Bill C-78: The Law's Expected Implementation Date

Bill C-78, or the Tax Break for All Canadians Act, is an Act respecting temporary cost of living relief (affordability). It was tabled in the House of Commons on November 28, 2024, and received Royal Assent on December 12, 2024. The Act amends the Excise Tax Act to implement a temporary GST/HST holiday between December 14, 2024, and February 15, 2025, for certain taxable supplies. This includes food and beverages, children's clothing and footwear, restaurant meals, and Christmas trees, among other essentials.

Tax break for all Canadians

Bill C-78, also known as the Tax Break for All Canadians Act, was tabled in the House of Commons on November 28, 2024, and received Royal Assent on December 12, 2024. The Act amends the Excise Tax Act to implement a temporary Goods and Services Tax/Harmonized Sales Tax (GST/HST) holiday, providing tax relief for Canadians.

The tax break is set to begin on December 14, 2024, and last until February 15, 2025. During this period, Canadians will be exempt from paying the GST/HST on certain supplies, including food and beverages, children's clothing and footwear, children's diapers, restaurant meals, certain alcoholic beverages, certain children's toys, printed books and newspapers, puzzles, and Christmas trees or similar decorative trees.

The purpose of this temporary tax relief is to ease the financial burden on Canadians and improve affordability, particularly during the holiday season. It is expected to put more money in the pockets of Canadians and stimulate economic growth. The tax break will also benefit businesses, especially restaurants, which often experience slower periods in January.

The tax break is part of the government's efforts to make life more affordable for Canadians while continuing to grow the economy. It is intended to provide much-needed relief to Canadians who have faced challenges such as the global pandemic, inflation, and other economic uncertainties.

Amendments to the Divorce Act

Bill C-78, which was introduced in the House of Commons on 22 May 2018, proposes amendments to the Divorce Act, the Family Orders and Agreements Enforcement Assistance Act, and the Garnishment, Attachment and Pension Diversion Act. The bill also makes consequential amendments to another Act. The amendments to the Divorce Act are aimed at ensuring that, when parents divorce, the best interests of the child are protected.

Clause 11 of the bill adds section 16.1 to the Act to authorize courts to make "parenting orders", which would allocate the exercise of parenting time and decision-making responsibility in respect of any "child of the marriage", a term defined at paragraphs 2(1) and 2(2) of the Act. This will replace the current authority conferred by the Act to make "custody orders." The bill also introduces child-focused terminology, such as "parenting time" and "decision-making responsibility", to replace the terms "custody" and "access". This change in terminology supports children's best interests by helping to reduce parental conflict.

Clause 11 of the bill amends section 16 of the Act to direct courts to take into consideration only the best interests of the child of the marriage in making a parenting order. Section 16 of the amended Act will also set out relevant factors for determining the best interests of the child, including the child's physical, emotional and psychological safety, security and well-being, the child's views and preferences, the child's cultural, linguistic, religious and spiritual upbringing and heritage, and any family violence.

The bill also creates provisions to help parents and courts resolve disputes over relocation after separation and divorce. Clause 11 of the bill adds sections 16.8 to 16.96 to the Act, which create a process requiring individuals with parenting time or decision-making responsibility to notify any other person with parenting time, decision-making responsibility, or a contact order of an intention to change their or the child's place of residence or to relocate. The bill provides that the court may dispense with the usual notice requirements for changes in place of residence and relocations only where appropriate, such as where there is a risk of family violence. A person with parenting time or decision-making responsibility who receives a notice of relocation can apply to the court to object to the relocation of the child. In the event of such an application, the court will determine whether to authorize the relocation on the basis of the best interests of the child.

The amendments to the Divorce Act also include a new duty for the court in any proceeding under the Act where there is a request for corollary relief, meaning a request for a parenting order or a child or spousal support order. Courts will be required to consider the existence of any civil protection, child protection or criminal proceedings or orders that involve the parties and are pending or in effect. This provision is intended to facilitate the identification of existing orders and similar instruments or proceedings that may conflict with an order under the Act, and to facilitate the coordination of multiple proceedings in different courts.

The bill also includes an evidence-based definition of family violence, which is defined as any conduct that is violent, threatening or a pattern of coercive and controlling behaviour, or that causes a family member to fear for their safety. The definition also includes direct or indirect exposure to such conduct in the case of a child. The bill requires that the courts consider family violence and its impact on the ability and willingness of any person who engaged in the family violence to care for and meet the needs of the child.

The amendments to the Divorce Act introduced by Bill C-78 are intended to promote faster, more cost-effective and lasting solutions to family law disputes, reducing the burden on courts and leading to better outcomes for families. The proposals advance four goals: promoting the best interests of the child, addressing family violence, reducing child poverty, and making Canada’s family justice system more accessible and efficient.

Amendments to the Family Orders and Agreements Enforcement Assistance Act

The Family Orders and Agreements Enforcement Assistance Act (FOAEAA) provides for federal cooperation with provincial courts, provincial enforcement services and peace officers investigating child abductions to enforce support provisions, custody provisions, or access rights, known collectively as family orders and agreements. The operational aspects of the FOAEAA are the responsibility of the Family Law Assistance Service unit (FLAS) of the Department of Justice.

The amendments to the FOAEAA contained in Bill C-78 are aimed at reducing poverty by ensuring that accurate financial information is available for the purpose of determining family support, and by promoting compliance with family support obligations. The bill expands the circumstances in which information held in federal databases can be searched and released, and establishes safeguards to prevent abuse of these measures. The bill allows information to be searched and released to establish or vary a support order. It also expands the group of provincial family justice organizations or services that can request that information be searched and released. In addition, federal payments may now be garnished for support arrears for 12 years instead of five years and can also be garnished for expenses related to the failure to respect a family law order.

Part I of the FOAEAA

Part I of the FOAEAA governs the search for, and confidential release of, the addresses of individuals, including children, and the names and addresses of their employers, held in nine prescribed databases (“information banks”) administered by Employment and Social Development Canada, the Canada Revenue Agency, and the Canada Employment Insurance Commission.

Part II of the FOAEAA

Part II of the FOAEAA provides for the garnishment of federal payments in accordance with provincial garnishment law. This includes tax refunds and funds payable under the Employment Insurance Act, Old Age Security Act or the Canada Pension Plan (CPP).

Part III of the FOAEAA

Part III of the FOAEAA allows provincial enforcement services to apply for the denial or suspension of the passports and aeronautics- and shipping-related licences of individuals who are in persistent arrears of support having failed to make full payments for three payment periods, or having accumulated arrears of over $3,000.

Amendments to the Garnishment, Attachment and Pension Diversion Act

The Garnishment, Attachment and Pension Diversion Act (GAPDA) provides for the garnishment of certain monies payable by the federal government (referred to as "Her Majesty in right of Canada" or "Her Majesty" in the legislation). Bill C-78 amends the GAPDA to give priority to family support obligations and simplify the processes under the Act.

The bill contains a number of amendments to the GAPDA, which are designed to "give priority to family support obligations" and "simplify the processes under the Act." These changes will have the effect of prioritizing family support obligation garnishment orders over all other garnishment orders and involving provincial enforcement services in the diversion of federal pension benefits to satisfy financial support orders.

Priority of family support obligations

Bill C-78 amends the GAPDA to give priority to family support obligations. It does so by amending the definition of "order" in section 2(1) of the Act to include a reference to any enforceable order, judgment, decision, or agreement respecting maintenance, alimony, or support.

Simplifying the processes under the Act

Bill C-78 also simplifies the processes under the Act. It extends the period during which service of a garnishee summons on Her Majesty is considered effective from 30 to 45 days. It also adds section 11(3.1) to the GAPDA to recognize payment to a provincial enforcement service by Her Majesty as good and sufficient discharge of Her Majesty's liability in respect of the garnishment order, provided that provincial garnishment law permits such payments to provincial enforcement services.

Temporary cost of living relief

Bill C-78, also known as the Tax Break for All Canadians Act, is an Act respecting temporary cost of living relief (affordability). It was tabled in the House of Commons on November 28, 2024, and received Royal Assent on December 12, 2024. The Act amends the Excise Tax Act to implement a temporary Goods and Services Tax/Harmonized Sales Tax (GST/HST) holiday between December 14, 2024, and February 15, 2025. This tax break is intended to ease the financial burden on Canadians during the holiday season and boost economic growth.

The GST/HST holiday will apply to certain supplies, including food and beverages, children's clothing and footwear, children's diapers, restaurant meals, certain alcoholic beverages, children's toys, printed books and newspapers, puzzles, and Christmas trees or similar decorative trees. This measure will put more money in the pockets of Canadians and help make the holiday season more affordable for families.

The Act also addresses concerns about equality rights under Section 15 of the Charter of Rights and Freedoms, as the inclusion of Christmas trees in the GST/HST holiday could be seen as providing tax relief associated with a Christian holiday. However, it is argued that seasonal trees are also seen as a secular adornment and are purchased by people of all faiths, so their inclusion does not constitute preferential treatment for any particular religion.

The temporary cost-of-living relief provided by Bill C-78 is expected to have a positive economic impact, with analysts predicting an increase in GDP growth. The measure has been welcomed by businesses and retailers, who anticipate an uptick in sales during the usually slower month of January. It is also seen as a way to support hard-working Canadians and make life more affordable, especially for parents and families.

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