Hon. Tony Loffreda: Honourable senators, my question is for the Government Representative in the Senate.

Once again, Senator Gold, my question is on minority rights. They are so important, not only in Quebec, but across Canada. Today, I want to address Bill 21 which infringes on the civil liberties of Quebecers. Many religious and ethnic communities in Quebec continue to feel their rights have been eroded. As you know, the law is currently being challenged before the provincial courts.

Last December, in an answer to a question from Senator Omidvar, you said:

. . . The Government of Canada remains committed to following the litigation closely and will take whatever decisions are deemed appropriate at the appropriate time.

Senator Gold, some might argue the appropriate time was a long time ago. When will the government take a strong stand on this bill and start defending the rights of minorities in our province? What is your definition of the appropriate time?

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. Tony Loffreda: Honourable senators, I rise today at third reading to speak to Bill C-19, the government’s budget implementation act, 2022, no. 1. I thank all the senators who have spoken thus far for their insightful speeches.

As a member of the National Finance Committee and the Banking Committee, I had the pleasure of immersing myself in a top-to-bottom review of this almost 500-page bill. Combined, we held eight meetings and heard from more than 75 witnesses. We received several written briefs, and I also reviewed the reports from the six committees who conducted pre-studies of specific parts of the bill. And I will attempt to be as complementary as possible to the other speeches we have heard.

Studying a budget implementation act is always an exciting and daunting task that usually includes a review of a long list of policy initiatives, income tax amendments and various other measures. Bill C-19 is no different.

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As we all know, sometimes you need to look around you to feel better about yourself. Indeed, the Canadian economy is doing well compared to our G7 allies. For example, the International Monetary Fund revised its growth projections in April downward slightly. Globally, growth is projected to hit 3.6%, while in Canada, the increase is 3.9%, which moves us ahead of the United States, Great Britain and the European Union. These projections are encouraging.

Although the Canadian economy is moving full steam ahead, many Canadians remain in tough, precarious situations. Inflation is mainly to blame for the many problems facing Canadians who are worried about making ends meet. Fortunately, there are some measures in Bill C-19 that will ease the financial burden for some of these Canadians.

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There are a few measures in C-19 that I welcome and feel will help alleviate some of the financial pressure and economic hardships Canadians are dealing with these days due, in part, to the inflationary pressures we are experiencing. I’m optimistic that some of these measures will help create wealth and increase productivity in our country.

For instance, I think of the labour mobility deduction for tradespeople, which was well covered, to allow workers to deduct eligible expenses of up to $4,000 per year. I’ve spoken to many entrepreneurs who continue to struggle to find workers. This measure should help and, hopefully, will solve some of the delays. Labour shortages are not the only challenge, as supply chain delays also continue to have a negative impact, as we have all witnessed and experienced.

I also support the government’s commitment to providing greater support to the disability community, namely through the home accessibility tax credit. This measure is expected to benefit 10,000 Canadian families and allow seniors and people with disabilities to live and age at home. I also support the expansion of the eligibility criteria for the disability tax credit, and I would welcome further expansion in the future to a refundable tax credit.

We all know housing supply and affordability in Canada are big issues. Let’s not mince words: It’s a crisis that needs our immediate attention. Thankfully, there are a few measures in Bill C-19 that focus on housing, namely Divisions 4 and 12 of Part 5. Division 4 authorizes the Minister of Finance to make payments to provinces and territories of up to $750 million out of the Consolidated Revenue Fund for the purpose of addressing municipal and other transit shortfalls and needs, and improving housing supply and affordability, which is so important.

Division 12 enacts the prohibition on the purchase of residential property by non-Canadians, a new statute that implements a ban on foreign investment in Canadian housing for two years. The prohibition would also apply to certain foreign corporations and entities and prevent non-eligible foreign persons from avoiding the ban by using corporate structures.

I also want to briefly acknowledge the government’s commitment to fast-track by two years the implementation of a public and searchable beneficial ownership registry by bringing amendments to the Canada Business Corporations Act. Division 30 of Part 5 of the bill will require private federal corporations to proactively send information on their beneficial owners to Corporations Canada. The registry is being implemented in a two-phase approach, and we expect further amendments this fall in the government’s second budget implementation act of 2022. In committee, officials from Innovation, Science and Economic Development Canada, or ISED, explained that the government will further consult with stakeholders, which is so important.

I think it will be important for our Banking Committee, when the time comes, to take a good look at the proposed changes in phase two to make sure that there are no loopholes that could, among other things, allow foreigners to create shell companies and bypass the measures in Division 12, which bans foreign investment in housing. I know our colleague Senator Downe shares this concern and has written to Minister Freeland about it.

Of course, these three measures are in addition to another housing-related measure we adopted in Bill C-8 last week: the Underused Housing Tax Act, which the government estimates will generate $735 million in revenue in the next five years. Officials who appeared before the National Finance Committee argued that Division 12 is one measure that is packaged within a number of measures put in place in Budget 2022 by the government to contribute to better affordable housing outcomes for Canadians and curb foreign demand.

I was reassured that these measures are only part of a larger package of initiatives because a lot of work still needs to be done on this file. Taxing foreign owners won’t solve the housing shortage, and it is unlikely to address affordability challenges. With the recent and anticipated interest rate hikes, housing may become increasingly more inaccessible for Canadians. Approximately one in four Canadians are worried that increasing interest rates will force them to sell their homes.

It is my hope that our Banking Committee will take the time this fall to explore what opportunities, challenges and risks lie ahead in the sector and make recommendations to the government on how to make housing more affordable, available and accessible.

I appreciate that the federal government may be limited in what it can actually do to address the housing crisis since many of the responsibilities fall within provincial and municipal levels of government. Zoning issues and permitting come to mind. I respect jurisdictional authority, but I also believe that the Canadian federation works best and can achieve great things when all levels of government work together. The housing file is one such issue where collaboration is crucial. When funding transit provincially, a solution would be that this funding be linked to an increase in housing supply. This housing supply is currently being rationed by provinces and municipalities. This is too complicated to get into in a short period of time, but we will study this further, and I will comment on it at a later time.

One issue that has received a lot of media coverage and that I have some reservations about is the select luxury items tax act, Part 4 of the bill. On the surface, this seems like a good policy. As the government argued when it introduced the tax in Budget 2021, those who can afford to buy luxury goods can afford to pay a bit more. It is estimated that this measure would increase federal revenues by $749 million over five years.

At the National Finance Committee, we heard from the aerospace and marine industries, and both advanced that the measure would be harmful to the economy and would have a negative impact for thousands of Canadian families. It was suggested that this measure could result in lost jobs and lost revenues to companies across the country. I won’t get into the numbers, but many supply chains will obviously be affected. We were reminded that the United States enacted a similar tax on boats in the early 1990s, only to repeal it a couple of years later. We can always learn from global jurisdictions and especially our largest trading partner.

Finance officials suggested that, within the context of the economy of the whole, it wouldn’t really impede growth globally but recognized that specific sectors, like automotive, boating and planes, will experience a bigger impact. I think the government may have failed to look at the consequence of this measure on workers within these sectors, lost revenue from sales and the impact on our reputation globally.

I am not suggesting that this tax be repealed from Bill C-19 — and we’ve made a few observations in our National Finance Committee’s report, to which you can refer — but I can’t help but question what economic impact assessment the government conducted to justify it. I think it will be very important for senators on the National Finance Committee to monitor the implementation and impact of this tax and for the government to also track the impact of this tax and the impact it will have on employment, and to act very quickly if the impact is negative.

We’ve discussed the excise taxes and the “sin” taxes, but, rapidly, what can I add? I’ll add this: as reported in the Public Accounts of Canada, revenues from tobacco between 2016 and 2021 amounted to nearly $16 billion, and just over $9 billion for alcohol. These are considerable sums of revenue for the treasury. With respect to vaping products now being taxed, the revenues from their taxation in the next five years will generate approximately $654 million. I just want to outline the importance of those taxes.

In relation to competition and growth, when Minister Freeland tabled her budget in the other place on April 7 she acknowledged that the Achilles heel of the Canadian economy is productivity and innovation. I completely agree with her, and I feel Bill C-19 could have done more to properly address this issue. The business community feels the same way. Sure there are some measures, like the changes to the Competition Act in Division 15 of Part 5, that could set the stage for a more competitive marketplace. According to the government, these changes could result in lower prices for goods and services, greater choices for consumers and better, good-paying jobs — we never have enough good-paying jobs — and an environment that fuels business, innovation and productivity.

This is good news, because we all know that competition will benefit the consumer, and the consumer, I often say, is the driver of every economic recovery and the motor of every economy. If we look south to the largest economy in the world, and our largest trading partner, the consumer is two thirds of that economy, and close to 60% of the economy in Canada. Seeing the importance of the consumer, any measure and/or amendment that benefits the consumer is always very welcome.

It is also important that the government increase engagement with stakeholders, the business community and others to see what else must be done to ensure that Canada keeps pace with our global competitors. We need to be an attractive destination, a place where we encourage businesses to innovate and give Canadian workers a chance to prosper. We must also establish very favourable conditions to promote domestic and foreign investment.

In conclusion, honourable senators, as we look to the future and consider how Canada can, should and must manage the recovery, we need to turn our attention to Canada’s overall competitiveness. I’ve said it before and I’ll say it again: It’s much easier to distribute wealth than to attract and create wealth. It was the same in business. When you tell executives to cut expenses, they quickly go and do so. When you tell them to grow sales, it’s a little tougher.

Canada needs a plan to address our lacklustre productivity and growth performance. Simultaneously, we must also find ways to raise revenues and start dealing with our debts and deficits. I won’t get into the numbers. They’ve been mentioned enough by Senator Marshall, who is looking at me while smiling and nodding. I also want to thank Senator Moncion for doing a great job as the sponsor of the bill, and Senator Marshall as critic.

While I’m at it, I want to thank all my colleagues on the Finance and Banking Committees. It’s always a learning experience, and I am really privileged. But the best way to raise revenues is to grow our economy.

Colleagues, I will vote in favour of Bill C-19. I feel most of these measures will have a positive impact on our economy, although I was hoping to see more measures to address Canada’s productivity growth and competitiveness. Bill C-19 is, nonetheless, a good step forward and a reminder that much work lies ahead — and not just talk. It’s easy to talk, but let’s see action. Let’s make action happen. I’m glad to contribute, and to join my colleagues on the Finance and Banking Committees in doing some great work. Thank you for all your work.

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