2005-02-04

[Stage Direction]
The House resumed from February 2 consideration of the motion that Bill C-33, a second act to implement certain provisions of the budget tabled in Parliament on March 23, 2004, be read the second time and referred to a committee.
Mr. Brian Masse (Windsor West, NDP): Mr. Speaker, it is my pleasure to rise today in the House to speak to Bill C-33, the budget implementation act. It is very important to look at a number of issues in the bill. There were a lot of issues that went to committee. I know that there is much interest in deciding what is going to happen with our economy. There were great presentations by hundreds of Canadians who submitted documents. It is important to note, though, that a couple of elements make this legislation very significant.
I am going to focus my remarks on a couple of elements, because I believe they deserve some attention and should be noted in this debate at second reading. One of them is an element that should be closed as it is something that is atrocious: the allowing, in business tax deductions, of fines and penalties to be tax deductible. That is going to be closed.
The second relates to the issue of infrastructure in our communities and our nation. I again will discuss, as I have many times, issues related to the crossing at Windsor--Detroit. I will certainly discuss some of the things that are happening now but also how this relates to our budgetary process. That is a moving target; there are a lot of things changing on a regular basis.
First I want to highlight some of the positive things that we New Democrats were very pleased to see in the budget bill. One in particular is the introduction of the closing of that loophole I mentioned, that gap.
It is hard for Canadians to believe this. A corporation could go to court and be convicted of a criminal offence related to polluting the environment, conspiracy related to market practices and a number of serious elements that are predatory not only to Canadian taxpayers but also to other businesses. The government would then go through the process, there would be a review, charges would be laid and a judgment cast. At the end of the day, behind closed doors, an accountant could then deduct those fines and penalties as a tax break.
It is amazing that the process to get here was so difficult. As New Democrats, we want to make this chamber work and we have been doing that in a number of different initiatives. This was very difficult to push through at the end, but I think it is important to talk about the first part of that process.
I do want to recognize the member for Winnipeg Centre, who pioneered this fight. This fight goes back to a time before I was elected to the House of Commons. It goes back to the member's comments in the House of Commons. I will read that question to the House. It will be shocking for Canadians to learn that there was no response until 2005, when we pressured the government to close the loophole:

Mr. Speaker, I cannot deduct my traffic tickets from my income tax yet a recent court ruling says that businesses can deduct fines, penalties and levies as a legitimate business expense. I find this outrageous. Will the Minister of National Revenue agree that it undermines the deterrent value of a fine if a company can write it off as a tax deduction?

That was said by the member for Winnipeg Centre in May 2002.
What we are talking about is the decision that it is a legitimate business expense to poison our water, a legitimate business expense to practice predatory behaviour that costs other Canadians jobs because their company might play by the rules, whether it is safety or product information that is valid as opposed to unfair advertising or practising predatory behaviour on consumers. These fines were a legitimate business expense and could be deducted.
We have not done all the research on this, but we know it has cost us tens of millions of dollars each year. One of the fines that was levied was for $50 million. It was a joint issue related to drug companies that were fined for conspiracy related to bulk vitamins. There were several companies involved. We estimate that from that $50 million they could have had $10 million of taxpayers' money coming back to them. It is a crime that this type of practice was allowed.
When the member for Winnipeg Centre brought this to the government's attention, nothing was done. In fact, he followed that up with this question back in 2002, about six months later:

Mr. Speaker, six months ago I asked the revenue minister to plug the tax loophole that allows businesses to deduct fines and penalties from their income tax as a business expense. Since when is breaking the law supposed to be tax deductible?

It is unbelievable that we still had no movement even then.
We continue to fight as New Democrats on this issue. We continue to raise the consciences of Canadians and make them aware that for this coming tax year they will not be able to deduct fines and penalties. At the same time, Canadians were having to pay more because the government was shovelling the money back to the people who had gone to court, lost a case and had been fined, penalized or had a levy placed upon them. We would shovel money back behind the scenes to them because they had good accountants and because there was no progress made on this file.
What happened here in the House of Commons is unbelievable. The government at the industry committee then introduced Bill C-19 which looked at increasing administrative monetary penalties but still did not fix the loophole.
I was pleased to introduce a motion at the industry committee to suspend deliberations and discussions on Bill C-19 until this gap was plugged. What was amazing was that we found out the legislation to fix this gap, which was again one of the promises in the Speech from the Throne that never reached fruition, was ready but the government refused to introduce the elements to actually cast the last completion to fix this loophole. It was sitting on a shelf gathering dust.
The motion passed, and I must give credit to the Conservative Party of Canada which supported the motion. Although the Conservatives did not necessarily agree with my position that tax deductions on fines, penalties and levies should not be tax deductible, they said that they were quite clear on that but that they were not fully convinced that was their thing. However they said that a promise was made by the government in the Speech from the Throne, that New Democrats had been raising the issue and that the promise should be honoured. The Conservatives were straight up and I give them credit for that. They have accountability. The Bloc Québécois supported it as well.
Do members know what happened? The Liberals on the committee stormed out of the meeting after we got the suspension. I will give credit to the Liberal chair of the committee who did a good job of handling the situation, handling the committee and making sure that we were working together in a non-partisan way. He was also very much interested in a dialoguing with me to get this moving, which was very important.
A week and a half later the government did introduce Bill C-33 and made sure the amendment was in the bill. We then came back to the House of Commons after the break and we are now in the final stages of the bill.
It is because of that that I kept my word as well and in committee this week we agreed to put Bill C-19 back on the table, which is how Parliament should work.
I do not understand why we had to drag the government kicking and screaming to end something that was so egregious for Canadian citizens. Once again I have to say that the member for Winnipeg Centre should be commended for pioneering this fight. It not only has an implication on individuals and the money they will save as taxpayers that will not be shovelled back to people that break the law, it will also set the record straight that if people are going to pollute, if they are going to use predatory practices that affect consumers and other Canadians and they are caught, they will be fined and not be able to get that money back through the back door. This sets an example.
We have seen a couple of vivid examples in the last few days where a special investigation unit of the RCMP has been out on Bay Street with a big van outside offices and securing records because of the potential problems on Bay Street. This is another issue that was behind the scenes. We did not have the van, but unethical practices were happening through the shuffling of paper that at least as Canadians we can say will be completed and finished. We are very proud to be part of that.
The budget is a very important document in terms of the way in which the process is developed and the promises that are made and things that are laid out later.
Another issue that is evolving right now is the importance of recognizing the decisions being made by this nation regarding infrastructure and investment that has already cost us a lot of money.
Forty-two percent of the nation's trade goes through the Windsor-Detroit border. At the present time there is a rail tunnel with a small load capacity which is not being used much right now because it has only a single stack and it needs a double stack to be more efficient. There is a tunnel for cars and trucks but it is predominantly trucks that use it. There is a ferry crossing and there is the Ambassador Bridge. These elements span about two kilometre's over the Detroit River. Forty-two percent of our nation's trade goes along those two kilometres.
The city and county councils of the day have just released a constructive plan from the Schwartz report. The community has struggled a great deal to find a solution to the gridlock and to ensure the proper infrastructure is in place. Many different community groups have been seeking solutions to this gridlock because it not only has an impact on the air quality, it also has an impact on the community in terms of travelling from the east side of the city to the west side. It is also having an impact on international trade and is prohibiting business development in the community.
The city has come up with a consensus on the problem but it is a problem that requires infrastructure dollars. I will remind the House that the Prime Minister promised that he would look for a solution but that he would not impose anything on the City of Windsor. What the Prime Minister needs to understand is that words are not good enough. Any action that has to be taken must also come with the resources.
After many months of study the Schwartz report is finally finished and now we have the bureaucrats suggesting that it might or might not work. That is not good enough. We were told that appropriate resources would be provided for this.
Let me put the importance of 42% of the nation's trade going through this corridor into context. There has been no infrastructure investment of any significant magnitude in this corridor since NAFTA. Despite all the growth, despite the years and years of warnings from the councils to the former minister of finance, now the Prime Minister, and finance ministers after him, and despite all the county and city resolutions, no action has yet been taken.
As a result, a report was released this year from the Michigan department of transportation that calculates that this year alone the Canadian economy lost $18 billion from delays at the border; double the surplus. We know that the auto plants and parts manufacturers are coming up with other options because of this infrastructure deficiency.
It is interesting to note that the city came back with a consensus report. What had happened was that the federal Liberal government, along with the provincial Conservative government at that time, behind closed doors, attempted to impose something on the community called a nine point plan. They tried to shovel taxpayer dollars to private companies to promote their advancement of solutions that would not work and had no modelling or grounding as solutions.
Our community fought that plan. We exposed its weakness not only in the planning but in the process. The governments had breached the trust of every resident of the city. There was no solution. They were just trying to seek taxpayer dollars. The city was asked to come up with a solution so it hired the brightest traffic guru in North America, Sam Schwartz, a former New York City traffic commissioner, to do a study and come up with a report, which he did. They have consensus for the first time. The warden and the mayor deserve credit for that.
It is not the perfect solution that I would have liked, nor is it everything I was seeking, but it is something. It actually has traffic modelling and it has an actual plan that is multi-model, that will carry the day and that will rebuild confidence.
However the plan will cost money. It has been estimated that it will cost about $1 billion to carry out that plan. Nothing is wrong with that because $18 billion was just lost last year and it will be lost again this year. I can tell members that if the resources are not there, the communities of Windsor and Essex county will fight something being imposed on them. If somebody else wants to impose something that does not support what the community has asked and advocated for, the timelines better be built in for what we are going to do to protect our community to make sure that it is a healthy and vibrant city, not only for raising families but also for economic development. That is important to note.
Once again the word of the Prime Minister and others was that they would be there. In fact just recently in the House of Commons the Parliamentary Secretary to the Minister of Finance said they would be there when I asked a question. Well they had better be there. We see stories though that give me concern. The Windsor Star reads:

Border money up in air--Federal and provincial politicians will decide within "a few weeks" how much funding will be provided and when construction will begin on the next phase of improvements to fix Windsor's border traffic problems.

That is fine, but I have not heard the political leadership say that the money will be there.
What is interesting about all of this is that on the U.S. side the Americans do not seem to have that problem. I will quote Paul Cellucci:

Cellucci urges border decision: Ambassador says U.S. may split costs:"U.S. Ambassador Paul Cellucci says Washington wants quick approval of a new border crossing between Windsor and Detroit and suggested the U.S. is prepared to split the cost.
He noted Canada and the U.S. have worked out a 50/50 cost-sharing formula to pay for a new bridge being built between New Brunswick and Maine, saying this could be the model for the new crossing under study in Windsor and Detroit to relieve the logjams that plague the countries' busiest border crossing.”

What is amazing and what is not talked about often enough is the fact that this corridor, with 42% of our nation's trade, the busiest and most important corridor that we have, has no coordinating body despite four crossings to get the trucks, people, cars and goods and services across the two kilometres. It is not done like that in Fort Erie. It is not done like that in Niagara Falls. It is not done like that in Sarnia. They have a border authority or a public commission. They at least have something that helps coordinate the long term development of the region, the traffic management, the flow and the infrastructure.
With all the changing legislation coming from the United States, it is more important today because just as important as infrastructure is legislation, programming, staff and technology to move the border traffic through at a good rate.
Why is that not being done in Windsor? Why is it that we are going to let 42% of our nation's trade hang in the balance of chaos and no coordination? Part of the reason is that unlike everywhere else, except for one other place, 24 crossings, which are tunnels and bridges, are held by the public sector. Two crossings are held by the private sector: the Ambassador Bridge and Fort Frances. The other ones are usually owned by state, provincial or sometimes municipal governments. In Windsor our tunnel pays a revenue and a dividend back to the people to relieve taxes as opposed to filling somebody else's pocket.
However in Windsor there has been no comment by the government to date as to whether it will fund the next crossing, which is incredible because we are going to let 42% of our nation's trade become a business for someone to usurp the profits of the auto industry, the agricultural industry and people crossing on a daily basis, as opposed to saying that it is a social and economic conduit between our two nations that should not be a profiteering model, not off the backs of industry and not off the backs of people. It is an important connection link between our two countries.
Those moneys for the border could go toward a solution for the future so that we will not have to dig back and try to find money. This should be done properly. I do not understand why we have been left in this situation. I cannot understand why we would let 42% of our nation's trade be thrown up in the air for the interests of a few as opposed to the benefits of many.
Hon. Roy Cullen (Parliamentary Secretary to the Minister of Public Safety and Emergency Preparedness, Lib.): Mr. Speaker, I know the member for Windsor West works very diligently and passionately with respect to border issues. His riding is situated close to the most important border crossing in Canada in terms of our commercial trade between Windsor and Detroit.
He throws out the figure of $18 billion in lost revenues, a figure which I think comes from the Ontario Chamber of Commerce. Frankly, it is good that the number is out there. It certainly helps us focus our minds on the importance of the border. I have also debated the figure with the Ontario Chamber of Commerce, and it depends so much on scenarios, models and formulas or what is built into that model.
I think the member also understands that the Deputy Prime Minister met recently in Detroit and Windsor with U.S. homeland security secretary Tom Ridge at which time the U.S. government and ourselves committed to increasing the flow of traffic and decreasing the transit times by 25% next year, and we will do that. Bridge lanes will be added on the Canadian and U.S. sides. We have committed to putting in 30 more customs officers at the border to staff the new lanes. The U.S. has made the same commitment on its side.
We know we have work to do. We know there are challenges. We know we have to keep the border secure but open for the huge amounts of trade between Canada and the United States.
Has the member really studied the figure of $18 billion earnestly and challenged that number? It is in the public and it deserves some scrutiny.
Brian Masse: Mr. Speaker, I appreciate the parliamentary secretary's work on this file.
I stand to be corrected, but I am almost 100% sure that the number comes from a recently completed Michigan department of transportation study. Another study was done by the Ontario Chamber of Commerce. If memory serves me correctly, it projected a $6 billion to $8 billion loss because of the trade impediments along the corridor. It almost does not matter whether it is between those two figures or off by a little, it is still more annually than it would be to fix the problem with the consensus presented by the city and the county. Every year there will be a greater loss than the cost to improve the corridor.
It is important to note as well that infrastructure improvements are not a net loss for the country. Infrastructure improvements pay a dividend, not only in terms of shortening the time of business travel and economic prosperity and savings in health costs related to air pollution, but the improvements create jobs and employment. People and companies pay taxes, all those things.
The solutions we are seeking on the border are ones that pay dividends for the rest of the country. It is not a net loss.
Mr. Guy Côté (Portneuf—Jacques-Cartier, BQ): Mr. Speaker, I can really sympathize with the complaints of our colleague from Windsor West. Unfortunately, we in Quebec are used to a federal government that often ignores consensus. It also tends to impose programs and agreements after holding negotiations behind closed doors. An example of this currently in the news is the parental leave program.
We are also used to a government that does not know how to adequately supervise its borders. We need only mention the recent example of the government's inability to ensure adequate protection of Quebec's border by the RCMP.
I want to ask the member for Windsor West to briefly review the reasons given by the government, at present, for not proceeding with necessary projects in his region.
Brian Masse: Mr. Speaker, the question is very pertinent to what is happening now. There has been stone silence since the proposal has been put forth in terms of making an outright commitment that the government will fund these projects. I do not know the reason for that. I have a problem with it because it goes back to the history of the promise that something would not be imposed upon our community and if a consensus was reached, we would be supported. We deserve the fulfilment of that promise.
It is important to recognize that in our corridor no one wants to move the traffic more than us. I do not want it polluting children playing in schoolyards a few hundred feet away. I do not want it blocking businesses. We do not want it stopping people from going back and forth to meet their friends and family or stopping those who work in Detroit and pay taxes here in Canada. We want a solution that works for all of us and for Canada. We believe we deserve the right investment. If we are healthy in Windsor and if we have a solution that works for us, it will work for the nation.
Ottawa has to understand that. It will work for the nation if it works for Windsor.
Hon. David Kilgour (Edmonton—Mill Woods—Beaumont, Lib.): Mr. Speaker, the hon. member for Windsor West and I were in Washington at a conference. Many people talked on the issue on which he speaks so passionately.
What can the member tell us today about the line-ups and that sort of thing that cause grief for Canadians?
Brian Masse: Mr. Speaker, I appreciate the efforts of the member who participated in the all party group that went to Washington. The interest in the file is very important because it affects our country.
I want to give some credit to the government. I do not want to be one-sided on this. We have cried for years and years for increased staffing. We finally got it, and that has helped the situation. We have a timeframe, a window, that will help us. We need more, and we wish the government had listened sooner. However, I give it credit for pushing those issues.
I have to question why we cannot put in the resources and those things that we can control and that have no effect on the people, the communities and the areas around them. Why would we not maximize that potential where we have elements of control? There has been an improvement with the additional staffing, but we have days when we still have a back-up. If there is one problem, it throws things out of whack.
One thing I have discovered we can do is stop the predatory practice on the ferry service which has to pay for customs whereas the tunnel and the bridge get a free ride for customs, which is a historical practice. The ferry service, which is supposed to move hazard material trucks, pays customs. The government is trying to run them out of business in my opinion. There is a solution to that, and the community supports it.
Why does the government not fix it? It can do it with the stroke of a pen.
Roy Cullen: Mr. Speaker, I am very happy to participate in the debate about the 2005 budget which the minister has announced will come up on February 23. This is a good opportunity for all members of Parliament to comment on what they would like to see in the budget.
The first thing I would like to comment on is the need for us to maintain our strong fiscal performance. One of the things our government has done is had a very sound economic and fiscal--
Mr. Ken Epp: Mr. Speaker, I rise on a point of order. It is a question of relevance. I think the parliamentary secretary has pulled the wrong speech out of his folder. We are not talking about the budget that is to come. We are trying to implement the budget that was passed last year.
The Deputy Speaker: I thank the member for Edmonton--Sherwood Park, but we have the budgets that were, will be and will be to come, and perhaps they are related. The parliamentary secretary will probably pull that all together.
Roy Cullen: Mr. Speaker, we know that developing and implementing a budget is a continuous process. As I said, we need to build on our strong fiscal performance. In 2003-04 we will record our seventh straight surplus. I am sure we will have another surplus again in 2004-05.
While the other parties opposite might argue that this is a bad news story because we have not predicted them precisely every year, I look at it as a very positive story. When we have surpluses we are able to pay down the debt. We cannot forget about the fact that we still have a federal debt exceeding $400 billion. Under the mandate of this government, we have paid down about $60 billion against the debt, but we still have more work to do. Because of that paydown in the debt, Canadian taxpayers are saving over $3 billion a year in money that would be otherwise used to service that debt. That is a $3 billion annual annuity that the federal government can put toward other priorities of Canadians.
While other members are concerned about the inability, in their judgment, in the government's ability to forecast these surpluses, the Minister of Finance has pointed out quite astutely that with a 1% deviation on the expenditure side coupled with a 1% deviation on the revenue side, suddenly the surplus is out by $3 billion or $4 billion. In the world we live in today, of increasing uncertainty and volatility, it is easy to understand how surpluses cannot be precisely forecast each year.
However, notwithstanding that, it is still a good news story. It has to be a good news story that we are coming up with surpluses, not deficits. Where are we that we have to attack the fact that we are having surpluses and that we are paying down our national debt?
Our economy has grown consistently at levels around 3%. In fact, we have performed very well. We have a very low interest rate environment that is good for businesses and Canadians. People in rental properties are getting out and buying houses or duplexes. They can take on a mortgage because it is affordable.
We have had the largest tax cut in Canadian history in the year 2000. When we had this debate the other day, the members opposite said that it was not really a $100 billion tax cut. It was. The reason they argue that is they are absolutely incredulous. They did not think a Liberal government would address taxes, but we did. Have we more work to do? Of course we do. Will we do more? Yes, I am sure we will. The fact is it was a $100 billion tax cut, the largest tax cut in Canadian history.
The members opposite argued that we put the indexing back into the tax system, which had been taken out to deal with the budgetary deficit. We re-indexed the tax system. In other words, a Canadian typically would have been paying more tax had we not done that. This is a tax measure that results in lower taxes for Canadians.
The parties opposite also, especially the Conservative Party, argued that the measure we took with respect to the Canada child tax benefit was not a tax cut. It was not a tax cut for wealthy Canadians. It was not a tax cut for big business. For the average family, a poor and middle income family with children, this has been a huge benefit. That is a tax cut because many of these people, while they would have only been paying modest taxes, were paying taxes. These were tax cuts. This is the largest tax cut in Canadian history.
I believe we need to do more in terms of the disposable incomes of Canadians. The members opposite argue that because Canada pension plan premiums have gone up that it is a tax increase. That is a fallacious argument, and they know it.
When a person invests in a pension, it has nothing to do with taxes. It has to do with a contributory pension plan system where the employee puts in money and the government puts in money, and that helps to secure the retirement plan of all Canadians.
The fact that Canada pension plan premiums went up has nothing to do with taxes. I would agree that it has something to do with the take-home pay of Canadians. The disposable income of Canadians is an issue we have to be mindful of all the time because we do want money in the hands of Canadians. It is good for the economy. It is good for economic growth.
We need to be mindful of the productivity gap between ourselves and the U.S. We need to ensure we are investing in innovation. We need to ensure that we are mindful of and focused on productivity issues vis-à-vis our major trading partner, the United States.
However, having said all that, the performance of our economy is the envy of the world. People look at our economy and say that Canada is a fiscal miracle.
Just today, for example, the numbers came out on unemployment. Of course we do not like to see any unemployment. Any unemployment is bad. However, it is down to 7%, which is the lowest it has been in four years.
We have to stay the course. We have to stay out of deficit, clearly. We have to keep churning out surpluses. We need to keep paying down the debt. We need to be investing in innovation. We need to contain expenditure.
The parties opposite talk about how expenditures have grown out of line, in terms of the size of our economy. I would agree that we need to be mindful of the levels of expenditure, but the reality is that some 80% of the additional resources that the federal government has been spending have been going to the priorities of Canadians, investing in such things as health care, education, social programs and an innovative economy. We do need to ensure that our expenditures stay in line with the growth in our economy. I would agree with the finance committee's recent report. It made that sort of recommendation as well.
One of the things that our government is very proud of is that we have delivered our commitments. As a government we have made a number of commitments over the last while. The budget will have to incorporate those commitments into our fiscal plan.
The one that is very important in the minds of all Canadians is health care. With the health care accord in 2003 and the additional moneys that were put into the health care system, it comes to an investment by this government of about $37 billion.
We all know that money is not the only solution for a health care system. It is one of those areas where we could keep pouring money. Notwithstanding the importance of having a sound health care system, we must have it managed better. We need to have it managed as a whole system.
When I travel around, I see so many examples where we are not managing our health care system as a holistic type of system. There are elderly people sitting in acute care beds because there is no place for them to go. They do not need the special care and attention of an acute care hospital, which by the way costs us as taxpayers maybe $1,000 a day because of all the services, equipment and highly qualified staff. We cannot put these people in lower cost institutions because the capacity is not there.
This is something the provinces and territories have wrestled with for years, but we still do not have it right. We will never have it perfectly right. We know that. However, we need to do a better job of ensuring that we have people in our health care system at the right level because it is better, in terms of patient care
If we have elderly persons sitting in intensive care in a hospital and they do not need that level of care, they would rather be in an outpatient program, or they would rather be at home. It is better for patient care and certainly better in terms of health care economics. It is better for the taxpayers of Canada.
While we need more money for the health care system, our government has consistently poured money into health care, as I said, $37 billion most recently. We need to and have agreed with the provinces and territories that there is going to be greater accountability, greater transparency, more reporting on benchmarking in terms of performance and standards. As a result Canadians in Saskatchewan can look at their province and compare it with what is going on in Yukon or in New Brunswick and can ask whether they are getting good value from their tax dollars.
We have made some major commitments with respect to cities and communities. We started last year by exempting municipalities from the GST. What does that mean? I will tell the House what it means in a city that I represent, the city of Toronto. By exempting the city of Toronto from the GST, which happened last year, it saves the city of Toronto $50 million a year. Some will say that is peanuts. I am sorry, but $50 million a year where I come from is a lot of money.
That is just the start because our Prime Minister and government have committed to give a portion of the excise tax directly to municipalities. I am happy to see that because in my province of Ontario we have seen, not so much under the regime in place now in Queen's Park but under the Harris and Eves government, a lot of programs devolve to the municipalities.
We saw that municipalities were going to have all these new responsibilities and new programs, but they forgot to transfer the resources. What we are going to do is transfer those resources directly to municipalities through a portion of the gas tax. This is being negotiated as we speak.
I would like to see that negotiation reflect the fact that large cities like Toronto, Vancouver, Montreal, Calgary, Edmonton and many others have unique challenges. They have unique challenges with respect to public transit, air quality, and a whole host of issues with respect to social programs, such as the homeless.
We need to deal with rural communities as well, but they have different problems. When we say one size fits all, we may be politically correct but we are missing the boat. We need to understand and target our programs to the unique needs that are there.
I am a big fan of dedicating this tax and sending it directly to cities because in the city where I live we have some challenges. We have some problems. I have seen air quality diminish over the last 10 years. We see a lot of homeless people. We see urban sprawl.
I was very glad to see the Ontario government finally taking some action with respect to urban sprawl in Toronto because there are communities expanding and growing, which does not lend itself very much to public transit. We need to get higher population densities within the city centre and that will create more opportunities for public transit. That will make our air better and life easier in cities like Toronto.
We have made some commitments to the learning and child care programs. I know the minister is working on that with the provinces and territories. I know that a lot of women in my riding have come to see me to say they need child care in the province of Ontario. We could not get any child care programs going because the Harris and Eves government said it was not participating. Now we are saying to heck with that, we are just going to do it. With the government in Queen's Park now we think we are going to have a more cooperative and sharing environment to do that.
We have recently concluded some new arrangements with respect to equalization dealing with the offshore oil and gas revenues of provinces like Newfoundland and Nova Scotia. That has to be built into the budget.
I would like to see something in the budget with respect to Kyoto. We signed the Kyoto accord. I know there was a lot of debate by members on both sides of the House. Some argued that greenhouse gases and climate change are not a problem. I do not believe that. I think that climate change and greenhouse gases are a problem and that we have to invest.
The difficulty I had when we signed the Kyoto accord was how we were going to meet this objective. I do not like to sign anything or commit to anything unless I can deliver it. We have some challenges on this very front. I would like to see in this upcoming budget some economic instruments that will encourage--
The Deputy Speaker: On a point of order, the hon. member for Peace River.
Mr. Charlie Penson: Mr. Speaker, I would like to remind the member that this is the budget implementation bill that we are talking about for last year's budget. He seems to be talking about the upcoming budget. I guess we would all like that opportunity, but I want to remind him that he is speaking about last year's budget.
The Deputy Speaker: I am sure the hon. parliamentary secretary is going to pull it together and make it all relevant.
Roy Cullen: Mr. Speaker, I thank the member for reminding me.
In last year's budget we had some investments in Kyoto. I would like us to build on that experience. We need some more beyond the measures in last year's budget. We need some more investments in economic instruments and incentives for industry to adapt and change, some market signals.
I know there has been this concept that has been floating out there about a fund that would buy up credits. Those areas where we have greenhouse gas reductions would get a refund from this fund. That allows the market to some extent to focus on what are going to be the major efficiencies that we can accomplish. I would like to see some emphasis on alternative fuels and renewable energy. We have various instruments in our tax policy, in the budget before us today and in future budgets, that will deal with that.
I would like to see the budget deal with municipal solid waste. We often forget that the landfills that we see all across this country produce methane. Methane rises into the atmosphere. In some cases we collect it underneath, but in most cases the methane just rises into the atmosphere.
Methane is about 20 times more harmful with respect to greenhouse gases than CO
2
. We still allow this methane to drift into the atmosphere. I know that there are technologies available to convert methane. I have worked with the city of Toronto and our ministers here to see if we can encourage the kinds of technologies that will convert this municipal solid waste into methane and turn it into electricity, and into products that could be used for example by the farming industry.
We need to invest further, beyond the measures in this budget, in public transit. In a city such as Toronto we see the air quality diminishing. I would like to see measures that will encourage energy efficiency and encourage investments in alternative energy, such as wind power, solar, the use of hydrogen, et cetera.
Having said that, we must remember that we still have some work to do on taxes. In last year's budget, the budget before us today and in future budgets, because of various commitments that our government has rightly made, I am not sure that there will be a lot of flexibility for the finance minister to look very aggressively at tax cuts.
In the forthcoming budget I would like to see a discussion around where we are going with taxes, particularly personal income taxes which are still somewhat high in Canada. We still need to be mindful of work that we have to do on taxes.
However, we learned in Ontario under the Harris and Eves governments that tax cuts are not the panacea. In Ontario, the government went well beyond what was required, necessary or prudent. We saw a gutting of programs. Canadians and Ontarians said the government had gone too far.
We must be careful about how we go with tax cuts because we erode the revenue base of the government and then we cannot deliver on some of our national priorities, some of the federal government's programs that most Canadians like and need. We must look at that.
We need to invest in our national security. I will declare a conflict of interest in the sense that I am the Parliamentary Secretary to the Minister of Public Safety and Emergency Preparedness. We need to deal with law enforcement. We need to deal aggressively with organized crime. We need to invest, as was discussed by the member from Windsor, in our borders. We need to increase our defence spending.
I suggest that this will be a difficult budget. I am confident that our Minister of Finance will come out with a budget that will reflect the priorities of Canadians.
Mr. Larry Miller (Bruce—Grey—Owen Sound, CPC): Mr. Speaker, usually when somebody swears in the House you correct them. I heard the hon. member across the way use the words “rural Canada”. Normally, coming from that side of the House they are swear words. Rural Canada has been ignored by the government for so long.
I have heard some members today talk about high taxes. High taxes affect everyone in this country, but they affect rural Canada more than any other place because of the different obstacles. Even the minister pointed that out.
Judging by the lack of spending in rural Canada over the years, it has been totally ignored. One thing that really hurt rural Canada and me specifically was the announcement by the government that when it came to infrastructure, the definition of small communities was 250,000. That is totally ridiculous. It is a blatant mockery. At first I thought it was just a sick joke. It is the same as taking a rural Canadian out to his barnyard, knocking him down in the manure pile and then stepping on his shoulders to make sure he gets good and dirty.
Rural Canada is short of funding for roads and bridges. On health care, there are doctor shortages. We hand over our cheques. For a long time the government reduced the funding that went to health care which hurt rural Canada a lot. After a lot of pressure from this side of the House the government finally agreed to put some of that money back in. That is good, but it hands the cheque over to the province without any direction.
I want to know what the government will do to address that rural Canada which the member across the way mentioned. Frankly, rural Canada is sick and tired of being used, bruised and abused.
Roy Cullen: Mr. Speaker, I certainly do not use the term “rural Canada” in any derogatory form whatsoever. In fact, my father was born and raised on a farm outside Montreal. As a youth I would go to the farm in the summers and bring in the hay and milk the cows, et cetera. I understand to some extent the challenges of farmers in Canada. We have a job to do to make sure that we preserve the life in rural Canada, the small farm.
A couple of years ago I worked with Ducks Unlimited on a proposal that would allow farmers, if they wished, to convert marginal farmland into ecological areas for wildlife and riparian areas. In fact, that thinking has advanced. I understand the problem of people living on farms and having to have other jobs just to make ends meet. There are areas on farms where there is marginal farmland that could be converted to other uses and provide some much needed capital to farmers.
With respect to the member's comment about health care, I thought I had been very clear that in the health accord we have asked, and the provinces and territories have agreed, that there be greater accountability, more transparency, more benchmarking and performance standards so that comparisons can be made between provinces.
Rural Canada also needs investments in infrastructure. The challenge there is the huge geography and the distances that are involved.
We have the challenges with world subsidies, the U.S. and European subsidies. I am hopeful that we will make some progress on that issue as well. We have a lot to do to support our farming communities across Canada. Our government is committed to doing that.

Statements By Members
Canadian ForcesHon. Keith Martin (Esquimalt—Juan de Fuca, Lib.): Mr. Speaker, on behalf of the Government of Canada and all members in the House, I would like to congratulate General Rick Hillier on assuming the post of chief of the defence staff of the Canadian Forces.
General Hillier's extensive experience and proven no-nonsense leadership will be instrumental in transforming our Canadian Forces to meet our security challenges in the post-September 11 environment.
He has served on many UN and NATO missions. Most recently he led 6,000 troops from 35 nations as the commander of NATO's international security assistance force in Afghanistan.
I would also like to congratulate outgoing chief of the defence staff General Ray Henault, who was elected to the post of NATO's most senior military officer as chairman of its military committee providing excellent advice and strong leadership.
On behalf of all members, I thank both generals for their profound service to our country. I look forward to working with General Hillier to strengthen the capabilities of our men and women who work in our Canadian Forces.
9/11 MemorialMr. Daryl Kramp (Prince Edward—Hastings, CPC): Mr. Speaker, I rise today to acknowledge the efforts of Mr. Paul Shier, a constituent of mine from the village of Tweed.
Like so many people around the world, Paul was deeply disturbed over the events of 9/11. While many expressed shock, anger, regret and sympathy, Paul was moved to create a lasting Canadian memorial.
With over 1,000 man hours of labour and talent, Paul created a massive 200 pound soapstone carving that truly captures the heroic efforts of the emergency personnel and the suffering of so many.
On March 6 and 7 of this year, Mr. Shier will travel to New York City to donate his tribute to the victims of 9/11. The statue will be displayed in the atrium of Bellevue Hospital, a few blocks away from ground zero.
Please join me today in congratulating the efforts and the commitment of Mr. Shier, and the thousands of other Canadians who have clearly demonstrated our solidarity with our American neighbours by standing with them in memory of that fateful day.
LiteracyHon. Judi Longfield (Whitby—Oshawa, Lib.): Mr. Speaker, I am pleased to rise today in recognition of family literacy day which was marked across the country on January 27.
Family literacy refers to the many ways families develop and use literary skills such as reading, writing, computation, communication, and problem solving skills to accomplish day to day tasks and activities, including sharing a bedtime story.
Literacy and the other essential skills are linked to quality of life, employment, health and self-esteem, and are critical to Canada's social and economic well-being in the 21st century.
Literacy begins with the family. When parents read to their children and provide a literacy rich environment, they show them that the written word is key to learning and that learning can be fun.
Children whose parents spend time reading to them achieve higher success in their education and their careers.
I encourage my colleagues in the House and all Canadians across the country to read to their children. I congratulate those who are dedicated to advancing family literacy skills in Canada.
Fleury FarmMr. André Bellavance (Richmond—Arthabaska, BQ): .Mr. Speaker, the owners of Fleury farm in Victoriaville, Jean-Albert Fleury, Ginette Boulanger and Jean-Claude Fleury, have just been awarded the title of Master Breeder, awarded annually to approximately twenty producers in Canada.
This distinction was given to this family farm in my riding for its entire herd and its management. This farm has 230 purebred superior Holstein dairy cows and heifers, and a total of 500 acres of forage and grain crops.
.The owners of Fleury farm were recognized at Holstein Quebec's annual meeting currently underway in Valleyfield and will be officially feted at the Holstein National Convention in Saskatoon in April. Holstein Canada will showcase the 21 nominees, including 6 from Quebec, in a brochure to be distributed throughout Quebec and Canada.
Congratulations to Fleury farm, which, by winning this honour, promotes agriculture in the Richmond—Arthabaska riding, known for its quality dairy cows.
Atlantic Canadian BusinessesMr. Michael Savage (Dartmouth—Cole Harbour, Lib.): Mr. Speaker, in the month of January I had the opportunity to visit a number of businesses in my constituency.
These businesses have several things in common. They are successful and employ many Atlantic Canadians. They focus on innovation, technology and the developing markets, not only in Atlantic Canada but around the world. Another thing they have in common is that ACOA has been involved in their success, not through grants but through loans, providing support and accessing capital investment, innovation, marketing and training.
These companies are forming the backbone of the Atlantic Canadian economy and providing jobs that are innovative, well paying and sustainable. Companies like Ocean Nutrition are finding great success based in Dartmouth with a plant in rural Nova Scotia and potentially plants around the world.
The Atlantic innovation fund has played a very strong role in ensuring the success of Atlantic Canada and it must continue. ACOA is a success story. I congratulate the leadership of ACOA, our current minister and those who have gone before him, for seeing the long term potential of Atlantic Canada and helping us to reach it.
Government OperationsMr. Guy Lauzon (Stormont—Dundas—South Glengarry, CPC): Mr. Speaker, Stormont--Dundas--South Glengarry is populated with honest hardworking taxpayers who have been ignored by the Liberal government for much too long.
Farmers have been waiting for 12 years to get an ethanol plant built in the riding and because of Liberal government dithering, the shovel is still not in the ground. Two major employers in Cornwall have recently announced layoffs totalling over 560 employees. One is relocating to the United States after trying to get help from the government for over two years.
My riding is within a stone's throw of Ottawa and we have a well educated, bilingual workforce and inexpensive office facilities. On two separate occasions I have urged the Minister of Public Works to show respect and compassion for my constituents by decentralizing some of the massive government operations located here in Ottawa to my riding.
Because my constituents have been such loyal Canadian citizens, I call on the minister yet again to immediately decentralize quality government jobs to my riding.
MunicipalitiesHon. Don Boudria (Glengarry—Prescott—Russell, Lib.): Mr. Speaker, I was pleased to learn that the Government of Canada has outlined to its provincial and territorial counterparts the details of how it will negotiate the new deal for cities and communities discussed in today's budget bill.
Starting this year municipalities in Ontario will share funding of approximately $1.8 billion spread over the next five years. This will be quite good for rural Ontario, particularly eastern Ontario.
I encourage the Government of Canada to quickly negotiate the particulars of this agreement with the province of Ontario so that municipalities in my riding and elsewhere will have access to much needed infrastructure programs. I know the minister is working very hard at this. I anxiously await this funding for my constituents.
International AidMr. Pierre Paquette (Joliette, BQ): Mr. Speaker, in London yesterday, on the eve of a meeting of G-7 finance ministers, Nelson Mandela challenged the leaders of the rich countries to reduce the debt of the poor countries, to significantly step up international aid, and to make international trade more equitable.
Mr. Mandela emphasized the urgent need to act promptly. Hon. members will recall that the Prime Minister made drastic cuts to international aid when he was finance minister. Now he has a duty to heed the heart-felt plea of the former president of South Africa, who said in his speech “Massive poverty and obscene inequality are such terrible scourges of our times—that they have to rank alongside slavery and apartheid as social evils”.
The Prime Minister must show some leadership and remedy his past errors. It is high time the government put a realistic plan in place to enable it to reach at least the minimum objective of 0.7 of GDP by 2015.
When the budget is tabled a few weeks from now, it will give us a good indication of how serious the Prime Minister is. This may be an opportunity for him to put his money where his mouth is.
Liberal Party of CanadaMs. Françoise Boivin (Gatineau, Lib.): Mr. Speaker, I am proud to be able to tell all Canadians that the Liberal women's caucus, of which I am the Chair, has included three resolutions among its priorities leading up to the biennial convention to be held in Ottawa in March.
These are early childhood education and child care, Canada's plan with respect to climate change, and last but not least, gender-based analysis, commonly known as GBA.
These resolutions, not one or two, but all three, will be debated at the convention, because the National Liberal Caucus has incorporated them in the five resolutions adopted in Fredericton.
The women's caucus also has great hopes that the hon. Minister of Finance will incorporate the principles of gender-based analysis in his upcoming budget, in response to our lobbying.
To quote a certain daily newspaper:
“What is hot this week?” Definitely the Liberal women's caucus who makes daily strong commitments toward real equality.
Government PoliciesMr. Tom Lukiwski (Regina—Lumsden—Lake Centre, CPC): Mr. Speaker, I have been looking back over the issues that have arisen in this Parliament and I have detected an interesting trend: special favours for strippers; taxpayer subsidized tattoos for convicts; and decriminalization of marijuana.
Suddenly it has become all so clear. The federal Liberals are the Trailer Park Boys of Ottawa. This explains a lot.
Our trade minister has not had much luck dealing with the U.S. on softwood lumber or beef, but a couple of years ago his department managed one significant success. It managed to enforce an anti-dumping ruling on the importation of American bingo cards. No doubt the good old boys back in the trailer park got good and cranked up about that one.
And to think most Canadians believe that Bubbles, Ricky, Julian and the rest of the gang reside in the Sunnyvale trailer park in Nova Scotia when they are really alive and well here in Ottawa sitting on the government side of the House.
Knights of ColumbusMr. Jean-Claude D'Amours (Madawaska—Restigouche, Lib.): Mr. Speaker, on January 29 I had the privilege of taking part in the 25th anniversary of Council 7503 of the Knights of Columbus, in the community of Saint-Joseph-de-Madawaska.
First, I want to remind this House of the commitment of the Knights of Columbus to their communities, all across Canada. Clearly the commitment and contribution of the Knights to many communities in Canada foster their communal and social development.
In that way, the Knights of Columbus of Saint-Joseph-de-Madawaska are no exception, and so I want to pay tribute to them today. The Saint-Joseph-de-Madawaska chapter is very active and certainly makes its community a better place to live.
Finally, I would like to thank the members of the Knights of Columbus of Saint-Joseph-de-Madawaska for inviting me to their 25th anniversary and I wish them many more years.
Post-Secondary EducationMs. Judy Wasylycia-Leis (Winnipeg North, NDP): Mr. Speaker, I rise to express NDP solidarity with students who are rallying this week in CFS Days of Action to assert their right to quality post-secondary education. Fifteen hundred students came out in Winnipeg on Wednesday, and hundreds more in Toronto, Sudbury and Windsor yesterday, demanding federal action to cut tuition fees and student debt.
Liberal majority budgets slashed billions of dollars from provincial education transfers, leading to major cost increases for students. More and more young people are being denied access to education they need for jobs and hope for the future. More and more families cannot afford to send their sons and daughters to university.
The Liberals promised $8 billion for post-secondary education in last year's election and New Democrats intend to use this minority government to hold them to that promise. We are here for students to ensure that this government no longer takes their needs for granted.
We want a day of action on post-secondary education from this government and that day is February 23, budget day.
Star of CourageMr. Ed Komarnicki (Souris—Moose Mountain, CPC): Mr. Speaker, I rise today to acknowledge Master-Corporal Jason Cory Hamilton, who is stationed at Trenton, Ontario, and whose parents, Russell and Fern Hamilton, are from Whitewood, Saskatchewan, in my constituency. They are in Ottawa today.
Today Jason will be awarded the Star of Courage, which is awarded for acts of conspicuous courage in circumstances of great peril.
On October 2, 2003, after their convoy's lead vehicle had struck an anti-tank mine, MCpl Jason Hamilton and Cpl Danny Matthews entered an undefined minefield to recover three of their stricken comrades near Kabul, Afghanistan. He and Cpl Matthews worked their way on to the dangerous terrain until they reached the first fallen soldier. After escorting the injured soldier back to safety to administer first aid, Cpl Matthews and MCpl Hamilton returned, advancing farther into the minefield, only to discover that the mine blast had claimed the lives of two other soldiers.
This is a salute to great acts of courage and bravery on the part of MCpl Jason Cory Hamilton.
Germain BoulianneMr. Stéphane Bergeron (Verchères—Les Patriotes, BQ): Mr. Speaker, as the shadow member of Parliament for the riding of Gatineau., I rise today to recognize the brilliant performance of Germain Boulianne, the first Quebecker ever to become a champion in the world Scrabble champion.
Mr. Boulianne, a resident of Gatineau and a translator right here in Parliament, won the highest honour last July at the world francophone Scrabble championships in Marrakesh, Morocco, in which more than 20 countries participated.
This sort of championship is not won without preparation. Germain Boulianne set himself a truly Olympic training regimen to prepare for this tournament, playing Scrabble for three to four hours every day. He had, in fact, won the Quebec championship six times before becoming world champion.
I would also like to mention that beautiful Quebec City will welcome nearly 1,000 players at the 36th world francophone Scrabble championships, from August 3 to 10, 2007.
Therefore, on behalf of all the Bloc Québécois members, I want to congratulate Mr. Boulianne, our own world champion from Quebec, and wish him continued success in this game, which showcases our magnificent French language.
Citizenship and ImmigrationMr. John Duncan (Vancouver Island North, CPC): Mr. Speaker, the Government of Canada was once known for its strong and principled backbone on human rights.
The behaviour of the Prime Minister in his recent visit to Beijing has only served to confirm that he is prepared to casually destroy this reputation by paying lip service to human rights in order to curry favour with Beijing.
The People's Republic of China desperately wants the return of Mr. Lai Changxing , who is in refugee hearings in Vancouver.
Chinese nationals only submitted depositions on behalf of Mr. Lai after a promise from the immigration minister that they would be protected and confidential. This promise was breached by Canadian authorities, who led Chinese police to Tao Mi. Now, over a year and a half later, she has not been seen since then.
The government has blood on its hands. When will the government have an accounting for Tao Mi ?
Conservative Party of CanadaMr. Russ Powers (Ancaster—Dundas—Flamborough—Westdale, Lib.): Mr. Speaker, the cracks in the Alliance Conservative Party are beginning to expand every day. Canadians are having confirmed what they suspected all along. This is not a real merger. Instead, the extreme social agenda of the Reform Alliance party is being imposed on the members of the Conservative Party.
Reports are coming in from across the country that the leader of the official opposition and his centralized office are forcing out moderates who refuse to adopt his radical social views. One former party executive in Toronto said that “democracy...is not being followed at all” under this Conservative leader.
In a February 4 Globe and Mail article, in New Brunswick the Conservative riding president in Moncton says there is an obsession by the party leadership to “have the ridings operate more or less by remote control by Ottawa...”.
The backlash to this centralized control was apparent when the Leader of the Opposition recently went to a GTA Conservative meeting and was heckled by his own members. Only this leader would be this out of touch with what--
The Deputy Speaker: Oral questions.

Oral Question Period
Sponsorship ProgramMr. Peter MacKay (Central Nova, CPC): Mr. Speaker, that was pathetic.
The Elections Canada database shows that a top Liberal organizer and Mr. Chrétien's golfing buddy and his wife donated over $10,000 to the former Prime Minister's 2000 election campaign and also contributed to the Liberal Party of Canada.
Let us see how this works. Corriveau prints all the signs and pamphlets for the Liberal Party for the 1997 election, has trouble getting paid by the party but somehow out of the blue lands a lucrative sponsorship program for millions of taxpayers' dollars. Then Corriveau donates money back to the Liberal Party. What a sweet deal. This damning information should have been before the Canadian public before the election.
Hon. Scott Brison (Minister of Public Works and Government Services, Lib.): Mr. Speaker, once again, Canadians want Justice Gomery to continue to work and do his inquiry. What they do not want is a parallel inquiry on the floor of the House of Commons, rehashing the same information but without the sage wisdom and management of a respected jurist like Justice Gomery. We know that the party opposite and the members opposite do not understand the laws of the land, so if they do not understand the laws of the land, why are they trying to conduct a judicial inquiry here on the floor of the House of Commons?
Peter MacKay: Heaven forbid, Mr. Speaker, that a question be answered in question period.
The Prime Minister promised Canadians that they would have enough information about the sponsorship scandal to make a judgment call about the rot and corruption in the Liberal Party before the election. Instead, the government shut down the public inquiry at the public accounts committee when things were getting hot.
Now information is coming out daily about how taxpayers' money was being funnelled through the sponsorship program to top Liberal Party organizers and the Liberal Party, donations going back to the Liberal Party from the public trust. Why was this information withheld from the public accounts committee?
Scott Brison: Mr. Speaker, the fact is that the government has cooperated fully with the public accounts committee and with the Gomery commission, in fact providing cabinet confidences back to 1993.
The fact is that the reason the hon. member can irresponsibly comment on the daily testimony before the Gomery commission is that there is a Gomery commission because of the courage and vision of our leader, the Prime Minister of Canada, who has actually done the right thing and has set up the Gomery commission to get to the truth, which is what Canadians want to happen.
Peter MacKay: Mr. Speaker, imagine the courage of calling an inquiry into the corruption of one's own party. That is pretty brave.
Jacques Corriveau, an important Liberal organizer, had trouble getting paid by the Liberal Party for his work on the campaign. However, he had no problem getting millions of dollars for contracts, via the sponsorship program. Just 24 hours ago, the leader of the opposition asked the Prime Minister if he had demanded that Mr. Corriveau pay back this tainted money.
Was this money returned—
The Deputy Speaker: The Minister of Public Works and Government Services.
Scott Brison: Mr. Speaker, it would best to avoid prejudging the work of Justice Gomery. We must wait for his report, which I look forward to reading. However, it is inappropriate to prejudge his work, daily here in the House of Commons.
Mr. Jay Hill (Prince George—Peace River, CPC): Mr. Speaker, once upon a time this Prime Minister told Canadians that he wanted to get to the bottom of ad scam. Thanks to Alfonso Gagliano's testimony at the Gomery inquiry it is now obvious to everyone, to all Canadians, that the ethics of the Liberal Party of Canada and this government have indeed hit rock bottom.
Now that the truth is finally getting out, why will the Prime Minister not keep his promise to Canadians and repay the public money used to finance Liberal Party campaign expenses?
Scott Brison: Mr. Speaker, once again they are commenting on daily testimony. They are slow learners over there when it comes to the laws of the land and the independence of a judicial inquiry. We have set up the Gomery commission to get to the bottom of this issue because that is what Canadians want to hear.
The fact is that Canadians also want to hear us in the House discussing important issues before the country, issues like health care, like child care, like the investments in Canadian communities, and they know that the reason why that party refuses to discuss those issues is that the Government of Canada and the Prime Minister of Canada are addressing those issues full square and doing the right things on behalf of--
The Deputy Speaker: The hon. member for Prince George--Peace River.
Jay Hill: Mr. Speaker, the government and the minister are the slow learners. Canadians want some answers to these questions.
Yes, we agree, the Gomery inquiry is doing its job and getting to the bottom of the dirty facts about the sponsorship program. More backroom Liberal Party deals are being unearthed daily.
The Prime Minister promised Canadians he would punish those found responsible. Will the Prime Minister now keep that promise and rout out the shady characters in his government who allowed this type of corruption to fester in the first place?
Scott Brison: Mr. Speaker, Justice Gomery is doing his work, and all Canadians will benefit from his work. We would be doing our work if we were to actually focus on the issues facing Canadians on a day-to-day basis, like agriculture, health care, our foreign policy issues, instead of talking about Justice Gomery's work on a daily basis.
They have no legal expertise over there. They do not understand the law of the land. Why are they trying to conduct a judicial inquiry here on the floor of the House of Commons?
Parental LeaveMs. Monique Guay (Rivière-du-Nord, BQ): Mr. Speaker, yesterday, Quebec minister Claude Béchard denounced the federal government, saying that it was asking Quebec families to contribute twice.
Instead of trying to save money on the backs of Quebec families, what is the Minister of Human Resources and Skills Development waiting for to make good on her 1997 promise by giving Quebec full funding for the first year of the parental leave program?
Hon. Jean Lapierre (Minister of Transport, Lib.): Mr. Speaker, a while ago I spoke to the Minister of Human Resources and Skills Development. She is still in negotiation with her Quebec counterpart. The negotiations are moving forward. We hope to come to a resolution. There is already a generous offer of $850 million on the table for the first year, which represents a considerable sum for Quebec families.
Monique Guay: Mr. Speaker, the first year funding is short $275 million. That is the reality. In 1997, the federal government promised to fully fund the first year of the parental leave program. It is the minister's refusal that has Minister Béchard saying that the current government is treating Quebec families worse than the previous government did.
How can the minister justify being so stingy with Quebec families? What is she waiting for to change her mind and give Quebec full funding for parental leave with no strings attached?
Hon. Jacques Saada (Minister of the Economic Development Agency of Canada for the Regions of Quebec and Minister responsible for the Francophonie, Lib.): Mr. Speaker, the well-being of Quebec families and their eligibility for parental leave is important to the minister and our entire government.
This is an extremely simple situation to understand. Negotiations are currently under way. Each party has its own position and interpretation. I think we have to give both parties a chance to negotiate to reach an agreement. One thing is certain, the floor of this House is not the place to solve this problem.
Mr. Yves Lessard (Chambly—Borduas, BQ): Mr. Speaker, if there is not enough money for parental leave, as the Minister of Human Resources and Skills Development claims, has it ever occurred to her that the reason for that may be that the government misappropriated the surpluses in the EI fund and used them for other purposes? If the government's financial resources are insufficient, it is the government that is responsible.
I want to ask the minister this. How does she plan to cover all the necessary expenditures for the first year of the parental leave program?
Jacques Saada: Mr. Speaker, I wish my hon. colleague opposite had taken the time to read the Employment Insurance Act, to grasp the constraints on the funding earmarked for parental leave which are set out in the act.
[Intervention]
Some hon. members: Oh, oh!
Jacques Saada: While I am trying to answer, there is a lot of noise coming from across the way. That will not change the reality, however, and the reality is that both parties are currently negotiating and that the only way to reach an agreement is by letting those involved negotiate outside this chamber.
Yves Lessard: Mr. Speaker, the reality is that close to $47 billion was misappropriated from this fund. The solution is simple. Instead of negotiating through press conferences, does the minister not think that she would be better inspired to give Mr. Béchard a call, confirming that she is prepared to settle the issue under the conditions set forth in the 1997 letter and to give Quebec the full amount back, with no strings attached?
Jacques Saada: Mr. Speaker, I would like to thank the hon. member opposite for suggesting that the minister phone her counterpart, with whom she has been in regular contact for the past several days.
I will repeat once more that, in this whole issue, no solution can be found until the negotiations between the parties are concluded. And the parties will not be concluding any negotiations in this place, here, today. That is not how it is done. We are going to take an intelligent approach and, more importantly, one that is sensitive to the well-being of families in Quebec.
The EnvironmentMr. Jack Layton (Toronto—Danforth, NDP): Mr. Speaker, in 1993, the Prime Minister promised to cut pollution by 20% by 2005. However, pollution has increased by 20%. So, the Liberals have not kept this promise.
Yesterday, Environment Canada issued a smog warning, which is still in effect for Montreal, Laval, Saint-Hyacinthe, Lachute, Drummondville and Quebec City. We are talking about a smog warning in February. Can the minister tell us who is to blame?
Hon. Stéphane Dion (Minister of the Environment, Lib.): Mr. Speaker, of course, more must be done to fight pollution. However, the hon. leader of the New Democratic Party does not have the correct figures. In fact, pollution is decreasing in Canada. There has not been a 20% increase in pollution. I do not know where he got that information.
Jack Layton: Mr. Speaker, this is unbelievable. The Arctic ice is melting, sea levels are rising, the prairies are drying out, and we now have smog in February. What is the government's solution? It is to call a 1-800 number. The number Canadians will be calling is 9-1-1 because they cannot breathe.
If we brought in mandatory emission standards for vehicles, we could cut smog. When will the government act so Canadians can stop choking on its broken promises?
Stéphane Dion: Mr. Speaker, it is true and the leader of the NDP is quite right that climate change is creating a lot of danger for the planet. It is true that Canada must do its share. We have an international commitment with regard to Kyoto. It is true that the automotive industry has to do its share.
We are now finalizing a very helpful negotiation. I am very confident that with the Minister of Natural Resources and all my colleagues, we will come to an agreement with the automotive industry.
National DefenceMr. Gordon O'Connor (Carleton—Mississippi Mills, CPC): Mr. Speaker, we know that the submarine acquisition was technically flawed. Now we have learned that the submarine training was also flawed.
A former submarine commander and training officer recently confirmed that to meet U.K. contract obligations, corners were cut in training standards both on shore and at sea.
The minister has led us to believe that all crew members were properly trained, yet we have the former training officer for submarines saying otherwise. Who should Canadians believe?
Hon. Bill Graham (Minister of National Defence, Lib.): Mr. Speaker, I believe the House would want to know that Mr. Kavanagh, who testified before the committee, was a training officer for the Oberon class of submarine, which went out of service 15 years ago.
This is an interesting observation by my critic. However, to be fair, the House should know the training has changed. We now use simulators, the same way airline pilots use simulators. There is a new way of training. One does not get as much sea time as one did before.
However, I can assure the House that when men and women go to sea, they are trained to do the job.
Gordon O'Connor: Mr. Speaker, he was a training officer for the Victoria, too.
The DND Portage la Prairie flight contract project, which has a potential value of $1 billion, has been tied up in the bidding process for 18 months. During that time the two bidders, Bombardier and Allied Wings, have had to extend their bid price three times. It has been reported that the contract award recommendation has been approved and the budget financing is in place, yet no public announcement has been made.
Given that the current Bombardier contract terminates soon, why is there a delay in awarding the new contract?
Bill Graham: Mr. Speaker, obviously these contracts are extremely important. We want to get it right. That is exactly what we do in the department.
This contract takes time. However, we are negotiating it in good faith with the two parties. We will sign a contract when it is in the best interests of the Government of Canada and the people of Canada to get the best contract we can for Canada.
Automotive IndustryMr. Gary Goodyear (Cambridge, CPC): Mr. Speaker, yesterday we warned that meeting Kyoto requirements could cost up to 450,000 jobs. The Minister of Industry said that it was no problem, that Technology Partnerships Canada would fix that.
The minister had better get out his famous Liberal chequebook because that translates into $27 billion at $60,000 per job.
Has the minister discussed this with the slush fund manager over there, the Minister of Finance?
Hon. David Emerson (Minister of Industry, Lib.): Mr. Speaker, the member knows not of what he speaks. We have had very good discussions with the automotive industry. My colleagues, the Minister of the Environment, the Minister of Natural Resources and myself, as well as other ministers, met this morning with the automotive industry. There is a very constructive solution that we hope will be put in place. The automotive industry will be stronger and stronger as a result.
Mr. Jeff Watson (Essex, CPC): Mr. Speaker, first the Minister of Industry said that Kyoto would cost us no jobs. Then he admits he misled us and Kyoto will cost us jobs. Now he says, “not to worry, we have TPC”.
TPC is supposed to be an R and D program, not an employment slush fund. Clearly, the government has not put any time into considering the impact of Kyoto on our important manufacturing industries, like the auto sector.
Will the Minister of Industry confirm that he has changed the mandate of TPC to include job protection commitments for Kyoto?
David Emerson: Mr. Speaker, I can confirm to the House that those people's thinking is so inconsistent, they should just sit down. They complain about TPC day after day, yet TPC is one of the key instruments for developing a competitive, strong, dynamic automotive industry in Canada.
Sponsorship ProgramMs. Pauline Picard (Drummond, BQ): Mr. Speaker, several million dollars in sponsorships were paid out to a major Liberal organizer and friend of the former Prime Minister. By all indications, these sponsorships were used to pay for professional services this Liberal organizer provided to the Liberal Party of Canada. On February 12, 2004, the Prime Minister said that those who are responsible will face the full consequences of their actions.
Has the government given André Gauthier, the lawyer assigned to recover the misappropriated funds, the mandate to investigate this specific matter?
Scott Brison: Mr. Speaker, I hope the Bloc Québécois understands the importance of independence in a legal inquiry. We have to wait for Mr. Gomery to finish his work. I am anxious to read his report.
However, it is inappropriate to keep discussing his work, here in the House of Commons, day after day.
Pauline Picard: Mr. Speaker, two weeks ago, the Prime Minister's political lieutenant in Quebec again promised to pay back the tainted money and said that the government has a clear cut case of sponsorship money being used to serve the interests of the Liberal Party. Does he not think there is only one thing to do: ask André Gauthier to investigate the matter?
Jean Lapierre: Mr. Speaker, indeed, we have submitted all the donations made to the Liberal Party to André Gauthier and the Gomery Commission and we are anxious to read the report. We hope the report of the Gomery Commission and the report of André Gauthier will allow the government to recover the money.
The EnvironmentMr. Bernard Bigras (Rosemont—La Petite-Patrie, BQ): Mr. Speaker, the Minister of the Environment recently announced the federal government's intention to table a new Canadian plan for applying the Kyoto protocol. On January 16, we learned of a memo from Natural Resources proposing to reduce greenhouse gas emissions by the major polluters from 55 to 37 megatonnes.
Can the minister guarantee that the new plan he will be tabling shortly will not lessen the obligations of major polluters to apply the Kyoto protocol in Canada?
Stéphane Dion: Mr. Speaker, first of all, it is not appropriate to comment on so-called government reports referred to in the papers.
Second, the Government of Canada will shortly be releasing its revised, corrected and improved 2002 plan, intended to get all Canadians on side in an effort to bolster the environment, reduce greenhouse gas emissions and create employment.
Bernard Bigras: Mr. Speaker, the minister has refused to answer the question.
The approach the federal government is preparing will unjustly penalize Quebec, which has already made considerable efforts. The Quebec environment minister wrote his federal counterpart some months ago to get Ottawa to sign a bilateral agreement with Quebec.
When does the minister plan to negotiate a bilateral agreement that will acknowledge Quebec's past efforts to reduce greenhouse gas emissions?
Stéphane Dion: Mr. Speaker, a lot of good things are being done in Quebec as well as elsewhere in Canada. They will be needed if we are to achieve our objectives. We must work in very close collaboration with all provincial governments. I have an excellent relationship with my Quebec counterpart.
In the plan we are working on, we will strengthen our ability to work with the Government of Quebec and with each provincial and territorial government.
The SenateKen Epp: Mr. Speaker, senators are appointed from a list of candidates. The Prime Minister has a list. Alberta people have a list, democratically chosen.
Could the Prime Minister give the House and Albertans just one valid reason for claiming that he cannot use the list that was provided by the people in a democratic vote?
Hon. Mauril Bélanger (Deputy Leader of the Government in the House of Commons, Minister responsible for Official Languages, Minister responsible for Democratic Reform and Associate Minister of National Defence, Lib.): Mr. Speaker, maybe we have more candidates for the Senate than we expected.
This matter came up yesterday, it has come up a number of times and the answer is the same. The government is open to Senate reform but we will not do so on a piecemeal basis.
Until a consensus is obvious and emerges among the provinces, we will not proceed with piecemeal amendments to reform the Senate.
Natural ResourcesTom Lukiwski: Mr. Speaker, last December the Minister of Natural Resources misled the House when he stated that he had never promised--
[Intervention]
Some hon. members: Oh, oh!
The Deputy Speaker: Order, please. I do not think anyone did anything deliberately, but we will listen to the end of the member's question, please.
Tom Lukiwski: Mr. Speaker, the Minister of Natural Resources stated that he had never promised a quick answer on the question of federal funding for the cleanup of uranium mines in northern Saskatchewan but media reports prove otherwise.
The minister also said that he would tour those mines last February. He did not.
The minister further stated that he would make this issue a top priority with his government. He has not.
My question for the minister is simply, why did you mislead the House and why--
[Intervention]
Some hon. members: Oh, oh!
The Deputy Speaker: Order, please. Sometimes things can happen that are not done deliberately, so perhaps the Minister of Natural Resources would like to clarify.
Hon. R. John Efford (Minister of Natural Resources, Lib.): Mr. Speaker, before I answer the member's question, I would suggest that the next time he should get someone competent to write his questions for him.
I have had meetings with the minister in Saskatchewan concerning the cleanup of uranium mines. As the minister it is my priority and it is a priority with the government.
I suggest that the hon. member just take his time and wait and it will be done.
Firearms RegistryMr. Garry Breitkreuz (Yorkton—Melville, CPC): Mr. Speaker, the Prime Minister promised voters a more open and transparent government and yet he hides a report on the $2 billion gun registry, a report he ordered and a report he promised would fix this mess. That report came back full of blanks.
Why is the Prime Minister blanking out the truth? Why is he doing the same thing Jean Chrétien did, keeping Parliament in the dark?
Roy Cullen: Mr. Speaker, the firearms program has a very positive cost benefit because it is working and it is contributing to public safety.
Police and other officials use the firearms program information. In fact, they are averaging 15,000 inquiries a week from the firearms registry online.
So far this year, 1,100 affidavits have been prepared by the Canada Firearms Centre to support firearms related criminal prosecutions and more than 12,000--
The Deputy Speaker: The hon. member for Yorkton—Melville.
Garry Breitkreuz: Mr. Speaker, that answer indicates that the government is shooting blanks and missing the target completely.
The Canadian Firearms Centre sent out letters with 770,000 free licence renewals but 46,509 letters came back as undelivered.
How are the police supposed to know where all the guns are when they do not even know where 50,000 gun owners live?
Roy Cullen: Mr. Speaker, the only member shooting blanks is the member opposite.
Police organizations are supporting the gun registry. In fact, I would like to quote the Canadian Association of Chiefs of Police President, Edgar MacLeod, who said:

There is no question that the system works and that it is a valuable tool. ...new gun-control system improves the screening of legal gun owners, increases their accountability and provides tools to prevent the diversion and misuse of firearms.

We are managing and containing the cost, and we will continue to do so.
AgricultureRuss Powers: Mr. Speaker, the corn producers of my riding are economically threatened by the extremely low commodity prices in Ontario as compared to prices paid for U.S. imports and to other Canadian producers. They are in fact being paid less than their production costs.
Will the Minister of Agriculture and Agri-Food advise me as to what action may be taken to assist the corn producers of my riding so that they can realistically continue to grow their produce for all Canadians?
Hon. Andy Mitchell (Minister of Agriculture and Agri-Food, Lib.): Mr. Speaker, corn producers are facing challenges in Ontario, which is why we have provided over $82 million through the CAIS program to producers in Ontario and why we have made changes in the program to cover negative margins to increase the cap.
That is why I am working with my provincial colleagues to contemplate additional changes. That is why the parliamentary secretary is taking a close look at structural changes within the various commodity sectors to deal with long term declines in income. That is why we are working within the WTO to make sure that our producers are able to compete on a level playing field. That is why collectively in 2003 we provided $4.8 billion of assistance to producers.
TaxationMr. Joe Comartin (Windsor—Tecumseh, NDP): Mr. Speaker, since 1986 the government has callously overtaxed Canadian recipients of U.S. social security benefits. This has caused great suffering to some of our most vulnerable seniors. The government can rectify this gross injustice created by this administration by a simple policy change.
I invite the finance minister not to wait for the budget, not to wait to be forced to do so by the combined opposition in the House, but to do it and to do it now.
Hon. John McKay (Parliamentary Secretary to the Minister of Finance, Lib.): Mr. Speaker, when a Canadian receives social security from the United States there is a credit of about 15% against that, so 85% goes into tax and 15% does not.
The hon. member has invited us to reduce that to 50%. The problem is that Canadians receiving $100, for example, from the Canada pension plan are fully taxed, whereas those who receive U.S. social security are then half taxed. That hardly seems like an equitable solution.
Foreign AffairsBrian Masse: Mr. Speaker, what the government could do is at least grandfather people so a justice could be done on this file.
A number of times I have asked the government about the patriot act. The U.S. patriot act violates Canadian privacy and exposes Canadian citizens and private companies to losing documents and information to the U.S. government upon its whim. Every time the government has denied there is a problem, it has left this chamber and taken corrective action. The most recent is a full audit of all outsourcing because of this significant breach of sovereignty.
My question is for the Minister of Foreign Affairs. Will the government get our files out of the oval office?
Hon. Diane Marleau (Parliamentary Secretary to the President of the Treasury Board and Minister responsible for the Canadian Wheat Board, Lib.): Mr. Speaker, that seems to be an odd question.
All departments are cooperating. We are certainly making sure that all our privacy concerns are met. Canadians can rest assured that their information is secure.
Natural ResourcesMr. James Bezan (Selkirk—Interlake, CPC): Mr. Speaker, the Province of Manitoba is currently in a legal dispute with the United States over water diversion from Devil's Lake in North Dakota. This diversion could potentially devastate Lake Winnipeg's water quality, fishing stocks and cause greater flooding along the Red River.
It has been suggested that foreign marine species, bacteria and disease could be catastrophic to Lake Winnipeg's ecosystem, affecting the tourism and fishing industries.
Will the government conduct its own review of the impact of the Devil's Lake water diversion on Lake Winnipeg and Manitoba's Red River?
Hon. Pierre Pettigrew (Minister of Foreign Affairs, Lib.): Mr. Speaker, that is a very important file for our government. We continue to pay a great deal of attention to it along with the American administration. It will certainly be a part of the first meeting I will have with Secretary of State Condoleezza Rice as I did with Colin Powell. Hopefully we will make progress on this most important file.
Aboriginal AffairsMr. Jim Prentice (Calgary Centre-North, CPC): Mr. Speaker, the Deputy Prime Minister continues to mismanage the residential school file. In November she told the House that her ADR program was a great success. In fact, we now know that only 25 ADR claims have been settled, out of a total of 88,000 cases, at a staggering cost of $100 million.
Her officials have publicly admitted that the system is deeply flawed. The AFN says that it is biased. The administration cost will be $2 billion, and it is abusive.
Why did the Deputy Prime Minister mislead the House? When will she stop re-victimizing aboriginal people and violating their human rights?
Roy Cullen: Mr. Speaker, the government is studying the report from the Assembly of First Nations. I should say that it takes some time for a program to get ramped up. As it is now, these claims are being settled.
The government is mindful of some of the recommendations and supports some of the recommendations coming out of that report, and will be responding in due course.
National DefenceMrs. Cheryl Gallant (Renfrew—Nipissing—Pembroke, CPC): Mr. Speaker, in the words of the military ombudsman, it was the “reliance upon the spurious claim of national security” that resulted in World War II veterans, who participated in chemical warfare experiments, to wait over 60 years for compensation.
JTF-2 troop injuries are also not reported due to concerns over the Official Secrets Act.
Why does the defence minister say that denying disabled special forces veterans' pensions is just a silly little problem about filling out a few forms?
Bill Graham: Mr. Speaker, I answered that question in the House the other day and, judging from today's question, I can only assume that the hon. member left after she asked the question and did not stay to listen to the answer.
As I explained to her, there is a problem. The JTF-2 forces know that their operations are secret. However in order for the Department of Veterans Affairs and ourselves to ensure they receive their appropriate pensions, we must find a way to reserve their right to privacy and the secrecy concerns.
The department is working on it. We have not denied the rightfulness of their claims but we must find a way in which we can do it consistent with the appropriateness of the system. We are finding that--
The Deputy Speaker: The hon. member for Bruce—Grey—Owen Sound.
Veterans AffairsLarry Miller: Mr. Speaker, when a country goes to war, it is a big undertaking. From troops on land, sea and air, to the supply ships and crews who provide troops with a means to carry out their mission.
After much urging from the opposition, this government reluctantly spent $1,000 per veteran to supplement their return to Europe for the 60th anniversary of Normandy.
Will the minister confirm that members of the Merchant Navy, who participated in the 60th anniversary ceremonies in May in Murmansk, Russia, will also receive the same $1,000 travel subsidy?
Bill Graham: Mr. Speaker, that is a very good question. I will have to take that under advisement and the veterans affairs minister will get back with an answer in the House next week.
AgricultureMs. Denise Poirier-Rivard (Châteauguay—Saint-Constant, BQ): Mr. Speaker, Quebec farmers, along with the Bloc Québécois, are speaking out against the federal government's inaction in managing the mad cow crisis. The federal Minister of Agriculture and Agri-Food had set aside money to help cattle producers, but the measures proposed were not adequate.
If the Minister of Agriculture and Agri-Food wants to do something useful for Quebec producers, why is he not doing his part by providing $11.4 million, which would represent 60% of the cost of production, making it possible to set a floor price of 42¢ a pound?
Andy Mitchell: Mr. Speaker, the reality is that actions have been taken. For instance, the Canadian Dairy Commission has provided a $5 increase in the price of milk, a portion of which has been allocated to deal with the issue of older animals.
Second, in the contemplated rule change that the U.S. has put forward, the ability to ship meat from older animals is one of the considerations and this would have a positive impact.
Finally, as the hon. member knows, we have been working very closely with the officials in the province of Quebec to determine what additional measures would be in order.
Denise Poirier-Rivard: Mr. Speaker, during a meeting with the leader of the Bloc Québécois, Quebec's cattle producers repeated that the federal Minister of Agriculture and Agri-Food's plan did not meet their needs. One way to improve the minister's plan would be to provide financial support for the two proposals to purchase slaughterhouses, which would have a solid impact on Quebec's cattle production.
Will the minister respond favourably to the wishes of Quebec farmers?
Andy Mitchell: Mr. Speaker, we have been very clear about our public policy in respect of slaughter capacity. We will support projects that increase the amount of capacity available to producers. That is the public policy. I have made it very clear to officials in Quebec that any proposal which deals with increasing capacity will be looked at very carefully.
Citizenship and ImmigrationMr. James Rajotte (Edmonton—Leduc, CPC): Mr. Speaker, Edmonton has not had a citizenship judge since July 3, 2004. This is completely unacceptable. I wrote to the former immigration minister in September 2004. I never even got an acknowledgment or a response.
Currently there are 4,000 people in Edmonton who are patiently waiting in line to be sworn in as citizens of this country, but the fact is that there is no judge to do it. There is a seven month wait. That is completely unacceptable. Why do people in Edmonton have to wait seven months to be sworn in as citizens of this country? When will a judge finally be appointed in Edmonton?
Scott Brison: Mr. Speaker, once again, Canada is recognized for both the fairness and the diligence of our immigration system. I know that the minister is working very hard to address the issue the hon. member has raised. We look forward to addressing it in the coming weeks and months.
Canadian Broadcasting CorporationMs. Bev Oda (Durham, CPC): Mr. Speaker, last week CBC reduced Ukrainian programming on Radio Canada International from three and a half hours per week to one hour.
Ukrainians deserve to have a reliable source of programming from a Canadian perspective and Canadians want our voices and values broadcast abroad. After playing a leading role in supporting millions in the lead-up to their elections and after, turning our backs on Ukrainians now is inexcusable. What will this government do to restore programs and ensure that Ukrainians do not lose any service on RCI?
Hon. Sarmite Bulte (Parliamentary Secretary to the Minister of Canadian Heritage, Lib.): Mr. Speaker, let me begin by first congratulating RCI for the wonderful job it does internationally. It is something we should be very proud of.
Let me also thank RCI and the CBC for actually postponing any kind of decision whatsoever to reduce programming to Ukrainians during the election. I would ask this House to commend CBC Radio-Canada and RCI for the fabulous job they did leading up to the elections in Ukraine.
Public Works and Government ServicesRoy Cullen: Mr. Speaker, my question is for the Minister of Public Works and Government Services. For some time now, unlike certain opportunistic opposition members, I have been working with the Department of Public Works and Government Services to allow companies that manufacture Canadian lapel pins in Canada, companies such as Bursan Limited in my riding of Etobicoke North, to be able to compete on a level playing field.
I would like to ask the Minister of Public Works and Government Services to--
The Deputy Speaker: Order, please. I am afraid this is my mistake, but of course a parliamentary secretary cannot ask a question of his own cabinet. I inadvertently recognized the member. I am sorry.
Human ResourcesMr. Mark Warawa (Langley, CPC): Mr. Speaker, in my riding of Langley lies a 43-year-old woman who is dying of cancer and has only weeks to live. Her sister has left her job and home to come and care for her. EI has denied the sister the compassionate care benefit.
Under the sloppy legislation brought in by this Liberal government, a sibling is not considered family. This dying woman has no husband and no children. Her sister is her family. Will the minister of human resources act now and immediately close this loophole so that the--
The Deputy Speaker: The hon. Minister of the Economic Development Agency of Canada for the Regions of Quebec.
Jacques Saada: Mr. Speaker, I am very much aware of the case of Ms. Brenda Armstrong and her sister who would like to assist, Theresa Flottvik. I would like to thank the member opposite for the letter that he sent to our minister. The minister is very sensitive to the human considerations in this file. She has undertaken to look at the file and get back to the gentleman in the near future.
Mark Warawa: Mr. Speaker, the EI act allows for the category of “other” to claim the benefit, but the year-old bill neglected to the define the word “other”. EI staff will not assume that it includes a sibling. The minister has the responsibility to correct this now and can make the necessary changes to include siblings under the definition of “other”. I want to hear from that minister. Will this minister immediately make these changes to allow this family to stay together?
Jacques Saada: Mr. Speaker, I can only reiterate the fact that the minister is very concerned with the issue and she will get back to the member opposite in the very near future.
Francophone and Acadian CommunitiesMr. Guy André (Berthier—Maskinongé, BQ): Mr. Speaker, when I asked the Minister of Canadian Heritage yesterday whether she had interceded with her colleague from Finance concerning the renewal of agreements between Canada and the Fédération des communautés francophones et acadienne, she was evasive.
I ask her again today: did she or did she not intercede with her colleague from Finance to ensure that the government will act on the FCFA's request to increase the funding levels for the Canada-communities agreements to $42 million annually, beginning with the upcoming budget?
Sarmite Bulte: Mr. Speaker, I am pleased to repeat what the minister said in the House yesterday. She is working with the community, with the minority community and with her officials. They are working to find the proper solution, but at this time I should like to also point out that the department has invested over $300 million since 1994 to support the development of official language minority communities throughout Canada and we should be proud of that.
HealthMichael John Savage: Mr. Speaker, my question is for the Minister of State for Public Health. In light of all the warnings recently from the World Health Organization about a potentially catastrophic flu outbreak, what are the measures being taken by the federal government to protect Canadians against an influenza pandemic?
Hon. Carolyn Bennett (Minister of State (Public Health), Lib.): Mr. Speaker, the World Health Organization has called the pandemic influenza plan for Canada one of the best in the world. I believe that is because of the amazing cooperation of the federal-provincial-territorial committee on this. One of their strong recommendations was the purchase of antivirals.
I am pleased to announce to the House that the Minister of Health this afternoon will be announcing an unprecedented investment of $24 million into the purchase of stockpiled antivirals to make sure that we will be ready before the vaccines can be available.
Foreign AffairsMr. Jason Kenney (Calgary Southeast, CPC): Mr. Speaker, 159 members of the House have written to the Prime Minister asking him to encourage the People's Republic of China to enter into direct negotiations with the Dalai Lama or his representatives to resolve the status of Tibet, a place that has been the victim of 50 years of terror and cultural genocide and the destruction of thousands of monasteries.
Has the Prime Minister done that, and if not, will he do that?
Pierre Pettigrew: Mr. Speaker, the respect for human rights, including cultural and religious freedoms, minority rights and freedom of expression and association are important objectives of Canada's views on the situation in Tibet. We are consistent. We have consistently spoken in favour of those rights. We do it at the United Nations. We do it in all of the forums in which we have the opportunity of doing it and we will certainly continue to express those values.
Public Works and Government ServicesMr. Pat Martin (Winnipeg Centre, NDP): Mr. Speaker, there can be no doubt that forced labour in Chinese factories really brings down the production costs of commercial items, but some of us believe that our emblems of our cultural heritage should be manufactured by Canadian workers in Canadian factories.
I would like to know if the minister for roadside hucksterism has had a chance to review the NDP's position. Will he tell us today that in the future, lapel pins or any other flag products for the House of Commons will be made here in Canada by Canadian workers in--
The Deputy Speaker: Is there no minister responding?
The hon. member for Ottawa--Orléans.
Mr. Marc Godbout (Ottawa—Orléans, Lib.): Mr. Speaker, my question is for the Minister of Public Works and Government Services. For some time now I have been preoccupied that our companies would be allowed to compete on an international basis for outsource production. I would like to ask the Minister of Public Works and Government Services to clarify whether or not he has taken any action to ensure that these pins are manufactured in Canada.
Scott Brison: Mr. Speaker, I want to recognize the hard work of the member for Etobicoke North, who has worked on this file for years. A competitive contract for the lapel pins was actually awarded to a Canadian company, which then sourced the pins to a Chinese manufacturer.
As a government we respect our trade agreements, but we do have a parliamentary exemption which we can apply within those trade agreements to purchases for members of Parliament and senators. As such, I have directed that Canadian pins made for the use of senators and members of Parliament will be manufactured in Canada from this point forward.
Points of OrderHon. Bill Blaikie (Elmwood—Transcona, NDP): Mr. Speaker, I rise on a point of order. I think the House would want to take note of the fact that the government showed disrespect for the protocol of the House of Commons.
There was a member who asked a question about the manufacture of the pins. The minister did not rise in his place to answer the question. Instead, he waited until he was asked a question by a Liberal backbencher.
I do not think, Mr. Speaker, I have ever seen before the government not rise to answer a question. We can understand why it did not because somehow it wants to take credit for the fact that it was actually a New Democrat who raised this and it is the New Democrats who changed the government policy when it came to the manufacture of these pins.
The Deputy Speaker: I thank the member for Elmwood—Transcona for that. Marleau and Montpetit is quite specific on the rights of members. It states on page 433 that during question period:

Members may not insist on an answer nor may a Member insist that a specific Minister respond to his or her question.

I appreciate the intervention of the member for Elmwood—Transcona and I believe that it is a point of debate rather than a point of order. On the same point of order, the member for Elmwood--Transcona with some new information.
Bill Blaikie: Mr. Speaker, I think you would also want to know just how entirely rare it is for the government to hide behind Marleau and Montpetit on this. It goes to show how profoundly embarrassed it was by its position on this--
The Deputy Speaker: I thank the member for Elmwood--Transcona. It is surely a matter of debate and not a point of order.
Hon. Tony Valeri (Leader of the Government in the House of Commons, Lib.): Mr. Speaker, just so that we are absolutely clear, I want the record to show that there is no minister of roadside huckster. Therefore, nobody got up to answer the question.
The Deputy Speaker: I thank the government House leader for that clarification.
Jeff Watson: Mr. Speaker, during some of the exchanges today the hon. minister of public works referred to members on this side of the House as losers. Clearly I defeated a former Liberal cabinet minister. That must not have included me. However, I think the remark should be withdrawn.
Scott Brison: Mr. Speaker, as a member of this government, I am certainly entitled as a member of Parliament to comment on the result of the last federal election and the fact is they did lose and they will lose the next--
The Deputy Speaker: I do think that is debate and everyone here is a winner, 308 of us are winners I would think.

Routine Proceedings
PetitionsDon Boudria: Mr. Speaker, I am pleased to present a petition on behalf of the hon. member for Peterborough. This petition draws to the attention of the House that a number of toxic substances are known to cause cancer. The petitioners ask that Parliament legislate that all processed foods that contain these particular items be properly labelled for the benefit of Canadians.
Mark Warawa: Mr. Speaker, I rise today to present petitions on behalf of over 600 Canadians across this land, including concerned citizens from my riding of Langley.
The petition calls for Parliament to amend the Canada Health Act and corresponding regulations to include IBI, ABA autism therapy for children with autism, as a medically necessary treatment and require that all provinces provide or fund this essential treatment for autism.
These petitioners also ask Parliament to contribute to the creation of academic chairs at a university in each province to teach IBI, ABA autism treatment, at the undergraduate and doctoral level in each province so that Canadian professionals will no longer be forced to go outside of our country for this critical training.
Hon. Lawrence MacAulay (Cardigan, Lib.): Mr. Speaker, pursuant to Standing Order 36, I am pleased to present two petitions. The first is from a number of citizens of Charlottetown and across Prince Edward Island.
The petitioners state that, “We the undersigned citizens of Canada, draw the attention of the House to the following: Whereas marriage is defined as a lifelong union between one man and one woman is the best foundation for families and the raising of children; whereas this definition of marriage has been changed by the courts; and whereas it is in the exclusive jurisdiction of the Parliament to define marriage; therefore your petitioners pray that Parliament define marriage in federal law as being a lifelong union of one man and one woman to the exclusion of others”.
Lawrence MacAulay: Mr. Speaker, my second petition is from my riding and it states, “We, the undersigned residents of Canada, draw the attention of the House to the following: That our children need protection from sexual exploitation, therefore, your petitioners call upon Parliament to protect our children by taking all necessary steps to raise the age of consent from 14 to 18 years old”.
Charlie Penson: Mr. Speaker, I have one petition to present today. It has been signed by 199 people from the Peace River riding. The petitioners ask the Government of Canada not to collaborate with the Americans to build their ballistic missile defence shield.
Questions on the Order PaperHon. Paul Harold Macklin (Parliamentary Secretary to the Minister of Justice and Attorney General of Canada, Lib.): Mr. Speaker, Question No. 27 will be answered today.
Question No. 27Mr. Rick Casson: With respect to the proposed plan by Correctional Services Canada to institute a needle-swapping program to combat the spread of blood-borne diseases in prisons, what are: ( a ) the expected duration of this program; ( b ) the locations of any Correctional Services Canada institutions which will be involved in the program; ( c ) the expected short-term and long-term costs of the program; ( d ) the number of prisoners to be involved in the pilot program and in the main program to follow; ( e ) a summary of concerns directed to the Deputy Prime Minister and to the Minister of Public Safety and Emergency Preparedness from the unions representing prison guards and other prison workers regarding this program; and ( f ) the expected amounts of payments to private medical practitioners assisting in the establishment and maintenance of the program in Canadian prisons?
Hon. Dominic LeBlanc (Parliamentary Secretary to the Leader of the Government in the House of Commons, Lib.): Mr. Speaker, I am informed as follows:
Correctional Service Canada, CSC, has no plan at this time to implement a needle exchange program and therefore has no information to provide in response to parts (a), (b), (c), (d), or (f) of the question. In response to part (e) of the question, CSC has conducted a review of correspondence received by either the commissioner and/or minister and has found no record of any letters from the Union of Canadian Correctional Officers, UCCO, on this topic. However, please note that, at a meeting of the National Joint Occupational Safety and Health Committee of March 24, 2004, the UCCO representative expressed concerns regarding the implementation of a needle exchange program. CSC clarified that it has not received a mandate to implement such a program at this time, and the UCCO representative was asked to ensure that UCCO members recognize that no plans in this regard have been made.
The Public Health Agency of Canada will need to review and analyze the Canadian HIV-AIDS legal network's report in order to provide formal public health advice to Correctional Service Canada on the prevention and control of infectious diseases in prisons.
It is premature to comment on specific programmatic issues until this analysis is completed and Correctional Service Canada has had the opportunity to consider the advice and/or recommendations of the Public Health Agency of Canada.
Under the Canadian strategy on HIV-AIDS, Correctional Service Canada receives $600,000 annually to support prevention and education activities in federal correctional institutions. Correctional Service Canada is the lead on this part of the file and should answer specific questions about funding. However, the Public Health Agency of Canada provides funding to the legal network, the organization responsible for the report, through the Canadian strategy on HIV-AIDS. The legal network is responding to media enquiries about the content of the report. Correctional Service Canada may ask the agency for formal advice and recommendation on this issue.
To enhance our efforts, federal funding for the Canadian strategy on HIV-AIDS will double over the next five years to $84.4 million.
Paul MacKlin: Mr. Speaker, I ask that all remaining questions be allowed to stand.
The Deputy Speaker: Is that agreed?
[Intervention]
Some hon. members: Agreed.
[Stage Direction]
The House resumed consideration of the motion that Bill C-33, a second act to implement certain provisions of the budget tabled in Parliament on March 23, 2004, be read the second time and referred to a committee.
Guy Côté: Mr. Speaker, I would like to highlight the very accurate observation the hon. Speaker made earlier this morning—following the presentation by the Parliamentary Secretary to the Minister of Public Safety and Emergency Preparedness, if memory serves—about past, present and future budgets actually all having things in common.
Where this government is concerned, these are: interference in the jurisdictions of the provinces and Quebec; poor budget forecasting; transfer of this Parliament's money into foundations to shield it from scrutiny by parliamentarians; mismanagement of the employment insurance fund and robbery of $46 billion; underfunding of equalization transfers; forecasts for the next five years which include reserves for contingencies and economic prudence larger than the estimated real surplus.
In his presentation, the Parliamentary Secretary to the Minister of Public Safety and Emergency Preparedness indicated that resolving the health management issues in Quebec and the provinces will take more than just money. The Liberal government claims to be a great health care manager prepared to take its place in this area, which is clearly Quebec's jurisdiction.
What kind of expertise does this government have in health care management? How many hospitals is it managing and how many employees work for the health department?
Roy Cullen: Mr. Speaker, I will respond to the questions and comments from the Bloc Québécois member. If the government runs a surplus, that is good news, in my opinion, not bad news. We can pay down the debt with each surplus.
I said that we must invest in Canada's health care system. At the same time, we have to take a closer look at how that system works.
We do not have the expertise at the federal level, unlike what the member was implying. We have the responsibility to provide national standards and funding, and it is up to the provinces to deliver health care.
What we have said and the commitment we have from the provinces and territories is to have greater accountability and transparency, more public disclosure of what results are being accomplished. This is not intruding into the jurisdiction of the provinces. In fact, the provinces have agreed.
With respect to the province of Quebec, there is a slightly different way of institutionalizing that, but the results are the same. Quebeckers and all Canadians deserve the right to know how their tax dollars are being spent and the kind of value for money they are getting for their tax dollars in the health care system compared to other provinces. That is a reasonable expectation of Canadians and Quebeckers, and that is what we are all committed to.
Mr. Joe Preston (Elgin—Middlesex—London, CPC): Mr. Speaker, here we are at second reading stage of the budget implementation act. Citizens will ask if this is the budget already. No, they should not be fooled; this is about the 2004 budget. The government was so concerned about these changes to Canadians' lives and here we are still speaking about them on the eve of the finance minister's next budget. It is important before we get to a new budget that we look back on the old budget and what was not in it.
We Conservatives have asked the government for tax relief for low and middle income Canadians. It has become more evident of late that despite bragging about great reductions in taxation, Canadians continue to say, “Show me the money”. Despite stated reductions in taxation, the hardworking people of Elgin—Middlesex—London and the rest of Canada have less money in their pockets.
We must find a way to offer needed services to the citizens of this great country and to stimulate the growth of our economy. We must also ensure that any and all money taken from Canadians in the form of taxes, in payroll deductions, or in fees by the government is treated with the respect it deserves. We must remember the source of these funds. The money comes out of the pockets, the wallets, the bank accounts and the piggy banks of Canadians. These funds belong to the people, not the finance minister.
It is the job of the government to wisely collect, account for, and prescribe spending that the country needs to support its people, remembering that the money belongs to the people. We must ensure that only the amount needed to accomplish this and the needs of Canada is taken away from Canada's citizens.
The habit of huge surplus budgets must end. We must, as suggested, implement a fully independent process for forecasting the government's financial situation. The government has proven either through deceit or ignorance that it cannot be trusted not to take billions and billions more from taxpayers than is needed to do the job. If we just left these funds with Canadians in the first place, we would save the cost of collection and influence the disposable incomes of all Canadians.
The government must also ensure that the tax dollars and other funds sent to the government are treated with the respect they deserve. We must erase the waste. The government has a legacy of waste and mismanagement.
One of the areas of waste in this implementation act is still the Air Travellers Security Charge Act, which should be renamed the “something really bad happened so we found a new way to take money from hardworking Canadians act”. This tax needs not to be reduced but eliminated. It is a drag on tourism. It is causing our airports to be expensive places to fly out of. We have continually asked for that tax to be eliminated, but we have not been listened to. We were correct that more money was being taken in than was needed for airport security. Thanks for listening and finally lowering the tax. The next step is complete elimination.
This is just another example of wasteful action on the part of the government. Canadians value their earnings, it seems, greater than the government does.
With the waste in the sponsorship debacle, the gun registry fiasco, and budget errors, the waste is permanently set into each Canadian's mind. Many Canadians cringe each time they send money or have it taken from them when they think of the wasteful areas in which the government has spent it.
Canadians are fully aware of the employment insurance fund hoax. Many young low income earners are stolen from on every paycheque with EI deductions for a program they cannot use. Employers are paying matching contributions into a fund that should be used as an emergency income support fund to assist workers who are out of work through no fault of their own. Instead it goes into a government slush fund. The use for which EI was designed is not being followed.
The bill makes some small attempts at small business tax relief, but in true dithering fashion it does not go far enough.
In the next budget we must see more tax relief. This brings me to the third and perhaps most important area of concern, taxes. Canadians are too heavily taxed. This kills jobs and causes our economy to grow at less than potential. Lower taxes must be a priority and the pace of implementation must be increased.
We continue to hear about the largest tax decrease ever given. The problem is that it is in the future. It is similar to having a sale at the store for washers and dryers 10 years from now. It sounds great if we are there to take advantage of the world's greatest tax decrease.
Starting with low and middle income wage earners, we can improve the quality of life and stimulate spending. That is where it can help the most.
We must see bold attempts at substantial tax relief in the small business sector. The government must stop its practice of half-measures and inadequate solutions and go the whole distance to help the economic engine that drives Canada, the small businesses of this country.
Through tax reduction in this sector we can assist in dealing with the rising dollar and the ever-rising costs. Small business has been crying out for tax reduction and all it has received is a substantial reduction in the income of small business owners.
In conclusion, Bill C-33 has arrived too late. It accomplishes too little and sets expectations for the next budget too low. Let us hope the finance minister is listening to us this time.
Don Boudria: Mr. Speaker, I am pleased to take part once again today in the debate on the budget implementation bill.
I had the opportunity to give a brief speech in the House a few days ago in anticipation of the coming budget. I am taking this opportunity to remind the House again of the importance of various initiatives in the previous budget and also, of course, of what needs to be done to ensure the prosperity of Canadians.
I neglected to mention when I started that I will be sharing my time with the hon. member for Davenport.
The last budget included a number of extremely important programs, which deserve mentioning. For example, the New Horizons program was reinvented, if that is the right word. I invite all members, especially those few—I know there are not many—who might be inclined to vote against this budget implementation bill, to remember that the new New Horizons program is in this bill.
So we should be proud of this but also support it so that these programs are implemented. This is an excellent initiative. I want to take this opportunity to ask the Minister of Finance, in the coming budget, to increase the funding allocated for the renewal or reinvention of the New Horizons program, which we are familiar with from a number of years ago.
I was surprised, even astonished, earlier today when I listened to the hon. member for Stormont—Dundas—South Glengarry. He and some of his colleagues, the extreme right of the members opposite, claiming that the Government of Canada has not done enough for rural Canada. A little later, another Conservative member, the one who has just finished speaking, told the House that we should simply stop collecting tax money and redistributing it. That would certainly further worsen the situation in rural areas.
That is the Conservative position. Here is why I say that: in eastern Ontario, thanks to the last budget—that is, the one before us today in this budget implementation bill—we have a program to help rural communities in eastern Ontario. In other words, all of eastern Ontario except Ottawa and Kingston.
This program—it is only a one-year pilot program and I will come back to that later—is intended to help rural communities. Its aim is to give them a chance to get ahead. Thanks to the intervention of the eastern Ontario caucus which is so ably chaired by the hon. member for Northumberland—Quinte West, thanks to the actions of the Minister of Finance and the Prime Minister, thanks to the association of mayors and reeves of eastern Ontario, who also favoured this program, we have obtained it. Unfortunately, it will only last one year. Therefore, the first thing we want is to have this program confirmed in this bill. The other thing we want is to make it permanent so that in the future, eastern Ontario's rural communities will be able to move forward.
It is important to say this for the benefit of the people in the riding of the hon. member for Stormont—Dundas—South Glengarry, who has made negative comments about this program all over eastern Ontario. If he votes against it, his voters will call him to order, as they should. The same may be said of the other Conservative members who might be tempted, in their usual bumbling manner, to vote against the Minister of Finance's excellent bill.
Returning to the upcoming budget, this morning I spoke with some farmers from my riding who telephoned me because of yesterday's debate on agriculture. As you are aware, Mr. Speaker, the Conservatives wanted to see the government take a unilateral step concerning one of its programs, which would have eliminated the provincial component. As a result, farmers would have ended up with 60% of their benefits, rather than the 100% they have today.
Needless to say, we on this side of the House are not in favour of that approach. Farmers are suffering enough already without losing 40% of their benefits.
However, we do have the package for the mad cow crisis already mentioned. We need to step up our assistance to farmers, but we must not neglect the needs of other agricultural sectors. For instance, it will soon be spring planting time, and unfortunately a number of farmers in my region have not been able to make early seed purchases. The earlier you buy, the better the price. But they have had to wait because they are short of money.
They are having serious problems. Last year's crops did not bring the prices they ought to have on the North American market. So incomes are down and farmers are increasingly in need of advances for purchasing their seed.
I hope that the hon. Minister of Agriculture and Agri-food will be able to enhance this program in his budget and thus increase the amounts allocated to the advance payments program I have just described.
That is what I wanted to touch on briefly today in this connection. It is to be hoped that the Minister of Finance will come up with a good budget and that we will all acknowledge what he and his predecessors have accomplished since we became the government in 1993.
I would like to close with the new unemployment statistics released today. Once again, the news is excellent. The government and the Minister of Finance deserve our congratulations. In the past years, we were one of the few G-8 economies to have created employment. We are also the only one among that illustrious groups of nations to have managed to achieve a balanced budget, and better yet to have paid off the debt accumulated by previous governments.
Do we need to remind hon. members of the last Conservative government, the Mulroney government, one of whose members I see across from me as I give this speech I spent a long time preparing earlier today? That hon. member must be aware that close to one-half of the debt accumulated during the entire history of Canada was accumulated by a single prime minister. That person, we must admit, was a Conservative Prime Minister, Brian Mulroney to be precise, he of the same political stripe as the chief whip of the official opposition sitting across from me, much as it may pain him to accept that. It is, however, reality.
Over those 10 years, our Liberal government has not only presented balanced budgets—I think we are up to seven in a row—but it has also paid down the accumulated debt, created employment and achieved a rate of unemployment that is far lower than ever before. I congratulate the Minister of Finance and all his team on these achievements.
I am therefore calling upon hon. members to support his bill and, of course, to support the excellent budget we will no doubt be seeing in the next few weeks, hopefully including extra assistance for our farmers.
Ken Epp: Mr. Speaker, it is always a pleasure to listen to the member. In previous times he was probably the best House leader that the Liberal Party has ever had. I would like to congratulate him for some very good work in this Parliament.
I have a couple of comments that I would like to make about his speech, one which I really want to emphasize.
The Liberals love to say, as he did again, that it was during the time of a Conservative government that the national debt rose at unprecedented levels. The mathematics of that is true, but all one has to do is look at the exponential curve on the growth of the debt if no payments are made toward it. I have taught mathematics, and I did the mathematics on this.
In 1993 I ran against a Conservative candidate and a Liberal candidate. The Liberal was way back when the polling was finally done. It was during that time when I did this math. The Conservative candidate said that the Conservatives had not added, through any program borrowing, any money to the debt. Over the nine years of their mandate, they had a balanced budget on program expenditures.
I checked this because I argued with this guy on the hustings. Having a little knowledge of math and finance, I checked it out and he was right spot on.
If we look at the debt the Conservatives inherited from the Liberals in 1984 and look at the debt in 1993, it is almost exactly equal to the amount of debt that the Liberals left them with accumulated interest. One could say that the Conservatives were in error in not addressing that debt more quickly. However, that is like saying an archer has shot an arrow and it is somebody else's fault it met its mark because somebody else should have caught that arrow in the air. It was a difficult time.
I would like to correct the member on that. It was not the Conservative's fault. It was a Liberal inherited debt from years past that caused this, and we are still burdened under it.
I would like the member's response, if he has one.
Don Boudria: Mr. Speaker, I want to thank the hon. member for his kind words. He was a House officer for his party for some time and we had the pleasure of working together.
The hon. member confessed that it was the Conservatives who were responsible for what I thought was half or so of the accumulated debt in the history of Canada, all of it under one prime minister, Brian Mulroney. His successor only had a summer job, and she was kicked out right away.
If I understood the hon. member correctly, he was apologizing for Brian Mulroney for having brought us one-half of the accumulated debt in the history of Canada based on the fact that it was not a particular kind of deficit, but another kind of deficit. I have never heard of Canadians being more satisfied because program money was mismanaged as opposed to some other kind of money. I do not think that would wash with Canadian taxpayers.
Half of that debt was so created. No new debt has been created in the country for seven or better of the last 10 years. We have repaid accumulated debt. Almost two million more Canadians are working today than were working when we came to power in 1993. Those are the facts. New numbers have come out today. There has not been an increase in unemployment in the middle of winter, and that is almost unprecedented. That is the kind of good management we have had under this government. I am proud to be a member of this team.
I ask people to vote for the bill because it has excellent things in it. I am anxiously awaiting an even better budget, if that is possible, on February 23.
Mr. Mario Silva (Davenport, Lib.): Mr. Speaker, I have had the pleasure to listen to members from both sides of the House speak on the issue of the budget. We have to keep in mind that Canada is the envy of the world in many respects, particularly in our financial situation. We have had seven consecutive budgets. We have had unprecedented surpluses in our budget as well, which makes us the envy of many places around the world.
At times, when listening to the debate, we forget to praise and recognize that Canada has put itself in the world stage, which is a remarkable feat. Because of these unprecedented balanced budgets and the measures taken by previous finance minister, now the Prime Minister, to put us in this great economic situation, we can look at investing in some of our key priorities that will put forward the social agenda for the country for the years to come.
In particular, an area I am most interested in is the cities. It is something for which I have a great passion, having been a municipal councillor for almost 10 years in the city of Toronto. The cities were not just crying out for money, although money is extremely important. They were crying out for recognition by the federal government that cities would play a big role in the decision making and for respect. I believe we have managed to do that.
The Prime Minister has spoken with many of the leaders of municipalities across the country. He has demonstrated time and time again that he wants to listen to their concerns and act on their suggestions. They greatly appreciate the Prime Minister giving a hand to help them.
In particular, the GST has saved municipalities like the city of Toronto some $50 million annually. That is a tremendous saving. The budget of Toronto is an extremely large budget of about $7 billion, but $50 million goes a long way to help the city deal with many of the financial burdens that it faces, specifically in delivery of direct services.
Another core issue that we are moving forward with is the gas tax. The announcement by the minister has been extremely well received by municipalities. It is another sign that our government and the Prime Minister want to work with the municipalities. The Prime Minister does care about their concerns and is doing everything he can within his power to ensure that cities get what they deserve. They very much appreciate the incredible amount of cooperation and goodwill that has been exhibited by our government and our Prime Minister.
Another area that is very important is public transportation. I particularly admire the fact that both the Prime Minister and the minister have stated over and over again that they want to move forward, not just with the GST rebate and the gas tax, but also with the issue of Kyoto and linking its obligations to meet the protocol. The moneys to be given to the municipalities is a very strong move forward in support of the importance of meeting the Kyoto protocol and our concerns about the environment.
There is a link when we talk about helping our cities. Cities are in many ways at the forefront of dealing of issues of the environment and issues around climate control. What better way in Toronto than to deal with the whole issue of public transportation? The Toronto transit system carries about two million passengers daily. In many ways that takes away the reliance on cars which in turn reduces smog.
Time and time again Toronto has faced many problems with smog in the summer. It is quite critical. Strengthening public transportation is essential in order to deal with the issue of smog and climate change.
This is a very important move at a very critical time. The government has pushed forward the Kyoto protocol agreement. Cities are moving forward on issues like public transportation. A link is being made between the gas tax rebate and Kyoto. This is fundamental. I am very proud to see that the government is moving forward very strongly in this area.
As a government and as a party, we have committed to health care, a fundamental issue to Canadians. Certainly the signing of the health accord with the premiers is fundamental in ensuring that we are on solid footing for years to come in Canada. I am very pleased to support the government. All of us should take great pride because it was not just an agreement reached with the Prime Minister. It was reached by the Prime Minister in conjunction with all the provincial premiers, many of them from different political parties. They came together, understood the importance of health care to the citizens of this country and were very proud signatories to this historical agreement.
We are moving forward on the issue of child care. The minister is meeting with his provincial counterparts. We hope to have an agreement signed soon. The government is quite committed to moving forward on child care. I had the privilege of sitting on the human resources committee. This issue has been dealt with and discussions are ongoing. We have heard from agencies and community groups who very much want the government to move forward on this proposal. We are encouraged by the goodwill of people in the communities and agencies. The minister's discussions with his counterparts have been extremely successful.
We are very happy to be moving forward on these very important issues. I want to state once again my profound thanks to the former finance minister, the Prime Minister, for the incredible direction in which he has taken the country. We thought years ago Canada was headed toward economic oblivion and that we would not have solid foundations on the issues of employment insurance and pension plans. On many other fronts we thought we would not have the money but it is now a decade later and we have the money and Canada is on a very good, solid footing.
It is a balanced approach. There are those in the House who would like to put all the money into one specific area. The government always looks to balance the budget in a way that provides the social service programs Canadians need and deserve, and at the same time makes sure that we are on solid footing. We do not want to forget our obligations to maintain a competitive economy. We must also look at the tax cut measures that were taken by the government. It is a balanced approach. I think Canadians appreciate that the government has put the economy on a good solid footing for many years to come.
Mauril Bélanger: Mr. Speaker, I have listened to the speeches of the hon. member for Glengarry—Prescott—Russell and the hon. member for Edmonton—Sherwood Park. They cited many figures and talked a lot about Canada's debt. I am no expert on the matter, but I have some figures that might give an indication of the extent of the debt at certain times in the recent history of our country.
In 1983-84, when the government changed, the debt was—if I recall correctly—roughly $198 billion. In 1993, when there was another change in government, the accumulated debt had reached $498 billion.
Mon colleague from Glengarry—Prescott—Russell, who said that the Mulroney government had almost doubled the debt, is mistaken. In fact, the Mulroney government more than doubled it. The debt went from some $200 billion to nearly $500 billion. Naturally, in 1993, during the first year the newly formed Liberal government was in power, a $42 billion deficit was added to the debt for the 1993-94 fiscal year.
For two or three years more, we continued to run deficits. Fortunately, they decreased year by year, and we finally managed to balance the books. For the past seven years, we have been generating budgetary surpluses. With these surpluses, we have been able to reduce the debt by $60 billion to, I believe, $501 billion now.
There is another important factor in all this. Hon. members should know that the debt to GDP ratio has decreased even more significantly. When the Liberal government was formed in 1993, the ratio was somewhere around 75%, while today it is less than 50%, which is why it is important to pass this bill.
Mario Silva: Mr. Speaker, the previous speaker was absolutely correct in that we have reduced the deficit by $61 billion and there is an incredible savings to the taxpayers of over $3 billion annually. This is a remarkable feat for the government. Today we can look at investing in child care, health care and our cities because we have done such a tremendous job over the years of balancing the books and creating a surplus for this country. This is a very historical moment which we have arrived at because of the good management and good stewardship of the government.
Brian Masse: Mr. Speaker, I would like to ask my colleague a question as a former municipal councillor. I know he is very proud of the Prime Minister's moving money from the GST file and the cities do not have to pay it any more, which is really what it is. First of all, why were they paying it in the first place? Why does the government not refund the money it stole from them over the years to begin with? What about school boards and other public institutions that currently have to pay GST? Why are they not worthy of having that burden removed?
Mario Silva: Mr. Speaker, for many years, actually for most of the history of this country, the cities had very few dealings with the federal government. The attitude of most federal governments was that cities were a provincial jurisdiction and according to the Constitution they dealt with the provinces, and the federal government dealt with the provincial governments.
It was this government that realized that the cities and the communities across this country needed assistance and it needed to ensure that the federal government had a presence. I would like to congratulate the government for dealing with issues like the GST and the gas tax. It is one way in which we are showing good faith and good judgment in our relationship with the municipalities and cities throughout this country, something which is quite historical and unprecedented. I would like to use this opportunity to once again thank the government.
Ken Epp: Mr. Speaker, I had totally not intended to speak in this debate. I know that some people are eager to get out of here, but I could not let this debate stop where it is.
The parliamentary secretary made a statement and the Liberals are trying to pin our country's debt on Brian Mulroney and the Conservatives at that time. I tried to do that in 1993 when I was running for Parliament against the local Conservative candidate as well as the Liberal. The fact of the matter is that Brian O'Kurley, who was a member of Parliament during that time, got up during the all candidates debates and he kept on saying that in 1984 the Conservatives had inherited this debt from the Liberals. He said that the Conservatives had a balanced budget on program spending and that they did not spend more on programs than the money they took in.
I believe in dealing honestly with people. As I said before, being a mathematician I checked the figures out. Since this issue has come up this afternoon, I got out my little scientific calculator which I never leave home without, and I calculated the numbers.
I do not know whether the numbers given from the other side are accurate. Unfortunately, I do not remember the exact debt way back in those years, but I am going to use the numbers that the member used. I will accept that in 1984 the debt was $198 billion on the premise that he is correct and that it grew to $498 billion. Those are the numbers that he used. We will use those for this illustration.
The ratio of that debt is about two and a half times. In other words it grew in nine years to two and a half times its original size. All we have to do is take the ninth root of two to find out the interest rate. That is exactly what I did in just a few seconds. It comes to 10.7916749 to be precise, but it is basically 10.8%. That was the going interest rate during those years.
We could say that the Liberals over a number of years spent way more money on programs and waste than they took in. They borrowed money year after year. The debt grew to $198 billion by 1984 when the Liberals were properly turfed out.
Then the Conservatives had a short time of nine years during which they balanced the budget. They did not spend more on programs. As I said before, they could be held accountable for not attacking the debt and the deficit sooner. We could say that, but the amount of the deficit every year was equal to the interest payable on that debt that they had inherited. That is the fact.
The sum of $198 billion compounded annually at 10.8% over nine years is worth $498 billion. It is a shameful Liberal legacy that we have in our national debt.
The Liberals like to crow that they have brought this under control. I remind members that in 1993 when we first stood on this side and started hammering them on the deficit and the debt, we were called every unsavoury name in the English language, and probably the French language too. I guess that is one time I was glad I did not understand French, when they were calling us all sorts of names.
The Liberals were really ripping into us because we were so un-Canadian. We wanted to stop the spending and the borrowing which was putting our future generations into more debt. The Liberals finally came around.
Herb Grubel was our finance critic at that time. He wrote a very fascinating book when he retired from politics after one term. One of the things that he confessed in his book was that from time to time the finance minister, now the Prime Minister, would say to him privately, “Keep up the pressure. I have so much pressure from within my party to keep spending a bunch of money. I know that for the good of this country we need to bring down the debt”.
So the Prime Minister, then the finance minister, did bring down the debt, but it was at the pressure of the then Reform Party, and he was asking for that pressure because he needed the legitimization of his point of view.
I want to point out another thing. The Liberals keep crowing about how well they have done in managing the finances. When we look at the $1 billion or $2 billion they spend just at the flip of a finger on a gun registry or at the money wasted in an ad scam and all of the other mismanagement of the government, let us just think about how much we could have done if they had managed the money properly.
There is another point. In 1993 the Liberals were campaigning against free trade. The effect of free trade in this country right now is a huge financial gain. I think it is $1.5 billion every day. They spoke against it. If it were not for the implementation of free trade by the then Conservative government, would we be, even now, in the position that we are in? The Liberals themselves admit that our debt is down as a percentage of GDP. The debt has gone down by only a very small amount relative to its size when they took over, but they take the ratio of the GDP, and because the GDP has grown substantially, mostly due to free trade, obviously the debt is down as a percentage of the GDP.
I do not want to take a whole lot of time here, but I just could not allow these misconceptions to go unchallenged. I want to just simply say that in the end to the taxpayers I guess that looking backward is not going to help them a lot. We cannot drive a semi, as I did for many years, by looking in the rear-view mirror.
Let us stop trying to place the blame, maybe, but let us place it correctly if we are. Rather, let us rather look ahead. I am saying this simply. We need to implement in our policies plans that will reduce the debt and the deficit so that we have smaller interest payments and more money available--instead of less--to spend on the programs that Canadians value.
We need to make sure that we manage government properly and honestly and that there is not all of this waste, mismanagement and corruption. I hate to use that word, but it is very evident in the present milieu of the inquiry by Mr. Justice Gomery. There is so much evidence now that there is actual corruption in there. It has to stop. I call on Canadians very frankly to turf this government, because the Liberals will not wake up to the moral challenge before them until they have what we call for our grandchildren “a time out”. I think it is time that the Liberals got a time out.
Mr. Brian Pallister (Portage—Lisgar, CPC): Mr. Speaker, I thank my colleague from Edmonton--Sherwood Park for his comments. He brings to the House considerable expertise, as was evident in his comments. I do not want to see that expertise wasted. I would like to take advantage of that expertise through my questions for him.
Notwithstanding the incredible waste of taxpayers' dollars that has occurred under this administration, I do not want to focus on that. I find it unfortunate and distasteful but it is not the focus of my question.
We know the government has claimed that its ability is very significant in terms of money management. It makes that claim repeatedly by saying that it has run surplus budgets for some time. We also know, in rough numbers, that the Liberal government inherited a debt created largely during the years of Pierre Trudeau and the previous prime minister, years of incredible overspending, which of course now the Liberals have has repeated in the last several years. The Liberals do not appear to have learned from the past. We know that.
We know the Liberals inherited a debt, we know that it continued to rise under their management, and we know that it has now dropped somewhat, to a level of approximately $60 billion less than what it was over a decade ago.
Where did the $60 billion come from? Notwithstanding the fact that much more money could have been applied to the debt if the Liberals had not wasted it on gun registries, foolishness, papering the bedroom walls of their friends and paying for lavish expenditures and trips such as those André Ouellet has enjoyed at the expense of the taxpayer, without receipts, notwithstanding any of that, they paid it down, they claim, by $60 billion. But what did they do with the EI surplus?
Forty-five billion dollars more was taken in by the government from working Canadians under employment insurance than was paid back in benefits to the workers of this country. There was $45 billion more taken out of the pockets of small business people, the major employers in this country, $45 billion more than was paid out in benefits. It was taken in by the government and it was not put in a reserve. The government did not set it aside. No. It is gone. It has vanished.
Where did the $45 billion go? Maybe it went against the debt. I am not sure. Maybe it went to André Ouellet. Maybe it went to worldwide travel. Maybe it went to the gun registry. We do not know. We are not sure. Maybe it went to jets for the Prime Minister. I do not know.
But I do know this. I do know that the government's claims of incredible money management are grossly overinflated. I would like the member to clarify for me if he feels that the employment insurance program could have been run more honestly and more transparently rather than used as a cash cow for the government.
Ken Epp: Mr. Speaker, what an excellent question and what a wonderful opportunity to lead up to another lesson for the Liberal government.
The hon. member asking the question made allusion to the fact that the Liberals got their $60 billion by which they have reduced the debt, perhaps a lot of it, from the EI surplus.
I want to emphasize this: the EI fund is to be an insurance program, as intended in the legislation. In fact, I think if we had an impartial court and were to plead the case, we could almost accuse the Liberals there, and probably win the case, of them having absconded with money to which they were not legally entitled. I do not like to use the other words that we sometimes use, but they took money to which they were not legally entitled.
It is interesting that the chief actuary has said over the years that when the surplus in the fund reaches $15 billion, that is sufficient. Yet these Liberals have kept accepting overpayments into it in huge amounts to the tune of $45 billion.
I have another number for members, though, and I do not know if many members here recall, but it is only about four or five years ago that we had a bill in the House in which the government took out of the civil service pension fund another $30 billion.
[Intervention]
An hon. member: And the military guys.
Ken Epp: And the military.
They took this surplus out of the fund just because they said there was a surplus in it so then it was theirs. But that is not accurate. Those contributions come half from the employer, in other words the government or the taxpayers of the country, and half from the employees themselves, because they contribute to their pensions.
When the Liberals took that $30 billion unilaterally from the civil servants of our country, our wonderful civil servants and our military people, they actually took money to which they were not entitled. If we take half of that, half of the $30 billion is another $15 billion. So there we have the $45 billion from the EI fund and the $15 billion in excess taken back out of the surplus from the pension fund, and there is the $60 billion.
In other words, the Liberals have not done a thing in terms of making the actual operations of government more efficient. They have merely taken money that they were not entitled to and applied it to the debt. And there they are, standing up and crowing about how wonderful they are because they have made such fantastic achievements in the financial end.
I submit that this government cannot be found guilty of good fiscal management. If charged with being guilty of good fiscal management, they would win the case: they are not guilty.
Mr. Brian Fitzpatrick (Prince Albert, CPC): Mr. Speaker, I must comment. During the election campaign, I remember some of the Liberal advertising hammering away at certain individuals.
Then I read an article by an economist from McGill University. He had the data to show that eight provinces in this country in the 1990s were basically have not provinces. There was a net inflow of money to help support those provinces during the period of 1993 to 2001. Most of them had provincial Liberal governments or NDP governments and there was a separatist government in Quebec.
The economist had the data for the province of Alberta from 1993 to 2001. The increase of revenues to this town of Ottawa was gigantic during that period of time. There was a huge influx of revenue. Then, mysteriously, from 1995 to 2001, there was a great big jackpot that came from Ontario. Every year Ottawa got more and more, which helped to fund this town. He said that without Alberta's and Ontario's contributions during this period of time this government and this town would have been an absolute fiscal basket case.
He said that the former finance minister, the Prime Minister, should have two great big pictures on the wall in his office, one of Ralph Klein and one of Mike Harris, and he should get down on his hands and knees every day and give thanks for what these two premiers did for the fiscal situation in this country.
It is a disgrace. You people have done nothing to sort out the fiscal house in here. You have wasted and squandered--
The Acting Speaker (Mr. Marcel Proulx): May I remind the hon. member to direct his comments through the Speaker.
The hon. member for Edmonton—Sherwood Park.
Ken Epp: Mr. Speaker, I would like to broaden the comments made by my hon. colleague from Prince Albert.
It is true that the economies of Alberta and Ontario have been successful, especially in Alberta. It is a combination, I believe, of a good Conservative government with sound fiscal management. If we look at the challenges that Mike Harris' Conservative government in Ontario had in recovering from the disaster brought on by the Bob Rae--
[Intervention]
An. hon. member: And Peterson.
Ken Epp: Yes, and Peterson before that and NDP and Liberal governments. It is wonderful that this has happened.
However I would not in any way want to minimize the contributions made by the other provinces as well, including Quebec, eastern Canada and Saskatchewan, from which I escaped a number of years ago. Each one of those provinces have successful businesses, entrepreneurs and many workers. They all send income tax in truckloads to Ottawa. It is incumbent upon the Government of Canada in our national capital to manage taxpayer money as a sacred trust.
It certainly is true that we need to adopt fiscal policies that promote a vibrant and healthy economy. In this battle of who should get the credit, there is no doubt in my mind that the provinces and the provincial governments, in what they do and the policies they have, are absolutely critical to the economic well-being of our country.
However they can start a fire but a Liberal government in Ottawa can do a lot of damage by pouring water on that economic fire. It is unfortunate the Liberals have shut it down.
The Acting Speaker (Mr. Marcel Proulx): Is the House ready for the question?
[Intervention]
Some hon. members: Question.
The Acting Speaker (Mr. Marcel Proulx): The question is on the motion. Is it the pleasure of the House to adopt the motion?
[Intervention]
Some hon. members: Agreed.
[Intervention]
Some hon. members: On division.
The Acting Speaker (Mr. Marcel Proulx): Accordingly, the bill is referred to the Standing Committee on Finance.
(Motion agreed to, bill read the second time and referred to a committee)
[Stage Direction]
The House proceeded to the consideration of Bill C-10, an act to amend the Criminal Code (mental disorder) and to make consequential amendments to other Acts, as reported from the committee with amendments.
Mauril Bélanger: 
moved that the bill as amended be concurred in at report stage and read the second time.

The Acting Speaker (Mr. Marcel Proulx): Is it the pleasure of the House to adopt the motion?
[Intervention]
Some hon. members: Agreed.
(Motion agreed to)
Mauril Bélanger: Mr. Speaker, I believe if you were to ask it, you would find unanimous consent to see the clock as being 1:30 p.m. so that we can move on to private members' business
The Acting Speaker (Mr. Marcel Proulx): Is it agreed?
[Intervention]
Some hon. members: Agreed.
The Acting Speaker (Mr. Marcel Proulx): The House will now proceed to the consideration of private members' business as listed on today's order paper.

Private Members' Business
Income Tax ActJeff Watson: 
moved that Bill C-265, an act to amend the Income Tax Act (exemption from taxation of 50% of United States social security payments to Canadian residents), be read the second time and referred to a committee.

Mr. Speaker, I am proud to announce that yesterday morning my wife, Sarah, delivered a beautiful son, Thaddaeus David, into the gentle hands of our midwife, at home with my children gathered around.
For much of my day I had the pleasure of spending time appreciating things of value, the nurturing help of my two daughters, Sophie and Emma, to their labouring mother, to my new son's big hands and long toes, and the quiet whisper of “Hi” from his 22 month old brother, Elijah, welcoming him to the family.
It is not only the start of life that is worth reflecting upon. Today my thoughts turn to men and women in their golden years. I am pleased to rise and speak to Bill C-265, an act to amend the Income Tax Act to grant an exemption from taxation of 50% to Canadian residents who collect U.S. social security as a basis of their retirement incomes.
The bill represents a near eight year promise kept to seniors in the riding of Essex to restore tax fairness. It also gives hope to tens of thousands of seniors across Canada from British Columbia to Ontario, from la belle province to the Atlantic, who have experienced the same plundering or their retirement income.
The bill is a reincarnation of two bills that were previously before the House which were sponsored by my distinguished colleague from Calgary Southeast who fought tenaciously, though unsuccessfully, to prevent a 70% tax hike on vulnerable Canadian seniors in 1997.
The bill would also gives form to the aspirations of my New Democrat colleagues from Windsor West and Windsor—Tecumseh who joined the House after the tax increase passed into law and who desire and have worked to see tax fairness restored to these seniors. I understand the member for Windsor West will be speaking shortly and I thank him for his support.
Together we have demonstrated an ability to work cooperatively across party lines. It is this cooperation in a minority Parliament that gives us and the seniors who we represent the most realistic opportunity to see the tax relief they deserve.
For government members opposite, it is my hope that they will support this measure.
My own quest to see tax fairness began with the stories of real people. They moved me to act for justice. I believe their stories will move all members of the House to endorse Bill C-265.
At issue here is the 70% tax increase in 1997 to Canadian seniors collecting U.S. social security. Bill C-265 seeks to reverse this tax hike by lowering the amount included for taxable income from 85% to 50%.
I am new to this chamber. In fact more than one-third of my colleagues are new to this chamber, so to understand how we arrived here I must take a couple of minutes to relive some painful history.
Canada and the United States signed the Canada-U.S. Tax Convention Act in 1984. Among other things, the act addressed the flow of social security benefits across the Canada-U.S. border, that is, t it dealt with the taxation of CPP or QPP and our OAS benefits received by persons resident in the U.S. and U.S. social security benefits received by persons resident in Canada. The tax treaty gave the power to tax benefits to the country of residence rather than the country paying the benefit.
Further, the rule was that only one-half of the benefit went into a taxpayer's income. For example, a Canadian collecting $15,000 benefit from the U.S. was taxable on only $7,500. This situation existed under the first and second protocols of the Canada-U.S. tax treaty up to December 31, 1995.
However something horrible happened to Canadian seniors. The Liberal government of the day entered into negotiations with the U.S. to change the tax treaty producing a third protocol. Taxing benefits moved from the resident country to the source country. Canadian seniors collecting U.S. social security were told shortly before Christmas 1995 that effective January 1, 1996, the U.S. would be withholding 25.5% of their benefits. This changed seniors' retirement assumptions entirely. Many low and modest income seniors were forced from their homes because they could no longer afford them. Moreover, they could not file a U.S. tax return to be taxed on a net basis. There was no way to avoid being taxed at 25.5%.
It was not the Grinch who stole Christmas 1995 from 85,000 Canadian seniors. It was their Liberal government in Ottawa.
However, rather than roll over, these seniors banded together to fight. A grassroots group was born in Essex called CASSE, Citizens Asking for Social Security Equality. It was an idea that soon drew thousands of seniors to rallies. It was not a glamorous army of idle rich seniors either. They came in wheelchairs and they came in walkers. One senior did not even have return bus fare because her fixed income was slashed. They gave the Liberal government every reason to go back to the U.S. to renegotiate the tax treaty.
After pressure on the then finance minister, on April 9, 1997 a fourth protocol was reached with the U.S. that restored taxation of benefits to the resident country as it had existed prior to December 31, 1995 under the second protocol.
The Liberals faced this issue and CASSE during the federal election in 1997. Seniors were told the new protocol would be revenue-neutral and should be supported. The issue was supposed to finally be over.
What the fourth protocol did not restore however was the 50% inclusion rate for taxable income that existed under the second protocol. Instead, it set the rate at 85%, a whopping 70% more than the pre-1996 rate. It was a crushing blow to seniors hoping to see their retirement income restored.
The fourth protocol was ratified by our members in the Bloc, not because it was fair but because it held the promise of retroactive tax rebates to affected seniors. The rebates proved to be few however because the 85% inclusion rate was also retroactive. Today, without those same urgencies but with the same need for justice to be swift, the bill gives Bloc members of Parliament the opportunity to fully restore tax fairness to Quebec seniors. I urge them to seize the moment.
During debates to ratify the fourth protocol, seniors were told many things by the government. The deputy prime minister of the day said that the move to the 85% inclusion rate would be revenue-neutral. Finance officials testified that that would not actually be the case. Of the hundreds of seniors affected in my region, I still have yet to meet even one who has received a rebate.
During these debates in 1997, seniors were told by the then finance minister, now Prime Minister, that the U.S. was moving quickly to ratify, so he and his government had no control over the inclusion rate. Federal finance officials testified before a Senate committee that Canada could have set the Canadian inclusion rate at zero if it wished.
During these debates seniors were told, believe it or not, to be grateful, that after all, Canadians collecting CPP in Canada have 100% of their benefits taxable. What the government failed to admit to seniors was that residents in the U.S. collecting CPP or QPP were treated far better than they were. In fact, a senior collecting Canada pension plan or Quebec pension plan in the U.S. has to earn about $59,000 Canadian before they have any income included at the 85% rate. The social security benefits worksheet provided to me by one of my constituents is absolute proof of that.
What seniors in Canada were not told by the Liberal government was that seniors in the United States pay no tax unless they are the richest of the rich. Eighty per cent of those collecting CPP or QPP in the U.S. pay no tax at all. A paltry six per cent pay at the 85% rate. By comparison, every senior in Canada collecting U.S. social security has 85% of his or her income taxable above the basic and perhaps the age exemption. Seniors at modest and the lowest income levels pay tax in Canada. If the inclusion rate had been restored to 50%, most seniors in Canada would have paid little or no tax.
Worst of all, during the debates of the fourth protocol, seniors in Canada were told to be grateful for their 70% tax increase because they had a public health system they never paid for. My predecessor in the riding of Essex not only argued this in this House, but she argued that the inclusion rate should have been 100%. It is right in Hansard . I could not believe what I read.
I would like to remind the House who these seniors are. These seniors are the women who waited six years alone or with small children while their husbands went to war to fight for Canada. These seniors are the men who sacrificed six of their productive years to the cause of freedom. After the war, these men and women married, built homes, paid for and raised money for hospitals, ambulances and schools. They built churches and helped build their neighbours' homes and barns. They spent every dollar they earned in neighbourhood grocery stores. They clothed their children with clothes from the local department store. They bought the cars their neighbours built. They volunteered in rural fire halls.
In my area these men and women helped start Windsor Medical, the first public health system in the province of Ontario. Liberals think these seniors should be happy for their inclusion rate not being 100% because they get a public health system? No, the government should be grateful these seniors built this country.
Canadian seniors who received U.S. social security more than paid their fair share. The government was wrong in 1997 to raise their taxes 70%. It is still wrong today, and it still needs to end this injustice.
That was yesterday for today's seniors. Let me talk about seniors today. We will find many of them in mobile homes dotting communities in British Columbia, Ontario, Quebec and the Atlantic. We will find others in tiny apartments or nursing homes living alone. Many have been forced to decide between paying for prescriptions or paying for utilities.
One woman in my riding has since survived cancer of the colon and of the right eye. Many are in wheelchairs because they can no longer walk. June, in the town of Harrow in my riding, told how her husband died recently of a heart attack. He died still under the stress of being unable to pay their bills. Now June is left to struggle with only her meagre social security and under the 70% tax increase from the government.
I can also talk about letters of great hardship, but valiant determination to fight by seniors in Quebec. I can talk about letters with horrifying stories. Joan and Ivan in Amherstburg in my riding told me that the 70% tax increase by the Liberals has “turned the golden years to sickness, sadness and bitterness”.
I urge ministers and even the Prime Minister to come with me on Monday to visit seniors in Viscount Estates in my riding of Essex. These are not sprawling mansions on hundreds of rolling acres in the countryside. Viscount Estates are not million dollar homes fronting on Lake St. Clair. Viscount Estates is mostly a mobile home community.
In the recent election, I knocked on every door there. I heard every terrible story. Not all seniors started their lives in Viscount Estates, but many ended up there because of the third protocol. They were promised by the Liberal government that the fourth and current protocol would make life better. Not one of the seniors still alive has moved out of Viscount Estates.
There are a couple of sad realities. The same seniors who had to leave their modest homes for mobile homes did not have the means to hire fancy lawyers to fight for them. They still do not. Nor can they launch full colour, glossy ad campaigns on billboards, in print or on TV. Instead, they have spent eight long years in suffering silence.
The other sad reality is that many are no longer alive to fight. The more than 85,000 affected seniors have been whittled away by disease and age. Eight years without reversing the 70% tax increase is not a strategy for justice and fairness. It is a wait and die attitude by the Liberal government.
My colleagues do not take my word for this. I urge my colleagues to pass Bill C-265 at second reading so that seniors from the west and the east, from Ontario and Quebec, those who can still make the trip to Ottawa, may come and tell their stories themselves.
My colleagues on the government side of the House pledged to lower taxes for low and middle income Canadians. These seniors will not believe it until you support a measure like Bill C-265. It will have a modest impact--
The Acting Speaker (Mr. Marcel Proulx): May I remind the hon. member that all comments are to be made through the Speaker.
Jeff Watson: I apologize, Mr. Speaker.
My colleagues on the government side of the House pledged in the throne speech to lower tax for low and middle income Canadians. These seniors will not believe it until they see the government support a measure like Bill C-265. It will have modest impact to the treasury, but maximum impact to vulnerable seniors, and it will end a disgraceful chapter in Canada's tax industry.
It is my sincere hope at the end of this process that no fewer than 154 of my colleagues from all sides of the House, Conservatives, députés du Bloc, New Democrats and Liberals, will join me to help seniors like Olive Smith, Bill and Bette Sands, Roy McMillan and June regain their dignity.
John McKay: Mr. Speaker, the government opposes the bill because it creates its own inequities. Let me tell members why.
Let us take seniors, living in the estates to which the hon. member referred, who are receiving a Canada pension plan amount, for simplicity's sake, let us say $100. That $100 is included in their income tax return for the purposes of calculating their income tax liability. Now their next door neighbours who are fortunate enough to receive social security payments from the United States already get a $15 benefit on that same $100. Therefore, that $100 comes to those seniors living right next door to the others who do not receive Canada pension plan and who only have to include $85 in income for the purposes of the calculation. The hon. member's bill proposes that instead of including $85 in their income, that they only include $50 in their income. Not only is there an issue of fairness here, there is an issue of even greater inequity than presently exists.
The current protocol of 15% was negotiated between the countries so that there would be some reciprocity in terms of recognition between Canadians living abroad, in the United States in particular, and receiving Canada pension plan. They too get a $15 discount and that reciprocity is given to Americans living here receiving U.S. social security and paying taxes here.
In fact, the fairness issue is really quite clear. There is a significant inequity between people living side by side, one receiving a Canadian pension and being a resident here and another being a resident here and receiving an American pension. Therefore, I fail to understand the thrust of the hon. member's speech and his bill. I put it to him that he is not only building on an inequity that exists, he is creating a further inequity between pensioners.
Jeff Watson: Mr. Speaker, I remind the hon. parliamentary secretary that his government created an inequity when it negotiated the protocol. The 85% represents a maximum threshold for inclusion. I go back to these statistics again.
The purpose of a Canada-U.S. tax treaty, as I would understand it, is so residents in each country have some equitable treatment. That 85% inclusion rate is a maximum in the United States. Only 6% of those collecting Canada pension plan or Quebec pension plan who are resident in the United States actually have 85% of their income included for taxation. In Canada 100% are included at 85%.
If the Liberal government wants to create a situation of equity, perhaps it could grade in the same type of situation. However, the reality is there is another way to skin the cat. If those who are collecting Canada pension plan are simply being taxed too high, we could also lower their taxes to be equal with others.
Hon. Rob Nicholson (Niagara Falls, CPC): Mr. Speaker, I want to congratulate the member for Essex. He is picking up on a real injustice that has taken place in Canada and that affects about 85,000 Canadians. I want to point out that a lot of those Canadians live in border communities. The hon. member is from the Windsor area. Hundreds of those individuals live in the Niagara Falls, Fort Erie and Niagara-on-the-Lake area. They are very much disadvantaged and hard done by.
What the parliamentary secretary did not point out was that those social security premiums those individuals paid all those years were not tax deductible against their American income tax. In fact, Canadians working in the United States were taxed at the very highest rate, much higher than if they had been residents of the United States. They were taxed at the highest rate. They did not get a deduction for the social security premiums, unlike his example of the individual who collects Canada pension plan. That individual did get those deductions all the way through. The 50% inclusion rate was a matter of being fair. What was unfair, was that it was changed.
He and all members of the Liberal Party know that this was very unfair to people who had planned their lives and their retirement upon getting American social security and then the tax changed from 50% to 85%. This is why I applaud and completely support the initiatives by the member for Essex. These people should not have to wait until there is a Conservative government. It should be done now. It should be done in this Parliament. This should be rectified. They do not have to wait until the Conservatives are the government of the country again.
Jeff Watson: Mr. Speaker, I applaud my hon. colleague. My thoughts are on the people back home who are watching. I am thinking of Olive Smith who had to watch and care for her bedridden husband until he passed away recently. She is living in Viscount Estates. I do not think she finds the government's position on opposing this bill any amount of comfort.
An injustice was committed by the government. I am of the opinion that we do not raise taxes on people after they have already retired. That is what the government did. It is cruel, it is heartless and it needs to be overturned today.
The best thing to do would be for the government to include it as a line item in its upcoming budget. Barring that, I believe we will have the support from the opposition parties in the House to finally correct an injustice.
It is a shame that the government cannot bring itself to recognize it has perpetrated a cruel injustice on tens of thousands of seniors who live in mobile homes, apartments and nursing homes. It is a travesty. I should not be here today to do this. The government should have had its own responsibility in order and done this back in 1997. However, I am glad I am here today to ensure that this happens.
Michael John Savage: Mr. Speaker, I am pleased to take part in the debate on Bill C-265.
I would like to first congratulate my colleague from Essex and his wife on the birth of their son. I had the chance to meet them early in our respective careers as parliamentarians at an orientation session, and I wish them both the very best.
Bill C-265 proposes to extend the exemption from tax granted to U.S. social security benefits from 15% to 50%. The government does not support this bill. The 15% exemption that already exists is a concession negotiated in a treaty that already represents some departure from basic tax policy principles. Extending the exemption to 50% would exacerbate the situation.
I believe that it would be helpful for members of the House to have the benefit of some history regarding the taxation of social security benefits as set out in the Canada-U.S. tax treaty and why it is that we have agreed to the 15% exemption.
The history has been complex and the current state of affairs represents the delicate balance between competing interests, a balance which the Conservative member's bill ignores. The Canada-U.S. tax treaty included rules for the taxation of social security benefits paid by one country to residents of the other since 1984. The evolution of these rules has progressed in three distinct phases.
Between 1984 and 1996, the treaty contained a residence-based taxation rule. Only the country of residence was allowed to tax social security benefits. During this time a resident of Canada receiving U.S. social security benefits would only pay tax to Canada. There was however a 50% deduction in computing taxable income in respect of those benefits because at that time the U.S. only taxed a maximum of 50% of U.S. social security payments. This represented a tax advantage over Canadian benefits, which were fully subject to tax.
In addition, U.S. residents receiving Canadian benefits were not subject to Canadian tax and so benefited from the 50% maximum inclusion rate in the United States. One consequence of this was that high income U.S. taxpayers did not pay the tax on old age security benefits, which applies to incomes above a certain level.
This residence-based rule was seen to be unfair. There were calls to change the rules so that all recipients of Canadian benefits were taxed in the same way regardless of residence, and so the rules were changed.
In 1995 Canada and the United States agreed to replace the residence-based rule with a source-based rule. In other words, the new rule would allow only the country from which the payment arose to tax that benefit. The result was that a Canadian resident receiving U.S. social security benefits was taxed only by the United States.
In addition, the maximum inclusion rate under U.S. law had risen over time from 50% to 85%, so a U.S. citizen in receipt of U.S. benefits would be subject to ordinary U.S. rates on a maximum of 85% of that income. If the recipients were Canadian residents, they would either pay U.S. rates or, if they were U.S. citizens, they would be subject to a final withholding tax. This rate was computed as 85% of the standard U.S. withholding rate of 30%. This was a final tax and was non-refundable.
For high income Canadians this tax was usually acceptable since, if they had to pay tax in Canada on this income, their marginal rate of taxation would likely have been higher than 25.5%. However, for low income taxpayers who otherwise rely on the progressive nature of the Canadian tax system to fairly distribute the tax burden, the 25.5% withholding tax constituted excessive taxation and caused, in many cases, severe hardship.
These taxpayers, had they been subject to tax in Canada on this income, would have paid little or no tax. Because they were subject to U.S. taxation, a quarter of their income was lost.
Conversely, U.S. residents receiving Canadian benefits under this rule could choose between the 25% withholding tax or, if they filed a tax return in Canada, graduated income tax at ordinary rates. For low income U.S. taxpayers, this meant they paid little or no tax.
At that time there was a great discrepancy in the taxation of these benefits to the detriment of many low income Canadian seniors. Canada and the U.S. recognized this unfair treatment and we came together again to change the rules.
To relieve hardship on low income Canadians, we agreed to restore residents only taxation. The current rule provides that social security payments are taxed as if they were payments from the home country's benefit plan. A Canadian recipient of U.S. social security is treated as if the payment were from CPP, QPP or OAS.
United States recipients of QPP, CPP or OAS are treated as if they were receiving U.S. social security benefits. This meant that Canadians receiving U.S. benefits could avail themselves of the graduated rates of our tax system and were no longer subject to a flat 25.5% withholding tax. As mentioned, the maximum inclusion rate in the United States had changed from 50% to 85%.
As a concession to the United States, we agreed to the 15% exemption for these benefits to match the maximum inclusion rate in the U.S. However, any rationale for returning to a 50% exemption based on an analogy to the U.S. rules disappeared once these rules were changed. That is the history of the taxation of social security benefits between Canada and the United States. That is pretty exciting too.
As the history reveals, it is a complicated issue. It also shows that any rule will advantage some over others. What is important is to find a rule that makes sense, that is fair, and that avoids imposing hardships on taxpayers who are least able to adapt to such hardships.
We have such a rule. While some higher income taxpayers may complain that they were better off under the previous regime with a U.S. withholding tax, the concerns regarding low income taxpayers were more urgent. Many of these taxpayers were simply not in a position to absorb a high withholding tax.
While a 15% exemption is a departure from the basic principle that individuals in similar circumstances should pay a similar amount of tax, it represents an agreement stemming from a process of careful negotiation. Extending this exemption to 50% would be completely out of line with tax policy and would fail to take into account the history of how the current exemption was reached. I therefore ask hon. members to join me in not supporting this bill.
Mr. Robert Bouchard (Chicoutimi—Le Fjord, BQ): Mr. Speaker, I must inform you immediately that the Bloc Québécois supports Bill C-265. I want to congratulate the member for Essex for his initiative in introducing this bill. I also want to congratulate him for something else: his wife, Sarah, has given birth to a son weighing 9 pounds, 15 ounces. Congratulations to the member for Essex and his wife, Sarah.
As my party's Canada Revenue Agency critic, I am pleased to speak in support of this bill. I hope that the House will support it, since it aims to restore equity and justice for those concerned.
In short, this bill rolls back the tax rate from 85% to 50% for Canadians and Quebeckers receiving social security from the United States. People might think, at first, that this bill is not very important. However, it affects approximately 85,000 Canadians and about 10,000 Quebeckers.
In the past, a number of bills have amended various measures on benefits paid to Canadian and Quebec taxpayers. A number of agreements between Canada and the U.S. have been negotiated and become law.
First, I want to talk about the most recent, and fourth, agreement on this, which was signed in July 1997 with a number of other countries, including the United States. Under this protocol, only the countries of residence were able to tax social security benefits. Since then, Canada has been able to tax American benefits paid to residents of this country, and vice versa.
The problem is that it gave Canada, under the U.S. Social Act, the right to increase the tax rate from 50% to 85%. Bill C-265, before us today, seeks to correct this injustice. The Bloc Québécois supports it, because it rectifies an error the Liberal government made in 1997.
As I mentioned earlier, several thousands of Quebeckers left their families to go work in the United States, often for years, and were punished by the provisions of this legislation. These are people who, in many cases, were close to their roots and did not want to leave their country for the United States.
The 1997 amendment to the act made it possible for the federal government to generate substantially higher revenues on the backs of seniors and the vulnerable. However, it is important to understand why Bill C-265 has been introduced in the House today and how it corrects a past error.
Historically, there have been four protocols which modified the income tax convention, providing that social security benefits would only be taxable in their country of origin. At the time, social security benefits in the United States were exempt from income tax. It was only in 1984 that they were taxed in the United States for the first time. Thus, the total taxable amount of benefits rose from 0% to 50%, depending on the taxpayer's net income.
Families and individuals on low incomes usually paid no tax on their benefits.
After that came the second protocol amending the Canada-U.S. Tax Convention Act in March 1984. This made social security benefits taxable in the country of the taxpayer's residence. It was at that time that 50% of benefits were made tax exempt. For example, an American citizen residing in Canada was taxed on 50% of the benefits received from the U.S.
Later, a third protocol was signed in March 1995 giving the source country the exclusive right to tax social security benefits. That meant that the United States taxed social security benefits leaving its territory and being paid to a resident of Canada at a rate of 25.5%, while that taxpayer was not taxed in Canada on benefits received from the U.S.
To return to this fourth protocol which amended the tax agreement; as I said before, it was signed in July 1997. It provided that benefits paid under U.S. social security legislation to a resident of Canada would be taxable only in Canada, as if they were benefits under the Canada Pension Plan or Quebec Pension Plan.
Under this agreement, the tax rate is 85% of the payments made to Canadian residents. Note that in the United States, the tax rate depends on the net income of the taxpayer. For example, for a single taxpayer living alone, the tax rate varies from 0% to 25% for a net income of $0.00 to $25,000. Furthermore, if this same taxpayer receives social security, he will be taxed at a gradual rate for any amount exceeding $18,000.
The protocol states that payments made pursuant to social security legislation in Canada to a resident of the United States are taxable only in the United States. Essentially, the purpose of Bill C-265 is to reduce from 85% to 50% the tax rate on United States social security payments received by Canadian taxpayers.
It is now 2005. For 20 years now we have been trying to find a fair and equitable solution for all Quebeckers and Canadians dealing with this problem.
I want to remind the House that there are thousands of Quebeckers and Canadians living, for the most part, near the border and who are subject to the impact of Canado-American tax reforms. This is a costly measure, but it is insignificant compared to the thousands who have sacrificed their lives and their families to work far from home. These people wanted to stay here and keep their identity.
I also want to remind the House that, between the two governments, there are different tax measures. That is why we support this bill to close the gap between Canada and the United States.
We support lowering the tax rate on benefits paid to Quebec and Canadian taxpayers, from 85% to 50%, because it corrects a certain injustice. That is why I once again congratulate the member from the riding of Essex for having introduced Bill C-265, which we will support.
Brian Masse: Mr. Speaker, I am pleased to rise this afternoon to debate Bill C-265. I am pleased to say the New Democratic Party will be supporting the bill. I would like to commend the member for Essex for his diligent work on this file.
I would also like to extend my congratulations to him and his wife Sarah and the rest of his family on the birth of their son David. It is difficult to commute between Ottawa and Windsor. It is stressful on a young family. However, there is better representation in the House when there are members here are at different life stages. I am glad he is doing that with his family here.
I want to tackle another important element of this file. There have been some eloquent presentations about the history of the treaty and how it has changed over time. The bottom line is that after all is said and done, this is about justice for a group of citizens who at a time when they are most vulnerable have found that the rules have changed.
I cannot understand why the government cannot say it made a mistake. I cannot understand why it cannot admit it had a negotiation problem and failed Canadians. I cannot understand why it cannot change this. The government did that today with respect to the Canadian flag lapel pin being made in China. When the Liberals were answering questions the other day, they knew that was not the actual fact and they came back today and changed it. I give them credit for that.
We should judge our society by the way we treat our most vulnerable individuals and it is those individuals we are talking about today. We are talking about people who have saved for their retirement, have planned for their golden years, and have now had the rules changed out by a deal in Washington and by a government in Ottawa. It affects their ability to live and prosper and to be effective members of our community. This is unacceptable.
It has been pointed out that Canadians across the country are affected by this, which is true. I have heard from people in Winnipeg, Nova Scotia, British Columbia and Quebec. I have heard the same story every time. These people were expecting something to be delivered in terms of their income but suddenly the rules changed and their lives changed dramatically. Some of these people lost their homes. Some of them lost their self-esteem. They lost their ability to contribute to such things as their grandchildren's education or to other family initiatives. They can no longer do this because their income has been lowered. This has affected them in many ways. It is insulting.
The government has said it had to do this because one individual was paying more than another. I have not had a single complaint from anyone anywhere suggesting that seniors are ripping off the tax system. I do not know where that notion came from. I do not know who thought it up. I do not know if members of the Liberal Party are just listening to the bureaucrats.
Where are the throngs of Canadians who are saying our seniors are ripping off the Canadian tax system and that those seniors had better be brought into line? Through all the discourse on this issue, from all the correspondence I have received, and all the new stories about this, I have never heard that. It makes absolutely no sense and it is insulting.
There is a history in the House of Commons of waffling on this issue. This has not come just from the Conservatives, the Bloc, the NDP, or the Liberals. Some of the Liberals have flirted with the idea of fixing this, but for whatever reason they have not found the political courage to tell the civil servants to fix this, that they laid the boots to these people. The Liberals should tell them to stop doing this and fix it.
The member for Windsor--St. Clair, who was speaking in the House of Commons on February 23, 2001, said:

Mr. Speaker, both the finance minister and the Deputy Prime Minister acknowledge the problem yet have chosen to do nothing about it. When will the government take action to address the gross injustice faced by the Canadians asking for social security fairness?

The secretary of state responded:

Mr. Speaker, I assure members this is an issue we have under consideration and we are pressing for changes.

The Liberals were pressing for changes back in 2001. What happened to that political courage? What dissipated at that moment in time that we did not see something fixed by 2005?
The government could do that now. It could fix it now. The Liberals have control over that. They would only be congratulated by members of the opposition who are unified in this. We will drag the government there kicking and screaming. One way or another we are going to fight for this. We are going to make it really painful if the government does not restore the fairness and justice for our seniors.
Back in history it was some of the Liberals' own members who said, “We are pressing for changes”. Where are those members now?
The hon. member for Windsor--St. Clair followed it up with another question in the House of Commons:

Mr. Speaker, when this session of parliament began I called upon the Deputy Prime Minister to explain his government's inaction in addressing the concerns of thousands of Canadians faced with crippling taxes on their U.S. social security benefits. The Deputy Prime Minister, the Minister of Finance and the Secretary of State for International Financial Institutions have all promised that they would take some action. Yet five months later nothing has been done. When will they move on this issue? When can we expect a response from them?

Answering this question was my predecessor, the member for Windsor West, the right hon. Herb Gray:

Mr. Speaker, as I pointed out in a letter to my hon. friend, I believe in February--

That is correct. He had the date correct:

--I have raised this matter with the Minister of Finance. He assures me that he and his officials are looking into it.

They were looking into it. They could have changed it then. It got lost again. I do not know why. It does not make any sense, especially when his colleague at the time said, “We are pressing for changes”.
Where was the direction to the department to say that changes were necessary? We saw that today when the Minister of Public Works went back and said, “Those lapel pins should be made in Canada”. We shut down a Canadian business. It was wrong. He went back and told them because he had the courage to do so. He came to the House of Commons and said, “We were wrong”. Why can that not be done for our seniors as well?
Once again the side by side analysis is insulting because I do not know of any seniors in Canada who are clamouring for support to make sure unfair taxation happens to their neighbours.
I would like to refer to another question, again by the member for Windsor--St. Clair. He said:

Mr. Speaker, the former Deputy Prime Minister and the former Secretary of State for International Financial Institutions assured the House on a number of occasions that action would be taken....There is still no action. When will it be addressed?

The hon. Prime Minister, who was the minister of finance at the time, said:

The fact is that this is part of a treaty with the United States and we are bound by the provisions of that treaty. Canada negotiated that treaty under this government and improved it substantially.

That is wrong. We knew that answer was wrong. There I think we saw the drift of things. We know that there was testimony at the Senate committee. This is a quote from the Senate committee:

It would be possible to provide further exemptions...if that were thought to be appropriate. It would not be necessary to seek agreement with the United States on that.

We know that the testimony contradicts that.
In summary, I would like to once again say to the member for Essex that I am glad he has brought forward Bill C-265. I think the government has a lot of accounting to do for itself with regard to its treatment of seniors, but this is an opportunity for it to correct things.
Once again, how is the government going to be able to validate its argument? Others believe this is unfair to them. What we do know is that it affected a lot of people and everybody wants this corrected. The people who are affected, their neighbours, their friends, their families, none of them object to that, and none of them will object to this bill.
Mr. Richard Harris (Cariboo—Prince George, CPC): Mr. Speaker, as the member for Windsor West just said in his presentation, we are going to continue the fight for the passage of Bill C-265. We are going to continue to press the Liberals to live up to their thus far broken promises of two elections ago.
We are going to continue that fight led by my colleague from Essex, a brand new MP who has a fire burning in his belly for the seniors who are a particular part of this bill. We are going to be joined by the NDP and the hon. member for Windsor West, who is leading the charge on behalf of that party, and by the Bloc Québécois. We are going to continue this fight because what we are dealing with is an attempt to rectify one of the cruelest tax grabs in the history of this country, a tax grab put onto over 80,000 seniors in this country by the Liberal government when the current Prime Minister was the minister of finance.
Mr. Speaker, I am going to tell you a little Christmas story if I may. I know you like Christmas. I just want to explain how the Liberal government, when the current Prime Minister was the minister of finance, spoiled Christmas and devastated Christmas dreams in 1995 for over 80,000 Canadians. I will be quoting as I tell this story.
During the Christmas season of 1995, most Canadians were enjoying Christmas, preparing for that special day when the family would get together and they would talk about how blessed they were to be living in such a great country, although yes, it is difficult to get by for some Canadians, including our seniors who are existing on pensions.
In this case they were seniors who had spent some time living in America, had qualified for social security benefits, and had moved back to Canada for whatever reason, but they were getting pension benefits. And particularly for those seniors, over 80,000 of them, here is what happened to them. They received a Christmas letter that shattered their lives.
It is important to point out that these were Canadian seniors who had already retired. They had already spent many years looking down the road to see how their retirements from their working days were going to be. They had made plans. They had set aside funding to supplement whatever pensions they were going to get, and for all intents and purposes, they had their plans all set.
They were on fixed incomes and they were going to receive pensions: first, a social security pension from the U.S., and second, a pension from the Canadian pension plan. They were quite satisfied to live with the fact that 50% of what they were receiving from the United States was going to be taxed in Canada. They were quite satisfied with that. They were getting by because they had made plans.
Suddenly they got a letter in December 1995 from the U.S. social security administration stating that beginning on January 1, 1996--and we must remember that this was December 1995--there would be a 25.5% non-refundable withholding tax applied to their benefits. This came out of the blue. Why? Because the Canada-U.S. tax treaty had been amended to allow the country that issues the benefits to collect the tax. We are talking about maybe three weeks' notice about this after they had spent years planning how their retirement incomes were going to go. We are talking about three weeks' notice that a tax increase was coming to these seniors who were living on their pensions and whatever other personal savings they had been able to put away. This was a life-changing thing.
The current Prime Minister, who was the finance minister back in those days, is the same minister who promised tax fairness to every Canadian in the 1993 red book. However, as the current Prime Minister says, he used some expletives in describing the red book, which I will not do in the chamber because it is not allowed, but he admitted that he wrote the red book and that fair taxation was in the red book. This is another example of a broken promise. He wanted to beat the crap out of seniors with punishing taxation measures and have them only three weeks' notice.
It was in December 1995 when they would have received it and it was to go into force on January 1, 1996. It did go into force and it caused severe hardship to this particular group of 80,000 and some seniors.
In 1997 or thereabouts the protocol changed again. Most seniors listening to the election promises of the Liberals prior to the 1997 election believed that they would revert back to the original 50% inclusion.
What happened was that the new protocol now said that Canada would collect all the taxes but that instead of the 50% threshold, it would be increased to 70%, up to 85% of what they were getting in social security payments. This represented a huge tax grab and would further destroy the financial plans of these 85,000 or so seniors.
I think it is important to point out that all the time that this was going on, the current Prime Minister, who was the minister of finance at that time, was also talking about closing some offshore tax havens, which he did. However, while he was beating up on this group of seniors with this punishing amendment to how the taxes between the two countries would be collected, he was closing some of the offshore tax havens for shipping but managed to leave open the Barbados connection to which most of his ships were registered. This multi-millionaire created a tax haven to unfairly collect tax refunds and tax exemptions that most Canadians could never in their wildest dreams imagine would happen to them, unless of course they were the finance minister making the rules.
I am very proud of the member for Essex who has made a commitment to the seniors in his riding. There was so much pressure on these seniors that they had to band together and form an organization in order to add a little more clout to what they were saying. The group is called seniors asking for social security fairness. I guess fairness is the word.
The member for Essex has spent a lot of time discussing this discriminatory tax protocol with them. He understands their plight and he understands how the sudden imposition of a new tax level has caused them a lot of distress, which is something they do not need in their golden years.
I congratulate the member for Essex who, given the demonstration since he came to this Parliament, will be around for many years and for many Parliaments to come. He is a dedicated young man and one who has just added a new member to his family but here he is today fighting on behalf of about 85,000 seniors who have been victims of this very discriminatory, unfair and cruel tax grab perpetrated by the Prime Minister of Canada, who was the finance minister back when this all took place.
I thank the NDP, the Bloc Québécois and all our caucus members. I hope all those over there who know this is right will have the courage to support the bill brought forward by the member for Essex.
The Acting Speaker (Mr. Marcel Proulx): The time provided for the consideration of private members' business has now expired, and the order is dropped to the bottom of the order of precedence on the order paper.
It being 2:15 p.m. the House stands adjourned until Monday next at 11 a.m., pursuant to Standing Order 24(1).
(The House adjourned at 2:15 p.m.)