Hon. Marc Gold (Government Representative in the Senate): Honourable senators, I give notice that, at the next sitting of the Senate, I will move:

That, notwithstanding any provision of the Rules, previous order or usual practice:

1.if the Senate receives a message from the House of Commons with Bill C-28, An Act to amend the Criminal Code (self-induced extreme intoxication), the bill be placed on the Orders of the Day for second reading on June 23, 2022;

2.if, before this order is adopted, the message on the bill had been received and the bill placed on the Orders of the Day for second reading at a date later than June 23, 2022, it be brought forward to June 23, 2022, and dealt with on that day;

3.all proceedings on the bill be completed on June 23, 2022, and, for greater certainty:

(i)if the bill is adopted at second reading on that day it be taken up at third reading forthwith;

(ii)the Senate not adjourn until the bill has been disposed of; and

(iii)no debate on the bill be adjourned;

4.a senator may only speak once to the bill, whether this is at second or third reading, or on another proceeding, and during this speech all senators have a maximum of 10 minutes to speak, except for the leaders and facilitators, who have a maximum of 30 minutes each, and the sponsor and critic, who have a maximum of 45 minutes each;

5.at 9 p.m. on Thursday, June 23, 2022, if the bill has not been disposed of at third reading, the Speaker interrupt any proceedings then before the Senate to put all questions necessary to dispose of the bill at all remaining stages, without further debate or amendment, only recognizing, if necessary, the sponsor to move the motion for second or third reading, as the case may be; and

6.if a standing vote is requested in relation to any question necessary to dispose of the bill under this order, the vote not be deferred, and the bells ring for only 15 minutes; and

That:

1.the Standing Senate Committee on Legal and Constitutional Affairs be authorized to examine and report on the matter of self-induced intoxication, including self-induced extreme intoxication, in the context of criminal law, including in relation to section 33.1 of the Criminal Code;

2.the committee be authorized to take into consideration any report relating to this matter and to the subject matter of Bill C-28 made by the House of Commons’ Standing Committee on Justice and Human Rights;

3.the committee submit its final report to the Senate no later than March 10, 2023; and

4.when the final report is submitted to the Senate, the Senate request that the government provide a complete and detailed response within 120 calendar days, with the response, or failure to provide a response, being dealt with pursuant to the provisions of rules 12-24(3) to (5).

[Translation]

Hon. Marc Gold (Government Representative in the Senate): Thank you for your question.

The independence of our law enforcement operations is a key principle of our democracy and one that the government deeply respects. I have been assured that at no point did the government pressure or interfere in the operational decisions of the RCMP. I direct all senators to the commissioner’s statement from yesterday in which she makes very clear that there was no interference.

Canadians, including those directly impacted by the tragedy, have expressed concern about when and how the RCMP shared information with the public, and that is why the government specified in the order of reference that the Mass Casualty Commission examine the communications approach taken both during and after the event.

Finally, senators, the former Minister of Public Safety, Minister Blair, both during Question Period in the House and today to reporters, was unequivocal. I know Minister Blair is a man of integrity, and I quote him from Question Period:

I can confirm for the House, as the commissioner has also confirmed, that no such direction or pressure was exerted by any member of this government to influence the commissioner’s exercise of her authorities over her police service.

Hon. Rosa Galvez: Honourable senators, I have the honour to table, in both official languages, the report of the ParlAmericas concerning the Eighteenth Plenary Assembly, held as virtual sessions on November 26, 29 and December 10, 2021.

Hon. Donald Neil Plett (Leader of the Opposition): Honourable senators, my question today is again for the Leader of the Government in the Senate. This is a follow-up to yesterday’s question, leader, about pressure put on the RCMP commissioner by the Prime Minister and Minister Blair to release information on the investigation into the horrific April 2020 shootings in Nova Scotia.

Leader, these are the notes of Superintendent Darren Campbell of the Nova Scotia RCMP:

The Commissioner said she had promised the Minister of Public Safety and the Prime Minister’s Office that the RCMP (we) would release this information. I tried to explain there was no intent to disrespect anyone however we could not release this information at this time. The Commissioner then said that we didn’t understand, that this was tied to pending gun control legislation. . . .

Leader, I know your government isn’t good at providing answers, but, now that you have had time to get a response, did Commissioner Lucki promise to use the mass murders in Nova Scotia to advance the Liberal government policy? Who in the Prime Minister’s Office or in the minister’s office talked to Commissioner Lucki about releasing this information?

Hon. Leo Housakos: Honourable senators, my question is for the leader of the Liberal-NDP government.

Senator Gold, I need to get back to the question asked of you by Senator Plett. At the end of the day, with your talking points, you are essentially asking us to believe the word of this Trudeau government over the RCMP.

Senator Gold, it has been a few years now since we found out that your government wasn’t above interfering in criminal court proceedings for political expediency, and more recently we found out that you are not above illegally suspending the rights of Canadians with an unjustified invocation of the Emergencies Act.

It should come as no surprise to any of us that your government thinks nothing of interfering in the police investigation of one of this country’s most brutal mass murders and taking advantage of that tragedy in order to advance the Trudeau political agenda.

My question to you is simple: Is there any length to which the Trudeau government will not go for political expediency?

Hon. Marc Gold (Government Representative in the Senate): The Government of Canada has always been clear that it is on the side of Quebecers who are shocked and disappointed that a young teacher can no longer practise her profession because of how she chooses to observe her religion.

This government is committed to defending the rights and freedoms that are protected in the Canadian Charter of Rights and Freedoms, including the right to freedom of religion and the right to equality, as this matter touches upon those fundamental freedoms and the interpretation of the Charter which underscore our liberal democracy.

This government fully expects that this case will be appealed to the Supreme Court of Canada. If that happens, the government is committed to contributing to the debate, giving the broad implications for all Canadians and the need to defend the Charter, including the way in which the “notwithstanding” clause was invoked. The government has stated clearly that it will intervene in this matter at the Supreme Court level.

Senator Loffreda: Thank you for your answer, Senator Gold.

I appreciate the government may not want to take a position on the bill until the Court of Appeal of Quebec renders a decision. But sometimes governments need to lead and protect the rights and freedoms of its citizens, whether they were born here or not. Like the rest of Canada, Quebec’s economic prosperity will rely heavily on immigrants.

This bill makes our province increasingly less attractive to diverse communities from around the world. When will the Prime Minister start advocating for these minorities who are such an important part of our national fabric? When will the government denounce Premier Legault’s use of the “notwithstanding” clause as a means to override individual Charter rights?

Hon. Marc Gold (Government Representative in the Senate): Thank you, Senator Galvez. I participated in many of those hearings, so I’m aware of the questions that you asked. I do believe that you received answers and they would be reflected in Hansard.

I don’t have Hansard at hand. I can refer you back to those answers. I hope that they are satisfactory. On the assumption that they are not, thank you for raising the issue in the chamber. We look forward to the third reading debate on the bill later today.

Senator Cordy: Thank you very much for that. I’m really pleased to hear about the interim steps that are taking place. I have never met Minister Anand, but, based on the things she has done, I have tremendous respect for her and am quite certain she will try to get things done.

The minister previously stated that she was acting on a recommendation from the previous External Review into Sexual Misconduct and Sexual Harassment in the Canadian Armed Forces report from 2015 to allow victims of sexual assault to request, with the support of what was then to be called the center for accountability for sexual assault and harassment — now the Sexual Misconduct Response Centre, SMRC — transfer of the complaint to civilian authorities. According to the Office of the Canadian Forces Provost Marshal last November, roughly 145 cases of sexual misconduct allegations involving Canadian Armed Forces members could be transferred to civilian police to investigate.

To date, do you know how many cases of these have been tried or brought to civilian court? Are civilian police obligated to investigate cases of sexual misconduct allegations if requested by the Canadian military, or are they able to refuse such cases?

Senator Patterson: Senator Gold, let me get a little more particular on my concern. We have heard that groups such as the National Association of Women and the Law felt they were not meaningfully consulted on Bill C-28. In fact, the national association’s meeting with justice officials occurred on a Tuesday and the bill was tabled that Friday. The association has now asked all senators for the opportunity to state their case. They complain that the process is rushed. However, it is possible, according to the motion you have given notice of today, that we will receive the bill either later tonight or tomorrow and be pushed into considering the bill at all stages in a single day without hearing — in this place or in the other place — from any women’s organizations, not to mention the wider legal community.

Senator Gold — and I ask this as, I suppose, yet another man speaking on this issue — is your government content to entirely exclude the voices of women’s organizations to provide their considered comments now that we know what’s proposed in the text of the bill? Is your government, which prides itself on being feminist, really content to exclude women and women’s organizations from commenting on this bill when they are telling us they have identified significant flaws in the legislation?

Senator Gold: I have not finished my answer, sir. I will take a cue from a colleague more experienced than I. To your question, “is the government content to ignore,” the government is not ignoring, so the answer is no.

[Translation]

Senator Plett: Reportedly, Minister Sajjan requested this exemption because, as you say, he carries classified information.

I find it strange that the minister would request this exemption now, as prior to his demotion last year, Minister Sajjan had been the Minister of National Defence. In his old cabinet post, he would have carried much more sensitive documents than he does in his current position as Minister of International Development.

The press also reported that former finance minister Bill Morneau once sought an exemption and was denied. Clearly, that policy has changed.

Leader, your government has created chaos in our airports. Instead of dealing with this issue, it looks like ministers are giving themselves additional privileges so they don’t have to suffer through security screenings like all other Canadians.

Is every Trudeau cabinet minister now entitled to bypass airport screening every time they travel with sensitive documents?

Senator Gold: The answer is no. To the best of my knowledge, this was the only request. I repeat that the exemption that was granted was partial only. The minister still has to go through regular security screening, save and except for the equipment and documents that are classified and not appropriate for review by the officials.

(For text of Delayed Answers, see Appendix.)

Hon. Raymonde Gagné (Legislative Deputy to the Government Representative in the Senate): Honourable senators, pursuant to rule 4-13(3), I would like to inform the Senate that as we proceed with Government Business, the Senate will address the items in the following order: third reading of Bill C-19, followed by third reading of Bill S-5, followed by second reading of Bill C-5, followed by all remaining items in the order that they appear on the Order Paper.

[English]

Hon. Lucie Moncion moved third reading of Bill C-19, An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures.

She said: Honourable senators, I am pleased to take part in today’s third-reading debate on Bill C-19, An Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022 and other measures (the Budget Implementation Act, 2022, No. 1).

The measures in this bill include many recent budget measures that are fundamental to the government’s plan to grow the economy and make life more affordable for Canadians as they continue to recover from the global COVID-19 pandemic.

[Translation]

In this is speech, I will touch briefly on important measures relating to housing, employment and tax fairness. I will also address other measures, such as the tax on vaping products and climate-related tax measures.

I will conclude with an overview of observations from reports by the committees that studied various parts of Bill C-19, specifically those in the report by the Standing Senate Committee on Aboriginal Peoples. I think it is important to read certain parts of that powerful report in this chamber.

First I will talk about housing access and availability.

Honourable senators, we know that Canadians need housing to thrive, but Canada simply doesn’t have enough. To address the situation, the government’s latest budget includes an ambitious housing construction plan. The plan would double the number of homes built in the country over the next 10 years.

Of course, a national effort will be required to make this project a reality. The government will work with its partners at all levels of government, and will provide significant payments to the provinces and territories under the proposals set out in Bill C-19. These include up to $750 million to help municipalities deal with the shortfall in public transit and housing caused by the pandemic. The funding would be conditional on provinces and territories matching the federal government’s contribution and working with their municipalities to expedite the construction of more housing for Canadians.

Honourable senators, Bill C-19 will also make the housing market fairer. We know, for example, that foreign investors are actively buying residential real estate in Canada. The bill prohibits non-Canadians from purchasing residential property for two years. This measure will help ensure that housing is used as homes for Canadian families and not as speculative financial assets.

[English]

In addition, the bill would further promote fairness in the real estate market by removing the ambiguity that may arise from the existing rules regarding the application of the GST or HST to the assignment of a contract of sale by making all assignments of contracts of sale by individuals taxable and by standardizing the tax treatment for the purchase of a new home.

Currently, when a person makes a new home assignment sale, the GST or HST may or may not apply, depending on the reason for purchasing the home.

For example, the GST or HST does not apply if the buyer initially intended to live in the home. This creates an opportunity for speculators to be deceitful about their original intentions and create uncertainty for everyone involved in an assignment sale as to whether the GST or HST applies. The current rules also result in the uneven application of the GST or HST to the full and final price of a new home. To redress this, Bill C-19 would amend the Excise Tax Act to make assignment sales in respect to newly constructed or substantially renovated residential housing taxable for GST or HST purposes.

On the housing front, Bill C-19 would also make housing more affordable for the homes people already live in. Over recent years, the home accessibility tax credit has provided support to offset some of the costs of home renovations and upgrades that make a home safer for seniors and persons with disabilities. In order to better support independent living, Bill C-19 would double the credit’s annual limit to $20,000, making additional significant alterations and renovations more affordable. These enhancements, which would apply to the 2022 and subsequent taxation years, would provide up to an additional $1,500 in tax support. Taken together, Bill C-19 offers Canadians a suite of measures that support housing availability and affordability.

[Translation]

Let’s talk about the importance of investing in a strong workforce. The investments in Budget 2022 extend far beyond real estate. Bill C-19 provides for investments in a stronger and rapidly growing workforce.

It will make it easier for the skilled immigrants our economy needs to settle in Canada. It will improve the government’s ability to select candidates from the Express Entry pool who meet the needs of Canadian businesses.

[English]

In addition, Bill C-19 would introduce a labour mobility deduction for tradespeople, which would allow workers to deduct up to $4,000 per year for travel and temporary location expenses. By making it more affordable for people working in the skilled trades to travel to where the jobs are, this deduction would help reduce labour shortages in some areas of our country.

Bill C-19 would also introduce 10 days of paid sick leave for workers in the federally regulated private sector, which will support 1 million workers and protect their families, their workplaces and their jobs.

Honourable senators, Bill C-19 would advance the government’s efforts to ensure Canadians benefit from a sound tax system where everyone pays their fair taxes. Bill C-19 proposes to implement the government’s tax on the sale of new luxury cars and aircraft with a retail sale price over $100,000 and on new boats over $250,000.

Bill C-19 will also help address complex financial crimes, including money laundering, corruption and tax evasion by providing authorities with access to accurate and up-to-date data on the people who own and control corporations. Anonymous Canadian shell companies can be used to conceal the true ownership of assets, including businesses and expensive properties. This change to legislation would accelerate the creation of a public registry of federally incorporated corporations before the end of 2023, two years earlier than planned, to help counter illegal activities.

This would also help to prevent shell companies from being used to avoid sanctions and the tracing and freezing of financial assets. This is particularly relevant as Canada works with its allies through the new Russian Elites, Proxies, and Oligarchs Task Force to target the global assets of Russia’s elites and those who act on their behalf.

At the Standing Senate Committee on Foreign Affairs and International Trade, officials described the process that would be followed for the forfeiture and disposal of seized assets. The minister would be responsible for identifying which asset could be seized and for applying to a court to seek a forfeiture order and to provide notice to any parties with an interest in the seized property.

[Translation]

On the topic of economic recovery, some of the measures in Bill C-19 are part and parcel of an economic stimulus package designed to meet the needs of the various sectors that were hard hit during the pandemic.

Many Canadian film and video productions were delayed during this time. Bill C-19 would grant more time to incur eligible expenses and extend certain deadlines related to tax credits that were available in these circumstances.

In 2019, roughly 1,540 and 550 corporations claimed the Canadian Film or Video Production Tax Credit, or CPTC, and the Film or Video Production Services Tax Credit, or PSTC, respectively. A comparable number of businesses could potentially avail themselves of these extensions. Another change found in the first part of Bill C-19 would allow the Canada Revenue Agency to accept late applications for the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and the Canada Recovery Hiring Program. Since their introduction, these programs have been subject to strict deadlines that are sometimes ill-suited to the reality Canadians are facing. This measure would allow the CRA to take into account exceptional circumstances, through a case-by-case analysis, when appropriate, in order to recognize a person’s eligibility despite their late application.

[English]

Programs offered by the government in response to the pandemic, including the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy, Canada Worker Lockdown Benefit, and the Canada Emergency Business Account helped the Canadian economy immensely to stay afloat. As for the International Monetary Fund’s recent Article IV report, the decisive actions and unprecedented fiscal support helped limit economic scarring and protected Canadian jobs.

In order to deliver these programs to support Canadians and the economy during the pandemic, the government had to make extraordinary borrowings. The total sum borrowed from March 23, 2021, to March 31, 2021, under section 46.1(c) of the Financial Administration Act was $6.3 billion. From April 1, 2021, to May 6, 2021, the total borrowed under that section was $2.1 billion. Amounts borrowed under section 46.1(c) do not count toward the government’s borrowing limit under the Borrowing Authority Act and are therefore not subject to the same reporting and transparency obligations as amounts that are part of the ordinary borrowing.

Given that the period of extraordinary circumstances has ended, the government proposes that the extraordinary borrowings from spring of 2021 be treated as regular borrowings to provide greater transparency on the stock of the government’s debt and accountability to Parliament for the total amount borrowed. The government followed a similar process in the fall of 2020 with respect to extraordinary borrowings that were undertaken between April 1, 2020, and September 30, 2020.

[Translation]

Let’s now turn to the health of Canadians. Part 2 amends the Excise Tax Act to ensure that the eligibility rules for the expanded GST/HST rebate for hospitals recognize the growing role of nurses and nurse practitioners in providing health care services in all regions of Canada, including those that aren’t remote. Hospitals, charities and non-profit organizations providing health care services with the active involvement of, or on the recommendation of, either a physician or a nurse will be eligible for this rebate.

Senators will also recall that Bill C-19 provides a one-time $2‑billion payment to reduce backlogs in the health care system through the Canada Health Transfer. A proportional payment will be made to the provinces and territories on a per capita basis.

[English]

The Government of Canada is also proposing measures that will have the effect of preventing long-term negative health behaviours among youth through economic impediments. Part 3 of Bill C-19 proposes to amend the Excise Act, 2001 and related acts and regulations to implement a new excise duty framework for vaping products.

The new framework would require manufacturers of vaping products to obtain an excise licence for vaping products from the Canada Revenue Agency and require that an excise stamp be placed on all vaping products entering the Canadian market for retail sale.

The amendment also includes administrative and enforcement rules relating to the new framework and are intended to ensure that the framework applies to imported vaping products. Many stakeholders, including the Canadian Cancer Society, are urging senators to support Bill C-19 to ensure that vaping products are taxed as soon as possible. Indeed, some statistics, particularly among our youth, are very disturbing.

Colleagues, according to the result of the national survey on tobacco, alcohol and drugs among high school students, the rate of vaping has more than tripled over a four-year period from 9% to 16% to 29%. Recent studies in the U.S. and Canada show alarming upward trends. When you consider that some of the products can contain up to 50 milligrams of nicotine, it is disturbing to see that a new generation is developing an addiction to nicotine through vaping products.

Vaping products are particularly affordable, and young people are very sensitive to product costs. We know that tobacco taxes had an impact on reducing youth smoking, and the same logic applies to vaping products. A tax should help reduce youth consumption.

However, in the interest of public health, the government must consider a comprehensive strategy to address nicotine use among Canadians in general. Ideally, this tax would be accompanied by other measures such as regulating the maximum level of nicotine that these products can contain, as is the case, for example, with cannabis; restriction on advertising and the flavours available; and more education and prevention.

To this end, Part 3 of the bill also amends the Federal-Provincial Fiscal Arrangements Act to allow the federal government to enter into agreements on a coordinated approach to the taxation of vaping products with provincial and territorial governments. Provinces and territories may also play a role in this national strategy within their own jurisdictions, including regulating the legal age of consumption of these products and the licensing of establishments.

[Translation]

Bill C-19 will continue to help Canadians fight climate change. In 2019, the government established a national price on carbon pollution to ensure that it is no longer free to pollute anywhere in Canada. In provinces where the federal fuel charge applies, all proceeds are remitted to Canadians and communities. Approximately 90% of these proceeds directly benefit the population through the climate action incentive.

[English]

The majority of families receive more money back through the climate action incentive than they pay into the federal system. Bill C-19 would change the delivery of the climate action incentive payments from a refundable claim annually on personal income tax returns for those living in Ontario, Manitoba, Saskatchewan and Alberta, to quarterly payments starting in July of this year. Payments would start with a double-up payment to return proceeds from the first two quarters of 2022-23 fuel charge year.

To support the growth of clean technology manufacturing in Canada, Bill C-19 would also help Canadians and Canadian businesses benefit from the global transition to a clean economy by cutting tax rates in half for businesses that manufacture zero‑emission technologies.

[Translation]

Bill C-19 also contains a measure to expand the scope of the capital cost allowance deduction to include new clean energy equipment. The measure would exclude equipment that mainly uses fossil fuels, for example, fossil-fuelled cogeneration systems and fossil-fuelled enhanced combined cycle systems. It would impose an efficiency requirement on waste-fuelled systems and limit the allowable proportion of fossil fuels that can be used by eligible equipment.

I will now talk about protection measures for Canada.

[English]

Bill C-19 would amend the Special Import Measures Act and the Canadian International Trade Tribunal Act to strengthen and improve access to Canada’s trade remedy system. The trade remedy system allows for the imposition of anti-dumping and countervailing duties on imports to protect domestic producers from injury caused by dumped or subsidized goods, thereby ensuring better conditions of competition for Canadian businesses and workers.

The trade remedy system also provides for the application of safeguard measures to protect domestic producers from injury caused by surges of fairly traded goods. At this time in our history, these important measures are essential to our economy.

Division 20 of Bill C-19 would amend the Customs Act to enable the Canada Border Services Agency to administer and enforce the Customs Act by electronic means. The proposed changes would also define the term “importer of record” and make that importer liable to pay duties on imported goods alongside the importer or person authorized to account for the goods, as the case may be, and the goods’ owner. This would provide for a fairer and more efficient system for Canada.

[Translation]

Under the Canada-United States-Mexico Agreement, or CUSMA, Canada agreed to amend the Copyright Act in order to change the general term of copyright protection from 50 to 70 years following the death of an author by the end of 2022. The general term of protection would apply to a wide variety of works. This will enable Canada to meet its obligations, level the playing field with its trade partners and create new export opportunities for Canada’s creative industry and Canadian content, while continuing to protect authors.

[English]

Bill C-19 would amend the Competition Act to provide better protection of consumers and promotion of fair and equitable markets. The government has chosen to proceed with its modernization in two phases.

The targeted amendments proposed in Bill C-19 in the first phase will bring Canada more in line with international best practices and provide immediate and tangible benefits to consumers and businesses. In general, the government’s proposed amendments will strengthen the Competition Bureau’s investigation powers, prohibit wage-fixing and related agreements on criminal grounds, increase maximum fines and administrative monetary penalties, clarify that posting of partial prices is false or misleading representation, expand the scope of business practices that may constitute abuse of dominance, allow private access to the Competition Tribunal to remedy abuse of dominance and improve the effectiveness of major notifications and other provisions.

In the second phase, the government will organize broad consultation and undertake a thorough review to continue reform by considering even more transformative changes.

Now, I would like to speak of — and I am very proud of — the committee work that was done by all committees toward truth and reconciliation.

In my second-reading speech, I acknowledged and thanked the members and chairs of the six committees that conducted the pre‑studies of Bill C-19, as well as the members and chair of the Finance Committee, for their work on the entirety of the bill — a lengthy and difficult undertaking. The reports from the various committees are important to provide context to the measures and sometimes a path forward to continue the work on certain issues. Not everything can be resolved through a budget bill, but the information contained in these reports is precious to continue our work.

Before I conclude this speech, I would, therefore, like to highlight one report in particular that I find very important and impactful, and I invite you all to read it. I’m referring to the report tabled by the Standing Senate Committee on Aboriginal Peoples. The committee made some observations on Division 3 of Part 5, which proposes to repeal the Safe Drinking Water for First Nations Act.

First Nations have repeatedly called for the repeal and replacement of the act, and the federal government is now required to do so under the safe drinking water class action litigation settlement agreement, jointly approved by the Federal Court and the Court of Queen’s Bench of Manitoba on December 22, 2021. The repeal of the act in Bill C-19 is therefore not contentious. However, the observations from the committee regarding the access to safe drinking water for all communities in Canada are important to emphasize. The report says:

The committee is alarmed about the unacceptable water crises that continues to plague First Nations across Canada causing serious illnesses, mental health issues and unnecessary suffering. . . .

It further reads:

The committee underscores the urgency of ensuring access to clean, safe drinking water for all First Nations.

Since November 2015, 132 long-term drinking water advisories have been lifted. We have witnessed great progress over the last few years, but we need to do so much better as a country and work in partnership and collaboration with our Indigenous counterparts to find solutions to this crisis. There remain 34 long-term drinking water advisories in 29 communities.

To improve the situation, the committee suggests the following:

The committee observes that there are innovative, First Nations-led solutions to drinking water and wastewater infrastructure. . . . The Government of Canada could contribute to these solutions, including by facilitating partnerships between the public and private sectors to deliver infrastructure to First Nations more broadly. Infrastructure builds create jobs and can drive economic and educational opportunities for local communities. Further, the Government of Canada could assess cost / benefits of infrastructure investments in terms of broader economic and social outcomes relative to their cost.

I take the opportunity to underline that June 21 was National Indigenous Peoples Day. The observation in this report reminds us of the relevance of this national day and how important it is to keep working toward the acknowledgement of the truth with respect to Canada’s treatment of Indigenous peoples in the past and the present.

[Translation]

In closing, Bill C-19 contains a wide variety of measures that seek to invest in Canadians and support some of their top priorities.

By investing in Canadians, the bill will contribute to our economic growth, support job creation and strengthen our economic recovery in the wake of the COVID-19 pandemic and other global challenges.

I urge you to vote in favour of the budget implementation bill and I thank you for your attention.

Hon. Marty Deacon: Thank you for that great summary and that level of detail. I really appreciate that. I do want to ask a question, if I may.

As you know from sitting at the Finance table, this last part of your speech is something that we ask every year. We get reports every year on water bans and infrastructure challenges. Absolutely, there is no question that going from 132 to 34 advisories is movement in a good, solid direction.

However, I have read the report and I still struggle with those final 34 advisories and getting this done. It is something that plagues my thinking a bit, particularly when you visit Indigenous communities and they give you such strong statistics. When we talk about the money part, we absolutely need funding and financing.

At the end, you started to talk about stakeholders and partners. Candidly, how do you see us addressing those final 32 advisories?

Senator Moncion: Thank you for the question. The answer I will give is outside of Bill C-19, but, having participated in the Finance Committee and in some of the meetings of the Standing Senate Committee on Aboriginal Peoples, the government struggles. The final 32 water advisories that are still in place are challenging beyond what was expected. These are the last 32, but they are the most difficult to deal with. Sometimes that’s just because of location or because of the industries that are around the First Nations.

The government is working very hard to bring solutions to these communities and to finally achieve zero water advisories in any communities.

Regarding the stakeholders, that’s where I see the beauty of the work that is being done. The government is working with Indigenous peoples, and they are training these people to build, maintain and understand the water balances, to be aware of the environment where they are and to identify the risks that the environment in which they live can have an effect on water.

They have been working with all First Nations to resolve these water advisories. They are working with each of these groups and with members of communities to really get this going so they can take ownership of both the clean water and waste water to manage them in the long term. These solutions are long term. They are a long time in coming and they take a long time to fix, but once it is done, it will be done, we hope, for as long as these systems can support these changes.

There is also the maintenance of these systems through the years. Just because you have built a system doesn’t mean you can leave it until you have to replace the whole thing. You must have upkeep and you have to put money into the system so that the technology, water sources and everything is kept up to date.

It is a large undertaking, but I would say the government has done a lot in the last 10 years. There is still a lot to do, but we are getting there.

Senator Simons: I almost feel I ought to give you a standing ovation, because I know how difficult it is to be the sponsor of the budget and carry it through.

However, there is still one part of the budget document that very much concerns me, and that is the insertion of amendments to the Criminal Code to criminalize denial and downplaying of the Holocaust. This was a question I didn’t get to ask the Government Representative, so I’ll ask it of you. Why was this placed in the budget bill, and should we be concerned that this Criminal Code amendment, that impinges upon constitutional freedom of expression rights, has been sort of tucked into the budget where it can’t be pulled out and properly debated?

Senator Moncion: Thank you for the question; it is an important one.

First, the knowledge I have of this specific issue is that it was something that was asked for by the Jewish community. There are people who are saying we don’t need this, and there are people who are saying this is important and needs to be in the bill. I can’t speak for the government, but I believe that bringing the offence into the Criminal Code was a way to provide Canadians with the assurance that this is top of mind for the government.

When we are talking about freedom of the press, I think we have to look at the different views on this. This will probably be challenged on a constitutional basis. I think at some point we might bring change to this, but I really believe that when the government was looking at putting this into the Criminal Code, it was done to send a strong message to Canadians about Islamophobia. It is a problem in our country and a problem, I think, elsewhere in the world.

The Hon. the Speaker: Honourable senators, I wish to draw your attention to the presence in the gallery of Danielle and Michael Allen. They are the guests of the Honourable Senator Plett.

On behalf of all honourable senators, I welcome you to the Senate of Canada.

Hon. Elizabeth Marshall: Honourable senators, I rise to speak to third reading of Bill C-19, the budget implementation act.

Honourable senators, Canada is facing many challenges. Inflation is at its highest in 40 years and is expected to increase. Interest rates are rising. Canadians are one of the most highly indebted people in the world, and increasing interest rates will make their mortgages and other debts more expensive.

Government has also increased its debt, which is now $1.6 trillion. Interest on this debt will now cost more. There is no commitment to return to a balanced budget. Our debt of $1.6 trillion will be transferred to our children, grandchildren and even great-grandchildren. Our debt will be their problem.

Canada’s GDP per capita grew by 0.8% annually from 2007 to 2020, ranking us in the third quartile among advanced economies. In other words, we were near the bottom of the rankings but not at the bottom.

As indicated in the government’s own budget document this year, the Organisation for Economic Co-operation and Development, or OECD, projects that Canada will be the worst‑performing advanced economy over the period 2020 to 2060. Our economy has waning competitiveness, weak private sector innovation and sluggish business investment. Our GDP per capita is 12% lower than the OECD’s best performers. Our productivity is 18% lower than the OECD’s best performers.

Our country needs a plan to address our economic problems and create the wealth we need to sustain our economic and social well-being.

Canadians and the Bank of Canada are coming to the realization that inflation, which remained at or below the Bank of Canada’s annual target of 2%, has now become a major economic problem. The Bank of Canada remained convinced that the inflation experienced in 2021 was transitory despite some economists sounding the alarm over the escalating inflation. In fact, in his recent press conference in early June, the Governor of the Bank of Canada warns us that inflation will probably go even higher, and it has.

Inflation has had a devastating impact on Canadians, especially low-income Canadians and those on a fixed income. Inflation in May was 7.7%, the highest since 1983. Food prices increased 8.8%. Canadians paid more in May for food compared to May 2021. Fresh fruit, vegetables, meat, bread and pasta all increased. Even a cup of coffee costs 13.7% more compared to last year. And consumers paid 48% more for gasoline in May than they did a year ago.

In April, average hourly wages for employees rose 3.3%, meaning that, on average, prices rose faster than wages and Canadians experienced a decline in purchasing power.

When this government came to power in 2015, they were focused on the middle class and those working to join it. Remember Budget 2016: Growing the Middle Class; Budget 2017: Building a Strong Middle Class; and Budget 2018: Equality and Growth for a Strong Middle Class, and so on?

We even had a minister of middle class prosperity. I don’t think anyone feels that “middle class prosperity” anymore with inflation now recorded at 7.7%.

Inflation is affecting many Canadians who have to choose between buying food, paying their bills and making their mortgage payments. There are numerous media reports of the dire circumstances of some Canadians and the increasing use of food banks.

To understand how inflation and rising prices are contributing to financial concerns or influencing the financial decisions of Canadians, Statistics Canada conducted the Portrait of Canadian Society survey from April 19 to May 1. The survey found that three in four Canadians report that increasing prices are affecting their ability to meet day-to-day expenses. Most Canadians are feeling the impact of inflation, but lower-income Canadians are more concerned about, and more affected by, rising prices. Canadians were most affected by rising food prices, which increased 9.7%.

When the finance minister was asked at our Finance Committee what initiatives were included in the budget to address the impact of inflation, she said inflation is very much a global phenomenon and referenced the recently announced items in the budget, including the dental program and the additional $500 payment for Canadians who are struggling with housing affordability.

While financial assistance provided to certain groups of Canadian society is certainly appreciated by those receiving the financial assistance, inflation affects almost all Canadians, and this is an issue which must be addressed by the government.

On June 8, the Bank of Canada released its Financial System Review focusing on inflation and rising interest rates, as well as existing and emerging vulnerabilities. In an effort to control inflation, the bank has increased interest rates and has indicated that they will continue to do so.

High household debt and high house prices are not new vulnerabilities. We have tracked household debt and house prices for years, and the Bank of Canada, the Canada Mortgage and Housing Corporation, and even the International Monetary Fund, have identified these as key vulnerabilities of the Canadian economy. However, households are now exposed to increasing interest rates, which will make their mortgages and other debts more expensive. For highly indebted Canadians, they may have difficulty servicing their debt. If the economy slows and unemployment increases, even more Canadians will have problems servicing their debt.

The Governor of the Bank of Canada has said that more Canadians have stretched their finances during the pandemic to buy a home, so they will be more sensitive to interest rate increases. In addition, Canadians who bought homes when prices were high may see the value of their homes decline. There is also the risk that the value of their homes may actually be less than their mortgage.

Last week, the Federal Reserve in the U.S. raised its benchmark interest rate by 75 basis points, its most aggressive hike in 25 years, as the U.S. central bank tries to rein in inflation in the United States.

The Bank of Canada is scheduled to make its next interest rate announcement on July 13, and some economists are predicting that the Bank of Canada will also move more aggressively to raise interest rates in Canada.

A recent debt survey by Manulife Bank of Canada found that 18% of homeowners polled are already at a stage where they can’t afford their homes. The survey also found that one in five Canadians expect rising interest rates to have a significant negative impact on their overall mortgage debt and financial situation.

But it is not just Canadians who will be facing increasing debt costs. The government is also carrying significant debt — in excess of $1.6 trillion — so the cost of servicing that debt will increase. While the government reported debt servicing costs in 2021 at $20 billion, they are projecting it to increase to $42.9 billion in 2026-27, and recent reports by the Parliamentary Budget Officer expect that increase to rise further.

Last May, Bill C-14 raised the government’s debt ceiling from $1.168 trillion to $1.831 trillion. While some parliamentarians were alarmed over this increase, the Minister of Finance told the House of Commons Finance Committee on March 11 last year:

We are saying that this is the upper limit to which the government may borrow.

We are not saying the government will undertake those borrowings. . . .

Now, just 15 months later, we are told that debt is now $1.6 trillion. We are well on our way to reaching that $1.8 trillion ceiling. In fact, it seems the government cannot reach that limit fast enough.

As the government takes on more and more debt, we have been assured by them that the cost of servicing this debt, or the “public debt charges,” remain low. However, we now know that interest rates are rising quickly and so is the cost of servicing the government’s debt. A review of the government’s financial documents over the past two and a half years shows that debt servicing costs are increasing significantly. Projections included in the last two budgets and the last two fall fiscal updates point to a rising concern over increasing interest costs.

The 2020 fall fiscal update released in December 2020 estimated that public debt charges for this year would be $22.4 billion. Four months later, this was increased to $25.7 billion in Budget 2021, and further increased to $26.9 billion in this year’s budget. Over a period of 18 months, the government’s estimate of debt servicing costs for this year increased $4.5 billion, or by 20%.

A second issue has surfaced over public debt charges. We all know that the government borrowed heavily during the pandemic, and a significant portion of this debt was acquired by the Bank of Canada. In fact, the bank’s purchases of government bonds were approaching half a trillion dollars before the bank ceased acquiring those bonds.

In 2021, the government reported debt servicing costs of $20.4 billion. However, the government also disclosed in the public accounts net losses totalling $19 billion in respect of the Bank of Canada’s purchases of Government of Canada bonds on the secondary market.

Why the $19 billion loss on the purchase of those bonds is recorded as negative revenue I do not know, but it is clearly a debt servicing cost. The debt servicing cost for 2021 is not the $20.4 billion being reported by government, but actually $39 billion.

As of June 1, 2022, the Bank of Canada continues to hold $397 billion of Government of Canada bonds. The Bank of Canada has indicated that it will not purchase any additional bonds but, rather, let the existing bonds mature, and they will essentially fall off the bank’s balance sheet. However, there are others who say that this passive shrinking of the bank’s balance sheet as the bonds mature strikes some observers as inadequate. Last month, the C.D. Howe Institute’s Monetary Policy Council urged the bank to accelerate the process by selling the bonds.

However, in a recent meeting of the Standing Senate Committee on Banking, Trade and Commerce, the governor of the bank testified that if the bank sold the existing government bonds it is holding, there would be a loss of $20 billion, which will be paid by the Government of Canada in accordance with the indemnity agreement between the government and the bank. This $20 billion would increase the government’s deficit by $20 billion.

Earlier this month, the World Bank said most countries are headed for a recession and warned of a possible return to stagflation: an economy characterized by high inflation and low growth. It said global economic growth is expected to slow down before the end of the year, and most countries should begin to prepare for a recession.

Earlier this month, the media reported that the United Kingdom’s economy unexpectedly shrank in April, raising the risk that their economy will contract in the second quarter.

Canada is just emerging from the pandemic, which was a major financial shock to our economy. We should now get our spending under control and prepare for the next financial shock.

While no one can predict the future, the government supported our economy during the pandemic by borrowing and spending a substantial amount of money. It is time to get our fiscal house in order, yet the government continues to spend and borrow, seemingly unaware of the dark clouds forming.

Honourable senators, Bill C-19, similar to previous budget bills, proposes several amendments to the Income Tax Act, which is now over 3,000 pages long. The Income Tax Act is a complex and inefficient piece of legislation which has accumulated a patchwork of credits, incentives and narrow “fixes.” Governments use the tax system to help meet certain policy goals by adding credits or deductions, or to provide benefits to specific groups, making the Income Tax Act more complicated with each amendment.

The last time the government carried out a review of our tax system was 1967. Yes, that is 55 years ago. Much has changed in the past 55 years. The world has become more global, technology has changed the way we live, people are living longer and the nature of work has changed. It is time to review our tax system — actually, it is past time.

Numerous national and international organizations have recommended many times that the government update its tax system, including committees of the House of Commons and the Senate. The current system is riddled with problems and has become unnecessarily burdensome to the Canadian taxpayer, businesses and tax professionals. Even the Canada Revenue Agency, which administers the Income Tax Act, is challenged to provide correct answers to public inquiries.

We need a tax system that is simple and easy for taxpayers and businesses, encourages investment and job creation and enhances Canada’s global competitiveness. We need to be better positioned to compete for jobs, talent and investment with a fair, simple and efficient tax system.

Before I discuss certain sections of Bill C-19, I just want to make a comment on the omnibus nature of Bill C-19. First, Bill C-19 is an omnibus bill. It is 440 pages long. The proposed amendments to the Income Tax Act are highly technical and numerous. Given that these amendments will amend the very complicated Income Tax Act, which is itself 3,000 pages long, the study of Bill C-19 by any committee of the Senate is a very daunting task.

The “Select Luxury Items Tax Act” is a bill within a bill. It is 175 pages of the 440-page Bill C-19, and it should never have been included in this omnibus bill. The “Select Luxury Items Tax Act” should have been tabled in Parliament as a stand-alone bill to be properly studied and debated. It is shameful that the government has not studied the economic impacts of the proposed tax to determine how it will affect workers, businesses and the economy.

Part 5 of Bill C-19 proposes 32 measures and includes amendments to many other acts. Each of these 32 measures warrant detailed study. However, the breadth and depth of the measures contained in Part 5 of Bill C-19 alone required more time for study than the time provided.

While various parts of Bill C-19 were referred to a number of committees for study, the time provided was greatly limited. We are expected to make do with the time provided and rubber-stamp the bill.

Part 4 of the budget implementation act proposes to implement the “Select Luxury Items Tax Act,” which will impose an additional tax on some vehicles, aircraft and boats. It is complex legislation. As I said before, it is 175 pages long and contains 157 clauses. It should not have been included in the 440‑page omnibus budget implementation act. Rather, it should have been tabled as stand-alone legislation to be studied and debated separately by Parliament, as I indicated earlier.

The “Select Luxury Items Tax Act” imposes a tax on the retail, sale, lease or importation of certain luxury cars and personal aircraft priced over $100,000, as well as boats priced over $250,000. The tax will be calculated at the lesser of 10% of the full value of the item or 20% of the value above the established threshold, which is $100,000 for cars and personal aircraft and $250,000 for boats. The tax will come into effect September 1, 2022. The Parliamentary Budget Officer estimates that this tax will generate $87 million in revenue this year because there is only part of the year remaining, and $163 million next year.

Representatives of the aerospace industry do not support this “Select Luxury Items Tax Act,” and estimate the loss of 1,000 Canadian jobs and up to $1 billion in lost revenues to companies across the country. They indicated that the tax will affect not only large companies but companies of all sizes, in all regions throughout the Canadian supply chain. Some manufacturers are already experiencing order cancellations due to the pending tax.

The tax comes at a time when the aerospace industry is still recovering from the pandemic. It is asking government to undertake an economic impact assessment to determine what effect the tax will have on the aerospace industry, its employees and the economy. The International Association of Machinists and Aerospace Workers also expressed concern over this luxury tax, indicating that the tax is misdirected toward manufacturing. The tax will adversely affect jobs, and the negative impact on jobs will far outweigh any benefits that would come from this tax. The association also took issue with the fact that there has been no assessment of the impact on jobs and stressed that such an assessment must be done.

In summary, witnesses testified that the luxury tax will put Canadian aerospace companies at a disadvantage globally compared to their competitors, and will cause a loss in sales that will translate into job losses. They said that other countries have implemented similar taxes but have had to repeal or modify them.

In its testimony on this luxury tax, the National Marine Manufacturers Association Canada indicated that an economic impact study carried out by Ernst & Young and economist Dr. Jack Mintz on the proposed tax would result in a minimum $90 million decrease in revenues for boat dealers and potential job losses of at least 900 full-time equivalent employees. The study concluded that the select luxury items tax act would largely fall on middle-income workers who would no longer service or manufacture high-end boats in Canada. The tax also threatens the survival of Canada’s domestic boat manufacturing base, which has already been negatively affected by years of competition from other jurisdictions. The tax will also cause job losses at marinas and service shops.

In 1991, the U.S. Congress passed a 10% luxury tax on all new boats sold in the U.S. that cost more than $100,000. Within the first quarter of the year, sales of new boats over $100,000 plummeted 89%, resulting in massive job losses and multiple bankruptcies. The tax was eventually abandoned.

The select luxury items tax act was studied by the Standing Senate Committee on National Finance, and the committee report was tabled in the Senate yesterday. The following is an excerpt from the committee’s report:

After hearing from groups, notably the Aerospace Industries Association of Canada and the National Marine Manufacturers Association, our committee was surprised to learn that the government has not studied the economic impacts of the proposed tax, including on business activity and employment in these sectors.

Our committee therefore recommends that, prior to implementing this tax, the Department of Finance conduct such a study and that it inform our committee of the results, including its consultations with the impacted sectors.

In addition, should this tax be found to have a negative impact on business activity and/or employment in these sectors, we would urge the government to react quickly and take mitigating measures including, if necessary, doing away with the tax altogether.

Division 6 of Part 5 of Bill C-19 is proposing to amend the Federal-Provincial Fiscal Arrangements Act to authorize a $2‑billion payment to the provinces and territories through the Canada Health Transfer, allocated on an equal per capita basis to help reduce the surgical and other medical procedure backlogs caused by the pandemic. In addition to the $2 billion proposed in this bill, an additional $500 million was provided in 2019-20 and another $4 billion in 2020-21 to address the pressures that COVID-19 have put on the health care system, including backlogs of medical procedures.

The Canada Health Transfer is the largest federal transfer to the provinces and territories, and helps pay for health care. It is expected to cost $45 billion this year, increasing to $56 billion in 2026-27. Provincial and territorial premiers are asking for another $28 billion increase, which is significantly more than the $11 billion increase projected over the next four years.

Provinces and territories are not required to report to the federal government on how the monies are disbursed, although the conditions of the Canada Health Act are to be respected.

In addition, our briefing note on this portion of the bill indicated that the Prime Minister has committed to discussing with the provinces and territories the long-term strength, sustainability — which is an interesting word — and resilience of the health care system after the pandemic. The cost and sustainability of our universal health care system is often raised.

Using data from the Organisation for Economic Co-operation and Development, or OECD, the Fraser Institute recently compared the performance of 28 high-income OECD countries with universal health care systems to determine how well Canada’s system is performing relative to its peers. They used 40 indicators representing four broad categories: availability of resources, use of resources, access to resources, and quality and clinical performance.

The study concluded that Canada spends more on health care than the majority of high-income OECD countries with a universal health care system. After adjusting for age — those over age 65 — Canada ranked second highest of the 28 countries for health care expenditures as a percentage of GDP and eighth highest for health care expenditures per capita. Although Canada ranks among the most expensive universal health care systems in the OECD, its performance for two of the four categories — that is, availability and access to resources — is generally below that of the average OECD country, while its performance for the other two categories — the use of resources and quality and clinical performance — is mixed.

The study concluded that there is an imbalance between the value of health care that Canadians receive and the relatively high amount of money they spend on their health care system. This is surely an issue that will be addressed by the Prime Minister and the premiers when they meet.

Division 7 of Part 5 of Bill C-19 is proposing to amend the Borrowing Authority Act and the Financial Administration Act to include the extraordinary borrowings of 2021 in the borrowing authority maximum amount and no longer treat this amount as extraordinary borrowings for reporting requirements.

Division 7 also proposes to amend the Financial Administration Act to change the reporting requirements for extraordinary borrowing amounts so that these amounts are no longer required to be tabled separately in the House of Commons within a 30-day time frame, but rather be reported in the annual Debt Management Report. Under current legislation, extraordinary borrowings must be reported within 30 sitting days of Governor-in-Council approval. There were extraordinary borrowings of $288 billion in 2020 and $8.4 billion in 2021. Both reports were tabled on a timely basis within the 30-day time frame stipulated by legislation.

The government is now proposing that extraordinary borrowings be reported in Finance Canada’s Debt Management Report. This is the same report we waited one full year to see. The government pushed back the tabling of its March 2021 Debt Management Report to March 2022. In essence, the government has concluded that the tabling of extraordinary borrowings is too timely, and that this information should be included in a report that can be delayed for up to a year, as they did this year.

The government is proposing this amendment under the pretext of improving accountability. However, if the government were truly sincere in improving accountability, they should have amended the Financial Administration Act to require the Debt Management Report to be tabled earlier rather than the one-year time limit currently stipulated.

Bill C-19 also proposes to amend the Borrowing Authority Act. This act focuses on the consolidated borrowings of government and its Crown agencies. However, reporting is only required once every three years. It is a triennial report — I think it’s the only triennial report required in government; all the other reports are annual. The consolidated borrowings of government is an amount not readily available, and I know because I went looking for it.

Since reporting is once every three years, to determine the consolidated borrowings, information is gleaned from the government’s public accounts, the financial statements and other financial information of Crown agencies themselves. You have to look through a lot of information, which I did before Christmas, and come up with the dollar amount yourself, and usually, it’s an estimate.

When we had the finance officials at the National Finance Committee, I asked them what the consolidated debt was, and they said $1.6 trillion. The $1.6 trillion I mentioned earlier in my speech, that came from finance officials. It was in a government document somewhere. I don’t know where. I checked with the Parliamentary Budget Officer and the Library of Parliament, but I don’t think that number is published anywhere.

If the government were truly interested in improving accountability, it should have amended the Borrowing Authority Act to require an annual report on consolidated debt rather than the triennial report currently required.

Division 12 of Part 5 of the budget implementation act enacts the prohibition on the purchase of residential property by non‑Canadians act. It prohibits the purchase of residential property by non-Canadians for a period of two years, and there are some exceptions defined under the proposed section 4 of the act.

The cost of homes in Canada has increased significantly over the past number of years, supported by low interest rates, a shortage of residential dwellings and high inflation. Both the federal and provincial governments have struggled to keep housing prices at an affordable rate.

The bill defines prohibition in section 4 of the act, stating that, “ . . . it is prohibited for a non-Canadian to purchase, directly or indirectly, any residential property.” The penalty for doing so is a fine of not more than $10,000 and, on application by the minister, a court order for the property to be sold. If sold, the owners are not to receive more than the price they paid for the property.

There was insufficient time to thoroughly study the proposed bill and its implications. However, of concern to me is the discretion afforded to the minister to prescribe matters by regulation. For example, the minister can exempt certain classes of individuals from the ban and can change the definition of certain key terms. As a result, regulations can change how the ban will actually work in practice.

There is also concern that the ban on the purchase of residential properties infringes on provincial jurisdiction or discriminates based on nationality. It remains to be seen whether this ban will actually increase the residential properties available for Canadian occupancy or moderate housing prices. Inflation and increasing interest rates may be the biggest factor in moderating prices in the housing sector.

Division 3 of Part 5 of the bill proposes to repeal the Safe Drinking Water for First Nations Act. This part of the bill was referred to the Standing Senate Committee on Aboriginal Peoples for examination. The committee tabled its report in the Senate on June 10. Like Senator Moncion, I was very much struck by the report.

In its report, the committee expressed alarm about the unacceptable water crisis that continues to plague First Nations across Canada, causing serious illnesses, mental health issues and unnecessary suffering. It went on to say:

Canadians would be shocked, and ashamed if they knew how the Government of Canada has treated First Nations on water issues.

The report outlines some specific examples of problems encountered by First Nations in accessing safe drinking water, including references to legal actions taken against the Government of Canada in relation to clean drinking water in First Nations communities. While the committee said it recognizes that the federal government is taking important steps to address long-term drinking water advisories, it said that it remains deeply concerned that First Nations had to resort to litigation to obtain federal funding for safe drinking water in some communities.

The committee concluded its examination of this part of the bill by saying it believes that:

. . . with respect to First Nations water, the Government of Canada has breached the honour of the Crown and its treaty and nation to nation relationships.

It was the committee’s view that the minister should report publicly on the solution to the First Nations water crisis, and further, “the implementation of any solution needs to be measured or the status quo is unlikely to change.”

Honourable senators, Division 30 of Part 5 of the bill proposes to implement the first series of changes required to meet the government’s commitment to create a publicly searchable corporate beneficial ownership registry by 2023. At the present time, anonymous Canadian shell companies can be used to conceal the true ownership of businesses. This makes them vulnerable to misuse for illegal activities such as money laundering and tax evasion. To counter this, authorities need access to timely and accurate information about the true ownership of these entities.

Specifically, the proposed amendments to the Canada Business Corporations Act will require private federal corporations to send information on their beneficial owners to Corporations Canada on an annual basis when a change in ownership occurs. This will allow Corporations Canada to provide that information to an investigative body or authorized entity.

Government has, for several years, been talking about a publicly accessible beneficial ownership registry. The information in such a registry would be invaluable in pursuing money laundering and tax evasion and would assist the government in collecting, according to some estimates, billions of dollars in tax revenues.

Last year’s budget provided $2 million for the implementation of a publicly accessible corporate beneficial ownership registry by 2025. The Banking Committee at that time expressed concern that the changes being proposed and the $2 million being provided were insufficient to implement the registry by 2025. This year, government is accelerating its targeted implementation date of a beneficial ownership registry to the end of 2023, a mere 18 months away.

Government has also indicated that the registry will now be implemented using a two-phased approach in which phase one includes these amendments and phase two will include other amendments, which will be disclosed in a future budget implementation bill in the fall of this year.

Government has further indicated this two-phased approach will allow for necessary consultations with stakeholders. Although consultations were held in 2020, there are several unresolved issues surrounding the government’s new commitment to implement the registry before the end of next year. Specifically, they have moved to what they call a two‑phased approach without providing detailed information on the plans and the objectives of each phase, and no funding has been provided for the implementation of the registry. While $2 million was included in last year’s budget, it was not enough to implement the registry and none of this money had been spent. While implementation of the registry by the end of next year is a laudable objective, this is only 18 months away. Government has many challenges to overcome before this deadline.

The Standing Senate Committee on Banking, Trade and Commerce was tasked with reviewing this part of the bill and also expressed concern over the two-phased approach. The committee also suggested that the government take complementary action to ensure the success of the registry by collaborating with provinces and territories, allocating adequate financial and human resources to ensure the success of the registry and continuing to examine the potential use of lawyers as nominee shareholders to shield the identity of beneficial owners.

Of particular interest was the release last week of the report of the Cullen Commission, which held a public inquiry into money laundering in British Columbia. The Cullen Commission said that the federal anti-money laundering regime is not effective and the Province of British Columbia needs to go its own way. Commissioner Cullen said that the agency tasked by the federal government to identify money threats, the Financial Transactions and Reports Analysis Centre, which we know as FINTRAC, is ineffective. He said that FINTRAC’s results compare poorly to other nations with comparable systems. Given the deadline established by government to implement phase one, we will be able to assess progress of the system during our study of the 2023 budget.

This year’s budget announced two spending reviews that are supposed to save the government and the taxpayer $9 billion over five years. The objective of the first review is to reduce planned spending in the context of a stronger recovery. Government estimates this review will save $750 million a year for four years, beginning next year, for a total savings of $3 billion. Government has said that the 2022 fall economic and fiscal update will inform us of the progress of this review.

The second initiative will be a strategic policy review led by the President of the Treasury Board. This initiative will assess program effectiveness in meeting government’s key priorities. It is also supposed to identify opportunities to save and reallocate resources. This second review is estimated to save $6 billion over three years beginning in 2025. Next year’s budget is supposed to provide an update on these savings. My primary concern relates to the $9 billion in potential savings since it is being used to reduce the five-year cost of new programs as disclosed in the budget. If the $9 billion in savings does not materialize in whole or in part, any shortfall will have to be funded by the government, thus increasing the projected deficit.

Given that previous expenditure reviews were unsuccessful, such as those in Budget 2017 and the 2019 fall fiscal update, government will be challenged to actually realize these savings. The initiative launched in 2017 actually resulted in increased spending while no information could be found on the 2019 initiative.

The Parliamentary Budget Officer has questioned these initiatives, indicating severe fiscal restraint will be required to achieve these savings. In addition, our review of departmental performance reports in the Finance Committee indicates that the quality of performance information provided by departments and agencies will make it much more difficult to carry out the review.

Given the invasion of Ukraine, government has signalled that there will be a significant increase in the budget for military spending. Budget 2022 allocates $6 billion over five years to reinforce our defence priorities with another $2 billion going toward supporting a culture change in the Canadian Armed Forces, enhancing cybersecurity and supporting Ukraine. The budget does not provide details on what the $6 billion over five years will provide, but the budget document frames it as funding that will strengthen Canada’s contributions to our core alliances and bolster the capabilities of the Canadian Armed Forces.

In 2017, the government released its defence policy and earmarked $164 billion over the 20-year period from 2017 to 2037 for capital expenditures for the Department of National Defence. However, financial information indicates that, for its capital spending, there was a shortfall or underspending of $10 billion on capital projects between 2017 and 2021 between what the defence policy had projected and what was actually spent. Revised departmental plans show that this $10 billion shortfall will now be shifted to future years, notably 2023 to 2028. That’s the background. This is my point.

Earlier this week, the government announced it would spend $4.9 billion over the next six years to modernize NORAD and upgrade our continental defence system, and there is a commitment by government to invest $40 billion over the next two decades on NORAD. Government must clarify whether the 2017 to 2021 spending shortfall of $10 billion, which is now shifted to future years, will be the source of funding for the NORAD initiative, or whether the NORAD initiative requires new funding. These issues are important because we need to know how post-budget initiatives will affect government-projected deficits as disclosed in Budget 2022.

It is not only NORAD which requires significant funding. The Canadian Armed Forces has old planes, old ships, second-hand submarines that are often not operational and a shortage of recruits. In addition, in order for Canada to reach NATO’s 2% of GDP defence spending benchmark, government will need to spend between $13 billion and $18 billion more per year over the next five years. Suffice to say the Canadian Armed Forces and the Government of Canada have their challenges in protecting our country.

Each year, government launches new billion-dollar programs or significantly increases existing programs. These include multi-billion-dollar infrastructure programs, such as the $187 billion Investing in Canada Infrastructure Program and the $30 billion Federal Secretariat on Early Learning and Child Care launched last year, promising reduced child care fees, 250,000 new child care spaces and about 55,000 new early childhood educator positions by 2026.

Last year, $1.5 billion was allocated in the budget for the Rapid Housing Initiative, promising 4,500 new affordable units that would be constructed within 12 months. The program is extended this year to create at least 6,000 new affordable housing units at an estimated cost of $1.5 billion. This year government is also committing $10 billion for the making housing more affordable initiative, targeting the creation of 100,000 new housing units over the next five years. However, all these numbers are projections. They are estimates. And we never see the report cards which tell us what has actually happened. Did the infrastructure projects actually get built? And where are those projects actually located? In what communities? Were the housing units actually constructed? In what communities? Are those units occupied? How many child care spaces have been created so far?

Honourable senators, these are the questions we should be asking, and this is the information we should be looking for. This is accountability. The easiest part is saying that we plan to do something. The difficult part is delivering results.

Each year, government departments and organizations release their departmental results reports. However, the information provided in many of these reports do not provide sufficient information to indicate what results they actually achieved with the funding provided. Quite simply, the departmental results reports are not providing the information they are supposed to provide. Government, its departments and agencies should provide report cards on its programs and demonstrate that the money provided has actually achieved its purpose. The departmental results reports no longer demonstrate accountability.

Honourable senators, in closing, I would like to thank Senator Moncion for two speeches on the budget bill. I would also like to thank all of my colleagues on the National Finance Committee, the chair, the deputy chair and all the staff who supported us in our many meetings while we studied the budget. Thank you, honourable senators.