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1 PART 1 AMENDMENTS TO THE INCOME TAX ACT AND TO RELATED LEGISLATION A. EDUCATION TAX CREDIT This measure will eliminate the education tax credit for the 2017 and subsequent taxation years. Unused education credit amounts carried forward from years prior to 2017 will remain available to be claimed in future years. The tuition tax credit will not be eliminated. B. TEXTBOOK TAX CREDIT This measure will eliminate the textbook tax credit for the 2017 and subsequent taxation years. Unused textbook credit amounts carried forward from years prior to 2017 will remain available to be claimed in future years. The tuition tax credit will not be eliminated. C. ONTARIO ELECTRICITY SUPPORT PROGRAM This measure exempts from income amounts received from the Government of Ontario s Electricity Support Program (OESP) to ensure that a taxpayer s income-tested benefits are not reduced as a result of the amount of assistance received under the OESP. D. SMALL BUSINESS TAX RATE This measure maintains the current small business tax rate, which was reduced from 11 percent to 10.5 percent for the 2016 taxation year (gradual reductions in the small business tax rate are currently legislated for 2017, 2018 and 2019). Corresponding changes are also made to the dividend gross-up factor and the dividend tax credit that apply to taxable dividends paid by corporations from income that is taxed at the small business tax rate. E. NORTHERN RESIDENTS DEDUCTION This measure increases the northern residency deduction for the 2016 and subsequent taxation years. Each member of a household located in the Northern Zone may claim $11 per day, and where no other member of the household claims the residency deduction, $22 per day. Residents of the Intermediate Zone will be entitled to deduct half of these increased amounts. Part 1 Overview Page 1 of 7

2 F. CHILDREN S ARTS TAX CREDIT This measure reduces the maximum amount of fees eligible for the 15-per-cent non-refundable children s arts tax credit to $250 for the 2016 taxation year. The children s arts tax credit is repealed for the 2017 and subsequent taxation years. G. INCOME SPLITTING CREDIT This measure repeals the non-refundable income splitting tax credit measure for couples with at least one child under the age of 18. This measure applies to the 2016 and subsequent taxation years. H. CANADA CHILD BENEFIT This measure introduces the new Canada Child Benefit. Under the Canada Child Benefit, an eligible individual is entitled to a maximum annual benefit of $6,400 per child under the age of 6 and $5,400 per child aged 6 through 17. On the portion of adjusted family net income between $30,000 and $65,000, the benefit will be phased out at a rate of 7% for a one-child family, 13.5% for a two-child family, 19% for a three-child family and 23% for families with four or more children. Where adjusted family net income exceeds $65,000, remaining benefits will be phased out at rates of 3.2% for a one-child family, 5.7% for a two-child family, 8% for a three-child family and 9.5% for families with four or more children, on the portion of income above $65,000. The Canada Child Benefit will be paid in equal monthly instalments. The national child benefit supplement will remain as a subcomponent of the computation of the Canada Child Benefit for the period July 1, 2016 to June 30, 2017, after which it will be repealed. The Canada Child Benefit will provide an additional amount of up to $2,730 per child eligible for the disability tax credit. This benefit will be phased out at a rate of 3.2% cent for families with one eligible child and 5.7% cent for families with more than one eligible child, on adjusted family net income in excess of $65,000, effective July 1, This additional amount will be included in the Canada child benefit payments made to eligible families. This amendment applies as of July 1, 2016 I. CHILDREN S FITNESS TAX CREDIT This measure reduces the maximum amount of fitness expenses eligible for the 15-per-cent refundable children s fitness tax credit to $500 for the 2016 taxation year. The children s fitness tax credit is repealed for the 2017 and subsequent taxation years. Part 1 Overview Page 2 of 7

3 J. TEACHER AND EARLY CHILDHOOD EDUCATOR SCHOOL SUPPLY TAX CREDIT This measure introduces a new 15-per-cent refundable School Supply Tax Credit for teachers and early childhood educators. Educators eligible for the credit include teachers possessing a valid and recognized teacher s certificate, as well as early childhood educators holding a valid certificate or diploma in early childhood education. The credit is based on an amount of up to $1,000 in expenditures made by the employee in a taxation year for eligible supplies. Eligible supplies will include consumable goods (such as art supplies and items for science experiments) and certain durable goods (books, games and puzzles, containers and educational support software). K. MINERAL EXPLORATION TAX CREDIT FOR FLOW-THROUGH SHARE INVESTORS This measure extends the Mineral Exploration Tax Credit for flow-through share investors for an additional year, until March 31, The Mineral Exploration Tax Credit is an additional benefit, available to individuals who invest in flow-through shares, equal to 15 per cent of specified mineral exploration expenses incurred in Canada and renounced to flow-through share investors. L. LABOUR-SPONSORED VENTURE CAPITAL CORPORATIONS TAX CREDIT This measure restores the Labour-Sponsored Venture Capital Corporations (LSVCC) tax credit to 15 per cent for share purchases of provincially registered LSVCCs for 2016 and subsequent tax years. Under the currently legislated phase-out of the LSVCC tax credit, the tax credit is 5 per cent for 2016 and is scheduled to be eliminated for the 2017 and subsequent taxation years. M. TOP MARGINAL TAX RATE CONSEQUENTIAL AMENDMENTS This measure introduces further amendments that are consequential to the new 33-per-cent personal income tax rate on individual taxable income in excess of $200,000. These amendments: provide a 33-per-cent charitable donation tax credit (on donations above $200) to trusts that are subject to the 33-per-cent rate on all of their taxable income; apply the new 33-per-cent top rate on excess employee profit sharing plan contributions; increase from 28 per cent to 33 per cent the tax rate on personal services business income earned by corporations; amend the definition of relevant tax factor in the foreign affiliate rules to reduce the relevant tax factor from the current 2.2 to 1.9; amend the capital gains refund mechanism for mutual fund trusts to reflect the new 33-per-cent top rate in the formulas that are used in computing refundable tax; Part 1 Overview Page 3 of 7

4 increase the Part XII.2 tax rate on the distributed income of certain trusts from 36 per cent to 40 per cent; and amend the recovery tax rule for qualified disability trusts to refer to the new 33-per-cent top rate. These measures applies to the 2016 and later taxation years. The charitable donation tax credit measure will be limited to donations made after the 2015 taxation year. In the case of the rate increase on personal services business income earned by corporations in taxation years that straddle 2015 and 2016, the rate increase will be prorated according to the number of days in the taxation year that are after The measure will also extend the proposed 33-per-cent charitable donation tax credit in Bill C-2 (which currently applies to donations made after 2015) to be available for donations made by a graduated rate estate during a taxation year of the estate that straddles 2015 and PART 1 (OTHER) The following measures were originally proposed during the last Parliament but were not legislated before that Parliament was dissolved. A. TAX AVOIDANCE OF CORPORATE CAPITAL GAINS (SECTION 55) This measure extends the scope of the anti-avoidance rule in section 55, which currently may recharacterize a tax-free intercorporate dividend received by a corporation to be a capital gain, if one of the purposes of the dividend is to reduce a capital gain on any share. In general terms, the measure extends this treatment to cases where one of the purposes of the dividend is to effect a significant reduction in the fair market value of any share, or a significant increase in the total cost of properties of the recipient of the dividend. In general, this measure applies to dividends received after April 20, B. CANADIAN EXPLORATION EXPENSE This measure ensures that the costs of environmental studies and community consultations that are required in order to obtain an exploration permit are eligible for Canadian exploration expense (CEE) tax treatment. CEE can be immediately deducted in the year incurred or renounced to investors using flow-through shares. This measure applies to expenses incurred after February Part 1 Overview Page 4 of 7

5 C. CAPTIVE INSURANCE Canada s income tax system contains rules that protect the tax base by preventing taxpayers from shifting certain Canadian-source income to a no- or low-tax jurisdiction. Under these rules, this type of income earned by a controlled foreign affiliate of a taxpayer resident in Canada is considered to be foreign accrual property income (FAPI) taxable in the hands of the Canadian taxpayer on an accrual basis. This measure will amend an existing anti-avoidance rule regarding the insurance of Canadian risks. This amendment is intended to ensure that profits from the insurance of Canadian risks, which are derived from value generated in Canada, remain taxable in Canada. In particular, it will be amended so that: a foreign affiliate s income in respect of the ceding of Canadian risks is included in computing the affiliate s FAPI; and for these purposes, when an affiliate cedes Canadian risks and receives as consideration a portfolio of insured foreign risks, the affiliate is considered to have earned FAPI in respect of the ceding of the Canadian risks in an amount equal to the difference between the fair market value of the Canadian risks ceded and the affiliate s costs in respect of having acquired those Canadian risks. This measure applies to taxation years of taxpayers that begin on or after April 21, D. SYNTHETIC EQUITY ARRANGEMENTS This measure would modify the current dividend rental arrangement rules to deny the inter-corporate dividend deduction on dividends received by a taxpayer on a Canadian share for which there is a synthetic equity arrangement entered into with a tax-indifferent investor such as a Canadian tax-exempt pension fund or a non-resident person. A synthetic equity arrangement will be considered to exist where the taxpayer (or a non-arm s length person) enters into one or more arrangements that have the effect of providing to a counterparty all or substantially all of the risk of loss and opportunity for gain or profit in respect of the Canadian share. This measure applies to dividends that are paid or become payable on a share after April 2017 and dividends that are paid or become payable on a share at any time after October 2015 and before May 2017 if, in general terms, all or any part of an agreement or arrangement, in respect of the share, is entered into, acquired, extended or renewed or if the notional amount under an agreement is increased after April 21, 2015 and before that time. Part 1 Overview Page 5 of 7

6 E. CANADIAN WHEAT BOARD This measure provides certain tax relief regarding the July 2015 commercialization of the Canadian Wheat Board (which was renamed as G3 Canada Limited). In general terms, the measure allows tax-deferred treatment for certain debt and shares that the Canadian Wheat Board (before and after its continuation) issued to a trust set up to hold the shares for the benefit of farmers who deliver grain to the Canadian Wheat Board. While the trust will not be taxed on the receipt of the shares, it will be taxed on the disposition of the shares. Similarly, the measure allows tax-deferred treatment for units that the trust issues to farmers who deliver grain to the Canadian Wheat Board. Farmers will only be taxed on the disposition of their trust units. This measure is deemed to come into force on July 1, F. INVESTMENTS BY REGISTERED CHARITIES IN LIMITED PARTNERSHIPS The measure will amend the income tax rules to permit registered charities and registered Canadian amateur athletic associations to acquire or hold investments in limited partnerships. The measure applies only if: the charity together with all non-arm s length entities hold 20 per cent or less of the interests of the limited partnership; and the charity deals at arm s length with each general partner of the limited partnership. The measure applies in respect of investments in limited partnerships that are made or acquired on or after April 21, G. WITHHOLDING BY NON-RESIDENT EMPLOYERS This measure proposes to reduce the compliance burden on non-resident employers by replacing the current employee-specific waiver system with a more streamlined process. The new process will, with the Minister's pre-authorization, provide an exception from the obligation to withhold and remit amounts in respect of salaries and wages paid by qualifying non-resident employers to qualifying non-resident employees. The exception applies only in circumstances where the non-resident employee is expected (based on certain criteria) to not have any Canadian income tax liability because of a tax treaty - i.e., only in circumstances where withheld amounts are otherwise fully refundable. The new process will not affect the determination of a non-resident employee s Canadian tax liability, and employers will still be obligated to remit amounts in the event that the conditions to qualify for the exception are not met. This measure will apply in respect of withholding obligations that arise after Part 1 Overview Page 6 of 7

7 H. REPEATED FAILURE TO REPORT INCOME PENALTY This measure amends the repeated failure to report income penalty to apply in a taxation year only if a taxpayer fails to report at least $500 of income in the year and in any of the three preceding taxation years. The amount of the penalty will equal the lesser of: 10 per cent of the amount of unreported income; and an amount equal to 50 per cent of the difference between the understatement of tax (or the overstatement of tax credits) related to the omission and the amount of any tax paid in respect of the unreported amount (e.g., by an employer as employee withholdings). This measure applies to the 2015 and subsequent taxation years. I. INFORMATION-SHARING FOR THE COLLECTION OF NON-TAX DEBTS This measure amends the Income Tax Act, Part IX of the Excise Tax Act (in relation to the Goods and Services Tax/Harmonized Sales Tax) and the Excise Act, 2001 (in relation to excise duties on tobacco and alcohol products) to permit the sharing of taxpayer information within the Canada Revenue Agency in respect of non-tax debts under certain federal and provincial government programs. It also amends Part IX of the Excise Tax Act and the Excise Act, 2001 to permit information sharing in respect of certain programs where such information sharing is currently permitted under the Income Tax Act. This measure applies on Royal Assent. J. INFORMATION-SHARING WITH THE CHIEF ACTUARY This measure facilitates legislative amendments to ensure that the Office of the Chief Actuary can efficiently and effectively deliver its services to key clients. Specifically, the amendments permit the sharing of taxpayer information with the Office of the Chief Actuary solely for the purpose of enabling the conduct of actuarial reviews of pensions plans established under the Public Pensions Reporting Act and the Old Age Security Act. This measure applies on Royal Assent. Part 1 Overview Page 7 of 7

8 PART 2 AMENDMENTS TO THE EXCISE TAX ACT (GST/HST MEASURES) A. Medical and Assistive Devices Insulin Pens and Insulin Pen Needles The list of medical and assistive devices eligible for goods and service tax/harmonized sales tax (GST/HST) zero-rating (i.e., relief) includes insulin infusion pumps and insulin syringes. These devices are used to inject insulin for the treatment of diabetes. Insulin pens are also used to inject insulin and are an alternative to infusion pumps and traditional syringes. The measure provides that insulin pens and insulin pen needles are added to the list of GST/HST zero-rated medical and assistive devices. This measure applies to supplies made after March 22, 2016 and to supplies made on or before that date unless, on or before that day, the supplier charged, collected or remitted GST/HST in respect of the supply. Intermittent Urinary Catheters Urinary appliances that are designed to be worn by an individual are currently included in the list of GST/HST zero-rated medical and assistive devices. Intermittent urinary catheters are an alternative to catheters that are left in place. The measure adds intermittent urinary catheters that are supplied on the written order of a practitioner for use by a consumer named in the order to the list of GST/HST zero-rated medical and assistive devices. This measure applies to supplies made after March 22, B. Purely Cosmetic Procedures This measure excludes, from the general exemption for supplies made by charities, a supply of a service rendered to an individual for the purpose of enhancing or otherwise altering the individual s physical appearance and not for medical or reconstructive purposes or a supply of a right entitling a person to such service. This measure applies to supplies made after March 22, Part 2 Overview Page 1 of 3

9 C. GST/HST on Donations to Charities This measure provides relief when a charity makes a taxable supply of property or a service in exchange for a donation and when an income tax receipt may be issued for a portion of the donation. When this measure applies, only the value of the property or services supplied is subject to GST/HST instead of the full value of the donation. This measure applies to supplies made after March 22, In certain circumstances, a special transitional relief also applies to past taxable supplies. D. De Minimis Financial Institutions This measure provides that interest earned in respect of demand deposits, as well as term deposits and guaranteed investment certificates with an original date to maturity not exceeding 364 days, is not to be included in determining whether a person will be treated as a de minimis financial institution for GST/HST purposes. The measure will allow a person (e.g., a business) to engage in basic deposit-making activity without that activity leading it to being treated as a financial institution for GST/HST purposes. This measure applies to taxation years of a person beginning on or after March 22, 2016 and to the fiscal year of a person that begins before that day and ends on or after that day for the purposes of determining if the person is required to file the Financial Institution GST/HST Annual Information Return. E. Application of GST/HST to Cross-Border Reinsurance This measure clarifies that two specific components of imported reinsurance services, ceding commissions and the margin for risk transfer, do not form part of the tax base that is subject to the special GST/HST imported supply rules for financial institutions. This measure also sets out specific conditions under which the special GST/HST imported supply rules for financial institutions do not impose GST/HST on reinsurance premiums charged by a foreign reinsurer to a primary insurer in Canada. This measure generally applies as of the introduction of the special GST/HST imported supply rules for financial institutions (i.e., in respect of any specified year of a financial institution that ends after November 16, 2005). PART 2 (OTHER) A. Feminine Hygiene Products This measure provides that a supply of a product that is a sanitary napkin, tampon, sanitary belt, menstrual cup or other similar product and that is marketed exclusively for feminine hygiene purposes is added to the list of GST/HST zero-rated supplies. This measure applies to supplies made on or after July 1, Part 2 Overview Page 2 of 3

10 B. Information Sharing for the Collection of Non-Tax Debts This measure amends the Income Tax Act, Part IX of the Excise Tax Act (in relation to the GST/HST) and the Excise Act, 2001 (in relation to excise duties on tobacco and alcohol products) to permit the sharing of taxpayer information within the Canada Revenue Agency in respect of non-tax debts under certain federal and provincial government programs. It also amends Part IX of the Excise Tax Act and the Excise Act, 2001 to permit information sharing in respect of certain programs where such information sharing is currently permitted under the Income Tax Act. This measure applies on royal assent. Part 2 Overview Page 3 of 3

11 PART 3 AMENDMENTS TO THE EXCISE TAX ACT (EXCISE MEASURES), THE EXCISE ACT, 2001 AND OTHER RELATED TEXTS Part 3 implements certain excise measures proposed in the March 22, 2016 budget. Part 3 also implements other excise measures confirmed in the March 22, 2016 budget. A. Restricting the Relief of Excise Tax on Diesel and Aviation Fuel The Excise Tax Act contains a limited number of provisions that relieve the application of the excise tax on diesel fuel in specific circumstances. Over time, court decisions have expanded these relief provisions. This measure ensures that excise tax relief for diesel fuel used as heating oil or to generate electricity is targeted to specific instances. This measure will apply to fuel delivered or imported after June 2016, and to fuel delivered or imported before July 2016 that is used, or intended to be used, after June B. Enhancing Certain Security and Collection Provisions in the Excise Act, 2001 The excise duty framework contains a number of provisions with respect to the enforcement of, and compliance with, the excise duties imposed under the Excise Act, 2001 on tobacco products, spirits and wine. To help ensure that these provisions continue to protect the excise duty base, this measure enhances certain security and collection provisions in the Excise Act, The amendments related to the security provisions will come into force on the later of June 22, 2016 and the day on which this Act receives Royal Assent. The amendments related to the collection provisions will apply to amounts assessed and penalties after the day on which this Act receives Royal Assent. PART 3 (OTHER) A. Information Sharing for the Collection of Non-Tax Debts This measure amends the Excise Act, 2001 (in relation to excise duties on wine, spirits and tobacco products) to permit the sharing of taxpayer information in respect of non-tax debts within the Canada Revenue Agency under certain federal and provincial government programs and in respect of certain programs where information sharing is currently permitted under the Income Tax Act. This measure will apply on Royal Assent. Part 3 Overview Page 1 of 1

12 PART 4 DIVISION 1 FEDERAL BALANCED BUDGET ACT Part 4, Division 1 repeals the Federal Balanced Budget Act, deeming it to never have come into force. The Federal Balanced Budget Act was enacted last year under the previous government. Part 4 Division 1 Overview Page 1 of 1

13 PART 4 DIVISION 2 CANADIAN FORCES MEMBERS AND VETERANS RE-ESTABLISHMENT AND COMPENSATION ACT The Act to amend the Canadian Forces Members and Veterans Re-establishment and Compensation Act and to make consequential amendments to other Acts would: Increase the Earnings Loss Benefit from 75% to 90% of a Veteran s monthly gross pre-release military salary; Change the name of the Permanent Impairment Allowance to Career Impact Allowance and the term Totally and Permanently Incapacitated to Diminished Earning Capacity, and add an element to individually assess the impact of the service injury on a Veteran s career advancement opportunities. Increase the maximum lump sum Disability Award to $360,000, make consequential changes to the Death and Detention Benefits, and issue a payment to individuals who received Disability Award, Death Benefit and Detention Benefit payments between April 1, 2006 and the coming into force date; and Clarify wording around when and how Disability Awards are payable. Part 4 Division 2 Overview Page 1 of 1

14 PART 4 DIVISION 3 FINANCIAL INSTITUTIONS (SUNSET PROVISIONS) The federal financial institutions statutes 1 contain sunset provisions mandating their renewal by Parliament every five years so as to ensure the financial sector regulatory framework is reviewed in light of emerging trends and developments, and remains effective and technically sound. These legislative amendments would extend the current statutory sunset date by two years to March 29, Extending the statutory sunset date will give Canadians sufficient time to share their views, including on the scope of the review, and will provide time to make any changes to the framework. 1 The Bank Act, Insurance Companies Act, Trust and Loan Companies Act and Cooperative Credit Associations Act. Part 4 Division 3 Overview Page 1 of 1

15 PART 4 DIVISION 4 AMENDMENTS TO THE BANK ACT (FEDERAL CREDIT UNIONS) The proposed amendments to the Bank Act provide a legislative framework for the Minister of Finance to provide targeted protection against transitional risks and to facilitate a smooth entry process for provincial credit unions continuing to the federal framework. Division 4 of Part 4 amends the Bank Act to provide the Minister of Finance the authority to: provide targeted protection, through a loan guarantee, to eligible federal credit unions that face transitional risks as they move to the federal framework; and waive or adjust federal procedural rules on entry, if the transitioning credit union is otherwise substantially compliant with federal rules. Part 4 Division 4 Overview Page 1 of 1

16 PART 4 DIVISION 5 BANK RECAPITALIZATION REGIME (BAIL-IN) The proposed amendments to the Canada Deposit Insurance Corporation Act (CDIC Act) and Bank Act provide a legislative framework for a bail-in regime for Canada s systemically important banks and include accompanying enhancements to Canada s bank resolution toolkit. These amendments would strengthen authorities ability to protect taxpayers in the unlikely event of a failure of a systemically important bank. The bail-in regime would allow authorities to convert certain debt of a failing systemically important bank into common shares to recapitalize the bank and allow it to remain open and operating. Only prescribed long-term debt would be subject to the bail-in power, and all deposits would be excluded. To support authorities ability to undertake a bail-in and resolve a failing bank, the proposed amendments would: permit the Superintendent of Financial Institutions (Superintendent) to designate individual banks to which the bail-in regime would apply as domestic systemically important banks ; provide new powers for CDIC to undertake a bail-in by converting eligible debt of a non-viable domestic systemically important bank into common shares; enhance CDIC s powers that are necessary to resolve a failed bank and to undertake a bail-in conversion including powers for CDIC to take temporary control or ownership of a non-viable bank; set out an updated process for investors to seek redress should they be left worse off as a result of CDIC s actions (including bail-in) than if the bank had been liquidated; require domestic systemically important banks to maintain a minimum amount of regulatory capital and debt subject to the new bail-in conversion power; and, authorize the Governor in Council to make regulations respecting the features described above. Consequential amendments will be made to the Bank Act, CDIC Act, Financial Administration Act, Payment Clearing and Settlement Act and Winding-up and Restructuring Act in order to ensure consistency with the amendments described above. Part 4 Division 5 Overview Page 1 of 1

17 PART 4 DIVISION 6 CHIEF EXECUTIVE OFFICER OF THE CANADA DEPOSIT INSURANCE CORPORATION The Government is moving to strengthen financial sector governance. The proposed change will expand the pool of qualified candidates for the Canada Deposit Insurance Corporation (CDIC) Chairperson position while protecting the integrity of the Financial Institutions Supervisory Committee (FISC) by replacing the CDIC Chairperson with the CDIC Chief Executive Officer as member of the FISC. Division 6 of Part 4 modifies the membership of the FISC established under the Office of the Superintendent of Financial Institutions Act by removing the reference to the CDIC Chairperson to replace it with the CDIC Chief Executive Officer. This removes the prohibition on financial holdings that currently applies to the CDIC Chairperson, which will facilitate the appointment of a well-qualified individual to the position. It also makes consequential amendments to other Acts regarding the disclosure of information and the obligation to consult with the CDIC Chairperson, which correspond to FISC membership. The CDIC Chairperson will remain subject to the Conflict of Interest Act as a public office holder. Part 4 Division 6 Overview Page 1 of 1

18 PART 4 DIVISION 7 FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS ACT Territorial Formula Financing (TFF) is an annual unconditional transfer from the federal government to each territorial government. It enables territorial governments to provide a range of public programs and services to their residents that are comparable to those offered by provincial governments, at comparable levels of taxation. Transfers to the territories were set to decline by $25 million in , largely as a result of a revision to the public sector data within Statistics Canada s Macroeconomic Accounts. Division 7 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to (i) establish each territory s gross expenditure base as the new basis for future determination of TFF payments, (ii) remove the ability for the Minister to recalculate the gross expenditure base of previous years and (iii) authorize the Minister of Finance to redetermine the TFF amounts for Part 4 Division 7 Overview Page 1 of 1

19 PART 4 DIVISION 8 FINANCIAL ADMINISTRATION ACT Authority for the Government to borrow in financial markets is provided by Part IV of the Financial Administration Act (FAA), which authorizes the Minister of Finance, with the approval of the Governor in Council, to issue securities and undertake related activities. Prior to 2007, the Minister of Finance was required to seek approval from Parliament to increase market borrowings. Amendments were made to the FAA in 2007 that removed the need for the Minister to seek Parliamentary approval before increasing market borrowing. This Division amends the FAA to restore the requirement for the Minister of Finance to seek Parliamentary approval of the Government s borrowing activities, including the borrowings of agent Crown Corporations. The Minister would have standing authority to refinance outstanding market debt, subject to an annual approval by the Governor in Council (GIC). Should borrowing be required in extraordinary circumstances such as a financial crisis or a natural disaster, the Minister of Finance would be empowered to seek GIC approval of extraordinary borrowing authority without requiring Parliament s approval. The Minister would be required to table in Parliament a report on the activities in relation to any extraordinary borrowing within 30 sitting days. Part 4 Division 8 Overview Page 1 of 1

20 PART 4 DIVISION 9 OLD AGE SECURITY ACT BACKGROUND The Old Age Security (OAS) program plays a significant role in providing income security to senior Canadians. It has been one of the cornerstones of Canada s retirement income system since The purpose of the OAS program is to ensure a minimum income to seniors and to contribute to income replacement in retirement. It is funded entirely through general tax revenues. Benefits under the OAS program include the OAS pension, which is paid to all persons aged 65 or over who meet the residence requirements, the income-tested Guaranteed Income Supplement (GIS) for low-income pensioners, and the Allowances for low-income individuals aged 60 to 64 who are the spouses/common-law partners of GIS recipients, or who are survivors. AGE OF ELIGIBILITY Old Age Security and Guaranteed Income Supplement benefits are an important part of the retirement income of Canadians, particularly for lower-income seniors. Vulnerable seniors depend on this support, and without it, face a much higher risk of living in poverty. In order to strengthen public pensions and improve the lives of Canadian seniors, the eligibility ages of the OAS program will be restored. The amendments to the OAS Act will cancel the increase in the age of eligibility from 65 to 67 for the OAS pension and the GIS, and from 60 to 62 for the Allowance (ALW) and the Allowance for the Survivor (ALWS). The increase in the age of eligibility was scheduled to take place in INCREASE TO INCOME-TESTED BENEFITS The GIS top-up currently provides an additional amount of GIS to the lowest income seniors, i.e. those with annual income of about $4,600 for single individuals and $7,650 for couples. However, current benefit levels still leave many single seniors living in low income and vulnerable. The amendments to the OAS Act will increase the maximum GIS top-up for the lowest income single pensioners and for pensioners whose spouse is not eligible for OAS benefits by up to $947 annually starting in July This increase would also apply to the maximum ALWS top-up. Part 4 Division 9 Overview Page 1 of 1

21 PART 4 DIVISION 10 SPECIAL IMPORT MEASURES ACT The Special Import Measures Act (SIMA) is the primary legislation governing Canada s trade remedy system. The Canadian trade remedy system provides for the application of anti-dumping and countervailing duties to remedy injury to domestic producers caused by dumped and subsidized imports. Canada s trade remedy investigations are conducted by the Canada Border Services Agency and the Canadian International Trade Tribunal. Division 10 of Part 4 amends SIMA to provide that: 1) a full trade remedy investigation will be conducted even if there is a finding at the preliminary determination stage that the margin of dumping or amount of subsidy is insignificant; and 2) expiry review proceedings will be initiated two months prior to the 5-year expiry date of an anti-dumping or countervailing duty measure. The Government has also launched public consultations with respect to a broader set of potential amendments to the trade remedy system. Part 4 Division 10 Overview Page 1 of 1

22 PART 4 DIVISION 11 PENSION BENEFITS STANDARDS ACT, 1985 Division 11 of Part 4 amends the Pension Benefits Standards Act, 1985 (PBSA) to combine the bilateral and multilateral agreement authorities under the Act and to clarify that an agreement may permit the application of provincial pension law with respect to a pension plan otherwise subject to federal pension law. In particular, the proposed amendments repeal section 6 of the PBSA, regarding bilateral agreements, and expand section 6.1 on multilateral agreements to also include agreements with only one designated province. In addition, the amendments clarify that an agreement may make the pension law of a designated province that is party to the agreement applicable with respect to a pension plan that would otherwise be subject to federal pension law. The amendments also rename a multilateral agreement as a federal-provincial agreement. Part 4 Division 11 Overview Page 1 of 1

23 PART 4 DIVISION 12 EMPLOYMENT INSURANCE ACT Waiting Period The Employment Insurance Act (EI Act) requires claimants to serve a waiting period prior to benefits being payable, and provides that it may be deferred or waived in specific circumstances. The waiting period has been set at two weeks since These amendments to the EI Act will reduce the waiting period from two weeks to one week. All claimants whose benefit period commences before the coming into force of these amendments will be subject to the existing two week waiting period. New Entrants and Re-entrants The Government will be seeking to make amendments to the EI Act and to amend the Employment Insurance Regulations (EI Regulations) and Employment Insurance (Fishing) Regulations (EI (Fishing) Regulations) to eliminate the New Entrants and Re-entrants requirements established for regular claimants and self-employed fishers. The amendments will eliminate the New Entrant and Re-entrant provisions introduced in 1978, and instead require claimants to meet their regional variable entrance requirement (which varies between 420 to 700 hours) to be eligible for EI regular benefits. Self-employed fishers will need to reach their regional insurable earnings entrance requirement for fishers (which varies between $2,500 and $4,200) to qualify for EI fishing benefits. Currently, New Entrant and Re-entrant rules require workers newly-entering the labour force or re-entering after an absence of two years to accumulate 910 hours of insurable employment in the year preceding their claim to be eligible for EI regular benefits. The intention of the New Entrant and Re-entrant provisions were to discourage a cycle of EI reliance by ensuring that workers and especially young people develop a significant attachment to the labour force before collecting EI benefits. The EI (Fishing) Regulations will be amended to eliminate the requirement that selfemployed fishers who are new-entrants or re-entrants to the labour force must have $5,500 in earnings from employment as a fisher in the qualifying period. The intent of the provision was also to reinforce the insurance principles of the EI program by ensuring that workers make a reasonable contribution to the system before collecting benefits. Part 4 Division 12 Overview Page 1 of 2

24 It was later determined that the New Entrant and Re-entrant rules did not achieve their intended purpose. An evaluation of the New Entrant and Re-entrant provisions conducted by Employment and Social Development Canada in 2011 found that by making EI more difficult to access for the first time, the New Entrant and Re-entrant rules did not act to discourage future frequent use of EI. These provisions also prevent workers from gaining access to EI-funded training supports delivered through the Labour Market Development Agreements (LMDAs) with provinces and territories, as workers must qualify for EI Part I before qualifying for Part II (and therefore LMDA-funded programs) as active claimants. Extra Weeks of Benefits for Workers in Regions Affected by the Downturn in Commodity Prices The EI program provides temporary financial assistance to unemployed workers who have lost their jobs through no fault of their own while they look for employment or upgrade their skills. Dramatic declines in global commodity prices since late 2014 have produced sharp and sustained unemployment shocks in commodity-based regions. Budget 2016 proposes to provide eligible unemployed workers in 12 regions hardest hit by the downturn in commodity prices with additional weeks of EI regular benefits. Five additional weeks of EI regular benefits will be available for all eligible unemployed workers in specified regions up to a maximum of 50 weeks and up to an additional 20 weeks will be available to eligible unemployed long-tenured workers, in specified regions, up to a maximum of 70 weeks. Extended benefits will be available for a period of one year starting in July 2016, with the measure applying to all eligible claims as of January 4, Part 4 Division 12 Overview Page 2 of 2

25 PART 4 DIVISION 13 CANADA MARINE ACT Canada Day public celebrations have been held for 28 years at Canada Place Corporation in Vancouver. These celebrations attract approximately 950,000 participants annually, and represent the largest Canada Day event outside the National Capital Region. In preparation for the 150th anniversary of Confederation in 2017, Canada Place Corporation has submitted an application for funding to Canadian Heritage proposing Canada Place as a hub for activities on the West Coast. The expression of interest proposes activities over several months. Canada Place Corporation is a wholly-owned subsidiary of the Vancouver Fraser Port Authority, which is commercially known as Port of Vancouver. As such, it is not eligible to receive funding from the Department for celebrations, as any contribution would contravene the Canada Marine Act. In consideration of the importance of the Canada Day celebrations and the potential scope of the proposed activities for the 150 th anniversary of Confederation, section 25.2 is added to the Canada Marine Act to allow the Minister of Canadian Heritage to make payments to Canada Place Corporation for Canada Day celebrations and for the celebrations marking the 150 th anniversary of Confederation. Part 4 Division 13 Overview Page 1 of 1

26 PART 4 DIVISION 14 JOBS, GROWTH AND LONG-TERM PROSPERITY ACT PPP Canada Inc. is a wholly-owned subsidiary of Canada Development Investment Corporation, a Crown corporation in the Finance portfolio. PPP Canada Inc. provides advice on delivering infrastructure projects by way of public-private partnerships (P3s), and it administers the federal P3 Canada Fund which supports P3 infrastructure projects in Canada. Division 14 of Part 4 amends the Jobs, Growth and Long-term Prosperity Act to authorize the Minister of Infrastructure, Communities and Intergovernmental Affairs to acquire the shares of PPP Canada Inc. on behalf of the Crown. It also sets out that the appropriate minister, as defined by the Financial Administration Act, holds those shares, and it authorizes the appropriate minister, with the Governor in Council s approval, to conduct certain transactions in relation to PPP Canada Inc. It also authorizes PPP Canada Inc. and its wholly-owned subsidiaries to sell their assets in certain circumstances, with the approval of the Governor in Council. Part 4 Division 14 Overview Page 1 of 1

27 PART 4 DIVISION 15 CANADA FOUNDATION FOR SUSTAINABLE DEVELOPMENT TECHNOLOGY The Canada Foundation for Sustainable Development Technology Act establishes an independent, not-for-profit corporation that funds clean technologies. The corporation operates as Sustainable Development Technology Canada. On November 4, 2015, the Minister of Industry was designated by Order in Council as the minister responsible for the purposes of the Canada Foundation for Sustainable Development Technology Act. Division 15 of Part 4 amends the Canada Foundation for Sustainable Development Technology Act and the Budget Implementation Act, 2007 to consolidate statutory appointment and funding authorities associated with SDTC under the Minister of Industry, as the designated minister. Part 4 Division 15 Overview Page 1 of 1