Moved second reading of Bill C-8, An Act to implement certain provisions of the economic and fiscal update tabled in Parliament on December 14, 2021 and other measures.

He said: Honourable senators, I am pleased to rise today as sponsor of Bill C-8, An Act to implement certain provisions of the economic and fiscal update tabled in Parliament on December 14, 2021 and other measures.

This speech today is my first official speech in the Senate since I was sworn in last November. I would therefore like to take a few minutes before I get into the substance of this bill to talk about why I joined the Senate and to share some of my thoughts on the state of our country’s economy.

First of all, it seems that global crises trigger in me an irresistible desire to travel to Ottawa to work on behalf of Canadians. In fact, I first came to work in the national capital at the onset of the 2008-09 financial crisis. I came here in September 2008, during a time of global financial devastation caused by the bursting of the U.S. housing bubble, to meet with Kevin Lynch, who was then the clerk of the Privy Council. I let myself be talked into leaving my job as chief economist for National Bank to become a special adviser at the Department of Finance.

Guess what? I have never regretted it. On the contrary, I felt a lot of satisfaction even if the days could be as long as the crisis was serious.

What a privilege for me to rub shoulders on a regular basis with the Minister of Finance at that time, the late Honourable Jim Flaherty; the Governor of the Bank of Canada at the time, Mark Carney; and the current Governor of the Bank of Canada, Tiff Macklem, then associate deputy minister in the Department of Finance.

What an honour to have also been designated by the Privy Council Office as Canada’s official representative on one of the four G20 working groups created at the Washington G20 Summit. I therefore want to take advantage of this forum to publicly thank the former Prime Minister of Canada, the Right Honourable Stephen Harper, and the Honourable Jim Flaherty for their confidence in me and this unique opportunity to represent Canada during the early work for the G20 leaders’ summit.

Honourable senators, I was working as a portfolio manager and the chief economist at the Industrial Alliance Financial Group when the global health crisis struck in the spring of 2020. This crisis and its unprecedented impacts on public finances once again awakened in me an irresistible desire to come to Ottawa, but how could I do it this time?

My charming wife, Jocelyne Duval, my life partner for over 45 years, and our three children convinced me to apply to be a senator by completing the well-known application form on the Senate website, because there were three openings to fill in the Quebec region.

I was so happy and proud when I got the long-awaited phone call from the Prime Minister of Canada in June 2021 telling me that I had been selected by the Independent Advisory Board for Senate Appointments to serve as a senator for Quebec. I would like to thank the Right Honourable Justin Trudeau for his trust in me and for this unique opportunity to be back here with you and to serve Canadians. I would also like to thank my three references, Sophie D’Amours, Rector of Université Laval, Rémi Quirion, Chief Scientist of Quebec, and the Honourable Jean Charest, former premier of Quebec, for supporting my candidacy and submitting their letters of recommendation to the Independent Advisory Board.

Honourable senators, I also want to thank all of you for your warm welcome here in the Senate. The welcome speeches of the leaders of the four recognized groups in this chamber, as well as the speech given by Senator Marc Gold on my swearing-in day, will be forever etched in my memory and I thank them for that. I wish to give special thanks to my esteemed sponsor, Senator Dennis Dawson, for his wisdom and his valuable help since my appointment to the Senate.

Honourable colleagues, I very much believe in the value of the Senate as a component of our Parliament and a counterbalance to the House of Commons in protecting the rights of minorities or under-represented groups in our society. Although our primary responsibility is to provide sober second thought on government bills, I am excited at the idea of introducing my own legislative initiative some day.

In the meantime — and to be perfectly honest — I’m not yet very familiar with all the procedures prevailing here in the upper chamber. Despite my experience as a politician for nearly four years at the National Assembly of Québec, I realize that there is still a lot to learn. This is, no doubt, partly why I agreed to sponsor Bill C-8. After all, as the old saying goes, “You learn to swim by jumping into the water.”

Personally, I very much believe in the idea of this second chamber being organized in a non-partisan way, independent from the governing party. As I mentioned to Canada’s Prime Minister, the Right Honourable Justin Trudeau, during our phone conversation last summer, I would definitely not be here with you if not for the reform in 2015.

Since I already had parliamentary experience at the National Assembly, I did not feel like getting back into partisan debates. Honourable colleagues, after just a few months with you, I prefer by far the generally serene and respectful tone of the debates that are held in this chamber to those we see in the other place, as they say. This can be perfectly illustrated by a simple comparison of the two chambers of Canada’s Parliament with regard to the nature of the questions asked of the various government ministers.

Speaking of independence from the executive branch, let me also publicly express my support for my colleague, Senator Marshall, regarding the need to eventually review the short deadlines imposed on the Standing Senate Committee on National Finance when approving the government’s main and supplementary estimates. We really feel like we are being rushed. Having just a few days in a Senate committee to approve tens of billions of dollars in government spending, in my view, is simply unreasonable and disrespectful of our mandate to give sober second thought to public finances.

As a member of the steering committee of the Standing Senate Committee on National Finance, my colleague knows that she can count on my support to come up with constructive, non-partisan solutions to better fulfill our role as senators.

I strongly believe in teamwork and count on your collaboration to help me as I assume my new responsibilities. As the well-known expression goes, “What you see is what you get.” Therefore, I ask that you not be shy about making suggestions to me in order to improve myself in the discharge of my duties.

Honourable senators, I know the bar is set high for me as a new senator from Quebec and the eleventh representative of the district of Kennebec. Indeed, my predecessor was the Honourable Serge Joyal, with whom I had the opportunity to exchange a few words just after my appointment and whom I salute in passing.

Let me be clear. While I am honoured to succeed him as the representative of this senatorial division in Quebec, I would never presume to replace him in this chamber, since I have neither his legal skills nor his mastery of public speaking. Nevertheless, inspired by his 2005 book entitled Protecting Canadian Democracy and by his actions to protect the rights of minorities and defend the French language, I will strive to contribute, constructively and in my own way, to the work of the Senate.

Colleagues, I am not a public health expert, and I will not predict how long this pandemic is going to last or how many potential additional variants might emerge. Throughout my career as an economist, I was always more interested in the health of our public finances and how our central banks set their monetary policies. I am certain that, on that point, no one will be surprised to hear me say that I am publicly very critical and vocal these days about how our central banks have behaved in the wake of this pandemic to control this rising inflation.

The Bank of Canada and its counterpart, the U.S. Federal Reserve, kept their foot on the gas far too long with their quantitative easing in 2021. What is more, last summer they misread the situation with their so-called transitory inflation, and most importantly, they were late getting into gear early this year with interest rate hikes. As illustrated by the sharp drop in financial markets since the beginning of the year, we are witnessing a loss of investor confidence in our central banks’ ability to counter inflation without causing a recession. I do not wish to lend credence to all the decisions made by our various levels of government in Canada, but our central bank’s primary responsibility is to maintain price stability, not fight against social inequalities. Traditionally, fiscal and taxation policies are much better placed than monetary policy to target an inclusive recovery.

Before I dive into Bill C-8, I would like to speak to that as a public finance expert, because I have participated in almost every Finance Canada budget consultation of the country’s chief economists since 1995.

That was a tradition started by the Right Honourable Paul Martin in his day. I imagine some of you might be concerned about the new fiscal and budgetary initiatives in Bill C-8, the December 14 fall economic update legislation. That is completely natural and understandable. After all, Canada’s COVID-19 Economic Response Plan resulted in record-setting budget deficits and a spectacular increase in the federal government’s debt over the past two years.

Like the former governor of the Bank of Canada, Stephen Poloz, I don’t really think you can accuse a firefighter of using too much water to put out a fire. All Western governments had to engage in massive spending and run up huge deficits to prevent the rapid contraction of the economy in the spring of 2020 from deteriorating into an economic depression similar to the one in the 1930s. In addition, because the federal government has far more financial flexibility than the provinces, it’s not surprising that the federal government played that leadership role and supported Canadian businesses and workers. Make no mistake, this was only possible because previous governments had spent the past two decades getting the country’s fiscal house in order.

What is the current situation today? It is fair to say that the debt-to-GDP ratio deteriorated during this pandemic, increasing from approximately 30% to 46.5% as of March 31 of last year.

Based on the figures recently released by the Parliamentary Budget Officer, we can see that federal debt servicing today represents 7 cents for every dollar of budgetary revenue, compared to 15 cents per dollar before the 2009 financial crisis, which is far from the 48 cents per dollar in the early 1990s.

I remember that in 1995, Canada ran the risk of being placed under the supervision of the International Monetary Fund when there was talk of a potential crisis. Following these events, former minister of finance Paul Martin took the situation in hand. Standard & Poor’s, the U.S. credit rating agency, has reaffirmed Canada’s AAA rating. Canada is one of the few G7 countries to have maintained this excellent rating.

Dear colleagues, I am of the opinion that Bill C-8 will be useful and will make a difference for many Canadians. Otherwise, I would not have agreed to sponsor it.

Obviously, you can count on my vigilance as an economist and a non-partisan senator who is independent of the political power in place to keep an eye on things in the years to come. After all, before embarking on new social programs or national guaranteed income programs, this country needs to accelerate wealth creation and to seriously address the causes of low levels of business investment if we are to realize our energy transition goals.

This should be a guiding principle for our leaders to follow. We must avoid transferring to future generations the burden of the present generation’s consumption of public goods and services.

Like all senators in this chamber, I too am in favour of a fairer and more inclusive society. There is no doubt that this chamber will have to consider bills along these lines in the coming months and years.

On the other hand, if we lose sight of wealth creation, we may one day not have enough wealth to distribute, and we may face harsh criticism from our children and grandchildren. I think the experience of Greece is a lesson for everyone here.

Honourable senators, I will now begin the second part of my speech, which focuses more specifically on Bill C-8, a bill to implement the measures in the economic and fiscal update tabled in December as well as other specific measures.

The majority of the fiscal or budgetary initiatives in Bill C-8 are a result of the COVID-19 Economic Response Plan. These are targeted measures to help the provinces, farmers, businesses and workers.

The bill also includes a previous commitment by the federal government to try to curb real estate speculation by foreign buyers. Over the next few minutes, I will do my best to simplify the often-opaque language used in this bill.

Honourable colleagues, I would like to talk about the four amendments that Bill C-8 proposes to make to the Income Tax Act.

First, as we all know, it has been established that adequate air ventilation and filtration is important to reducing the spread of COVID-19. Providing a refundable tax credit to small businesses would enable them to invest in better air quality. In order to encourage small businesses to invest in air ventilation and filtration, Bill C-8 proposes to introduce a 25% refundable tax credit on eligible expenses made for improving air quality, which would help increase outside air intake or improve air cleaning and filtration in commercial buildings.

Eligible businesses would receive the tax credit for eligible expenses up to $10,000 per location, with a spending ceiling of $50,000 for all eligible locations. In the spirit of encouraging businesses to act quickly, the tax credit could be claimed on eligible expenses made between September 1, 2021 and December 31, 2022.

Second, Canada’s vibrant rural and northern communities face unique challenges when it comes to their economic growth and resilience. The remoteness of many northern communities makes travelling costly for residents, including essential travel for the purposes of education and medical care. Right now, northern residents who are not receiving employer-provided travel benefits cannot deduct travel expenses under the deductions for northern residents. As a result, they are not receiving the same favourable tax treatment as those who receive employer-provided travel benefits. Bill C-8 proposes to amend the Income Tax Act and the Income Tax Regulations to expand access to the travel component of the northern residents deductions to individuals who do not receive employer-provided travel benefits.

Third, during the pandemic, Canada’s teachers showed a lot of resilience and supported initiatives to ensure that their students continued to receive a high-quality education. Often those efforts included purchasing school supplies out of their own pockets. In order to support teachers and early childhood educators, Bill C-8 proposes to amend the Income Tax Act and the Income Tax Regulations to increase the refundable eligible educator school supply tax credit from 15% to 25%. This will enable teachers to claim the cost of the supplies they use when they teach outside of school. Some electronic devices will also be added to the list of eligible expenses. The enhancement of the tax credit will provide significant support to teachers and early childhood educators so that they can help children learn in today’s difficult educational environment.

Fourth, recognizing that a large number of farmers use natural gas and propane as part of their operations, Bill C-8 proposes a refundable tax credit to return fuel charge proceeds to farming businesses in provinces in which the federal fuel levy applies, namely Ontario, Manitoba, Saskatchewan and Alberta, starting in fiscal year 2021-22. We estimate that for 2021-22, farmers will receive $100 million from the fuel charge. Refunds in future years would be higher, as the carbon tax increases.

Colleagues, Bill C-8 also proposes several other important measures to address pressing issues. For example, housing affordability has become an important concern in Canada, with house prices surging in most parts of the country. Bill C-8 proposes to introduce a new underused housing tax act that would impose a new 1% tax on owners of Canadian residential property in certain circumstances, effective in respect of the 2022 calendar year.

This new tax will ensure that non-resident, non-Canadian owners, particularly those who use Canada as a place to passively store their wealth in housing in Canada, pay their fair share of Canadian tax.

Beginning in 2023, certain owners of residential property in Canada would be required to file a return for the prior calendar year in respect of each residential property they own. In this return, owners may be eligible to claim an exemption in certain circumstances, such as where the property is rented out on a long-term basis or is occupied by its owner as their primary place of residence.

It should be noted that Canadian citizens, permanent residents of Canada and certain Canadian entities would not be subject to the tax, nor would they be required to file annual returns.

The Canada Emergency Business Account (CEBA) was essential to many small businesses that were struggling financially because of the pandemic. This account provided interest-free partially forgivable loans to nearly 900,000 businesses.

In January, the government extended the repayment deadline to qualify for partial forgiveness for CEBA loans from December 31, 2022, to December 31, 2023, for all eligible borrowers in good standing. Small businesses were eligible for an interest-free loan of up to $60,000, $20,000 of which can be forgiven if the loans are repaid by December 31, 2023, at the latest.

Bill C-8 would provide for a six-year limitation or prescription period for any amounts owing with respect to a loan provided under the program, which will help guarantee that CEBA loan recipients are treated consistently no matter where in Canada they live.

This limitation period is harmonized with other COVID-19 support programs, such as those set out in the Canada Recovery Benefits Act. Furthermore, the bill stipulates that any debt accrued through CEBA can be deducted from amounts owed or offset by them under the Income Tax Act.

Setting a six-year limitation period would ensure that CEBA loan holders are treated consistently, regardless of where they live in the country. The proposed limitation period would provide maximum leniency to small businesses that could be challenged for repayment of their CEBA loans.

Earlier, I spoke about the importance of proper indoor ventilation in reducing the spread of COVID-19. Bill C-8 proposes a $100-million top-up of the Safe Return to Class Fund to provinces and territories to support ventilation improvement projects in schools.

This $2-billion fund has helped provinces and territories work alongside school boards to meet the health and safety needs of their students to support in-person learning during the pandemic.

The top-up to the fund continues this support by specifically targeting ventilation-related improvement projects to reduce the spread of the virus in schools. Provinces and territories will have reasonable flexibility to spend their allocation on ventilation-related improvement projects that reflect their schools’ needs.

Examples of improvement projects include repair or replacement of heating, ventilation or air conditioning units; increasing maintenance of existing systems to ensure optimized operation; or other improvements that bring in more outdoor air or result in cleaner air, such as the installation of operable windows or portable air filtration units.

Funding will be provided to provinces and territories based on proposals outlining the overall costs of each jurisdiction’s proposed projects up to their maximum allocation.

Colleagues, I’m quite sure I don’t need to remind anyone that vaccination is one of the most effective ways of protecting ourselves, our families and our communities against COVID-19. Similarly, requiring proof of vaccination has helped increase the safety of indoor spaces, public gatherings and travel.

All provinces and territories have undertaken significant work to ensure that Canadians have access to standardized Canadian proof of vaccination and that it is consistent with proof of vaccination requirements in all regions of the country. In that regard, Bill C-8 proposes to provide the Minister of Health with legislative authority to make payments totalling up to $300 million to the provinces and territories to help with the costs associated with implementing COVID-19 proof of vaccination programs in their jurisdictions.

In addition, considering the significant expansion of provincial and territorial testing and control programs, including providing tests directly to Canadians, demand for rapid tests has increased in response to outbreaks and the arrival of the new Omicron variant last fall. These initiatives have led the way towards a further increase in large-scale testing in critical settings such as schools, shelters and long-term care facilities, as well as the introduction of screening to support vaccine mandates.

As case counts rose in August 2021, governments started implementing additional screening programs, including programs in schools, and stepping up serial testing for symptomatic and asymptomatic individuals in the workplace. The increased demand is due to specific factors, such as keeping schools and workplaces open, support for outbreak and resurgence management, including the risk of resurgence due to increases in indoor activities and gatherings over the holidays, and support for government and private sector vaccine mandates and personal risk management. To enable that, some provinces started distributing tests to the general public.

Bill C-8 would allocate an additional $1.72 billion to the Minister of Health to purchase and distribute rapid antigen tests to the provinces and territories and to workplaces.

Finally, colleagues, one other item in the bill that I would like to mention is Bill C-8 also seeks to amend the Employment Insurance Act to avoid penalizing seasonal workers who would have qualified as seasonal Employment Insurance claimants under the seasonal worker pilot project but, as an unintended consequence of the timing of the pandemic income supports, could not benefit from the program.

Honourable senators, the measures proposed in Bill C-8 that I talked about represent important changes that will help the provinces and many Canadians get through this pandemic and will also help the economy recover.

In closing, I would like to thank the Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland, and the Government Representative in the Senate, Senator Gold, for giving me this opportunity to sponsor Bill C-8.

Honourable senators, above all, I want to thank you for your indulgence, understanding and flexibility today in allowing me to share my motivation for becoming a senator before addressing Bill C-8 in greater detail.

Thank you. Meegwetch.

Honourable senators, I would like to start off by thanking my colleague for his comments on the bill and also congratulating him on his maiden speech. I look forward to working with him, not only on the Senate’s Finance Committee but also on the Banking Committee.

My role today is that of the critic of Bill C-8, An Act to implement certain provisions of the economic and fiscal update tabled in Parliament on December 14, 2021 and other measures. This bill received first reading in the other place on December 15, and it received third reading on May 14. The Standing Committee on Finance in the other place held three meetings on this bill. I want to take you back to a question that I had asked Senator Gold about the bill to make sure that the Finance Committee in the Senate would be able to study the bill in the same amount of detail as they were allowed over in the other place.

Honourable senators, the fall fiscal update is usually delivered mid-year — we’ve been getting one a year — and is followed by an implementation bill. Last year, Bill C-14 implemented the provisions of the previous year’s fiscal update.

Regarding the bill that we’re talking about today, there are seven parts to it. I’m going to speak to each part and just provide some preliminary comments prior to it being studied by the Finance Committee.

The first part of the bill, as my honourable colleague mentioned in his speech, amends the Income Tax Act and the Income Tax Regulations to introduce two new refundable tax credits. The first one is for eligible businesses on qualifying ventilation expenses incurred to improve air quality, and the other one is to return fuel charge proceeds to farming businesses in backstop jurisdictions. Backstop jurisdictions are the provinces that haven’t implemented a carbon tax system of their own. Those would be Alberta, Saskatchewan, Manitoba and Ontario.

In addition, Part 1 of the bill also expands two other programs: It expands the travel component of the Northern residents deduction, and it also expands the school supplies tax credit that increases from 15% to 25%. It’s also a refundable tax credit and expands the criteria for eligibility.

The second part of the bill is the enactment of the underused housing tax act. I consider this the major part of the bill. It’s going to implement an annual tax of 1% on the value of vacant or underused residential property directly or indirectly owned by non-resident non-Canadians.

I’m going to talk a little bit about the act and the provisions of it, but I just want to warn my colleagues that the act is quite complex. I’ve gone through it, and I think I’ve correctly extracted certain aspects of the bill. I just want to relay them to you and then point out a few issues with regard to the bill.

As I say, it’s the most complex part of Bill C-8, and it’s really a standalone act. It’s over 90 pages long. I think it should have been tabled as a separate bill and not part of an omnibus bill, because everything else in the bill is costing the government money. This is the only part of the bill that’s a revenue-imposed initiative, so because of the length and complexity of the bill it really should have been studied as a standalone bill.

Government initially announced its intention to implement the tax in its 2020 Fall Economic Statement. At the time, the government announced it was targeting the unproductive use of domestic housing owned by non-resident non-Canadians to remove those assets from the domestic housing supply. Then Budget 2021 provided more details and proposed a national 1% tax on vacant or underused housing. It also announced a consultation process to provide stakeholders with an opportunity to comment on the parameters of the proposed tax. The consultation period ran last year from August 6 until December 2.

The Minister of National Revenue is responsible for the proposed act, and it will consist of 40 sections. When it is enacted, it’s going to come into force, or deemed to have come into force, on January 1, 2022. The proposed act sets out rules to establish an owner’s liability for the tax. It also establishes reporting and filing requirements. It provides for administration and enforcement provisions similar to other taxation legislation. It also makes consequential amendments to a number of other acts, like the Financial Administration Act.

Generally speaking, the act proposes to impose an annual tax of 1% on the value of residential property located in Canada that is owned, directly or indirectly, by persons who are neither citizens nor permanent residents of Canada, unless the owner is able to claim one of the exemptions permitted under the act. Specifically, the act does not apply to an excluded owner or an individual who qualifies for one of the several exemptions under the act.

The act provides for a number of excluded owners, the primary one being a person who is a Canadian citizen or a permanent resident, unless that person owns the property and is acting in their capacity as a trustee of a trust or as a partner in a partnership.

The definition of “excluded owner” is presented in such a way in the bill that other individuals or other groups of individuals can be included or excluded from the tax by simply changing the definition of “excluded owner.”

As I previously mentioned, the second category of individuals who may not have to pay the tax are those who qualify for an exemption. There are a number of specific exemptions listed in the legislation, but the two that I think will probably be the most commonly used will be the following: properties that are used as a primary residence by the owner or the owner’s immediate family and properties that meet the qualified occupancy of a period of 180 days.

In summary, the proposed act imposes a tax on every person who, on December 31, is an owner of a residential property in Canada unless they can meet one of the definitions of “excluded owner” or they can claim one of the several exemptions.

The term “residential property” is also defined in the proposed act, and it includes numerous types of properties, such as a detached house, a duplex, a triplex, a semi-detached house, a row house and a condominium. The government has really scooped everybody and everything up.

So every owner, other than an excluded owner or an owner who can claim one of the exemptions, is liable for the tax of 1% on either the fair market value or the taxable value of the property, multiplied by that person’s ownership percentage. The act also defines the terms “fair market value,” “taxable value” and “ownership percentage.”

As I’ve said, the proposed act itself is quite complex, and while I’ve tried to give a general overview of the act, it is tax legislation. Anyone who thinks they are impacted by the legislation should obtain professional tax advice and not rely on what I’m saying here today.

The Finance Committee of the House of Commons studied Bill C-8 and the proposed underused housing tax act. One of the issues discussed at the committee was the objective of the program. Is the objective to raise tax revenues, or is the objective to make vacant and underused housing available for use?

During the Finance Committee meetings in the other place, the emphasis was on the tax as a source of revenue. However, when the government announced its intention to implement the tax in its 2020 Fall Economic Statement, the emphasis was on targeting the unproductive use of domestic housing, which removes those assets from the domestic housing supply.

Finance Canada officials indicated during meetings that they were unsure of the impact of the unused housing tax because there is a lack of information on vacancy rates for the housing market. However, they estimated that the tax will raise about $735 million in revenue over the next five years. Budget 2021 also estimates that the annual revenues to be collected over each of the next four years will be about $700 million. The Parliamentary Budget Officer estimates that the tax will raise about $600 million over the next five years, with estimated revenues of $130 million in this fiscal year. However, the Parliamentary Budget Officer stressed the uncertainty of some of the assumptions used to calculate the estimate.

At a recent meeting of the Senate Banking Committee, Peter Routledge, Superintendent of Financial Institutions, told the committee that there are about 250,000 households being created every year in Canada, compared to approximately 200,000 to 210,000 houses being completed every year, so there is a mismatch between supply and demand. It remains to be seen whether the 1% unused housing tax will result in more houses being available to address that shortfall.

Stephen Poloz, former governor of the Bank of Canada, told the committee that municipal regulations were to blame for shortages of available housing. Specifically, government rules are what stand in the way of the private sector solving many of our problems.

Several other issues regarding the unused housing tax were raised during meetings of the Finance Committee in the other place. For example, why is the tax rate 1%? Why is it not 2% or 0.5%? Has there been any analysis of the possibility of retaliation by other national governments? For example, many American citizens own property in Canada, and a tax on their property may result in the imposition of taxes on the property Canadians own in the United States.

Another issue is that if the government’s trying to identify extra tax revenues, why not improve the money laundering regime and the tax evasion regime in this country? Another concern that was raised is why the federal government is straying into property taxes, which is the domain of municipal governments.

The underused housing tax is also causing concern with Canadian homeowners. A recent report funded by CMHC recommends the implementation of an annual deferrable progressive surtax on home values starting at $1 million. Despite the assurances of the Minister of Housing that the government is not looking at charging capital gains or any surtaxes on primary residences, homeowners were concerned to learn through media reports that CMHC is tracking millions of mortgage holders to identify homeowners with more than one property, raising the possibility that the unused housing tax may in future be applied to second residences owned by Canadians, such as summer cottages.

I’m now going to leave Part 2 and get into Part 3 of the bill. Part 3 provides for a six-year limitation or prescription period for the recovery of amounts owing with respect to a loan provided under the Canada Emergency Business Account. The Canada Emergency Business Account, or CEBA, is a loan program put in place during the pandemic, and these loans were paid out by Export Development Canada under section 23 of the Export Development Act. Eligible businesses that applied before June 30, 2021, were offered loans of up to $60,000, and these loans are interest-free until December 31, 2023. But an annual interest rate of 5% will take effect on January 1, 2024. If at least 75% of the loan amount is repaid by December 31, 2023, the remaining balance will be forgiven. For loan amounts over $40,000, at least 50% of the loan expansion must also be repaid for loan forgiveness to apply.

Clauses 41 to 43 of Bill C-8 establish the limitation of prescription periods to recover money owing under a CEBA loan: six years from the date of default. The date of the default is the day on which the person making the claim first knew or ought reasonably to have known that the default had occurred. The six-year period resets every time the borrower acknowledges their debt, for example, by promising to repay the outstanding balance or by making a payment. I had thought that the six-year limit was a bit generous, but apparently that is quite a common time frame within the federal government. The length of the limitation of prescription period of six years is similar to other loan and repayment periods, such as those established under the Canada Student Financial Assistance Act.

Part 4 of the bill authorizes the Minister of Finance to make payments of up to a $100 million to the provinces and territories out of the Consolidated Revenue Fund for the purpose of supporting ventilation improvement projects in schools. The maximum payments for provinces or territories are stipulated in the bill itself. Officials indicated that the amounts stipulated in the bill are based on a flat amount of $500,000 for each province and territory, plus a per-child allocation for each child 14 to 18 years of age within that province or territory. The funding will be provided to each province and territory, which will be responsible for disbursing the funds.

Part 5 of the bill authorizes the Minister of Health to make payments up to $300 million to the provinces and territories out of the Consolidated Revenue Fund for the purpose of supporting their COVID-19 proof-of-vaccination initiatives. The amount of payment received by each province or territory is to be determined by the Minister of Health. No other information was available regarding provincial or territorial requirements to access the funding or how the funding will be allocated. Officials have indicated that negotiations with the provinces and territories are ongoing and include issues of accountability, how much funding will be allocated to each province and territory, and how the funding will be accessed. As indicated in the bill, the intent is to establish and maintain a proof-of-vaccination program while proof of vaccines is required.

Part 6 of the bill, and specifically clause 46, authorizes the Minister of Health to make payments of up to $1.7 billion out of the Consolidated Revenue Fund for the purpose of covering any expenses incurred on or after April 1, 2021, in relation to COVID-19 tests. As a result of an amendment proposed by the Finance Committee of the House of Commons and accepted by the House, Bill C-8 now includes an accountability clause requiring the minister to report every three months on the total amount paid under the act, the number of tests purchased and how they were distributed.

While Bill C-8 is requesting $1.7 billion relating to COVID-19 tests, two other bills have provided money for COVID-19 tests. Bill C-10 provided $2.5 billion for COVID tests, and the Appropriation Bill for Supplementary Estimates (C) provided $4 billion.

In a recent report, the Parliamentary Budget Officer said that the $4 billion provided by the Appropriation Bill for Supplementary Estimates (C) is a duplication of the funding being requested through Bill C-8 and provided by Bill C-10. This raises a question: Why is the government requesting money for the same initiative twice? If Parliament approves the same funding twice, will there be an extra $4 billion available to be spent on some other unknown project? Officials have indicated that the $2.5 billion approved by Bill C-10 has been frozen by Treasury Board. In addition, all but $6 million of the $1.7 billion in this bill has been frozen.

The Standing Senate Committee on National Finance, in its recent report on Supplementary Estimates (C), expressed concern over duplicate budgeting of this initiative. Specifically, the committee said that government should end duplicate funding requests, as it lacks transparency.

Part 7 of Bill C-8 amends section 12 and Schedule VI of the Employment Insurance Act to specify the maximum number of weeks for which Employment Insurance regular benefits may be paid to certain seasonal workers in regions with very seasonal economies. Under the EI program, regular benefits are available to eligible persons who lose their job through no fault of their own and are able and available to work.

Honourable senators, this concludes my comments on the second reading of Bill C-8. I look forward to the study of the bill by the Standing Senate Committee on National Finance. Thank you.

Are senators ready for the question?

Is it your pleasure, honourable senators, to adopt the motion?

Hon. Senators: Agreed.

(Motion agreed to and bill read second time.)