The finance committee has approved major changes to Finance Minister Chrystia Freeland’s budget bill, including dropping an entire section that would have created a new appeals regime for employment insurance.
Throughout the committee’s study, witnesses regularly told MPs that the 440-page legislation is another example of an omnibus budget bill that is difficult to properly scrutinize because it includes changes to a wide range of unrelated policies.
The fact that the budget was not tabled until April – rather that the usual window of February or March – further added to the time crunch given that the government generally aims to have the budget bill passed by Parliament before rising for summer.
The committee reported the bill back to the House this week with significant changes, including amendments to 10 clauses and the removal of an entire 48-clause section that dealt with employment insurance (EI).
That section would have created a new employment insurance board of appeal that would hear challenges to EI rulings and replace the current system, which has been widely criticized in various reports over several years.
However, some labour organizations said the proposal was flawed and required more scrutiny and consultation.
Employment Minister Carla Qualtrough has accepted that criticism and pledged this week to return to Parliament in the fall with new stand-alone legislation to reform the EI appeals process. The minister’s office said in a statement Thursday that the government will consult and take the time “to get it right.”
The EI changes – as well as several others – were approved unanimously by the four parties on the committee: the Liberals, Conservatives, Bloc Québécois and the NDP.
Conservative finance critic Dan Albas said the scope of committee changes to a budget bill is unprecedented in his experience.
“I’ve never seen it before,” he said, adding that the volume of issues with the budget bill raises questions about whether Ms. Freeland – who is both Deputy Prime Minister and Finance Minister – is devoting enough time to the finance role.
Ms. Freeland’s press secretary, Adrienne Vaupshas, said in a statement that the work of committees is vitally important.
“And contrary to Mr. Albas’ assertions, we’re pleased that all parties have been able to work together to quickly report this bill… back to the House of Commons so quickly.”
Canadian Union of Public Employees economist Angella MacEwen said the government’s attempt to pass the EI change via a budget bill was “strange,” but that labour organizations are pleased to see the section removed and the government pledging to try again in the fall.
The proposed EI changes in the budget bill were separate from a broader review of Canada’s employment insurance system, which is the subject of public consultations that will run until July 29. That review is focused on the adequacy of benefits for workers and the financial sustainability of the program.
Long-standing problems with the EI system were quickly exposed by the COVID-19 pandemic, as it was not immediately able to address the wave of sudden unemployment claims that resulted from widespread in-person work-force closings. As a result, the government quickly shifted to create the Canada Emergency Response Benefit, which was run by the Canada Revenue Agency.
Other committee amendments to the budget bill include changes that broaden and clarify access to the disability tax credit for individuals with type 1 diabetes and an excise-tax exemption for Canadian cider producers. Another amendment removed a section that would have exempted the immigration department from having to reimburse fees in some situations where people have faced extraordinary service delays.
One of the most controversial provisions of the budget bill was a section that would implement a Liberal promise to impose a luxury tax on the purchase of new high-priced autos, boats and aircraft.
The NDP sided with the Liberals to vote down amendments supported by the Conservatives and the Bloc to water down the luxury tax. An NDP amendment giving the government flexibility on the Sept. 1 implementation date for the aerospace sector received all-party support. However, House of Commons Speaker Anthony Rota ruled that amendment out of order Thursday on procedural grounds.
Industry groups and some union leaders have warned that the tax will create negative unintended consequences for Canadian manufacturers in terms of job losses and reduced sales.
Mike Mueller, president and chief executive officer of Aerospace Industries Association of Canada, said in an interview Thursday that he’s disappointed the committee did not accept industry recommendations to strike down the tax or at least narrow its application. He said industry is now focused on persuading senators to amend the bill.
“This tax just sends a completely horrible message,” he said. “Are any of our competitor nations doing this? No. None of them are.”
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