44th Parl. 1st Sess.
March 4, 2022 10:00AM
- Mar/4/22 10:19:57 a.m.
- Watch
- Re: Bill C-8
Mr. Speaker, we are at report stage for Bill C-8, the economic and fiscal update implementation act of 2021, which contains a number of measures.
The Bloc Québécois agrees with the thrust of the bill. However, from the beginning, we have been pointing out a major problem, and that is the fact that the federal government is sticking its finger in the property tax pie. This is the first time that has happened.
There is a housing shortage. The proposed measure will mean that foreign residents who are not permanent residents or citizens will pay more if they have a residence in Canada that they are not living in. This measure could marginally assist in addressing the housing crisis. We do not disagree with the principle, but as the song by Jacques Brel says, il y a la manière, there is a right way to do things.
We see this as a dangerous precedent that brings to mind other similar cases in Canadian history. Today, Ottawa is proposing to interfere in a new taxation area, the only remaining area that it is not already involved in, and that is property taxes.
The part of Bill C‑8 that targets non-residents proposes a 1% tax on underused housing. As I said, the idea may be a good one, but is it right for Ottawa to do this in such a cavalier fashion without consulting the municipalities and the provinces? I have a bad feeling about it, and we see this as a serious problem because different levels of government all have their own taxation powers.
Property tax is under the jurisdiction of the municipalities and other creations of the provinces, such as school boards. Revenue sources are limited, so when Ottawa steps in and helps itself to a portion of the property tax base, that sets an unfair precedent. Moreover, the federal government will collect this tax without even talking to the people, the organizations and the levels of government that handle this area of taxation. That is a serious problem.
We are only talking about some $100 million annually, which will not have a huge impact on the fiscal imbalance. The real problem here is precedent. To collect this new tax, the federal government, its departments and the Canada Revenue Agency will have to develop a brand-new mechanism and will have the power to collect this revenue from property taxes. The history of taxation in Canada gives us reason to worry.
During the First World War, the government decided to introduce a corporate tax to fund the war effort, citing exceptional circumstances. That tax was justified and was supposed to be temporary, but Ottawa never cancelled it and is still collecting it to this day.
The same scenario reappeared during the Second World War, when Ottawa introduced individual income tax to pay for the war. This exceptional tax was supposed to be temporary too, but Ottawa is still collecting it to this day.
Everyone in Quebec remembers Mr. Duplessis's rallying cry “give us back our loot”, which I would like to co-opt today for property taxes. This is how Ottawa works. Once it takes hold of a taxation area, it never gives it up, even if temporary and extraordinary circumstances might seemingly justify it.
That is the problem with this machine. It is always getting bigger and taking over everything, aiming to be the be-all and end-all.
We are telling the federal government to be careful. Municipalities, school boards, and organizations associated with the provinces and Quebec have the opportunity and the power to manage this area, which they do while drawing only limited resources. We have to be careful not to let the federal government get its hands on this area of taxation, since the provinces and municipalities are already under-resourced and struggling to provide all the services within their jurisdictions.
As we know, the Parliamentary Budget Officer publishes a fiscal sustainability report nearly every year. Even with Ottawa's extraordinary spending during the pandemic, his findings have not changed. In the long run, over the next few decades, Ottawa will have a budget surplus, and without major changes, the provinces will be saddled with debt levels from which they will never recover.
That is why all the provinces are asking Ottawa to fund health care at 35%, or just over a third of spending, simply to restore some balance. Studies by the Conference Board of Canada have reached similar conclusions. The Council of the Federation also says that balance needs to be restored. The Parliamentary Budget Officer's studies remind us of this every year.
Rather than agreeing with us and saying that the federal government is taking too much tax for the services provided and will therefore increase health transfers or leave tax points, now Ottawa wants to get its hands on the last taxation area that it has not waded into until now. This is unacceptable. It makes no sense.
This is what constitutionalist and law professor Patrick Taillon said on February 17, in parliamentary committee:
However, being a good idea is not an excuse to flout our constitutional principles. From the Charter of Rights and Freedoms to the division of powers, the spirit and letter of the Constitution must be respected. Without the prior consultation of the provinces or an agreement with them—in other words, without some legal due diligence—this good idea has vulnerabilities.
It is clear that the pith and substance of the measure involve the regulation of housing law, and there is no doubt that the provinces have exclusive jurisdiction over housing when it comes to private law, specifically, property and civil law and, generally, in relation to social policies and local affairs.
What the constitutional expert, Mr. Taillon, is saying is that because the purpose of this tax is to change behaviour in housing, an area of jurisdiction, it is highly likely that it is a regulation in disguise and would in fact be unconstitutional. He said that unfortunately, it is the courts that will have to rule on this.
It would have been interesting, smart and pragmatic to check all this ahead of time instead of exposing ourselves to court challenges that could end up overturning the legislation, knowing that if the act were to be struck down, the federal government's entire property tax infrastructure would already be in place and spending already committed. The damage would have been done. This would undermine the municipalities.
Should it not be deemed unconstitutional—we cannot assume how the courts will rule—it would nonetheless set a dangerous precedent because the tax will have been introduced without co-operative federalism, which could worsen the fragile fiscal balance within the federation. The balance would be unfair, and that is truly a serious problem.
In closing, the Bloc Québécois proposed a very simple amendment in committee stating that if Ottawa wants to move ahead with this tax, it must have the province's agreement to impose it, ensuring that there are consultations with the municipalities.
In closing, I take exception to your decision, Mr. Speaker. I take issue with you this morning, because you, and I am obviously directing my comments to the table, deemed that our amendment was out of order.
We do not agree with that decision. Our amendment did not broaden the scope of the act, nor did it alter it. It merely sought to make the bill respect the Constitution. We are therefore very disappointed with your decision, which makes the historic precedent set by Bill C-8 against the rights of the municipalities and provinces even worse.
In spite of my rebuke, Mr. Speaker, I thank you.
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- Mar/4/22 10:33:51 a.m.
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- Re: Bill C-8
Mr. Speaker, I thank my brilliant and esteemed colleague from Mirabel for his speech.
The housing shortage is affecting everyone throughout Quebec and Canada. It is a major problem. A whole series of measures is required to remedy it.
Yes, a 1% property tax for non-resident owners of underused housing is more than marginal. It is symbolic, and this level of government has no business collecting it, at least not without the co-operation of the provinces.
The problem is that there is not enough housing. The government really needs to make up for all the lost time and, most importantly, build more social housing.
Once again, Ottawa abandoned social housing back in the 1990s, and today we are paying the price many times over. We are now seeing where decades and decades of underinvestment has led.
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- Mar/4/22 12:26:27 p.m.
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- Re: Bill C-8
Mr. Speaker, we keep hearing about inflation. We have heard about the housing crisis. Right now in my riding housing has gone up over 40% in value just in one year, especially in Port Alberni. People are being pushed out. We need non-market housing. There have been several applications made to the federal government, but it continues to give them the shuffle. More and more people are displaced or homeless. Right now, we have an opportunity, a partnership of multi-stakeholders wanting to purchase a hotel in the Alberni Valley to house the hardest to house.
I might outline also that the Parole Board of Canada has written a letter of support for this proposal. It has outlined that there is not a single space for its clients to live when they are released through the federal parole system. That is very alarming and keeps the cycle of incarceration going.
Therefore, I am calling on the federal government, and I would ask the member if she agrees, to invest quickly into non-market housing to address this need.
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- Mar/4/22 12:27:43 p.m.
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- Re: Bill C-8
Mr. Speaker, I agree that we are seeing concerns with respect to inflation, food inflation and affordable housing, all due to the failed policies and lack of action from the current Liberal government. What I do not understand is why the member and his entire party continue to prop up the government and support these failed policies that are causing inflation and this burden on the people of his riding as well as mine.
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- Mar/4/22 12:30:06 p.m.
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- Re: Bill C-8
Mr. Speaker, the member commented earlier about the NDP and the Liberals working together. This is what it looks like: It is actually the Liberal-Conservative coalition that cut and gutted the national housing strategy over 25 years ago. We have lost over 500,000 units because of the Liberal-Conservative coalition to not invest in non-market housing and to come up with incentives for developers to build housing and profit off the backs of people who need non-market housing and need it right now.
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- Mar/4/22 12:30:43 p.m.
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- Re: Bill C-8
Mr. Speaker, certainly, they do need help right now. When we talk about affordable housing, we know it is supply and demand. The government, its actions and its bills have not increased the supply appreciably. It has not kept foreign buyers from the market. It has not done anything to address the vacant buildings. The measures in this act are small, yet the member and his party are going to prop up the Liberals again and vote in favour of it. I do not understand it.
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- Mar/4/22 12:43:56 p.m.
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- Re: Bill C-8
Mr. Speaker, I thank my colleague for his question.
I would like to say to him that our government worked very hard with all the provinces in Canada.
During the pandemic, we were there to support the provinces of Quebec and Ontario in long-term care homes.
On measures with regard to housing, obviously there are taxation measures that are very relevant to the federal government that we need to look at and we need to use. There are tools available for us. Our goal is to help with housing affordability and affordable housing. We have done that with the national affordability housing program. We will be bringing out a suite of measures that the minister has been working on. I look forward to seeing them. They were in our platform and Canadians voted for them. We are going to see them in the coming weeks and months.
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- Mar/4/22 12:45:00 p.m.
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- Re: Bill C-8
Mr. Speaker, I want to start by saying how much I appreciate the member for Vaughan—Woodbridge mentioning the cost of housing in his speech. In Kitchener, as he might know already, the cost of housing went up over 32% in the last year alone.
He mentioned an interest in going further and being more bold. For example, the underused housing tax that is in this legislation would only be for those who are non-Canadian, non-permanent residents. I wonder if, on the topic of blind bidding, for example, he might be interested in sharing more about his personal views on how we could go further to address the housing crisis we are in.
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- Mar/4/22 12:45:40 p.m.
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- Re: Bill C-8
Mr. Speaker, on housing affordability we must table measures. One of them will be the $1 billion-plus national accelerator fund. We need to encourage municipalities to speed up the process of approving projects and get shovels in the ground faster. I always hear the comparison that in the United States it can take eight to 12 months to start putting shovels in the ground, but in Canada it is much longer. We must break down the red tape and get more housing built across this country. In my area, the prices that things are selling for are remarkable. We need to get supply out there. This is multi-jurisdictional, and we will work together with all jurisdictions and all levels of government to get it done.
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- Mar/4/22 12:57:05 p.m.
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- Re: Bill C-8
Mr. Speaker, the member has been a great addition since this Parliament began.
I would like to ask him a quick question in regard to what is not in this bill. At committee, the MP for Simcoe North brought forward an amendment that would in fact help the Prime Minister keep his commitments to Canadians on housing. It would basically ban foreign ownership or purchasing of residential properties here in Canada.
We were able to get it on the floor to be spoken on, but it was Liberal members who voted against it. I know he is facing many of the same pressures in his riding as I do in mine, and foreign ownership is part of that.
Why does he think the government voted against its own commitment? Is it because the Prime Minister only cares about those votes at election time and has no intention to carry through on his promise?
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- Mar/4/22 1:12:12 p.m.
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- Re: Bill C-8
Mr. Speaker, I thank my hon. colleague for his fine speech.
I have questions about social housing. As we know, the provinces are capable of managing their own budgets. When we talk about health care, we are talking about transfers. Why does the government not transfer these amounts to the provinces as well?
I think that the government is interfering. It should really hand over the related amounts to the provinces, which are responsible for housing.
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- Mar/4/22 1:17:08 p.m.
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- Re: Bill C-8
Mr. Speaker, it is always a pleasure to see you, especially since we will be closing out the week together. Thank you for recognizing me.
Today, we are debating Bill C-8, which contains a number of budget measures, which we support for the most part. The Bloc Québécois is a party that proposes and supports measures that are in Quebec's interest.
This bill includes several standard elements and funds allocated under agreements with first nations, which we must endorse. Generally speaking, because these measures are useful, we will vote in favour of this bill.
However, there is a big hole in the bill, as there is nothing to address the housing crisis. The pandemic has changed people's habits. Some sectors in the market are facing severe shortages and, as several colleagues mentioned, the cost of renting or buying has increased considerably.
The economy will reopen, and immigration will resume, because Canada will accept newcomers and foreign students. That makes us happy. However, that is going to put pressure on the housing market in Quebec and the provinces.
As we have said repeatedly, the federal government has almost completely disengaged over time. From 1960 to 1995, it worked with Quebec and the provinces. For example, it supported the construction of about 25,000 new housing units. These past 20 years, however, there has been nothing. I am not saying it is any one party's fault. Both the Conservatives and the Liberals are to blame for doing nothing, and now we have a major housing shortage.
The government has since launched the national housing strategy and plans to help build 6,000 units per year, but that will not do much to alleviate the shortage I was just talking about.
The program numbers are convoluted because they include provincial money, private sector money and other sources of funding. Not only is this program less generous than what the Liberal government would have us believe, but it has been complicated for Quebec.
We lost a good two-and-a-half years negotiating. Housing falls under the jurisdiction of Quebec and the provinces, which we confirmed when we examined the bill in committee. Nevertheless, the Liberal government insisted on trying to impose its conditions, which shows the federal spending power. The federal government holds the purse strings, and so it has the provinces on a string.
Now it has come back to haunt them. Prices are rising and everyone is concerned about it, so the government is looking for a magical solution by creating a new tax on unused housing. This is a fiscal microaggression, an expression I am sure our NDP colleagues will appreciate. It is a small tax that will generate only $100 million in revenue. That is a small amount, and it is really easy for people to get around paying it. I am no tax expert, but I predict that people from other countries who have a house in Canada will start sending their children here on vacation for a few days so that they do not have to pay this tax.
This is also a one-size-fits-all tax. I am an economist and, during my career, I often looked at CMHC reports and expert reports on the housing market. Experts in the field study the housing market one segment, province, region or metropolitan area at a time, and yet this government is proposing a one-size-fits-all tax that will be the same everywhere, without any of the distinctions that a competent individual would make between the different markets. Sometimes, I feel like I am the only one here who understands that Montreal is not Vancouver and Saint‑Colomban is not Halifax. That is a problem.
Despite all that, this tax infringes on the last big area of taxation over which the provinces have exclusive jurisdiction. Patrick Taillon, a professor at Université Laval and recognized constitutional expert, testified about this before our committee. He said, and I quote:
With this tax, the federal government is, for the first time in the history of Confederation, at least, to my knowledge [and he knows a lot about this], encroaching on a form of taxation thus far left, and rightly so, in the hands of local authorities at the municipal and provincial levels. I am referring to the property tax.
He said that the federal government had shown wisdom in leaving this in the hands of the provinces. I would argue that the federal government had already lost much of its remaining wisdom when it comes to respecting provincial tax jurisdictions, and now with Bill C-8, it has none left at all. The government is fully treading on provincial jurisdictions.
This is a serious first step, because it will require infrastructure. When the value of a property or an asset is assessed, it has to be taxed as a percentage. This requires officials and infrastructure, mainly at the municipal level. That is a big problem.
This shows us once again that the federal government cannot help but interfere in the jurisdictions of Quebec and the provinces at the slightest temptation and any time there is a crisis, especially one that it has partially or fully caused.
History shows that whenever the federal government decides to take a little foray into the provinces' tax fields, it is often a one-way trip, and Quebec ends up footing the bill. That is how it is, and I think it is extremely serious.
During the election campaign, the city of Saint‑Colomban held a fantastic debate hosted by its mayor, Mr. Lalande, whom I salute. The mayors have told us that all towns and cities in Quebec need more tax revenue and that they need to look after their infrastructure. Some municipalities are having infrastructure problems because of climate change.
These mayors were telling us that they cannot rely on property tax revenues alone. That is all our cities have left, but the federal government is poking its nose in. Of course, the government will tell us that it is a small tax of just $100 million, but it is about the principle.
At committee, Mr. Taillon pointed out that this tax might very well be unconstitutional. On top of that, it will be ineffective. I am very familiar with tax systems, and this one will not get the job done. Not only is it a mistake, but it also shows a lack of respect for the fiscal jurisdictions of the provinces, for the Constitution and for our municipalities, which are asking us not to allow anyone to set foot in their tax field.
The Bloc Québécois proposed an amendment. There have been some major tax collection agreements. That is how Quebec got its own tax return. The other provinces get their tax base defined by the federal government. In the past, there have even been tax rental agreements, where some provinces rented their tax base to the federal government through a bilateral agreement. Some provinces did that, while others said no. Typically, Quebec was against that. Ontario did it and then withdrew, but it was done through a bilateral agreement.
In Quebec, we asked for common sense and respect for the Constitution, for Quebec and for historical precedents. We told the government that if it wanted to tread on our jurisdiction, then it needed to ask us ahead of time, and the provinces that were unwilling could establish their own policies. Quebec is capable of establishing its own housing policies, especially since housing is under Quebec's jurisdiction.
Unfortunately, I have to blame the table for not allowing this amendment. The Bloc Québécois still thinks that this would have been a solution for allowing willing provinces to consent to the federal government using this tax. Unfortunately, this was refused. The fact remains that we need co-operation, which is missing from this clause from Bill C‑8.
I will close by quoting Mr. Taillon.
In short, if co‑operative federalism means anything, the very least the government can do is consult the provinces and negotiate agreements to implement this policy, in keeping with the spirit and letter of the Constitution. The co‑operative mechanism should not, for that matter, allow the federal government to exert any authority over property tax.
I would have said it myself, but it was said so well at the finance committee.
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- Mar/4/22 1:30:05 p.m.
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- Re: Bill C-8
Mr. Speaker, I want to thank my colleague for his excellent, dynamic speech.
My question has to do with the underused housing tax.
Constitutional expert Patrick Taillon told the Standing Committee on Finance that it was probably unconstitutional and would be nullified by the courts. One of the concerns Mr. Taillon raised was that, in the meantime, Ottawa would have put a whole system in place to collect a property tax and that it would use this system in the future. There is a risk here.
What does my colleague think about that?
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