1997-11-28

[Stage Direction]
The House proceeded to the consideration of Bill C-10, an act to implement a convention between Canada and Sweden, a convention between Canada and the Republic of Lithuania, a convention between Canada and the Republic of Kazakhstan, a convention between Canada and the Republic of Iceland and a convention between Canada and the Kingdom of Denmark for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and to amend the Canada-Netherlands Income Tax Convention Act, 1986 and the Canada-United States Tax Convention Act, 1984, as reported (without amendment) from the committee.
Hon. Jim Peterson (for the Minister of Finance): 
moved that the bill be concurred in. (Motion agreed to)

The Acting Speaker (Mr. McClelland): When shall the bill be read a third time? By leave now?
[Intervention]
Some hon. members: Agreed.
Jim Peterson: 
moved that the bill be read the third time and passed.

Mr. Speaker, as you have indicated, this involves tax treaties with a number of countries including Denmark, Iceland, Kazakhstan, Lithuania, Sweden and The Netherlands, but most important or certainly most in the news has been the amendments involving our treaty with the United States of America. This important amendment is taking place in terms of social security benefits which are paid by the American government to people living in Canada.
The effects of this tax apply basically to about 60,000 Canadians. About one-third of these are low income residents of Canada who are still in receipt of U.S. social security benefits.
Under the current law the Americans are entitled to withhold 25.5% of these social security payments they make to people living in Canada. Where these recipients, approximately 20,000 of them, lose out is if they were taxed at ordinary Canadian income tax rates on these benefits, their tax rates, because they are in lower income brackets, would be much lower. Therefore, this blanket withholding of 25.5% by the Americans is a detriment to these particular residents of Canada.
This is why we have undertaken on their behalf to renegotiate this treaty to ensure that they can be taxed not by the source country, the United States, by way of withholding, but in Canada where they would be taxed on their net income. Many of these low income residents of Canada will end up paying no taxes whatsoever.
For recipients of U.S. social security benefits who are in higher tax brackets, there will also be a relieving position which comes about because only 85% of the benefits will go into taxable incomes, rather than 100%. This is mirroring the way the United States would tax its residents on this income.
This bill has gone through the House for second reading where it received great support from all sides. It has gone to both committees where they have sent it back unamended. It is of course important that we enter into these new treaties with new trading partners so that Canada can continue to be at the forefront of avoiding double taxation and encouraging international investment, international flows of currency, international jobs, but particularly in terms of our provisions dealing with the Americans.
It is very important that we make these relieving provisions so that we can get on with the job of making sure that these people are treated fairly by both the United States and Canada as it relates to their social security benefits.
I would like to repeat what the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques said about getting the co-operation of all parties because the main purpose of this bill is to remedy a fundamental inequity for low income persons.
We expect that as soon as this passes—and we certainly hope to have the unanimous support of all members of the House—that it will be signed into law very quickly and receive royal assent. We understand that the United States has done all that is necessary except receive presidential signature on this bill. As soon as it goes through, we would expect that within a few weeks, or in as short a time as possible, refund cheques will be sent out. Revenue Canada will be co-operating with the U.S. revenue authorities to track down every person who might have been unfairly prejudiced over the last two years by these provisions.
We expect, with the support of all members, to be able to correct this inequity and to make sure that the taxpayers in Canada who have been unfairly prejudiced are going to get their refunds.
I thank all members of this House for their splendid co-operation on this excellent bill.
Mr. Rahim Jaffer (Edmonton—Strathcona, Ref.): Mr. Speaker, I rise on behalf of the official opposition to address Bill C-10, an act to implement the convention between Canada and Sweden, a convention between Canada and the Republic of Lithuania, a convention between Canada and the Republic of Kazakhstan, a convention between Canada and the Republic of Iceland and a convention between Canada and the Kingdom of Denmark for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and to amend the 1986 Canada-Netherlands Income Tax Convention Act and the Canada-U.S. Tax Convention Act of 1984.
I will be sharing my time with my hon. colleague, the insatiable snack-packer from Calgary West.
It is clear that the proposed conventions with Sweden, Lithuania, Kazakhstan, Iceland and Denmark are important tax treaties. Neither myself nor any member of the official opposition would argue that these conventions are in and of themselves bad fiscal policy.
The thought of unchecked tax duplication is enough to make any of us a little uneasy. Much of Bill C-10 concerns simple—
The Acting Speaker (Mr. McClelland): If the hon. member would forgive me, I think I heard that the hon. member would like to share his time. At this particular point in the interventions, we, without unanimous consent, cannot split his time. I just wanted to make you aware of that.
Rahim Jaffer: Can I seek the unanimous consent of the House?
The Acting Speaker (Mr. McClelland): Does the hon. member have unanimous consent to split his time?
[Intervention]
Some hon. members: Agreed.
Rahim Jaffer: Mr. Speaker, much of Bill C-10 concerns simple parliamentary housekeeping. I think my hon. colleague from Calgary West would agree with that.
However, as my hon. colleague from Calgary Southeast has pointed out in past debates on this bill, part VII of this act concerning tax treatment of social security payments from the U.S. social security fund to Canadian residents reveals another Liberal tax gouge.
I am losing track but I think this is tax hike number 38, what a record.
Arguments have been made in this House and in committee that this bill will make amendments to the 1995 third protocol that will increase tax fairness and provide tax relief for lower income Canadian seniors.
Tax relief and fairness for low income seniors is an important and noble goal but unfortunately it is a goal that will not be achieved through this legislation.
In fact, I find it difficult to belief that tax relief is the goal of a Liberal government at all because the very tax treaty that imposed a 25% flat withholding tax for U.S. social security payments coming to Canadian residents was negotiated and agreed on by this government, the very government whose members are saying that it was an unfair agreement.
To fully understand this issue, I have to review the history of public policy on social security payments and taxation. It has given me a pretty clear idea of the low quality of the legislation before us today.
The 1984 U.S.-Canada Income Tax Convention Act allowed 50% of social security payments to Canadian residents to be included for purposes of Canadian taxation. That made a lot of sense because it was the same treatment that U.S. recipients of social security have. That is to say 50% of their social security payments were included for the purposes of taxation. With only 50% of their social security payments included for taxation, many low and middle income seniors avoided paying any taxes on their social security income.
This policy was changed in 1995 when the government entered into negotiations with the Americans to produce the third protocol which imposed a 25% flat withholding tax on those payments being made to American residents retiring in Canada.
For low income seniors, this meant 25% of their income disappeared. After Canadian seniors let this government know that their treatment under the third protocol was completely unacceptable, the government went back to the table.
The fourth protocol, the results of which are included in Bill C-10, would see the inclusion rate of U.S. social security payments rise from 50%, as it was before 1985, to 85%. That is a 70% increase on the inclusion rate.
Every senior who pays taxes will now pay more under this legislation. It is not just wealthy seniors, it is all taxpaying seniors who will be hit by this tax grab. This very fact was admitted in committee and, while I was not privy to the discussions, it was a matter of public record. Section 7 of part VII of Bill C-10 is clearly another Liberal tax grab.
When seniors suffering under the 1985 treaty asked for tax fairness, when they asked the government to do something about the 25% withholding tax, they were not looking for a 70% tax increase.
What this policy will do is penalize any and all seniors who have private savings that supplement their incomes so that they are at least within the lowest tax bracket.
Middle income seniors who have made sacrifices and wise financial choices about their retirements are being punished. This is not exclusively the very rich. It is every senior who pays taxes and who collects the U.S. seniors benefits, whether they make $10,000 a year or $1 million.
I am sure that this point will be ignored and my colleagues from across the way will remark that Reform is protecting the interests of the wealthy. This is simply not true and I would ask my colleagues to think about the facts before they perpetuate misunderstandings and misinformation.
Further to the issue of U.S. social security payments to Canadian residents it must be known that unlike CPP payments that are taxed only as income when they are withdrawn, U.S. social security payments are taxed at the time they are made and not when they are withdrawn. So Canadians receiving U.S. social security benefits have already paid taxes on those benefits.
A Canadian working in the U.S. would pay taxes on his or her premiums but would pay little or no taxes when he or she claimed the benefits. This makes sense since seniors are less able to pay the taxes when they are on a fixed income in their retirement years.
If that worker who contributed to the U.S. social security system moved back to Canada he or she would have to pay taxes on 85% of his or her social security income. They are being taxed twice. This is not only unfair, it violates the intended goals of our tax convention which is to eliminate any tax duplication.
I want to stress some key points before I conclude. First, this legislation was rushed through the industry committee. The critic for this bill, the hon. member for Calgary Southeast, only discovered that Bill C-10 would proceed through the industry by chance at the last minute. This makes me pretty suspicious that this legislation contains merely house cleaning matters.
Second, as I understand, the chair of the industry committee disallowed the hon. member for Calgary Southeast to request that seniors affected by Bill C-10 be allowed to testify before the committee. If there were nothing offensive in the legislation, the government would have nothing to fear from being transparent.
Another unfounded concern that came up in committee is that Reform is trying to delay the issuance of cheques owed to seniors by not allowing Bill C-10 to be fast tracked through the committee. Bill C-10 provides for the partial or full refund to some seniors of the IRS to a 25% withholding tax which occurred because of the original Liberal bill that was flawed.
The government has also said that Reform is doing this in an attempt to protect a small group of high income seniors from taxes. This is not true. The facts are every senior who receives U.S. social security and who pays taxes will pay more under this legislation. The inclusion rate for calculating taxable income moves from 50% under the pre-1996 convention to 85% under this bill, the fourth protocol.
By suggesting that Reform somehow wants to protect its idle rich supporters by supporting this bill, the government apparently feels that any senior who pays taxes is a high income senior and an idle rich supporter of the Reform Party.
For the record, let me remind the House that demographic studies show that the Reform supporter on average is less wealthy than the average Canadian. Our supporters are not very rich. They are average Canadians who are hurt by the heavy burden of taxation. However, I am not here today to speak exclusively on behalf of Reform supporters. I am here to speak on behalf of Canadians.
I would like to bring the attention of the House to the fact that the committee reports contain a clear statement by senior tax bureaucrats that the inclusion rate would rise from 50% to 85% under Bill C-10, and that this rise would cost all taxpaying seniors.
Reform resents the suggestion that we are responsible for delaying Bill C-10. We did not create the problem in the first place; the government did. Reform did not delay bringing forward this legislation until after the election; the government did. Reform did not wait three weeks since the debate to bring Bill C-10 to committee; the government did. And Reform did not refuse to hear witnesses explain the impact that this would have on their livelihood; the government did.
I am not naive to the fact that government backbenchers followed the lead of their cabinet. But an issue that involves raising taxes of Canadian seniors is just the sort of issue that should compel hon. members of the House to either change their caucuses or defy their caucuses.
Canadian seniors need a unified voice in the House, a voice that will speak resolutely whenever the government reaches its hands into their pockets. I fear that they do not have this voice with the government. This is not just about money, it is about seniors with retirement dreams and it is about seniors who will face their retirement years in government imposed poverty.
The Acting Speaker (Mr. McClelland): For the benefit of hon. members who were not here earlier, the hon. member for Edmonton—Strathcona had asked that his time be split. There are no questions and comments at this time.
Mr. Dennis J. Mills (Broadview—Greenwood, Lib.): Mr. Speaker, I was under the impression that the Reform Party was going to put forward another speaker. However, I appreciate having the opportunity to speak in support of this bill.
First, any attempt which this House makes to simplify the tax acts of Canada is something which I support and celebrate.
Bill C-10 would organize tax treaties for efficiency and fairness where there is a specific benefit to seniors in Canada. However imperfect, I believe it should be supported by all parties.
I would like to pick up from where the hon. member for Edmonton—Strathcona left off in his remarks. He talked about the fact that members on the government side of the House should debate and challenge the tax system of this country. The fact of the matter is we do. This party is not made up of lemmings. The government is not asking members to suppress creativity on how to improve or reform the tax acts. Quite frankly, I think the hon. member for Edmonton—Strathcona knows that.
This is purely coincidental today. There is a book which a group of us put together called “The Single Tax System” back in 1990. When I look at the acknowledgements of the people who contributed I notice the name “Rahim Jaffer, Ottawa”. I acknowledged the hon. member for Edmonton—Strathcona as one of the people who helped me put this effort at tax reform together.
The hon. member for Edmonton—Strathcona is here as a newly elected member of Parliament. I celebrate his being here. He is a creative, intelligent and thoughtful individual. However, I think that the challenge for the opposition is not just to criticize the flaws which exist in legislation, it is also the responsibility of the opposition to put forward constructive alternatives.
We listened attentively to the member's remarks during the last 10 minutes and all he did was criticize this piece of legislation. I have never seen a piece of legislation which was flawless, but not once did the member talk about a constructive alternative. I am beginning to wonder if the hon. member for Edmonton—Strathcona has gone soft on the notion of comprehensive tax reform. He is in the index of this book as being one of the strong supporters of a single tax system and comprehensive tax reform, but not once during his remarks did he talk about what he would put forward as his alternative or his party's alternative.
The day that the member was elected I was happy and hopeful that when he came to this Parliament he would be a champion of comprehensive tax reform. I thought that the member and the hon. member for Calgary Southeast, the former head of the Canadian Tax Foundation, were passionate supporters of the single tax system before they were elected. We have been here for months and we have heard barely a peep out of those members. All they do is criticize. They do not talk about comprehensive tax reform any more. They do not talk about the single tax system.
I listened attentively to the member's notice that there may be a couple of flaws in Bill C-10. I repeat myself. There could be areas requiring improvement in any piece of legislation, but I think we need to hear from the opposition parties on an issue like this one where they stand on comprehensive tax reform. Are they going to whisper about it from time to time, or are they going to get passionate in the House about real reform?
The time is right. We hear right now that not a day goes by in the United States that Democrat and Republican senators and congressmen are not looking at the notion of comprehensive tax reform. If the United States government has a simplified tax act because it flushed out and cleaned up many of the credits buried in the tax act, we know that we must follow.
We should not avoid taking advantage of this opportunity. We should get right into the debate, put our best creative minds together and see if we can create some momentum and some political will.
In the last 10 years I have watched our government and the previous government cut, cut, cut, offload all direct grants; but the fact of the matter is that the biggest or the largest grants to individuals or corporations are buried in the Tax Act of Canada. There is no accountability or very little accountability in these tax preferences.
I stand here today appealing to the Reform Party to stand up for comprehensive tax reform, the same way they did before they were elected. I also say to the Reform Party that it is fair ball to critique a flaw or two in a piece of legislation, but I appeal to my friend from Edmonton—Strathcona to put forward a constructive alternative.
The Acting Speaker (Mr. McClelland): Hon. members, before we go continue with the debate I should point out that the first three speakers had 40 minutes. We are now going to our fourth speaker, and it will be 20 minutes and 10 minutes for questions and comments.
Mr. Michel Bellehumeur (Berthier—Montcalm, BQ): Mr. Speaker, I am not sure I understood right. Do I have ten, or twenty, minutes for my speech?
The Acting Speaker (Ms. Thibeault): Twenty.
Michel Bellehumeur: Very good, thank you.
I am pleased to rise in the House today, particularly after the speech by the representative of the government, the hon. member for Broadview—Greenwood. I trust he was not generalizing, when he said that all the opposition did was criticize. I believe I am very well placed to point out that this was a half-truth.
I trust that he was not generalizing and was referring specifically to one, or all, Reform members. Since the beginning of this Parliament, looking back to when the government has presented bills, it has on a number of occasions had the complete co-operation of the Bloc Quebecois because not only were the rights and obligations of Canadians being advanced, but Quebeckers were also demanding to be properly represented and defended. That the Bloc has done. We have done it since June 2, and even before that, since the 35th Parliament.
In justice, I have personally given 100% co-operation to the new Minister of Justice and I have always offered constructive debate to move legislation forward, to advance the law.
I hope that the member was referring only to a member of the Reform Party or to the Reform Party as a whole and not to the Bloc.
That said, Bill C-10 is another example of the Bloc's leading the way in asking the Liberal government to act in this area, given its importance for a number of Quebeckers and Canadians. This is another area where Canadian and Quebec interests merge, and this bill is a striking example.
What is this bill about and what does it contain? It implements a series of tax conventions between Canada and other countries in order to avoid double taxation. Furthermore, Bill C-10 amends the 1984 tax convention between Canada and the United States, resolving the problems of Quebec and Canadian retirees receiving American pensions.
I am going to talk on behalf of the Bloc Quebecois and Quebeckers because I am in a good position to do so. A number of Quebecers worked in the U.S. and decided, on their retirement, to return to their homeland, the beautiful country of Quebec. They returned to Quebec and received American pensions. Because they had problems with taxation, these people were taxed in the United States and what little they had left from their pension was then taxed in Canada so they were doubly penalized and doubly taxed. Something had to be done.
My riding of Berthier—Montcalm is not near the American border, like other ridings along the Canadian border and the border between Quebec and the States. Despite that, there is a municipality in my riding called Rawdon where there are a number of anglophones who have worked in the States. For a while in the 35th Parliament, a number of my constituents in Berthier—Montcalm contacted me to draw my attention to this tax inequity.
Other members of the Bloc were also contacted. We thus became aware of the problem and rose on a number of occasions in this House with questions and worked in committee to oblige the government to act quickly. It did not act as quickly as we wanted, but it did act. A sin confessed is half forgiven. At least the government acted and introduced a bill. You know how the Liberals across the way are. With them, nothing is ever simple. You know how the many Liberals listening to my remarks today are. They had to cloud the issue.
Mr. Bob Kilger: We are all here.
Michel Bellehumeur: You are all here. Fine, they are all here listening carefully to what I am saying. They should listen more carefully, this way they would speak less nonsense than they have in the past little while.
That having been said, more seriously, the government confused the issue somewhat by putting together a bill containing a series of tax treaties between Canada and various countries which we cannot all treat equally because of their respective tax systems. Around the world, there are countries with tax systems very similar to that of Canada and countries with completely different tax systems.
We would have liked—this is admittedly a criticism I am making this morning, but a constructive and very positive one—Bill C-10 to deal exclusively with the American issue, a second bill to deal with other countries with a tax system similar to ours and a third one to deal with countries with a tax system completely different from ours.
It seems to me that this would have been less confusing and, particularly given the urgent, pressing need of many Quebeckers and Canadians and the fact that the United States are withholding money, I think that a tax convention, a bill dealing specifically with the U.S. would have helped expedite matters. These people who have been waiting for a cheque from the U.S. would have received it by now if we had worked diligently on preparing separate bills to expedite the process.
But the Liberals crammed everything into a single bill. For example, the purpose of parts 1 to 5 is to implement income tax conventions that have been signed with Sweden, Lithuania, Kazakhstan, Iceland and Denmark. These are countries with taxation systems that are, by and large, quite similar to Canada's.
The purpose of these conventions is to avoid double taxation and prevent fiscal evasion. They are based largely on the OECD model. It is not a case of reinventing the wheel. What is good is retained and used in the conventions with these countries.
There are also other countries with taxation systems less similar to ours, however, and a convention has also been produced to help in these cases. There is a tax convention signed with these countries. But many of them are considered to be countries where the rich hide their money, so-called tax havens. It is somewhat disappointing that they have all been lumped into one bill, Bill C-10.
Let us compare Canada's taxation system with the taxation systems of these countries. As I said earlier, a comparison of the maximum corporate and individual income tax rates reveals some differences and some similarities. For instance, the maximum corporate rate in Canada is 30.74% and the maximum individual rate is 52.94%.
In Sweden these percentages are similar. But in Lithuania, while the maximum corporate tax rate is 29% instead of 30.74%, not a major difference, the individual tax rate is 35% compared with Canada's 53%. You can immediately see the clear advantage for businessmen with a bit of money to pay their taxes in Lithuania rather than in Canada.
There are rather significant differences at various levels. One thing which is not really a concern, but which must be addressed is the fact that, over the years, Canada has signed many treaties with other countries. The figures I am quoting were given at a meeting of the Standing Senate Committee on Banking, Trade and Commerce, held on April 24, 1997. As of April 24, Canada had signed 57 tax treaties that were in effect between Canada and various countries, while 34 other ones had yet to be ratified.
As a member of the opposition, one wonders—again, this is not a negative criticism, on the contrary—whether the government allocated adequate resources to ensure a follow-up on all these conventions.
The tax treaties signed between countries are usually not for the benefit of ordinary citizens. Ordinary people do not have bank accounts in Switzerland or in Barbados, and they do not do business with Lithuania, Denmark, the Netherlands or the United States. Usually, the provisions of these treaties are used by multinationals, or by very wealthy people who have accounts here and there, such as in Switzerland or Barbados, and who travel frequently.
As an opposition party, we are the keepers of this government's sometimes deficient moral rectitude, and we have the right to wonder whether there are sufficient resources. With 57 treaties already signed and 34 other ones to be ratified—and more have probably been signed since April 1997—we wonder how many public servants are following up on all these conventions.
Mr. Speaker, I hope you are firmly seated in the Chair, because the committee learned that only one public servant was conducting this follow-up work. Thankfully, this person is working full time, which is something, given the cuts made by the government. We know there is an official monitoring this full time.
It is not being critical in a negative way to say that more than one official would have been better, considering what has gone on in the past and how people have been tricked in Canada and in Quebec. I think taxpayers, Quebeckers and Canadians, have been had in the past, including at roughly this time last year.
Of course, I am referring to the scandal of the family trusts. Everyone knows that it is rather frightening when officials, just before Christmas, can have a little meeting and decide to allow companies to send money outside Canada without paying any taxes. We are not talking here about $100, $1,000 or $100,000, we are talking about billions of dollars. I think that taxpayers, in these difficult times, could legitimately expect that there would be fair treatment for these companies but that they would be treated fairly too.
People who have means, who have two billion dollars in liquid assets and who want to transfer this money can afford to pay for very good legal advice, for good lawyers, but also for good tax experts. I am not saying that what they did was illegal, but it was certainly immoral, I want to state that very clearly, especially since everyone in Canada and in Quebec has to pay taxes, their fair share of taxes. I do not think it was proper for them to transfer this money without paying their fair share.
There are also other examples, when tax treaties are applied, when companies can afford good advisers, we see that certain people, certain companies can sidestep the law and avoid paying their fair share of taxes.
Briefly, I will give you a small example everyone knows about, Canada Steamship Lines. Everyone knows what that company is. Everyone knows that it is a Canadian company, but that its ships fly the flags of other countries, including Barbados and various countries. But why is that? It is to avoid paying their fair share of the taxes that they should be paying in Canada. This is not normal, especially considering who owns these ships. It is not normal that in Canada people should do such things.
Is the Bloc's criticism negative? No, this is positive criticism. We want as much as possible—
[Intervention]
Some hon. members: Hear, hear.
Michel Bellehumeur: I do not understand why the Liberals are not applauding me this morning, when what I am saying is a self-evident truth.
I think it is normal for the opposition parties, including the Bloc Quebecois, which are seeking the greatest equity for the people of Quebec and Canada, to try to get legislation that is as free of flaws as possible. We want to remedy those flaws. These two examples, I think, are striking. What is involved here is not to have huge quantities of international tax conventions. We just want to have quality tax conventions so that there can be proper follow-up and everyone can pay his or her fair share of tax.
Earlier, the government member, the hon. member for Broadview—Greenwood, was criticizing Reform members. He was accusing them of giving up on tax reform.
I understand why he did not say this about the Bloc Quebecois, because we have been talking about tax reform for a long time for both corporations and individuals.
If we look more specifically at this morning's topic, international tax conventions, I can refer you to two proposals made by us in the fall of 1996 focusing on corporate taxation.
This could have been included in international treaties as part of a mini-tax reform. It did not have to be a major reform, but they could at least have shown some degree of good faith in ensuring that it is not always the same ones who have to pay. I believe that a certain equity must be sought, and I can understand the taxpayers who are sitting in their living rooms and watching the government members over there. They are saying that the same ones always end up paying, and I understand that.
The government has thus missed a great opportunity to show its good faith with this bill. One of the proposals made by the Bloc Quebecois in the fall of 1996 is the deductibility of interest charges. When a Canadian company has a branch in a tax haven, not only does it first of all take advantage of very low tax rates on profits earned outside the country, but it can also deduct from its income earned in Canada the interest on loans used to invest in that offshore branch. We think the tax system is too generous in this case.
We would also have liked the government to amend the Income Tax Act to put a stop to this abuse. I think everyone has got the point, but so people understand better, I will give you a specific example. I have a company in Barbados; I borrow money in Canada to invest in Barbados to increase my profits in Barbados; I pay practically no taxes in Barbados, but, moreover, I deduct my interest costs in Canada. This is a bit crazy. I think the government could help people by putting a stop to these tax shelters.
The other proposal—and I will be brief, because time is passing quickly—concerns the deduction for intercorporate dividends. When a Canadian company has a subsidiary in a country Canada has a convention with, the dividends paid by the subsidiary to the parent company are not taxed in Canada. There are certain conditions, but they are easily met. This Canadian rule is much more generous than what is done in the States.
We asked the federal government to amend the Income Tax Act in order to tax foreign subsidiaries in Canada and to give a credit to them for tax already paid. That did not come about, but you know how determined the Bloc is. When we have an idea we do not let go of it, especially when it is a good idea like Quebec sovereignty and income tax issues. We will continue, we will keep at the government and perhaps soon, the government will concede as it did with Bill C-10 on the tax convention between Canada and the United States.
I repeat, and I conclude on this point, this was a real battle horse for the Bloc. We won. We were there for our constituents and we will be there again, every day, until Quebec becomes a country.
Ms. Susan Whelan (Essex, Lib.): Mr. Speaker, I believe the hon. member has just mentioned the importance of this bill and the time urgency of it as it affects Canadians receiving U.S. social security. This includes all Canadians, not just seniors but those who are disabled and spouses and children of those who worked in the United States.
I believe the hon. member has already partially corrected the record where the member for Edmonton—Strathcona earlier said that it was rushed through the industry committee.
As chair of the industry committee I want to confirm that I spoke to every member on the steering committee, including the member who represents the Reform Party. It was agreed by all parties that we would have no witnesses because of the urgency of this bill and get it back to the House as quickly as possible for debate. It was not that witnesses were disallowed.
For two years this bill has been debated. For two years this issue has been out there. If the Reform Party wanted to do its research, it would see that this has been going on for two years. As the member for the Bloc said, it has been going on too long. It is now before the House and we must deal with this as quickly as possible.
I hope that all members will recognize the importance of getting the refunds back to people as quickly as possible. We must recognize the importance of this bill to put Canadians on parity with their neighbours who live next to each other whether they are seniors or not seniors, that those who receive income will pay their taxes based on what they should pay. We recognize that they pay tax on U.S. social security by the fact that they are only going to include 85% and not 100% of their income whereas their Canadian neighbours who worked in Canada and receive only Canadian benefits will pay tax on 100% of their income.
Michel Bellehumeur: Mr. Speaker, the member is right about not hearing witnesses in order to speed up passage of the bill, given the Bloc Quebecois' repeated demands, given that we understood that we would not be getting separate bills, as I was saying we would have preferred, but so as not to further delay implementation, given that the government had not acted as quickly as we would have liked.
The federal machine can only move so quickly, however. We therefore did agree with the government not to hear witnesses. These were issues the Bloc Quebecois and the Liberal government looked at very closely. We therefore knew where we were headed. There were precedents: Canada had signed several international treaties; that was also on the agenda. There were also treaties with the OECD.
What it all boils down to is that we have this bill. It is not what we would have liked, but I think that at this stage, in the interest of speed, all parties, government and opposition alike, should cooperate in order to ensure the speediest possible passage of this bill, the purpose of which is to have everyone paying their fair share of taxes.
This does not mean, however, that there is no need for vigilance. It does not prevent the government from taking a very close look at its tax system to ensure that corporations taking advantage of tax havens are not encouraged but, on the contrary, watched very closely. We are therefore going to cooperate in ensuring that this bill is passed as quickly as possible.
The Acting Speaker (Mr. McClelland): Questions and comments. Hon. members, we have just a couple of minutes before we go to statements by members. If we have enough of the members in place, let us get started with statements and we will come back to the hon. member for Churchill on debate because he would have to be interrupted after about two minutes.
We will now proceed to Statements by Members.

Statements By Members
Canadian War MuseumMr. David Pratt (Nepean—Carleton, Lib.): Mr. Speaker, as the Canadian War Museum moves forward with plans for a long awaited expansion, I am very pleased that an advisory committee has been established.
The war museum holds a special place in the hearts of many with its mandate to stand as a memorial to those Canadians who defended peace, freedom and democracy.
It is essential that Canadians of all ages as well as future generations be informed and reminded of Canada's proud military heritage. Those concerned with the future of the museum, such as veterans groups should become actively involved in reviewing and commenting on future policy proposals.
It is intended that the Canadian War Museum advisory committee would work together with the war museum, the friends of the war museum and many other organizations that care deeply about the future of this institution.
Not everyone can make the pilgrimage to Vimy Ridge or Dieppe, but by working together we can ensure that the war museum explores new ways and continues to be a focal point for national remembrance.
Gun ControlMr. Philip Mayfield (Cariboo—Chilcotin, Ref.): Mr. Speaker, two things happened this week to indicate that the wheels are falling off the Liberals' gun control scheme.
In a brief presented to the justice committee, the Canadian Police Association said the Liberal government misled them into believing that police could get into the firearms computer system when making emergency calls. After hearing this criticism the Liberals now say that the police on call will have computer access to the system.
We also learned this week that the justice department's mail-in registration system will be so unreliable and unsafe that it will actually endanger policemen into providing inaccurate information. For example, justice officials claim that any firearms serial number incorrectly recorded on a mail-in application and then put on a registration certificate will still make the certificate valid. This is ridiculous. This means police will be unable to count on the accuracy of vital information entered into the system.
Why do the Liberals not face it? Their gun registration system is falling apart and must be scrapped immediately. It is becoming obvious that this sloppy gun registration system gives police no security but instead greater risk.
Bloc QuebecoisMr. Richard Marceau (Charlesbourg, BQ): Mr. Speaker, the parliamentary wing of the Bloc Quebecois recently published a booklet entitled “Quebec—on the road to nationhood”.
This booklet is designed to be a credible and intelligent response to the world-wide disinformation campaign led by the federal government and its henchmen around the world.
It sets out in factual, non partisan terms the real political situation of Quebec and Canada, thereby giving its full meaning to the unaltered commitment of many Quebeckers to taking their destiny into their own hands.
On behalf of Quebec's sovereignists, I wish to congratulate my colleagues from the Bloc Quebecois who sit on the Standing Committee on Foreign Affairs and International Trade on a job well done. They have advanced Quebec's project to build a country of its own by the year 2000.
ApecMs. Sophia Leung (Vancouver Kingsway, Lib.): Mr. Speaker, I congratulate the Prime Minister, the Minister of Foreign Affairs, the Minister for International Trade and the Secretary of State for the Asia Pacific on their important work during the APEC summit in Vancouver.
Their leadership has brought together the heads of state and senior officials of 18 countries to share their common concerns and their financial goals.
Some have accused the government of dismissing human rights issues. This is simply not true. Canada remains committed to human rights. This commitment was demonstrated in the government's support for the people's summit.
We make our voice heard through dialogue and co-operation, not through confrontation and accusation.
Joe BeelenMr. Bernard Patry (Pierrefonds—Dollard, Lib.): Mr. Speaker, I would like to pay tribute to Joe Beelen, a resident of my riding of Pierrefonds—Dollard returning from a voluntary assignment to Thailand for the Canadian Executive Service Organization, CESO.
The purpose of this assignment was to provide assistance to a pharmaceutical products laboratory. Joe Beelen used his skills and experience to develop an exhaustive index of all standing operating procedures as well as to provide technical information and assistance in preparing the products.
Later, he developed a personnel training program and designed a system for setting production standards to meet government requirements. This first class volunteer is one of the many Canadians who go on assignments outside the country for CESO.
We can be proud of the work accomplished by these volunteers who represent Canada so well abroad.
Thank you, Mr. Beelen, and congratulations on your involvement in this important project.
JusticeMr. Peter Goldring (Edmonton East, Ref.): Mr. Speaker, Edmonton was shocked this week by yet another failure of our justice system. A man with a long history of abuse, including a recent arrest for assault with a weapon and death threats against his wife, was jailed and then released on bail. He then proceeded to do exactly what he was arrested for threatening to do. He killed his wife.
A victim of abuse in life, a victim of justice failure in death, Jennifer's calls for help went unanswered. Two tragic deaths and one orphaned child is the legacy of the failure of our justice system. The law must ensure jail until trial for such obvious threats to society.
A two year old girl now cries out alone.
TaxationSusan Whelan: Mr. Speaker, during our November constituency week I held a very successful pre-budget consultation meeting in my riding of Essex. Interestingly my constituents did not find that a tax cut was desired or needed.
I say “interestingly” because it was reported in today's Globe and Mail that a C. D. Howe Institute report, authored by economist William Robson of the institute and William Searth of McMaster University, recommends that the government hold off on any tax cuts in favour of using budgetary surpluses to aggressively pay down the national debt.
Although my constituents acknowledged our national debt as a problem, and some felt it was a priority, they also have basic concerns for our social programs, pension plans, health care and education. Our 50:50 election promise is what they want.
I urge the finance minister to make careful consideration of the advice being offered through the pre-budget consultation process. I congratulate those Canadians who took the time and effort to participate in the process.
Canadian FederalismMs. Jocelyne Girard-Bujold (Jonquière, BQ): Mr. Speaker, we are supposedly living in an brand new Canada that bears no relation with the centralizing and domineering Canada of old. As evidence of that, we are often told that the issues relating to forestry, tourism, mining and social housing have been settled.
However, in the last 60 days, the Liberal government announced that it will develop a plan to ensure Canadians get appropriate education. It also announced programs that will deal with young people, health, rural communities, school adjustment, not to mention the social union, and centralizing bills such as the legislation on drinking water.
In spite of the rhetoric, the Liberal government's attitude remains the same. It is more centralizing and domineering than ever. When the federal government takes a step forward, provincial governments take a step backward. The only way for Quebeckers to move forward is to achieve sovereignty and they will do so.
Child & Youth Friendly OttawaMr. Mac Harb (Ottawa Centre, Lib.): Mr. Speaker, Child &amp; Youth Friendly Ottawa is an organization dedicated to promoting children and youth issues. By developing partnerships among young people, business groups and political leaders, local youth are able to experience a sense of citizenship and responsibility.
Founded by an outstanding community leader, Max Keeping, Child &amp; Youth Friendly Ottawa is run in partnership with young people. Its successful work includes inspecting and assisting local businesses in the area to become child and youth friendly. It also promotes student arts, advises regional government on civic issues affecting youth, and has established a youth volunteer corps.
Children in every part of our country are Canada's promise for the future. With the millennium just around the corner, Child &amp; Youth Friendly Ottawa is calling on all members of Parliament to help organize their constituencies so that Canada will become the first child and youth friendly country in the world.
I support its call and congratulate Max Keeping and everyone at Child &amp; Youth Friendly Ottawa on a job well done. Keep up the excellent work.
Correctional Service CanadaMr. Rob Anders (Calgary West, Ref.): Mr. Speaker, let me read a little shopping list: over 6,000 bags of Humpty Dumpty cheese popcorn, 12,600 bags of Hostess Cheezies, and 57,540 bags of potato chips.
Some would think this is for the Reform snack pack caucus meeting but it is not. Correctional Service Canada has ordered 89,493 bags of snacks for Canadian criminals from coast to coast to coast. That is a convict snack bill of $45,000 that we are sending to the Canadian taxpayers. Never mind stopping patronage pork; we have to stop prison pork rinds.
It is time for the government to get the message. Prisons are not convenience stores and taxpayers do not want to pick up the tab for convicts' snacks. No more chips at the convict snack shack while taxpayers take the dip.
Institut De PharmacologieMr. Nick Discepola (Vaudreuil—Soulanges, Lib.): Mr. Speaker, I take this opportunity to mention another initiative of our government that will promote the economic development of a strategic sector of the Canadian economy.
On November 25, the Secretary of State responsible for the federal office of regional development in Quebec inaugurated the new offices of the Institut de pharmacologie, in Sherbrooke. This high-tech centre, which specializes in medical chemistry and pharmacology, is the only one of its kind in Canada.
Through its contribution of close to $4 million, the federal government has recognized the expertise of the Eastern Townships in the area of medical research. It has also shown the confidence it has in partnerships with the private sector and with educational institutions to develop a promising sector for Canada.
Seal HuntMrs. Sue Barnes (London West, Lib.): Mr. Speaker, in recent weeks my riding and others across Canada have been contacted by very concerned Canadians about the seal hunt. There are a couple of comments I would like to put on record because I know there has been a lot of misinformation about the seal hunt.
There has been a televised advertising campaign put on by Canadians Against the Commercial Seal Hunt. It has launched an advertising campaign against Canadian sealers loaded with inaccurate and misleading allegations.
CATCSH alleges that Canadians are subsidizing an industry that kills baby seals. That is absolutely false.
CATCSH alleges that the seal harvest provides few economic benefits. That is also false.
CATCSH alleges that Canadians paid $3.4 million in subsidies and administrative costs in 1996 for a seal harvest that is uneconomic. That is absolutely false.
Contrary to the impression conveyed by this organization and other anti-sealing zealots, the commercial harvesting of seals in Canada is more tightly regulated now than at any other time in our history.
Reform Party Of CanadaMs. Bev Desjarlais (Churchill, NDP): Mr. Speaker, it has been quite a week in parliament. Reform members supported record bank profits made from the service charges paid by Canadians.
Reform told Canadians that despite mounting evidence Canada need not join the rest of the world to fight global warming.
Reform showed no respect for working men and women or for the collective bargaining process.
Perhaps most disappointing, Reform spoiled its motion on the future of Canada and the process of reaching a national consensus through the Calgary declaration, a process we in the New Democratic Party support, especially the idea of Canadians finding common ground on unity, by moving an amendment that could be interpreted to stand in the way of aboriginal treaty rights and self-government.
The New Democratic Party supports the process which began in Calgary. Shame on the official opposition.
The Late John SopinkaMr. Peter MacKay (Pictou—Antigonish—Guysborough, PC): Mr. Speaker, I rise this morning to pay tribute to one of Canada's greatest legal minds, the late Supreme Court Justice John Sopinka.
Much has been said this week to describe the life and accomplishments of Justice Sopinka. From modest beginnings he attained stature as a professional football player, respected criminal litigator and a member of the Supreme Court of Canada.
Whether catching a football or writing a thoughtful dissenting judgment, he did so with a class and unique style all his own. In his 64 years John Sopinka demonstrated numerous personal qualities that one could not help but admire and wish to emulate.
He was passionate about his vision for the law, often able to forge consensus over difficult issues at the Supreme Court of Canada level. Justice Sopinka had the ability to build coalition without watering down principles. He was unafraid to stand up to the changing winds of public opinion in making a decision if he felt that it was consistent with legal and social principles.
As an athlete, attorney, judge and family man, Justice Sopinka set new standards for greatness. If the magnitude of one's loss is the measure of life's gifts, this loss seems immeasurable.
His family and Canada mourn his departure for a higher court. Our sincere condolences to Mrs. Sopinka and the Sopinka family.
Christmas Basket CampaignMs. Raymonde Folco (Laval West, Lib.): Mr. Speaker, as in previous years, the Laval Volunteer Centre is organizing again this year the 13th edition of its Christmas Basket Campaign, and has set as its goal to collect 500 tonnes of food.
The purpose of this operation is to provide assistance to families who are going through serious economic difficulties because, of illness, bankruptcy or job loss, for example.
By enlisting the co-operation of 600 businesses and with the commitment of 1,400 volunteers and the contributions of the population of Laval, the centre expects to distribute 1,300 food baskets to about 4,000 persons on Sunday, December 21.
There are also in these families children and young people who, unfortunately, cannot enjoy some of the simple pleasures they so justly deserve.
Therefore, the Laval Volunteer Centre also organizes a large campaign to collect new toys so that these children too can enjoy Christmas.
In conclusion, I congratulate the organizers of this important charitable event and I encourage Canadians everywhere in Canada to also become involved in their own community.
Tfo Television NetworkMr. Mauril Bélanger (Ottawa—Vanier, Lib.): Mr. Speaker, I do not want to be negative, but I would like to point out that there seems to be a contradiction between what our Bloc colleagues are preaching and what their PQ counterparts in Quebec are doing.
Presently, TVO, the English language educational television network in Ontario, is broadcast to certain regions in Quebec based on a monthly wholesale pass-through rate. But in the case of TFO, the French channel of that network, Télé Québec and the Government of Quebec refuse to allow its broadcasting based on such a rate.
Instead of feeling sorry for French Canadians and throwing up their hands in despair, as they unfortunately have a tendency to do sometimes, my colleagues in the Bloc should pick up the phone, describe to their PQ counterparts how great TFO is, and remind them of their own policy on French Canadians outside Quebec.

Oral Question Period
The EnvironmentMr. Chuck Strahl (Fraser Valley, Ref.): Mr. Speaker, this government has had months to prepare for the Kyoto conference. The environment minister has over 4,000 bureaucrats at her disposal and a budget of $.5 billion. The conference starts on Monday and she still does not even know what position she will be arguing for or against.
For months this minister has said that she is taking the matter very seriously. Canadians do not believe her any more. If she really did take this seriously she would have released Canada's position long ago.
What possible excuse does this minister have for not having a position ready to take to Kyoto?
Hon. Herb Gray (Deputy Prime Minister, Lib.): Mr. Speaker, as the hon. member said, Canada's position will be stated publicly on Monday, but this will still be timely in terms of discussions at the official level and it will be very timely in terms of when the decisions are made by ministers. This will be at the end of the conference and the ministerial portion does not even begin until December 8.
Canada's position will be known well before that time. It will be a clear position. It will be a good position, unlike the Reform which has stated they do not know what they are talking about at all on this subject.
Chuck Strahl: Mr. Speaker, this gets more and more curious.
When the Liberal government cancelled its announcement planned for today it needed a pretty big excuse. It had already used up all the little excuses along the way. What excuse did it tell us all?
It said that a small detail had to be ironed out, an extremely minor point. What could that detail be? Could it be perhaps how much would this Kyoto deal cost Canadians or was it how much would it cost and who would pay or perhaps how would this deal be forced down the provinces' throats?
Just which minor point was it that caused such a cabinet split and cancelled the announcement for today? What went wrong on the way to Kyoto?
Herb Gray: Mr. Speaker, what has gone wrong with the Reform Party? When they were asked their position they said our position does not count. So what details are holding up the Reform Party in stating their position?
They are the Official Opposition. They are there, they claim, to be some day, and it will never happen, an alternative government. They have just proven why they will never be a government and they will not even be a party after the next election.
Chuck Strahl: Mr. Speaker, obviously there is a hot air problem within cabinet at least.
We have asked this government nearly 100 times to detail its position for Canadians. I think that is reasonable. One hundred times it has said that Canadians are going to have to wait just a little longer. We are sick of waiting.
The government promised again to release its position. Again, today it failed to do so but it has not cancelled its trip to Kyoto. Of course not, the government is going to go. It does not have a position. Nobody knows what it is going to cost, but it is going to go off and sign a deal, whatever the deal might be.
My question is for the Minister of the Environment, if she would care to answer this. How can she leave for Kyoto this weekend when the government still does not have a made in Canada position? Will the Minister of the Environment—
The Acting Speaker (Mr. McClelland): The hon. Deputy Prime Minister.
Herb Gray: My friend is totally wrong. The minister is leaving at the end of next week as scheduled because the ministerial portion of the meeting does not begin until December 8. Our position will be known publicly well before that time and yet there will still be no Reform position. They do not count. They do not care. Why do they not take responsibility to come to the table with a consensus to help Canada have a good deal? Where is the Reform Party? Absolutely nowhere.
Mr. Eric Lowther (Calgary Centre, Ref.): Mr. Speaker, we just have to keep going. This Liberal saga on Kyoto just continues. The Liberals have painted themselves into a corner. For months they have been saying they would sign a deal in Kyoto, before they had decided what Canada's position would be.
They agreed to a deal before they had seen it and worse still, before they had even come up with their own policy. Now they have fallen victim to those rash promises. They are boarding planes and they are still writing their position.
How can this minister board the plane for Kyoto? How can she sign a deal when she does not even know what the national position is?
Hon. Christine Stewart (Minister of the Environment, Lib.): Mr. Speaker, guess what, this government does have a position. We have been articulating it for months. The Reform Party refuses to listen that this is a real and serious issue, that this government is committed to legally binding targets in Kyoto that are realistic, achievable, that will be applied equitably in this country.
On Monday we will let Canadians know what the targets and time lines are in order to go to Kyoto.
Eric C. Lowther: Mr. Speaker, delay after delay.
My question now is on behalf of the people that have been shut out of this insane process. Two weeks ago the provinces agreed in principle to emission deadlines by the year 2010, but last week the federal government said it had unilaterally changed that to 2007.
Why has the government reneged on this deal with the provinces? How can it possibly come up with a nationally agreed to plan in the next 48 hours? This is too incredible.
Will the Minister of the Environment really get on that plane without getting provincial agreement first?
Christine Stewart: Mr. Speaker, the government has worked very closely with all Canadians on this issue: provinces, territories, business, industry, environmental groups, municipalities and Canadian citizens.
Good environmentalists have a 3R background: reduce, recycle, reuse. This Reform Party has refused, refused, refused: refused the science, refused to know and acknowledge that Canadians are concerned about this issue and refused to acknowledge that this is a real issue.
Kyoto SummitMrs. Suzanne Tremblay (Rimouski—Mitis, BQ): Mr. Speaker, my question is for the Minister of the Environment.
The press conference scheduled for this morning prior to the Kyoto summit was cancelled.
My question is a very simple one. Would the minister tell this House why the government is hung up on the Kyoto summit, and is unable to make its position public?
Christine Stewart: Mr. Speaker, the government was committed to making our targets and time lines known in time for the Kyoto conference. On Monday our targets and time lines will be made public. At the moment we continue to negotiate in good faith, not only with all of our partners in Canada but internationally as well.
Suzanne Tremblay: Mr. Speaker, I hope the minister is aware of the time difference, and I trust that she will go over there armed with the photocopier number, because if things go on as they are, she is going to need it to communicate the government position.
She tells us that she is negotiating in good faith, but what credibility will she have on arrival in Kyoto if, right up until then, she has been unable to make her government's position public? How can her world partners take her seriously?
Christine Stewart: Mr. Speaker, in the international community the Canadian government is very well respected for our efforts at negotiating important consensus. It is more important that we come out of Kyoto with a consensual agreement world-wide on how we as an international community are going to reduce greenhouse gases.
Canada continues to negotiate with other countries, some of whom have put their targets on the table. We are trying to find a consensual opinion.
Mr. Bernard Bigras (Rosemont, BQ): Mr. Speaker, my question is for the Minister of the Environment.
For weeks now, the minister has been telling us she has all the flexibility required to allow the government to take a bold approach at the Kyoto summit.
Since the government obviously still has no position, is it prepared to endorse the Quebec position, which suggests that it should go beyond the objective set by Japan?
Christine Stewart: Mr. Speaker, this government does have a position. We have had a position. I have explained what our negotiating position is. Our targets and time lines will be made public on Monday.
Bernard Bigras: Mr. Speaker, how does the minister explain her government's inability to play the lead role in this area that it has with anti-personnel mines?
Christine Stewart: Mr. Speaker, on December 8 and 10 ministers from around the world will be going to Kyoto and they will be making decisions in that period of time on behalf of the global community on how all citizens of this world can confront this very real and serious issue.
Canada will be there. We will play our full role.
ApecMr. Bill Blaikie (Winnipeg—Transcona, NDP): Mr. Speaker, my question is for the Deputy Prime Minister. It has to do with the fact that many Canadians are embarrassed, and indeed many Liberals are embarrassed, by the rather cryptic remarks of the Prime Minister with respect to the pepper spraying of demonstrators.
I wonder whether the Deputy Prime Minister would care to defend the Prime Minister's remarks. I wonder if he would also at the same time condemn the fact that peaceful demonstrators were asked to sign pledges that they would not demonstrate against APEC or countries at APEC on pain of being arrested. What is going on—
The Acting Speaker (Mr. McClelland): The hon. Deputy Prime Minister.
Herb Gray: Mr. Speaker, Canada as host of the APEC conference has an obligation under international law to defend the integrity of the precinct where the meeting is taking place. With respect to the use of pepper spray, the RCMP has announced that is under review. I understand the concerns of Canadians about whether appropriate procedures were followed.
Bill Blaikie: Mr. Speaker, the Deputy Prime Minister has refused to condemn the requiring of peaceful demonstrators to sign pledges not to do things unpleasing to the government. The theory of the Liberals is that trading with other countries helps them to adopt our values. The government is not worried that what is actually happening is that we are adopting their values. We are getting more like them instead of them getting more like us.
Herb Gray: Mr. Speaker, the hon. member's question shows that his allegation could not possibly be correct. The RCMP is reviewing the appropriateness of the matter of signing these undertakings. I am sure more will have to be said. I understand the concerns this practice has created. I believe it should be fully looked into and further reports should be made as a result
The EconomyHon. Jean J. Charest (Sherbrooke, PC): Mr. Speaker, I hope the report will include some information about instructions given by the Prime Minister's Office.
My question is about Canadian retailers and small business who will soon start one of the most important periods of the year, the month of December. What is the government trying to accomplish with policies of high payroll taxes, with an increase of 70% in CPP premiums, with an increase in interest rates this week and further increases in interest rates, and a postal strike to add to business people's pain? What message are they sending to Main Street business people in Canada who are trying to earn a living?
Jim Peterson: Mr. Speaker, I am pleased that our government was able to announce a 20¢ decrease in the EI tax. This is a major breakthrough. It is a major concession because it has cost us $1.4 billion. How can he say that this is negligible?
Jean Charest: Mr. Speaker, the minister must be out to lunch. Today he will probably find out that a major union in this country is pursuing this government, that it is bringing the government to court over the abuse of the EI system in using it for the purpose of reducing the deficit.
Since this government seems to be encouraging further increases in interest rates, is it really saying to Canadians that even if the unemployment rate were at 8% that it is okay to have well over a million Canadians out of work. It is fine with this Liberal government. As long as it meets its deficit numbers it does not actually care whether there are more poor children, whether there are people out of work, or whether we have a lower standard of living.
Jim Peterson: Mr. Speaker, our record has been to create over one million jobs since we have taken office. We realize this is not enough and we want to see it go even further. In terms of interest rates, Canada today as a result of the sound economic policies we have pursued, has the lowest five-year mortgage rate in history. We have the lowest 30-year rate on our debt. These are sound accomplishments on behalf of all Canadians.
The EnvironmentRob Anders: Mr. Speaker, we only have three sleeps left before the Kyoto conference starts, and still no plan from this government. This conference starts Monday. Will the environment minister write her plan in the plane on the back of an air sickness bag? Why will she not come out from under her rock and tell us her plan now?
Christine Stewart: Mr. Speaker, the Reform needs to start listening, listening to what this government's position is, which has been articulated for weeks in this House of Commons. Reform needs to start listening to the people of this country who in the vast majority say that this is an important issue. They want the government to do something about it and they are willing to take their part. When will the Reform Party get serious about this issue?
Rob Anders: Mr. Speaker, I cannot listen to a Liberal press conference that gets cancelled because of internal caucus divisions. The environment minister says that she only has a minor glitch in her plan. Never mind the minor glitches, I am still concerned about the major glitches of the plan like how much it will cost or how she will pay for it.
Christine Stewart: Mr. Speaker, perhaps on Monday the Reform Party will be around to hear what our targets and time lines are.
In the meantime, over the weekend they might talk to their constituents and come to understand how important this issue is to them and the fact that they want this government to do something about this serious issue.
Employment Insurance FundMr. Stéphan Tremblay (Lac-Saint-Jean, BQ): Mr. Speaker, on Friday, the Minister of Finance said that the surplus in the employment insurance fund has a direct impact on the health and stability of public finances.
Will the Minister of Human Resources Development finally admit, like his colleague from Finance, that the surplus is a form of deficit insurance for the government and of poverty insurance for the unemployed?
Hon. Pierre S. Pettigrew (Minister of Human Resources Development, Lib.): Mr. Speaker, I certainly would not want to contradict my colleague, the Minister of Finance. Of course, I support his position.
What I can tell you is that, as minister—
Jean Charest: Yes, yes, you had no choice. We understand.
Pierre Pettigrew: No, I mentioned it because the member for Lac-Saint-Jean had opened the door.
What I can tell you—
Jean Charest: We understand.
Pierre Pettigrew: I hear the Conservative leader, who certainly does not want us to point out that he was a member of a government where surpluses—
Jean Charest: It is other people's fault.
Pierre Pettigrew: —were unheard of. Our government has surpluses, while the Conservatives had deficits. We manage the employment insurance fund in a responsible way.
Stéphan Tremblay: Mr. Speaker, I remind the minister that the fund is there to protect workers, should they become unemployed.
When will the minister finally admit that it is not his money and that he is using the surplus to reduce the government's deficit?
Pierre Pettigrew: Mr. Speaker, our government has lowered employment insurance premiums four times in the past four years.
We implemented the largest employment insurance reform to modernize the system and adapt it to today's labour market. We must maintain the necessary flexibility to follow up on this reform and to react to any demand with regard to the most important reform of the past 25 years. That is responsible fiscal management.
Canada PostMr. Jim Gouk (West Kootenay—Okanagan, Ref.): Mr. Speaker, there is a tired old cliché that the cheque is in the mail. Instead of corporations, let us take a look at the effect this postal strike is having on ordinary Canadians.
Let us take the case of Judy Gillespie from Union Bay, B.C. who went to the unemployment office to get her cheque and was told the cheque was in the mail. However it was not delivered. It is lost somewhere in post office limbo. Amid tears she tells a tale of two young children with nothing, I repeat nothing to eat.
What does the minister who has denied the urgency of this matter have to say to this mother and her young children? Judy Gillespie and thousands of others like her are listening to his answer right now.
Hon. Lawrence MacAulay (Minister of Labour, Lib.): Mr. Speaker, there is never a good time for a strike and there is never a good time for a lockout. There is also never a good time to talk about legislation until it is introduced.
I have asked my mediator to meet with me this afternoon and I will evaluate the situation.
Jim Gouk: Mr. Speaker, the government has set up distribution centres for government cheques but in sprawling rural areas that does not work. Many communities are a long way from these centres and people who cannot afford food, never mind gas, have no way to get there. This is an overwhelming hardship on Canadians most in need.
Why can the minister not understand the damage he is doing to thousands of Canadians who count on this government and are being let down? When is he going to legislate an end to this devastating and harmful strike?
Pierre Pettigrew: Mr. Speaker, it is important for Canadians to realize that this government is quite aware of the hardship that this strike is creating. The government and my department, Human Resources Development Canada, have set up 500 sites across the country for people to pick up their cheques. We made an agreement with the postal people to deliver certain government cheques and most of them have been.
Accommodations can also be made for hardship cases such as for those for whom this system has failed. This is the best system that we could provide during this difficult time.
France-Quebec AgreementMr. Pierre Brien (Témiscamingue, BQ): Mr. Speaker, my question is for the Minister of Foreign Affairs.
Yesterday, officials from Quebec and Canada had a meeting to try to find a compromise solution regarding the judicial co-operation agreement between France and Quebec. The federal government's stubbornness still stands in the way of any progress being accomplished on this important issue.
Why is the Minister of Foreign Affairs maintaining an inflexible position when Quebec is showing obvious openness and suggesting possible compromises? Such a position prevents a mutually acceptable compromise.
Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.): Mr. Speaker, a convention between Canada and France is required under French law for an agreement between any Canadian province and France to have force of law.
Unfortunately, the Government of Quebec will not recognize this fact and reality and, as a result, Quebeckers have to do without judicial assistance in relation to alimony and support. I would like to have an agreement with Quebec, but it does not want to—
The Acting Speaker (Mr. McClelland): The hon. member for Témiscamingue.
Pierre Brien: Mr. Speaker, perhaps the minister should look in the mirror before pointing a finger.
On the one hand, the federal government passed a meaningless resolution recognizing Quebec's specificity in terms of civil law but, on the other hand, it wants Quebec's civil law to be subject to Canadian law.
Does the minister recognize that he is speaking from both sides of his mouth and that what he really wants to do is to “Canadianize” Quebec's civil law?
Lloyd Axworthy: Mr. Speaker, Quebec's position is that Canadian conventions between France and Canada do not apply to Quebec. We can go nowhere from there. It is difficult to negotiate with the Government of Quebec when it will not recognize conventions between Canada and France.
Canada PostMr. Ken Epp (Elk Island, Ref.): Mr. Speaker, this postal strike is making it impossible for charities to send out their solicitations and for donors to respond at this most important time of the year.
For example, the New Brunswick Lung Association in Fredericton is stuck with 300,000 Christmas seal envelopes which now need to be delivered by hand. With the mail not moving at Christmas, its receipts from donors for this most worthy cause will just get hammered.
What does the minister have to say to these charities and the people who rely on them?
Lawrence MacAulay: Mr. Speaker, as I indicated previously, there is no good time for a strike or a lockout. Also I have indicated quite clearly that I have asked my mediator to meet with me. I will meet with him after question period and evaluate the situation.
Ken Epp: Mr. Speaker, this evaluation should have been done months ago. Christmas is now only weeks away and needy families will have a tough Christmas because of this mail strike.
The Ottawa Food Bank for example is down to one-third of its usual funding. Thousands of needy children will have a bleak Christmas because of this do nothing government.
Surely this government can do better than merely watch from the sidelines while this government authorized monopoly takes the joy of Christmas away from thousands who need it.
Does the minister have any plans at all on solving this thing in the long term?
Lawrence MacAulay: Mr. Speaker, quite simply we call it the system. If hon. colleagues would just listen, what I indicated to the hon. member previously is that I am going to meet with my mediator following question period, evaluate the situation. Then if there are any decisions to be made, they will be made.
AlgeriaMrs. Monique Guay (Laurentides, BQ): Mr. Speaker, my question is for the Minister of Foreign Affairs.
More than 80,000 people have died since 1991 as a result of the civil war in Algeria. This tragedy has people throughout Quebec speaking out in support of the Algerian people and expressing their indignation at the international community's failure to act.
What specifically are Canadian diplomats doing to mobilize the UN Commission on Human Rights with respect to Algeria?
Lloyd Axworthy: Mr. Speaker, I share the hon. member's concern about the serious situation in Algeria. We have held several discussions with Algeria's Minister of Foreign Affairs. During my last visit to the Middle East, I spoke with other ministers from that region.
I am happy to learn that European parliamentarians will be going to Algeria next week. Canada is certainly prepared to undertake—
The Acting Speaker (Mr. McClelland): The hon. member for Sault Ste. Marie.
Foreign AffairsMr. Carmen Provenzano (Sault Ste. Marie, Lib.): Mr. Speaker, my question is for the Minister of Foreign Affairs.
The United States has not yet declared whether Canadians will receive an exemption to a new American entry law that threatens to cause major delays at our borders which is an inconvenience to Canadians.
Could the minister please inform the House of the status of negotiations aimed at ensuring a Canadian exemption from this law to allow continued easy access to the United States?
Lloyd Axworthy: Mr. Speaker, last weekend in Vancouver the Prime Minister in a meeting with the President had the occasion to raise the issue, as I did with the secretary of state.
The United States administration is very sympathetic to the need. What is really happening is that a number of amendments are now before the U.S. Congress which would obviate the necessity for the kind of rules which exist.
We are working very closely with those congressmen and senators. We are quite satisfied that the situation will be resolved within the next several months.
Dangerous OffendersMr. Jack Ramsay (Crowfoot, Ref.): Mr. Speaker, it is absolutely shocking and sickening that Yves Richard, a pedophile who forced 12 little girls to perform sadistic sexual acts including a two year old, has been granted a weekend unescorted pass into Ottawa.
The sentencing judge said that this was the worst case of sexual abuse he has ever seen, yet the bleeding heart parole board has granted this pedophile an unescorted weekend pass into this city.
I ask the solicitor general—
The Acting Speaker (Mr. McClelland): The Parliamentary Secretary to the Solicitor General of Canada.
Nick Discepola: Mr. Speaker, in effect, Mr. Richard is on a day pass.
I want to state to the House that when these passes are awarded, the risk that could be posed to the public is always assessed. In this case I can assure the House that the inmate in question is always under the supervision of a local parole officer.
Jack Ramsay: Mr. Speaker, this unescorted weekend pass was granted after serving less than two years of an eight year sentence.
What has the solicitor general to say to the victims and their families who have been horrified by this news? What does he have to say to them?
Nick Discepola: Mr. Speaker, it is very easy to take an isolated exception or one case out of context.
In essence, if the member reviews all of the statistics, he will understand that when it comes to escorted temporary passes and other temporary passes the success rate is very high, in excess of 98%.
One must realize that the majority of inmates eventually get out into the public after serving their sentences. It is important that the parole process is allowed to work so that we can reintegrate these people who eventually get out into society.
EnvironmentMr. Rick Laliberte (Churchill River, NDP): Mr. Speaker, climate change is an international issue and we are also dealing with an international deadline. Tomorrow the countries of the world will be starting to negotiate the Kyoto draft agreement.
Today the front page news is that cabinet is divided, while the rest of the world is ready to set targets from zero to 15%. Beyond that embarrassment, this government has not stated which department is the designated lead for Canada's role.
Can the Deputy Prime Minister assure Canadians he understands that climate change is an environmental issue and that the environment minister will be the lead negotiator in Kyoto and in the post-Kyoto implementation process?
Herb Gray: Mr. Speaker, I can assure the hon. member that Canada takes this issue very seriously and that the environment minister will be the chair of the Canadian delegation.
Rick Laliberte: Mr. Speaker, one thing we have realized is that the government and the official opposition have something in common. Neither of them have a Kyoto position.
English is my second language, but now I understand the meaning of ignorance.
The Reform leader's primary concern has been his collection plate and he cannot even acknowledge the impending disaster of our existence on this planet.
Is the prime minister recognizing the Reform Party's interests, or will he ensure that Canada will take a leadership role and regain the lost respect we have had from the world as an environmental leader and set reductions as a goal for this nation?
Herb Gray: Mr. Speaker, I can assure my hon. friend that we will take a leadership role, quite the contrary to the non-approach of the Reform Party.
My hon. friend would help if he would encourage the Saskatchewan government, the province he is from, to be fully supportive and co-operative with the federal government. Will he make that commitment now?
Mr. John Herron (Fundy—Royal, PC): Mr. Speaker, after last night's cabinet debacle and today's cancelled press conference, the world community now knows how disorganized this government is going into next week's negotiations.
I want to help. If the Minister of the Environment is unsure of what should be our position beyond targets and timelines, will she include the following economic instruments: joint implementation, tradable permits of emissions, recognition of Canada's carbon sink and a phased in plan for involvement of emerging nations? Or is the Kyoto position lost in the mail?
Christine Stewart: Mr. Speaker, I thank my colleague for the question. He raises some very important elements of our negotiations in Kyoto. In fact, those are part of our negotiation position.
With regard to the targets and timelines, as I have said before, we will let them be known on Monday.
Human RightsJean Charest: Mr. Speaker, I would like to offer the government an opportunity to clarify for the House its position on human rights and trade.
The Minister of Foreign Affairs will remember that a few years ago the Prime Minister stated during a visit to his riding of Shawinigan, when asked what our position was, that it depended on the size of the country we are dealing with. In other words, name me your country and I will name you my principles.
I would like to know what is the position of this government with regard to trade and human rights.
Lloyd Axworthy: Mr. Speaker, I think our position has been made very clear, that they are both very clear objectives of the Government of Canada to pursue in its international relations. Trade itself does not bring about an improvement in human rights, but it does bring access to many countries so that we can engage in that dialogue.
A good example is today when we were able to announce that both ourselves and China are co-sponsoring a major symposium on human rights that will be held in Canada early in the new year. That is a sign of how engagement can work.
Federal Public ServantsMr. Eugène Bellemare (Carleton—Gloucester, Lib.): Mr. Speaker, my question is for the President of Treasury Board.
In Canada, we are free to practice the religion of our choice. Is the minister planning to set aside areas in government buildings where Muslim public servants can fulfil their religious obligations on their own time?
Hon. Marcel Massé (President of the Treasury Board and Minister responsible for Infrastructure, Lib.): Mr. Speaker, freedom to practice one's religion means, for our employees as well, the right to be able to observe one's religious practices in the prescribed places and at the prescribed times.
Government administration requires that we all make an effort to facilitate the practice of all religions and make it possible for individuals to observe the required religious practices.
Debt ReductionRahim Jaffer: Mr. Speaker, on Tuesday, the Conseil du Patronat told the Minister of Finance that any budget surplus should be devoted to reducing the debt and the tax burden.
The Minister of Finance heard that same message from ordinary citizens and from business groups.
Does the Minister of Finance have an excuse for not complying with this request?
Jim Peterson: Mr. Speaker, I am happy to announce that we tried to achieve balanced fiscal programs.
We are well aware that the tax burden is considerable. We know that our debt has to be reduced, and we also have to maintain the social programs that are very important to all Canadians.
Asbestos IndustryMrs. Madeleine Dalphond-Guiral (Laval Centre, BQ): Mr. Speaker, my question is to the Minister of International Trade.
The federal government claims to be making every effort to save the asbestos industry. Yet recently, we heard the press secretary to the Minister for International Trade say that there was no action plan.
Are we to understand that there is no strategy to save the asbestos industry and that the minister does not intend to raise this issue with the World Trade Organization?
Hon. Sergio Marchi (Minister for International Trade, Lib.): Mr. Speaker, I think when the hon. member quotes a person she should do justice by quoting the entire paragraph.
Clearly the Government of Canada has been on the lead in bringing together not only the Government of Quebec but the industry in terms of asbestos. Yesterday my deputy minister with government officials from Quebec and with the entire industry met on the strategic plan to come forward. There was agreement around the entire table.
The hon. member might want to say why her premier from Quebec wanted during his visit to Quebec not for us proceed on the—
The Acting Speaker (Mr. McClelland): The hon. member for Winnipeg Centre.
Government BuildingsMr. Pat Martin (Winnipeg Centre, NDP): Mr. Speaker, this government owns 50,000 buildings, many of which are outdated, expensive to operate and waste energy. Yet today, unbelievably, the government postponed an energy retrofit program that would create thousands of jobs, save a fortune in operating costs and reduce harmful greenhouse gas emissions.
On the eve of Kyoto can the Minister of the Environment please explain why in the world she would postpone an idea as good as job creation through energy conservation.
Hon. Ralph E. Goodale (Minister of Natural Resources and Minister responsible for the Canadian Wheat Board, Lib.): Mr. Speaker, the idea is by no means postponed.
The federal buildings initiative is an ongoing effort of the government to encourage greater energy conservation in the construction and the operation of federal government buildings.
Over the last number of years we made considerable progress in achieving energy savings from a cost point of view and also improvements in the greenhouse gas performance. That program is ongoing and it will continue to be ongoing with announcements one after the other.
ImmigrationMr. Norman Doyle (St. John's East, PC): Mr. Speaker, the Geneva convention relating to the status of refugees in Canada, to which Canada is a signatory, states that contracting states shall in particular make every effort to reduce as far as possible all the charges and costs associated with the assimilation and naturalisation of refugees.
My question is for the Minister of Citizenship and Immigration. How does the minister square our international obligations under the Geneva convention with a head tax of $970 per adult refugee?
Ms. Maria Minna (Parliamentary Secretary to Minister of Citizenship and Immigration, Lib.): Mr. Speaker, I would like to say to the hon. member that the loan program for immigrants and refugees is a mechanism to assist those in need of financial assistance to cover the costs of certain fees associated with entering Canada.
Second, 95% of beneficiaries are refugees in need of assistance. This program has been a major success story. In fact, I am pleased to inform the House that over 92% of the loans have been paid back.
This not only demonstrates this government's commitment to helping immigrants and refugees enter Canada, it also speaks well to the integrity of newcomers to our country.
Thunder BayMr. Stan Dromisky (Thunder Bay—Atikokan, Lib.): Mr. Speaker, my question is addressed to the minister responsible for the Ministry of Transport.
In the middle of the city of Thunder Bay a railway tanker car containing volatile butane sprung a leak, thus possibly endangering the lives of hundreds of nearby residents.
What has been done and what is now being done to protect the citizens of my riding in this situation?
Hon. Don Boudria (Leader of the Government in the House of Commons, Lib.): Mr. Speaker, Transport Canada's top priority is public safety. Propane gas response specialists were on the scene early to assist the local fire department—
[Intervention]
An hon. member: How dare he answer this.
Don Boudria: I am sorry that the leader of the Conservative Party is not concerned about public safety.
As a preventive measure some 100 households were evacuated. As of today that number has been reduced to safety, and Transport Canada will be seizing the tanker car in question for investigation.
The EnvironmentMr. Dale Johnston (Wetaskiwin, Ref.): Mr. Speaker, when we ask the government what commitments it is going to make on behalf of Canadians in Kyoto we get things like manana, manana, tomorrow. But tomorrow is here.
We would like to know what are the standards to which this minister is going to oblige Canadians. Will she tell us today? Manana is here.
Christine Stewart: Mr. Speaker, as I said before, I suggest the Reform Party go home and study this issue, listen to its constituents and come back on Monday. We will let those members know on Monday what our targets and time lines are.
This is a real and serious issue. The hon. member's constituents are concerned about it. The constituents of each and every one of the members want them to take a responsible position on this issue.
Dairy IndustryMs. Hélène Alarie (Louis-Hébert, BQ): Mr. Speaker, my question is to the Minister of International Trade.
Last week, the Standing Committee on Agriculture reviewed the issue of the importation of oil, butter and sugar mixtures.
Will the government finally accept the dairy industry's request that oil, butter and sugar mixtures be reclassified under the proper tariff line, as has already been successfully argued in a recent NAFTA panel?
Sergio Marchi: Mr. Speaker, this is a very important question. We have spoken with industry representatives in Quebec and in Canada. I have had extensive discussions with my colleague, the Minister of Agriculture, and other ministers.
We are willing to review this matter and we are working very hard on this. I hope to be able to provide more information in the near future.
Employment Insurance FundMs. Angela Vautour (Beauséjour—Petitcodiac, NDP): Mr. Speaker, my question is to the Minister of Human Resources Development.
At a time when 57% of the unemployed are not eligible for unemployment insurance, the Liberal government is reducing the deficit on the backs of the unemployed. Because the Liberals do not care what happens to the unemployed in this country, the CSN had to submit a petition to the Federal Court to seek an end to the government's raiding of the employment insurance fund.
Have we really reached the point where it is necessary to go to court so that the unemployed can receive what they are entitled to, that is more generous benefits? Or is the minister willing to promise that in the future, the surplus will benefit only the unemployed?
Pierre Pettigrew: Mr. Speaker, as you are aware, we have implemented a major employment insurance reform. We feel that the reserve is absolutely necessary. I believe it is important that there be such a reserve.
Before we came to office, when the Conservative government was in power, the employment insurance fund went from a surplus to a deficit of $6 billion. A reserve is necessary because it reduces the need to increase premiums in a full-blown recession.
We must also see to it that we can provide benefits when they are most needed—
The Acting Speaker (Mr. McClelland): The member for West Nova.
Canada PostMr. Mark Muise (West Nova, PC): Mr. Speaker, depending on what time of day it is the minister responsible for Canada Post cannot decide whether or not he is going to privatize the corporation. The government has also made it clear that it has no plans to end this postal strike. In fact, the government has no long term business strategy for the future of the crown corporation.
The Canadian Federation of Independent Business reports that small and medium size businesses are losing $200 million a day while this government drags its feet about ending the strike.
Does the minister have any idea what he is going to do about Canada Post and if so, when?
Hon. Alfonso Gagliano (Minister of Public Works and Government Services, Lib.): Mr. Speaker, the government since last April has given a mandate to Canada Post to have universal service to all Canadians, to commercialize operations so that it can make profits and investments in the future and also to have price stamps below inflation.
That is what we are doing and we hope the negotiations will be completed as soon as possible so it can go on with its mandate.
ImmigrationRaymonde Folco: Mr. Speaker, my question is for the Parliamentary Secretary to the Minister of Citizenship and Immigration.
The government is being criticized because potential immigrants are allegedly discouraged from coming to Canada because they cannot afford the landing fees.
Can the parliamentary secretary explain to this House what steps she is taking to help those people who cannot afford the landing fees?
Maria Minna: Mr. Speaker, the government has a loans program which is very effective. In fact, it helps at least 95% of refugees and people come to this country. We also have a very high payback, 92%. It is a program that works very well for refugees and immigrants coming into this country. It is very effective.
The Acting Speaker (Mr. McClelland): Hon. members, this would bring us to the end of Question Period.

Routine Proceedings
Board Of Internal EconomyThe Acting Speaker (Mr. McClelland): I have the honour to inform the House that the following members have been appointed as members of the Board of Internal Economy for the purposes and under the provisions of an act to amend the Parliament of Canada Act, Chapter 32, Statutes of Canada 1997, namely, the hon. member for Winnipeg—Transcona and the hon. member for Pictou—Antigonish—Guysborough.
Government Response To PetitionsMr. Peter Adams (Parliamentary Secretary to Leader of the Government in the House of Commons, Lib.): Mr. Speaker, pursuant to Standing Order 36(8), I have the pleasure to table, in both official languages, the government's response to 12 petitions.
PetitionsMs. Aileen Carroll (Barrie—Simcoe—Bradford, Lib.): Mr. Speaker, I have a petition signed by 448 constituents of my riding of Barrie—Simcoe—Bradford concerning women appearing topless in public. These constituents request Parliament to enact legislation prohibiting women from appearing topless in public.
Questions On The Order PaperPeter Adams: Mr. Speaker, the following question will be answered today: No. 7. .[Text]
Mr. Ted White (North Vancouver):
What has the government determined to be the average annual unemployment rates over the previous 5 years for persons 18-25 and 26-34 with regard to: (a) ethnic identification and (b) gender?
Hon. John Manley (Minister of Industry, Lib.): According to Statistics Canada:
Unemployment rates by gender persons aged 18-25
Both Sexes—Men—Women 1992—16.6—19.4—13.6 1993—16.5—19.1—13.6 1994—15.3—17.0—13.4 1995—14.0—15.4—12.6 1996—14.3—15.4—13.0
Source: Labour Force Survey, Statistics Canada
Unemployment rates by gender persons aged 26-34
Both Sexes—Men—Women 1992—11.7—12.9—10.3 1993—11.6—12.2—10.8 1994—10.7—11.4— 9.8 1995— 9.7—10.0— 9.3 1996— 9.7—10.1— 9.3
Source: Labour Force Survey, Statistics Canada
The labour force survey, source of Canada's official unemployment estimates, does not include data on ethnic origin.
Peter Adams: Mr. Speaker, I suggest that the remaining questions be allowed to stand.
The Acting Speaker (Mr. McClelland): Is it agreed?
[Intervention]
Some hon. members: Agreed.
[Stage Direction]
The House resumed consideration of the motion that Bill C-10, an act to implement a convention between Canada and Sweden, a convention between Canada and the Republic of Lithuania, a convention between Canada and the Republic of Kazakhstan, a convention between Canada and the Republic of Iceland and a convention between Canada and the Kingdom of Denmark for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and to amend the Canada-Netherlands Income Tax Convention Act, 1986, and the Canada-United States Income Tax Convention Act, 1984, be read the third time and passed.
Bev Desjarlais: Mr. Speaker, I want to speak at third reading on C-10 that implements the treaty from tax conventions with a number of countries such as Sweden, Lithuania, Denmark and Kazakhstan. It amends tax treaties or conventions with the United States and the Netherlands.
Primarily a housekeeping bill, but a very lengthy and detailed one, it prevents double taxation in many cases and it works to prevent fiscal evasion by citizens. For the most part, we support the direction of the bill.
However, we have major concern with part VII of the bill. It is the amendment with the United States and it concerns over 80,000 people who receive social security benefits from the U.S. but who reside in Canada.
What is happening to them is unfair because it is done retroactively. These problems resulted from Bill S-9 in the last Parliament. Bill C-9 was layered with different taxation items.
The main thrust of our efforts in attacking the bill focused on the tax loopholes for wealthy individuals and corporations. However, many seniors were taken off guard when they experienced a drastic and unanticipated reduction in their social security benefits.
Before 1996, as a Canadian citizen living in Canada and receiving U.S. social security benefits, they had to report all these benefits on their Canadian tax return. Fifty per cent of these benefits were then deducted. Therefore one ended up paying Canadian taxes on the other 50%. The benefits however were not subject to any U.S. income tax.
Since Bill S-9 was ratified, U.S. social security benefits were no longer subject to Canadian tax. One still had to report these benefits as income on their Canadian tax returns, but could deduct the entire amount under “other deductions”.
This convoluted calculation is done because the government still needs to include benefits in total income for purposes of calculating the GST credit, child tax benefit and the provincial tax credits.
What was bad news for pensioners was that their U.S. benefits were now subject to U.S. tax. The tax was taken right off the top at 25.6% of the total benefit. This tax could not be recovered because it is treated as non-resident withholding tax.
There was a lot of legitimate protest after the passage of the bill because it unfairly attacked the incomes of some 80,000 Canadians who had done their retirement planning and had based their livelihood on a set of rules in place when they were working in the United States.
The protest continued for a fair amount of time. Last April the government made the announcement that there would be change. Indeed, that change has been made in the bill which is before the House today.
Now, instead of the United States taking off the withholding tax of 25.5%, the government and the country where the citizen resides will be taxing the citizen on the social security payment, the Canadian government in this case.
On the flip side of the coin, the American government will tax American citizens receiving the Canada pension plan or the Quebec pension plan.
What this government did not do was go back to the pre-1995 taxation level which was 50% of the social security payments. Instead, the government will be taxing 85% of the social security benefits, 85% instead of the previous 50%.
One could make the argument that in many cases this is better than it was a year or so ago but is still not nearly as good as it was prior to 1995. This is very unfair. This was done without properly consulting the people who were affected.
An organization called the Canadian Association of Social Security Seeking Equality is involved in this issue. It lobbied on this issue, and it was an important one, particularly in the Windsor area, for the election of June 2.
These citizens were not properly consulted. They certainly did not approve the change. For these people, the change is not good. They did their planning based on the rules and then the rules change.
Why is it that this government and its twin in the official opposition only push for tax reform that will benefit the very wealthy. For this reason, for the reason that the bill does not go far enough, we will be opposing Bill C-10.
John Herron: Mr. Speaker, I rise today to speak to Bill C-10, an act to implement tax conventions between Canada and the states of Sweden, Denmark, Iceland, Kazakhstan, Lithuania as well as amending income tax conventions between Canada and the countries of the Netherlands and the United States of America.
My party supports the agreements and the intent of this legislation would ratify in terms of income tax conventions between Lithuania, Sweden, Kazakhstan, Iceland and Denmark to avoid double taxation and the prevention of fiscal evasion.
However, the Progressive Conservative Party raised concerns earlier in the House surrounding the retroactive charges this legislation holds for the 1984 Canada-United States Tax Convention Act that was amended in 1995 by this Liberal government.
The facts in the matter are the following. Part VII of this bill is intended to uphold the promise made by the finance minister on April 9, 1997, a promise made during a host of pledges laid out by his government just days before the federal election was called.
Initially, the reaction by the affected groups to the announcement was extremely positive. However, now that the legislation has come forward, there are still some serious problems that have yet to be dealt with.
First, let us take a look at how the Liberals came to this point. Right off the top, I want to be on the record commending the Liberals for admitting they made a mistake. However, the Liberals, after changing the tax protocol in 1995 and setting the legislation effective January 1996, have now conceded they were wrong and are retroactively setting January 1, 1996 as the date effective for the current legislation, giving credence to the saying “if you do not succeed at first, try, try again”. Although they are trying, unfortunately they have unsatisfactorily succeeded here.
The proposed increase from 50% to 85% inclusion of social security benefits is ambiguous because the government has stated, more often than not, that under American tax protocol Americans are taxed at 85%. However, that 85% is a maximum and in fact the majority of the people who fall under this provision are still taxed at a 50% inclusion rate in the United States. In fact, on page 4 of the U.S. Social Security Publication 915, it states:
The taxable part of your benefits usually cannot be more than 50%. However, up to 85% of your benefits may be taxable, only if the following situation applies to you: the total amount of one-half your benefits and all other income is more than $34,000.
Those are American dollars not Canadian. I would never suggest that we follow the American lead, but just for information it would be interesting to know what the income tax bracket threshold would be for people required to pay over 50%. When asked in committee, the officials could not give an equivocal answer.
Furthermore, this increase does not take into account that in the United States social security premiums are taxed when earned and not taxed deferred as is the CPP in Canada.
Second, the Minister of Finance has stated publicly to those affected that the social security aspect of the third protocol was revenue neutral. If this is the case, why is the new change increasing the inclusion amount by 70%?
Third, I have noticed that the retroactive change would not cause Canadians to pay back taxes to Revenue Canada and those owed money would be paid dually. For this I congratulate the government. However, it is unfortunate that a consistent policy cannot be followed. The reason I mention this is that recently caucus colleagues of mine have had calls from constituents involving a very similar situation.
The situation involved contract buyout packages whereby a mistake by the government—notice in both instances a mistake by the government was the cause of the problem—miscalculating Treasury Board's buyout of the formula caused hardships to thousands of Canadians. However, unlike C-10, in this particular incident the people were required to pay back the money to the government.
The incident I am referring to is the forces reduction plan carried out by the Department of National Defence. Why were people adversely affected by this defence buyout when the Department of Finance is capable of writing off debt? These constituents were given just 30 days to make arrangements for payment on debts ranging anywhere from $100 up to $1,500 before interest started to accumulate.
The former defence minister applied to the Treasury Board to have the debt remitted last January and that request was denied in March. One month later, the Minister of Finance announces the contents of C-10 and is able to find money to retroactively pay these retirees. I realize the two instances are separate and need to be handled on their own merit. However in my opinion the same standards should have been used for military service personnel.
My party believes the avenue the finance minister has used to rectify the third protocol mistake he initiated two years ago is flawed. These retired individuals do not deserve a 70% tax grab by the finance minister who, while wavering on tax cuts, seems to have no problem with tax hikes for retired people, as evidenced by Bill C-2 and Bill C-10.
Some constituents have even commented on the fact that 15% is non-taxable. These constituents have asked for the bill to included a minimum of 15%. I understand it is improper to make any change to new legislation, but that is something the government should revisit in the future.
Rob Anders: Madam Speaker, Bill C-10 makes me angry for several reasons. First, the Liberals tried to convince people this was merely a technical change. They tried to hide the fact that it was a tax grab. Second, the Liberals tried to force the bill through committee so that nobody would be able to recognize it as the tax grab it was before it was okayed in parliament.
I will now talk about Mr. Farrel Mok. He receives a disability pension from the United States. He is legally blind. He has recently undergone a liver transplant and his medication costs are very high. Prior to 1996 Mr. Mok's pension was treated as tax exempt, but that is no longer the case. Under the third protocol there was a 25.5% tax at source. He was totally unprepared for the tax grab the government quickly imposed without warning in the new fourth protocol.
Mr. Mok says the disability pension is his major source of income and he is incapable of working. The imposition of the tax on his revenue has caused “tremendous hardship” as described by Mr. Mok. The fourth protocol will cause even greater hardship since he now must include 85% of his pension in his taxable personal income.
Mr. Mok says that although his situation is bad he knows that others are much worse and that it will be even harder for persons who receive disability pensions and are residents in health care facilities. These people are in danger of being forced to leave the facilities because they will no longer be able to afford the cost of the care.
It basically goes to some of the tenets of what the Liberal Party stands for in this regard. They are arrogant and out of touch. They are elitist because they think they know better. When it all comes to naught and we scratch below the surface, they are tax and spend Liberals.
Under the second protocol Canada taxed about 50% of what was coming in, in U.S. social security benefits. Then under the third protocol it was split between the two governments. They both had a crack at roughly 25% of the money that was coming in. Now with the fourth protocol we have not only gone back to the process whereby Canada has full jurisdiction on this taxation so it can once tax 50% but the Liberals have upped it. The Liberal government has upped it to 85%.
The taxman had the whole arm of seniors. Then that was changed by the third protocol and the taxman shared the arm. The United States got half of it and the Canadian tax man got the other half. Under the fourth protocol the Canadian taxman has the first part of the arm he had to begin with and the part the United States used to have before. Since it has been tacked up to 85% he is taking an extra share of what the seniors have left. That demonstrates exactly what is going on with Bill C-10, the tax protocol.
I have heard people across the way say that the bill has been out there for two years. There is nobody to blame for the bill being out there for two years but the Liberals. Liberal tax increases have been out there since Confederation. I wish people would finally realize what is going on.
I have some questions about legislation as it comes before the House. These are litmus tests which I believe can be applied to most legislation that comes before the House. The first question is who wants it. The 45,000 to 50,000 seniors who receive their social security benefits from the United States do not want an 85% inclusion rate.
Let us look at some of the other stakeholders. Is it the 50,000 people across the boarder in the United States who receive OAS and some of our Canada pension plan benefits? No, they do not want it either. If it affects people who collect social security benefits in the United States, there is a good chance that it will have impact on Canadians in the United States who are collecting some of their benefits. That is a total of 100,000 people who do not want it.
The only other stakeholder in the group is the Canadian government, the taxman, the finance minister and the revenue minister. They are the only people who want it.
Then we have to ask who will pay for it. The American government will not pay for it. The Canadian government will not pay for it. The people who pay taxes are the seniors who planned on receiving the benefit and not having it taxed at an 85% inclusion rate. That is who will pay for it. It will be on the backs of seniors.
Once again the Liberals have brought in 37 tax increases. The Canada pension plan increase is the 38th. The government has a record of tax increases since it took office in 1993. Once again the taxpayer will pay for it.
This time it is particularly insidious because it is not hitting all taxpayers. The government is going after a small group of taxpayers, 50,000 senior citizens. They are the ones who will pay the bill. Those people who have worked and helped build the country are being taxed at an 85% rate of inclusion when it used to be 50%. The Liberals have the audacity to claim it was somehow a technical change and not a net tax grab. When taxes go from 50% to 85% it is a huge tax grab, tax hike. Shame on the Liberals for calling it a mere technical change.
Who will slip through the cracks? The Liberal said they would give a tiggly-wiggly rebate to some people. What about the people who moved? What about the people who die? What about those people who were not on the government records for the rebate? Those are the ones who will slip through the cracks.
The Liberals think that by putting through the legislation and calling it a technical tax bill somehow they will be able to pull the wool over the eyes of Canadians and slip this through. My alternative is not to impose an 85% inclusion tax rate. That is the Reform solution. The government does not need more money. It spends it unwisely.
[Intervention]
An hon. member: Oh, oh.
Rob Anders: If the member across the way would like to engage in a debate about how poorly his government spends tax money, I would do it. I raise it now because it is relevant to the debate.
Who slips through the cracks? The 50,000 seniors are the ones who will get nailed by this measure. We should be concerned about them and not the revenue minister or the technicalities.
Does it solve the problem it was intended to address? What was the problem? There was a complication. Both the United States and Canada had joint jurisdiction in taxing social security benefits. Under the second protocol Canada had a crack at 50%. Under the third protocol the United States and Canada both had relatively equal cracks at roughly 25% each. That was complex and proved to be too problematic so people were calling for a change. They asked for it to be taken back to the time when Canada had full jurisdiction.
Then the Liberals agreed to do that, but rather than moving back to the 50% they had in the second protocol, they brought in a tax hike and hit everybody with 85%. Does it solve the problem of the complexity? Yes, it makes sure Canada has sole jurisdiction. Only the Canadian taxman, the finance minister and the revenue minister on the Liberal benches will get the money. It no longer goes to the United States.
However, they solve the problem by bringing in a tax hike, a built-in 70% top up in terms of what was coming in before as revenue. It is the 37th tax increase the government has implemented since it took office in 1993.
Surely, if there are problems with a bill, the Liberals should be running with their tails between their legs, realizing this is a tax grab that they will be nailed for.
The list gets worse. Now it comes to how much it will cost. The seniors affected say it will impact them to the tune of about $2,000 each. It could be much more for many of them. If we take that round number and multiply it by 50,000, we are talking about millions of dollars which the government is milking from a small select group of seniors. It applies to anybody who makes more than $7,000 a year. This impacts a wide spectrum of seniors.
Of those 50,000 people collecting U.S. social security benefits, those who make more than $7,000 per year will be impacted by the Liberal tax grab. Anyone who makes beyond the basic tax exemption will be nailed by members across the way.
They have the audacity to claim that this is a technical tax hike. It is not. It is impacting on every person of the 50,000 who qualify for U.S. social security benefits above the basic tax exemption of $7,000. It is tough for me to imagine how one would be able to live on $7,000, but some seniors obviously do it. Government members say that anybody who makes more than $7,000 will be taxed at an 85% rate of inclusion on their U.S. social security benefits. Shame on them.
They did not have the courage to raise this issue before the election. No, they dillied and they dallied. They brought it in as one of their first measures after they formed the government.
Why did they bring it in right after they secured their mandate in an election? Why did they raise CPP premiums? Why did they do these things? It is because they know these things are unpopular. It is a classic example of government reserving tax hike decisions until after the election.
When they were campaigning in Windsor where it will impact a lot of seniors I did not hear the Liberals talking about how they would suck tax money out of seniors who live in that neck of the woods. They did not have the courage to do it. They knew it would impact on votes, the bottom line for Liberals. They left the decision until after the election. Just like the CPP tax hike, they are bringing it in right on the heels of the election. They are hoping seniors will forget by the time it comes around to the next election.
I speak on behalf of seniors in Windsor, for those people who are being taxed beyond the second and third protocols. I hope these people remember and take it out on the Liberals in Windsor who did not stand up for them or talk about it previous to the election. They brought it in on the heels of their mandate. I hope they lose their seats for what they have done to seniors in Windsor and across the country who will be taxed at an 85% rate of inclusion, 70% higher than they were taxed under the second protocol. Shame on the Liberals.
Susan Whelan: Madam Speaker, I want to correct the record. The hon. member obviously does not have his facts correct. The 85% inclusion policy was announced in April, before the election.
As the member from Essex county, just outside Windsor, it was in my campaign brochure for everyone to see. They knew exactly what they were voting on. I wanted to ensure my constituents knew we had gone to bat for them and that we had incurred a change they wanted.
It does not only affect seniors. It also affects disabled Canadians. On average they receive $6,000. Overall those earning low incomes will pay less tax under the new proposal than they did under the 25.5%. Some will pay no tax. The majority will be better off.
I think Reform Party members should get their facts straight.
Rob Anders: Madam Speaker, once again I am going to apply that litmus test question to that Liberal MP across the way with the quavering voice because she knows exactly what she did to those seniors.
The question is who wants it. I cannot personally believe that she had seniors in her riding begging for an 85% inclusion rate. I can believe that seniors in her riding were asking for a simplification. There is no way they were asking for that rate to be jumped from 50% to 85%. Shame on her.
That is a 70% jump in the rate and I bet my bottom dollar that not a single senior went to her office or spoke in a town hall or read her literature and said “by Jove, I want to see a jump in the rate I pay on this”. Shame on her.
Susan Whelan: Madam Speaker, with all due respect to the hon. member, I think he should be aware that I have discussed this with thousands of people in my riding. I have knocked on doors and talked about the issue. And no, no one would like to see it go from 50% to 85%. However, we want to treat all Canadians on parity.
All Canadians, especially those seniors he talked about who use our health care system who live in Canada, should pay their fair share of taxes. An 85% inclusion rate still recognizes that 15% of it is not taxable. They live in Canada and they use our health care system. So their neighbours are going to pay on 100% of their income and they are going to pay on 85% because we are recognizing that they paid tax dollars on that.
I believe that the majority of my constituents know and believe they want to be treated fairly and equitably with their neighbours. In case the hon. member is not aware, I have direct family members who are affected by this. We have discussed this. They have told me they want to pay their fair share of taxes. They do not want special treatment. As well, some of my family members are going to be under the amount that will have to pay taxes and they do not deserve to pay taxes, disabled Canadians, and they will be getting their money back, and the sooner the better.
The longer the Reform Party holds this up, and that is exactly what it is doing by delaying and delaying, these people will not get their cheques. I say to the hon. members across the way please support this bill and get it back on track.
Rob Anders: Madam Speaker, I have just heard the admission I need. She made it right here in the House. She said no senior stood up and asked her for an 85% inclusion rate. Yet we have the government bringing this bill forward.
That says to me, it screams it out loud, I asked the question in the House but she just admitted it here, the only people who want it are her, the revenue minister and the finance minister.
While she has consulted with seniors, and nobody asked for an 85% inclusion rate, she stands here with pride in the House today and bellyaches about how she wants to see an 85% inclusion rate, how it is fair, but that nobody asked for it, nobody demanded it, nobody wanted it.
The only people who want are this Liberal MP and some of the people she is defending in terms of the finance minister and the revenue minister. In terms of equity, where is the equity when those people in the United States were putting in their tax money? They were being taxed at the point of source. They were being taxed on putting money into this fund and now they get taxed again on taking it out, but this time it is by the Canadian government. They got taxed by the United States going into it and they are getting taxed at an 85% inclusion rate by this government, by the Liberals, on the way out.
Once again I just want to drive it home for the seniors in Windsor. They said it in the House today. Nobody asked for an 85% inclusion rate but this government is doing it to them anyhow.
Susan Whelan: Madam Speaker, I believe the hon. member has confused the record once again. What the seniors in Windsor and Essex County said, and very clearly at the meetings I was at, is that they did not want a 25.5% withholding tax. They wanted that system changed. We told them up front that they cannot go back to the 50%. We have to do something new. We sat down with them and worked out the numbers.
Originally the majority of the people from the case group thought the 85% inclusion rate was fair because it benefited low income and middle income seniors. The people who are going to be affected or are going to have perhaps higher taxes than under the 25.5% are those who are in the upper income the hon. member speaks on behalf of.
Anyone in the middle or lower income under an 85% inclusion rate will pay little or no tax and will pay a lot less tax than under the 25.5% withholding tax. We cannot go back three steps. We have to move forward.
We were dealing with a 25.5% withholding tax. We have to go into the future and that is what we are doing.
I can guarantee we are fighting on behalf of low income and middle income seniors and all seniors so they are on parity with their Canadian neighbours, where as the Reform Party stands today and the numbers will show that it is only fighting for the rich.
Rob Anders: Madam Speaker, if that member across the way has the audacity to say that people who make $7,000 a year above the basic tax exemption or better are the idle rich, shame on her.
Every person, every senior of those 50,000 who makes more than the basic personal exemption of roughly $7,000 pays that 85% inclusion rate; 85% if you make more than $7,000. Shame on her.
For somebody making $8,000 in a U.S. social security benefit, for her to claim those people are the idle rich when they make more than $7,000 on that and are going to pay 85% rate of inclusion, when it was 50% before, shame on her. How dare she stand before the House and call somebody who makes $8,000 the idle rich.
The Acting Speaker (Ms. Thibeault): Is the House ready for the question?
[Intervention]
Some hon. members: Question.
The Acting Speaker (Ms. Thibeault): Is it the pleasure of the House to adopt the motion?
[Intervention]
Some hon. members: Agreed.
[Intervention]
Some hon. members: No.
The Acting Speaker (Ms. Thibeault): All those in favour will please say yea.
[Intervention]
Some hon. members: Yea.
The Acting Speaker (Ms. Thibeault): All those opposed will please say nay.
[Intervention]
Some hon. members: Nay.
The Acting Speaker (Ms. Thibeault): In my opinion the yeas have it.
And more than five members having risen:
The Acting Speaker (Ms. Thibeault): Pursuant to Standing Order 45, the recorded division stands deferred until Monday, December 1, 1997 at the ordinary hour of daily adjournment.
[Stage Direction]
The House proceeded to the consideration of Bill C-5, an act respecting co-operatives, as reported (with amendment) from the committee.
The Acting Speaker (Ms. Thibeault): There are two motions in amendment standing on the Notice Paper for the report stage of Bill C-5.
Motion No. 1 will be debated and voted on separately.
Motion No. 2 will be debated and voted on separately.
I will now propose Motion No. 1 to the House.
Jim Peterson: moved:
Motion No. 1
That Bill C-5, in Clause 85, be amended by replacing lines 28 to 30 on page 49 with the following:
“(b) subject to subsection (8), appoint a director to fill the vacancy.”
Eugène Bellemare: Madam Speaker, I am very pleased to rise today to speak at report stage of Bill C-5, an act respecting cooperatives. I am also pleased to report to the House on two supplementary amendments which came after the adjournment of deliberations on Bill C-5 by the Standing Committee on Industry.
The need for two more technical amendments became apparent just after the committee adjourned its hearings. We would like to put forward these amendments now.
Bob Kilger: Madam Speaker, I regret having to interrupt my colleague. There is one more grouping. I wonder if we could seek unanimous consent that the second motion be deemed read and seconded, while the ministers who were just mentioned are still present in the House.
The Acting Speaker (Ms. Thibeault): Is there unanimous consent?
[Intervention]
Some hon. members: Agreed.
Eugène Bellemare: Madam Speaker, I too am pleased to speak of the two additional amendments in the House today, which were made following the adjournment of the deliberations of the Standing Committee on Industry on Bill C-5.
The need for two more technical amendments became apparent just after the committee adjourned its hearings. We would like to put forward these amendments now.
The first relates to section 85 of the bill. The amendment is required to correct the conflict regarding how long directors may be appointed to fill an existing vacancy on a board.
Section 85(1)(b) states that an appointed director may fill a vacancy until the next annual meeting. However, section 85(9) states that the director may serve for the unexpired term of their predecessor.
The amendment resolves the conflict by removing the time period set out in section 85(1)(b). This ensures that the bill is consistent with similar provisions of other federal corporate law statutes.
Permit me to remind the House of the way Bill C-5 was drafted. The bill is the result of an initiative by users, that is, the co-operative sector. It comes from people who know best what it takes to maintain the vitality and dynamism of the co-operative movement.
The co-operatives sector in Canada sought a consensus among its members on their needs in order to survive and prosper in a competitive market. This bill is the outcome of hard work and devotion by the members of the co-operative movement in an effort to modernize legislation.
The bill was well received by all parties at second reading. In addition, it received the general approval of the committee, not only of the witnesses appearing before it but of the members sitting on it.
The bill has three main objectives. The first consists in revitalizing the rules for managing co-operatives. Accordingly, the bill gives co-operatives access to tools other businesses already have. Furthermore, it simplifies the process of incorporation and reduces government intervention to a minimum.
The second objective is to give co-operatives access to new forms of financing. For example, it authorizes them to issue participating stock on the stock exchanges enabling them to borrow on the financial market if they wish to do so.
The third objective is to reinforce the distinct character of co-operatives, by ensuring that only those organizations operating according to co-operative principles may be constituted as co-operatives. The bill also reinforces the control exercised by members and empowers them to decide on the structure of the co-operative.
The new legislation will enable Canadian co-operatives to operate effectively. It will help to stimulate investment, economic growth and job creation in numerous communities throughout Canada.
The co-operatives have been anxiously awaiting this reform. They have done their part. They did all of the ground work themselves. They have clearly pointed out what they wanted in this bill, and worked hammer and tongs to attain that goal.
The work done by the co-operatives has considerably facilitated the process of studying the bill. The effects of this can be seen in the support it has received on second reading and in committee.
The industry committee heard from several witnesses. It heard from two national organizations representing co-operatives, the Canadian Co-operative Association and the Conseil canadien de la coopération.
Further, it heard from specific members of the co-operative sector, the Alberta Wheat Pool and the Manitoba Pool Elevators. Finally, it heard about the cross-country consultations on this initiative with grassroots members of the co-operative sector.
One substantive issue was raised at committee. It concerned the ability of a co-operative to pay out a member who dissents on a proposal for a fundamental change or a change to the articles. Some members of the co-operative sector raised concerns that the right of members to dissent and be paid out could potentially jeopardize the capital base of a co-operative. These concerns were expressed in committee by the Alberta Wheat Pool and the Manitoba Pool Elevators.
In the true spirit of co-operation, a consensus was arrived at within the co-operative sector itself to deal with this issue. An amendment was proposed to allow a co-op to set out in its articles a time period for payout to a dissenting member as long as the time period does not exceed 10 years.
The amendment also ensures that the rights of members are protected by stipulating that any payout made will accumulate interest at rates set out in the regulations. This amendment was passed in committee.
Five other amendments were passed in committee. These were all technical in nature and did not raise any debate.
I wish to commend the hard work done by all committee members from all parties to bring Bill C-5 to fruition.
I will be pleased to address the second amendment in a few minutes.
Mrs. Francine Lalonde (Mercier, BQ): Mr. Speaker, during second reading, the Bloc Quebecois expressed its agreement in principle with this bill.
It pointed out, in particular, certain concerns raised by the bill. It is true that this bill started with a request from the co-operatives, but it must be kept in mind that Canadian and Quebec co-operatives, which, like the other co-operatives in the world, have to adjust to economic changes, have been involved in serious debate among themselves. They are torn between wanting to be flexible enough for the new economy, and not straying too far away from co-operative principles.
I know, and this is a finding I want to report, arising out of the work of the committee, that the Conseil québécois des coopératives, which encompasses all Quebec co-operatives, agreed with the bill in the end, but only after negotiating and winning a number of points it proposed. At report stage, the Conseil québécois pointed out that one of the points on which it had not won out related to the powers of the general assembly of members.
I would like to take this opportunity to point out that the first amendment, which suddenly popped up after this lengthy process, which took two years, and after the end of the committee's work at report stage, without our having heard a word about it beforehand, is a new one. It must be pointed out as well that this amendment diminishes the power of the general assembly of members and confirms the concerns I have expressed.
At the report stage, in the light of the discussions going on in the union movement, I said I still had some concerns about this bill. The representative of the Conseil québécois des coopératives did not say I was wrong to have concerns. He said he shared them, but that out of solidarity he would agree with his Canadian colleagues, pointing out that very few co-operatives in Quebec are federally chartered. To my knowledge, there are only six of 2,900, if we count all the co-operatives and 1,650 if we count the non- financial ones.
The amendment is not insignificant. It eliminates the use of general meetings to replace members who themselves were replaced by the board of directors.
I will try to make this a bit clearer. When a board member appointed by the general meeting has to resign or be removed, one of two things can happen: either they wait until the next general meeting or they are replaced. The bill provided that a replacement be found just until the next annual meeting. The first amendment eliminates the “until the next annual meeting”.
Quebec law, and I checked, very specifically provides that, in such an instance, the vacancy is filled until the next annual meeting, or—to put it another way—for the remainder of the mandate. So I feel quite justified in saying that it is deplorable that, after this process, which must be commended, we end up reducing members' powers.
I add that, for Quebec members, the powers of the members at the general meeting had been reduced compared to what is provided in Quebec legislation, because in this attempt at modernization, non-members may hold capital. Under Quebec law, these non-members may become board members, because they provide capital, but their appointment must be approved by the annual general meeting. This is what the Conseil wanted in the federal legislation, but it was denied.
So, not only will there be members on the board of directors who have not received the approval of the annual general meeting, but, if a member is replaced, the bill does not say it is only until the next annual general meeting.
For this reason, I am strongly opposed to this amendment and once again I do not understand why a government that has boasted about giving co-operatives what they wanted shows up with this amendment at the last minute. It confirms the fears I had, because co-operatives, of course, have to come up with the means to operate as best they can.
This is an important sector of our economy. It is a sector that is exceptional for the collective ownership by the members, and for the corporate characteristic of putting longevity ahead of short term profits, through transferability, purchase, sale, and so forth. It is therefore an important sector of the economy that needs to evolve, but it cannot do so by abandoning its fundamental principles. One of these principles is the power of the annual general meeting.
We therefore oppose this first amendment.
Eric C. Lowther: Mr. Speaker, I will be speaking to the bill in general and certainly to the amendment.
I have been encouraged by the whole process surrounding this bill, particularly by the way it was handled by the committee and the way the government listened to the concerns of the co-op members. I think the co-op sets a good example for all of us. The whole co-op structure is based on accountability to the members. That is part of the reason why the whole process works so well.
The amendments proposed to the bill and the total bill really were birthed out of concerns of the co-op management and members. The co-operatives recognized there was a need for change. They are in an increasingly competitive environment. They realized if they did not make some changes their viability was at risk for the long term.
They realized they were competing against larger entities with smaller management hierarchies and less bureaucracy. They realized they had to be more customer focused and more efficient. They realized that some investment dollars were needed in order to sustain them for the long term. I thought it was interesting that this realization caused them to actually bring forward the legislation in this bill, even to the point in our committee of fine tuning some of the amendments that we have here, to make sure there was not one thing that was not addressed.
These amendments here today were not something that the government so much brought forward as the members of the co-operatives themselves did. The management of the co-operatives brought them on themselves. This shows the accountability back to the members and that the government is listening to the needs of this industry and this group worked in this case. It was quite encouraging to me.
What I would like to see as a take-out of this whole endeavour is the lessons learned on the positive side. I encourage the government also to deal with some of the realities that Canadians are faced with and look at the model in this bill: a responsiveness to membership, a responsiveness to the people that put the directors of the co-operatives in place and the people that put us here.
I have concerns as I look at this bill and I compare it to what I see us in the House and the government doing. We talk about the fact that there is no deficit outstanding, we are hoping, yet we are sitting on a $600 billion debt and we see interest rates threatening to creep up on us. We are sitting on an interest rate time bomb. We pay $45 billion a year in interest. I was doing a calculation on this and that is enough money to put four million young people through a four year degree program at university. That is a lot of money and we pay that in interest every year.
These are all realities Canadians have to face. When I look at the co-operative situation and I look at what is happening in our government, I do not see the same kind of responsiveness here in the House of Commons. When I look at the throne speech with 29 new spending initiatives and we have that reality as far as the debt and the interest goes, it just does not line up for me and I do not think it lines up for a lot of Canadians.
Canadians are looking for us to deal with the realities that are needed in Canada today. Less government, not more. The co-operatives have demonstrated this in the management of their own operations. We do not seem to be able to do it in this House. We need to consider allowing Canadians to be heard the same way that members of the co-operatives were, to allow this government to encourage an environment where Canadians can plan for their future like the co-operatives have planned for theirs.
The problem is that we do not seem to be listening here and a lot of Canadians are pretty frustrated about that. What we get instead is what I have heard on and off in the debate in this House in the last couple of days and actually over the last several weeks.
There is a plan for the CPP that is going to bail it out they say, but it has been there for 30 years and 30 years of government management has left a $560 billion unfunded liability. The money that goes in at one end pays for those who receive it at the other. There really is no equity there to draw from, even though we have been paying into it for 30 years. There was a study done in Maclean's not long ago that 66% of Canadians do not believe it will be there for them when it comes time for them to collect. This is pretty tragic.
Instead of listening to some of the proposals we put forward and some of the other strategies that are out there in the world that have bailed out government funded pension plans and that are working, the government's answer is to increase the premiums by 73%. It will keep grinding the old engine hoping it is going to work one day. The fact is that it has not for 30 years and it is very unlikely it will go forward. Ten percent of every Canadian's paycheque is going to be going into a plan that has not worked.
What is equally tragic about this whole thing is that we are not listening. The government is not listening to the people, especially when we consider that youth unemployment is sitting at 16.5% to 17%. Here is our answer. We are going to hike up payroll taxes. We are going to hike up CPP. It is a mistake on the government's part. It will hurt the youth of this nation more than we can fully comprehend. They are the people who are keen to get out and apply their skills and energy. If that is cut off it will have negative reverberations in our country for years to come. The hope of our youth is being crushed with high payroll taxes.
In hoping to make us feel better about it, the government introduced a CPP investment board to manage the funds. Many of us have seen the results of government appointed boards. It is more of a concern than a consolation.
What Canadians really want is something like the co-operatives are doing. They want the ability to manage their own affairs. They want to manage their own money. We should remember that it is, in fact, their money.
They could do it successfully. Many people have their own investment plans, their own pension plans, which are available in other countries. Those plans have worked three to four times better than what we are seeing in government-run plans.
This would give Canadians a chance to plan for their future, just like the co-operatives are attempting to do. They are planning for their future in a very competitive marketplace.
There is another thing the co-operatives did with this very interesting bill and these amendments. They looked for a way to protect themselves and to survive for the long term. That seems to be very wise in this day and age. Canadians want to have the same opportunity to protect themselves and to establish security for their families in the long term.
It is incumbent upon government, particularly the Government of Canada, to do all it can to move that along. However, the government is holding it up. It continually says that is what it wants to do, but we are over-governed, we have a debt and interest problem, we have the highest tax to GDP ratio of all the G-7 countries. Twenty-nine new spending initiatives were announced, even in the face of that. CPP has been increased 10%. We have another government appointed board.
Those are not the answers that Canadians are looking for. We do not need more bricks on the load, we need relief, especially in the face of youth unemployment at 16.5% and using the EI surplus to pay down the debt and balance the budget. These are not the answers.
There is some hope. The hope is that the government was able to listen to the co-operatives and is responding to the needs of the co-operatives. That tells me that there is a ray of hope here. When government is ready to listen and frees itself from political patronage and influence and concerns itself with where Canadians are at, there is hope. The co-operatives are allowed to plan for their future.
We support this bill, not only for what it does for the co-operatives but for what it represents. It represents the kind of approach to government that is responsive to the voters and will bring about resolutions and improvements to serve the needs of Canadians.
Let us take this simple bill and use it as an example—
The Acting Speaker (Mr. McClelland): Resuming debate, the hon. member for Churchill River.
Rick Laliberte: Mr. Speaker, I stand on behalf of my party to support Bill C-5, as amended.
The amendments up to now, until the recent amendment which was moved quickly, were consistent with the co-operative way of doing business. The co-operative movement during consultations was challenged to support the bill as it was drafted, as well as the amendments. It went two rounds in the co-operative sector before it went one round in the federal sector. That shows great respect for the co-operative movement. These amendments seem to be all but technical issues. The co-operative sector actively discussed the amendments as did officials from Industry Canada, the co-op secretariat of Agriculture and Agri-Food Canada and there was a representation from the co-op of national organizations.
With respect to the position that the co-op sector has had in its gatherings as representatives, this bill seems to be a great step for our country. I would like to talk to the whole co-operative movement about how it will deal in light of the increasingly globalized world.
There are many federated co-op activities in Canada in areas related to fuel and food and many other items that meet the basic economic needs of people in this country. There is one key phrase among these items, “Truly Canadian”. That is probably the most powerful message of the co-operative movement. That is a unity message for us. Even our fellow representatives from Quebec showed support for a co-operative movement in their provinces. That co-op supports the idea that people should combine their efforts, their resources and their visions in an effort to create and support our economy. An entrepreneur from downtown New York would never imagine helping someone in small town Canada.
We have seen the Arctic co-ops shine. They are groups of partisans and craftsmen who have gathered their crafts and their marketing skills and have shown the world that as Inuit artists they could not do it singlehandedly. An individual could not create the energy or the economy or the resources, but many individuals could create collectively. As a collective the Inuit artists can be seen as a spotlight of this nation throughout the world.
I draw the House's attention to some of the experiences the co-ops have created in this country. In my neck of the woods, the Boreal Forest, the fur industry was a major activity. It was handled through Hudson's Bay and the Rupert's Land agreements of the British North America Act. All of a sudden the fur trade began to wither away. Nobody represented the trappers. All of a sudden their whole economy was falling apart.
The fur marketing board started up in northern Saskatchewan and the province of Saskatchewan through the CCF movement saw the light that could empower the people to market their own product.
PrivilegeMr. Dick Harris (Prince George—Bulkley Valley, Ref.): Mr. Speaker, I rise on a question of privilege in regard to a leaked report of the Standing Committee on Finance. Beauchesne's sixth edition, citation 877 states:
No act done at any committee should be divulged before it has been reported to the House. Upon this principle the House of Commons of the United Kingdom, on April 21, 1937, resolved “That the evidence taken by any select committee of this House and the documents presented to such committee and which have not been reported to the House, ought not to be published by any member of such committee or by any other person”. The publication of proceedings of committees conducted with closed doors or of reports of committees before they are available to Members will, however, constitute a breach of privilege.
Today in an article written by Rob Carrick of the Globe and Mail , a portion of the contents of the finance committee's pre-budget report was revealed. The first two paragraphs state:
The foreign content on RRSPs and registered pension funds should rise to 30 per cent from the current 20 per cent, the House of Commons finance committee says. The limit should be raised by two percentage points annually for five years, the committee says in a pre-budget report to Finance Minister Paul Martin that will be released Monday.
This morning at the finance committee members of the government admitted they had talked to the press concerning some issues in the matter of the work of the committee in preparing this report.
Joseph Maingot's Parliamentary Privilege in Canada on page 188 states:
A prima facie case of privilege in the parliamentary sense is one where the evidence on its face as outlined by the member is sufficiently strong for the House to be asked to send it to a committee to investigate whether the privileges of the House have been breached or a contempt has occurred and report to the House.
The evidence regarding this alleged leak of the pre-budget finance report is more than sufficiently strong. The article in the Globe and Mail would have us believe that the journalists either had access to the report or was told in detail of the report.
We are getting a little tired of the lack of respect this government gives this House and, in particular, those matters concerning finance and the Department of Finance.
Need I remind this House that only recently there was a complaint in this House concerning the government with respect to the setting up of the CPP board before the bill to authorize the board was passed by Parliament. The Speaker commented on this on November 6, 1997 on page 1006 of Hansard . He said:
This dismissive view of the legislative process, repeated often enough, makes a mockery of our parliamentary conventions and practices. That it is the Department of Finance that is complained of once again has not gone unnoticed.
Once again, it is the same group of people making a mockery of our parliamentary conventions. They view Parliament as a nuisance. They have little respect for Parliament and it is time we take them to task.
Mr. Speaker, if you rule this to be a prima facie question of privilege, I am prepared to move the appropriate motion.
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, this is on the same point of order raised by the hon. member.
As a member of the finance committee and having been at the meeting today and present at the consultations, I would like to advise members of certain facts which maybe are not clear from the intervention of the member who just spoke.
First, we are not talking about legislation.
The Acting Speaker (Mr. McClelland): In the opinion of the Chair, we are now getting into debate. I listened carefully to the intervention by the hon. member for Prince George—Bulkley Valley. The Chair will take the point of privilege raised by the member under advisement and the Speaker will rule as to whether or not this is a point of privilege and the Speaker will rule as to what further steps the House will make. However, we will not get into debate on the merits at this time.
I assure the House that the Chair does appreciate the importance of the member's potential point of privilege. The Speaker will rule on the potential point of privilege.
[Stage Direction]
The House resumed consideration of Bill C-5, an act respecting co-operatives, as reported (with amendments) from the committee.
Rick Laliberte: Mr. Speaker, I have heard stories from my parents and grandparents about the fur trade and the creation of a co-operative movement to try to market their furs. Unfortunately, we lived in the backwoods of the Churchill River, far removed from the garment makers in Montreal. In those days it was way beyond anyone's means to transport or communicate in order to co-operatively market and envision ourselves as a world leader in garment development in fur.
The co-operatives have taken on challenges. They have made mistakes by trying to develop economies through a collective effort in the communities. We cannot blame them for that because the effort was worth it. Individual markets and the globalization of multinationals who take out of our markets and economies is probably our nation's biggest fear.
Look at the success of the agricultural co-ops, the pools in marketing their grains and agricultural products worldwide. It is a major success. We have a wealth of resources in this country, resources in our people and our ideas. We have our timber, mining, water and other natural resources and non-renewable resources, all living resources.
I would like members to pay attention when they go to the parliamentary restaurant and turn to the right as they enter. They will see a picture highlighting the capital of this nation and its pyramid load is on the land, the resources, the timber, mining and fish. That image should be drawn up in a co-operative measure as how to go forward into the next millennium.
Look at the crown corporations. We have been selling off our railroads to American interests. All of a sudden Omnitrax owns major tracks of railroads in western Canada. Why did we not give the first option to Canadians? Maybe a Canadian co-operative could have taken up the transportation sector. Why not challenge ourselves in a co-operative perspective and give the first option to truly Canadian people as opposed to outside offshore interests?
I am very proud to speak on behalf of all the New Democrats and support this growing process of the co-operative movement in our nation. I encourage all Canadians to support their co-operatives in their regions. We must keep the process of negotiating these bills and amendments by taking it to the co-operative leaders and representatives and let them design and structure the necessary bills and legislation to come before the House.
The amendment which came in late, unfortunately may have missed the opportunity. However, I think it is truly a technical oversight on the part of legislators.
In closing, there are issues on the multilateral agreement on investment that will impinge on our national ability to improve the economy and the strength of our Canadian companies because outside interests can actually test the favouritism of our Canadian corporations and co-operatives.
The parties have united in supporting the co-operatives bill. We are looking to the government and the collection of all representatives of Canada to see the co-operatives flourish in this nation.
Mark Muise: Mr. Speaker, I am pleased to speak to Bill C-5, an act representing co-operatives.
Canada's history respecting co-operatives dates back to the mid-1800s with the formation of the Farmers' Mutual Fire Insurance Company. This was a result of the recognition by farmers that they too could have the same security in producing and marketing their products as seen by successful large businesses. The farmers decided to band together to gain better control over the marketing of their products and purchases. This was the birth of co-operatives in Canada.
The PC Party is pleased to support this legislation. Let me highlight some of the main characteristics of Bill C-5.
Bill C-5 redefines and widens the definition of co-operative basis. The principles of co-operative basis date back to 1844 and were set out by the Rochdale Society of Equitable Pioneers in England. These principles formed the basis of most Canadian provincial legislation for over 50 years before they were adopted by the federal government in the Co-operative Associations Act.
The new definition under Bill C-5 is in keeping with the 1995 statement on co-operative identity issued by the International Co-operatives Alliance and sets the tone for all proposed changes to the act. The new definition includes the principle of open membership. There is also some flexibility added to the one member, one vote principle with regard to delegate voting.
Furthermore the principle of member funded investment is expanded under Bill C-5 in order to provide for co-ops issuing investment shares. The principle of using surplus funds to extend the operation of co-operative enterprises is also added. Finally, the principle of education is included.
Bill C-5 makes changes to the rules governing incorporation. It permits co-operatives to incorporate provided they operate on a co-operative basis.
The act currently requires a memorandum of association for the granting of incorporation status. This memorandum is submitted to the minister. He then decides, provided the application meets all technical requirements and conditions, to either grant or deny the right of incorporation. This paternalistic approach works against the co-operative philosophy of group decision making.
With Bill C-5 they will be acting under the same principles of the Business Corporations Act of incorporation as a right and not at the discretion of the crown. The proposed system is simpler and would streamline the administrative practices. This would also reduce the costs currently associated with incorporation for all parties.
Bill C-5 introduces the concept of natural person when describing co-operatives. As a result, they are awarded the same rights and privileges of a natural person. This is instead of detailing the various rights, powers and privileges individually. It is also in keeping with the same rights now awarded to business corporations and mirrors the powers some provinces already offer co-operatives.
Record keeping under Bill C-5 is simplified and streamlined. This again is in keeping with similar rules found in the Business Corporations Act.
Bill C-5 simplifies the rules governing amalgamations with other co-operatives or corporations. For instance, Bill C-5 will allow provincial co-operatives to merge with federal co-operatives provided that the end result is a federal co-op.
Furthermore, co-operatives will have similar rights to those of business corporations under the Canada Business Corporations Act. When applying for an arrangement, the courts will have the power to order an arrangement or reorganization and not the crown. This is a change from the current situation where members apply directly to the minister.
Bill C-5 also includes provisions specifically for worker and housing co-operatives. Currently they are governed under general rules in the existing act. The industry has identified several gaps in the current legislation which does not address the needs of these two types of co-operatives. Bill C-5 attempts to resolve this problem.
In conclusion, I am pleased to support Bill C-5. I believe that it will benefit co-operatives and in turn, millions of Canadians.
Mr. Antoine Dubé (Lévis, BQ): Mr. Speaker, because I sit on the industry committee, which considered this bill, and particularly because I am the member for Lévis, I am pleased to take part in this debate.
“Why Lévis?” you may ask. As all Quebeckers know, Lévis is the cradle of the Mouvement Desjardins. The first Caisse populaire Desjardins was founded on December 6, in 1900 I think. The centenary is coming up. Over four million Quebeckers belong to the Mouvement Desjardins.
Eugène Bellemare: And Ontarians.
Antoine Dubé: And Ontarians. The member for Carleton—Gloucester, who is involved in this movement, also recognizes the importance of co-operatives for the survival of the French language. It played a large role in the survival, and I do mean survival, of the French language throughout Canada.
Lévis is the site of the Conseil de coopération du Québec. It is also the site of the headquarters of the Federation des coopératives en alimentation du Québec. There are several other federations, service co-operatives, including the federation interested in social economy, with headquarters in Lévis.
All this to say that, with the presence of the Mouvement Desjardins and the 2,000 employees working at the headquarters of the various Mouvement Desjardins institutions, Lévis can lay claim to being the co-operative capital of Quebec.
As the member for this riding, I therefore have no choice but to speak to this bill. One aspect that struck me in committee, because we are at report stage, was that, as the member for Carleton—Gloucester mentioned, there is what I would describe as a remarkable climate of co-operation among committee members, thanks to those influenced by representatives of the co-operative movement.
There are two large groups of co-operatives in Canada. There is the Conseil canadien de la coopération, which covers the francophone community and which has representatives in all the provinces of Canada except Newfoundland. There is also an equivalent organization for the anglophone community across Canada.
What we noted, and I also want the House to know this, is that the representatives of these two councils appeared together, side by side, before the committee. They came to testify and to submit their briefs while pursuing the same objectives. They showed solidarity, and I concluded that it would be possible, with people who have an open mind, to work co-operatively.
My colleague for Carleton—Gloucester might not like what I am saying, but this is proof of the value of the idea that the Bloc Quebecois and the sovereignists of Quebec are proposing to all of Canada, that is an open hand. It would be possible to have a partnership that would be useful for everyone if each of the parties made the effort and if they were confident in the efficacy of such a process.
I would like to point out that when people co-operate, francophones and anglophones, they discuss on an equal footing. We have always insisted on that.
So I wanted to take this opportunity to point out this example of co-operation that these people are providing us. I consider it unfortunate, at this stage, that there were two amendments introduced this morning, especially Motion No. 1, which limits the role of board members in relation to what can be decided at a meeting, as the member for Mercier clearly explained.
Except for that, the Bloc Quebecois reiterates that it supports the bill. We supported all the amendments that were proposed and the points of view provided by the witnesses who appeared before us. So we will continue to show co-operation by voting in favour of the bill at third reading.
The Acting Speaker (Mr. McClelland): Is the House ready for the question?
[Intervention]
Some hon. members: Question.
The Acting Speaker (Mr. McClelland): Is it the pleasure of the House to adopt the motion?
[Intervention]
Some hon. members: Agreed.
The Acting Speaker (Mr. McClelland): Carried.
(Motion No. 1 agreed to)
The Acting Speaker (Mr. McClelland): The hon. government House leader, on a point of order.
Don Boudria: Mr. Speaker, I had understood during negotiations with the House leaders that there would be an agreement to terminate the report stage of this bill today so that we could do the third reading next time.
If that is the case, as I believe it is, I wonder if the House would be prepared to ask for a division on the other amendment. I understood there were two of them.
The Acting Speaker (Mr. McClelland): The House has heard the suggestion of the government House leader. Is it the pleasure of the House to proceed as described by the government House leader?
[Intervention]
Some hon. members: Agreed.
The Acting Speaker (Mr. McClelland): Accordingly, pursuant to agreement made earlier this day, Motion No. 2 is deemed to have been proposed and seconded.
John Manley: moved:
Motion No. 2
That Bill C-5, in Clause 302, be amended by replacing, in the French version, paragraphs 302(24)(a) and (b) with the following:
“a) soit cinq ans après ce jour;
b) soit à tout moment, mais au plus tard dix ans, après ce jour, tel qu'il est mentionné dans les statuts de la coopérative.”
The Acting Speaker (Mr. McClelland): The question is on Motion No. 2. Is it the pleasure of the House to adopt the motion?
[Intervention]
Some hon. members: Agreed.
(Motion No. 2 agreed to)
Don Boudria: 
moved that Bill C-5, an act respecting co-operatives, as amended, be concurred in.

The Acting Speaker (Mr. McClelland): Is it the pleasure of the House to adopt the motion?
[Intervention]
Some hon. members: Agreed.
[Intervention]
An hon. member: On division.
(Motion agreed to)
Canada Pension Plan Investment Board ActDon Boudria: Mr. Speaker, the leaders of each party have consulted and I must advise you that unfortunately it was impossible to reach an agreement pursuant to Standing Order 78(1) or 78(2) concerning proceedings at the report stage and at the third reading of Bill C-2, an act to establish the Canada pension plan investment board and to amend the Canada Pension Plan and the Old Age Security Act and to make consequential amendments to other acts.
Pursuant to the provisions of Standing Order 78(3), I give notice that a minister of the crown will be presenting a motion on time allocation at the next sitting of the House in order to assign a specific number of days or hours for the debate at those stages and for the decisions required to dispose of these stages.
[Intervention]
Some hon. members: Shame.
The Acting Speaker (Mr. McClelland): It being 1.33 p.m., the House will now proceed to the consideration of Private Members' Business, as listed on today's Order Paper.

Private Members' Business
Goods And Services TaxMs. Wendy Lill (Dartmouth, NDP): moved:
That, in the opinion of this House, the government should consider the advisability of increasing literacy in Canada by removing the Goods and Services Tax on all reading materials.
Mr. Speaker, it is a pleasure and privilege to rise today to put forward Motion No. 93 which reads as follows:
That, in the opinion of this House, the government should further contribute to increasing literacy in Canada by removing the Goods and Services Tax on all reading material.
Since the GST was introduced in 1990 under the Conservative government of Brian Mulroney and implemented in 1991 the people of Canada have been subjected to a 7% tax on all reading material. That includes books, children's books, magazines whether at the news stand or by subscription, and newspapers. In fact all reading material.
The GST is the first federal tax on reading in Canada's history. Provinces have never taxed books. Every time someone opens their wallet to buy a magazine or a novel they pay an extra 7¢ on the dollar to the federal government. Post-secondary students who buy their own books must pay tax. Literacy learners who mostly buy their own materials must pay tax. Tutors in literacy are also affected. Canadians purchasing books for self-health purposes and to further their knowledge must pay tax. Parents who buy their children books must pay tax.
We recognize there are GST credits and other educational credits for students, but these do not make up for the fact that we tax textbooks. We are talking about a tax burden on a fundamental activity which people the world over take part in and benefit profoundly from, reading, something very simple, something very intimate when shared.
I had the honour of attending the public readings of the governor general literary award winners last week. It was a very special event to be involved in a public reading. We all know reading is something quiet and restorative. It helps us to connect with ourselves and link up the outside with our inner selves. It is a healthy, nurturing and calming pastime.
Unlike our national sport, fights never break out in groups of readers. Reading is educational, sustainable, non-polluting and non-violent, an A1 activity. Yet we are being taxed by the federal government for the privilege of engaging in it.
I would even go so far as to put forward the radical idea that reading is an important cornerstone of the country's culture. If writing is so then reading must also be.
In 1960 the O'Leary royal commission asserted that magazines and newspapers were the most important publications in creating a Canadian culture and sense of identity:
So far as the written word is concerned it is left largely to our periodical press, to our magazines, big and little, to make a conscious appeal to the nation to try to interpret Canada to all Canadians, to bring a sense of oneness to our scattered communities.
One does not have to be reading a 400-page novel by Jane Urquhart or David Adams Richards. One can be enjoying a favourite column in the newspaper or the weekend funnies.
My children still love to pour over magazines which advertise toys at Christmastime, reading every word about the toys they are interested in over and over and over so that they can conjure up a perfect picture in their minds of how wonderful that toy will be when they finally see it under the Christmas tree.
Magazines and newspapers are the reading material of choice for young Canadians and new learners. For someone young or old trying to crack the barrier between the non-reading and the reading world, magazines provide a colourful, picture filled non-threatening and potentially successful journey into the world of print.
Reading is thankfully something which Canadians continue to engage in despite the barrage of audio visual images coming at us at all hours of the day and night. Reading, however, like many other good things in our cultural and physical environment is somewhat on the endangered list and not helped along in the least by the GST.
Canada has a very high illiteracy rate. One if five Canadians tested in a recent international literacy survey could not understand the label on a bottle of aspirin well enough to know the safe dosage. When provided with a nutritional analysis, only one out of four Canadians could calculate the percentage of calories that came from fat in a Big Mac.
On September 12, 1997 the Globe and Mail quoted the Minister of Finance as saying: “I can't see how taking the tax off books is going to stimulate literacy”. The Minister of Finance continues to contend that literacy is not a financial issue and therefore, I guess, somehow not his responsibility.
This kind of thinking is very disturbing because it indicates that he either does not understand his own job or he is flailing about for any excuse to denounce the Don't Tax Reading Coalition's ongoing campaign.
I will try to take him through it step by step. The GST makes reading material more expensive. Reading is the foundation of literacy so literacy in this case is entirely the responsibility of the minister.
Clearly the best way to promote literacy is to ensure no obstacles are in the way of those who are trying to achieve it. Anything that makes books more expensive, for example a 7% federal tax, is certainly a large obstacle.
An international survey done in 1996 found that 97% of Canadians who achieved the highest literacy levels had more than 25 books in their homes. Only 50% of those in the lowest literacy levels had more than 25 books in their homes.
The GST prices reading materials out of reach of low income Canadians. It is truly regressive for that reason. Relatively speaking, lower income Canadians spend a larger amount of their income on reading materials than those of higher income Canadians. The government's own data say so.
Why should the Minister of Finance care if we are a nation of bookworms? After all, it is the age of the Internet and computers. Why not toss out the idea of reading along with the time honoured belief in universal health care and pension plans?
Why do we want to be literate? Because it is good for business. Britain, Japan, Australia, Ireland and the United States do not tax books. They know that strong literacy skills are essential in the modern workforce. Strong literacy skills are even more essential in this technologically driven era. Bear in mind, one has to be able to read to use the Internet. Canada's ability to train and redeploy its workforce to compete internationally is hindered by inadequate literacy skills.
Senator Joyce Fairbairn opened an international policy conference on adult literacy in November, saying on behalf of the Minister for Human Resources and Development:
A highly skilled literate workforce is crucial to a strong and internationally competitive economy as industrialized countries around the world fight to maintain and expand their share of high wage jobs.
Decision and policy makers have to take literacy seriously because the information society and the global economy require individuals and economies with high literacy and numeracy skills.
Today's new jobs require highly literate workers. Literate adults and senior citizens will be far better equipped to maintain their independence and quality of life in the future, thus lessening the need for social services.
The percentage of unemployment decreases as the literacy level decreases. The Minister of Finance and his government should surely be interested in these facts. He should also be interested in the stunning impact the GST has had on the Canadian publishing industry.
Within the first three months the GST was introduced, book sales dropped by 14% and the market has never really recovered. The used book trade has dropped even more sharply from 15% to 20%. Magazine sales are down 15%. Newspaper circulation is down 5%.
During the most recent recession of the early 1980s and every previous recession in Canadian history sales of reading materials have increased but not this time. It is astounding to think of the revenues that have been lost because of this regressive tax.
Writers' royalty earnings dropped significantly due to the imposition of the GST. We should think of the legions of artists, printers, book sellers and publishers who are no longer working because of the plummeting fate of the publishing industry.
The Government of Ireland, incidentally, tried a tax on books 10 years ago and withdrew it after six months because it was having such a negative impact on sales, but not our government.
Let us consider the astounding economics of book publishing. The authors of children's books currently gets 5% royalties on the sales of their creations. The government gets 7% in tax. Yes, the government is earning more than the writer while the publishing houses continue to tread water with the odd infusion of funds from a beneficent government.
The impact on the magazine industry with the imposition of the tax has been profound as well. Many consumers simply would not remit the GST on their subscription renewals. Magazine publishers have had to remit the 7% even if they have not collected it.
All of this reminds me of a story in Jewish folklore found in a letter to the editor of the Globe and Mail from a Charlottetown reader. It is about a mythical town of fools. In one story the citizens of the town discover that a storm has left a wide crater in the middle of their main street and they fear that passers-by will fall in and break their legs. After much discussion they decide not to fill the hole but to build a hospital beside it.
Rather than removing the GST from the sale of books Ottawa is throwing life rafts to the publishing industry and the Canadian literacy program. What we need to do is empower the consumer. Take the 7% stranglehold off the book marketplace and then the demands for and sales of books will rise. That is what is really needed to benefit the publishing industry.
Finance claims that the general public has become accustomed to GST on magazines and books. But the Don't Tax Reading Coalition to this day gets hundreds of phone calls, letters and petitions complaining about the GST. People hate the principle of paying tax on reading. Books are for learning and improving. They are not cash cows. Eighty-three per cent of Canadians are on record as opposing a tax on reading.
I say to the Minister of Finance that it is time he filled that hole caused by the devastating tax on books. It is time to do the right thing, do what the Liberals promised before the 1993 election at a policy conference chaired by the Minister of Finance. As well during the election and after the 1993 election the Liberals promised to reaffirm the historic principles embodied in the tax free status of the printed word and remove the GST from reading materials. The prime minister said so himself.
We recognize that the government has tried to reduce the impact of GST on books by offering tax rebates to municipalities, schools and qualifying literary organizations, but these rebates are only for institutions. What about the individual consumer?
Taxing books deals a crippling blow to our fight against illiteracy. If want to be a country that reads, then we must eliminate the tax on books.
In closing, I would like to read from a well loved and respected Canadian children's writer, Sheree Fitch, on the topic of GST:
On the road to Lunenburg A village by the sea I met some politicians Here's what they said to me; This is the road to Lunenburg We're committed to literacy I said I know you really care... So...what about reading and the GST?
On the road to Heart's Content In the middle of Newfoundland I met a group of children Here's what they said, off hand; We really like your books miss, We really like them a lot Where do we go to get them? Two dollars is all we got.
On the road to anywhere In the middle of the galaxy, I met a child who always smiled Here's what she said to me; Yesterday I saw the moon It wasn't in the sky It was in a book—it sounded round The gold got in my eye. You see—I learned to read, miss. Isn't it grand? I never knew it possible To hold the moon in my hands I never knew it possible To hold the moon in my hands.
In closing, I believe it is time we tackled the problem of literacy in our country by taking the tax off the printed word. It is time we took the tax off our country's imagination.
Mr. Speaker, I would like to put forward a request for unanimous of the House to make this motion votable.
The Acting Speaker (Mr. McClelland): Does the hon. member have unanimous consent?
[Intervention]
Some hon. members: No.
The Acting Speaker (Mr. McClelland): Resuming debate.
Mr. Tony Valeri (Parliamentary Secretary to Minister of Finance, Lib.): Mr. Speaker, the government is firmly committed to supporting literacy. The question has always been how can we do this without jeopardizing the hard won progress that we have made in getting the nation's finances in order.
It is quite clear that any measures taken must be effective and in fact fiscally responsible. That is why the government has introduced an initiative that rebates 100% of the GST paid on books to public libraries, schools, universities, colleges and other bodies which promote literacy.
This means that there is no GST on any books distributed freely for use in primary or secondary schools or other educational settings. This also results in tax relief on books, not only for structured learning in our schools and colleges but also for life long learning through public libraries and front line literacy groups.
The GST rebate on books recognizes the important role played by educational institutions and community groups in helping individuals get the tools they need to learn how to read. In addition, it is an efficient and responsible investment. Targeting assistance for front line literacy groups will certainly ensure a greater impact for every dollar of expenditure.
The special rebate complements government initiatives announced in the 1997 budget to support learning and education in Canada. And this year funding to the National Literacy Secretariat will rise by 30% to $30.3 million, creating more opportunities for individuals to improve their literacy and communication skills.
For students the education credit has been increased to recognize the non-tuition costs of schooling and the tuition credit has been expanded to cover not only tuition fees but also mandatory fees imposed by post-secondary institutions for educational purposes. In addition, students are now able to carry forward any unused tuition and education credits to be applied to future income.
Further, the annual contribution limit for registered education savings plans has been doubled and parents are now able to transfer that unused RESP into their registered retirement savings plan. Furthermore, the Canada Council provides support to Canadian authors and assistance is available to Canadian publishers through the Department of Canadian Heritage.
There are a number of ways that the government has taken on the initiative of literacy and is ensuring that the expenditures being made are targeted to front line literacy groups so that we can ensure that individuals who are most in need of literacy assistance will get it through the tax and rebate that we have provided through the GST.
Quite clearly the government does not claim that targeted tax relief will answer all the challenges that we face with respect to literacy and education. However, we are certainly convinced that these measures will go a long toward supporting efforts to improve literacy levels in communities across Canada. The Prime Minister, the Minister of Finance and all members of the House are committed to ensuring that literacy is a priority for the government. It is a priority which is reflected when we speak with Canadians.
I think the agreement in the House is perhaps how we will achieve the goal of increasing literacy in this country. We feel we have balanced that approach through our tax expenditure and will continue on that track to ensure that Canadians are well served by the expenditures the government makes.
Rahim Jaffer: Mr. Speaker, I rise in the House to speak on Motion No. 93, which reads:
That in the opinion of this House, the government should consider the advisability of increasing literacy in Canada by removing the goods and services tax on all reading materials.
I applaud the member for Dartmouth for presenting this motion. My constituency of Edmonton—Strathcona is home to the University of Alberta, an institution that is poised to become one of the finest in Canada. So I can appreciate how important it is to address the question of taxes on reading materials.
In fact, I even support the argument presented by the hon. member that the GST on books and other reading material works to discourage reading. As the cost of books and reading materials goes up, the demand goes down. That is the irrefutable law of supply and demand.
I am surprised to learn, however, that the member from the New Democratic Party has embraced such an important free market concept. I wait eagerly for the day when the NDP caucus stands in solidarity in the House and declares that taxes kill jobs. It will be a great day for Canada.
At the heart of the motion is the claim that taxes can create perverse incentives. In this case it is argued that taxes on books discourage people from purchasing books. This was not the intended purpose of the tax but the unintended and unseen consequences of the tax.
This argument is completely valid and it is an argument that has been made throughout history by many great scholars. It was an argument made by 17th century satirist Frederick Bastiat in his classic essay What is Seen, What is Not Seen , and it is an argument that is being made today by Nobel prize winning economists like James Buchannan and others.
What I find curious, however, is that while the members of the New Democratic Party understand the principle of supply and demand when it applies to books, they do not understand this principle in other applications.
For instance, when Reform argues that increases to the CPP contributions are a tax on jobs, the members of the NDP seem confused. However, when the cost of labour goes up, demand for that labour goes down. Taxes kill jobs.
When the cost of books goes up, the demand goes down. It is a very simple law of economics that has been proven over the course of history.
Let me provide the House with another example. The Liberal government taxes consumption at 15%. That means that when we spend our money we are now paying about 15% in taxes on average. When we save our money we are taxed at 54%.
This is another example of the perverse incentives which taxes can create. The incentive in this case is not to save. With the state of our CPP, encouraging Canadians not to save is a very bad idea, and yet I have heard so many individuals on the ideological left claiming that RRSP tax exemptions should be eliminated because they are a tax avoidance measure employed by the wealthy.
There is also the question of capital gains tax. This is a tax on productivity. When people are taxed for creating wealth, disincentives are created for productivity. Yet those on the ideological left are often heard calling for a higher capital gains tax. That is a recipe for economic stagnation and unemployment.
I could go on and on. For every tax and government regulation created there is an unseen and unintended consequence. Overtaxed cigarettes and liquor create underground, illegal black market industries. Increased payroll taxes create unemployment.
It is simple. Big government is the very source of our economic problems and not the source of the solutions. Big government is a disease masquerading as its own cure. I wish the NDP could come to appreciate this fact.
Having said all that, I regret that neither I nor the members of my caucus can support the motion. Reformers believe in tax cuts and we hate the dreaded GST, but it is our position that tax cuts should be broad based so that one product or one industry is not given preferential treatment.
I am sceptical of the merit of eliminating taxes on certain products or even on certain industries while neglecting other products or industries.
We subsidize Canadian book publishers to the tune of almost $20 million. Now the Liberals are adding another $15 million to this subsidy in the interests of promoting Canadian culture. A GST tax exemption would add to this preferential treatment.
Do not get me wrong. Canadian businesses are overtaxed. Canadian consumers are overtaxed. However, a fair tax system is one which provides for broad based tax relief.
Every Canadian business makes the claim that its product or industry makes a vital contribution to Canadian society and should be granted certain tax concessions. I am very sympathetic to this claim. Canadian businesses are overtaxed and they are looking for any way to get out from under the thumb of the federal government, but we must be extremely careful when we create tax concessions which give certain industries preferential treatment.
My hon. colleague from the NDP will very likely point out the many preferential tax concessions which are currently in place, but I would counter that by promising that a Reform government will implement a more simplified tax system which will be built on the principles of equality and fairness.
Having said all this, I am not convinced that GST on books is affecting literacy in Canada. Access to literature through public libraries and public schools ensures that those who wish to have access to books can do so. However, I would agree that access to the latest information may be hampered as universities and public schools try to find money in their budgets. But this is not a threat to literacy in the country.
I can understand the frustration which the hon. member feels for this issue. The Liberals broke their promise to scrap the GST as it applies to books. The Reform Party has criticized the government's lack of accountability in this House. Campaigning promises should be kept.
We support the member of the NDP in so far as she is bringing the question of accountability to the attention of this House. We cannot, however, support the motion for the reasons I have already stated.
In closing, I applaud the hon. member for the NDP for her clear economic thinking and for bringing the issue of accountability to this House.
Suzanne Tremblay: Mr. Speaker, I rise today to speak on Motion M-93 moved by my colleague from the NDP, the hon. member for Dartmouth.
The motion reads as follows:
That, in the opinion of this House, the government should consider the advisability of increasing literacy in Canada by removing the goods and services tax on all reading materials.
When Bill C-70 on harmonizing the GST was debated in the last Parliament, the Bloc Quebecois made the same request: that the GST on books be completely abolished. The Bloc Quebecois is therefore pleased to support this motion today.
Let us start with a little semantics, to be clear on the scope of this motion.
In French, literacy translates as knowing how to read and write, or the ability to understand and decode information to give it meaning. Illiterate persons are those who do not know this code. Without this code, they do not have the capacity to read or write, let alone the knowledge to do so. Functional illiterates know the code but experience various degrees of difficulty in understanding, using or interpreting it to give it meaning.
That having been said, it is inappropriate to translate literacy by “alphabétisme”. But semantics is not the topic of my remarks today, so I will stick to the text of the motion as it stands. Let us move to the topic of the motion asking that the government remove the GST on all reading materials.
The federal government has been repeating ad nauseam that Canada is the best country in the world. According to the government, illiteracy is not a problem in Canada. Just look at the mind-boggling statistic quoted in the 1997 edition of L'État du monde : the literacy rate in Canada is estimated at 104%. Let us take a closer look at this statistic which seems mind-boggling at first glance.
We will refer to Reading the Future: a Portrait of Literacy in Canada , a document published jointly by Statistics Canada, the Department of Human Resources Development and the National Literacy Secretariat in 1996. This document is based on the International Adult Literacy Survey.
In a chart illustrating the various levels of reading ability among adults aged 16 to 65, Canada's rate is 101% for the category “comprehension of narrative texts”. Does this means that every Canadian knows how to read and write? Of course not.
Indeed, out of this 101%, 17% of the population only reach the first level of reading. At this level, a person can read the directives on a bottle of aspirin. Twenty-six per cent are at the second level. At this level, a person can read, in an article, a short sequence of information on the characteristics of a garden plant. Thirty-five per cent are at the third level of reading. At this level, a person can read movie reviews and select the least favourable one.
Finally, 23% of the population reach levels 4 and 5. At these levels, people can read information on leaflets and integrate them in an interview, or they can use an advertisement from the Department of Human Resources Development to answer questions that use different words from the ones in the add.
The percentages are similar for the other two categories that were part of the test to evaluate reading ability, namely comprehension of schematic texts and comprehension of texts with a quantitative content.
The International Adult Literacy Survey defines literacy as the ability to use printed matter and written information to function in society, reach one's objectives, improve one's knowledge and increase one's potential. The survey shows that an impressive number of Canadian adults have a very low level of reading ability, which prevents them from fully participating in Canada's economic and social life.
The survey also shows that the availability of reading material is the primary factor in maintaining people's ability to read and understand. A country whose people read less than those of another country will be less productive and less competitive. This brings us to the purpose of the motion, which is to remove the GST on all reading materials.
According to the International Association of Publishers, Canada is the G-7 country that imposes the highest taxes on reading material. In Canada, the tax is imposed only by the federal government. The United States, Japan, England, Australia and Ireland are among the countries that realized the importance of not taxing books.
This tax has had a very negative impact. Sales of new books dropped by 10%, those of used books by 15% to 20%, and those of magazines by 15%. Newspapers' sales dropped by 5%, the first drop in 20 years in that sector. These combined drops have hurt publishers and writers, as their income also dropped.
The fact that the GST on reading material would have such an impact was anticipated. Anyone in the country who wants to buy reading material must pay a tax. Students who want to buy books must pay taxes. Functionally illiterate people who want to learn to read must pay a tax. Parents who want to buy books for their children must pay a tax. People who want to improve their knowledge and learn new things must pay taxes.
I have something to tell members opposite. I am thinking of a word which I cannot use in this House, because they would jump up from their seats. Still, I have that word in mind to describe their attitude and their behaviour regarding the GST on books. Let me explain.
At their 1992 convention, the Liberals adopted a resolution whereby they pledged to abolish the GST on books and reading material. In 1993, in a letter to the Don't Tax Reading Coalition, the Prime Minister promised to implement his party's resolution.
I would like to remind the House of what some of our friends across the way said when they were in opposition and the Conservative government wanted to pass the GST bill.
In November 1990, the Deputy Prime Minister claimed that charging the GST on books was akin to promoting ignorance. In 1991, the Minister of Canadian Heritage said that it was harmful to Canadian unity and identity. In 1990, the Minister of Industry gave a 20-minute speech explaining in great detail why he was opposed to the GST.
In December 1990, the member for Ottawa Centre tabled a pile of petitions against the GST. The parliamentary secretary to the Minister of Transport tabled four petitions against the GST. The government leader tabled a petition against taxing books and cared about the functionally illiterate.
The Minister for International Cooperation and Minister responsible for Francophonie tabled a petition against taxing books and magazines. The member for Carleton—Gloucester also tabled a petition, saying it was outrageous to tax newspapers and any reading material, whether it is intended for educated people or, worse yet, for those learning to read.
The government does offer tax reductions on books purchased by some libraries, educational institutions and organizations promoting literacy. But that is not enough. The government is still pocketing $120 million in taxes on reading material.
The Minister of Human Resources Development wants to increase training and development programs. He should know that, according to international studies, a substantial number of applicants can be turned down because of the fact that their limited reading skills in turn limit their capacity to enrol in adult and continuing education.
To conclude, I urge the government and the members across the way to stop behaving like tartuffes and to practice what they have always preached, by abolishing the GST. If they were brave, all members, including Reformers, would give unanimous consent to make this motion a votable item, so that we can put an end to taxing ignorance.
Mark Muise: Mr. Speaker, I rise today to speak in favour of increasing literacy levels in our country and in our communities.
As a father of two young girls, literacy is something that is very important to me. We should never lose sight of the fact that literacy skills are a key to learning. Many people think that literacy begins when we go to school and ends when we finish our formal education. However, studies have shown that the first years or year of a child's life will have a significant impact on their learning.
Reading to a child, whether it be when he or she is in the womb, a newborn or a toddler, is an important first step in developing a lifelong desire to learn.
Whether students are headed for post-secondary education or directly into the labour force, they need fundamental learning skills and basic knowledge. These are essential if they are to keep on learning, advance their careers and achieve their personal goals.
In short, the future of our youth and of our economy depends on whether today's students are being given a sound background in primary and secondary schools.
We all have a role to play in promoting literacy in our homes and communities. As to exempting books from the GST/HST, I would be open to hearing more information on this.
The GST was designed to raise no more money than the hidden tax it replaced. Special credits offset the impact of GST on low income earners, schools, hospitals, municipalities and new homes, Basic groceries, financial services and prescription drugs are not taxed.
By law, GST revenues can only be used to service or reduce the debt. In April 1996, Ottawa and Nova Scotia, New Brunswick and Newfoundland agreed to harmonize their sales taxes and to bury the tax in the price.
At that time Progressive Conservative members and senators from those three Atlantic provinces tried to expand the list of goods and services that are exempt from GST or HST. Examples of the proposed exemptions were books and funerals.
This being my first term, I was not part of the government that implemented the GST but I was a member of the party that saw the need to replace the hidden federal sales tax.
Unlike the Liberals who vowed to abolish the GST, the PC party recognized from the beginning that the GST would have to be fine-tuned after introduction. We see this as a continuing process. As all members know, the Liberals did not scrap the GST, much to the chagrin of certain members of this House.
During the Hamilton East by-election, the NDP leader for her part promised to cut the GST to 5% from 7%. She said she would eliminate the GST on new homes, children's shoes and clothing, books, school supplies, furniture and other essential family purchases.
She did not mention that the British Columbia NDP government raised the sales tax to 7% from 6%. Nor did she mention that one of the very first things that Saskatchewan's NDP government did was to raise its rate to 9% from 7%. Having improved its financial position, it has since lowered it back to 7%.
In closing, I want to reiterate my party's commitment to improving literacy levels in this country. However, the government must act with prudence. Before endorsing this motion, we must weigh the benefits of any changes against the potential cost. I would like to see hard data on the impact that taxing books has on literacy in comparison with lost revenues.
Mac Harb: Mr. Speaker, I rise to speak in support of literacy in our society. I thank my colleague for putting her motion before the House of Commons. I will be focusing on the problem of literacy.
As the member from Rimouski indicated, presently in Canada over 25% of the total population is considered to be illiterate. Certainly if we were to look at the cost to society as a whole as a result of that, it would be in the range of $15 billion to $20 billion annually.
To look at the source of it, we really have to go back to the early days of schooling, to the primary level, to the secondary level and to the graduate level. According to Statistics Canada, many graduating university students are considered to be functionally literate.
We have a problem here that is of a big magnitude. There is a problem here that is not only a federal responsibility but a responsibility of the provinces, school boards, the family and society as a whole. What we need is a holistic approach to the whole problem of illiteracy.
Personally, I congratulate the government and, in particular, the Minister of Finance as well as the Prime Minister for ensuring the continuation of funding to the secretariat in charge of literacy in Canada. The funding for that agency was due to end in 1993-94. Thanks to the efforts of many of my colleagues on the government side that funding has continued despite the fact that education is a provincial responsibility.
Many positive things are taking place in society. A council of ministers is looking at the issue of education across the country. Provincial ministers of education across the country are looking at the whole notion of standards in the area of education. I believe this is the essential element to finding a solution to the problem of illiteracy in Canada.
It is very unpleasant that in the second richest country on earth one out of every three students drop out before they reach university. As one of the richest countries on earth, over 25% of the population has difficulties reading or writing.
We spend per capita more than almost any other country in the world. Next to Sweden we spend over $50 billion a year on education. If someone turns around and says we need more funding for education, my answer would be no, we need to look at the way we are spending our resources.
I am not one of those people who says we need more school boards across Canada. I am one of those people who says we should eliminate every school board across the country from coast to coast to coast. In every municipality we should have one director of education that reports to a municipal or regional government. These elected officials would have to go to the public every three years in any event.
We would have democracy through the regional government. We would be able to eliminate the different administrations from coast to coast that cost millions and millions, if not billions of dollars. Then we would be able to put that money back into schools, into classrooms to provide necessary resources for students. That would be the first step.
The second step would a revamp of the way we do things. We need a national strategy for education and literacy. We need national literacy and education standards. If I were to graduate from a university or any educational institution in Newfoundland, I should be able to obtain the equivalent education in British Columbia or in Alberta. If I finished my education as an engineer or as a technologist in New Brunswick, I should be able to practise elsewhere in Canada.
We need transportability of education similar to what we have in the national health act. We need an understanding across the country that we live in the same nation. If I finish my first year of university in western Canada I should be able to transfer my credits to eastern Canada. Unfortunately we do not have that now.
There are many complications in the system. Instead of creating ways to help students at the provincial level progress in their education, we are creating complications and walls in front of them. Although education and literacy are provincial responsibilities the government has made literacy a national priority. I am delighted by that.
We need a co-operative approach among the municipal, provincial and federal governments and the business community which has a very important role to play.
We complain consistently that over 20% of students graduating from university cannot find jobs. Part of the reason they cannot find jobs is that some students are graduating in fields where there are no jobs. Who is setting the priority? Who is telling students in every university and community college in Canada where the jobs are? Someone should tell them which fields to consider if they want to find jobs in institutions, businesses or government agencies.
It certainly does not help anyone if every student across the country wants to become a lawyer. It will not help everyone if every student wants to be enrolled in history. There is no national strategy by the provinces to address this issue.
As for the federal government, one by one our ministers have consistently spoken about the need for a co-operative approach among different levels of government. I hope one day soon, as usual, the federal government will be open to the provinces asking it to act, whether as a chair, a facilitator or whatever, to develop those standards in education, standards in training and standards in literacy. I also hope we will look at standards in the environment, standards in every single sector.
We are a nation of different provinces. We all live under one Confederation. We are diverse. We need at least a common understanding that we require a minimum standard everyone across the country agrees on.
To that extent education is a provincial responsibility. That is fine, fair and square. The bottom line is an understanding among the provinces that on an annual basis we need a national testing standard in the core subjects. I am not talking about geography or history but about core subjects such as math, science, physics and chemistry.
We also need a strategy to provide the necessary tools to teachers across the country. How often have we seen provincial governments going to teachers at the university level, the community college level or the high school level to ask what they can do to help them do their jobs better and have a more educated or far more prepared student population? It rarely happens.
Look at what happened in the province of Ontario, for example, with Bill 160. The educational community was on one side and the government was on the other. In between them we had the population of Ontario shaking their heads. Rather than have an abrasive approach among governments, educational institutions and teachers we need a co-operative approach. That is what is necessary. We need a co-operative approach in education and literacy.
Looking at the wealth we have in the country and at the quality of our institutions we can do it. There is no doubt in my mind.
The Speaker: I would inform the House that we have approximately nine minutes left in debate and it is the custom to give the last five minutes to the mover of the motion.
Rick Laliberte: Mr. Speaker, I will try to be brief.
The motion asks for the government to consider removing GST on books and reading material. This inhibits and puts up blockades and barriers in people's journey down the road to literacy. The worse effect is for the people who cannot afford it. That is what my colleague pointed out. People who can barely afford to buy a book have to also pay the 7% GST.
The Reform Party says that it supports tax incentives but not GST on books. Liberal members on this side are telling us that they appreciate the literacy issue but removing the GST from books is not necessarily on their agenda.
The last Liberal member who spoke created an interesting debate, and I have to take him on. He indicated that we do not need school boards. That is a major debate.
School boards, university senates and boards of directors of community colleges are trying to create an ownership of their communities and regions by representing parents and children to try to envision the future of their education. At the moment, there is no national vision on education as it has been decentralized to the provinces.
A national vision creates a vision for the journey from kindergarten to grade 12. After grade 12, when they graduate, we drop them off. If the student survives, great. We congratulate them if they find a career. If they do they will probably be wealthy enough to buy a house or a vehicle and maybe some books for their children, but there is no journey.
Our acts of education say that the provinces are responsible for our children until they are 21 years old. In reality, the majority of these graduates are 17 and 18. We are short-circuiting our investment on our children.
Why not invest in our children regardless of what journey or where they are at in high school, university, trade school, community college, business school or any other school they are in until they are 21 or 25 years old? Why not take this huge tax grab that we call GST and invest it correctly?
Historically, the biggest tax incentives came after the second world war. The country was ready to fight in a war against some aggression in the world and suppress it. We won that war. Now this tax incentive in money and resources is to make our lives safe and peaceful in an international community. However, we cannot do this without the betterment of our children and a vision for our youth in this great country we call Canada from coast to coast to coast.
The GST is a major test for the parties. The hon. member is raising a major issue. The GST on the print media is a disincentive for these children and does not give them the opportunity to get their hands on books, magazines and a learning stage. This is a simple test.
Other bigger debates will come into this House and I look forward to being a big part of those debates if they enter the House. In the meantime, let us take the GST off. That is all the member is asking.
Ms. Marlene Catterall (Ottawa West—Nepean, Lib.): Mr. Speaker, there is only a little over a minute left in this debate. I just want to make one point.
I think my colleagues who have spoken before have outlined a number of initiatives that are being taken in the area of literacy both to help very young children and right through to university and so on, to help the libraries and schools that are instrumental in helping young people to read and adults to learn to read, often for the first time very late in life. They are instrumental along with a number of community organizations that are also supported by the funds that are raised in part through the GST.
I have to ask a question of my colleagues on the opposite side of the fence. One of the results of taking the GST off reading materials would be to reduce the amount of revenue coming from the GST. We have to ask ourselves who it benefits. Among others, the people who benefit are the people who are buying things like Hustler , Penthouse , Playboy and the swimsuit edition of Sports Illustrated .
Is it really important to help literacy by helping publications that are doing quite well, thank you very much, and do not need any help whatsoever from the taxpayer? Or, should we look in fact at investing directly into literature and reading material that is available to the general public as we do through schools, libraries, universities and so on and through very directed literacy programs delivered on the ground by community organizations across this country?
I, frankly, prefer the latter.
Ken Epp: Mr. Speaker, I want to just add my two bits worth to this debate.
Being an educator all my life, I of course know the value of books. I think it is unconscionable that students who, for the most part these days, are having a great deal of trouble making ends meet, are taxed to death by a government that has this insatiable hunger for tax revenue.
With respect to what the hon. member from the Liberal Party opposite said just a few moments ago, I have a tendency to agree that there would be a loss of tax revenue obviously from some printed materials that many would value not worthy of that exemption from the GST. On the other hand we find that taxpayers' money is being used via Heritage Canada to subsidize equally offensive publications and equally offensive productions. I have seen and heard them myself. That is using taxpayers' money.
Perhaps we should strike a deal. Let us say that we will not take the tax away from books if at the same time we will stop using that tax revenue for things which come into exactly the same category.
To be very honest I feel that we need to reduce government expenditures so that we can reduce the amount of debt and reduce the amount of interest payable. Then we could reduce in total the amount that Canadians have to pay in taxes.
If we get on to that and reduce the GST, say in stages to zero on everything, in the end all Canadians will benefit, especially those who are interested in promoting literacy in the country which is the motive of this bill, but in other areas as well. It would be a great boon to our economy if the government got its cotton pickin' GST fingers out of our lives.
The Acting Speaker (Mr. McClelland): The time for Private Members' Business has expired. However as colleagues know, it is a convention in the House on non-votable private members' motions that the last few minutes are very often given to the mover of the motion to sum up.
Do we have the unanimous consent of the House to give the mover of the motion, the hon. member for Dartmouth, three minutes to sum up?
[Intervention]
Some hon. members: Agreed.
Wendy Lill: Mr. Speaker, that is about as much time as I am going to need.
I cannot tell you, Mr. Speaker, how disappointed I am that I was not able to get unanimous consent on this motion. I thought this was something we might be able to come together on.
I am speaking on behalf of all the readers and the potential readers in Canada who were negatively impacted by this decision to not open this issue one more time for discussion. Given the fact that 83% of Canadians would like to see the GST removed from reading materials, I would say that it is a sad day for democracy.
I would also say that it seemed to me that it should have been possible for a dozen or so people left in this House on a Friday afternoon to actually address the issue at hand, which was the very direct relationship between the cost of books and literacy. That was really the only issue we had to be discussing today. We did not have to take each other down ideological paths around labour, around school boards and around Hustler magazine. A lot of red herrings were hauled out on to the floor this afternoon. I am very disappointed at that. The people who were hoping that this might be chance to discuss the GST again are really going to be saddened by that.
I want to close with a request to the Liberals. Why will you not keep the promise that you made many times over your reign and before you were elected? Please, do what you said you were going to do. In the words of your Minister of Canadian Heritage, “Food is not subject to GST because it is a necessity. So are books. They are needed for young minds to grow”. This is from the heritage minister. I hope that at some point your party will somehow get together on your ideas on this and you may in fact do what people in Canada have been asking be done for many years.
The Acting Speaker (Mr. McClelland): The time provided for the consideration of Private Members' Business has now expired and the order is dropped from the Order Paper.
It being 2.34 p.m., this House stands adjourned until Monday next at 11 a.m., pursuant to Standing Order 24(1).
(The House adjourned at 2.34 p.m.)