“They used up a lot of capital for what they did, and if they want to keep spending that capital, that’s their choice,” said NDP House Leader Nathan Cullen (Skeena-Bulkley Valley, B.C.). “C-38 became a big preoccupation for us because so much was being done to the public in it. … There have been omnibus bills before and there have been budget implementation acts before, but to continue down this path is really threatening to a lot more principles than just sound management. It’s democracy that’s at stake here.”
Former Liberal MP Don Boudria, who served as government House leader from 1997 until 2003, said that fall budget implementation bills typically include technical amendments to the previous budget bill and changes to the tax code.
Mr. Boudria, a senior counsellor with Hill and Knowlton, said that the fall budget bill will certainly be “voluminous,” but not necessarily omnibus.
“If omnibus means it’s going to be thick, it always is. But if omnibus means that it’s going to carry a tonne of stuff that was never in the budget in the first place, well then you have another story,” he said. “If the budget contains a whole bunch of stuff that was never raised in the budget in the first place, I think the Minister of Finance and the Prime Minister have a problem,” Mr. Boudria said. “If the government is going to try to put things in there that weren’t in the budget in the first place, I think that’s going to be the controversy.”
He said the opposition opened “Pandora’s Box” in the spring to oppose Bill C-38, the Budget Implementation Act, which contained measures never discussed in the budget. “The tendency of [the opposition] to rip their shirt is going to depend on how much is in the bill that wasn’t in the budget in the first place,” he said. “This could lead to a whole slew of amendments.”
Mr. Cullen said the NDP will use the same delay tactics it’s used in June if the government introduced another omnibus budget implementation bill, adding that the government should avoid omnibus legislation out of its own self-interest. “Even in their own self-interest, you’d think that they’d take a more reasonable approach to being in government,” he said.
Liberal House Leader Marc Garneau (Westmount-Ville Marie, Que.) said his party will also “take exactly the same approach” if the government tables another omnibus bill. “We’re hoping the government will have learned a lesson. If they insist on taking C-38 kind of approach, they’re going to get a C-38 response,” he said.
Bill C-38 was 420 pages long, amended 70 pieces of legislation and contained more than 150 pages of changes to federal environmental laws and regulation. To oppose it, the Liberals, New Democrats and Green Party leader Elizabeth May (Saanich-Gulf Islands, B.C.) introduced 871 amendments at the bill’s report stage in June. House Speaker Andrew Scheer (Regina-Qu’Appelle, Sask.) bundled the amendments into 156 votes, which resulted in a 24-hour round of voting.
Mr. Garneau said while he won’t know what will be in the second budget implementation bill until it’s introduced, he anticipates that tax reform, public service pension reform, and First Nations education will be addressed because those issues were left out of Bill C-38.
“If you look at what has been addressed by C-38 you can speculate that the rest of the budget will make an appearance in the second budget bill,” Mr. Garneau said.
Finance Minister Jim Flaherty (Whitby-Oshawa, Ont.) introduced the budget on March 29. It committed to putting in place a First Nation Education Act by September 2014 and implementing “new funding mechanisms” for First Nations elementary and secondary education. The budget also promised to “move forward” with legislation for the ownership of private property on reserves.
The government amended the First Nations Land Management Act with Bill C-38 to allow First Nations to exercise greater authority over economic development on reserves, but the first budget implementation act did not address First Nations education or the creation of on-reserve private property regimes.
The 2012 budget also addressed public service pension reform. The budget acknowledged the government’s commitment to meet current pension obligations, but it also outlined plans to raise public service employee pension contributions to match the employer, and introduce reforms to the Parliamentary pension plan that would take effect in the next Parliament. Neither initiative was covered in the first budget implementation act.
The budget also committed to implementing key recommendations of the 2011 Jenkins report on innovation, which urged sweeping changes to the Scientific Research and Experimental Development (SR&ED) tax credit system.
The Department of Finance announced on Aug. 14 that it was accepting public comments on a laundry list of amendments to the personal income tax, corporate income tax, and international taxation regimes that were part of the 2012 budget.
The proposed amendments include reducing the SR&ED investment tax credit from 20 to 15 per cent and removing capital expenditures from the calculation of the SR&ED tax credit.
Additional proposed corporate income tax amendments include the expansion of the accelerated capital cost allowance to cover a wider range of “bioenergy equipment,” and the phasing out of certain tax credits related to mining exploration and resource development.
Some corporate tax reforms could force Canadian companies to draw on their cash reserves. In August, Bank of Canada Governor Mark Carney chastised the private sector for holding on to more than $500-billion in cash reserves—an amount equal to nearly one-third of GDP.
Last week Mr. Flaherty followed suit, telling the Canadian Press that the government has “done a lot through the tax system to encourage Canadian executives, business people, to start utilizing some of the capital they have on their balance sheets.”
The rolling back of some corporate tax credits may be the federal government’s way of nudging the private sector into spending what Mr. Carney described as some $525-billion in “dead money.”
“At a certain point, it’s not up to the government to stimulate the economy, it’s up to the private sector, and they have lots of capital,” Mr. Flaherty said last week.
Mary Ann Dewey-Plante, Mr. Flaherty’s press secretary, confirmed that the government would introduce a second budget implementation bill addressing “outstanding legislative items” from the 2012 budget, but would not comment on the timing or content of the legislation.
Original Article
Source: hill times
Author: CHRIS PLECASH
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