Thank you. I have an hour and a half opening statement that I thought I'd start with. Seriously, though, thank you, Mr. Chair.
I'd like to thank all the members of the committee for having me here today. It's good to be back before this committee to discuss the budget implementation act.
Before I speak about the measures in this bill, I'd like to thank all the members on this committee for their due diligence on the pre-budget consultations. That obviously was critically important to us as we moved forward in the preparation of our budget. Of course, I'd also like to thank you now for your work on the budget implementation act.
This bill is the next step in our plan to invest in the middle class and ensure economic growth. Clearly, investments are essential if we are to do that.
When I talk to Canadians, they say they remember the situation in 2015. The Canadian economy had slowed down. People felt abandoned. During the years that followed, we worked extremely hard to reverse the situation through investments in people and communities, investments that bore fruit.
Canadians, supported by the government's economic plan, have created more than 900,000 new jobs since 2015, pushing the unemployment rate to near 40-year lows. Middle-class families are better off across the country, and fewer people are living in poverty in Canada today. That's a lot of progress over three and a half years, but we know there's still much more work to do. People are still feeling anxious about their futures and their ability to make big, long-term investments in their families.
That's why our government, through this budget implementation act, is taking more steps to invest in the middle class and the things that Canadians need to succeed. I'd like to take the opportunity this afternoon to highlight some of those important measures.
For many Canadians, one of their top concerns is their job. That makes sense. Canadians want to take pride in their work and be able to support themselves and their families, but as the global economy continues to evolve and as things like automation transform the job market, the skills people have today will need to change. This is a challenge that all industrialized countries are facing. What sets Canada apart and what will help us to remain competitive in the global economy is our people and the investments we make in them.
This year's budget proposes to introduce the Canada training benefit, a new benefit that will help Canadians to prepare for, to plan and to get the training they need. An important part of the benefit included in the budget implementation act is a training credit that will give working Canadians $250 every year to put toward the cost of future training, a credit that can add up to as much as $5,000 over the course of a career. That's the kind of long-term planning that you, as members, will be able to see in the course of reviewing all of our budget.
Housing is another good example. Our government believes that every Canadian should have a safe and affordable place to call home. The budget implementation act would enact Canada's first national housing strategy act, requiring the federal government to prioritize the needs of the most vulnerable in our society. It would require the government to report on progress toward achieving the strategy's goals, like building 100,000 new housing units, repairing 300,000 other units and cutting homelessness in half.
The BIA also proposes measures to help Canadians take their first steps toward home ownership. It would amend the National Housing Act and allow the Canada Mortgage and Housing Corporation to offer shared equity mortgages to eligible homebuyers. The first-time buyer incentive would reduce the monthly payments required for people in the purchase of their first home. For a new condo or house worth $400,000, the savings could be more than $225 per month. This measure is expected to help approximately 100,000 Canadians to buy their first homes.
The act would also increase the homebuyers' plan withdrawal limit, giving first-time homebuyers greater access to the savings in their registered retirement savings plan to buy a home. These measures would be especially beneficial to young Canadians for whom home ownership seems increasingly out of reach.
Housing isn't the only place where barriers exist for young people and that's why we're also working to make education more affordable. With the measures in the budget implementation act, students wouldn't have to start repaying their Canada student loans for six months after they graduate and interest wouldn't accumulate on those loans during that time period. That gives people time to start a career and to begin saving up. It's a change that sets young Canadians up for success, allowing them to focus on what they want to do, not on what they have to pay.
We're taking a similar approach with seniors. Through budget 2019 and through the budget implementation act, we're taking steps to make retirement more financially secure.
In order to help low-income seniors, we intend to raise the Guaranteed Income Supplement earnings exemption. This means that seniors will keep a larger part of their pay and benefits.
So that all workers may derive full advantage of their contributions to the Canada Pension Plan, we propose to register them proactively. The objective is to guarantee that those who contribute to the CPP and are 70 or more and have not yet registered to receive their pension benefits, will receive them. They deserve them. However, these are not the only measures that will allow us to protect Canadians and their families in the context of this bill based on communities and clean growth.
One of the other measures is to build a cleaner and more sustainable Canada. As you know, we already work with the provinces and territories to put a price on carbon pollution and fight climate change. We are going even further with Budget 2019 by making zero-emission vehicles more affordable, including for the businesses that want to renew their vehicle fleets.
The would allow those businesses to recover that investment faster.
Another way we're helping to protect Canadians is by combatting financial crime. I know this committee has done a lot of work in this regard and I know that you've looked at how we can best do that, and I'd like to thank the committee for that work. With this legislation, we know we can help improve Canada's anti-money laundering and anti-terrorist financing framework, strengthening the resources, intelligence and information sharing needed to identify and meet evolving threats, while also continuing to protect the privacy rights of Canadians and manage the regulatory burden on the private sector.
I could provide more examples. After all, as you know, this is an ambitious agenda, but what I'd like to do instead as I conclude my remarks is to thank the members of this committee for their careful attention to the bill. It's a bill that will help prepare Canadians for good jobs, make it easier to buy a home, and help young people starting out and seniors as they retire.
I'm happy to take your questions.
Thank you, Minister, for coming today, and to your team, which I know has worked very hard on our budget as well.
As you know, my riding is Northumberland—Peterborough South. Mine is a 3,000 square-kilometre rural riding in eastern Ontario. The diversity of our economy and the diversity of our population are things that I am seeing reflected in this budget.
The Canada child benefit, which of course was announced in a previous budget, just to give some sense of it, brings just under $6 million a month into our riding. When I go around and talk to small businesses, shopkeepers and stores, they're seeing the benefit of that money being spent in our riding. The lift that's being received, in terms of economic development in my riding and, I would say in rural communities specifically, has been significant.
There's another demographic within my riding, I believe the last StatsCan numbers showed that just over 40% of my riding is over the age of 55, so seniors and issues surrounding seniors are very important to us. There were a couple of things in this budget that responded to a number of things I was hearing. Certainly in a previous budget, when we increased the guaranteed income supplement by almost $1,000 for the most vulnerable seniors, if I'm remembering the numbers correctly, that lifted about 100,000 seniors out of poverty and prevented about 150,000 from falling into poverty.
This current budget talks about the enhancement of the earnings exemption, whereby, in easy terms, seniors are able to work and retain more of the income they have earned without losing the benefit of the GIS and those benefits and supports that go along with it. One of the things that surprised me when I read the budget was the automatic enrolment for those aged 70 and over. What I was surprised at were the number of people who hadn't enrolled to receive the benefits they were entitled to. I know we've done that in other programs and I see that as something very positive.
One thing in particular that I'm not sure has received as much attention as it should is something called the advanced life deferred annuity. When you mention those words, people's eyes glaze over, but I heard from a lot of my seniors who were middle-income that they were looking for something that would help them, as they retired a few years ago when life expectancies were shorter. They're much longer and people are concerned that they're actually going to outlive the money they have saved over their working years in order to retire. This talks specifically to the ability of people to take some of their RSPs and move them into an annuity for the time past age 85.
I wonder if you could speak a bit about why that's in here and what you see as being a benefit to retirees.
Thank you, first of all, for your overall comments around what we're trying to achieve, and in particular, what we're trying to achieve around seniors.
I never really expected that I would be able to get a question on deferred life annuities in my role as finance minister. You might remember I co-wrote a book called The Real Retirement when I was in the private sector, and I used to call it a cure for insomnia. What I would suggest to people who had severe challenges with getting to sleep at night was just to put the book right beside their bed stand and that would help them enormously with that particular challenge.
I think what I can do as well with this issue is that I can take the notes on the deferred life annuity and I can put it by your bed stand so that it will help you out in the long term.
The fact that it's detailed and causes that challenge doesn't take away from the seriousness of the issue for so many Canadians, but it is important, as you said, to put it in context. We're trying to help people who have worked hard during the entire course of their lives to have a dignified retirement, and there are multiple ways we need to work to achieve that.
In this budget there are a few things that we've done, and this is one of them that we think will have an important impact on a lot of Canadians. The change in the clawback rate on the guaranteed income supplement is particularly important. For seniors who are in a situation where they want to continue to work, especially in their early retirement years, we've increased the amount of money they can earn before they get a clawback on their guaranteed income supplement. What this means is that they'll have more money in their pockets and it will enable them in those early years to be successful at work while they're partially retired.
The Canada pension plan automatic enrolment was important because we just thought that was the best way to ensure people got those Canada pension plan benefits. However, we found as we were going through this that there were 40,000 Canadian seniors who were eligible for Canada pension plan payments, and many of them who hadn't actually applied for it had only had small amounts of attachment to the workforce so they didn't necessarily understand that they were qualified. What we did was we made sure that we put funding in to actually find those 40,000 people and improve their ability to get those benefits. It will be huge. There are a lot of elderly single seniors, a lot of women with relatively small amounts of workforce attachment in the generation behind, and on average I think it's about $3,000 per year that people will be getting.
The deferred life annuity is another issue that we thought was important. We wanted to make sure that Canadians don't basically outlive their retirement savings. It's a way of us thinking about how we can ensure that within the confines of our currently existing retirement system. It's allowing us to provide more options for those Canadians who don't have a defined benefit pension plan. You'll know that with a DB plan, of course, people get regular payments monthly and they know what those are going to be for the long term.
Buying a deferred life annuity can give them a similar sort of consistency in terms of their payments over their retirement years. This will provide individuals with increased flexibility in managing how their savings are received in retirement so that they can take this as their new approach. We think it will enhance retirement security. For many people, it will give them a greater sense of confidence that their money is still going to be there during the course of their lives and it's not going to run out because they budgeted inappropriately maybe during the early years of their retirement and were left with not enough money in later years. It's an important vehicle and one that, as you say, didn't have that much profile because it's maybe something people didn't dig into, but I think for a significant number of seniors it will give them more comfort in their retirement.
Thank you, Minister, for having taken the time to come before us to explain your plan and budgetary measures. What I am most interested in is the fact that this is the last-chance budget for 2019. A lot of promises were not kept by your government up until now, and are not on the way to being kept. The first one concerns the elimination of subsidies to the fossil fuel sector. That was a clear and distinct promise made by the Liberal Party during the last election.
Since that time, you have done absolutely nothing. The only thing you've managed to announce in the recent budget is that Argentina is going to assess Canadian subsidies to fossil fuels. According to our most recent estimates, tax gifts of every kind totalling about $1.6 billion a year are being offered to businesses that are amongst the most profitable in the country, and are in the fossil fuel sector. That is the opposite of what the government's objective and priority should be, that is to say green energy. To get back to what my colleague mentioned, you invested $4.5 billion in a pipeline that has been around for 65 years and is leaking, and you intend to invest up to $10 billion in an expansion project that will double its capacity.
How do you explain that we are where we were in 2015? There are still $1.6 billion in subsidies for oil companies, and in addition you are giving $4.5 billion more to an American oil company based in Houston.
Fine. I understood that it was for 2025.
The other unkept promise, which was a very clear one, was the one about stock options. You at least mentioned that in the budget, and I have to recognize that.
In your budget statement, you mentioned that this was a highly regressive measure. You admit that the measure is regressive, and even include very clear figures in your budget. I will mention them so that people who are listening to us understand well.
In 2017, 2,330 individuals who earned more than $1 million a year shared $1.3 billion in tax advantages related to stock options. And then there were 20,140 individuals who earned less than $200,000 a year, who shared $120 million thanks to that measure. In your own words, this is a highly regressive measure.
The only thing you did in the budget, even though this relates to a 2015 promise, is say that you would examine the issue and make an announcement next summer. Bill , which we are now studying, was your opportunity to change the Income Tax Act to finally correct it and provide that fairness.
Why did you again postpone a promise you made to Canadians, and which you have still not kept four years later, and are postponing again?
Thank you. This is a really important subject. It's obviously one that was unexpected in the sense that the U.S made significant changes.
The U.S. tax code, prior to their changes, was largely one that had fallen behind other OECD countries. Canada had already moved to lower corporate tax rates prior to the United States. We found ourselves in a situation prior to those changes and, in fact, afterwards as well, where we had a very competitive corporate tax rate. Our corporate tax rate, when you add in provincial and federal taxes, is roughly around 27% for large corporations and obviously a lot lower for small corporations, where we have the lowest small business tax rates among G7 countries.
When the U.S. changed their rates from an average of about 35% down to about 26%, they effectively changed them to be in the same zone as Canada. Of course, it made things more advantageous for companies in the United States. They broadened the base at the same time and added more things that were considered taxable, but importantly, they allowed companies to accelerate the depreciation of capital investments on a rapid basis. That created a situation where they were more competitive than Canada was with those changes.
That was what led us, in our fall economic statement, to accelerating the ability to depreciate capital cost investments for businesses in Canada. We did it slightly differently than the United States did. We added more categories, or we have more categories that are able to be depreciated, meaning that the analysis that we took on concluded that the ability for the next investment in Canada by an organization would mean there would be a 5% advantage on accelerating that depreciation in Canada versus the United States, allowing us to be in a competitive spot for new investments that should create jobs and help our economy to grow.
I would add that last night I attended the Chemistry Industry Association's annual international conference here. We've seen a number of projects, including Inter Pipeline, a $3.5-billion project, a joint venture between Pembina and the Kuwaitis. We also have the approval for LNG Canada, in the area of the country I grew up in, northern British Columbia. That will create tens of thousands of jobs and a great benefit for our economy, which will benefit from the introduction of the accelerated invested incentive.
I would like to pivot and move on. Within the BIA, there is a section with regard to poverty reduction. It's something that doesn't happen overnight. It happens with a number of policy instruments that our government has introduced. In my wonderful riding of Vaughan—Woodbridge, where I have the privilege of representing those residents, every month, with the Canada child benefit, nearly $5 million gets sent to the residents there, benefiting over 16,000 children. The exact number is 16,210 in over 9,000 families.
On February 26, StatsCan put out the Canadian income survey. It showed a large drop in poverty levels in Canada. I think the exact number is 825,000. I would really like to hear of policy measures that our government is continuing to adopt to reduce poverty and lift people into the middle class across Canada.
This is a really important discussion. Obviously we set out to make sure we could not only ensure that middle-class Canadians were more optimistic but also that more people had the opportunity to be successful and get into a better financial situation, particularly those who were impoverished.
There are three measures that we think have made the biggest impact. One is, as you say, the Canada child benefit that lifted literally hundreds of thousands of children and of course their families in many cases out of poverty. Another is the Canada workers benefit that gives a benefit to people to get into work if they're not in work and enhances that benefit so that, as they move off social assistance, they get more value from that. Also, there is the increase in the guaranteed income supplement for single seniors.
Those three measures together were what largely added up to the 825,000 people who moved out of poverty. It's one of those things that, as we look back on what's been achieved during this first term of the Trudeau government.... We will look back and say that it's quite remarkable that, in three and a half years, we've reduced the poverty level from over 12% to about 9.5%, helping hundreds of thousands of Canadians to be in a better situation today and more optimistic for tomorrow.
It's particularly important when we think about the challenged demographics we have in this country. Getting more people into work and getting more people with the capacity to invest in themselves and their families provide for greater future prosperity for them and for our whole economy. We need people to be seeing that kind of success.
Thank you, Minister, for coming to answer some of our questions.
I also want to talk about tax credits, but before I do that, I want to thank you for clearly highlighting the north in this budget. Over the last few years, we have seen some significant investments, and this coming fall, we're going to see a number of infrastructure projects starting off.
The Whatì road will start construction, with an indigenous government as a partner. We'll see the Mackenzie Valley Highway undergo an environmental assessment. The Great Bear River bridge should be under construction. There are a number of things that are really going to benefit us in the Northwest Territories, including the studies going on for the Slave geological province corridor and the Taltson hydro dam expansion. That is something that will help us with our costs.
For many years now, we've flagged to you that in the north, the mining industry is the backbone of our economy. We've always been talking about ways to lower the costs of the mining industry, and others, to come north. It is significantly more expensive to come to the Northwest Territories and other territories to do exploration and projects there.
I was very happy to see that the mineral exploration tax credit was expanded to a period of five years. Maybe you could tell us a bit about how we finally got to that decision, and about some of the benefits of that.
Thank you very much, Mr. Chair.
Minister, thank you very much for being here once again before the Standing Committee on Finance. I'd like to point out that this is not your first appearance here.
I will ask my first question on behalf of the seniors in my riding of Hull—Aylmer.
Since 2015, the government has taken steps to help our seniors on several occasions. We increased the guaranteed income supplement by approximately $1,000 in 2015, for seniors who live alone. We concluded an agreement with Quebec to broaden the Quebec Pension Plan so that retired people will receive up to 50% more when they retire. However, even with those changes, there are still seniors in need.
Minister, can you tell us about the measures in Budget 2019 to help our seniors?
You are correct, we have done a lot for seniors throughout the country, but we know there is more to do. This is an important challenge. It's difficult for seniors to live their retirement in dignity if they don't have enough money.
We had already taken several steps three years ago, but this year we did something important: we made sure that anyone who is eligible for CPP would automatically receive their benefits. We discovered 40,000 Canadians who are eligible for those benefits. This measure will help several seniors, particularly women, who did not stay on the labour market for long during their career.
In addition, we established a new approach for people who have already retired, who can continue to work without having their guaranteed income supplement reduced. Those retirees will have more money in their pockets, which will allow them to experience a more dignified retirement. In my opinion, that measure will also play a very important role in future in our economy.
There are two important measures in this budget. First would have applicability for some people who have savings in their registered retirement savings plan. We increased the ability for people to take money out of their RRSPs to put toward their first home from $25,000 to $35,000. That will obviously not help everyone, because many people won't have that amount of money in an RRSP, but for some people it will enable them to have more money to put toward their first home.
Second, importantly, we looked at how we could find a way to target first-time homebuyers and make the possibility of a home more feasible for them. We've come up with a first-time homebuyers incentive. This incentive is targeted, obviously, to first-time homebuyers, but also to people who are just not quite able to get into the market.
Families with up to $120,000 in annual income will be able to buy a home of up to four times that income, so up to $480,000. They'll be able to take part of their mortgage, either 5% for an existing home or 10% for a new home, and put that to the Canada Mortgage and Housing Corporation in the form of what we call a shared equity mortgage. This would effectively reduce the amount of their monthly mortgage payments by 5% or 10%, which would give them the ability to get into a home more rapidly and do so in a way that would allow them to have more income to raise their families, which is the situation for many people.
There are about 500,000 homes purchased each year in Canada, but 100,000 of them are by first-time homebuyers. This will increase by maybe 30% in each of three years, so there will possibly be up to 100,000 new families over a three-year period who will be able to get into a first home who wouldn't have otherwise. It's a significant change.
Thank you very much for having me here today and for your being here today.
It's been very interesting listening to all the testimony we've had. The thing that stands out to me is that every budget since 2015 has specifically been focused on benefiting people in this country, whether it's through the Canada child benefit—my community of Pitt Meadows—Maple Ridge gets on average about $5.5 million per month being applied to about 18,000 children—or the national housing strategy, which I really like because it's over a 10-year period and it brings certainty to developers and projects and non-profits who can actually access those and who plan to access those.
When we look at everything we've been doing, what I like about this budget, and maybe you can expand on it.... In my riding we have a food bank called Friends in Need Food Bank. I've volunteered there a few times. When I go there, it's heartbreaking to see young families standing in line to try to feed their kids. It's a challenge, and they raise a lot of money on their own. They do a lot of volunteer work to make sure the programs work for them. Then we hear about many young people across our country who are in the position that their kids go to school hungry. In fact we heard recently about the Ontario government dialling back on school breakfast programs. I struggle with this, because if we want our kids to succeed, we need to be able to take care of them.
Moving forward, are the initiatives in budget 2019, such as the national school food program and the local food infrastructure fund, going to help support students and food banks in communities such as my own of Pitt Meadows—Maple Ridge?
First of all, thank you for the question. I think you identify the challenge we all face in trying to make sure that everyone has equal opportunity. If children don't have enough access to food, clearly being successful in school is virtually an insurmountable challenge. We saw that the most important way we could start to get at this was, as we did in budget 2016, by ensuring that families, as they're raising their children at what is a very expensive time in their lives, have more money to raise their children. That's going to make an enormous difference.
Just to put numbers on that, the typical family of four in 2019 at a median income will be about $2,000 better off than they would have been in 2015. That's including everything. That's including all of the measures we took. That's really important.
We also realize that we need to do more. The idea around thinking about a food program for children is taking a federal leadership role in a place where all the provinces may not be yet. That's what we're trying to achieve by coming to some sort of national standard. We see that as critically important as people are going through their years. We're not responsible for the education system—that's a provincial responsibility—but we can certainly help people to be successful as they're going through education.
We've seen that in other measures in our budget as well, because we've thought not only about families being successful and kids being successful in school but also about how we ensure that they continue to be successful afterwards. It's putting in place, as we've done, the ability of students, as they get past primary and secondary school, to have work-integrated learning so they can get the kinds of skills they need to be successful at work afterwards. This budget made a really important commitment to ensuring that we'll have 150,000 spaces for co-ops or work-integrated learning over the next few years, working together with business and government, so that pretty well every single student who wants to have a work-integrated learning position after school will be able to have one.
We're trying to make sure that we think about the families and that we think about the kids as they're in early years, and that we then create opportunities later on in a way that's not all going to be federal. In the case of, in particular, as I said, the work-integrated learning, much of it's coming through business commitments and we see that as important because we're all facing up to this challenge together.
There are a number of measures. Obviously, putting a price on pollution and giving a rebate back to citizens in Ontario and in three other provinces is important, so I think people will be very pleased when they get those rebates. The overwhelming majority of families—80% of families, plus—as the Parliamentary Budget Officer has reported as well, will be getting more back in the rebate than the price on pollution.
We also, though, recognize that we want to see the opportunity for energy retrofit issues that are going to be important for households, for municipalities, so we put money towards the Federation of Canadian Municipalities green approach towards funding infrastructure projects. That, we think, will allow people at the municipal level to retrofit buildings that will provide opportunities for green approaches to reconsidering infrastructure. We see that as important.
We've also put in place measures so people can get an advantage if they are buying zero-emission vehicles. People are out buying all-electric cars. There are a couple of them out around Parliament Hill today. It will help people to get into vehicles that will actually have less of an impact on the environment. We see that as important. That goes a little further because it also allows firms that are building fleets of cars to have an accelerated ability to depreciate those fleets if they are zero-emission vehicles.
There are multiple things to help move the dial. What we're clearly seeing is that Canadians are recognizing that the impacts of climate change are real and enormous. It's obvious in and around this region of Ottawa, or in Quebec. I was meeting with the Premier of New Brunswick this morning in New Brunswick. The devastating impacts of climate change are real and we're trying to take action to make an important, long-term difference.
Thank you, Mr. Chair, and thank you, Minister.
Minister, yesterday we had the Bank of Canada governor come to committee. With that, we discussed many things including some of the information contained in the monetary policy report and with reference to the recent Ontario budget brought down by the Conservative Party of Ontario, which the Bank of Canada is now forecasting will negatively impact economic growth, not only in Ontario, obviously, but throughout Canada by 0.2% this year and flowing into 2020.
We've seen the cuts that the Conservatives in Ontario are undertaking to autism programs. This morning a $50-million program to help parents with day care costs was cut. They are not moving forward on infrastructure.
With regard to budgeting, it is important that we reassure our residents—and my residents back home in Vaughan—Woodbridge, specifically—that we as a government will continue to invest in those services that we provide and in those benefits for Canadians working hard, day in day out, to ensure a better future for not only my kids but all kids across Canada.
I wasn't here yesterday, obviously, to hear Governor Poloz with his comments, but I think what he was identifying was that when a government cuts back, as we're seeing happen in Ontario, it has a direct impact on the economy, which should not be a surprise to anyone.
Let's think back to the 2015 election when the Conservative Party and the New Democratic Party were both arguing for immediately balancing the budget. What they would have found was that they would be taking a lot of money out of the economy. In our estimation we should have been putting money into the economy.
It's no surprise that when you take money out of the economy, the economy contracts. We see those cuts in Ontario as cuts that are going to have a real impact on people, obviously, in myriad ways. Obviously, it will have a big impact on the students who won't have their student loans. For the travellers who won't have the ability to have health care provisions when they leave the country, that will have a real impact on them.
Our view is that we need to continue to be fiscally responsible, reducing our deficit and reducing our debt as a function of our economy over time. That's critically important, but we can do that while investing in people. We can do that while making sure that families are successful. We can do that while ensuring that our employment statistics and the real advantage of people being in jobs continues.
That balanced approach is our government's approach. Demonstrably it's working. We'll do that while we see places like Ontario make cuts.
My name is Margaret Tepczynska. I'm the director of strategic initiatives at the Department of Finance. With me is Eleanor Ryan, director general of the financial institutions division, and Mary O'Connor, special adviser.
Part 4, division 1, subdivision A proposes three technical amendments to the Bank Act in support of the budget 2019 announcement that legislative amendments would be proposed to modernize corporate governance for federally regulated financial institutions.
The first amendment relates to federal credit unions. Budget 2019 announced that legislative amendments would be proposed to provide members of federal credit unions with more options for voting, prior to and at annual general meetings, as well as improved means for participation in the voting process at the annual meetings. Provincial law gives provincial credit union members a wide variety of voting options. Provincial credit unions that have transitioned to the federal charter have asked for similar variety under the federal framework.
The proposed amendment will make it easier for members of federal credit unions to exercise their right to vote by adding more options—by phone, electronically or in person at a branch prior to the annual general meeting—in addition to the current way of voting at the meeting and by mail. This amendment was identified by federal credit unions as a means of enhancing their members' participation in the decision-making of federal credit unions.
The next set of amendments relates to the proxy regime under the Bank Act. They clarify the authorities for the form of proxy regulations and update existing language related to the solicitation of proxies to make it consistent with the Canada Business Corporations Act and in line with drafting conventions. The objective of the proxy-related provisions in the legislation is to ensure that companies provide shareholders with adequate information about their company so that shareholders can exercise their voting rights in an informed manner. To do so, the regulations set out the form of proxy, the proxy circular and the powers granted in the form to enable shareholders to appoint a proxy holder to act on their behalf and receive the necessary information.
The Standing Joint Committee for the Scrutiny of Regulations has highlighted the need to update existing out-of-date references in the form of proxy regulations. In response, and as a first step, a legislative amendment in the Bank Act is being proposed to broaden the authority for regulations that set out the proxy framework. Provisions that define solicitation and the rules surrounding soliciting a shareholder's proxy will be amended as well to clarify language and make bijural updates. These changes are consistent with the Canada Business Corporations Act's definition of solicitation and the modern drafting conventions.
The department conducted broad consultations in the context of the 2019 financial sector legislative review, as well as targeted consultations with industry on these amendments. The Canadian Credit Union Association and the federal credit unions requested that the Bank Act be amended to permit federal credit union members more voting options. The department has also had an ongoing dialogue with the Standing Joint Committee for the Scrutiny of Regulations in regard to updating the proxy framework for banks and bank holding companies. In February 2019, departmental officials appeared before the committee to present a planned approach to update the Bank Act and then the form of proxy regulations. The committee was supportive of the proposed approach and requested a timely implementation.
This concludes my overview of the provisions. We are able to answer any questions you may have. Thank you.