Bill C-74, also known as the Budget Implementation Act, 2018, No. 1, is a comprehensive piece of legislation that enacts various measures outlined in the federal budget tabled on February 27, 2018, and introduces other significant changes across several sectors. It addresses income tax, excise duties, cannabis taxation, veterans' benefits, and environmental regulations, specifically concerning greenhouse gas emissions. The bill also includes changes to various existing Acts, impacting areas such as financial administration, deposit insurance, fiscal arrangements with provinces and territories, the Bank of Canada, international trade, health research, and employment insurance.
Key components of the bill include implementing income tax measures such as adjustments to the small business tax rate, the Canada Child Benefit, and tax credits for medical expenses related to mental health. It also introduces a federal excise duty framework for cannabis products and modifies excise duty rates on tobacco products. Significant changes are made to veterans' benefits, including the replacement of several existing allowances with a new income replacement benefit and the introduction of pain and suffering compensation.
A substantial portion of the bill is dedicated to enacting the Greenhouse Gas Pollution Pricing Act, which establishes a system for charging for fossil fuels and pricing industrial greenhouse gas emissions. This includes setting fuel charge rates in listed provinces, providing rebates and exemptions, and establishing registration requirements for various entities involved in fuel production, distribution, and use. The Act also provides for the distribution of revenues from the fuel charge and the pricing of industrial emissions.
Furthermore, the bill amends various existing Acts to address diverse issues, including the establishment of the office of the Chief Information Officer of Canada, modernization of the Canadian deposit insurance framework, renewal of fiscal equalization payments, and changes to the Canada Pension Plan. It also includes provisions related to maternity and parental arrangements for members of Parliament, cyber security, and a new remediation agreement regime in the Criminal Code.
Inflation and Cost of Living
Part 2 of the bill talks about changes to the excise duty rates on tobacco products. These rates will now change every year based on inflation, instead of every five years. The excise duty rates on tobacco are also going up to account for inflation since 2014, plus an extra dollar per carton of 200 cigarettes and similar increases on other tobacco products.
Jobs
The bill amends the Department of Employment and Social Development Act to give the Minister of Employment and Social Development more power over service delivery to the public. It also changes the Employment Insurance Act to change how earnings received by people receiving benefits are handled.
Taxation
The bill includes changes to income tax, such as lowering the small business tax rate, changing the rules for dividend taxation, addressing income sprinkling to avoid tax, and removing the risk score requirement for deductions for Canadian Armed Forces personnel on international missions. It also introduces the Canada Workers Benefit and extends the mineral exploration tax credit for flow-through share investors. The bill implements a new federal excise duty framework for cannabis products, requiring cannabis growers and manufacturers to obtain a cannabis license from the Canada Revenue Agency and imposing excise duties on cannabis products.
Spending
The bill authorizes the Governor General to spend public money for the purposes outlined in the bill. The bill discusses renewing Fiscal Equalization Payments to the provinces and Territorial Formula Financing Payments to the territories for five years, starting on April 1, 2019 and transition payments to Yukon and Northwest Territories. It also expands the objectives of the Exchange Fund Account to include providing a source of liquidity for the government of Canada, and authorizes the payment of funds from the Exchange Fund Account into the Consolidated Revenue Fund.
Climate
Part 5 of the bill enacts the Greenhouse Gas Pollution Pricing Act. This act puts a price on greenhouse gas emissions through two systems: a charge on fossil fuels and a pricing system for industrial emissions. The fuel charge applies to fuels produced, delivered, or used in listed provinces, and provides rebates and exemptions in some cases. The industrial emissions pricing system requires large facilities in certain provinces to register and pay for emissions above a set limit. The bill also requires the Minister of the Environment to prepare an annual report on the administration of the Act.
Environmental Protection
The bill enacts the Greenhouse Gas Pollution Pricing Act, which aims to reduce greenhouse gas emissions. It also allows the government to apply provincial environmental laws to federal projects.
Energy
The bill includes the Greenhouse Gas Pollution Pricing Act, which puts a charge on fossil fuels. This charge will be applied to gasoline, natural gas, and other fossil fuels, increasing their cost. There are also some exceptions to the fuel charge.
Crime
The bill amends the Criminal Code to create a remediation agreement program. This lets prosecutors make deals with companies accused of economic crimes, to avoid a trial if the company follows the agreement.
Defense
The bill removes the risk score requirement for Canadian Armed Forces personnel and police officers serving on international missions, and increases the level of income that can be deducted.