C-63

Details

Full Title

A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures

First Reading

October 27, 2017, Parliament 42, Session 1

Type

House Government Bill

Full Content

https://www.parl.ca/legisinfo/en/bill/42-1/c-63

Summary

Bill C-63, also known as the Budget Implementation Act, 2017, No. 2, is a wide-ranging piece of legislation that amends several existing Canadian laws to implement various measures outlined in the federal budget. It covers diverse areas, from income tax and excise tax to financial regulations and labor standards. The bill was introduced to the House of Commons to gain approval for the public revenue required for the changes described within it.

Part 1 focuses on changes to the Income Tax Act. These changes address things like how oil and gas exploration expenses are treated, rules for registered education and disability savings plans, accounting methods for certain professionals, and tax rules for geothermal energy. There are also updates to rules about capital gains on the sale of a primary residence and provisions to ensure farmers and fishers selling to cooperatives can access the small business deduction.

Part 2 of the bill deals with amendments to the Excise Tax Act, specifically concerning the Goods and Services Tax/Harmonized Sales Tax (GST/HST). These changes aim to clarify and improve the GST/HST rules for pension plans and financial institutions. It also modernizes the rules around drop shipments and clarifies how GST/HST applies to municipal transit services.

Remaining parts of the bill cover amendments to the Excise Act (Part 3) to address beer taxation, and the Federal-Provincial Fiscal Arrangements Act (Part 4) to allow coordinated cannabis taxation agreements with provinces. Part 5 includes a variety of measures, including changes to the Bretton Woods and Related Agreements Act, the enactment of the Asian Infrastructure Investment Bank Agreement Act, and amendments to the Canada Deposit Insurance Corporation Act and the Bank of Canada Act. It also addresses labor standards in the Canada Labour Code, trade within Canada, and adjustments to the Judges Act and the Business Development Bank of Canada Act.

Issues

Economy

• Jobs

  Division 8 of Part 5 amends the Canada Labour Code to provide employees with a right to request flexible work arrangements from their employers. This could help employees better manage their work and personal lives, potentially improving job satisfaction and reducing stress.

  Division 8 also modifies certain provisions related to work schedules, overtime, annual vacation, general holidays and bereavement leave, in order to provide greater flexibility in work arrangements. This also has the potential to improve job satisfaction and work/life balance.

• Taxation

  Part 1 of the bill introduces changes to the Income Tax Act, including:

  * Changes how costs for oil and gas exploration are classified for tax purposes.

  * Revises the rules to prevent misuse of registered education savings plans (RESPs) and registered disability savings plans (RDSPs).

  * Eliminates the use of billed-basis accounting by some professionals.

  * Provides better tax treatment for geothermal energy equipment.

  * Extends rules about base erosion to foreign branches of Canadian insurance companies.

  * Clarifies who controls a corporation for tax reasons.

  * Introduces a new option for taxpayers to mark their derivatives to market.

  * Adds a rule to prevent tax avoidance using straddle transactions.

  * Allows some tax-free mergers of corporations into mutual fund trusts and mergers of segregated funds.

  * Improves tax benefits for ecologically sensitive land donations.

  * Closes loopholes related to the capital gains exemption on the sale of a primary residence.

  * Makes farmers and fishers selling to cooperatives eligible for the small business deduction.

  Part 2 revises the timing requirements for GST/HST rebate applications by public service bodies.

  Part 3 amends the Excise Act to tax beer made from concentrate consistently with other beer products.

  Part 4 amends the Federal-Provincial Fiscal Arrangements Act to allow the federal government to enter into coordinated cannabis taxation agreements with provincial governments.

• Spending

  Division 3 of Part 5 of the bill transfers responsibility for three international development financing agreements from the Minister of Finance to the Minister of Foreign Affairs.

  Division 12 of Part 5 amends the Business Development Bank of Canada Act to increase the maximum amount of the paid-in capital of the Business Development Bank of Canada.

Environment

• Climate

  Part 1 of the bill provides enhanced tax treatment for eligible geothermal energy equipment. This encourages investment in renewable energy sources that can reduce greenhouse gas emissions.

• Environmental Protection

  Part 1 of the bill enhances the protection of ecologically sensitive land donated to conservation charities and broadens the types of donations permitted. This supports the preservation of natural habitats and biodiversity.

• Energy

  Part 1 of the bill removes certain tax benefits for oil and gas companies, specifically:

  * The costs of drilling a discovery well can no longer be classified as "Canadian exploration expenses."

  * Small oil and gas companies can no longer reclassify up to $1 million of "Canadian development expenses" as "Canadian exploration expenses."

  Part 1 of the bill also provides enhanced tax treatment for eligible geothermal energy equipment.

Security and Defense

• Foreign Aid

  Division 3 of Part 5 provides for the transfer from the Minister of Finance to the Minister of Foreign Affairs of the responsibility for three international development financing agreements entered into between Her Majesty in Right of Canada and the International Finance Corporation.