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Politics Carbon pricing, small-business tax changes to become law as Senate passes budget bill

Senators passed the government’s budget bill without amendment, meaning federal carbon-pricing plans and small-business tax changes will soon become law.

Senators approved the 556-page omnibus bill Thursday afternoon without a standing vote or discussion at third reading.

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Some senators were planning to debate the bill further and the speed of the decision came as a surprise.

“It caught us off guard,” said Independent Senator Robert Black, who was planning to raise concerns about how carbon-pricing measures will affect farmers. “There were a number of senators lined up to speak.”

The Conservative leadership in the Senate said they supported quick passage of the budget bill to allow more time for the Senate to debate the government’s marijuana legislation. In contrast, Conservative MPs in the House of Commons proposed procedural delay tactics Thursday to protest the government’s approach to carbon pricing.

The Senate had previously divided the bill between eight Senate committees for study. Those reviews led to a series of reports that raise issues with some sections, but senators ultimately decided to express their concerns in the form of observations rather than amendments.

The bill includes a new law called the Greenhouse Gas Pollution Pricing Act, which sets a national carbon price regime that will apply in provinces and territories that have not established an equivalent carbon tax or cap-and-trade policy.

The Senate committee on energy, the environment and natural resources reported that while it supported the intention and policy approach of that section, the change “is significant and substantial enough” that it could have been introduced as a standalone bill.

Another section will limit access to the small-business corporate income tax rate for businesses with passive investment income of more than $50,000 a year.

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It was the final part of a package of small-business changes that Finance Minister Bill Morneau first announced in the summer of 2017 and later modified in response to strong opposition from small-business owners.

The Canadian Federation of Independent Business (CFIB) and a coalition of other national business groups had urged senators to delay the implementation of the passive investment changes to Jan. 1, 2019, instead of the 2018 tax year.

The national finance committee noted in a report that “a number of committee members continue to believe that the proposals need more study.”

CFIB president Dan Kelly said his group was unable to find a senator who would lead a charge to amend the bill.

“It is disappointing,” he said. “There were loads and loads of senators that were incredibly sympathetic but it was very hard for us to find a champion that was willing to go up against the government.”

Another area of controversy raised during Senate hearings related to changes to the Bank Act that would expand the ability of banks to enter into partnerships with financial technology companies, or fintechs.

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Federal Privacy Commissioner Daniel Therrien told senators the provisions failed to strike the right balance between promoting innovation and protecting the privacy of consumers.

The Senate banking committee reported concern that the bill could introduce “potential cyber security risks.”

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