Wednesday, June 19, 2024

The Standing Senate Committee on National Finance has the honour to present its

NINETEENTH REPORT

Your committee, to which was referred Bill C-69, An Act to implement certain provisions of the budget tabled in Parliament on April 16, 2024, has, in obedience to the order of reference of June 19, 2024, examined the said bill and now reports the same without amendment but with certain observations, which are appended to this report.

Respectfully submitted,

Observations to the nineteenth report of the Standing Senate Committee on National Finance (Bill C-69)

During the subject matter study of Bill C-69, your committee heard from witnesses of various backgrounds (e.g, senior government officials, organizations representing businesses, unions, not-for-profit organizations, etc.) as well as the Chairs of other Standing Senate Committees that studied the subject matter of specific parts of Bill C-69. A common theme we heard is the concern and dissatisfaction over the government’s continued use of omnibus bills, a sentiment we strongly share.

As we have repeatedly stressed in previous reports, the inclusion of non-financial matters in budget implementation bills prevents parliamentarians and Canadians from giving these matters the thorough scrutiny they deserve. This frustration is shared by other Standing Senate Committees as detailed in their reports to the Senate.

Specifically, the Standing Senate Committee on Social Affairs, Science and Technology believes that a budget implementation act should be linked only to the costed measures in the budget and recommends that non-financial provisions in Bill C-69 like Divisions 21 and 22 (Canada Labour Code), Division 31 (Food and Drugs Act) and Division 38 (Immigration and Refugee Protection Act) of Part 4 be the subject of subsequent stand-alone legislation.

Similarly, the Standing Senate Committee on National Security, Defence and Veterans Affairs recommends that the government remove Division 39 (“immigrant stations”) of Part 4 from Bill C-69 and consider reintroducing the proposed amendments in a separate bill.

In addition, the Standing Senate Committee on Banking, Commerce and the Economy asks that the federal government reconsider the merits of the proposal to remove Division 16 (“open banking”) of Part 4 from Bill C-69. Your committee agrees with its reservations over the government’s decision to designate the Financial Consumer Agency of Canada as the regulator for consumer-driven banking. This decision worries us for provincial or territorial financial institutions such as Desjardins, which could be subject to two levels of regulations.

Also, the Standing Senate Committee on Transport and Communications recommends that in the future, such content as Division 27 (VIA HFR - VIA TGF Inc.) and Division 37 (Telecommunications Act) of Part 4 of Bill C-69 be introduced in separate legislation.

The Standing Senate Committee on Legal and Constitutional Affairs made similar recommendations regarding amendments to the Criminal Code related to motor vehicle theft (Division 35 of Part 4) and to the Controlled Drugs and Substances Act (Division 44 of Part 4).

Your committee believes many of these provisions represent significant changes to a multitude of matters that are too important to be included in an omnibus bill, especially under the tight legislative schedule. Therefore, we join other Standing Senate Committees in recommending that the government remove non- financial provisions from budget implementation bills and introduce them as stand-alone bills, and cease such practice in future budget implementation bills. Your committee will undertake a study of this issue in the fall.

Despite its over 600-page length and inclusion of many measures unrelated to financial matters, one key Budget 2024 measure is notably absent from Bill C-69: the proposed changes to the capital gains tax regime. Its absence notwithstanding, we have heard serious concerns from Canadians of various backgrounds regarding the uncertainties created by the proposed changes. In particular, the government has proposed the effective date of June 25, 2024 for the increased capital gains inclusion rate even though the related legislation is yet to be introduced and is unlikely to become law before the proposed effective date. Your committee questions this practice, especially for a measure that has profound implications on Canadians’ finances in times of economic uncertainty. When the legislation on capital gains is introduced, your committee would ask the government to clearly explain to Canadians the rules; and it would give the legislation the close examination it deserves.

During these challenging economic times, several priorities in Bill C-69 — including housing, food security and addressing auto theft — are closely linked to conditions of economic uncertainty and emphasize the need for a more adequate Canada Disability Benefit and additional measures to meaningfully address poverty and economic insecurity, as well as for approaches to implementation of the tax fairness measures contained in Bill C-69 that ensure the tax system adequately supports these goals.

Finally, your committee notes that Bill C-69 contains many measures whose successful implementation requires close collaboration with provincial and territorial governments, including the proposed changes to the Employment Insurance Act, the consumer-driven banking framework, and the proposed National School Food Program. It is unclear to your committee whether proper consultations were conducted prior to the announcement of these changes. Therefore, it asks the government to maintain a continuous engagement with provincial and territorial governments, including during their drafting and implementation stages.

The reports of the different Senate committees that studied the subject matter of parts of Bill C-69, which include other insightful observations on these parts, are available on their website.