Bill C-43

RECOMMENDATION

Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled “An Act to implement certain provisions of the budget tabled in Parliament on February 23, 2005”.

SUMMARY

Part 1 amends the Income Tax Act and the Income Tax Application Rules to

(a) increase the amount that Canadians can earn tax free;

(b) increase the annual limits on contributions to tax-deferred retirement savings plans;

(c) eliminate the foreign property limitations on tax-deferred retirement savings plans;

(d) increase the Child Disability Benefit supplement to the Canada Child Tax Benefit;

(e) allow for a longer period for the existence of and contributions to a Registered Education Savings Plan in certain circumstances where the plan beneficiary is eligible for the disability tax credit;

(f) increase the maximum refundable medical expense supplement;

(g) exclude emergency medical services vehicles from the standby charge;

(h) extend to January 11, 2005 the date for charitable giving in respect of the 2004 taxation year for the tsunami relief effort;

(i) reduce corporate income tax rates, including the elimination of the corporate surtax; and

(j) extend the SR&ED tax incentives to SR&ED performed in Canada’s exclusive economic zone.

Part 2 amends the Air Travellers Security Charge Act to reduce the air travellers security charge for domestic air travel to $5 for one-way travel and to $10 for round-trip travel, for transborder air travel to $8.50 and for other international air travel to $17, applicable to air travel purchased on or after March 1, 2005.

Part 3 amends Part IX of the Excise Tax Act to extend the application of the 83 per cent rebate of the goods and services tax (GST) and the federal component of the harmonized sales tax (HST) to eligible charities and non-profit organizations in respect of the tax they pay on their purchases to provide exempt health care supplies similar to those traditionally provided in hospitals. It also amends that Act to provide that a director of a corporation may, under certain conditions, be held liable not only for unremitted net GST/HST amounts, but also for GST/HST net tax refund amounts to which the corporation is not entitled. Finally, it amends that Act to allow, under strict conditions, the creation of a Web-based GST/HST registry to facilitate the verification of a supplier’s registration by a registrant for the purposes of claiming input tax credits.

Part 4 amends Schedule I to the Excise Tax Act to phase out the excise tax on jewellery through a series of rate reductions over the next four years.

Part 5 amends the Federal-Provincial Fiscal Arrangements Act to authorize the Minister of Finance to pay funds to a trust established to provide the provinces with funding for the purpose of early learning and child care.

Part 6 authorizes the Minister of Finance to pay funds to a trust established to provide the Territories with funding for the purpose of assisting them to achieve the goals of the Northern Strategy.

Part 7 amends the Auditor General Act to permit the Auditor General to conduct inquiries into and report on the affairs of certain corporations that have received at least $100,000,000 in funding from Her Majesty in right of Canada. This Part also amends the Financial Administration Act to extend the application of financial management and control provisions in that Act to wholly-owned subsidiaries of parent Crown corporations and certain parent Crown corporations.

Part 8 authorizes the payment of funds to various foundations, including the Federation of Canadian Municipalities for the purpose of providing funding to the Green Municipal Fund.

Part 9 amends the Asia-Pacific Foundation of Canada Act to focus the mandate of the Foundation, to modify its governance structure, to establish qualifications for the appointment of the directors and the President, to impose a duty of care on the directors and the President and to require that the Foundation offer its services in both official languages. It also amends the Act to specify the type of funds the Foundation may receive and the appropriate use of those funds and to require that those funds be invested in accordance with policies, standards and procedures established by the board. In addition, the provisions of the Act respecting auditing, annual reports and winding-up have been expanded.

Part 10 amends Part 1 of the Budget Implementation Act, 1998 to broaden the category of persons to whom the Canada Millennium Scholarship Foundation may grant scholarships and bursaries to include not only persons who are Canadian citizens or permanent residents of Canada within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act but also persons who are protected persons within the meaning of subsection 95(2) of that Act, for example, Convention refugees.

Part 11 authorizes the Minister of State (Infrastructure and Communities), pursuant to the initiative commonly known as “A New Deal for Cities and Communities”, to make payments for the purpose of providing funding, in the fiscal year 2005-2006, to cities and communities for environmentally sustainable infrastructure initiatives, in accordance with agreements to be negotiated with provinces, territories and first nations.

Part 12 enacts the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act. The legislation will implement the arrangements of February 14, 2005 reached with Newfoundland and Labrador and Nova Scotia on offshore revenues. To do this, the legislation will

(a) authorize the payment of equalization offset payments to Newfoundland and Labrador and Nova Scotia for 2004-05 to 2011-12, set out the conditions under which payments will be extended to any of fiscal years 2012-13 to 2019-20, and authorize payments for that period should those conditions be met;

(b) set out the manner in which the offset payments are to be calculated;

(c) authorize the making of a cash pre-payment in the amount of $2 billion in respect of the agreement with Newfoundland and Labrador and a cash pre-payment in the amount of $830 million in respect of the agreement with Nova Scotia; and

(d) implement all other aspects of the agreements.

Consequential amendments to the Budget Implementation Act, 2004 respecting offset payments to Nova Scotia will also be required to ensure that 100 per cent offset is being provided for in fiscal years 2004-05 and 2005-06.

Part 13 establishes an Agency, to be called the Canada Emission Reduction Incentives Agency, to acquire greenhouse emission reduction and removal credits on behalf of the Government of Canada.

Part 14 enacts the Greenhouse Gas Technology Investment Fund Act. That Act establishes an account in the accounts of Canada called the Greenhouse Gas Technology Investment Fund to which are to be charged amounts paid by the Minister of Natural Resources for the purpose of

(a) research into, or the development or demonstration of, technologies or processes intended to reduce emissions of greenhouse gases from industrial sources or to remove greenhouse gases from the atmosphere in the course of an industrial operation; or

(b) creating elements of the infrastructure that are necessary to support research into, or the development or demonstration of, those technologies or processes.

The Act also provides for the creation of technology investment units in respect of amounts that are contributed to Her Majesty for those purposes.

Part 15 amends the Canadian Environmental Protection Act, 1999. Section 64 of that Act is amended to state that a substance that meets the criteria set out in that section may be added to the List in Schedule 1 to that Act. The name of the List in Schedule 1 to that Act is changed to “List of Substances”. Numerous consequential changes are made throughout that Act to ensure consistency.

Part 16 amends the Canada Deposit Insurance Corporation Act to

(a) increase the deposit insurance coverage limit for insurable deposits from $60,000 to $100,000;

(b) repeal the authority of the Corporation to make by-laws respecting standards of sound business and financial practices for member institutions; and

(c) provide that the deposits of a federal institution shall automatically be insured.

Part 17 amends the Canada Student Financial Assistance Act to provide for the termination of the obligations of certain borrowers in respect of student loans in the event of their death or if, as a result of their permanent disability, they are unable to repay their loan without exceptional hardship, taking into account their family income.

Part 18 amends the Currency Act with respect to the Exchange Fund Account and the management of Canada’s foreign exchange reserves. These amendments include authorizing the Minister of Finance to establish a policy concerning the investment of assets held in that Account and to advance funds to that Account on terms and conditions that the Minister considers appropriate.

Part 19 amends the Department of Public Works and Government Services Act to provide the Minister of Public Works and Government Services with responsibility for the procurement of goods and services for the federal government, and to authorize the Minister to negotiate and enter into contracts on behalf of the Government of Canada and to make commitments to a minimum volume of purchases on its behalf.

Part 20 amends the Employment Insurance Act and the Department of Human Resources Development Act to allow the Canada Employment Insurance Commission to set the premium rate under a new rate-setting mechanism. In setting the rate, the Commission will take into account the principle that the premium rate should generate just enough premium revenue to cover payments to be made for that year, as well as the report from the employment insurance chief actuary and any public input. On an as-needed basis, the Commission may also contract for the services of persons with specialized knowledge in rate-setting matters. If it is in the public interest to do so, the Governor in Council may substitute a different premium rate. In any given year, the rate cannot change by more than 0.15% ($0.15 per $100) from the previous year’s rate, and for the years 2006 and 2007 must not exceed 1.95% ($1.95 per $100).

Part 21 amends the Employment Insurance Act, for the purpose of the implementation of a premium reduction agreement between the Government of Canada and a province, to allow for a regulatory scheme to make the necessary adjustments and modifications to that Act as required to harmonize it with a provincial law that has the effect of reducing or eliminating the special benefits payable under that Act. A consequential change is also made to the parental benefits provisions.

Part 22 amends the Financial Administration Act to provide the authority for the President of the Treasury Board to create a shared-governance corporate entity for the purpose of administering group insurance or other benefit programs. In addition, the amendments provide the authority for the Treasury Board to establish or modify those programs not just for employees of the public service but for other persons or classes of persons as well.

Part 23 amends the Old Age Security Act to increase the guaranteed income supplement by $18 a month for single pensioners and by $14.50 a month for each pensioner in a couple, effective January 2006. Also, the amendments increase the allowance by $14.50 a month and the allowance for the survivor by $18 a month, effective January 2006. In addition, the amendments provide for identical increases to the guaranteed income supplement, the allowance and the allowance for the survivor in January 2007.

Part 24 authorizes the Minister of Finance to pay funds directly to the provinces of Quebec, British Columbia and Saskatchewan and to each of the three Territories.