Part 4: Various Measures
Federal Balanced Budget Act
Part 4, Division 1 repeals the Federal Balanced Budget Act, deeming it to never have come into force. The Federal Balanced Budget Act was enacted last year under the previous government.
Canadian Forces Members and Veterans Re‑Establishment and Compensation Act
The Act to amend the Canadian Forces Members and Veterans Re-establishment and Compensation Act and to make consequential amendments to other Acts would:
- Increase the Earnings Loss Benefit from 75% to 90% of a Veteran’s monthly gross pre-release military salary;
- Change the name of the Permanent Impairment Allowance to “Career Impact Allowance” and the term “Totally and Permanently Incapacitated” to “Diminished Earning Capacity”, and add an element to individually assess the impact of the service injury on a Veteran’s career advancement opportunities.
- Increase the maximum lump sum Disability Award to $360,000, make consequential changes to the Death and Detention Benefits, and issue a payment to individuals who received Disability Award, Death Benefit and Detention Benefit payments between April 1, 2006 and the coming into force date; and
- Clarify wording around when and how Disability Awards are payable.
Financial Institutions (Sunset Provisions)
The federal financial institutions statutes1 contain sunset provisions mandating their renewal by Parliament every five years so as to ensure the financial sector regulatory framework is reviewed in light of emerging trends and developments, and remains effective and technically sound.
These legislative amendments would extend the current statutory sunset date by two years to March 29, 2019. Extending the statutory sunset date will give Canadians sufficient time to share their views, including on the scope of the review, and will provide time to make any changes to the framework.
Amendments To The Bank Act (Federal Credit Unions)
The proposed amendments to the Bank Act provide a legislative framework for the Minister of Finance to provide targeted protection against transitional risks and to facilitate a smooth entry process for provincial credit unions continuing to the federal framework.
Division 4 of Part 4 amends the Bank Act to provide the Minister of Finance the authority to:
- provide targeted protection, through a loan guarantee, to eligible federal credit unions that face transitional risks as they move to the federal framework; and
- waive or adjust federal procedural rules on entry, if the transitioning credit union is otherwise substantially compliant with federal rules.
Bank Recapitalization Regime (Bail-in)
The proposed amendments to the Canada Deposit Insurance Corporation Act (CDIC Act) and Bank Act provide a legislative framework for a bail-in regime for Canada’s systemically important banks and include accompanying enhancements to Canada’s bank resolution toolkit. These amendments would strengthen authorities’ ability to protect taxpayers in the unlikely event of a failure of a systemically important bank.
The bail-in regime would allow authorities to convert certain debt of a failing systemically important bank into common shares to recapitalize the bank and allow it to remain open and operating. Only prescribed long-term debt would be subject to the bail-in power, and all deposits would be excluded.
To support authorities’ ability to undertake a bail-in and resolve a failing bank, the proposed amendments would:
- permit the Superintendent of Financial Institutions (Superintendent) to designate individual banks to which the bail-in regime would apply as “domestic systemically important banks”;
- provide new powers for CDIC to undertake a bail-in by converting eligible debt of a non-viable domestic systemically important bank into common shares;
- enhance CDIC’s powers that are necessary to resolve a failed bank and to undertake a bail-in conversion―including powers for CDIC to take temporary control or ownership of a non-viable bank;
- set out an updated process for investors to seek redress should they be left worse off as a result of CDIC’s actions (including bail-in) than if the bank had been liquidated;
- require domestic systemically important banks to maintain a minimum amount of regulatory capital and debt subject to the new bail-in conversion power; and,
- authorize the Governor in Council to make regulations respecting the features described above.
Consequential amendments will be made to the Bank Act, CDIC Act, Financial Administration Act, Payment Clearing and Settlement Act and Winding‑up and Restructuring Act in order to ensure consistency with the amendments described above.
Chief Executive Officer of the Canada Deposit Insurance Corporation
The Government is moving to strengthen financial sector governance. The proposed change will expand the pool of qualified candidates for the Canada Deposit Insurance Corporation (CDIC) Chairperson position while protecting the integrity of the Financial Institutions Supervisory Committee (FISC) by replacing the CDIC Chairperson with the CDIC Chief Executive Officer as member of the FISC.
Division 6 of Part 4 modifies the membership of the FISC established under the Office of the Superintendent of Financial Institutions Act by removing the reference to the CDIC Chairperson to replace it with the CDIC Chief Executive Officer. This removes the prohibition on financial holdings that currently applies to the CDIC Chairperson, which will facilitate the appointment of a well-qualified individual to the position. It also makes consequential amendments to other Acts regarding the disclosure of information and the obligation to consult with the CDIC Chairperson, which correspond to FISC membership. The CDIC Chairperson will remain subject to the Conflict of Interest Act as a public office holder.
Federal-Provincial Fiscal Arrangements Act
Territorial Formula Financing (TFF) is an annual unconditional transfer from the federal government to each territorial government. It enables territorial governments to provide a range of public programs and services to their residents that are comparable to those offered by provincial governments, at comparable levels of taxation.
Transfers to the territories were set to decline by $25 million in 2016-17, largely as a result of a revision to the public sector data within Statistics Canada’s Macroeconomic Accounts.
Division 7 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to (i) establish each territory’s 2015-2016 gross expenditure base as the new basis for future determination of TFF payments, (ii) remove the ability for the Minister to recalculate the gross expenditure base of previous years and (iii) authorize the Minister of Finance to redetermine the TFF amounts for 2016-17.
Financial Administration Act
Authority for the Government to borrow in financial markets is provided by Part IV of the Financial Administration Act (FAA), which authorizes the Minister of Finance, with the approval of the Governor in Council, to issue securities and undertake related activities.
Prior to 2007, the Minister of Finance was required to seek approval from Parliament to increase market borrowings. Amendments were made to the FAA in 2007 that removed the need for the Minister to seek Parliamentary approval before increasing market borrowing.
This Division amends the FAA to restore the requirement for the Minister of Finance to seek Parliamentary approval of the Government’s borrowing activities, including the borrowings of agent Crown Corporations.
The Minister would have standing authority to refinance outstanding market debt, subject to an annual approval by the Governor in Council (GIC).
Should borrowing be required in extraordinary circumstances such as a financial crisis or a natural disaster, the Minister of Finance would be empowered to seek GIC approval of extraordinary borrowing authority without requiring Parliament’s approval.
The Minister would be required to table in Parliament a report on the activities in relation to any extraordinary borrowing within 30 sitting days.
Old Age Security Act
The Old Age Security (OAS) program plays a significant role in providing income security to senior Canadians. It has been one of the cornerstones of Canada’s retirement income system since 1952. The purpose of the OAS program is to ensure a minimum income to seniors and to contribute to income replacement in retirement. It is funded entirely through general tax revenues.
Benefits under the OAS program include the OAS pension, which is paid to all persons aged 65 or over who meet the residence requirements, the income-tested Guaranteed Income Supplement (GIS) for low-income pensioners, and the Allowances for low-income individuals aged 60 to 64 who are the spouses/common-law partners of GIS recipients, or who are survivors.
Age Of Eligibility
Old Age Security and Guaranteed Income Supplement benefits are an important part of the retirement income of Canadians, particularly for lower-income seniors. Vulnerable seniors depend on this support, and without it, face a much higher risk of living in poverty. In order to strengthen public pensions and improve the lives of Canadian seniors, the eligibility ages of the OAS program will be restored.
The amendments to the OAS Act will cancel the increase in the age of eligibility from 65 to 67 for the OAS pension and the GIS, and from 60 to 62 for the Allowance (ALW) and the Allowance for the Survivor (ALWS). The increase in the age of eligibility was scheduled to take place in 2023.
Increase To Income-Tested Benefits
The GIS top-up currently provides an additional amount of GIS to the lowest income seniors, i.e. those with annual income of about $4,600 for single individuals and $7,650 for couples. However, current benefit levels still leave many single seniors living in low income and vulnerable.
The amendments to the OAS Act will increase the maximum GIS top-up for the lowest income single pensioners and for pensioners whose spouse is not eligible for OAS benefits by up to $947 annually starting in July 2016. This increase would also apply to the maximum ALWS top-up.
Special Import Measures Act
The Special Import Measures Act (SIMA) is the primary legislation governing Canada’s trade remedy system. The Canadian trade remedy system provides for the application of anti-dumping and countervailing duties to remedy injury to domestic producers caused by dumped and subsidized imports. Canada’s trade remedy investigations are conducted by the Canada Border Services Agency and the Canadian International Trade Tribunal.
Division 10 of Part 4 amends SIMA to provide that:
- a full trade remedy investigation will be conducted even if there is a finding at the preliminary determination stage that the margin of dumping or amount of subsidy is insignificant; and
- expiry review proceedings will be initiated two months prior to the 5-year expiry date of an anti-dumping or countervailing duty measure.
The Government has also launched public consultations with respect to a broader set of potential amendments to the trade remedy system.
Pension Benefits Standards Act, 1985
Division 11 of Part 4 amends the Pension Benefits Standards Act, 1985 (PBSA) to combine the bilateral and multilateral agreement authorities under the Act and to clarify that an agreement may permit the application of provincial pension law with respect to a pension plan otherwise subject to federal pension law.
In particular, the proposed amendments repeal section 6 of the PBSA, regarding bilateral agreements, and expand section 6.1 on multilateral agreements to also include agreements with only one designated province. In addition, the amendments clarify that an agreement may make the pension law of a designated province that is party to the agreement applicable with respect to a pension plan that would otherwise be subject to federal pension law. The amendments also rename a “multilateral” agreement as a “federal-provincial” agreement.
Employment Insurance Act
The Employment Insurance Act (EI Act) requires claimants to serve a waiting period prior to benefits being payable, and provides that it may be deferred or waived in specific circumstances. The waiting period has been set at two weeks since 1971. These amendments to the EI Act will reduce the waiting period from two weeks to one week.
All claimants whose benefit period commences before the coming into force of these amendments will be subject to the existing two week waiting period.
New Entrants and Re-entrants
The Government will be seeking to make amendments to the EI Act and to amend the Employment Insurance Regulations (EI Regulations) and Employment Insurance (Fishing) Regulations (EI (Fishing) Regulations) to eliminate the New Entrants and Re-entrants requirements established for regular claimants and self-employed fishers.
The amendments will eliminate the New Entrant and Re-entrant provisions introduced in 1978, and instead require claimants to meet their regional variable entrance requirement (which varies between 420 to 700 hours) to be eligible for EI regular benefits. Self-employed fishers will need to reach their regional insurable earnings entrance requirement for fishers (which varies between $2,500 and $4,200) to qualify for EI fishing benefits.
Currently, New Entrant and Re-entrant rules require workers newly-entering the labour force or re-entering after an absence of two years to accumulate 910 hours of insurable employment in the year preceding their claim to be eligible for EI regular benefits. The intention of the New Entrant and Re-entrant provisions were to discourage a cycle of EI reliance by ensuring that workers – and especially young people – develop a significant attachment to the labour force before collecting EI benefits.
The EI (Fishing) Regulations will be amended to eliminate the requirement that self-employed fishers who are new-entrants or re-entrants to the labour force must have $5,500 in earnings from employment as a fisher in the qualifying period. The intent of the provision was also to reinforce the insurance principles of the EI program by ensuring that workers make a reasonable contribution to the system before collecting benefits.
It was later determined that the New Entrant and Re-entrant rules did not achieve their intended purpose. An evaluation of the New Entrant and Re-entrant provisions conducted by Employment and Social Development Canada in 2011 found that by making EI more difficult to access for the first time, the New Entrant and Re-entrant rules did not act to discourage future frequent use of EI.
These provisions also prevent workers from gaining access to EI-funded training supports delivered through the Labour Market Development Agreements (LMDAs) with provinces and territories, as workers must qualify for EI Part I before qualifying for Part II (and therefore LMDA-funded programs) as active claimants.
Extra Weeks of Benefits for Workers in Regions Affected by the Downturn in Commodity Prices
The EI program provides temporary financial assistance to unemployed workers who have lost their jobs through no fault of their own while they look for employment or upgrade their skills.
Dramatic declines in global commodity prices since late 2014 have produced sharp and sustained unemployment shocks in commodity-based regions. Budget 2016 proposes to provide eligible unemployed workers in 12 regions hardest hit by the downturn in commodity prices with additional weeks of EI regular benefits.
Five additional weeks of EI regular benefits will be available for all eligible unemployed workers in specified regions up to a maximum of 50 weeks and up to an additional 20 weeks will be available to eligible unemployed long-tenured workers, in specified regions, up to a maximum of 70 weeks.
Extended benefits will be available for a period of one year starting in July 2016, with the measure applying to all eligible claims as of January 4, 2015.
Canada Marine Act
Canada Day public celebrations have been held for 28 years at Canada Place Corporation in Vancouver. These celebrations attract approximately 950,000 participants annually, and represent the largest Canada Day event outside the National Capital Region.
In preparation for the 150th anniversary of Confederation in 2017, Canada Place Corporation has submitted an application for funding to Canadian Heritage proposing Canada Place as a hub for activities on the West Coast. The expression of interest proposes activities over several months.
Canada Place Corporation is a wholly-owned subsidiary of the Vancouver Fraser Port Authority, which is commercially known as Port of Vancouver. As such, it is not eligible to receive funding from the Department for celebrations, as any contribution would contravene the Canada Marine Act.
In consideration of the importance of the Canada Day celebrations and the potential scope of the proposed activities for the 150th anniversary of Confederation, section 25.2 is added to the Canada Marine Act to allow the Minister of Canadian Heritage to make payments to Canada Place Corporation for Canada Day celebrations and for the celebrations marking the 150th anniversary of Confederation.
Jobs, Growth And Long-Term Prosperity Act
PPP Canada Inc. is a wholly-owned subsidiary of Canada Development Investment Corporation, a Crown corporation in the Finance portfolio. PPP Canada Inc. provides advice on delivering infrastructure projects by way of public-private partnerships (P3s), and it administers the federal P3 Canada Fund which supports P3 infrastructure projects in Canada.
Division 14 of Part 4 amends the Jobs, Growth and Long-term Prosperity Act to authorize the Minister of Infrastructure, Communities and Intergovernmental Affairs to acquire the shares of PPP Canada Inc. on behalf of the Crown. It also sets out that the appropriate minister, as defined by the Financial Administration Act, holds those shares, and it authorizes the appropriate minister, with the Governor in Council’s approval, to conduct certain transactions in relation to PPP Canada Inc. It also authorizes PPP Canada Inc. and its wholly-owned subsidiaries to sell their assets in certain circumstances, with the approval of the Governor in Council.
Canada Foundation For Sustainable Development Technology
The Canada Foundation for Sustainable Development Technology Act establishes an independent, not-for-profit corporation that funds clean technologies. The corporation operates as Sustainable Development Technology Canada. On November 4, 2015, the Minister of Industry was designated by Order in Council as the minister responsible for the purposes of the Canada Foundation for Sustainable Development Technology Act.
Division 15 of Part 4 amends the Canada Foundation for Sustainable Development Technology Act and the Budget Implementation Act, 2007 to consolidate statutory appointment and funding authorities associated with SDTC under the Minister of Industry, as the designated minister.
1 The Bank Act, Insurance Companies Act, Trust and Loan Companies Act and Cooperative Credit Associations Act.