Thank you, Mr. Chair, vice-chairs, and honourable committee members, for the opportunity to be here with you today.
I'd also like to thank all of you for your work on budget implementation act no. 2 and for all the work that I know you've been doing on the pre-budget consultations.
As you know, our government came to office with a plan to grow the middle class and to grow the economy, and budget implementation act no. 2 is an important next step towards that goal. The bill will help to make the tax system simpler, fairer, more flexible, and efficient.
includes measures to give federally regulated workers the right to request more flexible work arrangements from their employer, largely benefiting women, who continue to do the majority of unpaid domestic work in our society.
Also proposed is the elimination of unpaid internships in federally regulated sectors that aren't part of a formal educational program and providing labour standard protections for unpaid interns who are part of an educational program.
Mr. Chair, if you look at the measures in BIA 2, I think we can all agree that this legislation is an important step in our plan to build an economy that works for the middle class and for those who are working hard to join it.
Before I speak about the next steps in our plan, I'd like to tell you about how we got to where we are today and the signs that tell us our plans to build a stronger middle class and to grow the economy are working.
Just two years ago, the world economy was still in recovery. Canadians were feeling like they were working harder than ever but just weren't getting ahead, and there were grounds for their concerns. The median real wage income of Canadians had barely risen over the previous 30 years.
Middle-class Canadians were worried. They were looking for real change and elected a government with a plan to ensure that their hard work would not go unrewarded, a plan that would enable all Canadians to enjoy the benefits of a growing economy.
Today, as I mentioned, there are clear signs that this plan is working.
In just two years, we've lifted 26 long-term boil water advisories on reserve. Over 350,000 more students get help each year to afford books and tuition and earn their degrees. We've effectively doubled the Canada summer jobs program, helping almost 65,000 students find work in the summer months.
With the Canada child benefit, we've helped about 300,000 children to be lifted—
As I was mentioning, with the Canada child benefit, importantly, we've helped to lift about 300,000 children out of poverty.
Consumer confidence is up, Mr. Chair, and this confidence is sustaining a rise in household spending and economic growth. The Canadian economy is now resurgent, with average growth of 3.7% over the last four quarters, making Canada the fastest-growing economy in the G7 countries.
In just two years, over 500,000 jobs have been created, and the youth unemployment rate is near its lowest on record. This growth is underpinning a significant upgrade to Canada's fiscal outlook, which has improved by over $6.5 billion compared with what we were expecting just in March. The federal debt-to-GDP ratio has been placed firmly on a downward track, and Canada continues to have the best fiscal position among G7 countries.
These achievements are more than just numbers on a balance sheet. They mean a better country for ourselves and for our children.
Thanks to Canada's strong fiscal standing, we are able to do what many countries wish they could do: invest in our country and in our future, while retaining the flexibility needed to weather global economic uncertainty.
It proves that as we invest directly in Canadians and their families, we have an immediate positive impact on the economy. The fall economic statement takes important next steps to ensure that Canadians can share in the success we achieve as a country. We're taking action on the understanding that for Canadian families, shouldering the rising costs of raising children can be a real challenge.
Our government proposes to strengthen the Canada child benefit by making annual cost-of-living increases to it starting in July 2018, two years ahead of schedule. For a single parent making $35,000 with two children, a strengthened CCB will contribute $560 in the 2019-20 benefit year towards the cost of raising his or her children. That means more support for purchases of books, skating lessons, warm clothes for winter, or whatever the family needs. By helping parents with the high cost of raising children, the CCB brings added confidence to families. It has proven to have an immediate positive impact on economic growth. Indexing the CCB for the 2018-19 benefit year will provide an additional $5.6 billion in support to Canadian families over the 2018-19 to 2022-23 period.
The help is going to where it's needed most. About 65% of families receiving the maximum Canada child benefit amounts are single parents of whom 90% are single mothers.
For those working hard to join the middle class, and many of those who are living alone, we'll offer even more help with an increase to the working income tax benefit. This increase of $500 million per year is on top of the increase of about $250 million annually, which is already set to come into effect in 2019 as part of the enhancement of the Canada pension plan. It'll give a much-needed boost to over one and a half million low-income workers as they work long hours, sometimes in more than one job, to get a foothold in the workforce and to support themselves and their families.
Our new investments in the working income tax benefit, or WITB, will mean greater support for current recipients by raising maximum benefit levels and expanding the income range of the WITB so that more workers will have access to the benefit.
For many Canadians, a stronger CCB and a more generous working income tax benefit mean more peace of mind when the bills come due. With the fall economic statement, we're also providing direct support to the small businesses that create the jobs that Canadians depend upon.
The balance we have achieved will support strong economic growth by allowing small businesses to put a larger portion of their revenues towards reinvestment and job creation, while ensuring that these benefits are available to more than just the wealthiest Canadians.
We're proposing to lower the small business tax rate to 10% effective January 1, 2018, and to 9% effective January 1, 2019. This means up to $7,500 in federal corporate tax savings per year to help entrepreneurs and innovators to do what they do best.
Our plan for middle-class tax fairness will ensure that incorporated professionals and business owners can continue to have the flexibility to save up for personal reasons, such as parental leave, or for retirement, while ensuring that the measures are focused on a small number of high-income individuals who get the biggest advantage from existing rules.
We'll work with farmers, fishers, and business owners to better accommodate the transfer of a family business to the next generation while protecting the fairness of the tax system.
In everything we do, our government knows that when Canadians are given a real and fair chance at success, they'll make the most of it. The investments we're making point to a brighter future for Canadians. As we look to budget 2018, we'll continue our work to build on the gains we've made over the last two years.
We will make sure that Canadians have access to the skills, training, and learning opportunities they need to compete and prosper in a fast-moving global economy.
We'll drive forward our innovation plan, making big bets in the most competitive sectors of our economy, making Canada a world leader in industries like agrifood, clean tech, and digital. We'll continue investments in our transit, our roads, and in clean water to keep our cities moving and our children safe. We'll continue building a better future for the middle class, those working hard to join it, and those who will follow in their footsteps.
Thank you, Mr. Chair.
Thank you for the question.
As you know, two years ago, we decided to create a national tax regime that was effective and, at the same time, more efficient and fair. A year and a half ago, an expert panel helped us pinpoint the tax measures that were not working as intended. We included in the budget some of the measures stemming from our commitment.
We feel we identified key elements, and we will continue to implement measures that will result not only in a fairer tax system, but also create promising investment opportunities for the future.
The measures we put in place after consulting Canadians, a few weeks ago, are the most important when it comes to improving our system and making it more fair, and putting more money in the hands of small and medium-sized businesses so they can invest in the future.
Do you know the answer to the question?
If I could revert to your interview on CBC's The House, you were asked a similar question, and you said that those details have not been worked out, but it's not a detail, Minister. If a company has 10 shareholders, and that company is only allowed to have $50,000 in passive income, then that's actually $5,000 in passive income per person. I don't know on what planet one would have to live to think that $5,000 a year in passive income is enough for a business owner to pay for retirement or maternity leave or some other eventuality.
I'm just asking that you answer the question, because a lot of small business people desperately need answers, and you've been immersed in this matter now for 100 days. You should know, by now, what your policy is. Is your limit on passive investment going to be $50,000 per company or $50,000 per shareholder?
Minister and Mr. Rochon, thank you for being here.
Since we are talking about the budget today, we also have to talk about income. I am referring to the Income Tax Act, which falls under your authority. Bill includes dozens of pages of amendments to the act.
I'd like to ask you about Canadian direct investment abroad. Among the top 10 countries where Canadians invest the most, Barbados ranks third, Luxembourg ranks fourth, the Cayman Islands ranks fifth, Bermuda comes in six, the Netherlands is seventh, and, the Bahamas is in ninth place.
I am especially interested in the third country on the list, Barbados, where Canadians invested $68.3 billion in 2016.
Can you, as finance minister, give us an idea of the type of investments that $68.3 billion represents?
I would like to continue on this issue. In my opinion, the BEPS project does not seem to be working very well, since the numbers continue to increase.
You just mentioned that all companies should pay their fair share and that they should be on a level playing field. Recently, your colleague, the , signed a $500-million agreement with Netflix. Netflix continues to be exempt from collecting—I did say “collecting”—the goods and services tax, the GST. It is exempt. I'm not the one saying it. In fact, the Minister of Finance of Quebec has said it again today. This company is exempted by the federal government from collecting the goods and services tax.
Quebec has committed to rectifying the situation and to asking the company to collect taxes, as all the other companies are doing.
Will you commit today to doing the same thing?
The has sometimes even thrown the ball into your court, saying that tax matters are the responsibility of the .
My question is really for you, Mr. Minister. Do you commit to asking Netflix to collect the goods and services tax, as all other Canadian companies are doing?
Welcome, Mr. Minister.
Our government's focus is on the middle class. I am very pleased to say that the Canadian economy is growing fast. The growth is actually more than 4% and there are more than 500,000 new jobs.
That includes many new jobs in my riding of Vaughan—Woodbridge.
When we entered into office, we brought in the Canada child benefit. I was pleased to see the numbers in my riding—more than 16,000 children, 9,000 payments, for a total sum of $4.3 million going to families who need it. They are not the millionaires, but actually low- and middle-income families who need it for their everyday necessities and putting their kids in school. With that measure, we saw that the Bank of Canada governor noted that the economy was boosted by 0.5% with the CCB, and we've indexed it now.
Moving on from the CCB to innovation, in Bill , there are measures for clean technology, boosting the Business Development Bank capital, an investment of approximately $1.4 billion in new financing through BDC and EDC to help Canada's clean technology firms grow and expand.
I wanted to get your comments on how important this is, not only helping middle-class families through the CCB and indexing the CCB but also having an innovation agenda so that we can boost the capacity of our economy to grow.
First of all, commenting on the starting point in your question, we are clearly seeing the benefits of investing in Canadians. It's quite clear that what we move forward on, in terms of putting more money in Canadians' pockets through tax reductions for middle-class Canadians and an increase in Canada child benefits, actually put more disposable income in families' hands. That has served as an important part of the increased growth we've seen in our economy.
Our plan, which was to have confidence that Canadians would invest in our economy by taking that money and helping their families, has worked. We know, as you say, that we now also need to be assuring that the long-term future of our country is successful. That means investing in innovation, in making sure we have the kind of research and development going on that will lead to future success, and making sure that Canadians have the kinds of skills they'll need for jobs of the future.
What we saw in budget 2017 were significant investments in Canadians, in innovation through superclusters, and in putting universities, leading businesses, and small businesses together to find ways for us to create even more advantage in already strong sectors. That will be our continuing approach, thinking about how we can help with the R and D and how we can prepare Canadians for the jobs of the future. That's going to be how we'll make sure this success that we've seen is continued for the next generation.
On the issue of tax fairness, we've cut taxes for middle-class Canadians, approximately nine million of them, and raised taxes for our wealthiest one per cent. With the last measure we introduced—and I applaud this measure—reducing the small business tax rate to 9%, firms will benefit up to $7,500 in lowered taxes that they can use to invest and grow the economy.
I know my colleague on the other side mentioned passive investments. Isn't it a fact, Minister, that with a passive investment of $1 million, approximately 98% of small businesses, from coast to coast to coast, are unaffected by that proposed change, that this change will only impact literally less than 2% of CCPCs across Canada? The local restaurant, the local bakery, and the plumber are all unaffected. This measure is based on tax fairness and will grow the economy to incentivize capital to be put to work.
You know, I don't think we can say it often enough: 100% of small businesses in this country will be positively impacted by a reduction in the small business tax rate. Every single business that earns $500,000 or less in annual profits will have a lower small business tax rate. It will go down on January 1, 2018. It will go down again on January 1, 2019.
For the 1.7% of those private corporations that are shielding significant income and passive investments, yes, they may go over that million dollars in future, but let's think about that. First of all, every single investment in any small business that exists there right now will be protected. Nobody will have any change in tax situation on any investments they've accumulated in their private corporation. It's only in future that they will be able to continue to invest up to roughly a million dollars, and before then they would probably decide to, instead, put money into an RRSP or a TFSA.
We found a balance that ensures that every small business will have lower taxes and that, for almost all businesses, they will continue to be able to invest in passive investments to assure their retirement or maternity leave. We will end up with more investment in active businesses because it will be advantageous for businesses to do so, especially at the lower rate.
Minister, in Bill , one of the first measures are changes to work-in-progress, or sometimes called billed-basis accounting. That will basically force lawyers and other professionals, if they're working on contingency cases, to pay taxes every year.
Minister, do you realize that in some cases, in small rural areas where they are not serviced by large law firms that can subsidize these kinds of cases, you will in fact make it more difficult for people who are on the margins and have legitimate cases—where it may not be a slam-dunk case—to have their legal representative...?
Your own parliamentary secretary said in the House of Commons that he is sensitive to these changes. We had MP McKay, a lawyer as well, say that there are challenges with the approach.
Minister, are you concerned that this will make it more difficult for people to get representation?
Lastly, with regard to one of the Canada Labour Code changes in part 5, division 8, we heard from officials when we reviewed this section.... This is in regard to unpaid leave for victims of family violence for up to 10 days. I think it's a really important initiative, and as far as the language goes, the officials did a really great job in terms of explaining the process. The intention was to ensure that victims and their direct family members could seek help or, in some cases, medical attention right away, in terms of dealing with the longer-term implications with their employer. This really allows for that quick access to care in a lot of cases.
We've also heard in previous testimony—I believe it was on the pre-budget consultation—about the cost to the economy and the cost to employers as a result of domestic violence and family violence.
Can you speak to this initiative and why it's so important to start making these changes in the Canada Labour Code?
Thank you, Mr. Chair, and thank you to the minister for being here.
As the person from the north, not northern Ontario or Manitoba but Northwest Territories, one of two northern people sitting around this table, I wanted to bring some attention to some of the challenges we have in the north.
For many years, I sat as a minister with the Government of Northwest Territories and many times, we really experienced the shock of being left out of investments when the government would come forward with their budgets and we'd have to rush to Ottawa to try to get a carve-out because the money was invested in the north on a per capita basis. We have a small population and we have high costs, yet these things were not factored in. I'm hoping that you're going to keep an eye on some of these challenges that we have. We are working on a new northern strategy. The northern strategy provided by the previous government was military focused. That doesn't help us in our communities. Our communities are in crisis situations with housing, jobs, and many other things.
In the supplementary estimates, we talk about access to skill development and training for indigenous people. We also talk about adult basic education in the north. I'm hoping these things are going to get some priority and I'm hoping that we're going to develop a good strategy. We need a plan. However, as part of that plan, we're going to look at an economic chapter. I don't know if that's going to be enough. I'm wondering if you think that we need to sit down and develop a whole new northern vision with an economic focus for all of the northern territories—I'm saying territories, not northern provinces as well.
Thank you once again, Mr. Minister.
I want to come back to the topic we were talking about earlier, the Income Tax Act, which relates to your responsibilities as a minister, and the reality of new technologies.
When the foundations of our current tax system were established, neither the Internet nor new technologies existed. Many things have happened since. Netflix aside, I was wondering whether you were at least able to make a commitment to review our tax laws in order to adapt them to the digital age, where the situation is radically different. This week, even the Governor of the Bank of Canada said that this new reality needs to be addressed.
Is your department doing this right now?
Traditional trade, which takes place in a physical space, on the high street, has changed. Are you going to look into that?
We co-chair the framework working group at the G20 with India and have done so since 2009. What it does is it allows us to be engaged in the work the G20 does in thinking about the objectives of the international work that we do together. As we think about priorities globally, a good example would be the priority in China, which, under their G20 leadership, was around inclusive growth.
Of course, we were able to have really important insight and ability to influence the agenda. Clearly, each president of the year—that year, China—has the overall responsibility, but we're very involved in actually doing the work that gets us to conclude on what we can do together. Our objective, of course, is to encourage other countries to take economic actions that will help in their country but that will also, as a result, help the global economy, which will have a benefit for Canadians.
In thinking about how the global economy works, we do help Canadians directly. Our growth rate, while hugely advantaged because of the kind of work we've done over the last couple of years in helping Canadians to have more money directly in their pockets, is also enabled because the international growth rate has improved. That's part of the work we do together at places like the G20 table. We have Canadian experts who are at that table helping to get to good global conclusions.
Committee members, we need to vote on the supplementary estimates. You have them before you.
||Vote 1b—Program expenditures..........$31,952,332
(Vote 1b agreed to on division)
||FINANCIAL TRANSACTIONS AND REPORTS ANALYSIS CENTRE OF CANADA
||Vote 1b—Program expenditures..........$420,000
(Vote 1b agreed to on division)
The Chair: Shall I report vote 1b under the Department of Finance and vote 1b under Financial Transactions and Reports Analysis Centre of Canada to the House?
Some hon. members: Agreed.
The Chair: With that, we will suspend for a quick minute and bring the officials up here to deal with divisions 9, 10, 11, 12, and 13. Hopefully, we can get it done before they go.
Division 9 of part 5 is focused on provisions in part III of the Canada Labour Code related to interns, and responds very directly to the government's commitment in budget 2017 to limit unpaid internships in the federally regulated private sector. It also complements other Government of Canada initiatives to help Canadians, especially youth, to gain work experience in today's reality.
As you may know, part III of the Canada Labour Code establishes minimum working conditions for about 900,000 employees in the federal private sector, which includes industries such as banking, telecommunications, and international and interprovincial transportation, as well as most federal crown corporations. Part III sets out the rules for things like maximum hours of work, minimum wages, hours of work, scheduling, termination of employment, and also outlines and provides for a number of leaves.
Let's focus now on the interns part of this issue. An intern is someone who's in the workplace for a short period of time, and is there to learn and develop the skills and experiences they need to enter the workforce. An intern is typically a student who is doing a co-op or some other kind of work placement as part of their college or university program or secondary school training. Interns are also sometimes newcomers to Canada who want to be in the workplace to learn about Canadian work practices.
It's also important to recognize that interns can be paid and unpaid. When they're unpaid, this raises a number of concerns about whether they're being treated fairly, or even being exploited when they're in the workplace. Often, while an employer may call someone an intern, the individual is actually really doing work for which they should be paid. In 2015, the Statistics Canada federal jurisdiction workplace survey found there were about 13,000 interns in the federal private sector. The vast majority of these individuals were paid. Just over 2,300 were not paid.
The amendments proposed to the code in division 9 would repeal provisions related to unpaid interns that were enacted in 2015, through the economic action plan, and are not yet in force. The 2015 changes to the code established two very limited situations when an intern can be unpaid. The first is if their internship is part of the requirement for a program offered by a secondary or post-secondary educational institution or a vocational school in Canada or abroad. The second is if the individual's internship meets six specific criteria, such as its being four months or less in duration, the benefits of the internship accrue primarily to the intern, the intern does not replace an employee, and the internship is not a requirement for a position with the employer. In addition, a provision was introduced to specify that when an intern is unpaid, they are entitled to a modified set of labour standard protections, to be identified through regulations. This would include things with respect to maximum number of hours of work, for instance.
The amendments being proposed in the current bill would remove the second situation of when an intern can be unpaid, and the related regulation-making authorities that go with that second circumstance. The result would be that an intern would only be allowed to be unpaid if their internship is part of the requirement for their academic program. Any intern who is in this situation and is unpaid would continue to receive that modified set of labour standards, such as maximum hours of work, weekly days of rest, and general holidays that would be established through regulations.
I'll leave it at that and welcome any questions.
Are there any questions on division 9? There are no questions. Thank you very much.
I think division 10 will take a fair bit of time, so I am going to jump to division 11, the Judges Act, if we could. We'll leave division 10 till the end.
On division 11, Judges Act, from the Department of Justice, we have Ms. Crosby, senior counsel and deputy director, judicial affairs, courts and tribunal policy; and Ms. Decker, counsel, judicial affairs, courts and tribunal policy.
The floor is yours. Go ahead.
Thank you, Mr. Chair. I am here to speak to division 11 of part 5, and there are three measures reflected in the amendments to the Judges Act that are included here.
The amendments would authorize the salary for a new associate chief justice position for the Court of Queen's Bench of Alberta, change the designation of “senior judge” in the territorial superior trial courts to “chief justice”, and change the mechanism for payment of most annuities under the Judges Act. I'll briefly describe each of these proposed changes.
For the associate chief justice, funding for the salary for this position was included in budget 2017, and this new position is reflected in an amendment to paragraph 20(c) of the Judges Act.
With respect to the change in designation of senior judges, in the superior trial courts in the provinces, the head of the court is called the chief justice, but in the superior trial courts in the territories, the role is called a senior judge, which the Judges Act currently defines as the judge with the earliest date of appointment.
The proposed amendments would align the title in the superior courts in the territories with that used in the equivalent courts in the provinces, in the equivalent roles. The amendments would repeal the definition and remove all references to “senior judge” in the Judges Act. A transitional amendment would also ensure that any senior judges who served in that role before the amendments came into force would retain all of their entitlements, even if they didn't get the name change.
In terms of annuities, currently all annuities require an order in council be passed before they can be paid. However, the Governor in Council in fact has no discretion on whether to grant them. They must be paid. The proposed amendments would streamline the process for payment of all non-discretionary annuities to judges as well as survivors and children. In effect, once the statutory conditions are met, the payments can be made.
To implement the change, the proposed amendments would generally change the terminology, which currently uses the words “granting”, and in French, “accordées”, and it would be changed to say that they would “be paid”, or “versées” in French.
That's all I have prepared, but I'm happy to take any questions.
The division requests or proposes that the Business Development Bank of Canada Act be amended to increase BDC's paid-in capital limit to $4.5 billion. The BDC is subject to a paid-in capital limit under the BDC Act. It's currently set at $3 billion. This limit concerns the capital injected into the BDC by the Government of Canada, the sole shareholder. As of March 31, 2017, the paid-in capital limit of the BDC totalled $2.4 billion.
In budget 2017, the government announced that it is making available nearly $1.4 billion in new financing through the BDC and Export Development Canada to help Canada's clean-tech firms grow and expand. As well, budget 2017 announced that the government is making available, through the BDC, $400 million for a new venture capital catalyst initiative that will increase late-stage venture capital available to Canadian entrepreneurs.
To implement these two initiatives, the BDC would require an injection of new capital in the amount that surpasses the current limit of $3 billion. It is therefore proposed to increase the BDC's paid-in capital limit to $4.5 billion to allow the government to inject the necessary capital for the BDC to deliver these budget 2017 initiatives, and for future initiates or contingencies that may emerge.
I welcome any questions.
I have one point, Mr. Valerio.
We did ask the BDC to come, and the response we got was that ISED would make that representation. We ran into the same thing last year with ACOA.
From my perspective, as chair—we didn't have time to get into an argument about it—when we ask for BDC, we expect BDC, and you with them. You can tell them, in the future if we ask for BDC, we expect BDC to be here.
There are no further questions then.
Do we have agreement to go until 5:50? Votes are at 6:00. We have 26 minutes left. Do we have agreement to move forward?
Some hon. members: Agreed.
The Chair: With Treasury Board Secretariat, on division 13, Financial Administration Act, Mr. Sprecher, senior director, expenditure management sector.
Go ahead, Mr. Sprecher.
Good afternoon. I am pleased to be here today to speak to clause 261 of Bill , which deals with an amendment to subsection 32(1) of the Financial Administration Act on the control of financial commitments.
Let me put this amendment in context. In June 2017, the House of Commons approved amendments to the Standing Orders that deferred the tabling of main estimates from March 1, or earlier, to April 16, for the next two budget cycles. This deferral makes it possible to include in the main estimates the new funding announced in the budget.
When the main estimates were usually tabled by March 1, before the beginning of the new fiscal year on April 1, Parliament would be asked to approve an interim supply bill to provide departments with sufficient funding to be able to continue operations until all appropriations are approved at the end of June.
The Financial Administration Act, or FAA, currently constrains departments' ability to make financial commitments, such as for contracts or contribution agreements, by requiring there to be a sufficient authority in an appropriation or in estimates then before the House of Commons. The deputy of finance already spoke about this very briefly.
These limits are retained in proposed paragraphs 32(1)(a) and 32(1)(b). However, to begin the fiscal year 2018-19, only the interim estimates and corresponding appropriation will be available until the complete main estimates are tabled roughly two weeks into the new fiscal year. If the government were to leave the FAA as it is now, departments would not be able to reflect the full year's value in contracts or contributions that they sign on or just prior to April 1.
The proposed addition of paragraph (c) to subsection 32(1) of the FAA clarifies departmental financial commitment authorities for the period between the tabling of interim estimates in February and the complete main estimates in April. This would be done by permitting financial commitments to be made against a limit that would be specified in the interim estimates bill.
The second addition, proposed paragraph 32(1)(d), clarifies that commitments may be made against the unencumbered balance of revenues actually received by a department or the amount of a department's estimated revenues set out in the estimates. The commitment limit would be based on the forecast planned spending, including expected revenues, that is known when the interim estimates supply bill is introduced—in other words, the forecast main estimates before new budget measures are taken into account.
To conclude, I would emphasize that these amendments clarify the authorities of departments. They do not add to them, nor do they change their authorities to make payments out of the consolidated revenue fund. Such payments will continue to be limited by the specific amounts set out and voted on by Parliament in the appropriations.
With that, I thank you for your patience. I would be pleased to answer any questions you may have.
We'll bring to the table division 10, trade within Canada and harmonization of energy efficiency requirements.
From ISED, we have Mr. Fertuck, director general of the external and trade policy branch, and Ms. Hill, special adviser in the strategy and innovation policy sector.
Welcome. Thank you for coming, and thank you for your patience.
The floor is yours, Mr. Fertuck.
Thank you for having us.
To start I'll just provide a quick background about the Canadian Free Trade Agreement. The CFTA, as it's also known, came into force on July 1 of this year, and it's a successor to the Agreement on Internal Trade, or the AIT. The CFTA commits federal, provincial, and territorial governments to a comprehensive set of rules that will help to achieve a modern and competitive economic union for all Canadians.
In order for the Government of Canada to implement certain aspects of the CFTA, associated legislative changes are needed. As such, division 10 of part 5 would enact the Canadian Free Trade Agreement implementation act. It's based heavily upon the implementing legislation for the Agreement on Internal Trade. The nature of its provisions are mostly administrative. The act would establish the responsible CFTA minister, facilitate dispute settlement, permit the award of monetary penalties, allow the appointment of committee members and panellists for disputes, and authorize federal funding for the intergovernmental CFTA secretariat.
Given that the CFTA replaces the AIT, the Canadian Free Trade Agreement implementation act would also repeal the Agreement on Internal Trade Implementation Act.
In order to further demonstrate federal leadership on internal trade, division 10 of part 5 would also propose three amendments to the Energy Efficiency Act, or EEA. First, the EEA would be amended to provide the Minister of Natural Resources with the authority to make technical or administrative changes to existing Governor in Council regulations. These changes must be for the purpose of maintaining harmonization with another jurisdiction.
Secondly, the EEA would be amended to provide the Governor in Council with the authority to incorporate by reference technical standards documents for the purposes of harmonizing with another jurisdiction.
Lastly, section 26 of the EEA would be repealed, which is a requirement to pre-publish regulations in Canada Gazette, part 1, which is duplicative of a Treasury Board directive.
The above changes to the EEA will provide new tools that will allow for the Government of Canada to create consistency in standards across the country, and to ensure that Canada is aligned with other key trading jurisdictions.
Division 10 of part 5 also proposes consequential amendments to the Financial Administration Act, the Department of Public Works and Government Services Act, and the procurement ombudsman regulations by replacing references to the Agreement on Internal Trade with references to the new CFTA.
This division would also repeal the Timber Marking Act. The Timber Marking Act is an outdated federal law from 1870 that applies to only three provinces: Ontario, Quebec, and New Brunswick. It mandates that anyone floating timber on rivers in those provinces must mark the logs and register that mark. As such, it is de facto discriminatory, making it contrary to the non-discriminatory treatment obligation under the CFTA. A formal consultation on the repeal of the Timber Marking Act was held, and all stakeholders who provided comments expressed support for the proposed repeal and did not anticipate any negative impact as a result.
Division 10 of part 5 would be deemed to have come into force on July 1, 2017, to coincide with the coming into force of the CFTA, providing continuity. The proposed legislative changes contained in division 10 of part 5 are not controversial, given that any substantive changes pertaining directly to the CFTA were accepted by provinces and territories during the course of the negotiations, or in the case of the EEA amendments were the subject of consultations in which industry stakeholders, as well as provinces, were highly supportive.
We'd be pleased to take any questions you may have.