2001-05-11

Message From The SenateThe Speaker: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed certain bills, to which the concurrence of this House is desired.
[Stage Direction]
The House proceeded to the consideration of Bill C-22, an act to amend the Income Tax Act, the Income Tax Application Rules, certain acts related to the Income Tax Act, the Canada Pension Plan, the Customs Act, the Excise Tax Act, the Modernization of Benefits and Obligations Act and another act related to the Excise Tax Act, as reported (with amendment) from the committee.
Hon. Lawrence MacAulay (for the Minister of Finance): 
moved that the bill, as amended, be concurred in.

The Speaker: Is it the pleasure of the House to adopt the motion?
[Intervention]
Some hon. members: Agreed.
(Motion agreed to)
The Speaker: When shall the bill be read a third time? By leave, now?
[Intervention]
Some hon. members: Agreed.
Lawrence MacAulay: 
moved that the bill be read the third time and passed.

Mr. Roy Cullen (Parliamentary Secretary to Minister of Finance, Lib.): Mr. Speaker, I appreciate the opportunity to address the House at third reading of Bill C-22, the income tax amendments act, 2000.
The bill would implement key elements of the government's five year tax reduction plan, the largest tax relief package in Canada's history, and would legislate the technical amendments in Bill C-43 which died on the order paper last fall. Each measure in the bill is based on the principles of fairness and equity in the federal tax system to which we have been committed since 1993.
The most important component of the bill delivers measures announced in the 2000 budget and last October's economic statement to set out a multiyear plan for further tax reductions.
This plan, which provides $100 billion in tax relief by 2004-05, will reduce by an average of 21% the federal personal income tax paid by Canadians.
Families with children will receive an even larger tax cut of about 27% on average.
As of January 2001, tax rates on all income levels were reduced and the 5% deficit reduction surtax was eliminated. The low and middle income tax rates fell to 16% and 22% respectively. The top 29% rate was reduced to 26% on incomes between $61,000 and $100,000, which means the 29% rate applies only to income over $100,000. As all the economists and analysts have noted, the timing could not have been more perfect to bring in these tax cuts.
Increased support for families with children would be provided through the Canada child tax benefit. The maximum Canada child tax benefit for the first child would rise to $2,372 in July, well on the way to the five year goal of $2,500 by the year 2004.
For the second child the maximum Canada child tax benefit would increase to $2,308 in July 2004.
These amendments must be in effect by July 1, so that families can get this benefit within the set timeframe.
Other amendments to personal income tax are specifically designed to help those who need them most.
The bill would increase the amount on which the disability tax credit is based. It would expand the list of relatives to whom the disability tax credit can be transferred to make it consistent with medical expense tax credit rules and it would allow speech language pathologists to determine eligibility for the disability tax credit with respect to speech impairments.
In addition, the bill would increase the maximum child care expense deduction for children for whom the disability tax credit can be claimed and the amounts on which the caregiver and infirm dependant credits are based.
It would also include certain incremental costs under the medical expenses tax credit when a principal residence is built for people with mobility impairments.
Moreover, an amount of up to $3,000 in scholarships, fellowships and bursaries will be tax exempt, provided the student is eligible for the education tax credit. Self-employed workers can deduct from their income the share of the contributions to the Canada pension plan or to the Quebec pension plan paid by the employer for their own benefit.
Other personal income tax changes clarify the rules under which clergy can claim a deduction for their residence, allow Revenue Canada to release information about former registered charities under certain conditions and exempt municipalities from filing T4s for volunteers to whom they paid not more than $1,000.
Another element of the tax reduction plan would help make Canada's business income tax more internationally competitive. Corporate tax rates would drop to 21% from 28% for businesses in the highest tax sectors to make them more internationally competitive, beginning with a one point tax cut effective January 1, 2001.
By the year 2005 the combined federal-provincial tax rate would drop from the current average of 47% to 35%, five percentage points lower than the U.S. This would put our businesses on a more competitive level with other G-7 countries and serve to attract investment and create jobs.
The plan also provides a tax deferred capital gains rollover for investments in shares of certain small and medium size businesses, and a 50% reduction of the capital gains inclusion rate. Thus, the highest federal-provincial tax rate on capital gains will be lower than the same combined rate in the United States.
Increasing the employee stock option deduction from one-third to one-half means employees in Canada would be taxed more favourably on stock option benefits than employees in the United States. In addition, the bill would allow the deferral of tax on certain stock option benefits and an additional deduction for certain stock option shares donated to charity.
Bill C-22 would ensure a comparable tax system for Canadian banks and foreign bank branches operating here. It would strengthen the thin capitalization rules, phase out the special tax regime for non-resident owned investment corporations and introduce a temporary 15% investment tax credit for grassroots mineral exploration.
Technical amendments include extending the additional capital tax on life insurance corporations until the end of 2000 and clarifying the tax treatment of resource expenditures and the rules governing gifts of ecologically sensitive land.
There are three remaining measures I will touch on briefly before closing.
The first would introduce changes to the taxation of trusts and their beneficiaries, in particular property distributed from a Canadian trust to a non-resident beneficiary, mutual fund trusts, health and welfare trusts and those governed by RRSPs and RRIFs.
New antiavoidance measures will ensure that transfers to trusts cannot be used to unfairly reduce taxes.
The next measure would ensure that Canada retains the right to tax immigrants on gains that accrue during their stay in Canada. It would also clarify the effects of new taxpayer migration rules on rights to future income and allow returning former residents to unwind the tax effects of their departure regardless of how long they were non-resident.
To avoid international double taxation, former residents would be able to reduce Canadian tax payable on their pre-departure gains by certain foreign taxes paid on the same gains.
Another measure would make advertising expenses in periodicals with at least 80% original editorial content fully deductible and those in other periodicals 50% deductible regardless of ownership.
After July 1996 Canadian pension funds and other entities that own Canadian newspapers qualify as Canadian citizens under the ownership requirements of the Income Tax Act.
Before closing, I wish to mention that a number of amendments were made to this bill in committee. On behalf of the government, I wish to thank members of the Standing Committee on Finance for their detailed examination of this bill.
Improvements have been made to several provisions, including those affecting back to back loans, weak currency debts, foreign accrual property income, partnerships, mortgage investment corporations and segregated fund trusts, just to name a few.
Each of these amendments contributes to fairness in the tax system.
I remind the House that fiscal responsibility for government is fundamental and tax cuts are essential. At the same time we are committed to maintaining an effective, fair and technically valid tax system. Without a doubt this is the thrust of Bill C-22.
This bill will implement the key features of the five year tax reduction plan, which will lighten the tax burden on all taxpayers, strengthen support for families with children, and increase the competitiveness of the Canadian corporate tax system internationally.
I urge all my hon. colleagues to keep in mind that Canadian children need the Canada child tax benefit increases on July 1, a fact that makes speedy passage of the bill essential.
Mr. Ken Epp (Elk Island, Canadian Alliance): Madam Speaker, I seek unanimous consent of the House to split my time with the hon. member for North Vancouver.
The Acting Speaker (Ms. Bakopanos): Is that agreed?
[Intervention]
Some hon. members: Agreed.
Ken Epp: I am honoured to stand in the House today to speak to Bill C-22, an act to amend the Income Tax Act. Actually it was the Liberal Party election act. Members will recall that the finance minister announced most of the provisions that we are dealing with today just days before the election was called. Of course he had no idea that the election would be called four days later. After he did his economic update and announced these things in the House in October 2000, it came as a total surprise to him that lo and behold the Prime Minister announced an election.
I would like to begin by asking a simple rhetorical question. If there are policies that are necessary just before an election, how come those policies are not necessary between elections? Therein lies a very important question.
We have dealt with it over and over. We dealt with it not long ago when we were dealing with the equalization act. Suddenly it was necessary to lift the cap. It was done because there was an election coming. Believe it or not, the voters bought into it. A whole bunch of them in Atlantic Canada replaced sitting members with Liberal members because the Prime Minister said that the cap would be lifted.
When the legislation came in we dealt with it in the House. We did indeed lift the cap but for one year. We had some questions about the whole equalization process. We thought it should be revisited in order to look at it rationally because it was a very convoluted system. The opposition parties suggested that if it was good for an election year to lift the cap, it should be good policy to lift the cap in the long term. The government said no to that amendment.
All the Liberal members stood on command and voted against the amendment. That is a curiosity to me. If it is good economic policy we should be doing it, whether or not there is an election. If it is not good economic policy then we should be able to communicate to Canadian taxpayers why it cannot be done, and hopefully they would then trust that we would be fiscally responsible in managing their money properly. That is how we would gain their support.
Now we have Bill C-22, an act to amend the Income Tax Act. It goes on from there, but really it is a bill to enact the provisions of the Liberal fall election campaign in 2000. Our party is leaning toward supporting the direction the Liberals are going in. After many years, being a grassroots party and representing the wishes and sometimes the demands of Canadian voters and taxpayers, we brought to the House the wishes of Canadians on fiscal matters.
The Liberal government loves to tax and spend. It loves to take money out of the pockets of taxpayers and then roll it out during an election campaign so that hopefully it can stay in power, which is its overarching principle. Four days before the election was called the Liberals said that what the Canadian Alliance was saying was right on. The polls told them that. If they wanted to win the election, they had to do these things during the election period so that they could get re-elected.
The government introduced a number of measures, some of which are included in the bill. We are now debating what the government promised, just by coincidence, four days before the election was called.
I would like to say a little about those things. First I want to give very low marks to the Liberals but high marks to their communication department. They have spin doctors who work very well. They are able to communicate with straight faces to the Canadian people that there is a $100 billion tax cut. One billion dollars is an awful lot of money and $100 billion is massive. It boggles the mind.
I have sometimes used this example when I talk to students and we talk about the way in which governments spend money, and the way they tax and so on. Sometimes we also talk about the debt. When the Liberals came into power they inherited a debt of around $520 billion. They allowed it to grow to almost $580 billion.
We will be very fortunate if by the end of the government's mandate, say in the year 2004, although the Prime Minister will probably call an election in 2003, but certainly by the end of 2004, we will be back down to the debt level that we were in 1993 when it took power. However, the spin doctors are able to convince Canadians that the Liberals are excellent stewards of the public money. They are telling Canadians to trust them because they will manage our money properly, notwithstanding that the debt is much higher than it was when they took over.
I said that the magnitude is in the billions of dollars. I do not have the exact numbers before me because I was not planning on using this example. However, when I talk to students about $1 billion I ask them how long it would take them if they had to spend $1 million at a rate of $1 per second? Some of them guess a bit and then I tell them the answer. As I recall, if they started at midnight on January 1 it would take them until January 11 or 12 before the money would be gone, approximately 11.5 days to get rid of $1 million at $1 a second.
Then I ask them how long it would take them to spend $1 billion? Again, they guess and then I tell them the answer. I tell them that to spend $1 billion at the rate of $1 per second would take until September, 31 years later. That is how long it would take to get rid of $1 billion.
Here we have a government claiming through its spin doctors a tax cut of $100 billion. That is spin doctoring at its finest. The $100 billion includes a lot of money that it just decided not to take.
I will give another example. Let us say I decided to give my wife some money to spend on a house, which I know she would love, and told her that I was going to give her $20,000 more than I planned to give her. Under my breath I would mutter that I was planning on taking $18,000 away from her. She could say that $20,000 was great but the fact is it would only be $2,000 because it would include the $18,000 that I was going to take out of the housing fund.
This is what the government has done. It is claiming $100 billion in tax relief, but included in that is a whole lot of money that is represented by money that it could have taken but which it has now decided not to take.
For example, a couple of years ago the government announced that it was restoring indexation. There was no mention made of it being retroactive, so perpetually taxpayers were still suffering the removal of indexation on the tax rates over the last number of years because the government flattened the thing out. We were paying a whole lot more taxes because of bracket creep. When the government reintroduced it, it started from the present position and did not go back. Therefore, the errors of the previous years continue to be perpetuated.
One of the things the government is claiming is that due to indexation this is a tax cut. It is not a tax cut at all. The government said that it would take $10,000 from each taxpayer and now it is saying that it will only take $8,000. In that case, the government is calling this a $2,000 tax cut but it is still taking the $8,000. To call that a tax cut is inaccurate.
Furthermore, we have the child tax benefit. It is true that in the legislation the child tax benefit would be increased but that is not a tax cut. It is an expenditure. It is a case of the government thinking of a way to spend some money on behalf of families. In a way, I have some sympathy for that position but it cannot properly or legitimately call it a tax cut. That is spin doctoring and it is not acceptable in terms of the actual message that is being put out there.
The bottom line is that the actual tax cut is not $100 billion. It is actually closer to $50 billion and that is spread over five years.
We have a whole bunch of questions with respect to the bill but the government has decided to go ahead with it. We know its members will vote for it and it will happen. I will concede that families with children would get more money from the spending program and so for them it is an advantage. For families without children, such as in the case of my wife and I whose children are grown up and have left home, there would be no tax cut. It is a spin doctoring myth.
The bill also has implications in the area of tax rates. We talk about the single tax rate. The opposition and some of the other parties, and when I talk of opposition I mean the Liberals who are in opposition to us, totally misrepresented what a single tax rate does.
Our plan was to have one rate of tax at 17% and then subsequently we revised it so that it would apply only to $100,000 of taxable income. That still included all of the present deductions. None of them were to be taken away. However, instead of talking with Canadians and honestly debating its plan versus ours, the government has totally distorted what it said about our plan and then proceeded to knock it.
It is really an unfair thing. It is as if we have two car dealers and one dealer, trying to promote his product, says that the wheels fall off his competitor's cars as soon as they are driven 10,000 kilometres. It is not true but that is what he says would happen. He repeats it over and over again and then asks, with great passion, whether the customer wants to buy a car with wheels that fall off after being driven 10,000 kilometres. The customer says, no, and the car dealer suggests that the customer buy his car.
That is what those Liberals did. I almost used a bad adjective, but thankfully I caught myself. They took our plan, totally distorted what it did, developed animosity against that caricature of what we were proposing and asked Canadians to vote for them.
There are still thousands of Canadians who want to trust their governments. They want to trust their politicians. During an election campaign when these things are said Canadians think that if their trusted government leaders are saying something it must be right so they therefore believe them.
I will take a ten second diversion to say that the same distortions happened when the Minister of Citizenship and Immigration said what she said. That was a hurtful and total distortion for a person like myself whose family members have worked all around the world with people of all kinds of different backgrounds, helping them. To be labelled the way the immigration minister labelled us and then have Canadians say they would not vote for us because we were scary is hurtful and wrong.
If we want Canadians to trust us we have to start dealing openly and honestly with them. We have to tell them the truth and start debating the Liberal proposal versus ours. That unfortunately has not happened. I resent this.
I taught mathematics and computing for 31 years in my life prior to becoming a parliamentarian and when people misuse math I get just about as upset as I do when they describe me in pejorative terms. The government had Canadians persuaded, and this is one thing in the bill, that it would reduce the lower tax rate from 17% to 16%. It had the gall to go to Canadians, say it was reducing the rate to 16% and claim that was even better than the Canadian Alliance proposal.
However, it was worse than that. In every category, including that first category at the low rate, our tax plan would have given Canadian taxpayers a greater tax break. The reason was simple. Even though our rate was 17%, it was on less of taxpayers' income. We proposed, for example, that a two parent family with two kids would not pay any income tax on the first $26,000 of their earnings. The Liberals ignored that. They ignored the fact that we would increase the exemption. All they did was talk about the fact that they would reduce the lower rate to 16% from 17%.
I resent it when people trade on a misrepresentation of mathematical facts. This is what the government has done and this is what we would be passing with Bill C-22. If we pass the bill later today we would be approving the reduction of that rate to 16%. Canadians would get a smaller tax break than they would have had they voted for us because of the fact that the Liberals have a great deal of expertise in messaging, in telling people “this is what is” when in fact it is just the opposite.
In passing Bill C-22 the Liberals ought to send out a press release to say that while they would be reducing the income tax rates and going from three levels to four, while they would be decreasing the 17% rate to 16%, the 25% rate to 22%, the 29% rate to 26%, and retaining the 29% rate for everything over $100,000, there is something else. I would like that press release from the Liberal government to also say in bold letters at the bottom of the page “Please note that Canadians were hoodwinked into voting for a party that proposed this bill and got it pushed through the House and that it gives taxpayers a smaller tax break than, first, they deserve, and second, what the Canadian Alliance would have given them”. That is what the press release should say. I am expecting the Minister of Finance to put that on the bottom of the press release later today or next week when this bill is finally passed.
I am sure that will happen. I see the parliamentary secretary over there grinning from ear to ear, which of course shows compliance with my present request.
The fact of the matter is that a $100 billion tax cut is a $50 billion tax cut or even a little less if we look at how much the taxes are actually being cut. The rest is spin doctoring. The fact of the matter is that this would produce a tax cut smaller than the tax cut we would have provided.
There are some other provisions in the bill with which I happen to agree. There is a disability tax credit. There is also the issue of children. Families have big expenses when raising children. The government is going in the right direction here by making it slightly easier for families, but it does not come anywhere near recognizing the actual costs of raising children. We would have substantially increased the deduction for children. The government has not done that. The taxpayers would still pay taxes on the money and if they qualify they get a tax credit. Most people in the middle income bracket with two earners have the promise of a child benefit for which they are not eligible. Their taxes would stay the same. The government is not reducing the taxes yet is announcing with this bill that taxes would be reduced.
I regret that my time is up, Madam Speaker, but thank you for giving me the time to express my views on the bill. I will vote against the bill for the reasons I have articulated.
Mr. Ted White (North Vancouver, Canadian Alliance): Madam Speaker, I thank the hon. member for Elk Island for such an interesting speech. I would like to expand slightly on one of his points. It has to do with the size of the debt. The fact is that even after all these years of Liberal government and the claims of fiscal responsibility the debt is still larger than when the Liberals took office. Taxpayers are still paying $40 billion a year in interest.
My colleague talked about the examples he uses when he speaks at high schools. There is one in the Vancouver area that I use to illustrate the size of this $40 billion debt and what it really means. It is fairly well known that right at the moment the Lions Gate bridge is under reconstruction. To build a brand new Lions Gate bridge would cost about $200 million. Canada could build 200 brand new Lions Gate bridges every year with $40 billion.
Ken Epp: That's the interest.
Ted White: Yes, that is just the interest on the debt. Imagine the amount of infrastructure that could be built if we were not paying so much interest on the debt: 200 brand new Lions Gate bridges every year. That is four every week, four brand new highway bridges that could be built every week. These are huge bridges, not just normal small highway bridges. This is enough money to twin the freeway in Vancouver every month.
These are enormous amounts of money we are talking about and the bill would do very little to reverse the legacy that really dates back to the Trudeau days. All these problems that the bill would take tiny little steps to address go back to the days of Trudeau.
I have an article here written by Michael Campbell, quite a well known author in the Vancouver area, about the problems we have today and how they relate to those days of Trudeau. It does relate directly to the bill. I would like to read a little bit from the article because it illustrates the size of the problem. It was written on October 3, 2000, a little while after all the public outpouring of grief after Mr. Trudeau's death. Michael writes:
Trudeau is the godfather of Canada's interventionist government policies regarding the economy. It was Trudeau who spearheaded the drive for the “Just Society” through aggressive increases in government spending and wealth distribution that led to Canada leading the world in the growth of taxation.
It was the Trudeau government that brought Canada's federal deficit from zero in 1968 to $38 billion by the time he left office in 1984. It was the buildup of debt during the Trudeau years that laid the foundation for today's $40 billion in interest payments.
While socialists or Marxists might like to take credit for the philosophical underpinnings of his economic policy, it was Trudeau who put the thoughts into action.
In 1968 the federal government launched what was then called the short-term bailout of the Cape Breton Coal Company—
Do you remember that, Madam Speaker? It was a short term bailout in 1968. In the year 2000, after $1.7 billion in subsidies had been spent on that project, it was finally shut down.
Michael Campbell continues:
It was during the Trudeau era that unemployment insurance subsidies became a way of life for some in the Maritimes with the results still well in evidence today.
Under Trudeau we got nationalization of companies and industries. Canada curtailed foreign investment and exploded the government bureaucracy.
But his legacy extends beyond specific economic policies into a mindset that still dominates the landscape today in Canada.
We are still stuck with the problem that was built up in the country during the Trudeau years, as Michael Campbell notes:
It was during the Trudeau years that the anti-business, anti-success attitude—referred to by Nobel Prize-winner Robert Mundell as the chief obstacle to our economic prosperity—took hold and flourished.
Marketing all government policies as part of the pursuit of the Just Society has permanently linked the concepts of government intervention and justice in many people's minds.
We see the results today where opposition to extending government programs is regularly regarded as a form of inactivity at best and godlessness at worst.
As (the) Prime Minister...has told us regularly, only the selfish and greedy want to lower taxes. Only the most cold-hearted could oppose a national day-care program or business subsidies.
What's interesting to note is that before we headed on the path toward the Just Society, Canada had the second-highest economic output per person in whole world.
This fact is important to note. Before we headed down the Trudeau road we had the second highest economic output per person in the whole world.
Michael Campbell continues:
The latest numbers from the OECD put us at 20th out of 29 in the developed world. Our economy grew at an average pace of five per cent, excluding inflation, before 1968, which is 40 per cent higher than the average since.
Whatever economic indicator we look at since the Trudeau just society began, we have gone downhill in economic performance every way we measure it.
Michael Campbell says:
Our federal debt has grown from 0 to $750 billion, while our currency has gone from being at par with the U.S. dollar—
It is below 65 cents today. How can anyone spin doctor it so well? It is absolutely amazing to westerners that somehow there is this line at the edge of Manitoba and everyone to the east of it cannot see what is going on. They have bought into this terrible scam that was started back in 1968 and has been perpetuated.
As for the pursuit of the just society, poverty advocates tell us that nothing has changed. There are more people in poverty than there were before, which always leaves us somewhat startled considering that so many Canadians continue to call for more of the same policies.
The bill, as I have mentioned, would really just take tiny baby steps to reverse that terrible Trudeau legacy that has led us to where we are today. Also part of the Trudeau legacy is the beginning of western alienation. It was Trudeau who gave us the finger from the train in Kamloops many years ago. It was Trudeau who started the national energy program that destroyed the economy in Alberta.
Still to this day the west is not getting its fair share from this Confederation. For example, my colleague from Elk Island mentioned that there was recently a temporary increase in the transfer payments, but he did not mention that more than half of that went to Quebec, which somehow still manages to portray itself as a have not province.
It is totally ludicrous that this situation exists. I know from working here on the Hill that practically every product we use, every service we obtain, is supplied by Quebec. The pens and pencils, the paper, the water supplies, the computers, the people who work here: just about everything comes from Quebec. This shows that the Quebec economy is extremely well diversified. They build automobiles. They have manufacturing plants for aluminum extrusion. They export electric power. It is a complete mystery to me that it is a have not province. It is certainly a mystery to the people out west who are receiving less than their fair share of the transfers.
For example, spending in B.C. by the federal government is comprised of direct goods and services expenditures as well as transfers to individuals in the form of EI payments, pensions and so on. However the one area of spending that is 100% under the control of the government is the procurement of goods and services.
If we look at the data from 1992 to 1998, and that is the latest year for which we have figures available, on average the federal government spent about $3 billion on goods and services in B.C. in each of those years. Our share, based on the population, should have been between $4 billion and $4.5 billion. That difference amounts to a shortfall for B.C. in goods and services alone of $9.5 billion in just six years.
Worse still, no attempt has been made by the Liberal government to correct the problem. It has kept that figure stagnated between $1 billion and $1.5 billion steadily since 1993. It has done nothing, not a thing to increase it.
In a typical year, taking into account all federal transfers to the province of British Columbia, we receive about $1.7 billion less than Ottawa collects in revenues from B.C. For example, in 1998 the following differences can be found between British Columbia's actual share of expenditures and the hypothetical share based on population.
We had a goods and services procurement shortfall of $1.178 billion, almost a $1.2 billion shortfall. We had a shortfall in transfers to persons of $40.4 million and we had a transfer to business shortfall of $89.89 million.
In addition, because B.C. is rated as a have province despite our awful NDP government and the terrible deficits that it runs, we received approximately $1.1 billion less in direct transfers to the provincial government.
Of course it is no secret that B.C., Alberta and Ontario all contribute to the so-called equalization transfers to Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, P.E.I. and Newfoundland. Quebec is the strange one and how it still qualifies as a have not province despite its productivity is a mystery.
I noticed recently that the government of Quebec announced a tax holiday for some types of business. Equalization transfers are supposed to be based on the government's inability to raise sufficient revenues from its residents, so how can a government justify giving tax reductions to some businesses and at the same time saying it cannot raise enough taxes so it wants more equalization payments?
I suppose in theory the government of B.C. could reduce all the taxes to zero for its constituents and then say that it cannot raise any money from its constituents and ask Ottawa to transfer all the money back to it. It is a ludicrous equalization program in which we find ourselves entangled. It does not make sense at all.
It is interesting to note the fiscal outflow from B.C. caused by the weak federal spending on goods and services. It is not only proportionately higher than any other province, but it is higher in absolute numbers of dollars. We receive $295 less per capita than any other province. It is just not fair.
With the Prime Minister regularly saying that westerners would get a better deal if they voted Liberal, I hate to think of the mess we would be in today if that had happened. When we look at that federal debt and the way it was exploding in 1993, I well remember the Liberals and the Progressive Conservatives calling us extremists because we wanted to balance the budget back in 1993 with our zero in three plan that we promoted in 1993 to get the government's fiscal policies under control.
At that time every government in the country was running deficits. The federal government was running $40 billion deficits a year and we were called extremists for wanting to fix that problem. The government and the Progressive Conservatives scared people by saying we were extremists.
We managed to get 54 members into the House. We made the difference because today when we look across the country there is not a government, federal or provincial, that does not want to balance its budget. All of the credit, 100% of the credit for that goes to the Reform Party of Canada and the Canadian Alliance for taking it from extremism to being mainstream.
Anybody who tries to claim that it was the Liberal government that did it is misinformed or misinforming because it was not the Liberal government that did it.
The way to correct western alienation is not for more people to vote Liberal. It is for the government over there to stop the scare tactics, to stop the distortion of facts and to start looking at what is best for the country. What is best for the country is not what is contained in the bill. It is a sham, a complete sham.
As my hon. colleague said, we will end up at the end of this term with more debt to pay and with $40 billion a year in interest payments. If we had followed the Reform Party plan that was promoted in 1993, we would already have significantly paid down our debt. We would be in the range of $30 billion a year in interest payments, freeing up $10 billion a year to spend on infrastructure and other programs.
It is frankly dishonest to present the bill to the House and accuse us of holding it up when we are trying to take our entitled time to show the people of Canada exactly what is going on.
The bill is not only a sham. It adds to the complexity of the tax act. Every one of us in this place gets complaints from our constituents about the complexity of the tax act. There is hardly anybody who can even do their own tax returns any more; they have to hire an accountant or a specialist to do them. The Canadian Alliance promoted, which should be included in Bill C-22, a reduction in the complexity rather than an increase in it once again.
My colleague from Elk Island mentioned briefly how the numbers actually do not tell the whole truth. In my finishing minutes I would like to go over those numbers quickly.
The government claims a $100.5 billion gross tax reduction, but when we take off $3.2 billion over five years for social spending because of the child tax benefit, which is really spending and not a tax reduction; when we take off the $29.5 billion over five years for increased CPP premiums; and when we take off the $20.7 billion over five years for cancelled tax hikes due to indexation, we end up with $41.7 billion in tax relief over five years.
That is better than nothing. We are pleased that at least there is some. It certainly is not honest to portray it the way it has been on the other side of the House. The biggest problem we still have is the size of the debt and the size of the annual interest payments which, as I said at the beginning of my speech, could build 200 brand new Lions Gate bridges every year.
Mr. Joe Comartin (Windsor—St. Clair, NDP): Madam Speaker, I did have a different introduction to make, but after listening to my colleague from the Alliance I thought it might be important to point out to him and other hon. members of the House that the first government in Canada to balance the budget was an NDP government in Saskatchewan after some horrendous budgetary practices by the prior Progressive Conservative government.
We were the first ones. There were terrible practices by the prior government. It was a right of centre government, by the way. We take some pride in having been able to do that and, quite frankly, in the history of the administration of the finances of that province all the way back to when it was led by Premier Tommy Douglas.
I rise today to speak in opposition to the passage of this bill and wish to do so from a number of perspectives. I will start with the issue of the environment as that is my responsibility as critic for my party.
Earlier this week we had the opportunity to come together as a House on an issue proposed by the Progressive Conservatives with regard to the protection of water in Canada. All members of the House, with the exception of the Bloc, supported that motion and rightfully so.
When we look at these budgetary items we cannot help but realize the height of hypocrisy when the government side proposes that our finances be handled in this way. At the same time it ignores to a very significant degree the responsibilities of the government to provide necessary financing for a municipal infrastructure program to deal with the crisis facing Canada with regard to providing safe water for all citizens.
We see figures from the municipalities on what it will cost to treat our water and our sewage. The type of dollars they are talking about are no way reflected in the budgetary items before us. The figure proposed by the Federation of Canadian Municipalities is $16.5 billion. The allocation from the government for all types of municipal infrastructure is only $2.5 billion over six years, which is simply not enough.
I would like to present some statistics on the situation leading up to the financial statement. In the decade from 1989 to 1998 there has been a dramatic shift in wealth and we have seen the impact it has had on family incomes. If we break down by 20 percentiles all families in Canada, the statistics show that from 1989 to 1998 the families at the lower end of the scale dropped in income quite dramatically.
The poorest level dropped 17% in earning abilities in that period of time. The lower middle income group dropped 13%. The middle income group dropped 4%. The upper middle income group went up by 1%. The top end families that earned $114,000 in 1989 went up to $124,000, or a 9% increase, in 1998.

Statements By Members
Cannes FestivalMr. Clifford Lincoln (Lac-Saint-Louis, Lib.): Mr. Speaker, allow me to join all Canadians in congratulating the makers of Atanarjuat: The Fast Runner , which has been selected for screening in the non-competitive un certain regard section at this year's Cannes Festival. Atanarjuat: The Fast Runner is Zacharias Kunuk's first feature film and Canada's first Inuit language feature film. It is an exciting action thriller set in ancient Igloolik and produced in Nunavut by an Inuit company using local cast and crew.
In addition, a France-Canada coproduction entitled La répétition , along with The truth in advertising , a short film by Torontonian Tim Hamilton, have been nominated for a Palme d'or award in the best feature film and best short film categories respectively.
Other Canadian films will also be shown in the festival during international critics' week. They are the first feature length film by Quebec producer Bernard Raymond, La femme qui boit , and the France-Canada coproduction entitled Le pornographe . We can be proud—
The Speaker: The hon. member for Elk Island.
Ottawa TaxisKen Epp: Mr. Speaker, since I have been a member of parliament, now a little over seven years, there has been a curious thing happening here in Ottawa and I would just like to draw the members' attention to it.
When we go to the airport, the taxis can only carry passengers in one direction. There is somehow a rule somewhere that says one company gets the right to haul passengers from the airport into Ottawa and the other companies haul passengers from Ottawa to the airport. Therefore, every other cab is empty.
This has huge implications to costs. Some of these taxi drivers running empty half the time are making very little money. They are not able to pay as much taxes. It is definitely tough on the environment because we have all these vehicles spewing exhaust gases.
I think, if the federal government were responsible, it would look into this and not only give permission but require taxis to carry passengers in both directions.
Right Hon. Pierre Elliott TrudeauMr. Jean-Guy Carignan (Québec East, Lib.): Mr. Speaker, on July 1, Canada Post will be issuing a stamp commemorating the former Prime Minister of Canada, Pierre Elliott Trudeau.
It is no mere accident that the date of July 1 was chosen, it being the national day of this country, Canada, to which Mr. Trudeau has left such a great legacy.
It would be hard to list all of his accomplishments, but among them are the Official Languages Act, the Canadian Charter of Rights and Freedoms and patriation of the Canadian Constitution, not forgetting his contribution to our foreign policy, to improving the status of women and native people, and to promoting the French fact in Canada.
I congratulate Canada Post on this initiative to commemorate the contribution to this country by a great man, Pierre Elliott Trudeau, recently selected as the Canadian personality of the century.
Canadian MuseumsMr. Marcel Proulx (Hull—Aylmer, Lib.): Mr. Speaker, on May 3 the Government of Canada launched the second edition of the Canadian Museum Treasure Hunt.
This is an interactive learning game on the Internet, created to celebrate International Museum Day, which falls this year on May 18.
Through the treasure hunt, young people can discover 23 Canadian museums. Its purpose is to encourage young people to visit museums and learn about Canada and the world.
I invite young Canadians, as well as the not so young, to join in this ingenious treasure hunt by visiting the websites of the Department of Canadian Heritage and Virtual Museum Canada.
Have fun, everyone.
Millennium ScholarshipMs. Sophia Leung (Vancouver Kingsway, Lib.): Mr. Speaker, I am proud to congratulate the six outstanding students in my riding who have been awarded millennium scholarships for 2001-02.
The students are Stacey Chiu and Khanh Nguyen from Windermere Secondary School, Steven Co from Vancouver College, Jatinder Man from St. John's School, Esther Tain from Burnaby South Secondary, and William Wu from Charles Tupper Secondary School.
Those six students have worked hard to achieve those scholarships. I hope all members of the House will join me in congratulating them and indeed all scholarship winners from across the country.
Government Of OntarioMr. Jason Kenney (Calgary Southeast, Canadian Alliance): Mr. Speaker, the Mike Harris government has done it again. Since 1995 it has continued to produce tax cutting, deficit reducing budgets that have put Ontario back on track. The most recent budget is no exception. It took the first steps toward eliminating the job killing capital tax, and Ontario's tax incentives are being completely reviewed.
I am especially thrilled that the Ontario government took the principled and courageous decision to recognize the enormous sacrifice and the public good done by tens of thousands of Ontario families who, for reasons of conscience and obligation, send their children to independent schools and pay for those schools with after tax dollars, many of these families with very modest means and incomes.
The refundable tax credit for receiptable independent school expenses announced yesterday is a policy that the Canadian Alliance has promoted. We are delighted to see that the Mike Harris government, against the shrill voices of the Liberal opposition and the big union special interests in Ontario, has decided that parents should be able to decide what is in the best interests of their children, and they should not be penalized for doing so. We want to commend Jim Flaherty.
International Nurses DayMr. Serge Marcil (Beauharnois—Salaberry, Lib.): Mr. Speaker, this Saturday, May 12, is International Nurses Day. The theme for 2001 is “Nurses, always there for you: united against violence”.
This will be an opportunity for us and Canadians to recognize the important work these health care professionals do for each of us and all of society. Whether they work here or abroad, nurses make a difference in the quality of care provided.
With the new developments in health care, they are increasingly called on to work together with other professionals in health care. Their expertise and know-how often make them the central workers in the community. In the current context of resource shortages, they are creative and innovative.
I wish all nurses an excellent day.
Société Littéraire De LavalMs. Madeleine Dalphond-Guiral (Laval Centre, BQ): Mr. Speaker, on May 4, the Société littéraire de Laval, with its honourary president, Quebec poet Joël Des Rosiers, announced the names of the 11 winners of its second annual literary competition.
This initiative recognizes the talent and work of those who have the writing bug. Through the magic of prose or poetry, they breathe life into characters, set the scene, kindle emotions. We often see ourselves reflected in what they have to say.
This year's winners are tomorrow's writers. Whether they be called Dominic Gagné, Andrée Proulx, Alexandre Piché or Tania Langlais, they are a wonderful illustration of the exceptional commitment of the Société littéraire de Laval, which has had a soft spot for words for the past 16 years.
I am proud to congratulate all the participants in this competition, including the 150 college students. To the winners, I tip my hat, and to the Société littéraire, I offer my thanks for its work in developing vitality and excellence in the French language, at home, in Quebec.
Catholic Central High SchoolMr. Pat O'Brien (London—Fanshawe, Lib.): Mr. Speaker, I wish to extend my congratulations to the crusaders of Catholic Central High School in London on their 50th anniversary.
As an alumnus I am proud that I attended CCH and I also had the privilege to teach and coach there for 10 years.
Alumni from across the country attended the reunion last Saturday and reminisced about past times. Catholic Central was originally London's only Roman Catholic high school and has produced many outstanding citizens in all walks of life.
Archbishop Peter Sutton, a former teacher at CCH, was the guest speaker.
I was joined by my provincial counterpart, the MPP for London—Fanshawe, Frank Mazzilli. The mayor of London, Anne Marie DeCicco represented city council. Both of these leaders are also CCH grads.
May Catholic Central enjoy a very successful second 50 years.
Middle EastMr. Stockwell Day (Okanagan—Coquihalla, Canadian Alliance): Mr. Speaker, we are all saddened by the continuing violence in the Middle East. In the past few weeks we saw a four month old Palestinian baby killed by a missile strike and two young Israeli teenagers kidnapped and murdered. The cycle of violence must end.
The Canadian Alliance supports the right of the state of Israel to exist within safe and secure borders and the right of Palestinian people to negotiate for self-government through the peace process. We condemn any terrorism on any side of this complicated conflict.
We also call for the Government of Canada to be more open and transparent in its foreign policy development.
I want to assure all Canadians that this remains my position, the position of our party, and reflects my speech earlier this week.
I also wish to reiterate my great respect and friendship for members of all of Canada's religious and cultural communities with whom I and my party have worked hard to forge common ground on issues such as immigration, tax reform, support for the family and tax relief for parents who wish to educate their children in their own religious and cultural traditions.
We look forward to maintaining and enhancing our relationships with all these groups and individuals.
Canada Health DayMr. Yvon Charbonneau (Anjou—Rivière-des-Prairies, Lib.): Mr. Speaker, I am pleased to inform the House that tomorrow, May 12, is Canada Health Day.
Canada Health Day is held each year on the anniversary of the birth of Florence Nightingale, and is jointly sponsored by the Canadian Public Health Association and the Canadian Healthcare Association.
Together, let us wish an excellent Canada Health Day to the Canadian Public Health Association, the Canadian Healthcare Association, their members, their staff, their volunteers and their associates.
I ask all members to please join me in wishing the Canadian Public Health Association and the Canadian Healthcare Association a very successful Canada Health Day.
National Drinking Water StandardsJoe Comartin: Mr. Speaker, three years ago a Canada Mortgage and Housing Corporation study concluded that the cost of providing safe drinking water in Canada would be $4 billion a year over 15 years. Canadians are looking to their elected representatives to give them reassurances that the water they drink is safe.
New Democrats across the country are working on this. Last month in British Columbia the NDP government passed the drinking water protection act. It provided an additional $11 million in new funding and enforceable standards, despite the objections of the B.C. Liberal Party.
In Ontario New Democrat Marilyn Churley has introduced a private member's bill to ensure Ontarians that they can trust the quality of the water they drink. Both of these pieces of legislation provide a framework for public disclosure and ensure the public has the right to know the results of water testing.
It is time the government follows suit by providing national standards for drinking water and an adequate infrastructure funding program.
Mothers' DayMr. Mauril Bélanger (Ottawa—Vanier, Lib.): Mr. Speaker, it is a great pleasure to remind this House that Sunday is Mothers' Day.
This is a most important day, because it gives each of us an opportunity to show our attachment and our gratefulness to our mother. Our mothers are a source of inspiration. They never fail to display their courage, their love and their organizing skills.
Who has never phoned his or her mother in a panic to get a recipe? Mothers also show their kindness, their determination and their strength. Their contribution to our society is invaluable. On Sunday, let us think about the tremendous influence of our mother in our personal life and let us thank her.
I would be remiss if I did not take this opportunity to thank my mother, Yolande Bélanger, for the values that she instilled in me. I will be forever grateful to her.
Acadia UniversityMr. Scott Brison (Kings—Hants, PC): Mr. Speaker, Acadia University in my riding of Kings—Hants will graduate 750 students this weekend. These students, along with honorary degree recipients, the Hon. William Hoyt, Reverend William E. O'Grady, Mr. Hector Jacques and Col. Ian S. Fraser, will forever be connected to a university with a reputation second to none.
The Maclean's annual ranking of universities has again declared Acadia the most innovative and once again the best overall undergraduate university in Canada. Acadia has also placed first in the leaders of tomorrow and most innovative categories. This marks the fifth consecutive year that Acadia has been considered the most innovative.
Acadia has been honoured by the Smithsonian, has received the Canadian information productivity award and recently was the only Canadian university to receive a pioneer award, an award that recognizes outstanding commitment to the creation of a successful, ubiquitous learning environment.
The launch of the Acadia advantage program has been a key factor in Acadia's success. This program connects students, faculty and staff to a campus wide network. I hope the Canadian fund for—
The Deputy Speaker: The hon. member for Champlain.
Air TransportationMr. Marcel Gagnon (Champlain, BQ): Mr. Speaker, last week the Minister of Transport and the very serious Minister of Finance accused the separatists of being the reason for the problems of Mirabel and Dorval Airports. What arrogance.
The federal government is the one responsible for the decision two decades ago to make Toronto the Canadian hub of international flights. That same government penalized Dorval and Mirabel in allocating routes to Asia.
It sure takes a lot of nerve for a Minister of Transport from Toronto, backed up by an aspiring Prime Minister from Montreal, to lecture to us.
There is a response to this arrogance, and it is Quebec sovereignty. A sovereign Quebec will negotiate its own international routes and will do everything possible to make the airports of Quebec a model of cost-effectiveness and efficiency. Quebec sovereignty, that is the answer.
Teaching AwardsMr. Ovid Jackson (Bruce—Grey—Owen Sound, Lib.): Mr. Speaker, yesterday the right hon. Prime Minister participated in an awards ceremony recognizing the teaching profession.
The Prime Minister's awards for teaching excellence recognizes teachers across the country. Some 65 teachers, men and women who teach subjects as varied as Spanish, music and mathematics and using innovative methods to inspire youngsters to learn, received this award yesterday.
An innovative society needs the next generation of youngsters to be educated. I congratulate these teachers. We give them full recognition and appreciation for their work as they go back into the classroom to inspire future generations.
PensionsMr. Deepak Obhrai (Calgary East, Canadian Alliance): Mr. Speaker, let me tell Canadians how far the government will go to empty the purses or wallets of Canadians. A senior in my riding cashed in a life insurance policy he had held since 1935 so he could buy a computer.
Cashing in that $3,187 life insurance policy reduced his old age security by $1,400 per year, his Alberta seniors benefit by $648, and increased his federal and provincial taxes by $686. His rent which had been subsidized according to his usual income level increased by $50. The $3,187 windfall set in motion a chain of events that put him $161 in the hole.
I will be introducing a private member's bill that will allow seniors a one time windfall of up to $10,000 that will not be subject to clawback by federal programs.

Oral Question Period
The EconomyStockwell Day: Mr. Speaker, we are seeing more reports and assessments which the government has received from outside economists and organizations in recent weeks. These are very disturbing to taxpayers.
One of Canada's most respected economists, Dale Orr of WEFA, is warning today that for the fiscal year just ended federal spending will be about $2 billion more than expected.
How can the government pretend that we are not on track for a deficit or possible higher taxes when its spending is wildly exceeding even the finance minister's own projections? How can it deny we are not on track for a deficit?
Hon. Herb Gray (Deputy Prime Minister, Lib.): Mr. Speaker, we have met and achieved our targets in the past. This is evidence that we will meet our targets in future.
Certainly our spending commitments will be carried out in a fiscally responsible manner and in keeping with our usual prudent budgeting process.
Stockwell Day: Mr. Speaker, he is right on one thing. They have grossly exceeded their spending targets. They are way over.
It is very clear, as a former economist and now the member for Markham said as far back as last November, that the government through its wild spending would be eating into its contingency reserve. That account is there to protect Canadians, should there be unexpected downturns.
How can the government justify wild spending plans which cut into the very savings account that is supposed to be there to protect Canadians?
Herb Gray: Mr. Speaker, we do not have wild spending plans. We have prudent plans to make key investments in matters of importance to Canadians like health care, research and higher education. Why does the hon. member oppose helping Canadians in these key areas?
Stockwell Day: Mr. Speaker, they are wildly exceeding their spending plans. The Canadian Alliance said as far back as last November that there would be a possible deficit within three years. Just this week economists are saying the same.
The finance minister has said he would only bring out a mini update covering the next two years. In November he promised taxpayers everything was fine on a five year projection. He is not talking five years any more, just two.
Is he afraid of what lurks in that three year window, which is a deficit according to economists? Will he bring in a five year plan, not a two year one?
Herb Gray: Mr. Speaker, as I recall it is customary for the Minister of Finance to successfully make his forecasts on a two year basis. Doing that is not a change from the past.
Speaking of economists, Tim O'Neill, chief economist of the Bank of Montreal in today's Toronto Star said:
I don't think they (the government) are going to have any problems avoiding a deficit for the foreseeable future.
He went on to say, as quoted in the National Post :
The tax cuts and the other measures ended up being perfectly timed—
Jason Kenney: Mr. Speaker, while we are quoting economists, perhaps the Deputy Prime Minister noticed that Dale Orr from WEFA said that things would get pretty tight between 2003 and 2005 and that was why it was very important to make sure spending was well restrained.
The government was more than $2 billion over budget for the last fiscal year. In the month of March, the last month of the fiscal year, the government spent 70% more than the average for the other 11 months of the fiscal year. It was March madness taking over.
How can the government say that it has spending under control, when it threw billions out of the window in the last month of the year to satisfy its political agenda?
Herb Gray: Mr. Speaker, our spending is restrained and we are on target. We are exceeding the commitments we are making. We are not over budget.
As evidence of this from an outside source, Craig Wright, chief economist of the Royal Bank is quoted in the National Post today as saying:
Everything this government has done in the past would suggest we don't have to worry about a deficit.
Jason Kenney: Mr. Speaker, the auditor general has repeatedly criticized the government's practice of March madness where ministers and departments blow billions out the door in order to spend it before the end of the fiscal year when the finance minister claws it back.
Could the Deputy Prime Minister tell us why his government continues to ignore these warnings from the auditor general? Why did it announce $16 billion of spending in the last month, in the dying days of the fiscal year just closed? Why did we spend 70% more in March than in any month in the rest of the year? Why is that?
Herb Gray: Mr. Speaker, why does the hon. member not respond to the quote I just gave from the chief economist of the Royal Bank? He cannot do that because the chief economist of the Royal Bank was right when he said:
Everything this government has done in the past would suggest we don't have to worry about a deficit.
Why is the hon. member criticizing our spending to carry out our commitments to Canadians to improve health care, higher education. and research and development? Once again the chief spokesman of the Alliance Party is on the record as opposing these important initiatives for all Canadians.
Organized CrimeMs. Caroline St-Hilaire (Longueuil, BQ): Mr. Speaker, there is no doubt about our need for legislation against organized crime. However, support is far from unanimous for the immunity the minister plans to grant to police forces, without judiciary intervention. Both the Quebec and Canadian bar associations find this approach excessive.
Is the minister aware that this aspect of the anti-gang bill can lead to excesses and slip-ups that will lead to a loss of confidence by the public in their police?
Lawrence MacAulay: Mr. Speaker, I am really surprised at this line of questioning from the hon. member. If we want the police to fight crime, we need to give them the tools to fight crime. The member for Berthier—Montcalm was prepared to give the police power to commit murder.
The government will not allow that. What we will do, and we will not apologize for it, is give the police the powers to fight crime in this country.
Caroline St-Hilaire: Mr. Speaker, the Minister of Justice's words yesterday were very disquieting. Today, it is the solicitor general who is not being in the least reassuring toward the population of Quebec and Canada.
Is the Minister of Justice going to acknowledge that, in the case of search warrants and electronic surveillance, the tradition to which she referred is to involve the justice system in the investigation stage, precisely so as to avoid excesses and slip-ups?
Lawrence MacAulay: Mr. Speaker, as I indicated a number of times in the House, the bill outlines strict limits and controls on the use of this power and has direct political accountability.
What the government wants to do and what I would think all members of the House want to do is to give the police the tools to do the job.
Mr. Réal Ménard (Hochelaga—Maisonneuve, BQ): Mr. Speaker, let us be clear. The Bloc Quebecois has always wanted tough anti-gang legislation. It was even the first, in 1995, to introduce a bill designed to more effectively combat organized crime. But the bill now being proposed extends the notion of police immunity to all criminal investigations, instead of limiting it to investigations dealing exclusively with organized crime.
Will the Minister of Justice agree that she is completely ignoring the well-known conclusions of the Keable and McDonald commissions by allowing police forces to authorize themselves to commit criminal offences in the course of their infiltration activities, which is unacceptable?
Herb Gray: Mr. Speaker, his party is calling for legislation with teeth. But his question suggests that they want to remove those teeth.
Why does the Bloc Quebecois want to do this and make it harder for us to successfully fight crime throughout the country?
Réal Ménard: Mr. Speaker, do the Liberal tradition and the democratic practices the Minister of Justice was boasting about in the House yesterday consist in allowing the government to become politically involved in police investigations, in which case we on this side say shame?
Lawrence MacAulay: Mr. Speaker, the judges will not be involved in political investigations in this country. Politicians will not be involved in investigations in this country.
This bill will give the police the tools they need to fight crime in this country, and this government will never apologize for giving the police the tools to do the job.
The EnvironmentMs. Alexa McDonough (Halifax, NDP): Mr. Speaker, both the environment and the health ministers insist they stand behind the joint action group, the local committee charged with directing the Sydney tar ponds cleanup process. JAG with one voice has demanded residents in the contaminated area be relocated urgently.
My question is for the Minister of the Environment. If the government stands behind JAG, why is it not implementing as an urgent priority the relocation of those residents?
Hon. David Anderson (Minister of the Environment, Lib.): Mr. Speaker, the hon. member's question comes from the partial nature of the preamble she gave. It omitted a number of important facts.
As she should be well aware, we awaiting the report of the consultant on this very subject, which was expected this week and now is expected next week. As the premier of the province, as my hon. friend the Minister of Health and as local residents of the joint action group have made clear, we think it is important to wait until we have the basis upon which we should move rather than moving prior to receiving the information.
Alexa McDonough: Mr. Speaker, the joint action group has made it absolutely clear that the residents must be relocated. The government is not standing behind JAG; it is hiding behind JAG.
Every time leadership is needed the government thinks of another reason for delay. The federal government is the only partner with the resources to get the job done, both the relocation and the cleanup. The minister knows that no cleanup can take place until the residents are relocated. What is the government waiting for?
David Anderson: Mr. Speaker, once again I find it surprising that a member who has served in the provincial legislature of Nova Scotia should be so insultingly dismissive of the correct position taken by the people elected to Nova Scotia legislature.
The fact is that we will have the agreement of the parties based upon proper scientific information. She claims that we do not need proper scientific information. She claims we should proceed regardless of the experts. It is her privilege to ignore the province and the local people, but we expect to abide by the agreements we have made both with the province and the local people.
Atlantic Canada Opportunities AgencyMr. Loyola Hearn (St. John's West, PC): Mr. Speaker, my question is for the minister responsible for ACOA. Since the moratorium hundreds of millions of dollars have been dumped into Atlantic Canada in fisheries diversification and Atlantic partnerships, a lot of it through the minister's department. However a lot of that money cannot be reinvested in the fishery, yet the fishery is the best job generator in Atlantic Canada.
Does the minister not think his department should probably look at investing more money in the fishery in research, in experimental equipment, in marketing, and I suppose—
The Speaker: The hon. minister of state.
Hon. Robert Thibault (Minister of State (Atlantic Canada Opportunities Agency), Lib.): Mr. Speaker, I thank the hon. member for St. John's West for his question. I agree completely with him.
At ACOA we are spending a lot of energy working with the industry in export development, new manufacturing and added value training.
Team Canada, which will include fisheries business people from his province, will be taking a mission to Atlanta. We are also working very closely with the aquaculture industry as a new and developing industry. We have had great success in the development of new technologies and new species in Newfoundland.
Loyola Hearn: Mr. Speaker, my supplementary question is for the minister of fisheries who administers the great lucrative shrimp resource off the coast of Newfoundland and Labrador.
The minister has a whole lineup of people looking for quotas. Does the minister not think that it is about time his department, and the government generally, said to those who are looking to us for such quotas “I will give you the resource provided you show me how you will create jobs onshore”?
Hon. Herb Dhaliwal (Minister of Fisheries and Oceans, Lib.): Mr. Speaker, I thank the hon. member for giving me notice on this question. He is absolutely right. The northern shrimp is extremely important for Newfoundland and Labrador, as well as the maritime provinces.
The hon. member knows that there has been a huge increase in the harvesting of that resource, from just 37,000 tonnes five years ago to 112,000 tonnes. There are always pressures to exploit more of that resource, but we must ensure that any decisions we make are sustainable and that the resource can be taken advantage of for many years ahead.
My decision will be based—
The Speaker: The hon. member for Renfrew—Nipissing—Pembroke.
Canadian Broadcasting CorporationMs. Cheryl Gallant (Renfrew—Nipissing—Pembroke, Canadian Alliance): Mr. Speaker, as Canada's national broadcaster, the CBC has a responsibility to be accessible to all Canadians. Why is the CBC withdrawing service from rural Canadians?
Hon. Denis Coderre (Secretary of State (Amateur Sport), Lib.): Mr. Speaker, I am pleased to say that the Standing Committee on Canadian Heritage has chosen to undertake a study on the state of the Canadian broadcasting system. It will work for the next 18 months. We will wait for its report and then pick it up from there.
Cheryl Gallant: Mr. Speaker, service in small or remote locations is poor and getting worse. Taxpayers in my riding, less than two hours away from Ottawa, cannot receive an over the air signal, as is the case in the rest of rural Canada from coast to coast.
Will the minister direct the CBC to use the $60 million in additional funding to maintain transmission infrastructure rather than fuel a fire sale of assets, which is the current plan?
Denis Coderre: Mr. Speaker, maybe I should call the hon. member the new member for flip-flop, because the Alliance was against funding CBC.
We will take on our responsibilities. We will wait for the committee report and then pick it up from there.
Urban AffairsMr. Michel Guimond (Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, BQ): Mr. Speaker, in June 2000, the Minister of Public Works and Government Services met a group of elected city officials from the Quebec City area, where recognition of constitutional status was raised as a possibility for municipalities.
Are the remarks of the minister an indication that the government intends to reopen the constitutional file and thus justify the infringement of areas of Quebec's jurisdiction?
Hon. Don Boudria (Leader of the Government in the House of Commons, Lib.): Mr. Speaker, no, it is not the intention of the government to infringe on anything.
We always honour political jurisdictions. This is what the Government of Canada does, and the member opposite knows that for a fact.
Michel Guimond: Mr. Speaker, the past is an indication of the future.
Can the recent remarks by the Minister of Transport and the creation of an urban affairs committee be interpreted as the first steps to constitutional reform, aimed once again at centralizing all powers in Ottawa, in defiance of Quebec's jurisdictions?
Don Boudria: Mr. Speaker, the member has a very fertile imagination, to say the least.
The Prime Minister's caucus task force on issues important to Canadians living in an urban context is entirely reasonable.
It is a good thing to do. It was even something that everyone wanted, including city dwellers, just like the equivalent committee looking into rural issues set up a few weeks earlier. It is the same thing.
Government ContractsMr. Andy Burton (Skeena, Canadian Alliance): Mr. Speaker, treasury board guidelines on sole source contracting are very simple: that there is a pressing emergency, that the contract is valued at less than $25,000, that it is not in the public interest to solicit bids, or that only one person or firm is capable of performing the work.
Therefore, there are only two possible reasons why the government gave a $615,000 sole source contract to Groupaction: Either it was not in the public interest to solicit bids, because the company was a major Liberal donor, or because the work was done by Groupaction in the first place it was the only one capable of evaluating. Either way it is questionable. Which is it?
Mr. Paul Szabo (Parliamentary Secretary to Minister of Public Works and Government Services, Lib.): Mr. Speaker, I would like to note that the member is incorrect. The contract to Groupaction was not sole sourced. Groupaction was a qualified advertiser available to the department for utilization on specific contracts.
The work done by Groupaction was not in fact an evaluation of a past project. It was an identification of additional important opportunities for Canada to present Canadians with the services and programs available to all Canadians.
Andy Burton: Mr. Speaker, the parliamentary secretary maintains that this was not a sole source contract since the government picked from a source list of prequalified firms. I do not see the difference.
Would it not stand to reason then that Groupaction would have been disqualified from this list since it had done the original work in the first place? If it did not evaluate, what did it do? If there is really no problem with this contract why not release its findings? What is the government trying to hide?
Paul Szabo: Mr. Speaker, let me repeat. First, Groupaction is a qualified advertising firm. Sixteen agencies competed or were granted qualification after a competition. The particular contract involved was amended from evaluation and identification to simply identification of sponsorship opportunities. That is exactly what Groupaction did on behalf of the Government of Canada in accordance with the contract as amended.
Monetary UnionMr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Mr. Speaker, yesterday, the Minister of Finance wondered why Quebec's referendum legislation of 1995 suggested that, following a vote in favour of Quebec's sovereignty, the Canadian dollar would remain the currency used in that province.
There were two reasons for this: first, the dollar belongs to Quebecers as much as it belongs to Canadians and, second, this legislation provided that the Canadian dollar would be the currency having legal tender in Quebec following a yes vote.
Since then, the world situation has evolved. There was the Euro currency and now the FTAA issue. The only one in Canada who has not evolved is the Minister of Finance.
I would like him to tell me why he is so stubborn and narrow-minded that he will not even consider having a single currency for the three Americas?
Roy Cullen: Mr. Speaker, it is the hon. member for Saint-Hyacinthe—Bagot who, at the meeting with the Governor of the Bank of Canada, said “Mr. Governor, it is not the floating system I object to, far from it. I think it is the right way to go”.
Also, Mr. Dodge said that in the context of a common currency, Canada would have absolutely no influence on North America's monetary policy.
Why does the sovereignist party want to transfer our monetary sovereignty to Washington?
Yvan Loubier: Mr. Speaker, it is because the Governor of the Bank of Canada has no power to determine the value of the Canadian dollar, or interest rates. He is already doing what Washington does.
Therefore, why does the government persist in keeping a minor currency, which is the victim of speculators, which in turn creates instability in business planning, while everywhere else in the three Americas, they are talking about a possible single currency?
Even the Governor of the Bank of Canada agrees. Yesterday, Thomas Courchene described those who are not thinking about this issue now as dinosaurs.
Roy Cullen: Mr. Speaker, we really do know the motivation of the Bloc to attack the dollar. The dollar is a pillar of Canada and a signal of Canadian unity.
For the member to insult our dollar in the way that he has is an insult to Canadians. Our dollar has in fact been strong against every other currency and has done better against the U.S. dollar than many other currencies.
I would remind the member that the government has said that it is committed to a sovereign Canadian dollar and we will stick to that.
The EconomyKen Epp: Mr. Speaker, in giving testimony to the finance committee yesterday, several of Canada's leading economists suggested that the current surplus position of the government gives it a perfect opportunity to make fundamental, needed changes to the tax system. This would promote investment, employment and economic growth.
Will the government use this opportunity to strengthen our productivity, economy and investment and thereby improve the status of our lowly Canadian dollar?
Roy Cullen: Mr. Speaker, I would like to clarify some of the numbers that have been thrown around in the House.
In regard to the year in question, where some have questioned whether we would go into deficit, I should point out that this government and this finance minister have been very strong in building in prudence. In fact in that year there is $6.5 billion of fiscal cushion.
If we look at the red book commitments, over four years they are $5.9 billion. We do not have a problem with any deficits. In fact many economists were cited here in the House earlier. Tax reform is maybe something down the road, but we do not have any problem with deficits moving forward.
Ken Epp: Mr. Speaker, I guess that shows the flaw of reading the answer to the question he thought I would ask.
Integrating earned income with dividend income for tax purposes is a very necessary measure. This is an ideal time to do this since it can be done with tax cuts rather than with tax increases. Will the minister do this?
Roy Cullen: Mr. Speaker, again we have the other side of the House wanting their cake and eating it too. They want us to deal with any looming, alleged deficits and yet want us to cut taxes as well.
Canadian productivity has actually been picking up in the last couple of years. We have set the fiscal climate: We are cutting taxes, we are paying down the debt and the business community is responding. In fact investment in machines and equipment and investment in some of the high technology equipment is happening at a very strong pace and our productivity will keep that upward track.
I think those members should have more confidence in the Canadian economy than they have in their leader.
HealthMr. Jeannot Castonguay (Madawaska—Restigouche, Lib.): Mr. Speaker, as we can see on Parliament Hill, the tourist season has begun. Many Canadians will also be travelling overseas and Canadians can expect overseas visitors.
With this in mind, would the Parliamentary Secretary to the Minister of Agriculture and Agri-Food tell the House what the government is doing to enhance public awareness of the need to prevent foot and mouth disease from entering the country?
Mr. Larry McCormick (Parliamentary Secretary to Minister of Agriculture and Agri-Food, Lib.): Mr. Speaker, I certainly agree with the hon. member that it is extremely important for our federal government to remain vigilant in our efforts to keep Canada free of foot and mouth disease. We have all seen on television how this disease has ravaged the livestock industry in the European Union and around the world.
Our government has launched a public awareness campaign to engage the support and the co-operation of all Canadians, particularly the travelling public, in this very important effort. Our campaign includes an announcement that will air on television, a video to be shown on international airlines and a brochure to educate people. We ask for the co-operation of all Canadians on this very important issue.
Government Of CanadaMs. Libby Davies (Vancouver East, NDP): Mr. Speaker, I am sure we all remember the last great Liberal task force on western alienation. That really nipped the problem in the bud, did it not? Now we have one on urban affairs. Meanwhile, the infrastructure in our cities is crumbling as municipalities try to cope with essential services such as public transit, clean water, sewage treatment and housing.
Why will the Minister of the Environment not commit to a real plan of action to help our municipalities with sustainable development instead of hiding behind yet another useless Liberal task force.
David Anderson: Mr. Speaker, I am disappointed that the hon. member appears unaware of a $2 billion federal contribution to the third infrastructure program, which will of course by matched by a provincial contribution of $2 billion and a municipal contribution of $2 billion.
Certainly there are many things that need to be done but we believe in allowing municipalities to choose their own priorities, unlike her leader who thinks they all should be top down. We think we should be bottom up from municipalities.
If there is a further need, the government, if indeed revenues are available, will undoubtedly consider how the program continues in the future.
Libby Davies: Mr. Speaker, the much touted infrastructure program has everything in it but the kitchen sink. With no funds to match, I might add, municipalities are forced into the impossible situation of having to choose between housing, public transit or clean water.
I will ask again. If the government is committed to the sustainability of our cities and infrastructure, why is there not a real plan instead of just another task force? Where is the plan to do that over a long period of time?
David Anderson: Mr. Speaker, the hon. member served on a municipal council for some years before her election. This patronizing approach that we know best here in Ottawa about everything across the country and in every municipality is wrong. It is wrong headed. We do not agree with that.
We think we should provide a national program which assists municipalities in every part of the country to choose their own priorities. She does not believe they are capable of choosing priorities but we do. We think they understand local problems.
EmploymentScott Brison: Mr. Speaker, the Government of Canada is actively promoting the brain drain. A search of the HRDC job bank website finds listings for jobs located in the United States.
Why is the Government of Canada using Canadian taxpayer dollars to promote the brain drain? Why is the government posting jobs located in the U.S.?
Hon. Gilbert Normand (Secretary of State (Science, Research and Development), Lib.): Mr. Speaker, the hon. member's allegation is utterly unfounded.
Canada is currently doing everything it can to attract the best researchers, including the 2,000 chairs and the money invested in the Canada foundation for innovation. All the programs are now in place to attract the best researchers.
Last week, in Germany, I was told that that country was anxiously awaiting the outcome of our efforts to attract the best minds to our country.
Privacy CommissionerMr. Peter MacKay (Pictou—Antigonish—Guysborough, PC): Mr. Speaker, I direct my question to the Deputy Prime Minister. In light of the incredible announcement yesterday that the privacy commissioner has attempted to interfere in and to influence the information commissioner's court case regarding the Prime Minister's daily agenda, did the Prime Minister or any official in his office or the Privy Council Office make the request for the privacy commissioner to intervene in the information commissioner's case?
Or, is this another case of the Prime Minister calling someone he knows to get something he has done fixed? I ask the Deputy Prime Minister to reject the premise of that question.
Herb Gray: Mr. Speaker, the hon. member ought to be ashamed of himself for asking this question. He is reflecting on an officer of parliament. In fact he is reflecting on two officers of parliament.
I am certainly not aware of any action that he is alleging. He ought to apologize for his reflection on two distinguished officers appointed by the House.
HealthMr. Keith Martin (Esquimalt—Juan de Fuca, Canadian Alliance): Mr. Speaker, Canadians are slamming into a brick wall on health care in part due to the medical manpower crisis. Canada will lack 112,000 nurses in the next 12 years. Despite repeated red flags the government has done nothing.
My question is simple and for the Minister of Health. Why will the federal government not work with the provinces to develop a national strategy for this national problem?
Yvon Charbonneau: Mr. Speaker, the federal government, through Health Canada, is working in close collaboration with the provinces on this matter.
This dates back to last September and the last federal-provincial conference; the ministers of health of both levels of government agreed that this was a top priority. They struck a committee mandated to establish a human resources plan, including one for nurses. That plan is now available.
Keith Martin: Mr. Speaker, while the government talks, people die. The bottom line is that the federal government shares responsibility with the provinces.
The situation is not only terrible among nurses but also among physicians. In the next 12 years half of all physicians will be over the age of 55. Instead of talking, will the government work with the provinces to increase enrolment in nursing and medical faculties by 20%?
Yvon Charbonneau: Mr. Speaker, I notice that our colleague had a two-part question prepared. He feels he has to read the second, even though it was answered in my reply to the first.
I repeat, yes a joint approach is being taken, and we are not waiting for some tragedy to occur. Action is already being taken, and has been for some years. The federal-provincial approach in this field will be continued.
ShipbuildingMr. Antoine Dubé (Lévis-et-Chutes-de-la-Chaudière, BQ): Mr. Speaker, according to yesterday's Le Soleil , all Davie Industries are waiting for to begin construction of a new $340 million drilling platform is adequate funding from the federal government.
Since EDC officials have a letter of intent from the important Davie client who has been interested in building this platform for three and a half months, will the Minister for International Trade tell the House what the Government of Canada is waiting for to announce some good news to Davie workers? The shipyard's closing?
Hon. David Collenette (Minister of Transport, Lib.): Mr. Speaker, the Minister of Industry is now looking at our shipbuilding policy and is studying the report submitted a few weeks ago.
I hope that there will be a positive response in the future.
Antoine Dubé: Mr. Speaker, a coalition of unionized employees of shipyards in Atlantic Canada, Ontario, Quebec and British Columbia is asking for a meeting with the Minister of Industry in order to follow up on the report on shipbuilding entitled “Breaking Through”.
When will he grant this request for a meeting? Is he waiting for all Canada's shipyards to close?
David Collenette: Mr. Speaker, the Minister of Industry is aware of this issue and he is prepared to meet with all those in the community.
I will pass on the comment by the member for Lévis-et-Chutes-de-la-Chaudière to my colleague, the Minister of Industry, and I hope that he will look into the situation.
Correctional Service CanadaMr. Darrel Stinson (Okanagan—Shuswap, Canadian Alliance): Mr. Speaker, a couple of weeks ago John Martin, whose many convictions include assault and weapons charges, told prison officials that if released he would not go to a halfway house.
Despite his high risk status and his own warning, Correctional Service Canada released him from Joyceville and told him to go to a halfway house. Now he is unlawfully at large and police cannot find him. They say he is on the run with no money and likely to start robbing to support himself.
Will the solicitor general explain why a serious offender who explicitly said he would not follow the terms of his parole was allowed out of prison?
Lawrence MacAulay: Mr. Speaker, as my hon. colleague is aware the National Parole Board is an arm's length body that evaluates whether or not an offender should be transferred to another institution. That is not the responsibility of a politician.
Darrel Stinson: Mr. Speaker, John Martin is not an isolated case. We know there are hundreds of other cases such as John Martin's.
I have a question for the government. It is bending over backward and its institutions are bending over backward to help convicted criminals that are in prison. Yet it has given no service to a war veteran. Is it because it knows which way each one of them voted?
Lawrence MacAulay: Mr. Speaker, I am not sure how to answer a question like that. The fact of the matter is when people offend and are convicted they are evaluated and put in a penitentiary.
Yes, there is rehabilitation. There is rehabilitation and there is punishment.
Foreign AffairsMs. Paddy Torsney (Burlington, Lib.): Mr. Speaker, Canadians are seriously concerned about what is happening in Zimbabwe, particularly since the abduction of a Canadian aid worker and the harassment of our high commissioner to that country.
Could the Secretary of State for Latin America and Africa tell us what action the Government of Canada is taking to signal our concern over the deteriorating situation in Zimbabwe?
Hon. David Kilgour (Secretary of State (Latin America and Africa), Lib.): Mr. Speaker, the government is very concerned about what is happening in Zimbabwe. As a result I will announce the following measures that we will be taking.
We will suspend Zimbabwe's eligibility for the Export Development Corporation's export financing. CIDA will not undertake any new initiatives with departments of the government of Zimbabwe. CIDA will put on hold the mining titles environment project, an ongoing project at the moment.
Canada confirms its existing policy of barring all military sales to Zimbabwe. Zimbabwe's participation in Canadian peacekeeping training courses will be abolished, suspended. Canada will continue to work through the Commonwealth ministers action group to try to get the government of Zimbabwe to show greater respect.
Correctional Service CanadaMr. Larry Spencer (Regina—Lumsden—Lake Centre, Canadian Alliance): Mr. Speaker, Keith Lawrence escaped from prison in Ontario a long time ago. Since 1972 he has lived in Ontario under an alias and was recently rearrested, but it took nearly three decades and a tip from a family member to bring it to pass.
Would the solicitor general tell the House why he is doing so little toward finding the hundreds of offenders at large in Canada?
Lawrence MacAulay: Mr. Speaker, I would hope that my hon. colleague is not fearmongering to the public. The facts are the facts.
Very rarely does a person escape from our maximum and medium institutions. In the medium institutions we have in the last eight years cut the number of escapees by 61%. The government has done a lot to improve the prison system in this country.
Larry Spencer: Mr. Speaker, nearly a thousand convicted criminals are at large in Canada. These offenders, murderers, rapists and drug traffickers, were in the custody of Correctional Service Canada but are now outside without serving the sentences handed down by the courts. They are back on the streets putting our citizens in danger.
We can see by the incident involving Keith Lawrence that it can happen for decades. Would the solicitor general tell the House what he plans to do in order to put these offenders back where they belong?
Lawrence MacAulay: Mr. Speaker, it is unfortunate that my hon. colleague wishes to try to tell Canadians that a lot of offenders are escaping from maximum and medium institutions.
As I said, the facts are the facts. If a person does walk away from a medium security institution and is caught for speeding or anything else, he or she is rearrested right on the spot. It is important that Canadians know that.
The facts are also that escapes have been cut by 61%. We have done a lot to improve the system in this country and will continue to do a lot to improve it.
Port InfrastructuresMr. Jean-Yves Roy (Matapédia-Matane, BQ): Mr. Speaker, the federal government is allocating a meagre $50 million for the maintenance and repair of small craft harbours, when we all know that the infrastructure network and these harbours are in very bad shape, in Quebec and elsewhere in Canada.
How does the Minister of Fisheries and Oceans reconcile so few resources and so many needs? Is he prepared to invest more and quickly?
Herb Dhaliwal: Mr. Speaker, there is always quite a bit of demand for repairs of small craft harbours. We look at safety and need across the country. It is a priority to make sure that our harbours are safe and can be utilized by our fishing fleets.
It is done on a merit basis. We are repairing small craft harbours across the country. We will continue to repair them to ensure that they are safe and can be properly utilized.
Aboriginal AffairsHon. Andy Scott (Fredericton, Lib.): Mr. Speaker, my question is for the Parliamentary Secretary to the Minister of Indian Affairs and Northern Development.
In light of the recently announced decision regarding consultations with first nations to discuss changes to the Indian Act, which could lead to economic opportunities and infrastructure development on first nation communities, would the parliamentary secretary cite a positive example of such a consultation process?
Mr. John Finlay (Parliamentary Secretary to Minister of Indian Affairs and Northern Development, Lib.): Mr. Speaker, I thank my hon. colleague for his question. It gives me an opportunity to remind the House that one year ago today the Nisga'a Lisims government was inaugurated in New Aiyansh in northwestern British Columbia.
The federal government gave the Nisga'a stewardship over their lands and resources. It was the result of a combination of a hundred years of negotiation. When the Nisga'a Final Agreement Act was given royal assent in the other place, the Nisga'a called home. People left their homes and started parading.
TaxationJason Kenney: Mr. Speaker, yesterday the United States congress passed the largest tax cut in world history of $1.4 trillion.
Given that American labour productivity is already growing at three times the level of Canada and given that the huge tax cuts announced yesterday will make American tax levels permanently lower than those of Canada, what does the government propose to do to allow our productivity to compete with that of the United States?
Herb Gray: Mr. Speaker, we are away ahead of the U.S. on this matter. We have already brought forward and are implementing tax cuts which are going into effect faster, wider and deeper than those of the Americans. They are just catching up with us.
In future I hope the hon. member will get his questions from Canadian sources rather than sitting in the House and reading the New York Times .
Grants And LoansMs. Monique Guay (Laurentides, BQ): Mr. Speaker, the Minister of Human Resources Development indicated yesterday, before the Standing Committee on Human Resources Development, that she was considering the possibility of setting up a system of scholarships and learning accounts to help students pay for their training.
Why does the minister not acknowledge that the system of loans and grants in Quebec is the best in Canada, and would she not be better advised to allow Quebec to opt out with full compensation in order to avoid once again taking students hostage?
Ms. Raymonde Folco (Parliamentary Secretary to Minister of Human Resources Development, Lib.): Mr. Speaker, as the minister told the Standing Committee on Human Resources Development yesterday, the government has made a commitment to help Canadians improve their skills. This is written in the throne speech and in the red book.
In particular, we have spoken of the need to help people improve the ability to set money aside for ongoing learning. As the minister indicated yesterday, the government is working now to honour this commitment.
PrivilegePeter MacKay: Mr. Speaker, yesterday I gave notice to the Chair of a question of privilege concerning the public letter the Privacy Commissioner of Canada, George Radwanski, wrote to Information Commissioner John Reid. The letter was made public by wide dissemination through privacy commissioner facilities including the Internet and it appears on the website of the privacy commissioner.
It is important to note that the letter has received widespread distribution and is not a private piece of correspondence. Mr. Speaker, I will be sending you a copy of the letter from the website and I ask for consent of the House to table a copy at some point. The letter is a direct public attack by one officer of parliament on the work of another officer of parliament, as referred to by the Deputy Prime Minister today in the House. It seriously calls into question the impartiality of the privacy commissioner.
It will be my submission to the Chair that this public attack on an officer of parliament erodes public confidence in that officer. The fact that the attack was made by an officer of parliament erodes public confidence in this institution and is a contempt of the House and its officials. Both the privacy commissioner and the information commissioner are officers of parliament. They report to the House and operate under the authority of two statutes, the Privacy Act and the Access to Information Act.
I refer the Chair to page 155 of Erskine May, 19th edition, which states:
Both Houses will treat as breaches of their privileges, not only acts directly tending to obstruct their officers in the execution of their duty, but also any conduct which may tend to deter them from doing their duty in the future.
The duties and powers of the privacy commissioner are set out in section 29. I will not quote them here as you do not have to rule on questions of law, Mr. Speaker. It is sufficient to know that the privacy commissioner is empowered to investigate complaints from individuals.
The important feature is that there must be a complaint. There was no indication in the letter that a complaint had been made and we are not aware that any such complaint was made. The closest indication as to the motivation of the privacy commissioner is his statement found at paragraph five:
My duty as Privacy Commissioner of Canada is to champion and defend the legitimate privacy rights of every Canadian, whether it be an unemployed labourer or the Prime Minister of our country.
I do not know how many unemployed labourers are the subject of this sort of treatment, but I know there is a legitimate case before the Supreme Court of Canada for judicial determination. The privacy commissioner is attempting to alter its outcome on behalf of his friend the Prime Minister.
The relationship between Mr. Radwanski and the Prime Minister was raised in the House and in the second chamber of parliament prior to his appointment. It has been the subject of media comment. The unilateral and grossly improper attempt to make the information commissioner withdraw an action authorized by law gives the public the impression that an officer of parliament is primarily an agent of the Prime Minister and acting in such a way as to interfere with the process of the courts. The matter will be adjudicated in due course.
The Privacy Act empowers the commissioner to receive and to investigate complaints. He is empowered to make findings and to report his findings to government. He is empowered to examine databanks, to make findings and to report those findings. He is required to report to parliament annually. He is empowered to make special reports:
—commenting on any matter within the scope of the powers, duties and functions of the Commissioner where, in the opinion of the Commissioner, the matter is of such urgency or importance that a report thereon should not be deferred until the time provided for transmission of the next annual report of the Commissioner.
He is not empowered to unilaterally declare himself a champion of the Prime Minister's side in a court proceeding and to attack an officer of parliament who has lawful authority to seek judicial determinations on matters lawfully brought through the information commissioner's office. It is important and critical to my argument that the Chair consider that point.
There has been an increasing trend on the part of some parliamentary officers to involve themselves, mostly through public comment, in matters outside their statutory responsibilities.
I have refrained from raising questions on the issue until now. I find it particularly troublesome when individuals, in this instance the privacy commissioner, start telling other jurisdictions their views on what the laws should be. These people are appointed to fulfil their duties under the law and their appointments do not make them judge and jury on all matters relating to those subjects. They are first and foremost officers appointed to do their duty under the law.
We do not tolerate judges taking to the public platform to participate in public debate. There needs to be similar restraint exercised on officers of parliament. They do not speak for this place. They are not self-appointed, self-generated champions of what the law should be. Nor should they act in no way as agents for the Prime Minister or portray themselves in that fashion.
The issue of the information commissioner's access to the Prime Minister's agenda is before the Supreme Court of Canada, the highest court in the land, for determination. The court will do its job. The privacy commissioner seeks to subvert this lawful process and in so doing has been intemperate and accusatory. To call the lawful actions of an officer of parliament “tantamount to informational rape” is not only demeaning to the office holder. It reflects on the House of which he is an officer.
The information commissioner is a former parliamentarian empowered by the House. He is not freelancing or acting in some sort of nefarious purpose for the sole purpose of partisan exploration of the Prime Minister's agenda. He had a formal request to seek such information. He has a mandate and a responsibility to uphold that request and follow the chain of information. However the unprecedented attack by his counterpart the privacy commissioner is improper and I would submit illogical.
The privacy commissioner has concerns about the law. There is nothing in the law to establish the office of champion of the Prime Minister. We are aware of no complaint to the privacy commissioner unless it came from the PMO or the Privy Council Office. It appears he has set out to attack an officer of parliament for purposes other than his statutory framework. He is attempting to put the fix in for the Prime Minister's Office.
If the privacy commissioner has concerns about the law he has the ability to report those concerns to parliament. To my knowledge he has not done so. Instead he has, and this is important, publicly attacked the lawful activities of the information commissioner without the foundation of a complaint having been made to him.
This gives the appearance, whether true or not, that the privacy commissioner is the Prime Minister's agent, champion and client. It undermines public confidence in the independence of the privacy commissioner. He has become the champion of the Prime Minister against a fellow officer of parliament.
The ethics counsellor has cast himself in a similar role, and this is the complete opposite of what their offices should represent and are intended to do.
These actions, the unilateral and unauthorized public undermining of an officer of parliament in the execution of his lawful duties and the carrying out of a media campaign against an officer of parliament in the lawful pursuit of his duties, constitute prima facie evidence of contempt of the House.
Public confidence in all officers of parliament should be a matter of basic concern to every member of the House. The issue is sufficiently serious to merit examination by a committee, and I am prepared to move the necessary motion should you find there is a prima facie case of contempt before the House.
Don Boudria: Mr. Speaker, I will not take a long time to discuss the issue brought to the floor of the House by the hon. member for Pictou—Antigonish—Guysborough, the House leader for the Conservative Party.
The House will know that Mr. Radwanski, in responding to a media question, indicated he had not spoken to the Prime Minister about this case. Nor had anyone in the Prime Minister's Office encouraged him to speak about the issue. Let us be clear on that.
Both officials in question are officers of parliament, not only of this House but of both houses. They are officers of parliament as an institution. Just as the information commissioner responds to questions involving access to information, the privacy commissioner has a role to comment on what he believes to be privacy issues. His task in that regard is of solemn importance.
It is not for me to say which of the two tasks is more important. The fact that both officials have existed in a parallel way presumably means that the House and all of us consider both roles equally important.
The hon. member across the way said, and the blues will verify the precise words, that the privacy commissioner commented as to what the law should be. I do not believe the privacy commissioner has made remarks as to what the law governing his position should be. I do not think that is the case.
Second, the hon. member, while claiming to defend an officer of parliament, made very strong accusations about another officer of parliament. He said the officer in question had exceeded his mandate.
The hon. member has a right to state his opinion. I may or may not agree with it but that is a different proposition. However the member has said on repeated occasions, and I think there were five of them, that the officer in question was a champion of the Prime Minister. The member has no knowledge or information to support that and has produced no evidence before the House. Repeating a sentence he had said previously in the same discourse does not constitute proof.
Comments like that about an officer of parliament are inappropriate. As to whether the privacy commissioner is entitled to comment on privacy matters, I am sure that he is. Whether he commented in the proper forum is a debate which is perhaps of interest to some of us. If it is, there is nothing wrong with discussing the issue.
We could call one or both officers before the appropriate parliamentary committee under estimates, under Standing Order 108(2) or otherwise to ask them to define how they see themselves doing their jobs in that regard. That is fine. It is the privilege of the House and its committees to do so.
However, I do not believe that justifies making accusations of the kind that were made about an officer of parliament while alleging at the same time to defend the other officer of parliament. Both officers were appointed by resolutions of both Houses and carried with the vast support of this House. I do believe, Mr. Speaker, that is the issue before you to consider.
As I said, I do not want to belabour the point here. I believe I have addressed the issue. I do not believe it is my role to make a trial of one person while accusing another, nor the reverse thereof. Both of those would be inappropriate action on my part.
I would suggest that if we have questions about how these two officers discharge their functions there is an existing mechanism for us to do that.
One should also be prudent when making comments in the House about an issue that is presently before the courts. Prudent language on behalf of all of us is extremely important. The comments we make here can and have been used in the past.
The honourable and learned member across the way, who is a member of the bar, will know that the comments we make here can and have been used in the past to make points before the courts. Therefore, we should be twice as prudent. I invite the House to behave in that manner.
Mr. Derek Lee (Parliamentary Secretary to Leader of the Government in the House of Commons, Lib.): Mr. Speaker, I have two quick points which might assist the Chair.
I have listened to the matter raised by the hon. member. I have noted, and I hope all members have as well, that in our statutes governing access to information and privacy we have constructed a bit of a dynamic and a conflict between the two. The objectives and goals of access to information move in a certain direction and the goals and objectives of the privacy legislation operate in the opposite direction. As a result of that, there is a natural potential conflict between the goals of privacy and the goals of access to information.
In this particular case, parliament having constructed both of those mechanisms, it is natural that the dynamic of conflict would always be there. It is therefore my view that this is more a case of legitimate differences between the operation of a statute and its mandate than it is a question of privilege.
On the issue of whether or not this is a question of privilege, I personally do not grasp the difference between the information commissioner and the privacy commissioner, and our day to day privileges and operations here in the House. To be sure, it is a conflict and a very public issue, but I do not see the connection between that conflict and our day to day operations in the House as it pertains to our privileges.
The Speaker: The Chair will take this matter under advisement and come back to the House in due course. I thank hon. members for their interventions on the point.

Routine Proceedings
Inuvialuit Final Agreement ReportJohn Finlay: Madam Speaker, pursuant to Standing Order 32(2) I have the honour to table, in both official languages, copies of the 1999-2000 annual report of the implementation co-ordinating committee on the Inuvialuit final agreement.
Gwich'In Land Claims Agreement ReportJohn Finlay: Madam Speaker, pursuant to Standing Order 32(2) I have the honour to table, in both official languages, copies of the 1999-2000 annual report of the implementation committee on the Gwich'in comprehensive land claim agreement.
Order In Council AppointmentsDerek Lee: Madam Speaker, I am pleased to table, in both official languages, a number of order in council appointments recently made by the government. Pursuant to Standing Order 110(1) these are deemed referred to the appropriate standing committees, a list of which is attached.
Government Response To PetitionsDerek Lee: Madam Speaker, pursuant to Standing Order 36(8) I have the honour to table, in both official languages, the government's response to three petitions.
Committees Of The HouseDerek Lee: Madam Speaker, I have the honour to present the 15th report of the Standing Committee on Procedure and House Affairs regarding the provisions of Standing Order 87(6). The report recommends extending the temporary suspension of the 100 signature rule for private members' business.
If the House gives its consent, I intend to move concurrence in the 15th report later this day.
Ms. Nancy Karetak-Lindell (Nunavut, Lib.): Madam Speaker, I have the honour to present, in both official languages, the fourth report of the Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources.
The committee has concurred in the conclusions of the fourth report of the former standing committee on natural resources and government operations, 36th parliament, second session, entitled “Forest Management Practices in Canada as an International Trade Issue”, and pursuant to Standing Order 109 requests the government to table a comprehensive response to the report.
Peter MacKay: Madam Speaker, I rise on a point of order. In reference to my earlier point of privilege, I neglected to seek unanimous consent to table the letter which is the subject of the point of privilege.
I would now ask the permission of the House to table the letter that was written by the privacy commissioner, Mr. Radwanski, to the information commissioner, Mr. Reid. It is available on the Internet but I would like it to form part of the public record.
The Acting Speaker (Ms. Bakopanos): Does the hon. member have unanimous consent to table the letter?
[Intervention]
Some hon. members: Agreed.
[Intervention]
Some hon. members: No.
Derek Lee: Madam Speaker, I move that the 15th report of the Standing Committee on Procedure and House Affairs, presented to the House earlier this day, be concurred in.
(Motion agreed to)
PetitionsJoe Comartin: Madam Speaker, I rise to present a petition, pursuant to Standing Order 36, from my constituents and other members of the city of Windsor in the county of Essex.
The petitioners are looking for support in their drive to have a small area of land, known as the Ojibway industrial site, preserved in perpetuity for the members of the community. This is property that is on federal land managed by the Windsor Port Authority.
Questions On The Order PaperDerek Lee: Madam Speaker, the following questions will be answered today: Nos. 24, 30 and 33. .[Text]
Question No. 24—
Hon. Charles Caccia: What are the total estimated greenhouse gases emissions from: ( a ) Suncor Energy Inc. project millenium oil sands development project; and ( b ) the Shell Canada Athabasca oil sands project?
Hon. Ralph Goodale (Minister of Natural Resources and Minister responsible for the Canadian Wheat Board, Lib.): (a) Suncor Energy Inc. project millenium oil sands development project includes a new mine and mining equipment, additional bitumen extraction facilities, a new bitumen upgrading complex and a combined cycle cogeneration plant. This will increase production from 6.1 million m3 oil equivalent in 1999 to 12.6 million m3 of crude oil and fuel products in 2002.
Suncor does not publish project specific emission targets. The company expects to gain energy efficiency improvements throughout the operation of project millenium. Green house gas, GHG, emissions will be managed as an integral part of the overall operations. Suncor contributes reports regularly to the climate change voluntary challenge and registry program. The reported actual emissions per unit of production was 0.728 tonnes CO2 equivalent per m3 of production in 1999, 30% below the 1990 baseline.
Suncor estimates that in 2002, when project millenium is operational average GHG emissions from oil sands will be .606 tonnes CO2 equivalent/m3 of production. Based on this, and the anticipated production of 6.5 m3 per year from project millenium, GHG emissions from the project can be estimated to be 3.9 million tonnes CO2 equivalent per year.
(b) Shell Canada Athabasca Oil Sands project:
The Athabasca oil sands, AOS, project, with a production capacity of 24,646 m3/d, 9.9 million m3 per calendar year, was officially launched in December 1999 with start-up planned for 2002. The AOS project in committed to a 50% reduction in GHG emissions from those estimated when the project was officially launched in 1999.
In its current design the project is expected to emit 3.5 million tonnes of CO2 equivalent per year. This captures the project's own direct emissions and those form cogeneration facilities that will supply electricity and heat. This figure is projected, based on improvements made to the original feasibility study and the company's environmental impact assessment, which had estimated 4.8 million tonnes of CO2 equivalent per year.
Action to reach 3.5 million tonnes of CO2 equivalent per year includes addition of cogeneration facilities. The target emission level to be attained by 2010 is 1.75 million tonnes of CO2 equivalent per year.
Both Suncor and Shell have adopted ISO 14000, the international environmental management system standard. The companies are also involved in the oil sands task force of the Canadian industry program for energy conservation, CIPEC, in their pursuit of energy management.
Question No. 30—
Mr. John Duncan: What have been the total costs since 1995 for the project to replace the old foghorn at the Cape Mudge light station in British Columbia with an electronic foghorn, including: ( a ) the cost of the solar unit, batteries and horns; ( b ) the cost to repair or replace original components or failures; ( c ) the cost of maintenance; and ( d ) the cost of technician transportation and labour?
Herb Dhaliwal: (a) The following equipment was installed at Cape Mudge light station as part of the lightstation service project.
This amount includes the total cost of equipment and hardware.
(b) The first electronic foghorn installed on October 21, 1997, was an AB560 model with a frequency of 645Hz. The foghorn's two emitters were defective at the time of installation and replaced under warranty, however the Canadian Coast Guard, CCG, spent approximately $900 to replace the emitters.
(c) Following the installation of the electric foghorn, complaints were received by local residents that the horn was too loud. The foghorn was subsequently replaced on April 9, 1998, by a smaller AP/FA390 foghorn with a frequency of 390Hz that has a lower frequency and less range. This is the horn that is currently operating at Cape Mudge. The AB560 foghorn was returned to inventory to be redeployed to another location. The cost to replace the foghorn with the AP/FA390 was approximately $1,400.
(d) The light station is serviced by CCG technicians on a six month schedule at an annual cost of $2,000 including the cost of labour helicopter time and travel costs.
In terms of additional costs, every attempt has been made to correct outages at Cape Mudge by combining with other regular maintenance trips. No other significant costs have been incurred since 1995.
Question No. 33—
Mr. Bill Casey: With respect to the ethics counsellor, Howard Wilson, who was appointed by the Prime Minister On June 16, 1994: ( a ) what is the salary range for the position of ethics counsellor; ( b ) what are the terms and conditions of his employment; ( c ) when is his term of employment up for renewal; and ( d ) what is the operating budget for the office of the ethics counsellor?
Derek Lee: I am informed by the Privy Council Office and Industry Canada as follows:
(a) Effective April 1, 2000, the salary range for the ethics counsellor is $145,000 to $170,700.
(b) The ethics counsellor is subject to the terms and conditions of employment in the executive group in the public service.
(c) The ethics counsellor serves for an indeterminate period of time.
(d) The office of the ethics counsellor's total operating budget for the year 2001-02 is $1,965,893 of which $1,683,515 is for salaries and $282,378 is for general operating expenditures.
Derek Lee: I ask, Madam Speaker, that the remaining questions be allowed to stand.
The Acting Speaker (Ms. Bakopanos): Is that agreed?
[Intervention]
Some hon. members: Agreed.
[Stage Direction]
The House resumed consideration of the motion that Bill C-22, an act to amend the Income Tax Act, the Income Tax Application Rules, certain Acts related to the Income Tax Act, the Canada Pension Plan, the Customs Act, the Excise Tax Act, the Modernization of Benefits and Obligations Act and another Act related to the Excise Tax Act, be read the third time and passed.
Joe Comartin: Madam Speaker, before we broke for question period I was detailing some of the difficulties our population was facing because of the type of budgetary processes we have had over the last number of years while this government has been in power. I was explaining how the financial positions of a number of Canadian families have altered to a significantly lower level.
I would now like to address the question of wealth. I will cite only one statistic. In 1999 the top 10% of Canadian families had a medium net worth of $703,500. The lowest 10% had a negative net worth of approximately minus $2,010. The top 10% are wealthy and the bottom 10% are in a negative position. That is the type of society that has been created by these types of budgetary processes.
The other point I would like to address concerns the capital gains break that the government has given mostly to the wealthy. The tax rate on capital gains had been set at 75%. The bill would reduce that to 66.7%, which is a substantial reduction.
It is interesting to note that as the bill was working its way through the process, there was other work going on as well. Neil Brooks, a tax expert, was making a compelling case against the capital gains tax break in the Senate committee. He pointed out the impact this capital gains tax break had on substantial wealth. He made the argument that it violated the fundamental tax principle, which is that taxpayers with the same ability to pay should pay the same regardless of their income sources. He went on to point out that its impact encouraged speculation not just in the stock market but in real estate, commodity futures and collectibles. We have seen some of the negative consequences of that type of speculation, especially in the stock market in the last six to twelve months.
Professor Brooks made another point, which was a bit more subtle but still important. As we encourage the type of investment that results in capital gains, it takes away from other areas of the market and the economy. He said that this provided incentives for the conversion of dividends and even labour income into capital gains as opposed to allowing those to continue, and the benefit that it would give to the economy generally. His final point was that it also complicated the tax system and actually reduced tax revenue.
It is important to appreciate the size of the gain. In 1996 taxpayers with incomes of more than $250,000 a year reported average capital gains of $74,000. That was almost 500 times the average capital gain of $150 reported by taxpayers earning between $20,000 and $40,000. That is the kind of system the bill would encourage and continue.
We heard from some of the other speakers today that over the next five years the bill would reduce taxes by $100 billion. Of course the government takes great credit for this. I would like to go back and look at that.
On the simple basis of fairness, does it make sense to be doing this? Do those tax breaks do anything at all to reduce the inequality that I mentioned earlier in my address? The answer is no, it does not. In fact it perpetuates and increases the inequality between that lower 10% or 20% of the families in Canada and the upper 10% and 20% of the families in Canada. It will follow an American model that is even worse than what we have now, but toward which we are very rapidly going. This will result in the same type of inequalities from which that country suffers.
The other point I would make about the $100 billion is that it just cries out, as I made the point earlier, of the hypocrisy of the government supporting the motion we had on safe water earlier this week, then not spending it on an infrastructure program that was at all meaningful in terms of treating our water and our sewage, thereby creating a safe water system for all of Canada. This government level is the only one that has the ability, in terms of revenue, to deal with the problem.
In that regard, it is not as though it can claim any ignorance of the need for these funds. I have already mentioned that the Canadian Federation of Municipalities had a figure out there for some time of $16.5 billion that would be needed over the next 10 years. I mentioned earlier that CMHC, Canada Mortgage and Housing Corporation, had a study three years ago that set out the need for $4 billion a year in infrastructure over the next 15 years to deal with the water problem and crisis and to provide the country with safe water.
Somehow the government missed those two studies, those figures and that information. We had Walkerton and that was before the bill was introduced. We saw the tragedy in that community as a result of an unsafe water system.
In conclusion, it is a bill that obviously my party cannot support and is one that we will vote against for all the reasons that I mentioned today.
Yvan Loubier: Madam Speaker, I am pleased to address this important legislation, but I want to say from the outset that my party will oppose Bill C-22.
Why? Because of the lack of concrete measures that would serve the public interest, particularly low and middle income earners.
I want to discuss the tax cuts that were mentioned in the last federal budget and that will now become reality with Bill C-22. These tax cuts by the Minister of Finance are great for very high income earners.
If we look at measures such as lower tax rates or the new tax rate on capital gains, we realize that those who will benefit the most from the Minister of Finance's budget and tax cuts are the people who earn at least $250,000. The Minister of Finance targeted these people first and foremost. As of this year, this group will save about $19,000 in taxes.
Instead, we are shocked to see how minimal the tax cuts and savings for low and middle income families are.
Taking the example of a single parent with one dependent child and an income of $30,000, this person will have a tax saving of $750 and will continue to pay taxes. Is it normal for a single parent family, with a single wage-earner and one child to earn $30,000 and still pay some $1,545 in income tax, even after a tax cut? Is this normal for a family that has to live on $30,000? That is the cut-off figure for the poverty line, according to Statistics Canada.
Is it normal for the federal government to continue to impoverish this family still further, even with the tax cuts, by making it pay an average of $1,500 in federal income tax? No, it is not. A single parent with one child and an income of $30,000 ought not to be paying any federal income tax.
That is the way it is in Quebec. For some time now the Government of Quebec has been revising its tax categories. It has revised the marginal tax rates with the following result: a family of two adults and two children with an annual income of $47,000 will pay hardly any tax. How is it that a family with one child and one wage earner is still in the situation of having to pay more than $1,500 in tax?
I can already hear the Parliamentary Secretary to the Minister of Finance replying “That is wrong, it makes no sense”. I have news for him. It is wrong to say that it makes no sense. He should save his breath. People have just finished filing their income tax and they have it fresh in their memories that, once again this year, they have paid federal tax even though they are in the low income category.
When we look at the tax cuts for low and middle income families, we see that the tax savings this year, for example, will be no more than $300 or $350. That is for this year, because these tax cuts are being phased in between now and 2004; that is about the average.
But the high income earners get great breaks. As I mentioned earlier, on average, those earning $250,000 and up will save $19,000 this year. There is a double standard here. The government has also forgotten that it is low and middle income earners who have brought down the deficit since 1993, who have contributed to the huge surpluses, and we will come back to this later.
Middle income families are the federal government's cash cow. They are the source of most of the money collected in income taxes. The government should have been a bit more sensitive when it came to this category of revenue. These families should have been given a few more credits for having played such a major role in helping put the fiscal house in order.
It can never be said often enough that all the cuts made by this government since 1994, such as in the Canada social transfer for funding health, education and social assistance, have taken their toll on these families. These are the people really responsible for putting the fiscal house in order and generating surpluses. They are still doing it today. It must never be forgotten that every year the Liberals greedily help themselves to the surpluses accumulating in the EI fund because of the premiums paid by workers and employers.
It is not right that barely 40% of unemployed workers qualify for EI benefits. It is not right. The system is too restrictive. It excludes too many people who should normally have been entitled to EI benefits, since everyone pays into the plan now.
There is something wrong when these people are being hung to dry by the last budget, actually the last two budgets, and asked to help with fiscal consolidation through their contributions. The government does not have to worry any more.
Everything left in the employment insurance fund, once it has paid benefits to only 40% of the unemployed, the rest, that is 60%, goes into the consolidated revenue fund. It is added to general revenues, therefore contributing to fiscal consolidation and general surplus.
Why is it that these people could not benefit from true employment insurance reform; a real reform, not a “reformette”, a true reform of the employment insurance plan using most of the accumulated surplus to really help the unemployed instead of excluding 60% of them?
What we have instead is tax relief especially for millionaires, probably those who contribute the most to the Liberal Party coffers. We have unemployed workers who are excluded from the employment insurance plan. Low income single parent families with one child, making $30,000, are still paying $1,500 in federal income tax. It is despicable.
Is there a justice in this country? Are we eventually going to do something for these people or are we going to shamelessly forge ahead with the same budgetary policy we have being following so far?
As for social housing, why was there nothing in the past two budgets, that is, those of February and October 2000, the October mini budget geared to the election, of the Prime Minister in waiting. He has long been in waiting, but he is still hoping.
How is it they failed to consider social housing? It is an important issue that probably affects the single parent family, with one dependant and an income of $30,000 or less, which I cited as an example earlier.
How is it that this family is being put off once again? Why is not one cent provided for social housing? Is this a matter of no importance?
And yet, when we look at the statistics, the number of people spending over 50% of their income on housing has increased alarmingly, especially since the start of the 1990s.
At the moment, if we look at the statistics, there are 833,000 households—nearly a million households—that should be offered social housing, because they spend over 50% of their income on housing. That means that the other 50% is left for all the rest: food, electricity, telephone, clothing the children, child care and heating in winter.
When we think of the scandalous profits of the oil companies, which have raised prices significantly in the past two years, we could say there is collusion—let us not beat about the bush—in the oil industry.
They get together and raise prices at the same time. This is what the major oil companies do, and the government does nothing about it. Who is hit by the oil crisis, a crisis created by the big oil companies through collusion? Again, it is the poor, it is those who, after spending 50% of their income on rent, must spend part of the other 50% on heating.
Given such glaring needs, why did the federal government not think for one second of including new money for social housing in its budget?
If the government had continued to spend proportionally the same amount on social housing that it did before 1994, if it had maintained these expenditures since 1994, there would be 30,000 additional social housing units in Quebec alone. The government should have invested $3.5 billion in social housing since 1994, but it did not.
I cannot believe that, with surpluses coming out of his ears—even with the downturn—the Minister of Finance is not ashamed when he gets up in the morning and looks at himself in the mirror, because he did not show any consideration for the poor, who are not the main beneficiaries of his tax cuts and of all the measures implemented by the government since 1993.
I can hardly believe that. Why did he not also consider—after talking about it for so long—the possibility of transferring $500 million from the employment insurance fund to Quebec, to set up a true parental leave program?
Instead, they are putting the $6 billion surplus in their pockets to increase the surplus and to promote the image of the Prime Minister in waiting, that is the current Minister of Finance. Why have these people, who claim to be civilized, who claim to support social justice, not think of transferring, as provided under section 69 of the Employment Insurance Act, the $500 million that is required to set up a parental leave program in Quebec?
Because of this and because of them—and they are not in the least ashamed—the introduction of this plan has been put off until 2003. How is it that they are making young couples postpone having children? Are children not important to this government? Why will it not agree to transfer to Quebec the amount allowed under the Employment Insurance Act? Is it because Quebec is asking? Do they have it in for young families in Quebec?
It is sometimes hard to understand, to keep one's cool, in the face of such deceit, such an obstinate refusal, such incredible closed-mindedness, when by rights we should have had a parental leave plan in Quebec in 2001 or 2002, thus helping not just young parents working for businesses or the government, but also those who are self-employed.
Unlike the federal plan, the Quebec parental leave plan pays benefits to self-employed workers and takes the reality of the labour market into account. Not only are we still dealing with dinosaurs when it comes to a single currency, but also when it comes to parental leave. They are incapable of adapting to the labour market and keeping the public interest in mind.
Let us not forget that not only does federal parental leave not cover self-employed workers, but the eligibility criteria for this leave are the same as for employment insurance. This means that most people are excluded right off the bat. That is the situation right now. A little over 40% of unemployed workers qualify for EI benefits; if these are the same criteria used for the federal parental leave policy, quite a few people besides self-employed workers will not qualify.
In Quebec no one is excluded, not the self-employed, not the parents who wish to take advantage of our parental leave program. It is a far superior program. Because of the obstinate refusal of this government, however, young parents cannot take advantage of such a program.
How can it be that there has been no thought given, with billions of dollars in surplus again this year, to indexing the social transfers to the provinces, for health and education in particular? How can it be that, seeing what is going on in the hospitals, with the lack of funds and increasing demand, no thought is being given to putting more into transfer payments for health and education?
They say “But we must be prudent. The surplus is not all that big”. This is false. Contrary to the Minister of Finance's forecast in last year's budget, the surplus will not be $4 billion—insignificant, even taking into account the tax cuts in the October mini budget—but rather in excess of $17 billion, or four times his predicted figure. When it comes down to it, the Minister of Finance's sole plan was to use figures that have nothing in common with reality for petty political gain.
That is what he has done ever since he has been Minister of Finance. When there was a federal government deficit, he inflated the deficit figure, telling people “Look out, we need to be careful, because we do not have all the manoeuvrability we need, and the battle is far from over”.
He even told the members of his own party “We need to be careful”. But there is always a limit to prudence. We are all in favour of being careful, of having a contingency fund, but we are not in favour of lying to the population by not giving the real figures and by avoiding any debate on how to use the surplus.
When he forecasts a $4 billion surplus and that in reality the surplus is $17 billion, the $13 billion that was not forecast is used directly to pay down the debt. He avoids any debate and puts everything on the debt. There is no democratic debate, no transparency. This is hypocrisy, big time, and he wants us to swallow it.
I made a bet with a reporter. Did he know what the Finance Minister will say next week in his economic statement? He will say “There is no unanimity among economists; some say that things may go well, others that they may go wrong”. One of his former assistants, Mr. Drummond, who has been Assistant Deputy Minister of Finance and who is now the chief economist at the Toronto Dominion Bank, said “We have to be careful. We could come back to deficits in three years”, and he knows what he is talking about. Having been an assistant to the Minister of Finance for several years, Mr. Drummond cannot go wrong that easily and talk nonsense.
The Minister of Finance is setting the stage for next week by saying “Surpluses will not be as high next year. The economy is slowing down, we could go into a recession, find ourselves in the red. We may not necessarily be headed toward a deficit, but we still have to be careful. Since there is no unanimity among economists, I prefer to draw a line down the middle and say that surpluses will not be as high”. In other words, he is still going to tell us nonsense.
He is setting the stage. Some economists are optimistic. Yesterday, Thomas Wilson, a well known forecaster, forecast a surplus of $14 billion for the fiscal year ending March 31, 2001. He is a bit closer to reality. Our own figure is $17 billion. Even with last October's tax cuts and the new spending for Genome Canada, we still come up with $17 billion.
Next week, the Minister of Finance will tell us we have to be careful. That is a lie. It is hard to believe how much the public has been fooled since this man has become the Minister of Finance.
It is so much so that the economic statement exercise is losing its credibility, according to several analysts, particularly Mr. Piché, of La Presse , because the figures we are given are false. They are just not the right figures. We cannot rely on them to tell whether government management is good or bad. Does it follow certain priorities in its management, or does it take into account the interest of the population? There is no way for us to know, because we do not have the right figures. We have to find them for ourselves.
For the last fiscal year ending on March 31, we have a surplus of at least $17 billion. For each of the last five years, I have tried to lower the figures because of an economic downturn, but I cannot see the day when we will have a deficit.
The government could have done a lot of things with this money. It chose to side with the millionaires and not with the population. For all these reasons, we are going to vote against the bill.
Roy Cullen: Madam Speaker, as usual, the member for Saint-Hyacinthe—Bagot is all mixed up. I will, if I may, try to provide a few clarifications.
The member gave the impression that the focus of the October 2000 budget update was on the high income Canadians, and not on low and middle income Canadians. On the contrary, the update was aimed at the low and middle income Canadians.
I will give two small examples, if I may. For a two-earner family of four with a combined income of $60,000, in less than four years, taxes will be reduced by 34%.
Here is another example. For a family with two children and a single income of $40,000 a year, the reduction will be 59% within four years.
The member also talked about affordable housing. In our election platform the government committed to working with the provinces to deliver affordable housing programs.
Yesterday in committee the member talked about his lap top computer and its modelling capabilities. Has he made the same errors on his income tax calculations as he did with his economic projections?
Yvan Loubier: Madam Speaker, as usual the Finance minister's assistant is talking through his hat.
Any confusion is coming from his side. It will not be easy to fool those who just completed their income tax returns. Canadians know very well that a lone parent family with one dependant and an income of $30,000 a year is still paying a lot of income taxes to the federal government and that the federal income tax impoverishes this family already living below the poverty line. He will not fool those people.
If he thinks that Canadians are all stupid, he should think again, especially since the income tax period only just ended. Canadians just filed their income tax returns. They cannot be fooled because they know what they paid in income tax. That is the first thing.
The second thing is that, talking about these great tax reductions, he said—he was honest enough to say so—“within four years”, not right now. The surplus is there. Does anyone know how much has accumulated in the federal government's coffers in the first 11 months of the last fiscal year? Twenty billion dollars, and the Minister of Finance is committed to put $15 billion into the debt payment. He is forgetting the other priorities.
It is fine to pay off the debt, we are all for that. But to put all the money in there, while there are huge needs in the health sector and in the fight against poverty, I cannot take this.
He is having discussions with the provinces about social housing. Let us look at that. Do people know what the government wants to do? It wants to leave the old stock of social housing to the provinces, with maintenance costs, but not one cent for investing in social housing. It is easy to pass the buck that way.
The forecasting errors—I did not want to raise them, but he did. Do people know for how long the Bloc Quebecois, with a small team of two or three people and a small portable computer, has been doing the estimates, the forecasts for the deficit and the surplus? Since 1995. Do people know what the margin of error in our forecasts has been from year to year? Three per cent, a normal forecasting error.
What kind of error margins did the Minister of Finance and the Liberal representative who just spoke have in their forecasts? Between 130% and 400% recently, a 3% margin of error in our forecasts as opposed to between 130% and 400%. Where is the confusion? Where is the inability to forecast the surplus, or rather, the deliberate way of hiding the truth, the real numbers, from the population?
This does not come from the Bloc Quebecois. It comes from the government. So, before telling us what to do and saying any odd thing to the population, who knows how much taxes it is paying to the federal government, I would urge my colleague to reflect further.
Scott Brison: Madam Speaker, it is with pleasure that I rise to speak on Bill C-22.
The amendments to the Income Tax Act come as a result of the February 2000 budget and also as a result of the October mini budget, or economic statement or whatever semantics one would utilize to describe that pre-election document of the Liberal Party of Canada.
The amendments to the Income Tax Act represent a collection of baby steps. Some are in the right direction. Some simply represent a further complication of an already far too complicated tax code. Most represent the triumph of politics over public policy.
If we look at the general direction of these tax measures, we will find there is no general direction. In fact most of them have resulted from a flimsily put together pre-election document. The document is referred to as the mini budget and reflects a mini vision of Canada.
These baby steps and tinkerings do not reflect what Canadians truly need in an overall and significant broad based tax reform. Tax reform can be used as a vehicle to create greater levels of economic growth and opportunity. Instead of making tax tinkering part of a pre-election policy, we should seize the tremendous opportunity we have now with the budget surpluses to bring taxes down, but use tax reform and tax reduction in lockstep.
Typically with tax reform we always create winners and losers. However, if we implement tax reform and tax reduction simultaneously in lockstep, we can ensure that there are no losers created by significant tax reform. All Canadians then would be winners as we create a more competitive and less distortionary Canadian economy which is poised and positioned for significant growth and opportunity, particularly in new economic endeavours.
We have seen in recent years our competitiveness with our trading partners suffer. We have seen other countries like Ireland leapfrog over Canada and seize opportunities to grow and prosper while Canada languishes. Ireland had a 92% growth in GDP per capita over a 10 year period. During the same 10 year period Canada had a 5% growth in its GDP per capita. This is pretty anemic when we consider the extraordinary growth in Ireland, a country once referred to as an economic basket case. Now it is referred to as an economic lion. Ireland did that by utilizing significant tax reform, particularly focused on a reduction of capital and corporate income taxes.
One of my hon. colleagues opposite constructively offered her views on this. I appreciate her views, as someone with a profound understanding from her family perspective of Ireland, and I agree with her. Ireland's commitment to education over the last 20 years to 30 years has strongly helped position Ireland. That being the case, Canada has by and large with its provincial and federal governments over time made significant commitments to education, so I would argue that that part of the equation has been done quite well.
We could improve our commitment to education, as could any country. It could be argued that Ireland could improve its commitment. The greatest difference between the two environments at this point is not in their commitment to education, it is their commitment to tax reform as a lever to create greater levels of economic growth and opportunity. That is the part we have to address, and I am certain she would agree with me on that front as well.
If we look at the government's record on economic issues since 1993 and how international confidence has been demonstrated in the government's record since 1993, there is no better gauge by which to judge the government than the performance of the Canadian dollar. We have seen under this government a loss in the Canadian dollar relative to the U.S. dollar of about 11 cents. The dollar reflects the shareholder value of Canada has seen a significant decline under the government. Under the previous government there was a one cent decline over a period of nine years. This government has achieved an 11 cent decline in a period of about eight years.
Every time our dollar goes down it is effectively a pay cut for every Canadian. We depend on the U.S. to such a significant amount as our trading partners. From a consumer perspective, given the degree to which Canadian consumers buy from U.S. companies, it significantly reduces over a period of time their disposable income.
It also has a very negative impact on productivity. Canadian companies in the short term do not necessarily see the need to make productivity enhancement a priority if they can hide under this low dollar policy of the government.
The low dollar also damages productivity in the long term. Companies that purchase productivity enhancing equipment or technological advancement software, et cetera from the U.S. are less inclined to do so if the dollar is low. As a result it becomes a self-perpetuating prophecy that in fact the low dollar creates in the long term lower levels of productivity by actually reducing incentives for companies to do the right thing and build their productive capacity in Canada.
In general, what is particularly disturbing about the state of the Canadian dollar is that the Bank of Canada has in recent years pursued a high dollar policy, yet Canadians are suffering as under this low dollar result. The Bank of Canada under its policies has targeted inflation rates in Canada of about a point lower than those which are considered acceptable by the federal reserve in the U.S. Despite this high dollar policy, we are getting this low dollar result. We have to carefully analyze and respond to the fiscal inadequacies of the fiscal framework in Canada.
The government describes having a balanced approach. The fact is a balanced approach is not the appropriate approach if we have significant inherent imbalances in the economic framework, and we do have some significant imbalances. Some are with taxation, not only in terms of overall levels of taxation but particular types of taxation which in and of themselves have the most negative impact on economic growth. Unfortunately, some of the taxes which are most politically palatable to reduce are ones that will probably have some of the smaller impacts on economic growth and opportunity. Some of the tax reductions which would spur the greatest level of economic growth are those that sometimes are less popular politically.
In the short term, and particularly after an election, the government should take some risks and tackle some of the major issues and addressing tax reform and the reduction of some of Canada's most productivity damaging taxes. I will speak about a couple of them.
One is our dependence on capital taxes in Canada. Capital taxes reduce investments and the incentives for Canadians and people outside of Canada to invest in the country. If we look at any study on productivity, there is a strong correlation between productivity and investment. If we tax capital and investment to the degree we do in Canada, that will have a significant negative impact on productivity enhancement.
The government has made some reduction in capital gains taxes. The government says that the effective rates of capital gains taxes are lower than in the U.S. That is not the case. We are still higher in Canada than in the U.S. However, the most important thing to recognize is the missed opportunity of the government to eliminate personal capital gains taxes. In this one instance we would be ahead of the U.S. in a very critical area of the economy, that of taxing capital gains and encouraging investment as opposed to discouraging investment innovation.
The government is losing this opportunity because of political reasons, the same reasons why the Liberal opposition fought vociferously against the GST. It was a case of politics then and it is a case of politics now. That is why it is not moving more aggressively to address capital taxes in Canada, specifically capital gains taxes.
I am focusing my comments today on tax reform, but we also need to see a greater commitment to debt reduction which in time would strengthen the Canadian dollar through fiscal policy.
In short, we are asking the Bank of Canada with one blunt instrument, the interest rate, to try to strengthen the Canadian dollar. We are ignoring in many cases the fiscal policy issues that could be addressed by the government, but it refuses to talk about the dollar. It also refuses to talk about some of the concrete measures it could take through fiscal policy to address the dollar.
We could also utilize tax reform in lockstep with equalization and other policies as part of our economic development strategy. I mentioned earlier the tremendous success that Ireland has enjoyed over the last 12 years. Some would say that comparing Ireland to Canada is not the best possible comparison because of the degree to which Ireland received EU transfers in order to allow it to invest so significantly in tax reduction. That argument is not necessarily a bad one. However if we want to look at the best possible comparison, we could compare Atlantic Canada today to Ireland 10 years ago.
Today we have a hodgepodge of economic development policies and agencies such as ACOA for Atlantic Canada. We also have our equalization policy which is the only constitutionally enshrined spending program of the government. I would suggest we should develop a tax policy in consideration of some of our economic development strategies.
In Atlantic Canada for example, the total budget for ACOA is a little more than the total amount of federal corporate taxes paid in Atlantic Canada. If we were to try to think in a more imaginative and visionary way about this, we could see the possibility exists with some assistance to eliminate federal corporate taxes in that region of the country to spur economic growth and opportunity. Quite possibly this could have a greater level of impact on economic growth than would result from the activities of ACOA.
I am not saying that ACOA has not had a positive impact in some areas. My personal belief is that in many ways it was probably a more appropriate instrument in the old economy than it is in the new economy. In the new economy tax measures have demonstrated far greater traction in achieving results in targeted areas than have direct investments by agencies such as ACOA.
We need to invest in infrastructure. If the Atlantic innovation fund focused on infrastructure, universities, technology transfer strategies and commercialization, those sort of initiatives could be very beneficial. I have great concerns about government agencies making direct investments in individual companies.
Another potential role for ACOA would be for it to take part, through the Atlantic innovation fund, in syndicated investment. Effectively the participation of ACOA would not be as an individual investor in a company, it would be part of a syndication of investors, the majority of which would be private sector investors.
That could help by reducing overall risk and encouraging private sector investment in particular geographic and sectoral areas, so that is a potential role. However, we need to get far more creative about how we encourage tax reform as a vehicle for economic growth. We must also consider other public policy priorities, such as economic development, and work more creatively in that regard.
On a technical issue, Bill C-22 would allow tax deferred rollover treatment for Canadians who hold shares of foreign corporations that have been subsidiaries to the parent shareholders. Some companies do not qualify because the bill would require distributing corporations to have their shares listed and actively traded on a stock exchange. That is inherently unfair. It is my understanding from the Parliamentary Secretary to the Minister of Finance that the issue will be addressed in future amendments and legislation. I would be supportive of that and would encourage the anomaly to be addressed.
In terms of general tax reform, the government would do well to dust off the Mintz report on corporate taxation and implement its recommendations without significant amendment. That would go a long way to improving competitiveness and reducing the distortionary nature of our tax code.
We must move aggressively not just to reduce taxes in totality but to reduce those which have the most negative impact on economic growth and opportunity. Jack Mintz, in his report to the Minister of Finance, went a long way toward doing that. However the report has collected a lot of dust and has not garnered the respect it deserves. The significant changes that should have followed the report never occurred.
To compare the way the current Liberal government deals with the erudite reports of great Canadians like Jack Mintz to the way the Mulroney government dealt with such reports, we need only look at the great report of Donald MacDonald on free trade.
Donald MacDonald had been a Liberal cabinet minister yet the Mulroney government recognized the inherent benefits of following the recommendations of the MacDonald commission. The Mulroney government pursued a controversial free trade policy, fought an election on it and did what was at the time relatively unpopular. In the 1988 election over half of Canadians voted against free trade yet the Mulroney government had the courage, vision, foresight and wisdom to pursue innovative policies and do what was right.
That is what I hope to see from the current government. I hope it has the courage, vision and foresight to pursue an aggressive policy of innovative tax reform and thereby create greater economic growth and opportunity for all Canadians.
Ken Epp: Madam Speaker, I listened with intrigue to the member's speech. He is a fellow member of the finance committee. When members of the finance committee listen to witnesses and debate among themselves a lot of interesting ideas come out.
During his speech the member made a passing reference to ACOA. ACOA has been used by various governments as a means of currying political favour come election time. However its long term economic benefit to Atlantic Canada has been much less than advertised. The member said the same thing and indicated that a good system of tax breaks would be of much greater benefit. I think along those lines as well.
Could the hon. member enlarge a bit on the role of ACOA? What vision might he have for bolstering, or setting free the economy of Atlantic Canada? Would he be kind enough to respond?
Scott Brison: Madam Speaker, the hon. member for Elk Island keeps us all on our toes periodically, in this place as well as in the finance committee, and I appreciate his question.
ACOA has often played an important role in Atlantic Canada, even into the mid-1990s, by investing where no private sector venture capital players were doing so. Some of the technology companies that have since developed and emerged would not be there today had it not been for government investment.
The environment has since changed. I am aware of four active venture capital firms that are investing directly in Atlantic Canada. Investment banking activity is taking place. Some of Canada's smartest money is finding opportunities in Canada's smartest region and I am pleased to see that development.
Now that private sector money is being invested in Atlantic Canada, ACOA can perhaps act as a partner to such investment without necessarily making the decisions. It could play a transitional role in reducing overall risk without necessarily controlling investment. It could leave some of that control in private sector hands or, as I suggest and with which I believe the member concurred, the ACOA budget or part of it could be used to reduce corporate taxes in Atlantic Canada and thereby create greater economic growth and opportunity.
It is important to recognize that ACOA played an important and positive role for Atlantic Canada before private money began finding its way to these early stage companies. We can now be far more creative and innovative in terms of tax reform and economic development strategies.
Deepak Obhrai: Madam Speaker, it is my pleasure to speak to Bill C-22. I take the opportunity to speak to the bill because I have a concern. I will not dwell on the logistics of the bill. I will leave it to my colleagues to talk about its other technical aspects.
I rise to speak to the bill because the government claims it has helped Canadians by reducing taxes and listening to Canadians. I see the former revenue minister sitting there. He created the big super agency and decided how it would work.
I will point out a direct example from my constituency of how the government and the minister's former agency have been picking the pockets of ordinary Canadians. A gentleman in my riding wrote me a letter and gave me permission to talk about it.
Eric is a senior citizen on the Canada pension plan. He is upset because the government is withdrawing money from his account without notifying him. The gentleman lives on CPP and the government is taking more than 10% off his pension. How does the government expect him to live if it takes more than 10% off his CPP?
Eric admits he owes the government money. However the government should have better mechanisms for collecting money from seniors and others who cannot afford to have their meagre benefits taken away by Revenue Canada. How does the government expect the gentleman to live after that?
This morning I rose in the House on an S. O. 31 to talk about a senior citizen who had taken $3,000 out of his retirement savings plan to buy a computer. It triggered penalties and an increase in his income tax. The poor senior citizen ended up losing interest. The gentleman took out $3,000 and ended up paying the government $168.
Is that how we treat senior citizens? Is that how we treat Canadians who work hard and save their money? When they try to reap the fruits of their labour the government, with policies that go from left to right and top to bottom, takes money away from them. It takes only a little here and there but cumulatively the individual loses. The gentleman ended up paying the government. Is that justice? It shows that the left hand of the government does not know what the right hand is doing. All Liberal members care about is how to take money from Canadians.
I have permission from another senior citizen to speak about his income tax return. This gentleman was mad.
Herb Dhaliwal: I hope he did it electronically.
Deepak Obhrai: Yes, I am sure he did. Let me tell the minister opposite what his government and his former department did.
The gentleman's income was $24,000 a year. I hope members across the way will not tell me that $24,000 is a big sum of money. Because the gentleman took money from his retirement savings plan Revenue Canada charged him instalment interest of $109. The department charged him instalment interest on an income of $24,000.
How does the government expect the gentleman to live? How is a gentleman earning only $24,000 expected to pay tax to Revenue Canada on time? Can Revenue Canada not see that and show some compassion instead of charging him $109? I have examples from all my—
The Acting Speaker (Ms. Bakopanos): I apologize to the hon. member but his time is up. He will have 14 minutes and 22 seconds when we resume debate.
It being 1.30 p.m., the House will now proceed to consideration of Private Members' Business as listed on today's order paper.
[Stage Direction]
The House resumed from April 3 consideration of the motion that Bill C-222, an act to amend the Income Tax Act (deduction of expenses incurred by a mechanic for tools required in employment) be read the second time and referred to a committee.
Yvan Loubier: Madam Speaker, I am very pleased to rise today to speak to this private member's bill introduced by my very hon. colleague, the member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans. He is a bit of a visionary. He showed remarkable intelligence by putting this bill forward.
For too long this category of workers has been neglected. We only have to think back to the quiet revolution of the mid-1960s and Quebec's development in the 1970s. A similar phenomenon occurred in the rest of Canada. A university education was valued to such a point that what we used to call trade schools, today's training schools for specialized technicians, were neglected.
We must re-assert the value of specialized technicians as a trade in various sectors. There is a shortage of specialized technicians these days. In my riding we are experiencing a situation I never thought we would see only a few short years ago. We can no longer fill specialized technician positions, especially in mechanics.
There is going to be, there already is a shortage of specialized technicians. The shortage could very well worsen with time. Recently, in June 1999, if I remember correctly, the Canadian Automotive Repair and Service Council said that the biggest challenge facing the industry at the end of the 20th century was to attract young people. They were talking about mechanics.
When it is possible to improve the situation for automotive mechanic technicians, we must do so with the objective of attracting new recruits. We must make it easier for young people who decide to get training in automotive mechanics to become skilled technicians, because we all need them.
If we do not attract excellent skilled technicians to parliament, we will be prevented from doing our work correctly. Who never wished for a skilled automotive mechanic when his or her car broke down? Automotive mechanics provide an essential service for the smooth operation of the economy.
If, a few years down the road, we face a shortage that is worse than it is today, we would deeply regret our inaction. This is why we must make a particular effort.
Once again, I congratulate my colleague from Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans. It is thanks to this kind of initiative that we often manage to change things.
We are not asking for much. We are only asking for fairness for automotive mechanics, by allowing them to claim a tax deduction for tools of $250 or less in value. For tools that cost $250 or more, we are asking that this be treated as a capital expenditure, which would allow these workers to claim a capital cost allowance on the cost of their tools, which are often highly sophisticated and very expensive.
For example, the cost of the basic tool kit for a young person starting out as an automobile technician is said to be between $3,000 and $4,000. This young technician needs this basic tool kit. When he is looking for a job, the first question he is asked by the prospective employer is “Where is your tool kit?” This young technician who just got out of school must pay $3,000 to buy his tools, after having paid several thousand dollars for his specialized training.
A highly skilled technician, a brake specialist or a radiator specialist, for example, may have a basic tool kit that costs $3,000 to $4,000 and a special tool kit that may cost anywhere from $20,000 to $40,000 depending on the area of specialization. This is a lot of money to spend for tools that are required.
I am pleased to see that, in the last parliament, my colleague introduced a similar bill, which was passed by a vast majority of members in this House. I think only 11 or 12 out of the 301 members of the House of Commons opposed that bill.
It is encouraging to see that it is possible to raise awareness among all members and to get them to set aside any partisan considerations in order to make tax policy decisions that will help the cause of a particular category of workers, namely automotive technicians.
It may seem like a minor tax bill, but its impact is just huge. I say that, because the only reason my colleague—and those who, like me and my colleagues in the Bloc Quebecois, support him—has introduced such a bill is to serve the public interest and improve the general well-being of the population. All bills, private members bills as well as government bills, should aim at serving the public interest.
Such deductions may seem trivial, but they may be the incentive needed to bring a young person, who still does not know what to do in life but who is very gifted in mechanics, to choose this trade.
We need gifted mechanics. I am not a specialist of mechanics and I will never be, this is not my ambition. I hardly know the difference between an engine and a carburetor. However, I do not want to dwell on my shortcomings. My point is that a young person who has such a talent and who does not know yet what trade to choose could decide to become a mechanic if he has some hope that a tax credit or a special capital cost allowance on tools will make things easier for him.
Those who already work as mechanics and who are given the chance to deduct the costs of their tools will also feel relieved. We should not forget that automotive technicians provide an essential service. Without them, we might not be here this morning. Mechanics do not make fortunes. The average salary varies from $29,000 to $40,000 a year. Providing relief to automotive technicians, who must not only buy their equipment but keep it up to date, could contribute to improve their quality of life. That is what we are here for.
The automobile industry goes through changes and incredible technological evolution. My colleague, the member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, told me that every year there are incredible changes occurring in mechanics, namely in terms of hybrid components, that is electrical and fuel injection components. We must take into consideration the fact that technicians need to renew their equipment.
I hope that all members will support this bill introduced by the member for Beauport-Montmorency—Côte-de-Beaupré-Île-d'Orléans.
Libby Davies: Madam Speaker, I am very pleased to rise in the House today to speak in support of Bill C-222.
I congratulate the member for having brought the bill forward in the last parliament and for having gained such strong support from all sides of the House. The New Democratic Party supported the earlier bill and we will support the new version of the bill. In fact my colleague from Acadie—Bathurst introduced a similar motion in the House.
The basic principle of the bill is about valuing people's work. We should be supportive of the work that mechanics do. They should legitimately be allowed to deduct the tools of their trade as an expense. It is the principle of fairness and of recognizing the importance of this one type of work.
Not everybody can afford an automobile but most of us do rely on automobiles to drive us to different locations. However, we do not really value the work that goes into maintaining those automobiles. Auto mechanics have a thankless task.
We like to complain about auto mechanics and the cost of repairs. Sometimes people do get ripped off but we are talking about an area of work that is highly skilled. Mechanics require an enormous amount of training and initiative in terms of keeping abreast of technological advances in the automobile industry.
My colleague from the Bloc mentioned that many auto mechanics do not make a lot of money. It is not exactly the most highly paid and lucrative job out there. It is very important that we look at this kind of work and recognize that there is a monetary expense involved for auto mechanics. They do not have the advantage, as do some other sectors, of being able to claim the tools of their trade as an expense.
The bill is not only about valuing people's work, it is also about fair taxation. Our tax system is a crazy maze. Most people feel very intimidated by a system that has become incredibly complex but most people understand instinctively, although our system is a progressive tax system, that the less money one earns the worst break one gets.
We have situations where corporate executives can write off all kinds of expenses that are considered to be legitimate expenses of business or employment. Buying hockey tickets, fancy dinners or other kinds of things for entertainment are considered essential costs of a corporate executive of doing business and are recognized by our taxation system. At the other end of the spectrum, when looking at the work of an auto mechanic, no such recognition is provided.
When I was first elected in 1997 I received a number of letters from auto mechanics in east Vancouver. We have a number of successful car dealerships just at the edge of my riding. I received a number of letters from skilled auto mechanics regarding the unfairness in the tax system and the fact that they could not claim their tools which were to them a fair and legitimate expense.
The bill is a very good initiative and an good example of what a positive contribution private member's bills can make in the House. We may not be able to solve the problems of the whole world but we can bring specific concerns forward for debate, seek the support of other members of the House and actually get them approved.
Not only is this a good bill but it is a good example of how we can cut across party lines and actually support a small but very reasonable initiative.
The New Democratic Party most wholeheartedly supports this initiative. We believe it is important to recognize the work that auto mechanics do. The small break they would get as a result of this bill being passed is important to those people. It would not change the total scheme of things. I do not think it would upset any balance. It could be seen as part of a direction to support the idea of fair taxation, which is taxation is based on ability to pay. It is based on the idea that a tax system should be progressive and certainly there are major issues within our tax system that we can hold up as examples of great inequities within the system.
Another constituent of mine brought forward the example of a pensioner or someone with a very low income who is sent a shortened income tax form, even shorter than the regular one. I think it is called a TS1A. If a pensioner or someone on a low income happens to make a political contribution, as many pensioners do, the form itself does not actually contain the appropriate line for the contribution. It has to be put somewhere else. As a result anyone making a $100 contribution would end up getting a credit of only $17 whereas those using the regular tax form would get a full credit of $58.
I bring this forward because to me it is just another example of practices that have gone on within the system. Maybe they go on unnoticed. No one pays attention to them. They are actually discriminatory. They do not recognize that in the case of the pensioner or low income person making a political contribution, the person actually gets ripped off by the tax system relative to those of us who fill out the full length form.
I think the motion is along those lines in terms of wanting to make a small change that will provide some recognition and value regarding the real cost of tools for this work.
I congratulate the member for continuing to press the matter in the House of Commons and for not giving up. It is sometimes through these small advances that working people get a better break. I would hope that all auto mechanics in Quebec, in my province of British Columbia and in other places in Canada would have the benefit of what would come from the approval of this bill.
We would certainly encourage the government to actually translate the bill into the necessary tax system change. I think most people anticipate that the bill would be approved and I thank the member for bringing it forward. All of us in the New Democratic caucus support his initiative in the bill.
Cheryl Gallant: Madam Speaker, it gives me great pleasure to speak in support of Bill C-222, an act to amend the Income Tax Act for the deduction of expenses incurred by a mechanic for the tools required for employment.
I first acknowledge the tremendous leadership my Canadian Alliance colleague from Lakeland has shown in providing information on the issue. He introduced Bill C-244, which is identical in subject matter to the bill before us today, and I know that as a newly elected member of parliament it is issues such as this one and the quality and calibre of representation of members like the member for Lakeland that bring credit to this institution.
During the November 22, 2000, election I had the opportunity to speak to a number of mechanics who were very aware of this issue. In fact I spoke to one mechanic from Petawawa, Ontario who told me that he had been working on this issue for 30 years. It was his wish that while it was probably too late for him to see any fairness on the issue, hopefully this issue could be resolved for his son who is looking to follow in his footsteps now.
What has been very disappointing in regard to this issue is how it so clearly demonstrates the dysfunction of parliament. This is a private member's bill. All members should be allowed to look at the proposal and then decide on behalf of their constituents whether this is an issue that they should support. All members should let their conscience be their guide and vote accordingly. In the last election Liberal members said they supported this legislation.
The government does not care about whether or not its members have an informed opinion about a particular piece of legislation. They are now being whipped into line with the silliest of objections. It is a shame that members of the government party are muzzled in the way they are.
I am proud that I am able to do something that no government member is allowed to do, that is, to speak freely and vote freely in the House of Commons. This sad fact was also brought home with the decision by the Liberal Party to force its members, except for one or two brave souls, to vote against its election promise, something it received votes for as part of its election platform, to vote against an independent ethics counsellor. What a sad day for the democratic process in Canada.
I know that there are some conscientious members on the government side. There were enough of them on the House of Commons finance committee before the last election to direct the Minister of Finance in their report, in prebudget consultations, and tell him to do the right thing and change the tax rules so that mechanics would be treated fairly.
Let us take a look at some of the government's objections. These objections were raised by the government in regard to implementing tax fairness for mechanics. Let us be clear. We are not talking about special treatment. We are talking about fairness.
The Liberal government's first excuse is that mechanics make too much money for this write-off. Frankly that is such a foolish assertion that I am astonished the government even made it. This proposal is not about whether mechanics are charity cases and whether the government should throw them a few scraps. This is about being treated fairly under the Income Tax Act and in relation to how others are treated as well. It is a sad commentary that the Liberal Party should feel this way.
The Liberal government also says it is true that mechanics need to spend anywhere from $20,000 to $70,000 on tools, but that is a cost incurred over maybe 40 years. That may be the way the government does equipment procurement for the military, but I have news for the government: tools wear out or get lost.
That is why some employers make it a condition of hiring that mechanics buy their own tools. If mechanics do not own their own tools, some owners have found, the tools disappear. They get left on vehicles or misplaced. It just happens. I am not talking about theft because I do not believe that to be a problem whatsoever. Tools get misplaced around the home as well. The issue is that mechanics must have their own tools as a condition of employment. Others such as shop owners can write off the cost of their tools. The issue here is tax fairness.
The Liberal government knows this but it persists with the myth that somehow this is a special treatment rule. It is not. It is an issue of tax fairness.
Monique Guay: Madam Speaker, it is with great pleasure that I rise to speak to the bill presented by my colleague from Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, a bill that is being presented for the second time.
I would like to point out his determination—I would even say his endurance and pride—in coming back once more before the House with a bill that will make things much easier for those who work as mechanics.
Moreover, this is a votable bill. As we all know, my colleague presented the same bill in the last parliament, and 213 members voted in favour of the bill. That says a lot, when you think that there are 301 members in the House.
Again, we hope to have the same kind of support for this bill, which is really forward looking in this field, and I want to insist on that.
The purpose of the bill is to allow mechanics to deduct the cost of providing tools for their employment. In the last 15 years, members from almost all parties have introduced private member's bills to ensure that mechanics could deduct the cost of their tools.
It is very important here to consider that—I am going to speak a little about the past—when we began even a few years ago to encourage all our young people to go to university, as my colleague mentioned earlier in his speech, we neglected the vocational sector to some degree.
I was looking earlier at the statistics in my own riding. I have 1,300 mechanics working in the Laurentides riding. That is not insignificant. A look at the work of mechanics reveals it to be fairly hard work, physically difficult and requiring a lot of energy and good health. It is not the sort of job a person can continue doing to age 70. It is the sort of job people retire early from, at age 50 or 55, because it requires an enormous amount of physical energy.
These people will therefore expend their energy differently and much more physically than we parliamentarians here in the House.
It is an absolutely vital trade. We could never do without mechanics. Madam Speaker, if you had a flat on the highway, or if I did, I can tell you I would be very happy to see a mechanic coming to help. Even changing a spare is not something all the members of the House could do.
This is a very important trade, for which I have very great respect. As I was saying, in another decade, everyone went to university. Now we are realizing we have a shortage, especially in areas such as mechanics. Young people get specialized training in schools and colleges. They pay a lot for that, and when they enter the labour market, most private places they go to work for, either garages or institutions, ask then “Listen, do you have your tool chest?”
But a tool chest costs a lot of money. It does not cost hundreds of thousands of dollars, but it still costs several thousands. To work in a garage or a service station, these young people need a solid background, and the necessary tools right from the start.
Sure enough, if we compare with Bombardier, it will supply tools to its workers. Bombardier is specialized in this area. But if you take an independent worker, who works in a small garage in a village or in a local garage, as much as possible he must provide his own basic tools. It is like a hairdresser; she needs her tools to work and she provides them.
So he is considered to be a sort of self-employed worker. These young people are barely into their twenties when they enter the labour market, and they are penalized, often on top of having to pay back their tuition, costs of special training, because they must go into debt just as they are hitting adulthood in order to pay for tools. I think that this is unacceptable.
When we see that the federal government is racking up surpluses on the backs of unemployed workers—we are talking about a whopping $38 billion—when we see that it has so much money and that it is not able to help young people get a start in life, that is unacceptable.
This bill would correct this situation. It would be an excellent beginning for the government. It could stop resorting to parables and show us once and for all that it truly intends to help young people enter the labour market. It could innovate even further because, in other trades, such as plumbing or electrical, in all these fields, it could eventually do almost the same thing.
There are 1,300 mechanics in my riding of Laurentides. We should be able to encourage these people from the beginning; we are not asking for the moon and the stars. There are 115,000 mechanics in this country who invest an average of between $15,000 and $40,000 each for their tools and equipment. Their average pay is not all that much; according to some, they earn an average of $29,000 annually. With $29,000, if a mechanic has to buy a set of tools worth between $15,000 and $40,000, I can tell the House that it will take a mechanic many years to pay for them; this is a form of mortgage for these people and a mortgage takes 20 years to pay off.
I believe that we have the means, the capacity and the cash to help them get a start in life. We keep hearing in committee that young people are important, that women are important, that everything possible is going to be done to help them, so perhaps it is high time the Liberal government made good on its desire to do good deeds. We are still hearing talk in the human resources development committee about loans and scholarships, but that is not what is needed.
What is needed is something tangible. We need the government to take prompt action in matters such as this. We need a majority vote here in this House. The Minister of Finance has the fiscal capacity to accommodate it. It can be calculated, very rapidly even. We need a gesture of good will from this government.
I repeat that I totally support my colleague for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans and sincerely hope we can have as good a vote as we did during the last parliament, that our colleagues will be informed on the issue and will also speak on it. They are, of course, welcome to add their comments on Bill C-222.
We would be very pleased to finally see a tax policy that will help trades people, who often have not had the opportunity to attend university but who work very hard at what they do, who do marvellous work and for whom we have enormous respect. These people absolutely deserve to have help getting off to a good start in life.
Today in the House, the government has an opportunity to provide these young people with the support they so greatly need. We cannot ignore them. We need positive, real and tangible policies so that our young people can get off to a real start toward a better life.
Ken Epp: Madam Speaker, I am honoured to stand in this place to speak in defence of those who perform the mechanical repairs on our vehicles.
This issue has been ongoing for many years in parliament, certainly all the years I have been here. I am up to the challenge today of persuading 172 Liberals to vote in favour of the private member's bill. I hope I can convince at least half of them. As for the others, I do not care if they vote against it. If I can get half the Liberals to support the bill then finally the injustice would be stopped.
What injustice are we talking about? I am speaking about the fact that a taxation principle is being unfairly applied when it comes to the tools used by mechanics. The general tax principle is that people can deduct from income money that is expended in earning an income. For example, if a farmer requires a tool in order to do the work of earning an income on the farm, the cost of that tool is a deductible expense when it comes to filing income tax. In other words, they can buy a tool that they need without having to pay income tax on the money earned to purchase it.
There are many other professions where this applies. When I walk down the mall in some of my communities I see a doctor's office with a sign that says professional corporation. That designation is so that the doctor can deduct the cost of the expense of the equipment which he or she needs to earn income. Lawyers deduct the cost of all tools they need to do their jobs. Accountants register themselves as professional corporations thereby being able to claim all the expenses of earning an income and avoiding income tax on that portion.
Almost everyone can deduct from income money that is spent to earn income, either instantaneously as an expense or through some form of depreciation. While we are talking about a straight deductibility for mechanics, the government may also want to look at providing a system of capital cost allowances. Costs could be depreciated year by year until the value has been totally written off.
I remember a real estate acquaintance of mine who took an old used door that he had in his basement and put it on top of two milk cartons, set a chair in front of it and called it a desk. He was able to deduct from income tax the proportional cost of his house as he worked as a real estate agent. He was able to deduct a presumed cost that he had in earning his income.
When it is an explicit requirement that a mechanic have tools to do his or her job to earn income, why is it that the government and all governments before have discriminated against mechanics by not allowing them to either deduct from income the cost of their tools or to depreciate them on an ongoing capital cost allowance basis?
That is blatant unfairness and it needs to be corrected. That is why I am so passionately pleading with 172 Liberals and other members of the opposition to vote in favour of the bill. The bill, in one form or another, has been in front of every parliament since I came here and the government has scuttled it every time by letting it go on and on until finally there was a prorogation of the House and the bill was dropped.
I know quite a bit about the use of tools. I used to do all my own mechanical work. The very first car I owned was a 1959 Meteor, a fantastic gift from my parents. It was my primary vehicle for 25 years and I drove it every day. I always said that I would drive it to the moon, and the mileage on it when it finally cratered was just 5,000 miles short of having driven the equivalent distance from the earth to the moon.
The reason I did my own mechanical work was that I was not a very rich kid. My dad's friend gave me a grease gun so I did my own grease jobs. I bought oil in bulk and did my own oil changes. When something needed fixing and I did not have the tool, I went to the store and bought it so I would have it the next time. In one of my vehicles I had the major task of replacing the bearings in the differential. I borrowed a gauge for the very precise measurement of spaces that was required for that job. I bought an expensive Craftsman tool at Sears so I could take it apart. I still have the socket even if I only used it once. I do not claim to have the right to deduct it from my income. However, one thing I did learn was that accumulating tools was a very costly thing and all I had were the basic tools. I could not afford a winch so when I did a motor job on my Honda Civic I took the head off it before I took the motor out. Then I lifted the motor out so I would not need a winch.
Tool costs are extremely high. When most mechanics are hired by garages and service stations a condition to their employment is that they have their own tools. Without their tools they could not touch a thing, just as I could not. If I did not have the right tool I had to buy it. The same thing is true for mechanics. When they do not have the right tool they go out and buy it unless they can persuade a fellow worker to lend it to them. Once they have it, it is in their toolbox.
An empty toolbox without any tools that rolls on the floor costs between $300 to $400. Mechanics must invest between $20,000 and $50,000 in order to do their job. It is high time we recognized both the importance of the work they do and the unfairness that is being perpetrated on them by not allowing them to deduct the tool expenses from their taxable income.
As has been mentioned, those tools also have to be replaced because they wear out and some are lost. I have on numerous occasions picked tools up off the highway because I know the value of them. I also know that if they are left on the road they can be kicked up and cause damage to a vehicle, such as puncturing a tire or even causing injury to another person.
I have picked up a few screwdrivers and other things which I have found on the road. It is pretty well impossible to find out from where these things came. Likely a mechanic left them sitting on some part of the motor when he was working on it and forgot to remove them. The person for whom the work was done drove away and the screwdrivers fell onto the highway. This is another source of loss.
Losses have to be replaced. That is a cost item. I plead with all members to agree that there is no reason in the world why these people should not be treated the same as anyone else who has a cost of employment to that extent in earning their income. I again emphasize my plea to members to please vote in favour of this bill so that finally this inequity will be solved.
Mr. Alex Shepherd (Parliamentary Secretary to President of the Treasury Board, Lib.): Madam Speaker, I am very pleased to speak on Bill C-222, a very important bill brought forward by the member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans.
As a number of other members have mentioned, a concept of this bill has been before the House many times before. In my previous life I was a self-employed chartered accountant. I had many mechanics, both employed and self-employed, as my clients, so I am very familiar with their concern regarding this issue.
I believe a number of interveners have possibly misunderstood the concept. The first issue is self-employment as opposed to employment. In fact the previous speaker gave many examples of people who were able to deduct tools, et cetera, by virtue of the fact that they were deemed to be self-employed. He was also confused about incorporated and unincorporated businesses. Unincorporated self-employed people are allowed to deduct expenses laid out to earn income.
There is a significant difference in the income tax system between people who are employed as opposed to people who are self-employed. We can have a long debate about that in and of itself, but generally speaking it is considered that people who are self-employed have likely more substantial risk in earning an income than do people who receive a weekly paycheque. Some people dispute that in this day and age when people are getting laid off of their jobs and so forth, but that is some of the foundation that underlies why this situation has occurred.
The issue of fairness was mentioned. A number of interveners said that it was only being fair to do this. I understand that plight and the costs involved in acquiring and even maintaining a tool inventory. However many people who are employed have similar costs related to being employed. Even we have a dress code in the House of Commons. I incur costs for suits and other things related to maintaining my job as a condition of employment, but these costs are not tax deductible.
I have two young sons who are engaged in the high tech sector. While it is not a specific condition of their employment, they feel it is part of their jobs to have computers in their homes. They use those computers as an extension of their work, but they are not allowed to deduct those computers for tax purposes.
The fact of the matter is that if we are going to start talking about fairness, we are going to have to talk about a lot of other people. I am sure people in our audience today or sitting at home watching this debate who are employed can think of things that they incur as well to earn employment income.
Uniforms is another issue that has been around for years. People may be required to wear uniforms such as a waitress or whatever the case may be. They are required to buy the uniform from their employers, but are not allowed to deduct them for tax purposes. That is another idiosyncrasy of the income tax system.
I am sure all of us can think of reasons why we should have a tax deduction. The real issue is why should this group of people be treated somewhat differently than all other people who are employed.
To go over the bill itself, the bill proposes to change the Income Tax Act to help mechanics to pay the costs of providing their own tools when this is a condition of their employment. I think that is very important.
We should also ask ourselves a fundamental question. Why is it a condition of employment for mechanics to buy their own tools? There are a lot of reasons for that but it has developed differently from other industries.
Changes would allow mechanics to deduct the cost of buying, renting, insuring or maintaining their tools. Income deductions would be available for tools costing less than $250 and this could be adjusted in accordance with inflation. That is what the bill says. For bigger amounts it would be subject to capital cost allowance and allowed to be deducted over a period of time.
The Government of Canada understands the difficult issue this bill is trying to address. We appreciate that employed mechanics face work related costs that are sometimes significant. This is particularly true, and it has been brought out in the debate today, of young people who have just become mechanics and have to buy that first investment. It is well known that if people enter a career path as a mechanic, they will have to buy their first set of tools. It does not alleviate the fact that it is very expensive and could be cost prohibitive to people becoming mechanics.
There is some merit that the bill is trying to achieve. However the bill overlooks some very important administrative issues, issues that would need to be considered if the bill went forward.
For instance, the bill talks about the word mechanic. Many people have used the words auto mechanic but it does not say that in the bill. Canada's national occupation code lists many kinds of mechanics. There are automotive mechanics, but there are also auto body mechanics, heavy duty mechanics, small engine mechanics, aircraft mechanics and many varieties of industrial mechanics. That has not been defined in the bill. People have used the analogy automotive mechanics but the bill says mechanics of all kinds.
Many other people would call themselves mechanics as defined under Statistics Canada even though they may not fit in any of those particular categories. In reality the bill has brought forward a great deal of confusion.
Another important administrative issue is how the deduction will work under the bill. I am puzzled by the use of the thresholds. The bill talks about those amounts in excess of $200, I believe, which is different from the current capital cost allowance provisions which is $250. In other words, it would appear that the bill anticipates some other form of capital cost allowance regime. This is a mystery to me.
What is even stranger is the bill talks about the proportionality of tools in excess of $250. I have a hard time reading and understanding it myself. I am assuming if a particular tool was $1,000, the first $250 would be deducted as a regular expense and the $750 would somehow be added to a person's capital cost allowance schedule as a depreciation.
There is no system of the Income Tax Act that treats capital acquisitions in that manner. It does not take part of a car and write it off while the other part is depreciated over a long period of time. It does not take part of a tractor, write it off and depreciate the balance over a long period of time.
The bill is inconsistent and does not fit in with the current income tax regime. Therefore, it is not a simple bill. It is a very complex bill that deals with a whole different method of depreciation and providing for capital cost allowances.
One of the problems is the matter of control. We recognize that in some areas there are already mechanisms which apply to employees who have to pay out of their own pocket for work supplies. The cost of chainsaws is allowed to be written off by loggers because it is recognized that they depreciate quicker than other forms of equipment.
We have to sit back from this issue and think about it for a minute. We talk about fairness but there are other employed people who are treated similarly to mechanics. This is not to say that mechanics are not deserving of some kind of treatment, but if we open up that Pandora's box we will have to open it up for a lot of other people, especially some of the people who are listening to us today.
My preference is that at this time the bill not go forward until it is studied further.
Antoine Dubé: Madam Speaker, I am very pleased to speak to Bill C-222 that was introduced by my colleague from Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans. This is the second time that he has introduced this bill. Unfortunately, it died on the Order Paper because the election was called.
I understand his situation, because I remind the House, without going into this too much, that I myself introduced a bill on shipbuilding that also died on the Order Paper when it was on the verge of being passed at third reading. The government preferred not to pass it.
Again today, during Oral Question Period, we talked about this. The same thing applies to mechanics. At the time, at second reading, only 11 members had voted against the bill. Before the election, many Liberal members had voted for the bill. I hope they will continue to do so. It is simply the election that prevented it from being passed.
I listened to my two Liberal colleagues who spoke about this bill. The parliamentary secretary basically maintained the position he took last time. But I am a little surprised to see the position taken by the member for Durham, who has often shown that he can not only express himself in an independent way, but also vote independently from his government when he had the opportunity—
Alex Shepherd: Madam Speaker, I rise on a point of order. I would like it known that I voted against the bill the first time round.
Antoine Dubé: Madam Speaker, I was saying that the member for Durham had shown, on a few occasions, that he placed the interest of his constituents before the position of his party.
At any rate, he put forward several arguments which I think should be discussed by the finance committee, which would be called upon to study this bill and bring the necessary amendments, keeping in mind that we must not establish a precedent.
I simply remind those who are listening to us that we are still looking at the principle of the bill. The member talked about tradition. This is something I know about. I have two brothers who work in this field. One is an employee who specializes in automatic transmissions, and his tools are very expensive. The other one owns his own garage and could claim a capital cost allowance on his tools. There is a double standard here. One is self-employed whereas the other one is an employee. So I know what I am talking about today.
For the benefit of my constituents, very often, in the House, I talk about the Lévis shipyard. When that shipyard is in full operation, it employs 1,000 to 1,500 workers. In my riding, this bill also affects 1,200 to 1,500 workers. Therefore it is very important.
The Acting Speaker (Ms. Bakopanos): The hour provided for the consideration of Private Members' Business has now expired. The order is dropped to the bottom of the order of precedence on the order paper.
It being 2.30 p.m. the House stands adjourned until Monday next at 11 a.m. pursuant to Standing Order 24(1).
(The House adjourned at 2.30 p.m.)