation Act by adding the President and Chief Executive Officer of the Canada Deposit Insurance Corporation and one other member to that Corporation’s Board of Directors.
Division 6 of Part 5 amends the Federal-Provincial Fiscal Arrangements Act to authorize additional payments to the provinces and territories.
Division 7 of Part 5 amends the Borrowing Authority Act to, among other things, count previously excluded borrowings made in the spring of 2021 in the calculation of the maximum amount that may be borrowed. It also amends the Financial Administration Act to change certain reporting requirements in relation to amounts borrowed under orders made under paragraph 46.1(c) of that Act.
Division 8 of Part 5 amends the Pension Benefits Standards Act, 1985 to, among other things, permit the establishment of a solvency reserve account in the pension fund of certain defined benefit plans and require the establishment of governance policies for all pension plans.
Division 9 of Part 5 amends the Special Import Measures Act to, among other things,
(a) provide that assessments of injury are to take into account impacts on workers;
(b) require the Canadian International Trade Tribunal to make inquiries with respect to massive importations when it is acting under section 42 of that Act;
(c) require that Tribunal to initiate expiry reviews of certain orders and findings;
(d) modify the deadline for notifying the government of the country of export of properly documented complaints;
(e) modify the criteria for imposing duties in cases of massive importations;
(f) modify the criteria for initiating anti-circumvention investigations; and
(g) remove the requirement that, in order to find circumvention, the principal cause of the change in a pattern of trade must be the imposition of anti-dumping or countervailing duties.
It also amends the Canadian International Trade Tribunal Act to provide that trade unions may, with the support of domestic producers, file global safeguard complaints.
Division 10 of Part 5 amends the Trust and Loan Companies Act and the Insurance Companies Act to, among other things, modernize corporate governance communications of financial institutions.
Division 11 of Part 5 amends the Insurance Companies Act to permit property and casualty companies and marine companies to not include the value of certain debt obligations when calculating their borrowing limit.
Division 12 of Part 5 enacts the Prohibition on the Purchase of Residential Property by Non-Canadians Act . The Act prohibits the purchase of residential property in Canada by non-Canadians unless they are exempted by the Act or its regulations or the purchase is made in certain circumstances specified in the regulations.
Division 13 of Part 5 amends the Parliament of Canada Act and makes consequential and related amendments to other Acts to, among other things,
(a) change the additional annual allowances that are paid to senators who occupy certain positions so that the government’s representatives and the Opposition in the Senate are eligible for the allowances for five positions each and the three other recognized parties or parliamentary groups in the Senate with the greatest number of members are eligible for the allowances for four positions each;
(b) provide that the Leader of the Government in the Senate or Government Representative in the Senate, the Leader of the Opposition in the Senate and the Leader or Facilitator of every other recognized party or parliamentary group in the Senate are to be consulted on the appointment of certain officers and agents of Parliament; and
(c) provide that the Leader of the Government in the Senate or Government Representative in the Senate, the Leader of the Opposition in the Senate and the Leader or Facilitator of every other recognized party or parliamentary group in the Senate may change the membership of the Standing Senate Committee on Internal Economy, Budgets and Administration.
Division 14 of Part 5 amends the Financial Administration Act in order to, among other things, allow the Treasury Board to provide certain services to certain entities.
Division 15 of Part 5 amends the Competition Act to enhance the Commissioner of Competition’s investigative powers, criminalize wage fixing and related agreements, increase maximum fines and administrative monetary penalties, clarify that incomplete price disclosure is a false or misleading representation, expand the definition of anti-competitive conduct, allow private access to the Competition Tribunal to remedy an abuse of dominance and improve the effectiveness of the merger notification requirements and other provisions.
Division 16 of Part 5 amends the Copyright Act to extend certain terms of copyright protection, including the general term, from 50 to 70 years after the life of the author and, in doing so, implements one of Canada’s obligations under the Canada–United States–Mexico Agreement.
Division 17 of Part 5 amends the College of Patent Agents and Trademark Agents Act to, among other things,
(a) ensure that the College has sufficient independence and flexibility to exercise its corporate functions;
(b) provide statutory immunity to certain persons involved in the regulatory activities of the College; and
(c) grant powers to the Registrar and Investigations Committee that will allow for improved efficiency in the complaints and discipline process.
Division 18 of Part 5 enacts the Civil Lunar Gateway Agreement Implementation Act to implement Canada’s obligations under the Memorandum of Understanding between the Government of Canada and the Government of the United States of America concerning Cooperation on the Civil Lunar Gateway. It provides for powers to protect confidential information provided under the Memorandum. It also makes related amendments to the Criminal Code to extend its application to activities related to the Lunar Gateway and to the Government Employees Compensation Act to address the cross-waiver of liability set out in the Memorandum.
Division 19 of Part 5 amends the Corrections and Conditional Release Act to restrict the use of detention in dry cells to cases where the institutional head has reasonable grounds to believe that an inmate has ingested contraband or that contraband is being carried in the inmate’s rectum.
Division 20 of Part 5 amends the Customs Act in order to authorize its administration and enforcement by electronic means and to provide that the importer of record of goods is jointly and severally, or solidarily, liable to pay duties on the goods under section 17 of that Act with the importer or person authorized to account for the goods, as the case may be, and the owner of the goods.
Division 21 of Part 5 amends the Criminal Code to create an offence of wilfully promoting antisemitism by condoning, denying or downplaying the Holocaust through statements communicated other than in private conversation.
Division 22 of Part 5 amends the Judges Act , the Federal Courts Act , the Tax Court of Canada Act and certain other acts to, among other things,
(a) implement the Government of Canada’s response to the report of the sixth Judicial Compensation and Benefits Commission regarding salaries and benefits and to create the office of supernumerary prothonotary of the Federal Court;
(b) increase the number of judges for certain superior courts and include the new offices of Associate Chief Justice of the Court of Queen’s Bench of New Brunswick and Associate Chief Justice of the Court of Queen’s Bench for Saskatchewan;
(c) create the offices of prothonotary and supernumerary prothonotary of the Tax Court of Canada; and
(d) replace the term “prothonotary” with “associate judge”.
Division 23 of Part 5 amends the Immigration and Refugee Protection Act to, among other things,
(a) authorize the Minister of Citizenship and Immigration to give instructions establishing categories of foreign nationals for the purposes of determining to whom an invitation to make an application for permanent residence is to be issued, as well as instructions setting out the economic goal that that Minister seeks to support in establishing the category;
(b) prevent an officer from issuing a visa or other document to a foreign national invited in respect of an established category if the foreign national is not in fact eligible to be a member of that category;
(c) require that the annual report to Parliament on the operation of that Act include a description of any instructions that establish a category of foreign nationals, the economic goal sought to be supported in establishing the category and the number of foreign nationals invited to make an application for permanent residence in respect of the category; and
(d) authorize that Minister to give instructions respecting the class of permanent residents in respect of which a foreign national must apply after being issued an invitation, if the foreign national is eligible to be a member of more than one class.
Division 24 of Part 5 amends the Old Age Security Act to correct a cross-reference in that Act to the Budget Implementation Act, 2021, No. 1 .
Division 25 of Part 5
(a) amends the Canada Emergency Response Benefit Act to set out the consequences that apply in respect of a worker who received, for a four-week period, an income support payment and who received, for any week during the four-week period, any benefit, allowance or money referred to in subparagraph 6(1)(b)(ii) or (iii) of that Act;
(b) amends the Canada Emergency Student Benefit Act to set out the consequences that apply in respect of a student who received, for a four-week period, a Canada emergency student benefit and who received, for any week during the four-week period, any benefit, allowance or money referred to in subparagraph 6(1)(b)(ii) or (iii) of that Act; and
(c) amends the Employment Insurance Act to set out the consequences that apply in respect of a claimant who received, for any week, an employment insurance emergency response benefit and who received, for that week, any payment or benefit referred to in paragraph 153.9(2)(c) or (d) of that Act.
Division 26 of Part 5 amends the Employment Insurance Act to, among other things,
(a) replace employment benefits and support measures set out in Part II of that Act with employment support measures that are intended to help insured participants and other workers — including workers in groups underrepresented in the labour market — to obtain and keep employment; and
(b) allow the Canada Employment Insurance Commission to enter into agreements to provide for the payment of contributions to organizations for the costs of measures that they implement and that are consistent with the purpose and guidelines set out in Part II of that Act.
It also makes a consequential amendment to the Income Tax Act .
Division 27 of Part 5 amends the Employment Insurance Act to specify the maximum number of weeks for which benefits may be paid in a benefit period to certain seasonal workers and to extend, until October 28, 2023, the increase in the maximum number of weeks for which those benefits may be paid. It also amends the Budget Implementation Act, 2021, No. 1 to add a transitional measure in relation to amendments to the Employment Insurance Regulations that are found in that Act.
Division 28 of Part 5 amends the Canada Pension Plan to make corrections respecting
(a) the calculation of the minimum qualifying period and the contributory period for the purposes of the post-retirement disability benefit;
(b) the determination of values for contributors who have periods excluded from their contributory periods by reason of disability; and
(c) the attribution of amounts for contributors who have periods excluded from their contributory periods because they were family allowance recipients.
Division 29 of Part 5 amends An Act to amend the Criminal Code and the Canada Labour Code to, among other things,
(a) shorten the period before which an employee begins to earn one day of medical leave of absence with pay per month;
(b) standardize the conditions related to the requirement to provide a medical certificate following a medical leave of absence, regardless of whether the leave is paid or unpaid;
(c) authorize the Governor in Council to make regulations in certain circumstances, including to modify certain provisions respecting medical leave of absence with pay;
(d) ensure that, for the purposes of medical leave of absence, an employee who changes employers due to the lease or transfer of a work, undertaking or business or due to a contract being awarded through a retendering process is deemed to be continuously employed with one employer; and
(e) provide that the provisions relating to medical leave of absence come into force no later than December 1, 2022.
Division 30 of Part 5 amends the Canada Business Corporations Act to, among other things,
(a) require certain corporations to send to the Director appointed under that Act information on individuals with significant control on an annual basis or when a change occurs;
(b) allow that Director to provide all or part of that information to an investigative body, the Financial Transactions and Reports Analysis Centre of Canada or any prescribed entity; and
(c) clarify that, for the purposes of subsection 21.1(7) of that Act, it is the securities of a corporation, not the corporation itself, that are listed and posted for trading on a designated stock exchange.
Division 31 of Part 5 amends the Special Economic Measures Act and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) to, among other things,
(a) create regimes allowing for the forfeiture of property that has been seized or restrained under those Acts;
(b) specify that the proceeds resulting from the disposition of those properties are to be used for certain purposes; and
(c) allow for the sharing of information between certain persons in certain circumstances.
It also makes amendments to the Seized Property Management Act in relation to those forfeiture of property regimes.

[Daniel Rubinstein, Senior Director, Policy and Government Relations, Federation of Canadian Municipalities]

Thank you very much.

I’m Daniel Rubinstein. I'm the senior director of policy and government relations at the Federation of Canadian Municipalities. We're the national voice of Canada's local governments, representing 90% of Canada's population, coast to coast to coast.

We are grateful for every opportunity to discuss how our two levels of government can work together and improve the quality of life for people.

I'm pleased to be here today to speak to budget 2022 and relevant provisions in Bill C-19.

Budget 2022 equips local leaders with tools that deliver concrete results in our communities—the places where people live, work and raise their families. First, it recognizes that municipalities are essential partners in solving our greatest national challenges, including housing affordability. We know that tackling our housing crisis means getting all orders of government working together better and faster. The federal budget makes major investments to tackle common goals, from growing housing supply to taking important steps to end chronic homelessness.

Municipalities, which best understand local supply needs, welcome the housing accelerator fund. It has transformative potential to help get housing built faster, through direct and flexible investments, if we work together to design it with speed and results in mind. The fund can help communities regardless of size. From cities to fast-growing rural towns, the potential is there for sure.

We were also glad to see the budget commit to improving the rental construction financing initiative and the national housing co-investment fund. The changes could mean more affordable rental supply for more Canadians. That's a direct call from local leaders and FCM and really is a critical component to expanding housing supply options for all. Municipalities have significant ambitions to tackle the housing crisis, and these investments—especially the accelerator fund—give municipalities the ability to take action and grow the right kind of affordable housing supply for Canadians.

The budget scales up the rapid housing initiative and extends the Reaching Home program. Both are critical to support the shared goal of ending chronic homelessness in Canada. The rapid housing initiative has been a genuine success story. It's working, and FCM will continue to advocate for growing the rapid housing initiative into a long-term tool to eradicate homelessness.

One critical outstanding need is for a robust urban, rural and northern indigenous housing strategy. We look forward to discussing this further.

Let me now turn to a second important issue for the public, namely climate action.

With the support of the federal government, municipalities are ready to take action on climate change.

Municipalities are on the front lines of new climate extremes. The new investments in this budget, from broadening electrical vehicle charging infrastructure to building retrofits and nature-based solutions, provide municipalities with the tools they need to take local action on climate change.

We welcome the federal government’s recognition, in the emissions reduction plan, that municipalities are critical to achieving Canada’s 2030 emission goals. We look forward to working with this Parliament on the implementation of that critical plan to ensure that municipalities have the direct funding tools they need.

That brings me to a third focus area for the budget, which is strong communities of all sizes. We know that Canada’s recovery needs to take root in our rural communities, which represent one-third of the economy. In particular, we welcome new investments in natural climate solutions and wildfire prevention and also the commitment to ensure that growing rural and smaller communities can access the housing accelerator fund.

When we look at the scale of need for rural climate adaptation and disaster mitigation, it's clear there's more to do through the disaster mitigation and adaptation fund. The need for this is urgent, as we saw last year in B.C. and Atlantic Canada, and as we’re seeing right now with the flooding in Manitoba and the Northwest Territories.

Finally, many communities across the country are grappling with retroactive contract policing costs resulting from the new federally negotiated RCMP labour agreement, and rural communities will be particularly hard hit. This situation requires urgent federal attention and collaboration with FCM and affected municipalities.

The relationship between the federal and municipal governments is essential for the recovery Canadians deserve. Like never before, the past two years have exposed our most pressing national challenges. They have taught us that, when we work together across orders of government, we can face these challenges in a way that supports the economy, builds strong communities and ensures Canadians’ quality of life.

Local governments are ready to continue this vital work with Parliament, and the budget will help keep us moving in the right direction. That certainly includes the $750 million in emergency operating funding for transit that is included in Bill C-19.

Thank you.

I will be happy to answer any questions you may have.

[Siobhan Vipond, Executive Vice-President, Canadian Labour Congress]

Good afternoon, Chair and honourable members.

My name is Siobhán Vipond. I am the executive vice-president of the Canadian Labour Congress. I am honoured to be joining you today from the traditional unceded territories of the Anishinabe and Algonquin peoples.

We at the CLC speak on behalf of working people in Canada in every industry, occupation and region of the country. The congress welcomes many aspects of the budget implementation bill. The introduction of a labour mobility tax deduction, improvements to Canada's trade remedy legislation and restoring the prohibition on wage-fixing in the Competition Act are all steps that Canada's unions have been urging the government to take.

However, there is a great deal that is missing from this bill. Budget 2022 provides an additional $2 billion one-time top-up to provinces and territories for health services, yet health workers are facing dire staffing shortages and growing burnout. The bill fails to take urgent action to improve the retention and recruitment needed to address this crisis.

Also missing is action to help Canada's care workers, including in early learning and child care and in long-term care. To appreciate the scale of this problem, in March, Statistics Canada estimated the value of unpaid care at between $515 billion and $680 billion.

The budget takes steps on housing affordability and transit shortfalls, but it falls short of addressing the affordability crisis facing working people. The cost of food, fuel and shelter has shot up while wages lag far behind. Workers' spending power is falling. Living standards are declining for workers whose real wages are dropping at the fastest rate in memory. Pensioners who lost inflation-protected pensions are seeing their fixed incomes quickly eroded by soaring inflation.

The government should be urgently responding to this crisis by taxing corporate superprofits, housing speculators and the concentrated wealth of the richest Canadians; allowing wages to rise by strengthening labour standards and removing barriers to unionization; and strengthening social programs by implementing national pharmacare and dental care, quickly getting child care fees down and expanding free high-quality public transit.

Instead, the government is ramping up employers' access to vulnerable migrant workers, while the Bank of Canada is preparing to hike interest rates in the hopes that it will cool inflation. These measures are going to hurt working-class households and worsen inequality while doing nothing to tackle the entrenched power and corporate greed responsible for price-gouging and pandemic profiteering.

Let me end with some specific recommendations for amending Bill C-19, starting with the EI board of appeal.

For many years, labour and community organizations have struggled to restore important elements of the EI boards of referees that were scrapped by Stephen Harper's government in 2012. EI appeals should be heard by worker and employer representatives: people who understand their communities and the realities of workplace life.

Instead of the board of appeal reporting only to the government, we, Canada's unions, urge the committee to make the board of appeal answerable to the entire Canada EI Commission, including both worker and employer representatives.

We also urge the parties to restore the commission's lead role in selecting labour and employer members of the board. Historically, this was done in consultation with the commission's social partners, which included local labour councils. Workers have a right to regional representation and the option of an in-person hearing, another key recommendation of the 2018 tripartite review.

Establishing accessible, accountable social safety nets like our proposed changes to EI ensures workers have the support they need during turbulent economic periods. In our current climate of economic insecurity, workers must have confidence in the services they receive and the future of their employment. The proposed strategic policy review must not be a Harper-style attack on public service workers that opens the door to cuts and the privatization of services that workers and families rely on.

Thank you. I look forward to answering any questions you may have.

[William Robson, Chief Executive Officer, C.D. Howe Institute]

Thank you very much.

I'll start off, and then I'll turn it over to my colleague Ben Dachis. We appreciate your inviting Ben and me to join you here today, and we hope our contributions will help you and your work on the 2022 federal budget and Bill C‑19.

By way of background, federal fiscal policy is a long-standing area of focus for the C.D. Howe Institute. Our work covers accountability and transparency, macro questions of debt and sustainability, detailed work on taxes and an annual shadow federal budget.

Our opening remarks will necessarily touch on only a few topics, mainly the elements of Bill C‑19 dealing with competition issues. We would be glad to answer questions on a wider range of topics if that would be helpful to members of the committee.

Although it's applicable to much more than Bill C‑19, I hope members will excuse my starting with a high-level comment about budgets and budget implementation bills, which is that there is too much in them.

A budget should be a fiscal document first and foremost. The key financial information—the pre-budget track for revenue, expense, the surplus or deficit, and the change in the accumulated surplus or deficit, plus what the budget projects are on those things—should be in the first 10 pages. Changes in taxes belong in budgets, as do changes in programs that affect expenses. Other program changes and commentary likely often belong in separate documents.

I have a comment about implementation bills. Even though Bill C‑19 deals with only some elements of the 2022 budget, it is a daunting document. Omnibus bills have a bad reputation for good reason, and I mean no disrespect to MPs but rather the opposite. I mean great respect to Parliament when I say that it ought not to be challenging for elected representatives to get on top of the text of a bill, let alone to anticipate the regulations and the contingencies and all the consequences.

Among the specific items that are covered in Bill C‑19 that Ben and I would answer questions on if there's interest would be the luxury tax. I did not know that Messieurs Mueller and Chartrand would be appearing on this issue. I think many economists would share the view that specific taxes of this kind are not good taxes. They distort purchases and production, as we've just heard from Mike and David. What they said about aircraft applies equally to motor vehicles and boats.

I'm not very enthusiastic about this but I'll say it anyway. If you think that it's really a good idea to single out specific products and services, use the GST. It's not as good as a low uniform rate on everything consumed, but it has some advantages compared to this.

Because Mr. Tobin...and we just heard also from Michael Holden on labour markets, I'll just quickly mention that a key test of any labour market policy—notably EI—is whether it impedes or promotes the matching of talent with opportunity. As everyone knows, the unemployment rate is at a record low. This is a good time to unwind provisions that encourage people in places or with employers that do not offer opportunities for stable jobs that pay well and offer advancement. We also would be happy, if people are interested, to answer questions with regard to vaping and the prohibition on foreign buyers of residential properties, among other things.

Let me just say that competition policy is a major focus of the provisions of Bill C‑19. It's also a major focus for the C.D. Howe Institute, particularly of my colleague Ben Dachis, who has been introduced already. He's our internal lead on the institute's competition policy council, and I turn my remaining time over to Ben.

[The Chair, Liberal, Peter Fonseca]

I call this meeting to order.

Welcome to meeting number 49 of the House of Commons Standing Committee on Finance. Pursuant to the order of reference of May 10, 2022, the committee is meeting on Bill C-19, an act to implement certain provisions of the budget tabled in Parliament on April 7, 2022, and other measures.

Today's meeting is taking place in a hybrid format pursuant to the House order of November 25, 2021. Members are attending in person in the room and remotely using the Zoom application. As per the directive of the Board of Internal Economy on March 10, 2022, all those attending the meeting in person must wear a mask except for members who are at their place during proceedings.

I'd like to make a few comments for the benefit of the witnesses and members. Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike and please mute yourself when you are not speaking. For interpretation for those on Zoom, you have the choice at the bottom of your screen of floor, English or French. For those in the room, you can use the earpiece and select the desired channel.

This is a reminder that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as well as we can, and we appreciate your patience and understanding in this regard. I request that members and witnesses treat each other with mutual respect and decorum.

I would now like to welcome today's witnesses.

From the Aerospace Industries Association of Canada, we have with us Mike Mueller, president and chief executive officer. From International Association of Machinists and Aerospace Workers, we have David Chartrand, Canadian general vice-president. We have Steven Tobin, chief executive officer of LabourX, as an individual. From the Business Council of Alberta, Michael Holden is with us. He's the vice-president of policy and also the chief economist. From the C.D. Howe Institute, we have Benjamin Dachis, who's the associate vice-president of public affairs, and William B.P. Robson, chief executive officer, although I am told that William Robson will be with us only until 4:30, members, so be aware of that.

From the Canadian Labour Congress, we have Siobhán Vipond, who's the executive vice-president, and we also have Chris Roberts, director, social and economic policy. From the Federation of Canadian Municipalities, Daniel Rubinstein, who's the senior director of policy and government relations, is with us today.

We'll now begin with Mr. Mueller from the Aerospace Industries Association of Canada, with his opening remarks of up to five minutes.

Go ahead, please.

[John Clayton]

Thank you for the opportunity to speak to our work in Ukraine.

It was my privilege on Sunday at 2 p.m. at Pearson International to receive 28 Ukrainians on an aircraft we had coming back from Poland and that landed in Toronto. I got to spend the entire afternoon with them at the airport. They're now in Vegreville, Alberta, the home of the world's largest Easter egg—so they're in familiar territory—and wonderful people. We're anticipating receiving another 21 people tomorrow, on Friday.

We continue to be active. I know that there are many other organizations that are very active across Ukraine and the periphery, so our current activities, using the donor support that we have, are in the 17 projects that we are currently funding in Poland and a number of other European countries in supporting displaced and refugee Ukrainians who have made their way across Europe. We're very active with that.

Our particular interest here today is about direction and control and “own activities” and specific provisions that are in the budget implementation act. I trust that you've made yourself aware of—or we could make them available to you—the specific amendments that we are seeking. I've already spoken with MP Lawrence. We see it as very important for us to keep our charitable sector and the way we can function modernized and to update things. That's something we're seeking.

It's really great to hear you recognizing our work. We have a lot of Canadians—70 Canadians, I think—who have served in Ukraine in our emergency field hospital and in the work we're doing across the country. There's an awful lot going on, and Canada plays a big part across the entire charitable sector in Ukraine.

Thank you.

[Jenny Kwan, NDP, Vancouver East, BC]

Thank you very much, Madam Chair.

Thank you to the officials for coming to our committee today.

I have questions in both areas, so let me first go to the piece around the fees. Just to be clear, under our current rules, the Service Fees Act for immigration requires the government to reimburse portions of fees when service standards are not met. Then there are certain exemptions to areas where service standards are not met such that the government does not have to reimburse. They're exempt.

Bill C-19 is now asking for further categories to be exempt in terms of the government having to reimburse fees if they don't meet service standards. Is that correct?

[Denis Trudel]

On the same topic, I would like to know how francophone immigration is going to change in practical terms. It's a fact that the numbers for 2022 are still below the targets set by the government.

How will Bill C-19 change things?

[Denis Trudel, Longueuil—Saint-Hubert, BQ]

Thank you, Madam Chair.

I would like to thank the witnesses for being with us today. Immigration is just as important as it is interesting.

Let's talk about Quebec, where permanent residents are selected on the basis of selection certificates issued under the 1991 Canada–Québec Accord relating to Immigration and Temporary Admission of Aliens.

Will the amendments proposed in Bill C-19 affect the agreement or Quebec in any way?

[Marie-France Lalonde, Liberal, Orléans, ON]

I'd like to thank the witnesses for appearing before the committee on such short notice. I have a few questions for them.

I'll go straight to my questions.

I understand that Bill C-19 aims to make enhancements to the express entry program for highly skilled individuals who want to immigrate to Canada.

Could you briefly summarize these enhancements, please?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I will do the same thing as MP Chatel with the Native Women's Association, and thank them for coming and ask if they were they consulted on the budget this year and if any of the items they recommended to government are reflected in Bill C-19.

Thank you.

[The Chair, Liberal, Salma Zahid]

I call the meeting to order.

Today we are here to study the subject matter of part 5, division 23 of Bill C-19, an act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other matters.

I would like to welcome and thank our witnesses from the Department of Citizenship and Immigration for appearing before the committee today. We are joined by Julie Chassé, director general, financial strategy; Philip Somogyvari, director general, strategic policy and planning; Marcel Poirier, director, fees and activity based costing division; and Jonathan Joshi-Koop, acting director, express entry policy.

Thank you for appearing before the committee. You will have five minutes for your opening remarks, and then we will go to a round of questioning.

You can please begin. You will have five minutes. Thank you.

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

Thank you, Mr. Chair.

My questions are also for the Council of Canadian Innovators, namely, Mr. Schiavo or Ms. O'Born.

Mr. Schiavo, in your presentation, you said that the programs are difficult, long and tedious. That's also what Ms. O'Born said.

Can you give us some examples and tell us what could be changed?

I only have two and a half minutes, and I would like to ask you another question.

In Bill C-19, where could amendments be proposed to better support innovation?

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

Thank you, Ms. Groulx. Meegwetch.

You raised five very important concerns that we’ve taken note of. I thank you for sharing them with us.

Have you and your organization had time to peruse the 440 pages in Bill C‑19?

You've accurately outlined what may be missing and what your concerns are, in general. Is there anything in Bill C‑19 that you feel strongly about? Are there any amendments that you think could be made to improve it?

Specifically, what does the budget have to offer and what does it still urgently need to address?

[John Clayton, Director of Programs and Projects, Samaritan's Purse Canada]

Mr. Chair and members of the finance committee, thank you for the opportunity to appear before you today concerning Bill C-19, the budget implementation act, and specifics related to charities.

I've spent 30 years working in the charitable sector. Back in August 2019, Samaritan's Purse studied the Senate report on the charitable sector, specifically the pages concerning CRA direction and control. We decided to pursue changes to ITA legislation to correct problems we and many other charities in Canada have been experiencing. Samaritan's Purse then joined Cooperation Canada, where I am co-chair of the direction and control working group.

I don't know the precise history, but about 70 years ago the Government of Canada enacted legislation in the ITA that enabled charities to function but required that they only pursue their “own activities”. Subsequent to this, the CRA policy was developed around this idea.

I need to mention that the idea of “own activities” is unique to Canada. No other country uses this concept and every other country has found ways to hold non-profits accountable without using the idea of “own activities”. It is the cause of the problems we are dealing with today and the issues within the budget implementation act.

Cooperation Canada, Imagine Canada and Philanthropic Foundations Canada, together with a group of Canada's leading charity lawyers and Senator Omidvar, worked together for the last two years bringing forward Bill S-216. Bill S-216 would have eliminated “own activities” requirements, but in the last days, and after two years of advocating for changes to the Income Tax Act, this year's budget announcement indicated that the charitable sector's concerns had been heard. We were grateful for this and considered it a great success.

However, our initial euphoria turned to concern when the details of the BIA emerged. The BIA proposes changes to the Income Tax Act that would add new rules allowing charities to make “qualifying disbursements” or grants to non-qualified donees. The qualifying disbursement mechanism is a workaround to the problem of “own activities”. The BIA claims this would provide the needed funding mechanism for charities to work with non-charities and that this was in the spirit of Bill S-216, but what the BIA proposes is not in the spirit of Bill S-216. Instead, it would add 800 words of tightly defined, inflexible and prescriptive terms and conditions to the ITA.

The BIA's proposed qualifying disbursement mechanism will not work and will not be used by charities. Charities need to work with non-charities. This happens in Canada and around the world. The ways these partnerships and arrangements take shape are complicated and are determined by contextual realities, current events, cultures and a myriad of other factors.

I'll give some examples. In the last month, Samaritan's Purse, my organization, and many other organizations have responded to the Ukraine crisis. We are currently working with 17 local partners across Europe that are providing assistance to Ukrainian refugees. Another aspect of international work is that many charities are affiliated parts of larger networks. When they come together to respond to events like Ukraine, they need to be able to easily combine or pool their resources in a common response. This increases effectiveness and efficiency. Other charities are engaged in long-term development projects involving multiple partners, complex programs, funders and local governments. Lastly, within our own country, the government provides funding to charities, expecting them to work with community groups, marginalized, racialized and indigenous groups, and other non-charities.

I need to make it clear that the BIA's proposed inflexible terms and conditions don't work in any of these contexts. The qualifying disbursement mechanism would provide a one-size-fits-all regulatory straitjacket. The qualifying disbursement mechanism doesn't fit the real world. With this approach, we appear to be taking the problems of “own activities” and making them worse. Charities will avoid using this mechanism and its codified rules in the ITA because any failure to perfectly comply would result in a loss of charitable status.

If the BIA proceeds as is, we would see a combination of ITA regulations, CRA policy and a regulatory hierarchy that would be complicated and confusing. This should not be allowed to happen.

If we're going to work around the problem of “own activities”, we need to make amendments to the BIA to connect a qualifying disbursement mechanism to the practical realities and operations of charities. We all acknowledge the need for accountability. The CRA needs to monitor and enforce policy when tax-protected dollars are involved. The charities themselves are concerned about integrity and the public trust that they must preserve with their donors.

Nobody is asking for relaxed or reduced accountability. We need appropriate accountability for practical, workable mechanisms for engagement with non-qualified donees. The BIA as is will not provide this. The committee already heard earlier this week from Bruce MacDonald of Imagine Canada and has received a detailed briefing note from the three organizations, Imagine Canada, Cooperation Canada and Philanthropic Foundations Canada, which was signed by 66 significant Canadian charities.

If I have time, I'd like to restate the three specific amendments we are seeking: to refine—

[Dave Prowten, President and Chief Executive Officer, JDRF Canada]

Thank you very much.

Good morning, everyone. My name is Dave Prowten. I'm the president and CEO of JDRF, the leading charitable funder of type 1 diabetes research. Today I'm joined by Mr. Matt Stimpson, who is a person living with type 1 diabetes and also the proud father of a wonderful young woman, Tilly, who's 14 years old and also lives with type 1 diabetes.

First of all, thank you for inviting us back to committee today. We are here again to reiterate our request to propose an amendment to the budget implementation act that would remove or reduce the 14-hour requirement under the “life-sustaining” category of the disability tax credit. This change would make life better for the 300,000 Canadians who live with this disease 24 hours a day, seven days a week.

The 14-hour requirement really is arbitrary and antiquated and has not been changed since 1988. Since then, diabetes management has come a long way and lives have drastically improved, but only with the right supports and technologies.

Type 1 diabetes continues to be a very costly disease for everyone—for individuals, families, the health care system and society overall—so we implore the committee to amend the budget implementation act and call for either a removal of the 14-hour requirement entirely or, alternatively, a reduction in the hours to seven so that more Canadians with type 1 diabetes can qualify.

We know there's a willingness to make the change, as evidenced by the budget's inclusion of additional criteria that will help more people qualify, but there's still a level of interpretation around the amount of time per week of these activities. Our proposal to remove or reduce to seven hours is really not arbitrary. It will be very clean and clear. It will really make it easier for the health care practitioners to approve and improve equity for those with type 1.

The purpose of the disability tax credit is to really ensure that Canadians with a disability are eased of financial burdens. This arbitrary and antiquated requirement for 14 hours is really preventing many with type 1 diabetes from accessing this. Therefore, the policy is not living up to its mandate. It needs to be modernized to ensure it's delivering support to some of the most vulnerable Canadians, who can use the support right now.

In our opinion, we have a very rare opportunity. This is an important change. JDRF has been working on improving the disability tax credit since 2017, so that's five years. The time to get it right is now.

I'm going to turn this over to Matt, Mr. Stimpson, who will share with you his personal experience with the disability tax credit.