2002-11-01

Business of the HouseThe Deputy Speaker: Pursuant to the provisions of Standing Order 81, it is my duty to inform the House that the motion to be considered Monday during consideration of the business of supply is as follows:

That this House condemn the government for continuing to overstretch our military personnel; and call on the government to increase spending more than is currently planned, as the Canadian Forces need more money simply to continue operating in a sustainable way.

This motion stands under the name of the hon. member for Saint John. Copies are available at the table.
Tax Conventions Implementation Act, 2002Hon. Maurizio Bevilacqua (for the Minister of Finance): 
moved that Bill S-2, an act to implement an agreement, conventions and protocols concluded between Canada and Kuwait, Mongolia, the United Arab Emirates, Moldova, Norway, Belgium and Italy for the avoidance of double taxation and the prevention of fiscal evasion and to amend the enacted text of three tax treaties, be read the second time and referred to a committee.

Mr. Bryon Wilfert (Parliamentary Secretary to the Minister of Finance, Lib.): Mr. Speaker, I appreciate the opportunity to present Bill S-2, the Tax Conventions Implementation Act, 2002, for second reading today.
The bill relates to Canada's ongoing effort to update and modernize its network of income tax treaties with other countries, a network that happens to be one of the most extensive in any country of the world.
At present, Canada has tax treaties in place with over 75 countries. Passage of the bill will, of course, see the number increase. The bill would enact tax treaties that Canada has signed with seven countries. Of these seven treaties, three represent updates to existing tax treaty arrangements and four of the treaties establish bilateral tax arrangements with countries for the first time.
More specifically, the treaties with Kuwait, Moldova, Mongolia and the United Arab Emirates are all new treaties that have recently been signed. They are historic in the sense that they are the first comprehensive tax treaties ever concluded with these countries.
The new treaties will provide individuals and businesses, both in Canada and in the other countries concerned, with more predictable and equitable tax results in their cross-border dealings. What is more, our arrangements with Belgium, Italy and Norway are updated to ensure that our bilateral arrangements are consistent with current Canadian tax policy.
Before discussing these treaties any further, I want to take a few minutes to provide the House with a brief overview of the importance of tax treaties and why it is necessary for the bill to be passed.
Canada taxes both the worldwide income of Canadian residents and the Canadian source income of non-residents. Put another way, all income of Canadian residents, whether earned here or abroad, is subject to a tax in Canada, whereas as non-residents are generally only taxed here to the extent that they participate in the economic life of Canada or receive income from sources in Canada.
Bilateral tax treaties or, if one prefers, income tax conventions, are an integral part of our tax system. Basically, they are arrangements signed between countries that are primarily aimed to protect taxpayers from double taxation and to assist tax authorities in their efforts to prevent fiscal evasion.
Canada benefits significantly from having tax treaties in force with other countries. Our tax treaties, for example, assure us of how Canadians will be taxed abroad. At the same time they assure our treaty partners of how their residents will be treated here in Canada.
Tax treaties also impact on the Canadian economy, particularly because they help facilitate international trade and investment by removing tax impediments to cross-border dealings. This is significant because, as hon. members know, Canada's economy relies significantly on international trade. In fact, Canadian exports account for more than 40% of our annual GDP.
What is more, Canada's economic wealth depends on direct foreign investment to Canada as well as inflows of information, capital and technology. In other words, by eliminating tax impediments and by creating more predictable tax results for traders, investors and other taxpayers with international dealings, our tax treaties promote opportunities at home and in international trade and investment abroad.
Since Canada's economy is likely to become more intertwined in the world economy, eliminating administrative difficulties and unnecessary tax impediments with respect to cross-border dealings will remain important.
I would like to point out that there can be economic disadvantages for countries and taxpayers in the absence of cooperative tax arrangements with other countries.
Let me explain. The absence of a tax treaty makes the threat of double taxation a concern to taxpayers. Double taxation occurs when a taxpayer lives in one country and earns income in another. Without a tax treaty in place to set out the tax rules, income is at risk of being taxed in both countries. This situation produces unfair results and can have adverse economic impacts.
It is only natural that investors, traders and others with international dealings want to know how they will be taxed before they commit to doing business in a given country. For example, when considering doing business in Canada, investors and traders are anxious to know the tax implications associated with their activities both in Canada and abroad. They also want assurances that they will be treated fairly.
Tax treaties establish a mutual understanding of how the tax regime of one country will interface with that of another, thus helping to remove uncertainty about the tax implications associated with doing business, working or visiting abroad.
Such an understanding can be achieved by allocating the right to tax between the two countries together with incorporating measures that resolve disputes, eliminate double taxation and require notice to be given before the arrangement can be terminated. All these measures promote certainty and stability and help produce a better business climate.
Although tax treaties, including the ones enacted in this bill, help to facilitate trade, investment and other activities between Canada and its treaty partners, they are principally aimed at achieving two main objectives. First, they aim to encourage cooperation between tax authorities in Canada and in treaty countries. One form in which cooperation takes place is through the exchange of information related to taxes. There are good grounds for including provisions in tax treaties concerning cooperation between tax administrations.
In the first place, it is desirable to give administrative assistance for the purpose of ascertaining facts as to how the rules of a particular treaty are to be applied. Moreover, in view of the increasing internationalization of economic relations, countries have a growing interest in the reciprocal supply of information.
Cooperation is also promoted through the establishment of a so-called mutual agreement procedure for resolving difficulties arising out of the application of a particular tax treaty. The mutual agreement procedure acts as a mechanism through which Canadian tax authorities and their counterparts in the other country can resolve disputes and address unintended outcomes, such as double taxation of income.
This brings me to the other fundamental objective of tax treaties, namely to prevent double taxation. Relief from double taxation is so very necessary and deserves to be discussed in some detail. Having income taxed twice when the taxpayer lives in one country and earns income in another can be troubling unless relief from double taxation is offered. As I mentioned earlier, without a tax treaty both countries could claim tax on the income without providing the taxpayer with any measures of relief for the tax paid in the other country. To alleviate the potential of this happening, a tax treaty between two countries allocates taxing authority with respect to a given item of income in one of three ways: first, the income may be taxable exclusively in the country in which it arises; second, it may be taxable only in the country in which the taxpayer is resident; or, third, it may be taxable by both the source country and the residence country, with relief from double taxation provided in some form.
The treaties contained in the bill will confer an exclusive right to tax with respect to a number of items. The other country is thereby prevented from taxing those items and double taxation is avoided. As a rule, this exclusive right to tax is conferred on the state of residence. Put another way, where a certain country is granted an exclusive right to tax, the frequency with which taxpayers of one country are burdened by the requirement to file returns and pay tax in the other country when they are not meaningful participants in the economic life of that country, or where it would be a nuisance for them to do so, is reduced.
For example, if a Canadian resident employed by a Canadian company is sent on a short term assignment, say for three months, to any one of seven treaty countries in the bill, Canada has the exclusive right to tax that person's employment income. However in the case of most items of income and capital, the right to tax is shared, although for certain types of income, such as dividends and interest, the amount of tax that may be imposed in the state of source is limited.
Under any of the seven tax treaties contained in this bill, where a shared right exists to tax an item of income of a taxpayer, there also exists an obligation on the part of the country in which the taxpayer is a resident to eliminate any double taxation.
There is another aspect of tax treaties that I want to discuss, and that is the importance of withholding taxes. The bill provides for several withholding tax rate reductions. Withholding taxes are a common feature in international taxation. In Canada's case they are levied on certain payments that Canadian residents make to non-residents. These payments include interest, dividends and royalties for example. Withholding taxes are levied on the gross amounts paid to non-residents and represent their final obligations with respect to Canadian income tax.
Without tax treaties, Canada usually taxes this income at a rate of 25% which is the rate set out under our domestic law or more precisely under the Income Tax Act. Canada's tax treaties establish limits on the amount of withholding tax that can be levied in respect of certain payments. In all cases where the maximum rates of withholding tax are set out in Canadian tax treaties they are always established at a rate lower than the 25% provided under our domestic law.
The tax treaties in the bill would all provide for certain reductions in the withholding tax rates. For example, each treaty provides for a maximum rate of withholding tax of 15% on portfolio dividends paid to non-residents. The maximum withholding tax rate for dividends paid by subsidiaries to their parent companies is reduced to a rate of 5% in all cases.
Withholding rate reductions also apply to royalty, interest and pension payments. Each treaty in the bill caps the maximum withholding tax rate on interest and royalty payments to 10%.
What is more, the treaties with Norway, the United Arab Emirates and Belgium specifically provide that no withholding tax can be levied in respect of royalty payments for the use of computer software, patents and know how.
In addition, with respect to periodic pension payments, the maximum rate of withholding tax is set at 15% for all countries except Belgium and the United Arab Emirates where no cap has been established.
These treaties also implement other measures which ensure that the tax consequences for certain transactions are in line with Canadian tax policy. Unfortunately, time does not permit me to go into detail about all these measures today.
In closing I want to point out that the bill is important, but albeit routine legislation. As I stated at the beginning of my remarks, the bill relates to Canada's ongoing efforts to modernize and to expand its network of tax treaties with other countries. The key word here is ongoing, for Canada is already in the midst of negotiations with other countries to implement more tax treaties. I encourage all hon. members to support the bill and to pass it without delay.
Mr. Rahim Jaffer (Edmonton—Strathcona, Canadian Alliance): Mr. Speaker, it gives me great pleasure to rise in the House to talk about Bill S-2, an act to implement tax freebies with Kuwait, Mongolia, the United Arab Emirates, Moldova, Norway, Belgium and Italy for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
Let me preface my remarks on the bill and the fact that the opposition will be supporting it by saying that there are some concerns the bill allows us to raise in the context of the direction we should take when it comes to taxation and the way the bill was introduced in the House.
We in the opposition always have had concerns with bills that are introduced through the Senate and then come to the House. We feel that the Senate, being unelected, lacks the legitimacy to address legislation prior to the House of Commons. More and more we find the government going that route to introduce bills relating to tax policy, and we have seen a few over the history of this government. Bills should be brought to the House so we can debate the merits first and then pass them on to the other place.
The parliamentary secretary talked about the importance of tax treaties and I would agree with him. He cited specifically that tax treaties tend to promote certainty, stability and cooperation among countries with which we engage in tax treaties. I would agree with that and so does the opposition.
However, I would take it one step further, especially as we start to enter into these forms of tax treaties. If the legislation had been introduced in the right place and had been given fair debate, Canadians and the House would have had the opportunity to compare our jurisdiction of taxes with those of other countries and see how we could create a more competitive environment to attract more business. We could also see if we were on par with other countries around the world.
It is no secret that Canada has one of the highest tax rates of industrialized nations, namely within the G-8 countries. That puts us at a great disadvantage when it comes to competing in the global economy we find ourselves in today.
I would go further than the parliamentary secretary and say that tax treaties would not only promote certainty and stability, but hopefully, by reducing overall taxes, would create a more competitive and attractive environment for businesses and people to consider Canada as a place to locate. Also, we would have a fairer tax system if we collected more taxes at home rather than the other way around. With tax rates being so high compared to those of other places, we lose our competitive disadvantage.
I would challenge the parliamentary secretary and the government to take it upon themselves to compare our tax system with those of other countries.
As was mentioned, the purpose of the bill is to ratify tax conventions agreed upon between Canada and the particular countries I mentioned. These agreements were set out to avoid double taxation between the representative nations and to establish a cooperative framework to prevent fiscal evasion. The Canadian Alliance has traditionally encouraged all measures to further equalize and liberalize foreign trade and investment. In this regard Bill S-2 is a positive measure. Nonetheless it was introduced in the Senate instead of the House of Commons.
When it comes to economic and fiscal themes, I would like to put on the record our party policy. The Canadian Alliance supports securing access to international markets through the negotiation of trade agreements. Our trade agenda would focus on diversifying both the products we sell abroad and the markets into which we sell these products. We would vigorously pursue the reduction of international trade barriers, tariffs and subsidies. We would work with international organizations that have relevant expertise to ensure the concerns of Canadians about labour practices, environmental protection and human rights are reflected.
We know that is done and reviewed on an ongoing basis, not only when it comes to tax policies, but on other facets as we engage in forming treaties and agreements with other countries. It is important that Canadians take some of our values and compare them with those around the world and share some of our experiences with countries that have challenges in some of the areas I mentioned. Hopefully we can influence some to change their ways or improve in certain areas. On the flip side, maybe we can learn from some of them.
Tax conventions, such as the ones to be implemented with Bill S-2, seek to arrange an agreement under which each government agrees to limit or modify the application of its domestic taxes to attempt to avoid double taxation. The parliamentary secretary spoke in detail about this issue.
The tax treaties that would be implemented by the bill reflect efforts to update and expand Canada's network of tax treaties so as to obtain results in conformity with current Canadian tax policy. These treaties are generally patterned on the model double taxation convention prepared by the Organization for Economic Co-operation and Development.
Obviously, as the parliamentary secretary said, this is so that we do not have Canadians taxed on the same income or revenue for themselves doubly, whether in the country they currently reside in or work in and here at home.
Parts 1 to 4 of this enactment would implement tax treaties with Kuwait, Mongolia, the United Arab Emirates and Moldova. Parts 5 to 7 of this enactment would implement the most recent tax treaties with Norway, Belgium and Italy. Parts 8 to 10 of this enactment would correct the English version of tax treaties with Vietnam, Portugal and Senegal which already have been enacted.
To conclude, notwithstanding the fact that the bill was introduced in the Senate, which is unelected and lacks the legitimacy to address legislation prior to the House of Commons, the Canadian Alliance will be supporting Bill S-2 as an initiative to expedite tax procedures for Canadians abroad, reduce tax evasion and focus CCRA resources on collecting taxes from Canadians living in Canada.
Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Mr. Speaker, I am caught off guard. I expected more comments, and comments in greater depth, from my colleagues in the Canadian Alliance, particularly where taxation matters are concerned, but I can say this.
We in the Bloc Quebecois have been reflecting for years now on tax conventions and tax reform. These tax conventions and the signing of numerous conventions between Canada and a number of other countries must be incorporated into the broader framework of tax reform.
I would remind hon. members that the need for federal tax reform has been debated here since the 1993 election. As part of this reform, we have also talked about ensuring that the Canadian taxation system no longer contained loopholes allowing corporations and individuals, more specifically individuals with very high incomes, to avoid paying tax, and in fact to commit out and out fraud.
Those listening have seen our emphasis since 1994, particularly on the issue of money laundering. Since that time, the former finance minister, who is also the member for LaSalle—Émard and a candidate for the leadership of the Liberal Party of Canada and the job of prime minister, has remained silent about our demands for taxation reform to close the loopholes and to ensure the integrity of federal public finances.
Even the Auditor General joined in with us in reminding the former finance minister and the current finance minister that everything possible had to be done to ensure the safety of the federal tax base, which has been jeopardized year after year by the government's lax attitude to tax loopholes, in particular through certain tax conventions with countries considered to be tax havens.
It is the same thing for the OECD. My colleague from the Canadian Alliance mentioned this earlier. Not only did the OECD identify problems of double taxation, but it also pointed out that there were tax treaties concluded between countries and other accords, including tax conventions, that might be detrimental to the operation of the regulatory mechanisms for liberalizing international financial markets.
About two years ago, the OECD also joined in with the Bloc Quebecois in demanding—OECD members are not members of the Bloc Quebecois, but they are as able as we are to do some good analyses—that some tax conventions signed by countries considered to be tax havens, which encourage harmful tax practices, be denounced. This is a lead in to Bill S-2.
First of all, I would like to say that we will support the bill, with the reservations I mentioned earlier about tax reform. Naturally, the corporate tax rates in Kuwait, Mongolia, the United Arab Emirates, Moldova, Norway, Belgium and Italy are fairly similar to Canadian tax rates. Therefore, any tax convention signed with these countries to deal with the issue of double taxation makes a lot of sense.
Let me explain what a tax convention is. It is a set of rules which two countries adopt to ensure fair treatment of the business income of subsidiaries of Canadian corporations operating abroad, compared to how that income would have been treated in Canada.
The purpose is to prevent a Canadian business, with a subsidiary in the United States for example, operating in the United States and being taxed in the United States, from also being required to pay tax in Canada. It would be absurd. It would be totally unfair and it could jeopardize the profitability of Canadian businesses. Where the taxation and corporate tax rates are comparable, there is no tax equity problem. However, signing tax conventions with countries whose tax rates are not comparable to those in Canada does create a problem.
In such cases, there is a problem because it introduces a bias in the investments of Candian businesses abroad, favouring countries with low tax rates that have signed tax treaties with Canada.
We have condemned this situation for years now. There were, and there still are, certain tax treaties signed between Canada and the United States that have no justification, that are flagrant injustices and that bias Canadian investors' decisions abroad.
The vast majority of tax treaties are fine, because Canadian taxation rates and those of these other countries are relatively comparable. So, taxing and returning revenue from Canadian businesses abroad poses no problems in terms of fairness when compared to Canadian businesses operating in Canada.
However, if we take the example of Barbados, where the tax rates hover around 1.5% for corporate profits and capital gains, and compare it to our rate of 28% or 29%, it becomes clear that there is a flagrant imbalance.
It becomes clear that there is a bias at work that favours Canadian investment in Barbados. The tax treaty between Canada and Barbados creates both direct and indirect investment in Barbados. This is not a simple bias.
There is a total of $257 billion of direct Canadian investment abroad, approximately. Of this amount, Barbados ranks third in terms of Canadian investment abroad, with $16.8 billion in direct Canadian investment; that is more direct Canadian investment than Japan, France and Mexico combined.
When a little country such as Barbados, with 270,000 residents, ranks third in terms of direct Canadian investments abroad, it begs the question: why? We are not the only ones asking this question. The former Auditor General, Mr. Desautels, asked this question for years. The OECD has also asked why. Specifically, its Financial Action Task Force on Money Laundering, the FATF, has asked the same type of question that we have been asking for years.
What is it that promotes this bias? The tax treaty between Canada and Barbados. We need to look more closely into this type of situation. We have been asking the Minister of Finance and the government to reassess tax treaties, particularly those signed with countries that are considered tax havens for good reason. We have done so because we must ensure that when we talk about the free market, when we talk about the movement of funds, when we talk about direct and indirect Canadian investments abroad, we have to see what produces these biases, problems and barriers for these investments.
In the case of Barbados, there are no barriers; indeed, it is the exact opposite. We are encouraging Canadian investment in Barbados, which is considered to be the number one tax haven, where the tax rate is incredibly low, if not non-existent in some cases, compared to corporate taxes in Canada. We are promoting cashflow out of Canada to Barbados. We find it fair that corporate profits are taxed at 1.5% and returned to Canada, where Canadian businesses operating on Canadian soil have to pay 28%. It just does not work. It makes absolutely no sense.
How can we encourage this type of system? Even the FATF, the OECD group, compiles a list of countries considered to be tax havens and also considered to have taxation practices that are harmful to all of the world. For three of the four years that the FATF, this OECD group, has published the names of the countries at fault, Barbados has always been on the list. There are others, but Barbados has always been on the list.
Others have made improvements with regard to bank secrecy. It is no longer as strict as it used to be in several countries that previously were adamant about it, regardless of who the investors or depositors were. A degree of flexibility has been introduced first to ensure that the money laundering networks of international criminal groups and terrorist groups do not benefit from tax conventions or from these countries being recognized by the United Nations organization.
Second, some tax practices, although above board, hurt others because they introduce a great deal of bias or distortion due to the imbalance in tax rates. Such practices must be rectified. Barbados has never had to make such corrections, and yet we still have a tax convention with that country, which hurts direct foreign investment. It would appear the government sees nothing wrong with this kind of tax convention.
As I said earlier, we are not opposed to tax conventions. They are a logical thing. We cannot have double taxation because it would be damaging to Canadian companies doing business abroad. But this does not mean we should sign tax conventions with countries considered to be tax havens with damaging practices, especially countries such as Barbados which, like the OECD, we have been condemning since 1994. This does not make sense. As if it were not bad enough that we have a tax convention with Barbados, the federal government is promoting this tax haven on its website. This leaves some of my colleagues completely speechless. I invite them to visit the web site of the Department of Foreign Affairs and International Trade. They will find a rather romantic description of tax havens, particularly Barbados, and ways to avoid paying federal taxes by investing money abroad in what is called the offshore financial sector.
On the Foreign Affairs and International Trade website, in the brochure entitled “Barbados: A Guide for Canadian Exporters”, we read, and I quote:

The offshore financial sector—

—referring to tax evasion in tax havens—

continues to grow and is becoming increasingly important to the economy as a source of foreign exchange and employment. The Canadian business community and banking sector is especially active in Barbados.

By the way, the five major Canadian banks have a total of 50 branches in Barbados. I have been asking the Canadian Bankers Association since 1993 what they are doing with 50 branches in Barbados. I have been asking where their revenues come from, what their activities are, and whether they are not at risk of having a fast one pulled on them, say by being involuntarily involved in money laundering by organized crime groups, drug traffickers in particular, and terrorist groups. Since 1993, I have not managed to get an answer.
I continue quoting from the document posted on the Foreign Affairs and International Trade website:

A Double Taxation Treaty exists with Canada—

This is a tax treaty like the ones brought before us this morning through Bill S-2. I continue:

—and the two Governments have recently signed a Foreign Investment Protection Agreement.Tax treaties with Canada and the United States have been important to the development of this industry.

We are talking about offshore banking here.
And yet we have across the way a government that will come after any of us if we owe the taxman so much as a penny. The Canadian tax system literally hunts down anyone who owes it $10. It is merciless. Taxpayers must pay up.
If we owe $100, we must pay $100, or they will come after us. We face penalties, are charged interest, hunted down. However, the same government promotes foreign investments in countries that are considered to be tax havens, countries like Barbados that the OECD condemned for having tax practices detrimental to countries with regular tax systems.
The federal government promotes investments in such countries but, at the same time, it tells Canadian taxpayers that they must pay every penny that they owe in taxes. This is a rather strange way of doing things. It is shameful on the part of a government to tax people to death and to even talk about adding another tax to fund health care, when federal surpluses have totalled several billions of dollars over the past three years. The government is talking about adding a new tax to fund health care while promoting tax avoidance for Canada's richest taxpayers, through countries such as Barbados.
Is it not bad enough to ask us to tighten our belt, to keep paying over and over and, at the same time, to use federal websites for propaganda encouraging the rich not to pay taxes here, but instead to safely invest their millions and billions elsewhere? I remind those who are listening to us that Barbados is the third most popular destination abroad for direct investments by Canadians. This tax scheme encourages wealthy Canadians to avoid paying taxes to the federal government.
This raises ethical issues. I mentioned federal websites, but there is also CanadExport , a publication of the Department of Foreign Affairs and International Trade which promotes international trade, provides progress reports on that activity, includes news on the financial sector for goods and services, and so on.
In an article recently published in CanadExport , it was mentioned that the government wanted to “demystify tax havens”. Again, this is a publication from the federal government which, on the one hand, tells us that we must pay all our taxes and, on the other hand, promotes tax havens for Canada's richest taxpayers, so that they do not have to pay their due to Revenue Canada.
It does not make sense to ask those of us who stay in the country to foot the whole tax bill. It does not make sense to cut employment benefits again and again as has happened since 1995, to reduce health and education transfers and ask us to further tighten our belt because the government cannot afford to do more. On the other hand, however, the government encourages wealthy taxpayers to take their money out of Canada to avoid paying income tax to Revenue Canada. I wonder if Canadians realize or can figure out how much those rich taxpayers save in income tax by investing in Barbados, for example. Do they realize that these businesses can also save money through direct investments in Barbados and other countries considered to be tax havens? Are people aware that this money which is not coming into the federal coffers means that the federal government will have that much less to spend on health, education or the fight against poverty?
We would not need new taxes, as proposed by senators in the other place. They are talking about a special $5 billion tax. If the federal government did not encourage people to invest their money abroad to avoid income tax, it would have enough money in its coffers to provide adequate funding for health, education and social assistance. This is absolutely clear.
How can the government pawn such nonsense and inequities off on us? How can there be two classes of citizens in this country? One which is crushed by income tax and poverty and the other which is spared taxes and is encouraged by the federal government, through numerous brochures and its website, to invest its money abroad?
The brilliant analyses of senior Department of Finance officials also facilitates this. “Want to know how to invest in Barbados? To save tax money? No problem. We will explain the whole tax haven situation. Want to jeopardize the entire federal tax base? No problem. We, federal public servants that we are, will help you invest your millions, even billions, of dollars in other countries so as to jeopardize the entire federal tax base”.
The Auditor General has been speaking out against these practices for years. The Auditor General has also criticized the lack of specialized staff at the Canada Customs and Revenue Agency and the Department of Finance to keep an eye on these tax conventions and the exodus of rich Canadians' assets to other countries. There is no control over this.
Hon. members will recall the transfer to the United States, several years ago, of two family trusts worth over $2 billion. This wealthy Canadian family was told it could make this transfer without paying any taxes to Canada. Remember?
There have certainly been other similar instances. There have probably been a number of cases of preferential treatment for wealthy taxpayers. There is something called a Department of Finance advance ruling that enables the wealthy to seek the opinion of senior departmental officials and then to invest, or carry out certain other operations, in another country without paying a cent of income tax.
There have likely been dozens of such instances of federal taxes evasion resulting in lost federal revenues, and thus the slashes to federal contributions to health and education carried out by the former Minister of Finance, the hon. member for LaSalle—Émard, and Prime Ministerial hopeful. These cuts might have been a little less drastic if his wealthy friends had paid what they should have to Revenue Canada.
While we are on the subject of the transfer of those family trusts worth $2 billion, is there anyone at the Department of Finance or the CCRA who can tell me what has become of them? The ten year term for these family trusts ended last year, I believe. Up until last year, the trustees did not have the right to cash in their trusts, in other words, sell their assets for profit, without paying tax to the CCRA, even if they were in the United States.
Is there currently any sufficiently specialized public official who has followed these two family trusts that were transferred to the United States and who could tell me if the trustees sold off their assets for a profit? Is it possible to find out if the trustee sold these assets off last year, after the deadline, or before the date that allowed the CCRA to collect its share of the capital in the form of taxes? Can anyone provide this information?
No, there is no such person. Do hon. members know why? Because, as the Auditor General has pointed out for years now, there is a lack of specialized resources at the Department of Finance and the CCRA to track the movement of capital from Canadian investors.
We no longer have enough specialists to properly manage the countless tax treaties and advance rulings handed down by senior officials when it comes to the investment of Canadian capital abroad.
I will conclude on the other aspect of the issue. Since 1994, we have been asking the Minister of Finance and the government to review these tax treaties and any practices that could be harmful in terms of the flight of Canadian capital abroad. The government keeps turning a deaf ear.
On occasion, as I asked questions to the former Minister of Finance and member for LaSalle—Émard, who wants to become the leader of the Liberal Party of Canada and Prime Minister to boot, about the fact that he was not taking any action on tax reform or on the termination of certain tax treaties, I could not help but wonder if he was not both judge and defendant in such instances and if it will not be even worse when he is the Prime Minister.
The former Minister of Finance and member for LaSalle—Émard also owns a shipping company that operates in waters bordering countries recognized as tax havens, like Barbados. I think that it would be very difficult for someone wanting to become the Prime Minister, let alone once he has become the Prime Minister, not to respond to our criticism of the tax treaty between Canada and Barbados, which the OECD also condemns.
Will the next Prime Minister have more courage than the former Minister of Finance, even if he has interests in boundary waters in the Caribbean, in Barbados in particular? Will he have the courage to terminate the tax treaty between Canada and Barbados? Will the future Prime Minister and member for LaSalle—Émard stop looking out for his own personal interests and start looking out for those of all taxpayers in Canada and Quebec instead?
Can we get from this future Prime Minister the formal commitment that he will not consider the expansion of Canada Steamship Lines as the fundamental basis for his decisions as Prime Minister, but that he will consider the interests of all taxpayers? Concerning tax conventions that impact negatively on the federal tax base, that are a source of inequity for the other taxpayers who pay huge amounts in taxes every year and who are tracked down, as if they were thieves, when they owe as little as a single cent to Revenue Canada, he has to rectify the situation and to listen very carefully. We hope that he will do so even though he has remained silent for several years about our demands to denounce tax conventions, such as the one with Barbados, which impact negatively on the federal tax base.
We will see what happens, but I hope that the future Prime Minister will listen more carefully, will have a better sense of equity and justice and will not consider merely his personal benefits, but also those of taxpayers in general when he decides to maintain or abolish these conventions.

Statements By Members
Kyoto ProtocolMrs. Karen Kraft Sloan (York North, Lib.): Mr. Speaker, we have heard a lot about big businesses like BP and Royal Dutch Shell who have made laudable strides toward energy efficiency and sustainable development. These accomplishments are worthy of remark, and one wonders why some industrial players would prefer to remain rooted in the industrial stone age.
Less mention has been made of the accomplishments of small and medium sized enterprises. Many smaller businesses across Canada are reducing emissions and using greener technologies. Profit making for these companies is clearly linked to more environmentally sensitive ways of doing business.
Unfortunately, the Canadian Chamber of Commerce and others fail to recognize that in a post-Kyoto Canada business can be profitable and compete. The fact is, industrial countries that do not ratify Kyoto will be left behind economically.
IranMrs. Betty Hinton (Kamloops, Thompson and Highland Valleys, Canadian Alliance): Mr. Speaker, yesterday I attended a meeting on the state of human rights in Iran.
Under the mullah regime, 214 innocents have been publicly executed in 2002. The method of execution was stoning. The vast majority of the victims were women. Their crimes were as minor as attendance at a birthday party. These sanctioned executions take place in public where victims are buried up to their neck. Their fellow citizens are encouraged and expected to participate in their slow torturous death. The stones used are not left to chance. They are supplied by the regime. They are not big enough to inflict a single lethal blow and not small enough to be painless. The intent is to prolong the agony, preferably for hours.
Yesterday the Canadian Alliance was the only party present at the viewing of these smuggled tapes. I cannot close my eyes without seeing these atrocities replayed. I am here today to open the eyes of my fellow colleagues to these crimes against humanity. Continued silence by the Canadian government is tantamount to sanction.
Canadian Broadcasting CorporationMr. Gurbax Malhi (Bramalea—Gore—Malton—Springdale, Lib.): Mr. Speaker, it is my pleasure to recognize the CBC which recently changed the way in which it develops and delivers its programs.
The new programming and format reflects the cross cultural composition of our country. It is about reaching new audiences and supporting Canadian talent across our country. It is bringing regional issues and points of view to national audiences. It has done this by adding new programs and continuing with the high level of excellence Canadians have come to expect.
In a world where media and foreign programming reach all of us, I wish to congratulate the CBC on maintaining its presence on the world stage.
ItalyHon. Charles Caccia (Davenport, Lib.): Mr. Speaker, yesterday the Campobasso region in Italy was struck by an earthquake which took the lives of 25 children and two teachers. Some 3,000 people are now homeless, and one can imagine the despair of the victims' families. Worth noting is the fact that a school, usually a safe place for children, was demolished while the surrounding buildings resisted the impact of the tremor, 5.4 on the Richter scale.
This House, I am sure, would want to convey to the victims' families and all those whose lives have been so abruptly disrupted our heartfelt condolences and our expression of sorrow. May the memory of these innocent victims become a source of inspiration in rebuilding a new future and in strengthening community bonds.
Queen's Jubilee MedalMr. Julian Reed (Halton, Lib.): Mr. Speaker, last Wednesday I had the honour to present the Queen's Golden Jubilee Medal to 20 outstanding residents of the riding of Halton.
They were: Sgt. Chris Brooks, Stu Chapman, Lynn Clark, Wendy Cotton, Colin Cousens, Dr. Jianrong Feng, Ted Gorth, John Harrison, George Henderson, May Hoare, Doug Holt, Kirk Hughes, Dwight Jonker, Art Lindop, Krista Nicholls, Erin Rowe, Richard Ruggle, Bert Stewart, Lt. Scott Teeter, and Major Tom Weihmayr.
I am humbled to have played a small role in paying tribute to these Canadians whose achievements and contributions have benefited their community and their country, and to celebrate 50 years of Her Majesty's reign. God save the Queen.
Public ServiceRahim Jaffer: Mr. Speaker, the government is desperately clinging to minority hiring targets for public service employees. This policy does not work and is degrading to all visible minority groups in Canada.
The Canadian Alliance policy is to work toward the elimination of discriminatory hiring and promotion policies for federally regulated employees. Every public service job should go to the most qualified applicant. As an MP, I am proud to have been elected based on merit, not as part of some quota for visible minority MPs. Constituents voted for me because they felt that I was the best candidate for the job.
Instead of reverse discriminatory practices, the government needs to look at why qualified Canadians from all groups are not applying to join the public sector. The reasons are clear. The private sector has more to offer. We need to find new ways to communicate available positions and to recruit applicants from across the country. We also need to rebuild respect for the public service through responsible management, something this government does not understand.
I strongly urge the government to end this negative program of discriminatory hiring practices in the federal public service.
Louis FournierMs. Nancy Karetak-Lindell (Nunavut, Lib.): Mr. Speaker, on November 2 Father Louis Fournier of the Catholic Mission in Repulse Bay will be celebrating his 50th anniversary of priesthood and his 50th year in Nunavut.
Father Fournier, shortly after his ordination in France, came to northern Canada in 1952. Over his 50 years he has lived and worked in numerous communities such as Chesterfield Inlet, Igloolik, Iqaluit, Whale Cove and presently in Repulse Bay. Known “as the builder”, Father Fournier constructed many stone structures and monuments in the communities in which he lived and served. Father Fournier has taken an active role in ensuring Inuit culture is represented in the church as well as supporting cooperative movements in the community.
On behalf of my constituents of Nunavut I wish to congratulate Father Fournier on his 50 years of serving the people of the Arctic. We wish to thank Father Fournier for his generosity and sensitivity to the Inuit people and their culture.
FerriesMr. Gérard Asselin (Charlevoix, BQ): Mr. Speaker, the federal government is a very bad owner.
It allowed the wharves in Les Escoumins and Trois-Pistoles to deteriorate to the point where the Compagnie de navigation des Basques was prohibited from using the wharf at Les Escoumins, thus depriving the regions of Charlevoix and Les Basques of $5 million in economic spinoffs.
Worse still, after getting assurances from the Minister of Justice, who is responsible for Quebec, that the work would be done this fall, we have now been now told by the federal Minister of Transport that he cannot guarantee that the repairs will be completed in time for the 2003 ferry season.
The transport minister's carelessness is unacceptable and the unfulfilled commitments of the Minister of Justice are scandalous. It is no wonder that the Compagnie de navigation des Basques, the stakeholders from the tourism industry and the whole region are upset.
The federal government must get its act together and announce this fall that the repairs will be completed. The very existence of a powerful tool for economic development and tourism is in jeopardy, and this is strictly because of the federal government's ineptitude.
Down's SyndromeMr. Jeannot Castonguay (Madawaska—Restigouche, Lib.): Mr. Speaker, today marks the beginning of National Down's Syndrome Awareness Week. Close to 50 organizations have got together to launch this national campaign. In Canada, about one in seven hundred live births is affected by this syndrome. It is a chromosomal disorder that may restrict children's development. Still, those who suffer from this condition manage to live an active life and make a positive contribution to our society.
A number of activities are scheduled this week, and I invite Canadians to participate in them.
Together, we can help improve the lives of these people by acknowledging their contribution to our society and by facilitating their integration.
Car TheftsMr. Gurmant Grewal (Surrey Central, Canadian Alliance): Mr. Speaker, car theft has been referred to as Surrey's fastest growing industry. Last year 6,100 cars were stolen in Surrey, the car theft capital of North America. Car thieves drive stolen cars to their court hearings. This is not a joking matter.
Auto offences in Surrey cost ICBC $13 million last year. Out of 13,000 court cases, half were auto theft related. The RCMP Auto Theft Task Force complains that thieves receive virtually no punishment. In the revolving door, criminals are arrested over and over with 90% being repeat offenders. Courts refuse to treat auto theft as a serious crime. Less than 8% of those arrested go to jail. The truth in sentencing is lacking. Parole should be harder to earn and easier to lose. The people of Surrey have had enough.
When will the government give adequate resources and laws with teeth to our law enforcement agencies, become serious about property crime, get tough on criminals, and make our streets safe?
Pierre-Luc Bergeron and Xavier FugèreMs. Raymonde Folco (Laval West, Lib.): Mr. Speaker, recently Pierre-Luc Bergeron and Xavier Fugère were the first and second place winners respectively of the Laval chess league's junior chess tournament.
I would like to draw hon. members' attention to the courage and determination of these young residents of Laval. Their victories did not only involve skill on the chess board, they have also had major victories over illness.
Xavier Fugère has had a lengthy battle with Wilms' tumour and is now in total remission. Pierre-Luc Bergeron has recently survived a battle with flesh-eating disease.
These two miracle children are veterans of a lengthy battle with illness. They have come out of it with the patience and perseverance that are essential to being a champion.
I join with all the residents of Laval in congratulating Pierre-Luc Bergeron and Xavier Fugère on the great things they have accomplished, now that they have been given back their life. They are an example to us all.
Hazardous MaterialsMr. Pat Martin (Winnipeg Centre, NDP): Mr. Speaker, now more than ever we must recognize the need for advanced training in the handling and treatment of hazardous materials for our firefighters who are the first to respond to emergencies such as terrorist attacks.
The International Association of Fire Fighters in the United States has spent millions of dollars developing an excellent curriculum on hazardous materials and it is generously offering to share it with its Canadian counterparts free of charge. It is estimated that by using a train the trainer methodology this valuable life saving information could be distributed to every firefighter in Canada for as little as $500,000.
Our brave men and women, who are the first to respond to emergencies, put their lives at risk to save our lives. They deserve the best protection that we have to offer and sometimes that protection is information, training and knowledge. I urge the government to find the resources to fund the delivery of the IAFF HazMat training curriculum and to do it without delay.
René LévesqueMr. Yves Rocheleau (Trois-Rivières, BQ): Mr. Speaker, the former Premier of Quebec, René Lévesque, died on this day 15 years ago.
A symbol of Quebec's Quiet Revolution, René Lévesque was the incarnation, for a quarter century, of a nation's daring decision to affirm its existence and promote its identity through a series of reforms that modernized Quebec, socially, culturally, economically and politically.
Two parts of his legacy I would like to particularly emphasize are the nationalization of hydroelectric power culminating in the creation of Hydro-Québec, and the political reform that has made Quebec democracy a model for the world.
René Lévesque passed on his conviction of Quebec's nationhood and his pride in that nation to an entire people.
I pay tribute to the memory of this great democrat, to the courage, generosity and integrity that characterized his actions throughout his entire career, to build a modern Quebec with an awareness of its dimension as a nation with the potential to participate in the community of nations.
St. John's HarbourMr. Loyola Hearn (St. John's West, PC): Mr. Speaker, on Monday, overlooking the harbour in St. John's, the Prime Minister is finally going to announce that the federal government will participate in funding the clean-up of St. John's Harbour.
This project has been on the agenda for several years. Finally, with the help and the great work done by: the ACAP group; the member for St. John's East, who has been an avid supporter; the three levels of government; and shall I say myself, the project is about to become a reality.
Despite the fact that the former Newfoundland minister constantly stated that funding for clean-up must come from regular infrastructure funding, it is on the record that our party suggested that a special project fund was needed. We are glad to see that the previous finance minister agreed and that the new Newfoundland minister supported this new direction.
It shows what cooperation can do. It is a good day for St. John's.
Diabetes Awareness MonthMr. Lynn Myers (Waterloo—Wellington, Lib.): Mr. Speaker, November is Canadian Diabetes Awareness Month. Since the discovery of insulin in the 1920s, at the University of Toronto by F.G. Banting and C.H. Best, Canada has been recognized as a world leader in the search for a cure for diabetes.
Today, Canada is once again on the leading edge of diabetes research. The Edmonton Protocol has the medical world abuzz as a possible new treatment for this terrible disease. Diabetes afflicts more than two million Canadians, both young and old.
During November a number of events, fundraisers and educational activities will be taking place to highlight the fact that diabetes is a major health care issue in Canada. Celebrations include World Diabetes Day which occurs on November 14 and marks the birthdate of Dr. Banting.
Hopefully one day soon Diabetes Awareness Month will be a thing of the past because by then we will have found a cure.
Arts and CultureMr. Werner Schmidt (Kelowna, Canadian Alliance): Mr. Speaker, every once in a while something extraordinary happens in this place. Such an event occurred Wednesday night of this week.
The rare event was an exciting musical expression of Serbian and Balkan music performed by the Teofilovic Twins. Their rendition of traditional Serbian and Balkan music helped participants to discover some of the mystery of the musical art of the Balkans. The twins have an extraordinary expression of music. They have solved the mystery of the second voice and found long lost harmonies of traditional singing. The twins have made recordings for national radio and television stations and were part of all the great spiritual and secular festivals and music gatherings in Serbia. The twins were the guests of the Speaker and performed in the Hall of Honour in this place.
I wish to take this opportunity to publicly thank the Speaker for his contribution to culture and art for parliamentarians and many other guests.
SportsBryon Wilfert: Mr. Speaker, it is with great pleasure that I rise in the House to recognize the leadership that has been shown by Athletes CAN in developing its six point manifesto for sport in Canada.
Athletes CAN is a 10 year old organization representing national team athletes whose mission is to work with partners in leadership, advocacy and education to ensure a fair, responsive and supportive sport system for high performance athletes in Canada.
At its annual forum in Quebec City last month, it further refined its declaration, which was recently announced to the public. The manifesto calls for the federal government to invest in a comprehensive sports development program from playground to podium and beyond, for the provincial and territorial governments to increase sport and physical activity in schools, and for the creation of a national infrastructure program to assist in developing sport and recreational facilities.
The Government of Canada appreciates the dedication of our high performance athletes in their athletic achievements and congratulates them for the leadership that they continue to demonstrate in trying to improve the sport system in Canada.

Oral Question Period
Government ContractsMr. John Reynolds (West Vancouver—Sunshine Coast, Canadian Alliance): Mr. Speaker, for days now the Minister of Citizenship and Immigration has denied that he pulled any strings to give his friends at Everest a lucrative federal advertising contract.
Yesterday, however, a former executive director under the minister confirmed, yes, confirmed, that the allegation was true and that the minister did give his friends at Groupe Everest half a million dollars in federal contracts.
Why did the minister give his Everest friends a lucrative contract and then try to cover it up?
Hon. Ralph Goodale (Minister of Public Works and Government Services, Minister responsible for the Canadian Wheat Board and Federal Interlocutor for Métis and Non-Status Indians, Lib.): Mr. Speaker, it was not and is not the prerogative of the secretary of state to decide. The matter came under the contracting procedures of the Department of Public Works and the choice with respect to the firm to be selected off the pre-qualified list was made by officials within the Department of Public Works.
John Reynolds: Mr. Speaker, as if rewarding friends was not bad enough, the minister compounded the wrong by trying to cover it up. Instead of owning up to his wrongdoing, the minister tried to discredit his former executive director. Fortunately Mr. Roger Farley would not be bullied by the minister and insisted that the allegations were true.
My question: Why does the minister not simply come clean and admit that he did get involved in this contract?
Ralph Goodale: Mr. Speaker, again let me explain the process here. This occurred a number of years ago under the process in place at that time. The department wishing to have a certain advertising service set up a requisition. That requisition, as is the normal case, included a suggestion, but it was not the prerogative of the requisitioning department to make the decision. The prerogative rested with the Department of Public Works and the officials in that department at that time.
John Reynolds: Mr. Speaker, no matter whose prerogative it was, there are e-mails out there that were denied. The minister insisted that Mr. Farley's e-mail was untrue. The minister's director of communications used even more creative language and told reporters to check with Mr. Farley. They did and Mr. Farley said exactly this, that he stood behind his e-mail which said that “The Secretary of State wants to hire Everest as the agency”.
To clear this up, will the minister turn this over this afternoon to the ethics counsellor and tell him to talk to all sides and get to the bottom of this so that we do not spend another few weeks in Parliament going around contracts? To get to the bottom of it, that is what the ethics counsellor is for--
The Deputy Speaker: The hon. Minister of Public Works and Government Services.
Ralph Goodale: Mr. Speaker, the issue here is who had the authority to take the decision. Under the processes existing at that time the decision was taken by the Department of Public Works, not by the Department of Canadian Heritage, not by the secretary of state, but by the Department of Public Works. The officials who had the responsibility at that time exercised their judgment and made a choice, but it was their decision, not one resting with some other minister.
Mr. Dale Johnston (Wetaskiwin, Canadian Alliance): Mr. Speaker, this is not the first time that the immigration minister has tried to convince us that he has no close ties to Groupe Everest. In May he admitted being a guest in a Groupe Everest luxury condo after denying it in an interview in 2000.
Given his history, it is not hard to understand that we do not believe what is going on here. We think this should be turned over to the ethics counsellor. We have a contradiction here between the minister and his top bureaucrat. Let us find out who is telling the truth.
Ralph Goodale: Mr. Speaker, I obviously have no authority in relation to the matters that the hon. gentleman is suggesting, but I have looked at the records in my department to indicate what transpired at the time. What those records reveal is that an appropriate procedure was followed. A department needed certain services. It requisitioned those services from a pre-qualified list of suppliers. The selection of the firm from that pre-qualified list was made by the officials within the Department of Public Works.
Dale Johnston: Perhaps, Mr. Speaker, since the public works minister admits he has no authority, I will ask the Deputy Prime Minister.
There seems to be a pattern here. The immigration minister has stayed at the Everest condo, denied it and then eventually had to come clean.
Why does the Deputy Prime Minister not save the immigration minister a lot of pain and just ask the ethics counsellor to investigate this and find out in fact whether the e-mail was correct or the minister's statement was correct?
Ralph Goodale: Mr. Speaker, again the issue is the question of who made the decision. The evidence that appears on the file in my department is that the decision was taken by the officials vested with that responsibility, and it was the officials within the Department of Public Works. The Department of Canadian Heritage could make a recommendation, as is its prerogative, but it does not make the decision.
Budget SurplusesMr. Michel Guimond (Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, BQ): Mr. Speaker, in October 2000, the Prime Minister justified an early election by saying that he had very valid reasons because, for the first time, there was a budget surplus, and before spending this money, the government should ask Canadians what they wanted as a society.
Does the Minister of Finance realize that the promises made by the Prime Minister are a long way away from being kept and that, instead of asking Canadians anything, the only thing that he and his predecessor have done is to hide the surpluses and prevent a public debate on their use?
Hon. John Manley (Deputy Prime Minister and Minister of Finance, Lib.): Mr. Speaker, there was a big debate in the fall of 2000 and the government was re-elected. I consider the support of Canadians as clearly based on the fact that they prefer surpluses over deficits.
Michel Guimond: Mr. Speaker, no one is arguing against the use of part of the surpluses to pay down the debt. However, contrary to what the government is stating, the Auditor General has said that there is no legislation that requires that 100% of the surplus be used to pay down the debt.
How then can the Minister of Finance justify his behaviour and that of his predecessor, whereby they arbitrarily siphoned off billions of dollars to pay down debt without any public debate on the decision?
John Manley: Mr. Speaker, we have just determined, with the confirmation of the Auditor General, the surplus for the financial year ending March 31. How can we turn back time to last year, to reduce last year's surplus by spending? We need to be logical here.
Ms. Monique Guay (Laurentides, BQ): Mr. Speaker, not only does the government deny the existence of a fiscal imbalance, but it is also cutting the provinces' financing for health and resorting to one accounting trick after another to hide surpluses, all of which go toward paying down the debt.
How can the Minister of Finance have the gall to tell us that he has no choice, when the Auditor General has said the opposite?
Hon. Stéphane Dion (President of the Queen's Privy Council for Canada and Minister of Intergovernmental Affairs, Lib.): Mr. Speaker, in the coming years, transfers to the provinces will increase by 6%, while it is estimated that government revenue will grow by 2%. If we can do more, we will. The Prime Minister has said so, the Minister of Finance has said so, the Minister of Health has said so, and I am saying so once again.
One thing is certain: the Government of Canada will not go back into deficit. We will help the provinces within the financial capability of Canadians.
Monique Guay: Mr. Speaker, even the Auditor General is calling for a debate when she says, “I hope we will be able to have a good discussion in parliamentary committee and make it clear to parliamentarians that there are no laws or accounting rules forcing them to reduce the debt”.
Does the Minister of Finance realize that he is doing many things to prevent any debate on the use of surpluses, which do not belong to him but to the people?
John Manley: Mr. Speaker, I am very interested in what the Auditor General says, but I am sure she would agree that forecasting surpluses or deficits is more of an art than a science. We have the example of the United States, which had forecast a surplus of $235 billion for the year just ended, but ran a $165 billion deficit instead.
Since we do not know whether or not we will have a surplus, how do we know how we will be spending it, before the end of the year?
Missile Defence ShieldMs. Alexa McDonough (Halifax, NDP): Mr. Speaker, this government is silent on the U.S. missile defence shield project. In order to make it easier to convince Canada to support their views, the Americans are directly contacting Canadian businesses, such as Canadian Aviation Electronics, to ask them to join in the program.
My question is for the Minister of National Defence. Does this government support the U.S. missile defence shield project, yes or no?
Mr. John O'Reilly (Parliamentary Secretary to the Minister of National Defence, Lib.): Mr. Speaker, Canada has made no decision but is keeping an open mind about the U.S. ballistic missile defence project.
With respect to CAE, I would like to remind the hon. member that it is a private company that does not act on behalf of the Canadian government.
Alexa McDonough: Mr. Speaker, the government is participating de facto in the American missile defence project. CAE has already received $72 million in federal funds in partnership with Boeing. This company is involved in the NMD and the Canadian government is funding it.
The government says that it has not made up its mind and it turns around and subsidizes a corporation that is running simulations for the project.
Why does the government not simply admit it is supporting the missile defence program? What kind of policy hijacking is this?
John O'Reilly: Mr. Speaker, may I remind the hon. member again that CAE is a private company. It does not act on behalf of the Canadian government. No decision has been made on national missile defence system.
There are three items here. One is our commitment to NATO, one is our commitment to NORAD and one is our commitment to interoperability with the Americans.
I remind the member that CAE is a private company.
ByelectionsRight Hon. Joe Clark (Calgary Centre, PC): Mr. Speaker, there are currently three vacancies in the House of Commons: Lac-Saint-Jean—Saguenay, Berthier—Montcalm and Perth--Middlesex. This morning the Prime Minister called only two of those byelections.
Why is the Prime Minister treating the voters in Perth--Middlesex as second class citizens by denying them the same opportunity to elect a representative to defend their interests in the House of Commons? How can the government defend this blatant double standard?
Hon. Don Boudria (Minister of State and Leader of the Government in the House of Commons, Lib.): Mr. Speaker, there is no double standard and the right hon. member should know that. He should know that the last vacancy occurred only a few days ago as a result of an illness. His colleagues are familiar with that. Out of respect, he should also know that gives very little time for the election to be called and for the people of Canada in that particular constituency to choose a representative.
The member has been here a long time and I think he would have known all these things.
Joe Clark: Mr. Speaker, the way to demonstrate respect for the people of this country is to give every citizen the same opportunity to have a representative in the House of Commons. The government has just denied that basic principle.
He cannot hide behind the time it takes to call a byelection. The Prime Minister could have called a byelection in Perth--Middlesex at the same time if he wanted to. He chose to deepen the democratic deficit. He is taking it out on the people of Perth--Middlesex. Why are they being treated with such a double standard?
Don Boudria: Mr. Speaker, the right hon. member talks about the respect for the electorate. Should he not know that the electorate has the right to choose in all political parties, democratically, candidates to represent them in the election? Why does he have so little respect as to want to deny that process to them because of a vacancy which occurred only a few days ago?
TerrorismMr. Stockwell Day (Okanagan—Coquihalla, Canadian Alliance): Mr. Speaker, the Solicitor General suggested that the Canadian Security Intelligence Service is responsible for the delay in preventing Hezbollah from engaging in certain activities in Canada. I do not agree.
Does the minister think that the Canadian Security Intelligence Service is too slow, too busy doing other things or, maybe, afraid of making a recommendation to the Liberals? What is the reason?
Ms. Aileen Carroll (Parliamentary Secretary to the Minister of Foreign Affairs, Lib.): Mr. Speaker, as has been said several times in the House, we have listed the military wing of Hezbollah. In that regard we join all of our other allies. We have not listed the political wing of Hezbollah, nor have the British, nor have the Europeans.
If the hon. member or anyone has any information regarding terrorist activities in Canada, it is incumbent on them to bring them forward to the Solicitor General, which he made adequately clear in the House yesterday.
Mr. Darrel Stinson (Okanagan—Shuswap, Canadian Alliance): Mr. Speaker, the government would have us believe that Hezbollah kills thousands of people with its left hand and makes peace with its right. However CSIS commentary number 63 shows that after funds are raised by the political wing there is “no way of controlling how the funds are actually used”. The entire group is controlled by Hassan Nasrallah who had VIP seats at the Prime Minister's francophone speech.
What proof can the government provide that the political funds raised by Hezbollah in Canada are not being used to further fund terrorism?
Aileen Carroll: Mr. Speaker, in listing Hezbollah's military wing we freeze all its assets and we prohibit any fundraising. It does not have charitable status in Canada and the activities to which the hon. member expresses his concerns and views are simply being very carefully monitored by CSIS at all times.
TaxationMr. Réal Ménard (Hochelaga—Maisonneuve, BQ): Mr. Speaker, not only will the government not participate in any debate on how the surpluses ought to be used, but it will not discuss the fiscal imbalance issue either, going so far as to deny the existence of such an imbalance.
This issue is the subject of public debate in any case, and there is even unanimity, both among all opposition parties in the House of Commons and among provincial governments, on the existence of a fiscal imbalance.
Will the minister commit to taking part in a real debate, since his management style is to ignore people's concerns and since he is reneging on the commitment made by the Prime Minister during the 2000 elections?
Stéphane Dion: Mr. Speaker, the Government of Canada is prepared to discuss the issue of fiscal imbalance. That is what we are doing. We have explained why it does not exist. We have also explained that, in a federation where the provinces all have access to the same source of revenues and even have a monopoly on natural resource royalties—and Canada is a country rich in natural resources—they are responsible for managing their finances to the best of their abilities, and some do better than others.
There could be a debate in Quebec on why, of all the provinces, Quebec is the deepest in debt, has the highest taxes and is spending in many areas, not necessarily health.
Réal Ménard: Mr. Speaker, the minister must be aware that the same taxpayers are paying income tax to the provinces and to the federal government, and that these taxpayers realize that they are sending too much money to the federal government, when the services they consider as essential are provided by the provinces.
If the minister really had the best interests of the taxpayers at heart, would he not recognize that there is a fiscal imbalance?
Stéphane Dion: Mr. Speaker, the International Monetary Fund recently determined that Canada had the healthiest public finances in the G-7, and that Canada also has the strongest economic growth in the G-7.
The worst mistake we could make, in my view, is to change direction. The provinces have much lower deficits than ten years ago. Their situation has improved as well.
There is no fiscal imbalance in Canada, but there is definitely an obligation to support one another to provide Canadians with the strongest growth possible.
HealthMr. John Williams (St. Albert, Canadian Alliance): Mr. Speaker, it only took one day for the finance minister to revert to typical Liberal spending. On Wednesday he touted fiscal prudence and responsibility, but by Thursday there was a call for an additional $5 billion in new spending.
The government says that there is no money for health care and yet it finds $72 million for gun control, bringing that up to $900 million; $8 million to Communications Canada, that discredited organization that breaks every rule in the book; and $100,000 for marijuana research.
I do not know what the minister is smoking but he sure has the money munchies with taxpayer dollars. What does he say?
Hon. Lucienne Robillard (President of the Treasury Board, Lib.): Mr. Speaker, all the estimates that were tabled this week are included in the fiscal framework of the government. I think the member would agree with us that we must have very good spending for the citizens of our country.
What does the member have against giving some money to CIDA? What does the member have against giving more money to the health institutes to have better health research? What about the fact that we will also help with pay adjustments for our army personnel?
All this spending is worth--
The Deputy Speaker: The hon. member for Prince George—Bulkley Valley.
Government SpendingMr. Richard Harris (Prince George—Bulkley Valley, Canadian Alliance): Mr. Speaker, no matter how we cut it, it is another $5 billion up in smoke. While the minister continues to blow smoke with his $5 billion spending program, Canadians are kind of concerned about things like health care, the state of our military and the quality of life for our seniors.
Instead of blowing smoke, when will the government's spending programs reflect the real priorities of Canadians? When will that start?
Lucienne Robillard: Mr. Speaker, what about affordable housing? I think all members of Parliament are for the fact that we should improve affordable housing and they will find us spending money on that.
What about disability pensions for veterans affairs people? Are they saying that we should not pay disability pensions to our people?
What about homelessness? Are they saying that we should not spend money for that big problem?
I think the opposition is completely wrong.
Government ContractsMs. Madeleine Dalphond-Guiral (Laval Centre, BQ): Mr. Speaker, the list of Liberal scandals is getting longer and longer: the Auberge Grand-Mère, the sponsorship program, the resignations of the former Minister of National Defence, Solicitor General, and Minister of Public Works and Government Services. Now Democracy Watch has added to the list by establishing a direct link between the awarding of highly lucrative government contracts and the amounts contributed to the Liberal Party of Canada by the companies awarded those contracts.
Will the Deputy Prime Minister agree that it is high time to cast some light on this government's system of awarding contracts, by calling at last for an independent public inquiry?
Don Boudria: Mr. Speaker, the hon. member opposite is no doubt aware, having listened to the excellent speech by the Prime Minister as I did, that he has said here in this House that, in addition to the rules on transparency already in place, there will be additional rules within the bill I myself will be introducing before the Holidays. These will address leadership races, the nomination process, limits on corporate donations and on those from the unions, of course. There will be a whole series of other rules to enhance transparency—
The Deputy Speaker: The hon. Member for Laval-Centre.
Madeleine Dalphond-Guiral: Mr. Speaker, we have been waiting ten years for some proof of transparency, and are still waiting. The government's handling of surpluses, its methods for awarding contracts, and its hesitancy about political party funding, are a clear indication of this.
Are we to understand that only those companies that are cozy with the Liberal Party of Canada will benefit shamelessly from the Prime Minister's largesse and that of his government?
Don Boudria: Mr. Speaker, I will repeat for the hon. member's benefit: the contributions are already public and the rules of transparency will be enhanced by the bill that is going to be introduced shortly. Finally, I might point out to her and her party that, when we reinforced the rules for third party transparency with Bill C-2, her party voted against it.
Kyoto ProtocolMr. Bob Mills (Red Deer, Canadian Alliance): Mr. Speaker, developing countries are now saying that they have serious doubts about ever being part of the Kyoto protocol at any time in the future. Now developing countries are out. We have no clean energy credits. Eight out of ten provinces are opposing Kyoto. Industry is out. It seems everyone is out except the government. It is simply out to lunch on this issue.
When will the government agree to a made in Canada solution and give up on this flawed bureaucratic Kyoto protocol?
Mrs. Karen Redman (Parliamentary Secretary to the Minister of the Environment, Lib.): Mr. Speaker, I find it absolutely incredible that Canadians know what the Kyoto protocol is all about. Like so many international undertakings, the developing world will be the first phase, which is the period between 2008 and 2012. After that we will look at including developing countries.
We have an incredible opportunity for Canadians and Canadian technology to be on the cutting edge, to come up with technological advances that we can then export and help developing worlds deal with this very important issue. Canadians understand.
Mr. Gerry Ritz (Battlefords—Lloydminster, Canadian Alliance): Mr. Speaker, the petroleum industry like any business requires a stable economic climate and long term planning. Thanks to the Liberals' continued bungling of the Kyoto accord, industry cannot count on anything but uncertainty. It has no idea what the government has planned other than imposing Kyoto on Canadians.
Husky Oil and Petro-Canada pulled back $5 billion of investment in western Canada. Will the government now consider a made in Canada approach or will it continue to force Kyoto and drive investment like this away?
Karen Redman: Mr. Speaker, clearly, we have said two things throughout this entire negotiation, which is well over five years in the making. We have said that no region will be disproportionately burdened nor will any sector be disproportionately burdened, which is why we continue to talk to industry and to our provincial counterparts.
I will point out to the hon. member opposite that Syncrude, for example, has reduced its emissions intensity by 22% since 1990 levels and aims to attain a 45% reduction. The industry understands what we are up to.
Aboriginal AffairsNancy Karetak-Lindell: Mr. Speaker, we know that experiences in early years influence a child's development, affecting lifelong health, well-being and learning abilities.
While conditions are improving, the general health status of Canada's aboriginal population is still below the national average. Sadly, first nations and Inuit children have higher risks of infant mortality. There are higher risks of FAS and poor nutrition and too many babies are born with unhealthy birth weights.
In the last throne speech the government committed to enhance early child development programs for aboriginal children--
The Deputy Speaker: The hon. Secretary of State for Children and Youth.
Hon. Ethel Blondin-Andrew (Secretary of State (Children and Youth), Lib.): Mr. Speaker, I am pleased to inform the House that the early childhood development strategy for first nations and other aboriginal children was launched yesterday at the Oneida of the Thames First Nation in Ontario in the presence of Chief Terry Doxtator of the Oneida, Chief Joe Miskokomon of the Chippewas and all their parents and children.
The strategy provides $320 million over five years to improve and expand early childhood development programs for aboriginal children by building on existing programs and services for first nations and other aboriginal children, including head start and programs addressing fetal alcohol syndrome.
Grain TransportationMrs. Bev Desjarlais (Churchill, NDP): Mr. Speaker, in the 1970s and 1980s the Canadian government bought a fleet of hopper cars which were then leased back to railroads to haul western grain. The government no longer wants the cars but a farmer rail car coalition is prepared to acquire and manage the fleet. The coalition is broadly based and it has a business plan ensuring that benefits will flow back to all western farmers.
Will the transport minister commit to turn these cars over to the farmer rail car coalition for the sum of $1?
Hon. David Collenette (Minister of Transport, Lib.): Mr. Speaker, the hon. member's question is timely because I met with the coalition yesterday. We had a very fruitful meeting. We explored all the options. I would hope in the coming months as we outline the transportation blueprint and introduce amendments to the Canada Transportation Act we could also deal with the issue of the disposition of these hopper cars.
Canadian Wheat BoardMr. Dick Proctor (Palliser, NDP): Mr. Speaker, a politically motivated group is again backing anti-Wheat Board candidates and thumbing its nose at rules and regulations to ensure free and fair elections. By refusing to register as a third party, this group is funnelling money from grain companies and railroads to fund anti-Wheat Board candidates without disclosing from where that money is coming.
It is a repeat actually of what happened the last time there were Canadian Wheat Board elections. Would the minister responsible please explain why the government refuses to take the steps necessary to ensure that Canadian Wheat Board elections are conducted fairly, honestly and in compliance with the law?
Ralph Goodale: Mr. Speaker, there is a procedure in place to ensure just that. If there are violations of the rules, those violations can be investigated and the appropriate steps can be taken. If there are facts that are being alleged here that should be drawn to the attention of either me under the law or the election coordinator, I would welcome that information and the appropriate adjudication will take place.
Government ContractsJoe Clark: Mr. Speaker, my question is for the Deputy Prime Minister.
Roger Farley, a senior government official, stands by his word that the present minister of immigration intervened on behalf of a $500,000 contract for Groupe Everest in 2000. The minister of course says it is totally false.
The partisan minister and the non-partisan official cannot both be right. If the Deputy Prime Minister takes the word of the minister over that of the official, what steps are being taken to reprimand the official? If he believes the official over the minister, what steps are being taken to investigate the actions of the present minister of immigration?
Ralph Goodale: Mr. Speaker, I should remind the right hon. gentleman of the procedure.
Where a department wishes to have a certain service provided with a firm to be selected from a pre-qualified list, that department sends the requisition to the Department of Public Works and it is officials within the Department of Public Works that make the decisions.
The minister or the officials within the other department may have opinions or advice to offer, but the fact of the matter is the decision does not rest with them. The decision rests with the officials in the Department of Public Works.
Fisheries and OceansMr. Gerald Keddy (South Shore, PC): Mr. Speaker, my question is for the Minister of Fisheries and Oceans.
Fisheries and Oceans real property management leased Atlantic Pacific Fish Trading Limited space on the Willow Cove wharf in Port Mouton. The minister's department later backed out on this lease stating that Atlantic Pacific's method of unloading fish was polluting the harbour. The method the department banned was the use of a herring pump. There are hundreds, perhaps thousands, of herring pumps in Atlantic Canada.
Does the minister intend to ban the use of all herring pumps in Atlantic Canada, or was his decision specifically for Atlantic Pacific Fish Trading Limited to get it off the wharf?
Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food, Lib.): Mr. Speaker, the question that the hon. member asked is relatively specific. The Minister of Fisheries and Oceans is not able to be in the House today but on behalf of the hon. member, I will make sure that the minister responds to the specifics of his question as soon as possible.
HealthMr. Rob Merrifield (Yellowhead, Canadian Alliance): Mr. Speaker, the health minister wants to spend five years and $15 million just to study obesity in this country but we already know what poor diet and inactivity do. How much of that $15 million is actually going to help kids today?
Hon. Anne McLellan (Minister of Health, Lib.): Mr. Speaker, as the hon. member is aware, obesity is becoming a major challenge for the health and health care systems in nations, not only developed nations but third world and developing nations. It is very interesting that in the United States the Surgeon General has described obesity as a crisis. The WHO has described it as an epidemic. We know that obesity rates are growing in this country.
I would suggest that if the hon. member has some magic bullet that the WHO does not have, the Surgeon General does not have and we do not have, he might like to share it with all the health care researchers and health care professionals in this country who actually want to work together and understand--
The Deputy Speaker: The hon. member for Portage—Lisgar.
Mr. Brian Pallister (Portage—Lisgar, Canadian Alliance): Mr. Speaker, this has been quite a week in the puzzle palace. Farmers are going to jail for selling wheat. We have a government that opposes secret ballots. Now first degree murderers get to vote in this country. It has been a wonderful week. How do we top that? We do a research study on the last great mystery in Canada, the cause of obesity. That is incredible.
Let us see if the minister can make a commitment to the House. If the report magically concludes that a beer and pizza diet and a lethargic lifestyle cause obesity, will she give the $15 million back to the Canadian taxpayers?
Anne McLellan: Mr. Speaker, what is interesting is it is amazing that countries around the world have acknowledged the challenge of obesity. We do not understand why some people are prone to obesity and some are not. We do not know the interrelationship between behavioural and genetic factors. We do not know why some strategies to deal with obesity work for some groups within society and not for others.
I find it amazing. What is this, the flat earth society over there? Those members do not want to spend money to understand more about this huge medical challenge.
École de médecine vétérinaire de Saint-HyacintheYvan Loubier: Mr. Speaker, in response to a question that I asked him regarding the federal government's intentions concerning the École de médecine vétérinaire de Saint-Hyacinthe, the only French language veterinary school in North America, the minister replied that he was discussing with the provinces.
After checking, I found that no discussion had begun with the Quebec government. Since the December deadline is almost upon us, could the minister tell us about his real intentions, instead of saying whatever goes through his mind?
Lyle Vanclief: Mr. Speaker, as I said several times this week, the government recognizes the important role of veterinary colleges in not only animal health and safety but human health and safety. We are seeking ways in which we can work with the provinces in order to ensure the continued accreditation of all four of our veterinary colleges in Canada.
Yvan Loubier: Mr. Speaker, no discussion was begun with the Quebec government regarding the future of the École de médecine vétérinaire de Saint-Hyacinthe.
I will again ask the Minister of Agriculture the question. A few years ago, one of his colleagues was telling us the same things concerning the Collège militaire royal de Saint-Jean, which is now closed.
Is the minister not up to the same dirty trick?
Lyle Vanclief: Mr. Speaker, I have already answered that question; I think that is the sixth time this week. We are looking at ways in which we can assist in order to help assure the accreditation of the four important agricultural veterinary colleges in Canada.
HydroelectricityMrs. Cheryl Gallant (Renfrew—Nipissing—Pembroke, Canadian Alliance): Mr. Speaker, the unbundling of the Ontario Hydro bill has provided the federal government the opportunity to gouge consumers by collecting GST on hydro debt. The government refuses to protect consumers from being charged for line loss on the same bill. The Electricity and Gas Inspection Act, a federal statute, specifically prohibits charging for electricity beyond what is actually delivered to customers. The charge for line loss makes up to 22% of a hydro bill.
Is the reason the government is allowing the federal law to be broken because it is cashing in on the GST applied to the illegal charge?
John Manley: Mr. Speaker, the way that Ontario has decided to burden its taxpayers with the debt of Ontario Hydro is to add a charge to the cost of electricity. That is how it does it. I think it is a little under a cent per kilowatt hour. That is how it is charged. It could be done other ways. It could have chosen to include it in the price of electricity.
I know the hon. member would agree with me that it would be very difficult if every business was able to disaggregate its costs in order to segregate those that have to do with--
Official LanguagesMr. Scott Reid (Lanark—Carleton, Canadian Alliance): Mr. Speaker, yesterday the RCMP said it issues unilingual traffic tickets in Gatineau because the Contraventions Act requires it to enforce Bill 101. This just is not so.
The Official Languages Act obliges the RCMP to offer bilingual services throughout the national capital region. The act also states, “In the event of any inconsistency between this act and any other act of Parliament, this act shall prevail”.
When will the Solicitor General order the RCMP to obey the law of the land and issue bilingual tickets only in Gatineau?
Lynn Myers: Mr. Speaker, the RCMP of course operates in the national capital region and is fully committed to official bilingualism and providing services in both official languages. The RCMP complies with provincial legislation regarding the issuance of tickets. The RCMP continues to do a good job for all Canadians.
YouthMr. Mac Harb (Ottawa Centre, Lib.): Mr. Speaker, in the recent Speech from the Throne the government made a number of commitments to youth, to help get youth out of poverty and to build safe neighbourhoods and communities.
I would like the Parliamentary Secretary to the Minister of Justice to answer to the House and Canadians the concern raised at a recent conference of some youths. They indicated that they were having a difficult time obtaining information about education, safety and other issues.
Would he tell the House what his department is doing in order to ease the flow of information to youth?
Mr. Paul Harold Macklin (Parliamentary Secretary to the Minister of Justice and Attorney General of Canada, Lib.): Mr. Speaker, I thank the member for that very important question.
Under the national crime prevention strategy, we are supporting innovative projects across Canada that strive to foster resiliency in young people and allow them to participate more fully in our society.
In Hamilton for example, the Youth Truth Community Web Project is working with street kids and at-risk youth to develop employment and life skills. This is just one of over 2,500 projects we have supported under the national crime prevention strategy, an initiative that is helping our youth, helping our communities and helping us fulfill our commitments in this--
The Deputy Speaker: The hon. member for Elk Island.
Committees of the HouseMr. Ken Epp (Elk Island, Canadian Alliance): Mr. Speaker, yesterday we saw an amazing spectacle in the House. In a desperate attempt to hang on to every vestige of power, the Prime Minister, the government House leader and the whip pulled all the strings they could to prevent MPs from actually being able to select the chairs and vice-chairs of committees.
It is widely expected that one of the backbenchers may become prime minister. Is it the Prime Minister's view that when a backbencher morphs into prime minister, he magically attains supreme wisdom, to know all things, with exclusive knowledge of who would be the best chair?
Don Boudria: Mr. Speaker, the hon. member's House leader proposed a motion to the House yesterday. It has been deferred for a vote until next Tuesday.
I fail to understand why the hon. member has so little confidence in the motion proposed by his own House leader that he feels justified to artificially prop it up with the language he is using today.
EthicsMr. Rob Anders (Calgary West, Canadian Alliance): Mr. Speaker, the government's ethics package is about as weak as a kitten. The package has taken nine years to come together and it is still almost toothless.
The Prime Minister chooses the ethics commissioner. The draft has loopholes big enough to drive a truck through and cabinet ministers, the source of most of the problems, are treated with kid gloves.
The Canadian people want transparency from government. The ethics package keeps cabinet business behind the closed doors of the PMO. When will the government bring forward legislation which will treat backbench MPs and cabinet ministers equally?
John Manley: Mr. Speaker, I do not know why the hon. member would believe that backbench MPs should have to meet the same standard of conduct as ministers. In fact, the code of conduct for public office holders is of course much more strict and contains a lot more disclosure requirements than will be the case under the proposed code for members of Parliament.
I fail to understand why he would want MPs to meet that higher standard when they have a lower obligation to the public given the role that they play.
PrivacyYves Rocheleau: Mr. Speaker, a spokesperson from Canada Customs recently confirmed the government's intention to include in its megafile not only personal information on air passengers, but also on people who come to Canada on cruise ships, ferries, trains and even buses.
How can the government broaden the scope of its megafile when the privacy commissioner has already stated that he considers it illegal and feels that it will turn every citizen into a potential suspect?
Hon. Elinor Caplan (Minister of National Revenue, Lib.): In fact, Mr. Speaker, the authority for the collection and sharing of data is contained in legislation of Parliament. I believe it was Bill S-23, an important piece of legislation that also requires guidelines and permits audits by the privacy commissioner.
We have achieved the appropriate balance under that legislation to ensure both the privacy protection and civil liberties of Canadians and at the same time to ensure the protection and security interests of Canadians. That is what the API program is all about.
HealthMs. Paddy Torsney (Burlington, Lib.): Mr. Speaker, chronic diseases such as diabetes affect millions of Canadians and their families and result in a staggering number of deaths.
Could the Minister of Health tell the House what the Government of Canada is doing to improve the lives of Canadians suffering from chronic diseases?
Anne McLellan: Mr. Speaker, as the hon. member has pointed out, chronic diseases, such as diabetes, kidney failure and cardiovascular disease, share many common causes, risk factors, treatments and prevention strategies. That is why I am very pleased to announce today in the House that the Canadian Institutes of Health Research, working with the Canadian Diabetes Association, the Heart and Stroke Foundation and the Kidney Foundation of Canada, will fund a $6.9 million chronic disease research initiative. This joint initiative will help us better understand the common aspects of these diseases. More important, this new research can help us to prevent--
The Deputy Speaker: The hon. member for Charlevoix.
Government ContractsGérard Asselin: Mr. Speaker, Everest denies that it made a $1 million bid to organize the tour of the then Secretary of State for Amateur Sport, while the Department of Canadian Heritage says that it brought the amount of the bid down to $500,000. Obviously, the two versions contradict each other.
Could the Minister of Canadian Heritage tell us if she has made the necessary checks? I would like her to tell us who is telling the truth in this matter.
Ralph Goodale: Mr. Speaker, the hon. gentleman raises the issue of value for money in this matter. Let me quote an independent expert:

--I want to congratulate the government for consulting with the sport community, whether it be athletes or coaches, as well as with other levels of government. I think these consultations were necessary--I even took part in several of the meetings--and I just wanted to congratulate the government on taking this initiative.

That quotation is from the BQ member for Châteauguay.
Automobile IndustryMr. Brian Masse (Windsor West, NDP): Mr. Speaker, two weeks ago the Minister of Industry responded to my question on the need for an auto policy by saying he “convened a sector council”. That meeting was in June. His answer to how he was protecting one in seven Canadian jobs, he said not to worry, that he had talked to some people four months ago.
People are worried. In fact more than 20 Ontario mayors have called on the minister to meet with him to discuss a new auto policy. The mayors have joined the CAW and the big three and it seems that everybody is on side. In fact the list of those who do not understand seem to have dwindled to one, the industry minister himself.
Will the minister commit today to finally taking some real action and agree to meet with the mayors in December? Yes or no.
Hon. Allan Rock (Minister of Industry, Lib.): Mr. Speaker, I welcome the letter from the mayors and would be happy to find some way to ensure that they have a voice in the process.
However the member should know that the answer to developing a long term strategy for the success of the auto sector lies not in empty NDP rhetoric. It lies in the hard work of bringing all the interests to the table, getting the right environment for that investment, the tax system, environmental and transport standards, ensuring we have the infrastructure we need and getting governments to work together with the industry to ensure it remains a strong sector in Canada.
Airline IndustryLoyola Hearn: Mr. Speaker, Air Canada committed to government to continue to provide services to all the communities served by Air Canada and Canadian Airlines for a three year period. That commitment is now up and Air Canada is cutting routes.
The minister might say he cannot interfere but he can do something about the reasons, which are increased costs because of security charges, airport fees and fuel taxes. Will he?
David Collenette: Mr. Speaker, the hon. member is correct. Under Bill C-26, Air Canada was obliged to serve those communities served by Canadian Airlines and Air Canada on December 21, 1999. That expires January 4, 2003, and it has given notice to terminate service to some communities.
Our experience has been that when an airline leaves a community with the sufficient notice as provided for in Bill C-26, other carriers come in. In his own province, Provincial Airlines and Air Labrador have immediately announced that they will fill the vacuum. That shows the airline policy is working.
FisheriesMr. Keith Martin (Esquimalt—Juan de Fuca, Canadian Alliance): Mr. Speaker, due to the government's mismanagement of our west coast fishing stocks, our commercial and sport fisheries have become increasingly dependent on hatchery fish to survive. Now the minister is going to make a colossal mistake. He will be slashing hatchery funding programs, despite the fact that it receives $20 for every dollar invested.
Will the Minister of Fisheries and Oceans halt these destructive cuts to our hatcheries and start standing up for our west coast fisheries instead of trying to destroy them?
Lyle Vanclief: Mr. Speaker, I know that the Minister of Fisheries and Oceans is very concerned. He is very conservation minded and knows the importance of the role of fish hatcheries. He will do all he can to ensure, through his ministry and through his department, that their work is properly done.

Routine Proceedings
House of CommonsThe Acting Speaker (Ms. Bakopanos): I have the honour to lay upon the table the performance report of the House of Commons administration for 2001-02.
Government Response to PetitionsBryon Wilfert: Madam Speaker, pursuant to Standing Order 36(8) I have the honour to table, in both official languages, the government's response to 10 petitions.
Committees of the HouseMr. Joe Jordan (Parliamentary Secretary to the Prime Minister, Lib.): Madam Speaker, I have the honour to table the sixth report of the Standing Committee on Procedure and House Affairs regarding the selection of votable items in accordance with Standing Order 92.
The Acting Speaker (Ms. Bakopanos): Pursuant to Standing Order 92(2) this report is deemed adopted.
Income Tax ActKen Epp: 
moved for leave to introduce Bill C-283, an act to amend the Income Tax Act (deduction of property taxes paid in respect of a principal residence).

Madam Speaker, this bill is an important one as we are taxed to death in this country. My bill could actually be called the freedom from double taxation bill because we all have to pay income tax on money that we then subsequently use to pay our property taxes. The bill would permit homeowners to deduct from their taxable income the amount of money spent on their municipal taxes.
This is a much overdue bill, and I hope all members will support it when it comes before the House.
(Motions deemed adopted, bill read the first time and printed)
Canada Evidence ActKen Epp: 
moved for leave to introduce Bill C-284, an act to amend the Canada Evidence Act.

Madam Speaker, the title of the bill hardly says what it is about, but it has to do with dates. Since we have moved into the years 2000, dates have become very confusing. For example, what does 4/2/3 mean as it pertains to a date? Is that 4 February, 2003? Is it April 2, 2003? Is it 2004, February 3? Is it 2004, 2 March? When there is a conflict or when there is a possibility of misinterpretation of dates in the Canada Evidence Act, the bill would provide that the default would be year, month, day. This is the international standard to which Canada has acceded.
(Motions deemed adopted, bill read the first time and printed)
Labour Market Training ActPat Martin: 
moved for leave to introduce Bill C-285, an act to provide for the establishment of national standards for labour market training, apprenticeship and certification.

Madam Speaker, the bill I am introducing today seeks to address the serious skill shortages that exist around the country. It seeks to create national standards for training curriculums in all skilled trades and to create a national training advisory committee for each one of those trades to be peopled by labour and management representatives to aid in the standardization and the harmonization of training curriculum, entrance requirements and the ultimate certification of those skilled workers.
The bill also seeks to give the right to those national training committees to have some control over the spending of moneys in those skilled trade fields.
(Motions deemed adopted, bill read the first time and printed)
Canada Water Export Prohibition ActPat Martin: 
moved for leave to introduce Bill C-286, an act to prohibit the export of water by interbasin transfers.

Madam Speaker, as the name of the bill states we are seeking to ban the bulk sale and export of water and in fact the increased commercialization of water. We are also seeking to address the environmental impact of the interbasin transfer of water and the risk of invasive species et cetera in mixing those two water sources.
The bill deals with first, the commercialization of water which we do not believe, as an essential quality for human life, should be commercialized; and second, the recognition of the environmental impact of the interbasin transfer of water. The bill would bar both of those.
(Motions deemed adopted, bill read the first time and printed)
Canadian Coast GuardDon Boudria: Madam Speaker, I move:

That a debate pursuant to Standing Order 53.1 on the subject of the Canadian Coast Guard take place on Wednesday, November 6, 2002.

There has been all-party consultation regarding the subject of this particular debate and it has been agreed to by everyone.
The Acting Speaker (Ms. Bakopanos): Is it the pleasure of the House to adopt the motion?
[Intervention]
Some hon. members: Agreed.
(Motion agreed to)
PetitionsBetty Hinton: Madam Speaker, I have a petition that has been signed by literally thousands of residents of Kamloops, Thompson and Highland Valleys regarding the buoy system.
The petitioners ask that the attention of Parliament be drawn to the attempt by the Canadian Coast Guard, department of fisheries Pacific region in the electoral district of Kamloops, Thompson and Highland Valleys, to divest itself of navigational voyage systems. It is in direct conflict with the safety and well-being of the users of the water system and the river system. I am proud of the number of people who signed.
Bob Mills: Madam Speaker, today I have two petitions signed by 388 people from Alberta. In the first petition the individuals believe that the creation and use of child pornography should be condemned and that a clear majority of Canadians would like to see the exploitation of children stopped.
Bob Mills: The second petition, Madam Speaker, calls upon Parliament to enact legislation to modernize the employment insurance program according to the plan proposed by the Canadian Labour Congress.
Mr. Eugène Bellemare (Ottawa—Orléans, Lib.): Madam Speaker, I have a petition which was drawn from the decision of the British Columbia Supreme Court on March 26 that said that written material depicting sado-masochistic scenes of violence and sex directed at young boys was legal since it had artistic merit. The petitioners are asking that this be outlawed.
Karen Kraft Sloan: Madam Speaker, I have a petition that calls upon Parliament to request that the Government of Canada undertake a review of the foreign aid policy that provides the Bangladesh government with aid in view of the government's record of recurrent violation of human rights with respect to the persecution of Hindus and other minorities.
It also calls on the Government of Canada to consult with the Government of India to ensure that refugees belonging to Hinduism and other religious minorities in Bangladesh are given all possible assistance in India on humanitarian grounds, as outlined in the Geneva convention and in conformity with the practice of the Indian government in the past.
Karen Kraft Sloan: Madam Speaker, I have a number of other petitions as well which call upon Parliament to enact an immediate moratorium on the cosmetic use of chemical pesticides until such time as their use has been scientifically proven to be safe.
Loyola Hearn: Madam Speaker, I want to present a petition signed by several hundred people from Newfoundland and Labrador. Many more such petitions will be coming. We also have a major petition on the web signed by over 3,000 people which calls upon Parliament to support the standing committee's recommendation and move expeditiously for Canada to take custodial management of the Nose and Tail of the Grand Banks and the Flemish Cap.
Questions on the Order PaperBryon Wilfert: Madam Speaker, the following questions will be answered today: Nos. 18 and 19.
Question No. 18Mr. John Cummins: With regard to specific treaties with the crown and the following aboriginal bands or communities in the Maritimes; Abegweit, Lennox Island, Big Cove, Buctouche, Burnt Church, Eel Ground, Eel River, Fort Folly, Indian Island, Kingsclear, Madawaska, Red Bank, Oromocto, Pabineau, Saint Mary's, Tobique, Woodstock, Acadia, Afton, Annapolis Valley, Bear River, Chapel Island, Eskasoni, Glooscap, Membertou, Millbrook, Pictou Landing, Shubenacadie, Wagmatcook, Waycocomagh: ( a ) what is the specific treaty that covers each of these bands or communities; ( b ) when was each of these specific treaties signed; ( c ) where was each of these specific treaties signed; ( d ) which of these bands or communities are covered by the so-called Marshall or Halifax treaties; ( e ) which of these bands or communities are covered by treaties signed after the so-called Marshall or Halifax treaties; ( f ) which of these bands or communities are covered by the Miramichi Treaty of 1779; and (g) which of these bands or communities are not covered by treaties?
Hon. Robert Nault (Minister of Indian Affairs and Northern Development, Lib.): With regard to specific treaties being made between the crown and aboriginal bands or communities in the Maritimes, the British crown signed a number of historical documents with the Mi’kmaq, Maliseet and Passamaquoddy people between 1725 and 1779. These historical documents are commonly referred to as treaties, but only three of them, the two LaHeve treaties of 1760-61 and the Cope treaty of 1752, have been formally recognized by the Supreme Court of Canada as having the constitutional status of treaties.
In response to part (a) of the question, it is important to consider the geographical boundaries and political structures of the Maritimes in the 1700s. In the Marshall decision, the Supreme Court of Canada noted that “...the British signed a series of agreements with individual Mi’kmaq communities in 1760 and 1761 intending to have them consolidated into a comprehensive Mi’kmaq treaty that was never in fact brought into existence. The trial judge found that by the end of 1761 all of the Mi’kmaq villages in Nova Scotia had entered into separate but similar treaties”. It is important to note that during the colonial period, Nova Scotia was considered to include modern day New Brunswick.
Regarding parts (b) and (c) as they relate to the Supreme Court of Canada decision on Marshall, only the 1760-61 treaties were recognized by the Supreme Court of Canada as treaties under s. 35 of the Constitution Act, 1982. The 1760 LaHeve treaty was signed on March 10, 1760 in Halifax. The 1761 LaHeve treaty was signed on November 9, 1761 in Halifax.
In addition, the other “historical documents” that have been identified from various archival sources are virtually identical to the LaHeve treaty of 1760 with the exception of the February 23, 1760 agreement with the Saint John (Maliseet) and Passamaquoddy Indians, which contained similar promises but also renewed previous peace and friendship treaties with the crown.
Copies of the following 1760-61 documents were provided to the House of Commons Standing Committee on Fisheries and Oceans, by the Department of Fisheries and Oceans in May 2001:
Renewal of 1725 Articles and 1749 Articles, with the delegates of the Saint John and Passamaquoddy, at Chebucto (Halifax) Harbour, 23 February 1760; Treaty dated 10 March 1760 with Chief Michael Augustine of the Richebuctou Tribe; Treaty with Chief Paul of LaHeve Tribe at Halifax, 10 March 1760; Treaty with Claude René, Chief of Chibennacadie and Muscadoboit, concluded at Halifax, 10 March 1760; Treaty with the Merimichi Tribe, concluded 25 June 1761; Treaty with Chief Claude Atouash of the Jedaick Tribe, concluded at Halifax, 25 June 1761; Treaty with Etiene Apshobon of the Pogmouch Tribe, Halifax, 25 June 1761; Treaty with Joseph Argimaut, Chief of Mesiguash Indians, Halifax, 8 July 1761; Treaty with Chief Jeannot Picklougawash on behalf of the Pictouk and Malegomich Tribes, 12 October 1761; and Treaty with Chief Francis Mius of the LaHeve Tribe, concluded at Halifax, 9 November 1761.
In part (d) reference is made to “Marshall or Halifax treaties”. It is assumed this is in reference to the LaHeve treaties of 1760-61, which were considered by the Supreme Court of Canada in the Marshall decision. Therefore, with respect to which bands or communities are covered by these treaties, the Government of Canada is of the view that while modern day first nations are the most likely successor groups of the original signatory groups, it is impossible to determine a direct correlation between the application of treaties to modern day first nations.
It is important to keep in mind that the passage of time has meant that there have been changes to the composition of some of the signatory groups. We recognize the difficulty in connecting the signatories of historic treaties to particular contemporary first nation communities. This may be due in part to migration of first nations, intermarriage, government policies creating bands and other initiatives such as the centralization of reserves. However, since the court found that all Mi’kmaq communities participated in the treaties, members of modern communities are likely beneficiaries of these treaty rights.
For these reasons, the Government of Canada has determined that the most appropriate course of action is to enter into a dialogue with the 34 Mi’kmaq and Maliseet first nations in present day Nova Scotia, New Brunswick, Prince Edward Island and Quebec to consider the implications of the Marshall decision.
Parts (e) and (f) of the question are unanswerable since only the two LaHeve treaties of 1760-61 and the Cope treaty of 1752 have been formally recognized by the Supreme Court of Canada as having the constitutional status of treaties. In addition, the Government of Canada maintains that while modern day first nations are the most likely successor groups to the original collectives that signed the treaties, it is impossible to determine a direct correlation between the application of treaties to contemporary first nations. As for which bands are not covered by treaties, part (g), the question is unanswerable due to changes in the composition of some of the signatory groups over the years. Nonetheless, the Government of Canada has drawn from the observations of the Supreme Court of Canada in its decision on Marshall and has determined that working with the 34 Mi’kmaq and Maliseet first nations on the implications of this decision is the most appropriate course of action.
Question No. 19Mr. Bill Casey: With respect to reports of a breach of security committed by Russell Sanford who designed software that provided access to the Department of National Defence (DND) computer system: ( a ) what steps have been taken since that breach was discovered to ensure that the computer system is secure; ( b ) how many times had DND’s computer system been breached by hackers before this incident; ( c ) how many times has the computer system been breached by hackers following this incident; and ( d ) was classified material downloaded or copied in any incident to date, when the computer system was compromised by the hacker?
Hon. John McCallum (Minister of National Defence, Lib.): In response to (a), a DND/CF Internet web server was hacked. Since the department’s Internet site became operational, protective measures have been in place and are constantly upgraded to ensure the security and integrity of the systems. These measures include firewalls and anti-virus programs as well as careful monitoring. In response to (b), there were none. In response to (c), there were none. In response to (d), the department’s Internet websites that were targeted are public sites and do not contain any classified information. At no time were the department’s internal or mission critical systems at risk.
Bryon Wilfert: Madam Speaker, I ask 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 S-2, an act to implement an agreement, conventions and protocols concluded between Canada and Kuwait, Mongolia, the United Arab Emirates, Moldova, Norway, Belgium and Italy for the avoidance of double taxation and the prevention of fiscal evasion and to amend the enacted text of three tax treaties, be read the second time and referred to a committee.
Pat Martin: Madam Speaker, I am pleased to share our views, on behalf of the NDP caucus, on Bill S-2.
The member from the Alliance, who spoke on the bill, has already mentioned that the bill originated in the Senate. The NDP is critical of that very fact. We believe that bills should originate in the elected chamber of the House of Commons, not in the unelected Senate. We will make that point every time we see a bill coming forward that is marked S rather than C.
The NDP will have no trouble voting for Bill S-2. We recognize there are seven tax treaties that are designed and speak to the issue of fairness, and try to minimize the duplication of taxation for Canadian citizens working abroad. The reciprocity would exist for others who are signatory to that treaty to have the same fairness and rights were they working in this country.
We recognize that it is necessary for cooperation between this country and our trading partners. We believe that tax treaties enhance the trading relationships that we have with other countries around the world. We recognize the benefit that treaties like this have in giving opportunities to share information between the two countries, for example, administrative information that can aid, assist and benefit the relationship that exists between these very countries. We recognize the need for us to deal with the issue of double taxation.
We would hope that our government would take steps to minimize the risk of such a thing happening to Canadian people working abroad. We would point out though that there are a number of ways that the treaty could have been crafted to deal with the issue of double taxation. We do not know who has the exclusive authority, and perhaps this will become clear as the bill moves further along, regarding double taxation, for example, exclusive to the source country, or exclusive to the country of residence of a person being taxed or some combination of the two. One of the points that has come to our attention is that there is a lack of clarity on that issue as it tries to deal with the issue of double taxation.
The other point of note, as the parliamentary secretary who introduced the bill pointed out, the withholding tax rates are of some concern to those involved. We are satisfied that Bill S-2 would address the issue that interest, dividends and royalties that are subject to withholding taxes would be taxed at a rate which used to be 25% and would now be reduced to about 5% in some countries to a high of 15%. This is a general reduction of taxes for those who are having funds withheld due to interests, dividends or royalties. That may have an effect on Canadian artists and musicians who have royalty cheques coming from other places. The tax rate would be harmonized now at a rate lower than they are being taxed currently. We would see that as mildly beneficial to some Canadians and therefore we would be pleased to support it.
I would like to thank the finance critic for the Bloc Quebecois for expanding the debate somewhat, because I think it is an opportunity for us to speak to the larger picture of the treatment of taxation when we are dealing with international trading relationships. He spent much of his speech pointing out that we must be careful that we are not enhancing tax havens, in other words disadvantaging our own country by unduly promoting tax situations in other countries which may in fact be detrimental to our own revenue streams here in this country.
He used the example of Barbados as a popular Canadian tax haven and he pointed out that the Government of Canada's own website was offering offshore investment opportunities as an idea for minimizing a person's taxes. It strikes me as strange that the Government of Canada would do anything to enhance and promote people's tax avoidance by putting money offshore.
I was pleased he raised that, because even though today we are dealing with a tax treaty that deals with seven tax treaties, I believe, with countries like Kuwait, Mongolia, the United Arab Emirates, Moldova, Norway, Belgium and Italy, we can have a much larger debate about the treatment of tax havens and certainly the government's unwillingness to protect revenue that rightfully belongs in Canada and should be spent in Canada.
Again, we have pointed out the contradiction that we have revenue shortages and program cutbacks that need an injection of revenue. We are even contemplating the possibility of raising taxes to meet those needs, yet we are willingly letting revenue slip out of the country and, if the hon. member is correct, even promoting money slipping out of the country which should rightfully be going to programs.
I would like to draw attention to one case that I have quite a lot of personal knowledge of, that is, the tax avoidance of the Bronfman family. I will use the name even though during the court cases the name of the family was not used. Ten years plus a few months ago, the Bronfman family transferred billions of dollars in family trusts out of the country and got special dispensation not to pay any capital gains tax on those billions of dollars. Had the Bronfmans paid an ordinary rate of capital gains on that money, it would have been $750 million of revenue for the Government of Canada. The statute of limitations on this kind of thing is 10 years. In the ninth year, when people in the general public became aware that it was the Mulroney government that allowed this transfer of Canadian funds out of the country without any capital gains being paid on it, they tried to intervene in the courts. They called it “operation loophole”.
The reason I have some personal knowledge of it is that a constituent of mine is the person who appealed to the Federal Court for the right to intervene on behalf of Canadian taxpayers to encourage Revenue Canada to enforce the law for the benefit of all of us and to charge the taxes that were owing to the country. His name is George Harris. I think he is a Canadian hero. For two years he fought tooth and nail and made an enormous personal sacrifice in terms of time and resources to go through all the stages of Federal Court and was blocked every step of the way. The Government of Canada tried to stop him from filing that appeal.
The case went to the Supreme Court of Canada because the case was won at the various preliminary stages. It went all the way to the Supreme Court of Canada, with the request that the Government of Canada enforce its own revenue laws. Ultimately the case was lost in the highest court of the land. The Bronfman family got away with it and Canada lost $750 million worth of revenue.
We had members of the Canadian Health Coalition come before the finance committee stating what they thought the needs were for the health care system for this year alone. They were not blue-skying it. They say that $1.1 billion is required immediately to plug some of the gaping holes, whereas the government willingly let $750 million worth of revenue go out of the country. If you or I, Madam Speaker, owed $100 in taxes we would be hounded to the ends of the earth. The government would be knocking down our doors to collect that. It would be repossessing our property to collect that. However, it willingly let $750 million of revenue go. I am very critical of that. It is relevant. I do not know if I am going to be challenged on relevancy in this speech, but it does have to do with taxation policy and international foreign relationships, I suppose, with other countries.
I am really quite impressed with how thorough and how comprehensive Bill S-2 is. It really seems as though it tries to consider every eventuality and is very careful to anticipate all the possibilities of Canadians working abroad and whether they file taxes in their home country or in the country that is the source of the revenue. All the combinations, permutations and possibilities were considered, yet the contrast I would like to point out is that there are other aspects of taxation law where there seems to be a complete unwillingness to even lift a finger to correct obvious flaws in the Income Tax Act. I would like to draw attention to just one and that is the fact that businesses can deduct fines as legitimate tax deductions.
I simply cannot believe that it was ever Parliament's intention when it crafted the Income Tax Act to make it tax deductible to break the law. I do not accept that, but we have made government aware that this is the perhaps inadvertent status quo or byproduct of the current act and it has chosen not to take any steps to correct it. It has known for years that this is the situation, so I am confused by the amount of detail and analysis that it spent on Bill S-2, which does not affect that many people, really, although it will be of benefit to some Canadians working abroad. I am confused by its complete unwillingness to address this outrageous tax loophole that exists whereby fines and penalties can be considered a legitimate, tax deductible business expense.
The government will not dedicate one iota of time and resources to add one simple line to the Income Tax Act, which could say that “for greater clarity, fines and penalties imposed by law are not to be considered tax deductible expenses”. The situation would be resolved. In the absence of the government taking that action one can only conclude that it approves of the current situation, which most Canadians certainly would not.
The other thing I would point out in terms of contrast to the amount of energy and attention that the government attributes to some things is the disability tax credit. There was an absolute missionary zeal with which it undertook harassing every disabled person in the country who applies for and qualifies for the disability tax credit. It spared no effort in terms of energy or resources to go to every single person who applied for the disability tax credit and make them undergo a whole new medical test at their own expense and then reapply and requalify under a rigid new set of criteria. It raised the bar a great deal in regard to who should be eligible for the paltry $970 disability tax credit.
We can imagine the energy and the resources it must have taken to review every one of those applicant and recipient files, craft a letter and send it out. I believe the current estimate is about $7 a letter. That is what it costs to mail a letter these days by the time it is produced, printed and mailed to the public. Then each one of those people who wanted to reapply for the disability tax credit was forced to go and get a new medical opinion at their own expense. Doctors do not do that for free because it is not covered under the medical plan. It costs from $130 to $150 to prove that a visually impaired person is still unable to see or to prove that an amputee is still an amputee or to prove that for quadriplegics nothing miraculous happened overnight to change their circumstances between when they filed for their disability tax credit last year and now wish to file again. This small amount of money is supposed to compensate people for the extra expenses they incur due to their disability, so it is frankly the most meanspirited and cynical initiative that I have witnessed since I have been here in Ottawa.
I raise it because it stands in such glaring contrast to how the government shows a wilful blindness to an obvious tax loophole that could be plugged, thereby forgoing revenue as a result by allowing a tax deduction that should not be allowed. On the other hand, the government wastes all kinds of energy and resources in harassing, of all people, the disabled. It is a glaring contrast that we should shine the spotlight on.
Bill S-2 does not offend me. I can see it being necessary and even useful. What irritates Canadians, I believe, are the other contradictions in taxation policy in the country and the warped sense of priorities that exists when one considers the disability tax credit, operation loophole, and allowing businesses to deduct fines, to reward people, let us say, for breaking the law. I do not think there can be a person here who does not recognize that it undermines the deterrent value of a fine if we can have it reduced automatically by writing it off against our income taxes. That much is common sense.
If Bill S-2 is worthy of our attention in such great detail, I wish that Revenue Canada would spend more time and attention on glaring, outrageous omissions like the business tax deduction for fines.
Bill Casey: Madam Speaker, I am pleased to speak to Bill S-2. The previous speaker brought up the subject of the disability tax credit and I am glad he did. I had not thought to raise that issue in my remarks, but I will do that now. I have raised the issue in the House several times and I have been very troubled with the way in which some of my specific constituents have been dealt with.
Last night the Minister of National Revenue spent a long time helping me go through the system. I very much appreciate her taking the time to do that. I am still just as concerned as I was before, but I have a much better understanding of the process. She was very good to have spent the time with my staff and me to help us understand why this review happened, why the changes are there and what the philosophy is behind them. I would like to extend my appreciation to the minister for that.
In those discussions last night I talked about two people in my riding who had been receiving the disability tax credit for some time and then had it cancelled. One is Don Pryor, a man who was run over by a train. His leg was amputated and his internal organs were damaged. He has gone through a great deal of grief and pain since I think 1979. He was receiving the disability tax credit and then with this new review, it was taken away after all that time.
Obviously he still does not have his leg and suffers from all the injuries, but he has been denied his tax credit. We will to appeal it once again, as the minister instructed, and hopefully we will have it reinstated. That is an example of the shock that hits people on this issue.
Again, I want to thank the minister for taking the time last night to help me with this. I really do appreciate it. It was very helpful. Perhaps if we all had access to that, we could understand what is happening and we could help people with disabilities through this very troubling program.
My staff and I came away from that meeting much more informed and better prepared to help because we all care about disabled people. We all have them in our ridings. They are all coming to our doors with these situations. It is much more than just a review to them. It is almost intimidation by big government. They are afraid in some cases to even fill out the form and return it. They go to their doctors and the doctors are sometimes not cooperative. The forms that are filled out are supposed to be free but now some doctors find it necessary to charge for them. There are a lot of questions and it is very complicated for people with disabilities.
I never had a lot to do with people with disabilities until I came to Parliament. Now it is very much a part of my job because of the hurdles thrown in the paths of people with disabilities at every turn. Whether it is a disabled person applying for Canada pension or simply trying to find ways to afford to put a ramp into a house or to change the facilities in a house or receiving the disability tax credit, it is very complicated for that person.
In my view it results in many cases with people with physical disabilities ending up with very troubled emotional situations because they have lost their ability to contribute in some cases. They have lost their ability to support their families in some cases. What starts off as an emotional disability ends up as a financial disability because they cannot work, they cannot earn a living like they used to, they cannot join the workforce and the hope for promotions and recognition for the good jobs they have done is gone.
When someone is totally disabled, it has a big impact on them, much more than just a physical disability. I have learned to appreciate that from meeting some of the people with disabilities. I admire them for handling their situations.
I have a letter from a Mr. Sherman Bent. This man is incredible. He was a hard worker all of his life. He never had a day off in his entire life until he was diagnosed with a very serious cancer. He went through a full year of chemotherapy, which did not work. Then he had to go through a bone marrow transplant. That left him without 80% of his vision in one eye and 50% in the other. He is pretty much confined to a wheelchair. He requires help to do everything in his normal life that people without disabilities can do and not even think about it.
He applied for the disability tax credit some time ago and received it. Then this year he has been denied it even though he is totally disabled. As instructed by the minister, I will help Mr. Sherman Bent appeal this. I believe by any standards he should receive it and I will stay with it until he does. It is a big issue for all of us.
I would say that perhaps the case was not handled the way it should have been. Considering how serious it is to these people, perhaps we should all go back, take a look at this and try to learn more about it, which is what I did last night. It will change how we handle it.
I will move on to the subject at hand, which is what I am supposed to be talking about, Bill S-2. It just makes common sense to enter into treaties with other countries so that we can share information and make sure there is not double taxation. This came very close to home for me a couple of years ago.
Before a friend of mine moved to Bermuda he got all the rules and regulations from the tax department. As he was told by the tax department, he sold his house and completely transferred his whole life to Bermuda. He had a three year contract and is a professional. He did everything he could to avoid double taxation. He followed the rules exactly.
What happened was that a situation happened in his family. He thought it would be better if he came back to Canada before his three year contract was up. Of course that triggered a nightmare from the tax department because Bermuda charged him tax and Canada charged him tax. He had gone through this whole thing for nothing. He had sold his house and had taken all the steps that the tax department told him to, but because his circumstances changed it placed a great burden on him. It took a long time for him to sort it out.
I understand what double taxation can do. This was a Canadian who had gone to Bermuda to do a professional job. He ended up being audited by Revenue Canada when he came back and it determined that he owed a lot of tax money on which he already had paid tax in Bermuda. Again he had gone through the painful ordeal of selling his house, moving his family and completely uprooting himself exactly according to the instructions.
It can be very troubling when someone from another country comes to Canada or someone from Canada goes to another country and has to face this double taxation. This convention will help eliminate that.
The convention would actually ratify treaties with Kuwait, Mongolia, the United Arab Emirates and Moldova, but it would also correct treaties with Norway, Belgium and Italy, and some technical aspects of the treaties with Vietnam, Portugal and Senegal. It now means that Canada has negotiated tax treaties with 80 countries so that if Canadians do move to another country they will at least have a chance under these treaties not to be double taxed .
Unfortunately, every country has a different regime for taxation. Some have capital gains and some do not. Some have income tax and some do not, and so on, but at least now they will have some protection against double taxation. It should also facilitate investment from country to country, which is necessary for us all to grow and get the maximum benefit from the global economy.
The second purpose of the bill is to avoid tax evasion by people who go from country to country and try to break the rules. All of us as members of Parliament know that if the government establishes a set of rules, it does not matter whether it is a disability tax credit or fisheries, there are always some people who try to get around the rules. By previously allowing people to go from one country to another, and there was no sharing of information, the people who wanted to break the rules and take advantage of loopholes were able to do so. Perhaps this will avoid those infractions of our taxation rules. Perhaps it will ensure that Revenue Canada gets the taxation revenue to which it is entitled.
I will be supporting the bill. It is a timely bill and it would increase our participation in the global economy. It would make it easier for Canadians to participate and exercise their rights to travel and work in other countries.
The Acting Speaker (Ms. Bakopanos): Is the House ready for the question?
[Intervention]
Some hon. members: Question.
The Acting Speaker (Ms. Bakopanos): The question is on the motion. Is it the pleasure of the House to adopt the motion?
[Intervention]
Some hon. members: Agreed.
[Intervention]
An hon. member: On division.
The Acting Speaker (Ms. Bakopanos): I declare the motion carried. Accordingly the bill stands referred to the Standing Committee on Foreign Affairs and International Trade.
(Bill read the second time and referred to a committee)
Joe Jordan: Madam Speaker, pursuant to consultations, I believe if you sought it you would find consent to see the clock at 2.30 p.m.
The Acting Speaker (Ms. Bakopanos): Is it agreed?
[Intervention]
Some hon. members: Agreed.
The Acting Speaker (Ms. Bakopanos): Accordingly, the House stands adjourned until Monday at 11 a.m. pursuant to Standing Order 24(1).
(The House adjourned at 12.42 p.m.)