36th Parliament, 1st Session
EDITED HANSARD • NUMBER 16
CONTENTS
Monday, October 20, 1997
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | GOVERNMENT ORDERS
|
1105
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | INCOME TAX CONVENTIONS IMPLEMENTATION ACT, 1997
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Bill C-10. Second reading
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Jim Peterson |
1110
1115
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jason Kenney |
1120
1125
1130
1135
1140
1145
1150
1155
1200
1205
1210
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Lorne Nystrom |
1215
1220
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Ken Epp |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gary Lunn |
1225
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Mark Muise |
1230
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jason Kenney |
1235
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rob Anders |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Alex Shepherd |
1240
1245
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jean-Guy Chrétien |
1250
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jason Kenney |
1255
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Ken Epp |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Lorne Nystrom |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gurmant Grewal |
1300
1305
1310
1315
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Lorne Nystrom |
1320
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jason Kenney |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Darrel Stinson |
1325
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Alex Shepherd |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Susan Whelan |
1330
1335
1340
1345
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gary Lunn |
1350
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jason Kenney |
1355
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Ken Epp |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | STATEMENTS BY MEMBERS
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | BUS ACCIDENT
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rick Casson |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | SMALL BUSINESS
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Sarmite Bulte |
1400
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | STRATFORD IN BLOOM
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Richardson |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | LAND MINES
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Janko Peric |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | STRATEGIS
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Walt Lastewka |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | HEALTH
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Grant Hill |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | POVERTY
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mrs. Judi Longfield |
1405
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | GOVERNOR GENERAL'S AWARDS
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Carolyn Bennett |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | LIEUTENANT-COLONEL JOHN MCCRAE
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Peter Goldring |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | INFRASTRUCTURE PROGRAM
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Guy St-Julien |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | ÉBOULEMENTS TRAGEDY
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gérard Asselin |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | ATLANTIC CANADA
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Peter Mancini |
1410
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | COMMISSION NATIONALE DES PARENTS FRANCOPHONES
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Michel Guimond |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | STORNOWAY
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Denis Coderre |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | SMALL BUSINESS
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Herron |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | DURHAM IN BLOOM
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Ovid L. Jackson |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | ORAL QUESTION PERIOD
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | TAXATION
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Preston Manning |
1415
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Paul Martin |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Preston Manning |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Paul Martin |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Preston Manning |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Paul Martin |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | RCMP INVESTIGATIONS
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Miss Deborah Grey |
1420
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Herb Gray |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Miss Deborah Grey |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Herb Gray |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | THE DEFICIT
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gilles Duceppe |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Paul Martin |
1425
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gilles Duceppe |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Paul Martin |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | EDUCATION
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Michel Gauthier |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Paul Martin |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Michel Gauthier |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Paul Martin |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | THE DEFICIT
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Alexa McDonough |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Paul Martin |
1430
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Alexa McDonough |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Paul Martin |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | RCMP INVESTIGATIONS
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Marcel Massé |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Peter MacKay |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Marcel Massé |
1435
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | POLITICAL CONTRIBUTIONS
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Chuck Strahl |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Don Boudria |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Chuck Strahl |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Don Boudria |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | OPTION CANADA
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Sheila Copps |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Pierre Brien |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Sheila Copps |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | SOMALIA INQUIRY
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Art Hanger |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Arthur C. Eggleton |
1440
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Art Hanger |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Arthur C. Eggleton |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | SINGER RETIREES
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Claude Bachand |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Pierre S. Pettigrew |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Claude Bachand |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Pierre S. Pettigrew |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | THE ENVIRONMENT
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Bill Gilmour |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Christine Stewart |
1445
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Bill Gilmour |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Christine Stewart |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | SECURITY IN GOVERNMENT BUILDINGS
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Stéphane Bergeron |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Don Boudria |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | HUMAN RIGHTS
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John McKay |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Lloyd Axworthy |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | MEFLOQUINE
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Cummins |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Allan Rock |
1450
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Cummins |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Allan Rock |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | NATIONAL DEFENCE
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Dick Proctor |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Arthur C. Eggleton |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Dick Proctor |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Arthur C. Eggleton |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | THE ECONOMY
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rick Borotsik |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Paul Martin |
1455
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rick Borotsik |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Paul Martin |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | SCIENCE AND TECHNOLOGY
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Reg Alcock |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Ronald J. Duhamel |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | JUSTICE
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jack Ramsay |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Lucienne Robillard |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | KIDNAPPING OF CHILDREN
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Benoît Sauvageau |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Lloyd Axworthy |
1500
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | PRESENCE IN GALLERY
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | The Speaker |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | PRIVILEGE
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Security in Government Buildings
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Stéphane Bergeron |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | ÉBOULEMENTS TRAGEDY
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Claude Drouin |
1505
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Preston Manning |
1510
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gilles Duceppe |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Lorne Nystrom |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. André Harvey |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | ROUTINE PROCEEDINGS
|
1515
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | ORDER IN COUNCIL APPOINTMENTS
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Peter Adams |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | PATENT ACT
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Bill C-248. Introduction and first reading
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Solomon |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | INCOME TAX ACT
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Bill C-249. Introduction and first reading
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Murray Calder |
1520
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | PETITIONS
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Telephone Rates
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Peter Adams |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | QUESTIONS ON THE ORDER PAPER
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Peter Adams |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | GOVERNMENT ORDERS
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | INCOME TAX CONVENTIONS IMPLEMENTATION ACT, 1997
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Bill C-10. Second reading
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Yves Rocheleau |
1525
1530
1535
1540
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jerry Pickard |
1545
1550
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rob Anders |
1555
1600
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rob Anders |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Brent St. Denis |
1605
1610
1615
1620
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rob Anders |
1625
1630
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Randy White |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Peter Mancini |
1635
1640
1645
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rob Anders |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jim Abbott |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Randy White |
1650
1655
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rick Borotsik |
1700
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rob Anders |
1705
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Bryden |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rob Anders |
1710
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rob Anders |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Roy Cullen |
1715
1720
1725
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jim Abbott |
1730
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rob Anders |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Pierre de Savoye |
1735
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jim Abbott |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rob Anders |
1740
1745
1750
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jim Abbott |
1755
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Rick Borotsik |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Darrel Stinson |
1800
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Bob Kilger |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Motion
|
1805
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Walt Lastewka |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Motion
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jim Abbott |
1810
1815
1820
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Bryden |
1825
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Hon. Don Boudria |
1830
1835
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Val Meredith |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Williams |
1840
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Ms. Val Meredith |
1845
1850
1855
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Werner Schmidt |
1900
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Williams |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | motion
|
1905
1950
(Division 11)
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Motion negatived
|
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Chuck Strahl |
1955
2000
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Guy St-Julien |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Bill Blaikie |
2005
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Herron |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Williams |
2010
2015
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Jason Kenney |
2020
2025
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Ken Epp |
2030
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Randy White |
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. John Williams |
2035
2040
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Mr. Gary Lunn |
2045
![V](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/b_stone1.gif) | Division on motion deferred.
|
(Official Version)
EDITED HANSARD • NUMBER 16
![](/web/20061116182516im_/http://www2.parl.gc.ca/common/images/crest2.gif)
HOUSE OF COMMONS
Monday, October 20, 1997
The House met at 11 a.m.
Prayers
GOVERNMENT ORDERS
1105
[English]
INCOME TAX CONVENTIONS IMPLEMENTATION ACT, 1997
Hon. Jim Peterson (for the Minister of Finance, Lib.) moved
that Bill C-10, an act to implement a convention between Canada
and Sweden, a convention between Canada and the Republic of
Lithuania, a convention between Canada and the Republic of
Kazakhstan, a convention between Canada and the Republic of
Iceland and a convention between Canada and the Kingdom of
Denmark for the avoidance of double taxation and the prevention
of fiscal evasion with respect to taxes on income and to amend
the Canada-Netherlands Income Tax Convention Act, 1986 and the
Canada-United States Tax Convention Act, 1984, be read the second
time and referred to a committee.
He said: Mr. Speaker, I intend to be very brief this morning.
We intend to enter into three new tax treaties with Lithuania,
Kazakhstan and Iceland and we are making revisions to four
existing taxation treaties, those with the Netherlands, Denmark,
Sweden and the United States.
Canada currently has 61 treaties for the avoidance of double
taxation and the prevention of fiscal evasion. With these three
new treaties we will be up to 64. This is very important for
Canada as a nation which is outward looking and which depends on
40% of its economic wealth in any one year on its exports, on its
commerce abroad, on its foreign direct investment and the flows
of information, capital, technology, royalties, dividends and
interest.
In five of the treaties, those with Ireland, Denmark, Lithuania,
Kazakhstan and Iceland, the major provisions, apart from avoiding
the double taxation of income, i.e., deciding that if income
flows from one country to another, which country has the right to
tax it. Obviously both countries cannot if we are to have a
modern world. Otherwise the rates of tax would easily exceed
100% of that income.
Through these treaties one country foregoes the right to tax in
certain circumstances. For purposes of simplicity we have
countries of source and we have countries of destination, usually
where the recipient is resident. Will it be the country where
the income is owned or the country where the recipient is
resident that will determine the primacy of taxation? In this
exercise we have followed the general outlines set out in the
OECD model convention for the avoidance of double taxation.
In five of these treaties, those of Ireland, Denmark, Lithuania,
Kazakhstan and Iceland, one of the main provisions involves
reducing the withholding tax that would otherwise be payable by
the source country, in this case Canada, 25% under the Income Tax
Act, reducing it down to a level which is far less punitive. In
most of these cases we have reduced it to 5% where the foreign
resident has a controlling or major interest in a Canadian
corporation. The rate is often reduced to 10% where interest
payments go abroad. In many cases where there are payments on
government debt, there is no withholding tax whatsoever.
One of the main concerns in bilateral negotiations has been to
try to reduce the withholding taxes to zero, where they deal with
royalties on scientific know-how, computer software and things
which are necessary to produce a modern industrial state.
1110
I regret that in some of these five treaties we are not able to
get that rate down to zero on such royalties. However, in the
treaties with Sweden and Netherlands we have confirmed that we
will have a zero withholding rate on those types of payments.
This is significant progress in a world which is increasingly
dependent on the flows of information and technology.
Perhaps the most important change being made today is with
respect to the tax treaty with the United States. Its main
provision deals with social security benefits which flow across
the Canada-U.S. border: a person resident in the United States
who receives Canada or Quebec pension plan or old age security
benefits or a person resident in Canada who receives from the
United States its social security benefits.
Just so we understand these provisions I would like to go back
to the law as it existed prior to 1996. At that time the country
paying the benefit did not exercise any taxing jurisdiction or
taxing power. That taxing power was exercised only in the country
of residence. Therefore a person resident in Canada who was
receiving U.S. social security was taxable in Canada. The rule
was that only half of that social security benefit went into the
resident taxpayer's income but it is obvious to members on all
sides of the House that this produced unfairness.
For example, if persons resident in Canada were receiving social
security from the U.S. of say $8,000 they were taxable on only
$4,000 of it, whereas if they were receiving $8,000 of old age
security they were taxable on all of it. This was not equitable
and not fair.
Therefore we entered into negotiations with the United States to
change that law as of January 1, 1996. We said that rather than
the country of residence taxing the pensions or the social
security it would be the country of source. If a resident of the
United States received Canada pension plan or OAS, Canada would
withhold 25% on those payments to the resident in the U.S.
If the U.S. person was a low income taxpayer and his or her
marginal rate of tax was either zero or less than the 25%, Canada
gave that person the option of filing a tax return in Canada. To
the extent that the tax would have been less than that 25%
withheld by Canada, Canada would give a refund. It worked well
for a person resident in the U.S. receiving pension benefits from
Canada. On the other hand it did not work so well going the
other way.
The U.S. withheld 25.5% on social security payments going to a
resident of Canada but it did not allow the Canadian who was in a
low income or no income bracket to file a U.S. tax return and be
taxed on a net basis; i.e., to be taxed at less than 25.5%.
Accordingly, negotiations were entered into with the United
States and that is the result of this protocol. We are saying
that the country of residence of the taxpayer or the recipient
now has the exclusive right to tax. The country paying the
social security, the United States will forgo its withholding tax
or Canada will forgo its withholding tax when paid to the United
States.
1115
Second, the resident of Canada will include only 85% of U.S.
social security in their Canadian income, and a reciprocal right
applies to residents in the United States receiving pensions from
Canada. This means that low income taxpayers are in effect going
to be taxed on a net basis and it will not be punitive. This is
a desirable and hopeful result.
In order to protect those who might have already suffered or
paid their taxes, this law, when in effect, will be retroactive
to January 1, 1996. To help in the transition, if someone has
already paid their taxes for 1996 or 1997, we have said that they
will pay no more taxes than they otherwise would have. Therefore
if a person is in a higher bracket than the 25.5% withheld, they
will not have to pay that for the years 1996 and 1997. It will
only be on an ongoing prospective basis that these full rates of
tax, applicable to domestic or resident taxpayers, are going to
be applied.
There is also one other amendment that deals with capital gains.
We know that if a U.S. resident owns real estate or resource
properties in Canada and disposes of them they would be subject
to Canadian tax. Suppose they own those properties through a
corporation resident in the United States and sell the shares in
that corporation. It would seem natural that they should not be
able to get away with something by doing it indirectly through a
corporation, that they could not get away with it even if they
owned those properties directly. This is why Canada has always
had a law in its books which states that where one owns those
Canadian assets indirectly through a U.S. corporation, they will
be taxable as if one owned those assets directly.
However, the U.S. does not tax Canadian residents on this basis.
Accordingly, we have amended the tax convention with the United
States in order to reflect that both of our laws be brought into
this more modern mode. Quite frankly, in terms of administering
a law when a resident of the U.S. sells the shares of a
particular company it is very difficult to look behind that
corporate shell and find out what all the assets are. In a
modern world this does not make a lot of sense.
I am very pleased to say that we have settled this issue of
transporter pensions or social security in a way that is fairest
to those who have the lowest income and whose tax rates would
otherwise be under the 25.5% U.S. rate or the 25% Canadian rate
when they are taxed on a net basis. This is a desirable result.
It is fair and is evidence of the ongoing good co-operation and
strong relationship between our two countries.
Mr. Jason Kenney (Calgary Southeast, Ref.): Mr. Speaker,
I rise on behalf of the official opposition to address Bill C-10,
an act to implement a convention between Canada and various
conventions between the countries of Sweden, Lithuania,
Kazakhstan, Iceland and Denmark for the avoidance of double
taxation and the prevention of fiscal evasion and also to amend
the 1986 Canada-Netherlands Income Tax Act and the 1984
Canada-U.S. Tax Convention Act.
At the outset I would like to make clear that the official
opposition supports the proposed conventions with Sweden,
Lithuania, Kazakhstan, Iceland and Denmark. We have no objection
to the essentially housekeeping amendments made to the
Canada-Netherlands Income Tax Act.
However, the government did try to seek our consent and that of
the other opposition parties to rush this bill through the House,
which is often the case in technical bills involving housekeeping
amendments of this nature.
1120
It is a good thing that we as opposition MPs sometimes look a
little below the surface to find something very suspicious and
nefarious lurking beneath the surface of such technical bills.
Indeed such a nefarious section exists in this bill with respect
to the tax treatment of social security payments to Canadian
residents from the U.S. social security fund. Schedule section
of part VII of Bill C-10 deals with those payments which the hon.
minister just addressed.
However, in reviewing the government's rationale for amending
the treatment of taxation of social security payments received by
Canadian residents, the minister left out a few very pertinent
facts.
He implied that somehow these change being made from the third
protocol agreed on by this government in 1995 to the protocol
that was signed in April by representatives of the American and
Canadian governments would somehow increase tax fairness and
provide tax relief for lower income resident Canadian seniors.
That really is not the full picture. What the minister forgot
to mention was that tax treaty, the 1985 third protocol which
imposed a 25% flat withholding tax for social security payments
coming to Canadian residents, was negotiated and agreed on by
this government, the very government whose members are saying
that it was an unfair agreement. Indeed it was.
Let us back up a couple of steps and give the government a bit
of a history lesson when it comes to how it has treated these
80,000-some seniors who have received U.S. social security
payments in Canada.
Originally since the 1984 U.S.-Canada Income Tax Convention Act,
50% of social security payments to Canadian residents could be
included for purposes of Canadian taxation. That made a lot of
sense because it was the same treatment that U.S. recipients of
social security have. That is to say, 50% of their social
security payments were included for the purposes of taxation.
In 1992 the U.S. government under one of the Liberals'
ideological allies, Bill Clinton, decided it was going to raise
taxes on seniors. It did that by raising the total maximum
inclusion rate for U.S. social security benefits from 50 to 85%
so that theoretically wealthier seniors were paying more tax on
their social security benefits.
Following that, this government entered into negotiations with
the Americans to produce the third protocol, which did not create
a parallel system with the American treatment of the taxation
social security benefits. Instead what they did was impose this
25.5% flat withholding tax on those payments being made to
Canadian seniors and American residents of Canada. That was
devastating. It had an absolutely devastating impact,
particularly on low income seniors.
I think the members from the government who come from the
Windsor area in particular where many of these taxpayers are
concentrated know of what I speak. It put many of the lowest
income seniors there into terribly dire straits.
Many of the lowest income seniors saw their tax bills rise by
$1,000 to $2,000, people on fixed incomes, people who do not have
the resources to hire tax accountants or lawyers or specialists
to advise them on this kind of change. Suddenly it appeared,
even after the government made commitments that no one would pay
more taxes.
The hon. deputy prime minister, a member from the Windsor area,
indicated in several public statements on the record that the
1985 protocol would not result in a tax increase for any Canadian
resident. He was wrong. He was completely wrong because every
Canadian receiving U.S. social security payments saw a
significant increase in their tax bill. The government was wrong
then and it is wrong again today.
Those seniors lost trust in this government's ability to protect
their interests in negotiating the 1985 treaty. As a result
there was a lot of political heat felt by this government. They
went back to the table and they renegotiated it, and today we are
analysing the result of that negotiation.
1125
What happened? Once again this government sold Canadian seniors
down the river by raising the inclusion rate of U.S. social
security payments from 50%, as it was before 1985, to 85%. That
is a 70% increase in the inclusion rate. That is a 70% increase
in the taxes that seniors who receive U.S. payments will have to
pay the Canadian government.
The Liberals call this fairness. They say this is revenue
neutral. It is not. If more seniors pay more taxes than they
used to, that is a tax grab.
I know this government has a problem when it comes to
accounting. By adding $100 billion to the federal debt it claims
to have somehow balanced the budget. It thinks adding debt means
fiscal responsibility, that increasing taxes equals tax fairness.
It is more of the same old Liberal tax, spend and borrow game
that we see in section 7 of part VII of Bill C-10.
This is a very serious matter and I hope the government listens
closely. We have received representations from an organization
representing thousands of Canadian resident seniors, the
Canadians asking for social security equality. They point out to
us the kind of very serious dire straits that older Canadians
fell into as a result of the 25% flat withholding tax, unfair tax
grab, imposed by this government in the 1985 treaty.
They made representations to the government to make changes so
they could get back to revenue neutrality with the pre-1985 tax
rules. Instead they get a 70% tax increase.
The government will say these changes are fair because Canadian
taxpayers who receive Canada pension plan and OAS, now seniors
benefits, have an inclusion rate of 100%. They are right.
Liberals must be happy that seniors have to get shaken down.
What they are doing under the proposed seniors benefit changes
is to deeply penalize middle income seniors in particular who
have acted responsibly to save for their retirement by imposing
massive taxes on their income from private savings. That is what
they are doing under the seniors benefit. They are doing very
much the same thing under this bill.
The government will argue, as have several of the members from
the Windsor area, that the 100% inclusion rate for CPP payments
to Canadian residents is somehow a precedent for these Canadian
residents receiving U.S. social security payments. On the face
of it, it seems like a reasonable enough argument. We want
fairness. Everybody should be treated the same.
There is a difference here. Canadians are not taxed on the
payments they make to the Canada pension plan. The so-called
premiums, premiums which the government will be raising by 73%
between now and the year 2003, are deductible from the taxes we
pay. They are not included as taxable income.
The U.S. government treats its taxpayers differently. They do
not get to deduct the cost of their social security premiums paid
to the U.S. treasury. They are taxed at source on those
payments. That is why Americans do not have a 100% inclusion
rate for social security benefits. They have decided for policy
reasons to tax that pension system at the front end when the
taxpayer earns the money and pays into the system rather than
when he retires and collects from it.
Imagine the case of a hard working Canadian taxpayer who goes
across the border to find gainful employment in the United States
because there are not enough jobs in Canada. Under American law
a portion of their paycheque is taken off at source and sent to
the U.S. federal treasury to fund their social security benefits.
They do not get to write the cost of that off against the taxes
they pay. They are paying taxes on those premiums and they make
their retirement plans based on that income. Of course most of
these people are seniors on modest fixed incomes. Then finally
along comes their retirement and what happens?
1130
If they were residents of the United States they would be faced
with a very small tax on the social security benefits they
receive. In fact anyone in the United States who earns up to the
equivalent amount of $40,800 Canadian as a senior would pay no
taxes on their social security benefits, none, zero, zip. There
are no taxes for low income seniors on their social security
benefits. If they earned a little bit more, if their income was a
little higher, then for middle or higher income seniors somewhere
between 50% and 85% of their social security benefits would be
taxable.
The Americans have built a progressive scale into their tax
system for social security benefits. There is progressivity and
fairness. The wealthy would pay more, 85% of their social
security benefits are what they would pay taxes on. But the poor
would pay nothing.
This government has created a double standard for Canadian
residents earning the same social security benefits. Not only
did they have to pay taxes on their social security premiums when
they were working, now they will have to pay taxes on 85% of the
social security benefits regardless of whether they bring in
$10,000 a year or a million dollars a year.
This government loves to lambaste our American friends for
unfair taxes. This government prides itself on being the paragon
of fairness when it comes to taxation, but it has created this
gross double standard. It is going to double tax Canadian
residents who happen to have worked in the United States, who
have been taxed once by the U.S. government on their payments
into the social security plan. They will now be taxed again
regardless of their income level and 85% of their social security
benefits will be included for purposes of Canadian taxation. That
is not fair. That is what is called a tax grab and it is
something the government is going to pay a serious political
price for.
Let us look at the so-called fairness of these changes if you
were a recipient of social security benefits in the United States
earning $30,000. What would have happened under the 1985 tax
treaty this government brought in, if you were a Canadian living
in Canada collecting U.S. social security benefits, the 1985 tax
treaty which it is trying to change added $1,300 to the tax bill.
If you were a senior earning $30,000 the changes brought in in
1985 would have added $2,000 to your tax bill.
I spoke to some seniors from the Windsor area on the telephone
today who indicated that the flat 25% tax imposed by the
government in the past tax treaty added $2,000 to their tax bill.
This is not just a number, not just a figure. It is real money
out of the pockets of real people, affecting their lives, making
them poor, putting many of them in distress.
We have heard stories of seniors receiving social security
benefits in Canada who had to leave their apartments, who had to
sell their cars and could not drive to the grocery store and who
could not afford cabs. I understand there is a member of the
government from Windsor who actually should be commended for
volunteering to drive some of these seniors to the grocery store
because they cannot afford a cab because of the $2,000 tax grab
agreed to by the government in the last tax treaty. It was not
fair, not right. It was a tax grab so the government tried to
change the rules.
What happens now? The government grabs more. Under the new
treaty, under the fourth protocol that we are debating in Bill
C-10 today, the same seniors will again see an increase in the
taxes payable on their U.S. social security payments. In fact
somebody earning $30,000 a year will pay over $3,000 more than
they did in 1985.
1135
We are talking about seniors on a fixed income of $30,000 a year
who will see 10% of their gross income disappear because of the
70% increase in the inclusion rate proposed by Bill C-10. That
is fairness? They call that fairness? I call it a rip-off, a
rip-off on top of 36 tax increases imposed by this government
since it came to power.
Let us look at the example of a Canadian resident with a gross
income of just over $40,000. What happens to him? In the United
States he would only pay an inclusion rate of 50%, not 85% as in
Canada. The marginal tax rate would only be 32% but as a
resident of Canada he would pay $2,600 more than he would if he
were a resident of the United States. That is how we are
treating our seniors and I think it is shameful.
The government will claim again and the finance minister has
said in correspondence with me that these changes are necessary,
that the 50% exemption was in the tax treaty because when the
treaty was signed that was how the U.S. taxed its own residents'
social security income. True enough. If that is how the U.S.
government treats its residents, why are we treating people who
paid into that system differently? Why do they have to pay 85%
of their income into this system?
As people from Canadians Asking for Social Security Equality
have said, this is a massive tax grab. They just want an
amendment so they will get the same treatment they had under the
pre-1985 rules. That seems reasonable enough to us. So that
they do pay their fair share but not a penny more.
This government's idea of tax fairness is that everybody pays
more. My idea of tax fairness and tax efficiency and a growing
economy is a system where Canadians get a bit of a tax break. It
is a system that acknowledges that Canadians have worked all
their lives and it will not penalize them for saving. They have
saved all their lives and they will not get penalized for trying
to live out a reasonable retirement.
I repeat that this is from a government that has imposed 36 tax
increases on Canadians, tax increases that have amounted to $24
billion in additional revenues as of last year. It is from a
government that now imposes a tax burden of 46% on the average
Canadian family. This is a government that has presided over
four straight years of shrinking after-tax family income. The
government calls that a record of economic growth. I call it a
record to be ashamed of. This is a government that has presided
because of those tax increases, because of that shrinking family
income over 9% unemployment, over 17% youth unemployment.
Now in Bill C-10 which we are considering today the government
is attacking Canadian residents who are receiving U.S. social
security payments. Under the proposed amendments to the Canada
pension plan the government is attacking younger Canadians by
imposing on all working Canadians a 73% increase in their CPP
premiums. This will give self-employed Canadians a $3,600 tax
bill for their CPP premiums, money that people of my generation
know we are likely never to receive.
This is a government that is proposing, in its amendments to the
seniors benefit, tax increases which would severely penalize
middle income seniors for having acted responsibly and for having
saved for their retirement. And today again it proposes yet
another tax increase.
My message to the government is to listen to Canadians who are
speaking out about this and who are asking for fairness. Even
the finance minister made an admission in a letter to me dated
September 22 by saying “I can understand some recipients are not
in favour of the new agreement”. Why is that? It means that
after 1997 they may have to pay more tax than they did in the
past. The finance minister admits it.
1140
In 1985 the deputy prime minister said that the proposed tax
treaty would be revenue neutral. He was wrong. I will not say
that he lied because that would be unparliamentary. He just did
not tell the whole truth. Whether he knew it or not, he did not
tell the whole truth.
We just heard the hon. minister say that this would not increase
anybody's taxes, that it would bring taxes down for lower income
Canadians but I have here in my hand a letter from the finance
minister contradicting that statement. The Minister of Finance
has admitted that Canadians are opposed to it because it will
mean a tax increase for them.
Which is it? Is it fairness or is it an increase? Is it a tax
cut or is it a tax grab? I guess we will have to trust the word
of the hon. Minister of Finance when he says that it is a tax
grab.
I have a question. I am sorry I did not have a chance to ask
the minister this question, but there was no question and comment
period. Somewhere in the labyrinthine hallways of the Ministry
of Finance surely somebody sitting at a computer terminal has
crunched the numbers as to how many more millions of tax dollars
the government will squeeze out of low and middle income seniors
to satisfy its insatiable demand for tax dollars through Bill
C-10. Surely they know what the dollar figure is. Why have they
not disclosed that?
My challenge to any government member speaking on this bill
today is to tell us how much money they are squeezing out of the
poor seniors with this bill. How many millions of dollars will
there be on top of the billions of dollars they have already
squeezed out of Canadians,
on top of the billions they plan to squeeze out of
seniors benefits, on top of the $10 billion they plan to squeeze
out of the Canada pension plan?
It may not mean a lot to the millionaires who populate the front
benches of the government and it may not mean a lot to ordinary
members who get $5 out of every dollar they put into their gold
plated MP pension plan. However a $2,000 tax increase for a
Canadian resident senior earning only $30,000 a year means a lot.
It can make the difference between living a reasonable
retirement and a retirement stuck in poverty.
I am sick and tired of the government prattling on about tax
fairness when again and again it means higher taxes for the
people least able to defend themselves, least able to hire tax
lawyers and accountants who populate the Liberal Party, least
able to handle this kind of cut to their income.
I call on my colleagues opposite to look at this bill.
There is no doubt that when government members walked into the
government lobby this morning, government hacks were there
handing them their speaking notes. They will dutifully stand up
today and read word for word, verbatim, about how this bill is about
fairness and how it is just an innocuous housekeeping amendment.
That is what we will hear from those members today. They do it
time and again.
The finance ministry, as always, will frame the
amendments and the legislation working behind closed doors with
the minister while the backbenchers are left in the dark not
knowing what is really in the bill. When they show up in the
House they are presented with 138 pages of technical legislation.
They are given their speaking notes. They have not read the
bill. They have not looked beneath the surface of those speaking
notes to ask the minister questions.
But seniors are asking us questions, not just members of the
opposition but members of the government. They are pleading for
the sake of their retirement for the MPs opposite to take this
seriously and not to bluff it off as just another government
bill, another technical housekeeping amendment because it is not
that. Over 80,000 Canadian seniors are going to see their taxes
go up over what they paid in 1985. That is not fair.
Why will members opposite not look beneath the surface? Why
will they not throw away the scripted notes they have been given
by bureaucrats in the finance department, which some of them are
reviewing at this very moment? Why will they not speak for
themselves and their constituents rather than for the bureaucrats
in the finance department?
That is the challenge of democracy. That is the challenge of
representation. That is the challenge this government again and
again has failed to meet with its massive tax increases which
have reduced hope for older Canadians and younger Canadians and
which have given us a 9% stagnant unemployment rate for 86
straight months. That is the economic record of the government.
They are very sly. The Mulroney government used to get heat all
the time for any little change like this one because the Liberals
were very good opposition members. Mr. Speaker, I think you know
that from experience. They pointed out tiny tax increases hidden
in complicated bills like this one and the Mulroney government
paid a price for it.
1145
The Liberal government is very slick. It has lots of high
priced PR hacks telling it how to hide these sorts of things from
Canadians.
I put the government on notice today. On behalf of all Canadian
taxpayers the official opposition party—and I think the other ones—will
not let these kinds of things slide through any more.
The government approached us and asked us to fast track the
bill, to consider it in committee of the whole and to let it go
in one day, hoping that the 85,000 Canadians who will face a tax
increase would not notice it. That is what it tried to do, but
it will not get away with it.
We will take it to committee. We will draw out debate. We will
bring witnesses before the finance committee, the same seniors
who will be so deeply affected in their lives by the bill. Those
Canadians will not tolerate this kind of completely irresponsible
approach to democratic deliberation.
I say again that my hon. colleagues opposite should take a look
at the facts. I would be happy to get unanimous consent of the
House to table a chart prepared by Mr. Bruck Easton, a tax and
commercial lawyer from Ontario, in which he compares the relative
taxation of U.S. social security payments to Canadians using
comparable U.S. rates. It demonstrates conclusively the tax
changes proposed under the protocol included in Bill C-10 will
levy a massive tax grab on a small number of Canadians.
A small number of Canadians, no more than 85,000, are affected by the
bill. They do not have, as I
mentioned earlier, high priced tax lawyers. They do not have
high priced lobbyists like former Liberal cabinet ministers
working for them to get access to decision makers in the
government. They do not have anybody at their beck and call on a
$5,000 a day retainer who can call up Mr. Goldenberg or other
officials in the prime minister's office.
I was talking to a representatives of the organization today. I
asked him to urgently fax me some critical information for this
debate. He had to drive three miles just to get to a fax machine
to fax something here. These people are not equipped like the
special interest group, the big business lobby friends of the
government opposite, to object to bills like this one. All they
have is a bit left over which the government lets them keep, a
bit to contribute to this kind of fight.
Many of the seniors are of an age and in a condition of health
where they do not know what will happen to them. What
happens is that they get their cheques and the cheques have
shrunk; they are smaller. They look at their tax return and
wonder what has happened because their income is $2,500 less than
it was four years ago. That is a good question members opposite
will have to answer.
There may be only 85,000 Canadian resident taxpayers affected by
the bill but each and every one of them as a taxpayer has a right
to object to do so. The government
will be hearing from people like them.
I plead with government members not to listen to backroom boys
in the ministry of finance. They should listen to their
constituents, listen to Canadians asking for social security
equality, and listen to taxpayers who asking to keep a bit more
of their money.
The attitude of the government as with all Liberal governments
is that it is the government's money. Somehow it is the
property of the Government of Canada, if not the
Liberal Party of Canada. This money belongs to Canadians. When
the government raises taxes on particularly hard pressed seniors,
as it is proposing to do in the bill, it suggests that those
people do not need the money and that the government needs it
more.
To do what? To lavish billions upon billions of dollars on
special interest group handouts and subsidies to its big business
friends.
1150
I ask members opposite to reveal to the House and to taxpayers
exactly how much they expect to squeeze out of Canadian
recipients of U.S. social security payments through the bill.
I suspect the amount is probably less than the $100 million the
government decided to give earlier this year to its billionaire
friends at Bombardier, a company that has donated hundreds of
thousands of dollars to the already overflowing coffers of the
Liberal Party of Canada.
How many other hundreds of millions of dollars have been handed
out to big business, corporate friends of the government? Who is
forced to pay for it? Not those very same corporations but
retired seniors trying to get by on $12,000 or $20,000 or $30,000
a year. That is where the money is going. I say shame on the
government for having its priorities so desperately wrong.
Is the government really in favour of fairness and equality
which it prattles on about ceaselessly? The hacks in the
various government departments who write their scripted speeches
have, I think, a very limited vocabulary because the word fairness appears
about 18 times in every scripted speech.
If they really had an understanding of the concept of fairness
in a modern liberal democracy, they would exercise it in the way
they act and not in just what they say in political speeches.
They would exercise the concept of fairness by saying to the same
seniors they are persecuting in the bill today that they would be
willing to give up, or at least retroactively reform
their gold plated, taxpayer subsidized MP
pension plan.
We know they will not do that. We know their concept of
fairness starts with taxing Canadians more and taking more out of
the public trough for themselves and their big business friends.
That is not fairness. I call that unfairness.
I want to close by asking the party opposite to consider
seriously the effect this bill will have. We will be proposing a
minor amendment to the bill at committee stage to clarify article
2, paragraph 5 of article XVIII of the 1984 Canada-U.S. Income
Tax Convention Act. It is a very simple amendment that would
make clear the inclusion rate for U.S. social security payments
to Canadians could not exceed the same level imposed on American
recipients of the same benefit. There would not be double
taxation or unfairness. Those seniors would be treated the same
way, as if they were paying taxes in the country where they
earned the benefits.
If the government agrees to the amendment, many tens of
thousands of Canadian seniors will be very grateful and will be
better off for it. Their lives will be better. They will be
less hard pressed. They will be able to do more for themselves,
for their families and for their grandchildren.
I appeal to the genuine humane instincts of members
opposite to look beneath the surface of the bill and to ask the
Minister of Finance about it in caucus on Wednesday. They will
get a chance to do so because we did not agree to fast track the
bill and are pushing for debate. They should ask him, as he
confirms in his letter to me, whether it increases taxes on poor
seniors, to what extent it does so, and how many more millions of
dollars will come into the public treasury as a result. When he says yes,
why not ask the minister to agree to the amendment we will be
proposing to establish tax fairness for these hard pressed
Canadian seniors?
[Translation]
Mr. Michel Bellehumeur: Mr. Speaker, I am pleased to speak on Bill
C-10. It makes a bit of a change from being official Bloc Quebecois
critic for justice.
Bill C-10 is extremely important. It affects a number of my
constituents in Berthier-Montcalm, and particularly in the Rawdon
area. That municipality is home to a number of retired persons from
nearly all parts of Quebec.
In particular, there is a concentration of anglophones who—while
remaining Canadians' worked in the United States when they were
younger, and have now come to the Berthier—Montcalm area to
retire and have made Rawdon their home.
1155
I was made aware of the problem as far back as 1995. It is a rather
significant one, because retired people do not have the same income as
they did while working. These people were heavily penalized because
of the conventions betwen Canada and the United States, which did not
work very well. Taxes had to be paid to both sides and they ended up
being penalized.
Our interventions on this date back to 1995. The problem was raised
here in this House.
The government was challenged on it. François Langlois, the Bloc
member for Bellechasse at the time, did an extraordinary job with
this question. He got it debated on several occasions, both in
committee and in this House. Speaking for both the Bloc Quebecois and
myself, François Mercier is owed a vote of thanks for the work he has
done on this matter. He is back home now, not having been re-elected
in 1997.
Another Bloc Quebecois member, the hon. Member for
Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, has been
involved with this matter since 1995 and is still responsible for it.
He defends constituents faced with this problem anywhere in Quebec in
an exemplary manner.
I should say first of all that the Bloc Quebecois supports Bill
C-10 before us. It resolves the questions we have had since 1995
and also the concerns of our constituents faced with this
problem.
However, there are a number of parts to this bill. I have some
constructive criticism, given the importance of the subject. Part
VII of the bill contains the rules for American pensions. Given
our geographic position, the history of the two countries, which
have long been friends, our close relations with the United
States, there are many economic relations between the United
States and Canada, much more than, say, between Lithuania and
Canada or Iceland and Canada, to mention just those two countries
also included in Bill C-10.
To speed up the entire process, given the importance of
relations between Quebeckers or Canadians and Americans, I think
the government should have drafted the treaty for American
pensions specifically, dealing with the problem of taxable income
between the taxable incomes in Canada and the United States, to
acclerate the adoption process and prevent ambiguity with other
parties to settle the issue once and for all. But Bill C-10 also
includes other conventions. Parts I to V refer to Sweden,
Lithuania, Kazakhstan, Iceland, Denmark, the Netherlands and, of
course, the United States. It is like trying to hide the most
pressing problem in a bill that is more complex than it needs to
be to solve the most urgent problem.
This will not prevent the Bloc Quebecois from supporting the
bill, but had the government listened to us in 1995 and 1996, if
the government had drafted a specific bill to resolve the most
important problem, that is, a convention between Canada and
United States, the problem would now be solved. People who should
get refunds would have them, and we would be in a very different
situation where we could be talking about conventions with other
countries, not less important, but with whom our dealings are
less important in terms of the objective of pensions for people
having worked abroad who retire in Canada.
As I was saying earlier, the purpose of parts I to V is to
implement tax conventions with all the countries I listed
earlier, except the Netherlands and the United States.
Part VI concerns the Netherlands, and part VII concerns the
United States, our neighbours to the South.
1200
These conventions are basically the same, and are largely
patterned on the OECD model. They are standard conventions with
which Canada is familiar because it often enacts similar
conventions.
What surprised me when I looked into this matter,
because I had this problem pointed out to me in my riding and we
discussed it in the Bloc Quebecois caucus, is that in April
1997—and this was confirmed in the joint committee on banking,
trade and commerce—there were 57 tax conventions in effect
between Canada and various countries and 34 pending or under
negotiation. Of the 57 treaties in effect, many are quite old, do
not necessarily meet OECD standards or were not concluded in the
way Canada now concludes such treaties.
In other words,
Canada has a great many tax treaties like this.
It is good to
have these treaties between countries when the goal is to ensure
fair and equitable tax treatment of residents and non-residents.
It is also good to have treaties when the goal is to encourage
trade and investment between countries. But we must prevent
these treaties from becoming smoke screens for abusive tax
avoidance. I will not mention shipping companies under flags of
convenience to avoid paying taxes in Canada and Quebec. Not will
I talk about the scandal we saw in the House, involving both
Liberals and Conservatives, because both of them were equally
involved in the family trust affair. We heard a lot about that
during the 35th Parliament. Shall I talk about that? The
member opposite is looking at me and might be interested in these
things.
I will talk about them after all, as I have the time.
It is said
that tax conventions—the member opposite is smiling, he wants me
to get into this, I found him a bit deadpan today, but his smile
is a sign that it is important that I speak about this—encourage
trade and commerce, but care must be taken not to abuse such
treaties. Companies making hundreds of millions of dollars in
profits can hire good lawyers, good tax experts knowledgeable in
Canadian taxation. They pay then with what they get through
existing legislation. It's quite legal, nothing is illegal. But
there has been abuse.
The first example I
gave—I did not want to get into this, but I am being encouraged
to speak—is Canada Steamship Lines.
As for tax conventions being used as a means to reduce one's tax
liability in Canada, the example comes from high above. I am
referring, unfortunately, to the current Minister of Finance. A
newspaper article—this is not a figment of my imagination—indicates
an in-depth study of the company was done, and the
finance minister is taking advantage of tax conventions with
countries considered as tax havens, such as Bermuda, Liberia,
Barbados, and in 1981, when the finance minister became the owner
of Canada Steamship Lines, this shipping company was conducting
the same sort of business, but under the Canadian flag.
However, the study released in Le Soleil revealed, and this
was later confirmed by many, that between 1981 and 1994 the
company set up three subsidiaries in Bermuda and three more in
Liberia.
1205
We also learned that
since 1994 the GST group established seven more subsidiaries in
Barbados. According to tax experts, Liberia, Barbados and Bermuda
are among the countries where the tax man is most complacent
toward companies.
All this to say that when we make abusive use of legal tax
conventions, as the finance minister did, such treaties serve
essentially the same purpose and allow the awarding of the same
contracts as before 1981, before the finance minister took over
the company, but now the ships fly the flags of countries experts
consider as tax havens. Why? Simply to avoid paying taxes, or
to pay as little as possible. It is rather clear. Existing tax
treaties are used in such a way as to benefit the wealthy.
The other example mentioned by the Bloc Quebecois during the
35th Parliament is the whole issue of family trusts. One day, in
May 1996, we learned from the auditor general that there were
serious concerns as to how the Income Tax Act had been applied to
transfers abroad of at least $2 billion in assets held in trust
funds in Canada. With the complicity of the Department, with
the complicity of both the Liberals and the Conservatives,
because both parties had a hand in this, $2 billion were
transferred to the U.S. without a cent being paid in taxes, all
this perfectly legally, again because of the tax treaties.
This is the kind of tax treaties on which we must focus to try
to plug loopholes as much as possible, so that each and every
citizen of this country, in Quebec as well as in Canada, pay
their fair share of taxes.
These are two very important examples. Given the extensive
number of tax treaties between Canada and various countries, one
might expect that in signing such treaties a responsible
government would assign appropriate resources to evaluating,
adjusting and renegotiating tax conventions that present
problems, especially with countries representing the greatest
risk of tax losses for Canada.
I have a riddle for you this morning. Guess how many
employees are assigned to tax treaties in the finance department.
How many employees work on these treaties? There are 57 treaties
that have been signed so far and, as of April 1997, there were
another 34 pending. Probably several of these have already been
signed.
All in all, there must be approximately 100 treaties. So, in the
federal administration, this big machine, how many employees are
monitoring these treaties, ensuring that they are reviewed and
that amendments are made if mistakes are found, if the loopholes
are too great for tax fairness? How many? A hundred,
twenty-five, twelve? We have learned that there is only one in
charge of seeing to these conventions. Fortunately, this is a full
time job. However, he is alone, and billions of dollars are at
stake.
I am not questioning the skills of this employee, whom I
actually find very courageous to tackle this task on his own,
without asking for any help. On the other hand, I wonder how
serious the government is about seeing that these treaties are
properly implemented. I think that in a case such as this one,
it is not a matter of saying that the government is just
ignoring the implementation of such treaties.
I think that, by having one public servant for a hundred or so
treaties, the government is deliberately turning a blind eye and
a deaf ear to what is going on with all these international
treaties.
1210
Are you aware that Canada spent more on the visit by
the Queen of England than on auditing tax treaties à an example I
have chosen because it is in today's news. Speaking of royal
visits, I am sure the Queen of England must now be recovering
from the visit to India, which seens to have been a trial for
her. This is just to show that the government is not necessarily
investing in the right place.
Perhaps more public servants need to be assigned to keeping a
serious eye on all these international treaties, which are
essentially good things.
I believe there must be international
treaties. There must be legislation to protect the most
disadvantaged, as Part VII of this bill does. The Bloc Quebecois
initiated it in 1995. It is right for there to be tax
conventions to solve the problems of Canadians residents and
non-residents having once worked in the United States, but these
havens and tax conventions should not be abused. To avoid this,
there must be a minimum follow-up, and that is provided by civil
servants, investigations, people responsible for these
conventions' application.
To conclude, the Bloc
Quebecois supports Bill C-10. We do, however, call upon the
government to take subsequent follow-up far more seriously.
We are calling upon the government, in light of what is at stake,
the billions of dollars involved—big bucks here—and in light
of the fact that most often it is companies who make use of tax
conventions, and they can afford top notch lawyers and
tax experts, to have enough resources, civil servants to do a
good job, a very good one, of following up on the application of
these international treaties.
[English]
Hon. Lorne Nystrom (Qu'Appelle, NDP): Mr. Speaker, I want
to say a few words on Bill C-10 that implements tax treaties and
tax conventions with a number of countries such as Sweden,
Lithuania, Denmark and the former Soviet Republic of Kazakhstan.
It also amends tax treaties or conventions with the United States
and the Netherlands.
The bill is fairly lengthy and detailed. For the most part the
NDP agrees with what is being done. Primarily it is a
housekeeping bill. It prevents double taxation in many cases. It
also prevents fiscal evasion by citizens. In the main we support
the direction in which the bill is going.
We do have one major concern and that is with part 7 of the
bill. That is the amendment to the convention with the United
States. It concerns over 80,000 people who receive social
security benefits from the United States but who reside in
Canada. What is happening to them is unfair because it is being
done retroactively. That is the part of the bill which we as
parliamentarians should look at changing.
Until 1996 when Canadians received social security payments from
the United States, and a lot of these people reside in the area
of Windsor, Ontario, they were taxed on 50% of their social
security payments.
1215
That is a system that was in use in this country for many years.
It was under that understanding and under that law that people
made their retirement plans and did the financial planning for
their families. That is what it was based on.
Then in November 1995 the government introduced Bill S-9 in the
Senate. That bill introduced a very important change. The
Canadian government would not collect taxes on social security
payments but instead there would be, in effect, a withholding tax
taken off the paycheques of Canadian citizens by the American
government. The withholding tax rate is 25.5%.
That was a big drop in income for many citizens. It happened
very quickly, without proper consultation, maybe without any
consultation with these citizens.
There was a lot of legitimate protest after the passage of that
bill because it unfairly attacked the incomes of 85,000 Canadians
who had done their retirement planning and had based their
livelihood on a set of rules in place when they were working in
the United States.
The protest continued for a fair amount of time. Last April the
government made the announcement that there would be change.
Indeed that change has been made in the bill which is before the
House today.
Now instead of the United States taking off the withholding tax
of 25.5%, the government in the country where the citizen resides
will be taxing the citizen on the social security payment; in
other words, the Canadian government in this case. On the flip
side of the coin, the American government will tax American
citizens receiving the Canada pension plan or the Quebec pension
plan.
What the government did not do was go back to the pre-1995
taxation level which was on 50% of the social security payments.
Instead the government will be taxing 85% of the social security
benefits, 85% instead of the previous 50%. One could
make the argument that this is, in many cases, better than it was
a year or so ago but it is still not nearly as good as it was
prior to 1995. This is very unfair. This was done without
properly consulting the people who are affected.
There is an organization called CASSE, Canadians asking for
social security equality, which is involved in this issue. It
has lobbied on this issue. It made this issue an important one,
particularly in the Windsor area for the election of June 2.
These citizens were not properly consulted. They certainly did
not approve the change. For these people the change is not good
enough. They did their planning based on the rules. The rules
were changed after the game was played. Now we are in the world
series and all of a sudden there is a lot of interest in
baseball. If a team wins or loses that is nullified because the
rules were changed after the game was played. It is extremely
unfair.
The very least the government should do is grandfather this
particular part of the bill so it will not affect people who are
already retired. Those people have already planned their lives.
They have already purchased their retirement home. They have
already budgeted for their groceries and clothing. It should be
grandfathered so it does not affect the people who have retired.
Like many other tax bills, if the government wants to go in this
direction and it can make a case, then of course it is not unfair
in terms of people who are still working not being notified
because the rules are there. It is a different situation
altogether. We can then argue, of course, whether a tax on 85%
is too high or too low.
The first option is to go back to the way the rules were prior
to 1995. These people should be taxed on 50% of their social
security income. The second point I want to make is that, at the
very least, it should be grandfathered so that retirees will not
have the rules changed after they have done their planning.
1220
I also want to make a couple of other remarks about the bill
before us today and the general issue of tax fairness in this
country. I remember the 1993 election campaign when the Liberal
Party talked about abolishing the GST, about getting rid of that
goods and services tax. All of a sudden the party was in power
and there was no action on that.
I want to urge the government, something which our party has
been doing, to eliminate the GST entirely from children's
clothing and books. That would be a good step in the right
direction toward tax fairness. It would reduce taxes by about a
billion dollars in a targeted sense on many people who are the
least able to pay for taxes in Canada. At the same time it would
also stimulate some employment in terms of circulating more money
in the economy. That is the kind of thing that should be done.
I was rather amused this morning as I listened to the Reform
Party critic for national revenue as he waxed eloquent in the
House about the need for tax fairness, to get rid of tax grabs
and tax increases. You would think he was thinking about all
those ordinary people, those ordinary citizens, those mainstream
Canadians who have difficulty making a living in Canada.
On October 1 in Parliament that member was asked the following
question: “Mr. Speaker, does the hon. member really believe we
have tax fairness in this country, that the Conrad Blacks and
other wealthy people pay their fair share of taxes?” He replied
that they, meaning the Conrad Blacks and other multimillionaires,
“pay more than their fair share of taxes”. What a shame, they
pay more than their fair share of taxes. The Reform Party thinks
that Conrad Black and multimillionaires are overtaxed in this
country, that they are paying too much and that if we reduce
taxes for them we would have to up the tax bite on ordinary
citizens living right across this country. I think that is
utterly disgusting for a democratically elected party in the
latter part of the 20th century.
We are seeing some real hypocrisy coming from that side of the
House when they pretend to be concerned about senior citizens and
about the people in the Windsor area and across this country who
are seeing their taxes increase by the bill that is before the
House today. People who are watching the House of Commons
proceedings should be aware of where the Reform Party really
stands and who it really speaks for. It speaks for the extremely
wealthy, the multimillionaires in this country, the people who
have a lot of money. Reformers want them to have more tax breaks
and to hell with the ordinary citizens of Canada.
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, I would
like to ask the member a very simple question. He is so
interested in fairness. With the changes coming to CPP, with
benefits decreasing relative to the premiums and seniors
generally being really pushed, does he also believe in the
fairness that will cause him to say no to his MP pension plan?
Hon. Lorne Nystrom: Mr. Speaker, I do not know what that
has to do with this bill but I want to inform the hon. member
that I voted against that pension legislation a long time before
he was even concerned about MP pensions.
Mr. Gary Lunn (Saanich—Gulf Islands, Ref.): Mr. Speaker, we
are in the House today to debate Bill C-10. I looked back on the
35th Parliament and counted about 36 tax increases by this
government. Today we are in our fourth week of Parliament and
this is the second tax increase proposed by this government.
We saw in Bill C-2 the single largest tax grab, again with
respect to the Canada pension plan, which was brought in by this
government and rammed through this House without debate. The
government wanted to do the same thing with Bill C-10. It
approached the opposition and asked to move this bill through
very quickly without debate in the House.
With Bill C-2, I was very concerned for the future of Canada's
children. Would they get a pension? Would their premiums be
paying for the benefits of people today while they would never
see a dime? Today I am concerned for their grandparents. Last
week it was the children. Today it is the grandparents. There
is absolutely no question that this again is another tax grab by
this government. It is another sneaky hidden one.
1225
What concerns me is in only four weeks of parliament we are
already into the second tax increase. They are increasing the
rate of what they did in the last parliament.
We already know the senior supplement is coming. This will be
another massive tax grab on middle income seniors. When is the
government going to wake up and realize the Canadian public is
not going to stand for this?
We heard members this morning from the opposition and the
government sides. I made some notes with respect to the speaker
from the government side. With the proposed changes he said
recipients of this benefit will have to claim only 85% of their
income as taxable income. What he is not telling us is under the
previous tax provisions they were required to claim only 50% of
their income.
The net effect of this is a 70% tax grab on these people. The
government knows full well it is putting more money in its pocket
to do with as it wants.
I agree with the comments of the hon. member for Calgary
Southeast. I would like to know what that number is. Some of
the bureaucrats within the ministry of finance know exactly what
that number is. We have a right to know what it is.
Mr. Mark Muise (West Nova, PC): Mr. Speaker, Bill C-10
allows Canada to ratify income tax treaties with Sweden,
Lithuania, Kazakhstan, Iceland and Denmark. It also ratifies
changes to existing treaties with the Netherlands and the United
States. These treaties set out a framework for taxes on
investment income flowing between Canada and other countries.
They provide mechanisms to avoid double taxation and prevent tax
evasion.
Over the past several years Canada has negotiated tax treaties
with over 70 countries. These agreements deal with problems that
arise when residents of one country earn income in another. They
are based on the model double taxation convention prepared by the
Organization for Economic Cooperation and Development.
A key problem these treaties address is that of double taxation.
This occurs when the same person or business pays comparable
taxes in two or more countries on the same taxable income for the
same period of time. For example, double taxation would occur if
a resident of one country were taxed in both Canada and that
country on dividend income received from a Canadian company.
Preventing double taxation helps facilitate investment. To
prevent double taxation these treaties limit the application of
each country's respective tax laws and ensure that the taxes paid
in one country are recognized in the other. Limits on
withholding taxes in the country where the income is earned are
set. An exemption is provided for certain income that would
otherwise be taxed in the country where it is earned.
The treaties outline the maximum withholding taxes that may be
charged on different forms of income such as dividends,
royalties and interest. Specifically under the tax treaties
included in Bill C-10 a general rate of withholding tax of 5%
will apply to dividends paid to a parent company on branch
profits.
Second, a withholding tax of 10% will apply to interest and
royalties. Software, patent and knowhow royalties, except in the
treaties for Lithuania and Kazakhstan, will be exempt in the
country in which payments arise.
The withholding tax on other dividends is set at 15%. When the
income is then received in Canada double taxation is prevented by
subtracting the tax already paid from what would otherwise be
payable on that income. The treaties contain measures to prevent
double taxation of income earned in Canada by residents of the
countries concerned.
1230
Another problem addressed by tax treaties is that of tax
evasion, where income earned abroad is not reported in Canada. To
prevent tax evasion the treaties provide for the exchange of
information. Changes to our treaty with the Netherlands include
an article on assistance and tax collection.
This article, which is similar to that approved with the United
States two years ago, ensures that Canada and the Netherlands
will not be used as a refuge for those seeking to avoid taxes in
other countries.
Bill C-10 deals with a problem that arose as a result of recent
changes to the way our tax treaty with the U.S. treats social
security payments. Under changes made law in 1995, social
security payments made to residents of other countries were to be
taxed by the government that issued the cheque. Previously the
country of residence taxed that income.
The U.S. then imposed a flat 25.5% tax on all social security
payments made to its former residents now living in Canada
regardless of other income. This created hardship for low income
seniors, many of whom saw their cheques cut by one-fourth.
Under Bill C-10 Canadian residents will no longer, retroactive
to 1996, be subject to the United States flat tax of 25.5% on
social security payments. Under the changes 85% of such income
from the U.S. will be added to Canadian taxable income and will
then be subject to the normal tax rate of Canadians.
Similarly U.S. residents receiving Canadian social security
benefits will only be taxed in the United States. Bill C-10 also
preserves each country's exclusive right to tax its residents
gains on shares of companies that are not resident in other
countries. The government agreed to a change in the Canada-U.S.
tax treaty that let the U.S. tax this income. Unfortunately the
Liberals did not bother to find out at what rate it would be
taxed or whether there would be relief for low income earners.
The U.S. chose to apply a flat 25.5% tax regardless of the
income of the recipient, resulting in hardship for low income
earners. When that income was instead taxed by Canada our rules
required that only half of it be applied to taxable income.
This resulted in a considerably lower tax rate than 25.5%; as
low as zero in the case of low income seniors and about half for
most others. With great fanfare in the House of Commons the
Liberals today announced that they have fixed the mistake they
made two years ago.
Canada and the U.S. have agreed to return to the old rules
whereby social security and CPP are taxed by the country where it
is received and not by the country that pays. The change is
retroactive. A refund cheque will be issued. About 50,000
people will be affected.
The Progressive Conservative Party would like a firm commitment
from the government. Before entering into further tax treaties
on social security the government should determine exactly how
the other country intends to tax and at what rate.
Mr. Jason Kenney (Calgary Southeast, Ref.): Mr. Speaker,
I commend the hon. member on his comments.
In speaking with representatives of the taxpayers affected by
the changes included in the bill for Canadian resident recipients
of U.S. social security benefits, they were under the
understanding the Progressive Conservative caucus would be
opposing the bill.
I was not clear from the hon. member's remarks whether his
caucus would be favouring or opposing the bill on the grounds
that it in fact increases taxes for those seniors. I wonder if
he could illuminate me and the House.
Mr. Mark Muise: Mr. Speaker, our concern is that of
double taxation and of tax evasion. We are concerned about the
issues being addressed in the bill. That is why the discussion
went forth as I presented it.
1235
Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, I am
wondering what the Tory caucus thought in terms of supporting a
tax increase to keep in line with the Mulroney government's long
history of increasing taxes.
Is the Tory promotion of a tax increase keeping in line with
Brian Mulroney's tax increases?
Mr. Mark Muise: Mr. Speaker, I just do not know how long
the present government and the opposition will harp on past
governments.
The past government was the Liberal government that is in force
now. I am flabbergasted by how long they can look into the past.
We have to look to the future and make changes as required.
Mr. Alex Shepherd (Durham, Lib.): Mr. Speaker, I am
pleased to enter into debate on the issue of Bill C-10 and, more
important, to support passage of the bill.
It is appropriate to review what has happened and why it has
become a problem. The Canada-U.S. tax treaty was amended and
came into effect on January 1, 1996. Unintentionally social
security benefits and disability benefits of some Canadians who
worked in the United States for part of their working lives were
taxed by the U.S. government at roughly 25.5%. We basically did
the same for American residents who were receiving Canadian
benefits.
The problem is that Canada has a very fair and reasonable system
of taxation which allows non-residents to file tax returns in our
country and to seek a refund of the taxes if they were not in
fact taxable. Unfortunately the United States does not have a
similar system of refund.
As a consequence a good number of seniors—as was mentioned
today it is upwards of 85,000—discovered that suddenly taxes
were being deducted from them that they had no real way of
getting back.
In my riding and across the country I have dealt with many
seniors who are concerned about the issue. I spoke to a woman in
my riding, Ellen Mowat, whose total income was about $14,000. Of
that amount, $10,000 was social security benefits. The result
was that it increased her taxes to $2,500, and the woman was only
receiving a total of $14,000 in income.
Statistics Canada says that low income cutoffs for people are
about $25,000. Clearly Mrs. Mowat would be considered to be in
poverty. Yet at the same time she had this problem of over
$2,500 a year being deducted from her income.
I had letters from Mrs. Leona Jeremy of Middleton, Nova Scotia.
It was the same situation. She had $14,000 of income and was
paying over $1,000 a year in taxes. It goes on and on. Les
Stevens, a resident in my riding, had a total income of $12,000 a
year and was paying $1,000 in tax through this retrogressive tax
the United States imposed. He had no way of getting it back.
It is interesting to note, in spite of some of the comments of
the Reform Party today, that none of those people will pay any
more taxes under these changes. In spite of some of the things
the Reform Party has been saying today about tax increases, the
bottom line is that these people will not be paying any more
taxes. In fact they are entitled to a refund of their taxes.
I will address some of the other issues presented today. One is
the income inclusion amount in Canadian taxes.
It is true the income inclusion amount has been increased from
50% to 85%. When I say “income inclusion amount” I am talking
about people in Canada receiving social security benefits from
the United States being required to report 85% of that income for
tax purposes.
1240
The Reform Party went on and on about the 85%. The reality is
that it was already at 50%, so there has been an increase in the
income inclusion amount of over 35%.
We should think about what it means. People in some
jurisdictions will be heavily influenced, such as Windsor and
other border cities. There could be someone receiving Canada
pension benefits and paying 100 cents on the dollar on their
taxes because of the income inclusion factor being 100%. Another
person receiving a U.S. pension could still report only 85% of
it. How could anything be more fair? Many would suggest it
should be higher.
Once again the Reform Party is taking little shreds of evidence
and turning it into a fiasco. Of the 85,000 seniors who will be
affected very few will pay more taxes.
The law came into effect on January 1, 1996. What has happened
in the interim? Taxes have actually been held back. Mrs. Mowat
is missing $1,000. It goes on and on. For over two years these
people on meagre incomes have had thousands of dollars held back
by the U.S. government. Our Minister of Finance has taken on
their cause and negotiated with his American counterpart to
relieve the problem.
It is interesting the U.S. Senate committee has already accepted
the proposal without amendment and is pushing it through the U.S.
Congress. Here we have the Reform Party saying that it will
delay it and wants to amend it.
Who are Reform members talking about protecting? Are they
talking about Mrs. Mowat? Are they talking about low income
seniors across the country who are out this money? No. They are
talking about the very highest income earners. That is with whom
the Reform Party is siding.
The Reform Party is stating today that it is prepared to delay
the legislation? Why? So a few people who do not want to pay do
not have to recognize 85% of that income on their tax returns and
only have to recognize 50%, even though every other senior in the
country receiving a Canadian pension has to recognize 100%.
Reform members are talking about these people. They want to
protect them. That is atrocious.
Reform members spoke about people who could not afford to get in
their cars to go and get groceries. The U.S. government has
$5,000 of Mrs. Mowat's money and she is only making something
like $15,000 a year. What does the Reform Party say to Mrs.
Mowat? It will somehow delay the legislation. Tell me how that
is being responsible.
The Reform Party talks about the progressivity of the system. We
have a progressive system. I have worked with the Canadian
Association of Retired Persons. The Reform Party is saying that
it will get on the case and really study it. It will drag its
feet through parliament.
Where were Reformers when this was going on in the 35th
parliament? I did not hear them asking how they could help these
poor people. It was members on this side of the House and
members of the Bloc who asked how we could resolve the problem.
On various occasions the Minister of Finance went down there to
negotiate with his American counterparts. He told them that the
problem had to be resolved because it was hurting Canadian
seniors.
1245
The Reform Party is a great wall of silence. When does the
Reform Party become interested in this issue? When we talk about
increasing the income inclusion amount from 50% to 85% of the
85,000 seniors affected by this. I heard the member for Calgary
Southeast say the number of people affected was 10,000. He did
not say 85,000. He said it was, at most, 10,000 who may see
their taxes increase. It is those 10,000 who the Reform Party is
concerned about. It is not the 75,000 sitting out there who may
well become deceased while they wait for this process that the
Reform Party is now talking about dragging through the House of
Commons.
Most people can see what the real issue is today. The government
is asking for this bill to be fast tracked because we want to get
that money back in the hands of seniors.
Mr. Darrel Stinson: You want to get it in your own hands.
Mr. Alex Shepherd: By the way, if they are so concerned
about these people, part of this protocol basically says that
anybody who during that two year period, because of the 85%
inclusion amount, would have seen their taxes increase will not
be reassessed. How much fairer can you be? People who would
have paid taxes based on the increase in the income inclusion
amount during that period of time will not be reassessed.
The retroactivity is solely directed to the benefit of the low
income seniors who need the money that the U.S. treasury is
sitting with in its bank account. When this protocol is passed
by both governments the IRS will cut a chunk to Revenue Canada
and Revenue Canada will turn around and distribute that money
back to those lower income seniors.
In conclusion, it is those low income seniors, the Mrs. Lois and
Mr. Stevens of this world who are waiting for this legislature to
get this bill through so they can get their money back. These
people are desperate. They are not making $85,000 like the
member over here. They are making $15,000 and they need their
money. That is why this legislation should go through the House
as quickly as possible and not be derailed by this party.
[Translation]
Mr. Jean-Guy Chrétien (Frontenac—Mégantic,
BQ): Mr. Speaker, the federal riding I have the pleasure to
represent in this House, the riding of Frontenac—Mégantic, lies
along the American border, so that I have over 500 retired people
who are being unfairly penalized by the convention adopted
January 1, 1986.
Most of them are suffering, because their
incomes are between $10,000 and $18,000.
Under this convention, which is still in effect, they lose 25%.
The United States takes 25.5% of their American pensions at
source, and there is no way to recover this amount, even though
they should be able to recover much of it.
For those in the low income group, this is therefore unfair, and
in the riding of Frontenac«Mégantic, more than 500 people are
directly affected by the legislation before us this morning.
I have three questions for my colleague from Durham. When can
retired people expect to receive their American cheques in their
entirety?
My second question is: I understood that this bill would be
retroactive from January 1, 1996, is this still the case?
1250
My third question is not a question but a comment. My colleagues
in the Reform Party intimated earlier that they would do
everything within their power to delay passage of Bill C-10,
which we are debating this morning. I think I understand why the
Reform members are so strongly opposed. There were loopholes in
the 1986 convention but there was also abuse. The Minister of
Finance of the government to which the member for Durham belongs
shamelessly took advantage of tax shelters by registering his
vessels of the Canadian Steamship Line in tax havens. This is
perhaps why the Reform members are opposed to Bill C-10.
We in the Bloc—and Gérard Lamothe who is watching us this
morning is no doubt very proud of his member of Parliament—will
support you, but we would like you to act very quickly, because a
number of our constituents have been calling for this bill to be
passed for months.
[English]
Mr. Alex Shepherd: Mr. Speaker, I thank the member for
his question.
First, if he is concerned about his constituents then he does
not understand the retroactive nature of this protocol. He talks
about going back to January 1, 1996 for the money previously paid
by his constituents that will be refunded and that we are putting
the world back to 1996.
I am surprised by the member. What would some of his
constituents say if he is willing to support an initiative which
delays this legislation? It is his constituents who are out the
money. Every month that goes by another 25.5% will be deducted
from their cheques, money which they will not have to spend in
his riding. I am surprised that the Bloc would support the Reform
Party.
These people are desperate for their money. These people are
saying “Alex, when are we going to get our money? We want our
money back”. That is what we should doing. The Americans have
realized this and that is why they are pushing their protocol
without amendment. They realize the demoralizing effect it has
on Canadians.
Mr. Jason Kenney (Calgary Southeast, Ref.): Mr. Speaker,
I find the remarks of the member for Durham quite remarkable.
Who was in power in 1986 when this tax treaty was promulgated?
He talks about the terrible problems these people are suffering.
I talked about the very same problems in the majority of my
speech. I do not know if he was listening or not.
The low income seniors who have been whacked by this 25.5% flat
tax were whacked by this government which agreed to the tax
treaty. Shame on it. Now it is trying to blame us for the
mistake it made. We believed the Deputy Prime Minister and the
finance minister just like the member did when he voted for the
tax treaty, just like the seniors did when they said nobody would
end up paying more taxes. What happened? They all ended up
paying more taxes.
I have one question for the member. Who was in power in 1986?
Did he vote for the treaty?
We do not want to drag out this debate. We would like to end it
right here, right now if the government would agree to an
amendment which would make it clear that this would not increase
anybody's tax burden over what was paid in 1995.
If this member and the government are willing to entertain an
amendment that does not treat social security payments to
Canadians differently than to Americans in terms of the inclusion
rate we will support it right now. We will fast track it right
through this place.
Why does the member not agree to do that? He says that this
will increase taxes for everybody. Under this treaty the
inclusion rate will be 85% for the constituent he is talking
about whereas in the United States a retiree would have to earn
$60,000 to get an 85% inclusion rate on the social security
benefits.
1255
Every Canadian recipient of these payments will get an inclusion
rate of 85%. It does not matter how low their income is. That
is the unfairness we are trying to address. That is why we want
to make an amendment. Will the member support us in getting such
an amendment passed today?
Mr. Alex Shepherd: Mr. Speaker, I can understand why the
member is having such a problem with this issue. It is because
he does not understand the difference between income inclusion
and taxation.
These people will see 85% of their income included on their tax
returns. The reality is, they do not care. They are not
taxable.
The very few people who the member is trying to defend, yes,
they may see lower taxes. By the way, they are not going to be
any worse off than they were for the two years in which that
legislation existed.
Who are these people defending? It is not low income seniors.
Bloc members should be ashamed of themselves too—
The Acting Speaker (Mr. McClelland): The hon. member for
Elk Island.
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, mine is an
academic question. I would ask the member to declare publicly
that people who have a low income will not be taxed by this
provision. Is that true or is that not true?
We are talking about inclusion rates. Is he saying that people
who have low incomes will not be taxed?
Mr. Alex Shepherd: Mr. Speaker, once again it depends on
the definition of low income.
I will tell him that the people I represent who are making
$14,000, or the example given of the individual making $10,000,
no, they will not be paying any tax.
Hon. Lorne Nystrom (Qu'Appelle, NDP): Mr. Speaker, the
Reform critic was talking about tax fairness. He was asked a
question in the House on October 2. The question was whether we
have tax fairness? Do Conrad Black and other wealthy people pay
their fair share of taxes? His answer was “They pay more than
their fair share. Conrad Black is paying too much in taxes.
Multi-millionaires pay too much in taxes”. I wonder whether the
member agrees with the Reform Party on that.
Mr. Alex Shepherd: Mr. Speaker, the Reform Party seems to
have an agenda which represents probably less than 10% of the
people of the country.
Yes, there is high taxation in higher income groups, but not
unavoidably so. We have a progressive taxation system. As the
member knows, we have lowered the number of taxation categories
from something like six to about three.
The agenda of the Reform Party is a flat tax. A flat tax would
shift the total tax burden from the higher income earners to the
middle income earners, the people that party does not represent.
Mr. Gurmant Grewal (Surrey Central, Ref.): Mr. Speaker, I
have the honour and privilege of being the first ever member of
Parliament to rise in this House on behalf of the people of
Surrey Central, one of the six new electoral districts of Canada.
This being my first speech in the House, I should like to pay
special tribute and thank the Reform Party member of Parliament,
the hon. member for South Surrey—White Rock—Langley, and former
member of Parliament Margaret Bridgman for their excellent
representation of the people of Surrey in the 35th Parliament.
I would like to thank the constituents of Surrey Central for
placing their confidence in me and in the Reform Party of Canada.
I would also like to take this opportunity to publicly thank my
campaign manager, my campaign workers, my official agent,
supporters and friends, my parents, my wife and my two sons for
their successful efforts in the recent election.
Surrey is the heart of beautiful British Columbia. Surrey is a
city of parks and is home to the largest Canadian flag.
1300
It has the fastest growth rate of any city in Canada. We have a
diverse population in Surrey Central. Many new immigrants to
Canada have chosen Surrey as their new home. We want to build on
the cultural, religious and linguistic integration that we
already enjoy in our community as a success.
This feeling is strengthened from events such as Newton
community day held recently in Surrey. I hope to fulfil my role
in the official opposition's effort to build a strong and
prosperous Canada.
My constituents have sent me to Ottawa to hold this Liberal
government responsible and accountable for job creation, tax
relief, making our streets safe again, repairing the social
safety net and securing our national unity as well as to hold
this government's feet to the fire for every misspent hard earned
Canadian taxpayer dollar.
I now turn to the issue of the debate in which we are engaged.
We are debating Bill C-10, the Liberal government's legislative
proposal to implement an income tax convention between Canada and
the United States, and between Canada and several other
countries.
Let us look beneath the surface of Bill C-10. I can assure
members that my constituents and I are glad to have the
opportunity to speak out in opposition of this proposed
legislation.
We are anxious to oppose this tax grab by the Liberal
government. The constituents of Surrey Central, whom I have the
privilege to represent in this House, eagerly want to expose Bill
C-10 for what it is, a tax grab. The people I represent are
proud to participate in exposing this thinly veiled tax grab.
Residents of Canada who receive social security benefits from
the United States of America will be more heavily taxed by this
legislation. It is estimated that at least 80,000 Canadian
taxpayers will be affected by this legislation.
On this side of the House we give fair warning to the Liberals
that we do not want the debate on this bill to be suddenly
cancelled. We know that the Liberals will use time allocation,
the Liberals will use closure or do anything else they can
possibly think of to put stop on debate in this House. They have
already done this with Bill C-2, the bill that contains the
largest single tax increase in Canadian history.
The Liberals invoked time allocation on this second piece of
legislation. We must warn the Liberals not to continue to
suddenly cancel debate in this House.
Today we are debating the tenth piece of legislation in the 36th
Parliament. Already in this Parliament, being only a few weeks
old, we have two tax increases foisted on Canadians by the newest
Liberal government.
These are the same Liberals who cancelled the Somalia inquiry.
Never before in the history of our country has any government
shut down a commission of judicial inquiry. The Liberals did.
The Somalia inquiry was only two thirds of its way through when
the Liberals shut it down. The inquiry was very close to
analysing events in the department of defence that took place
under the Liberal government.
The Liberals did not want to be held accountable for their
actions. The senior officials, including the senior management
team at national defence headquarters, did not want to be held
accountable for their actions and therefore had the Liberals
cancel the Somalia inquiry.
I mention the Somalia inquiry because while the House was in
recess last week the Liberal defence minister announced the
government's response to the recommendations of the Somalia
inquiry.
The reason the defence minister had to respond last week was one
of the former Somalia inquiry chairmen, Peter Desbarats, was
releasing his book on the Somalia inquiry.
Today is the first day the House has returned from the break and
the Liberal defence minister's attempt to finally bury the
Somalia inquiry. It is not ironic that we are debating the
Liberal government's bill which has a 35% tax increase buried in
it.
1305
The Liberal defence minister has chosen not to adopt the most
serious recommendation of the Somalia inquiry, namely the
establishment of an inspector general. The Liberal defence
minister has chosen instead to leave the upper echelons of
national defence headquarters unaccountable for their actions
even in the future. We know the Liberals are always prepared
to stop Canadians from holding the Liberal government accountable
for its actions.
Two weeks ago the Liberals stopped debate on the largest tax
increase in the history of this country. Last week the Liberals
refused to allow the recommendations of the judicial commission
of inquiry and today we are faced with another Liberal government
tax increase. This is very serious. Canadians should be
concerned about the fact that the Liberals have ruined the
existence of the most powerful tool we have in this country to
find truth, a judicial commission of public inquiry. They
stopped the Somalia inquiry right in the middle of its work.
They have shown Canadians that they are not afraid to stop the
pursuit of truth. They are prepared to put a stop to things that
hold people responsible and accountable for their actions.
The truth is that the Liberals stopped debate in the House and
passed Bill C-2 at second reading. This bill represents the
largest tax grab in the history of this country. The truth is
that the Liberals stopped the Somalia inquiry from finding the
truth. Today the truth is that the Liberals are again increasing
taxes for certain Canadians with Bill C-10.
Bill C-10 is offering Canadians a new income tax convention with
the Americans but the truth is the Liberals have taken the
opportunity to gouge the taxpayers again. They are using Bill
C-10 as another opportunity to raise taxes. The Liberals cannot
even do something as simple as negotiating a tax treaty with
another country without trying to figure out a way to squeeze
more money out of the already overtaxed Canadian taxpayers.
The income tax take has been rising steadily in this country.
The Liberals are balancing the budget on the backs of Canadian
taxpayers. Let us see how strong the backs of Canadian taxpayers
are. The Fraser Institute calculates that the average family of
four has had lost a total of $3,000 in purchasing power since
1993, since the Liberals took power in this country.
Net personal income tax revenues increased from $51.4 billion in
1993-94 to $66.5 billion in 1997-98. These revenues are right on
track to increase to $70.4 billion in 1998-99. The saving rate
of Canadians in 1992 was 10% and had dropped to 3.2% in fourth
quarter of 1996. It dropped further to 0.9% in the second
quarter of 1997. The Canadian personal income tax burden is
already the highest in the G-7 countries and is 34% higher than
the OECD country average. Canadian living standards were lower
in 1996 than they were in 1989. This made Canada the only nation
to experience an absolute fall in living standards over that
period.
Clearly the Canadian economy is not performing as well as the
finance minister is projecting. In fact, it is underperforming.
The election is over now. I advise the government to stop making
political footballs out of the issues facing the Canadian people.
Canadians are tired of these games. Let us get serious for the
next millennium at least.
The government is telling Canadians that it is okay for
federal Liberal politicians to have a generous gold plated
pension plan. And yet it leaves Canadians with a very rusty
plan. At the same time, the government has no problem in clawing
back pension benefits from retired Canadian workers who have
scrimped and saved for their retirement.
The Liberals are placing a burdensome tax on the backs of our
youth. Where is the fairness? Where is the hope for the future?
1310
Taxes are going up again. In the red book, in the throne speech
and in the recent economic statement by the Minister of Finance
the Liberals made no firm proposal for tax relief for Canadians.
The finance minister has just introduced the largest tax hike in
Canada, a 73% increase in CPP premiums which will cost Canadians
$10 billion. The average income level for Canadians has dropped
almost $1,000 since 1989 and their disposable income has dropped
almost 9%. Gross tax revenues total $139.8 billion in 1996 and
1997, or 17.5% of the GDP, the highest they have been in 20 years
and the second highest ratio in Canadian history.
Increased revenue collection accounted for 72.5% of the total
improvement in the Liberal government's deficit figures. Of the
total deficit target overshoot of $10.1 billion, 53.5% was the
increase in revenues.
The employment insurance surplus alone made up $7.4 billion of
deficit reduction in 1996-97. There is more to the story of Bill
C-10 than the badly camouflaged tax grab. The Liberals are
admitting to it. They are admitting to the mistake by proposing
Bill C-10.
When the third protocol took effect it was evident that the
United States did not take into account the income levels of the
recipients of this benefit. This devastated the lives of
thousands of people including middle income Canadian seniors. At
that time the current deputy prime minister, the member for
Windsor West, was quoted in the Windsor Star on December
22, 1995 as saying he was assured that Canadians would not pay
more taxes but would pay less taxes. He was dead wrong. He was
wrong then. He is wrong now.
Everyone who earned less than $70,000 paid more taxes. No one
paid less taxes. The Liberals are admitting that the income tax
convention they made with the United States in 1995 was so bad
they had to implement a new tax convention. This is pathetic.
They are well aware of the mistakes they have made.
When they finish ramming this legislation through the House and
the Liberal controlled Senate, a retirement home for the creme de
la creme of Liberal party faithfuls, Canadians will have had to
deal with the experience of facing three separate income tax
conventions with the United States in the last two years.
The Liberals cannot seem to get it right. They do not care
about more than 80,000 Canadians affected by this tax convention
mess. They say “too bad, there is nothing you can do about it
and there will be no debating it”.
Bill C-10 brings us back to where we began in terms of
negotiating an income tax protocol with the United States. Bill
C-10 is undoing the mistakes the Liberal government made in 1995
but now it includes a tax increase.
Bill C-10 returns Canadians to the income tax convention regime
that existed before the terrible treaty of 1996. Under Bill C-10
Canadian residents who receive social security benefits from the
United States will have 85% of those benefits taxed. Under the
old system 50% of the benefits were taxed.
Bill C-10 is supposed to reinstate the old system but one
specific difference is the 35% tax increase.
It will not take the next four years for Canadians to figure out
that the balanced federal budget has been paid for by the
Canadian taxpayers through successive tax increases, if the
Liberals actually do balance the budget in the future.
1315
Canadians want a reduction in the amount of government
interference in their lives. We want to put an end to the
wasteful and mismanaged spending of our hard earned tax dollars.
We want to balance the federal government budget through the
elimination of duplication and waste in federal spending, not by
increasing tax revenue.
The Liberals are continuing to raise our taxes. They are
balancing the budget through tax increases. They have not
stopped government duplication. They have not stopped waste.
They have not stopped mismanagement. They are only concerned with
putting a stop to what will hold them accountable. These things
include debate in the House, public commissions of judicial
inquiry and anything else that comes close to holding them
responsible for their actions.
The shutting down of the Somalia inquiry, the ending of debate
on Bill C-2, the largest tax increase in history, and now the
almost hidden tax increase in Bill C-10 are examples of the kinds
of things Canadians will be adding up when they hold the Liberals
accountable in the next election. Backbench Liberal members
should be very worried. They will be held accountable in the
next election.
Bill C-2 and Bill C-10 will increase our taxes, yet this
Parliament is only a few weeks old. All Liberal members of
Parliament will pay the price for the arrogant and sly actions of
their cabinet.
Last week during the Thanksgiving break when the House was not
sitting, the United Nations development program held a conference
in Ottawa. In fact it was held right here in the House of
Commons. The conference was one of many the United Nations is
holding around the world to discuss its good governance and
democracy initiative. It strives to establish the means for
recipient countries to govern themselves effectively and
efficiently. Some countries that have agreed to pursue democracy
do not have the structures of government needed to carry out
democracy.
For example the International Monetary Fund said that Cambodia
was to downsize its public service. Cambodia was having a
difficult time reducing its public service because it did not
even know how large it was. There was the problem of figuring
out exactly how many public servants there were working for the
Cambodian government. The United Nations program was able to help
by providing Cambodia with the tools necessary to establish the
structures of a public service.
It seems to me that the United Nations could do some work right
here in Canada. It seems clear to me that the Liberals need to
be taught that a commission of judicial inquiry in a democratic
nation is supposed to be free to pursue the truth.
The almost hidden and unjustified 35% tax increase contained in
Bill C-10 stands as an example of how Liberals need help in terms
of understanding the use of good governance in a democracy. They
will use any opportunity to increase taxes. The abuse of the
structures of good governance by the Liberal government in our
democracy is unacceptable. Bill C-10 is unacceptable. The Reform
Party opposes its passage through the House until the amendment
is made so that Canadian recipients will pay the same inclusion
rate as their American counterparts.
On behalf of the constituents of Surrey Central, I am unable to
support this regressive legislation. It is another tax grab by a
government which lacks vision.
Hon. Lorne Nystrom (Qu'Appelle, NDP): Mr. Speaker, the
member's illustrious leader said in the House on October 2 that
he believes Conrad Black is overtaxed along with other
multimillionaires. His response, just to be precise, was that
they pay more than their fair share.
Conrad Black and these other multimillionaires pay more than
their fair share.
1320
Does he agree with his spokesman in terms of the tax issue that
Conrad Black is overtaxed? That is the Reform Party policy.
Does he agree with that?
Mr. Gurmant Grewal: Mr. Speaker, we in the Reform Party
have always opposed any further taxes. We think there is a need
to give tax relief to the Canadian public who are already taxed
almost to death.
The taxes are so high for seniors who are on fixed incomes and
their incomes are shrinking. By imposing more tax on them we are
making the lives of seniors miserable. There is no way that we
can afford to pass this bill with such a tax increase.
Mr. Jason Kenney (Calgary Southeast, Ref.): Mr. Speaker,
I want to commend the hon. member for Surrey Central for his
excellent maiden remarks in the House. His constituents should
be proud to be so well represented in the House.
I would like to tag on to the comments the hon. member just made
to the question by the hon. member for Qu'Appelle.
The Reform Party believes that all Canadians pay more than their
fair share. When we have a tax burden that now consumes over 40%
of our gross domestic product, all Canadians are paying more than
their fair share.
I want to make one thing clear for the record that the hon.
member for Qu'Appelle in his lusty reliving of his sixties class
warfare days may not understand.
The federal Department of Finance statistics show that the top
10% of income earners in Canada report about 32% of the income
earned and pay 48% of total Canadian taxes. The top 10% pay
nearly half of the income taxes. Before the hon. socialist member
for P.E.I. stands up, I would like to remind him that this
statistic comes from his Department of Finance which also tells
us that the top 1% of income earners who report 9% of the income
earned pay 18% of the taxes collected in Canada. The top 1% pay
nearly 20% of the taxes. The top 10% pay nearly half the taxes.
If this is not paying more than their fair share, I do not know
what is.
The solution for everybody, whether it is a poor member of
Parliament like the member for Qu'Appelle or a Canadian like Mr.
Black who is creating jobs, is tax relief so we can have more
jobs. Or we could try to tax people out of this country like the
hon. member's friends in the NDP in Saskatchewan were so
successful in doing in destroying the wealth creation machine in
that province by taxing them all into Alberta.
Hopefully we will not do the same thing. Hopefully we will not
launch into the same kind of class warfare campaign the hon.
member is recommending.
Mr. Gurmant Grewal: Mr. Speaker, the member for Calgary
South has explained it very well. We support the notion which he
tried to express.
Mr. Darrel Stinson (Okanagan—Shuswap, Ref.): Mr.
Speaker, I would like to commend the hon. member on his maiden
speech. It was very well done.
He mentioned during his speech that this is a democratic
Chamber. I have a couple of questions I would like to ask the
member.
He was duly elected in his constituency by the taxpayers of
Surrey Central. They sent him here to have his say. The member
came down here fully anticipating that this would be a Chamber
for debate where he would be allowed to talk on any subject but
more important, talk about subjects his constituents deemed
important for him to speak upon.
The hon. member mentioned in his speech that Bill C-2 was a
pension grab, a rip-off or whatever the member would like to
address it as.
Personally I think it is a rip-off, legalized theft hidden in
government forms. I would like the hon. member to stand up in
this House and say to me that underneath the democratic process
we have with this so-called Liberal government you were given
your chance to stand up here in this House, the greatest house in
Canada, to say your speech on behalf of your constituents, that
you were allowed that with Bill C-2.
1325
The Deputy Speaker: On behalf of his constituents. The
hon. member for Surrey Central.
Mr. Gurmant Grewal: Mr. Speaker, it is a good question. I
came here with ambitions and aspirations. I came here with the
idea that I was going to represent my constituents, but on Bill
C-2 I was the next speaker in line. I had lots of things to say
about the CPP and Bill C-2. I was astonished when I saw that
there was taxation without representation. I could not talk
because debate on the bill was closed by members opposite. It is
a shame for members opposite that we had so many things to say.
We care about the future of the younger generation on whose
backs this government is funding the pension for today's seniors.
This was a unique situation I found myself in. I never expected
this kind of situation would arise. We warn members opposite and
we challenge them to have a debate, to have representation for
the people who sent us here to represent them so well. We have
every right to represent them. We have every desire to represent
them. This situation should never occur. The members on the
opposite side should take a serious view of it.
Mr. Alex Shepherd (Durham, Lib.): Mr. Speaker, I have a
comment on the issue of hypocrisy. I thought it was kind of
unusual in the speeches on Bill C-2 by Reformers that they talked
about wanting the time to go back and consult with their
constituents. I know we are getting a little off topic but Bill
C-2 was presented in the 35th Parliament. The negotiations for
Bill C-2, that is to say pension reform, occurred during that
period of time. It included the Government of Alberta which has
basically signed on to the amendments.
I thought it was really remarkable that Reform Party members
wanted to go back and talk to their constituents now, when I and
many of my colleagues had town hall meetings two years ago. When
is the Reform Party going to get its act together?
Mr. Gurmant Grewal: Mr. Speaker, Bill C-2 presented a 73%
tax hike which is the largest tax hike in Canadian history.
I want to ask members opposite why they had to put closure on
this discussion. Why could they not have the courage to come to
this House and say let us debate the issue and then go for the
increase or decrease or do whatever we have to do? We know from
talking to Canadians in all constituencies that they do not want
a tax hike. We have to give them tax relief at this time. It is
shameful when we give them a 73% tax hike without looking into
the situation and what people are representing. It is shameful
when the Liberals do not have the courage to debate in the House.
Ms. Susan Whelan (Essex, Lib.): Mr. Speaker, I am pleased
to participate today in the debate on Bill C-10 that among other
things amends the Canada-U.S. tax convention. In particular the
bill deals with the manner in which residents of Canada receive
U.S. social security and residents of the United States receive
Canada pension plan payments and OAS.
This amendment is to change a flaw in the U.S.-Canada tax treaty
which was negotiated by the previous government but implemented
by our government. It is a flaw that we did not catch at the
time and that due to the hard work of many members on this side
of the House was brought to the attention of the finance minister
who undertook to renegotiate the bill with the U.S. government.
And renegotiation takes time. I will explain how that came about,
what the flaw was and what we have done to deal with it.
The Canada-U.S. tax treaty sets rates at which Canada or the
United States can tax pension benefits, U.S. social security
being received in Canada and CPP and OAS being received in the
United States.
1330
Before 1996 the country that paid the benefit to a resident of
the other country could not tax that benefit at all. The country
where the recipient lived would include 50% of that benefit in
their taxable income. The other half of the benefit was tax
free. Thus people residing in Canada receiving U.S. social
security benefits would claim half of that amount on their
Canadian tax return as income and other half would be tax free.
In 1996 the tax treaty was changed. Under the new rules the
country that pays the benefit, the country that issues the
cheque, can tax all of it. The country where the recipient of
the cheque lives cannot tax any of it. Therefore Canada would
tax CPP payments going to people who live in the United States
and the United States would tax U.S. social security benefits
going to people who lived in Canada.
Canada ordinarily taxes Canada pension plan and old age security
benefits going to non-residents at a rate of 25%. Canada also
applies the OAS recovery tax, the clawback on high income earners
to non-residents as well. However, to ensure fairness in our tax
system, any non-resident can choose to file a Canadian tax return
and pay tax at the ordinary Canadian rate rather than at the flat
25%. The result is many low income U.S. recipients pay little or
no Canadian tax on their Canadian CPP or OAS. The United States
also taxes outbound social security benefits at a rate of 25.5%.
Here is the flaw that escaped us as legislators. The United
States tax system does not allow any non-residents to file tax
returns unless they are U.S. citizens or resident aliens. There
are some of those living in Canada. Therefore the 25% tax is
fixed and final to Canadians. There is no recourse for
non-American non-residents to file a U.S. return and to be able
to pay U.S. tax at a lower rate.
It was at this point in December 1995 that I first realized
there was a problem when the United States began withholding
25.5%. At that point myself and the other Windsor MPs contacted
the office of the Minister of Finance to explain the problem and
to ask that it be addressed. I attended meetings with CASSE,
Canadians Asking for Social Security Equality in Windsor, the
local Windsor group organized to deal with the problem.
The minister realized the problem. He actually travelled to
Windsor in September 1996 to meet with members of the local CASSE
committee established to lobby the government to renegotiate this
change with the United States government. The Minister of
Finance then met with his counterpart in Washington, Mr. Robert
Rubin, to negotiate with the United States to reopen the
Canada-U.S. tax convention to address this problem.
The proposed new rule included in the latest protocol to the tax
treaty will give the country of residence the exclusive right to
tax social security benefits. This means only Canada will be
able to tax U.S. benefits paid to residents of Canada and vice
versa.
Under this change, all low income Canadians that the Reform MPs
have been talking about today will pay no tax. This change will
retroactively ensure that these low income Canadians will pay
less tax than the 25% withheld by the United States.
Once this protocol is ratified, several thousand low income
Canadians will no longer pay any income tax. Thousands more will
pay less tax than they currently do.
The Reform Party member for Calgary Southeast who spoke this
morning raised the issue of fairness by comparing the U.S. rate
of taxation on U.S. social security in this proposal. The
purpose of Canadian law is not to reflect U.S. tax laws. The
purpose of Canadian tax law is to ensure that people living in
Canada are all treated equally. The purpose of our tax code is
to treat neighbours coast to coast equally, not to treat people
who live in Canada and work in the United States the same as they
would be treated if they lived in the United States.
There are many non-tax differences between Canada and the United
States. For example, a person living in Canada has access to the
Canadian universal health care system. If that person lived in
the United States he or she would have to pay for health care in
many cases. That may not be a tax but it definitely does affect
income.
I can speak to that personally because I have an aunt who lives
in the United States. I know for a fact that while she was
receiving U.S. social security benefits before she was of
senior's age she was paying over $350 U.S. a month to a private
health care system to ensure that she had health care.
When she became ill that very health care system, that wonderful
system which the Reform Party thinks is great, cut her off. It
was one thing after another, from long term care, to medication,
to a co-pay of 30% to 70% every time she had any type of test.
The sicker she got the more she had to pay. That is how the
system works in the United States with a private benefit system
where one pays and continues to pay into it while receiving the
benefits.
1335
We should be aware that when seniors living in Canada receiving
social security go to the hospital that distinction is not made.
They are not asked where their incomes come from or where their
taxes are paid. We have always treated all Canadians and those
who live in Canada equally.
I believe that the changes will ensure that neighbours are
treated equally and fairly, which is why Canada will require the
U.S. social security recipients to include 85% of U.S. social
security as income when they file their income taxes.
As I stated before, thousands of low income seniors, disabled
Canadians and spouses and children of those who work in the
United States will pay no tax at all due to this change and
thousands more will pay less.
There seems to be some allegation that this change is only about
seniors. It is not just about seniors. I want to make that
clear to the members of the Reform Party. There are thousands of
those who work in the United States. There are children of those
who work in the United States and there are disabled Canadians
receiving U.S. social security benefits. I can speak to this
from my own personal experience.
I have an aunt whose husband worked in the United States and is
receiving U.S. social security. They have a disabled child who
receives U.S. social security. The benefits from U.S. social
security are higher than those she would receive in Canada. This
change will directly affect her because she will pay no tax as a
disabled Canadian receiving U.S. social security.
However, my aunt, who receives U.S. social security, will pay
some tax. She has told me that she believes she should pay her
fair share in Canada. She is not one of those high income
seniors the Reform Party is speaking on behalf of today. When
this proposal was first made in Windsor, people should be aware,
the first people I have talked to on CASSE thought it was a good
change and a good benefit because low income seniors, disabled
persons, children and spouses would get their tax dollars back.
When they realized they were in the upper income and they would
be paying their fair share in Canada while they lived in Canada,
that is when they became opposed to this proposal.
This proposal was negotiated with CASSE. It was put forward
before CASSE. When its members first heard the proposal they
were in agreement with it until they found out how some of their
individual cases or situations would be affected and that they
would still pay less tax than their Canadian neighbour. That is
what seems to escape the Reform Party in this whole debate today.
Somebody in a high income bracket living in house A receiving
U.S. social security and somebody in a high income bracket living
in house B receiving the same income but from Canadian sources
will pay more tax than the person in house A. If they live in
Canada and they all get the same Canadian benefits, they all
should pay for the same Canadian benefits. We are still giving
that person in house A, the person receiving U.S. social
security, a break, a 15% inclusion in their income. We are
recognizing that they did pay tax on their U.S. social security
benefit.
For the Reform Party to stand up and say that the amount of
taxes that one will pay on their U.S. social security benefit
equals the amount of benefits they are receiving today is
ludicrous. It is very similar to our Canada pension plan system
where people receiving pensions today did not pay into the system
what they are getting out. The tax they pay in the United States
does not equal anything near the amounts they are getting out.
The reason they have that exemption in the United States of
$27,000 U.S. is because they do not have a universal health care
system and because they do not have the same benefits as we have
in Canada for many other things.
I agree with the member for Qu'Appelle when he said that the
Reform Party speaks for the high income seniors. Those are the
people who are complaining about this change. Those are the
people who have problems with this change because they may
actually come close to paying what their neighbours in the same
income bracket will pay. They are still going to get a break. I
am not sure that their neighbours in house B would agree that
house A should still get that break because we all have to pay
for our Canadian system. We all have to pay for our health care
system.
Maybe the hon. member for Calgary Southeast should come and
visit Windsor and he would understand what happens in the health
care system in Windsor. He would recognize what his colleagues
in the province of Ontario are doing to the city of Windsor.
In fact, what has happened in Windsor had to do with the lowering
of taxes by the province of Ontario. That caused the loss of
$4.9 billion in revenues to the province with the first tax cut
which was funnelled down to the health care system.
1340
When they talk about lowering taxes and tax relief for all
Canadians, I think hon. members on the other side should stop and
think about the effects of tax relief and look at what has
happened in border communities such as Windsor and Essex county,
and try to understand the benefits of today's proposal and
recognize that low income seniors, the disabled, children and
spouses of those who worked in the United States, the majority of
whom will be better off if they are in a low income bracket. Many
will pay the same but some will pay more. Those are the ones the
Reform Party members are speaking for today. Even those who pay
more will pay less than their Canadian neighbours. That is
something which should not be lost on the House and not lost to
all Canadians.
When the Reform Party says there has been no debate, where has
it been? I raised this with the Minister of Finance in December
1995 when the changes first took effect. Where were Reform
members when the changes were announced on April 9, 1997? Where
were they during the rallies in Windsor in 1996? I was there,
but I did not see any Reform members. Where have they been
throughout the discussion? When exactly did they decide to jump
on to the band wagon and offer their own solutions? We have been
talking about this and dealing with people in our communities who
have been affected.
The members for Windsor and Essex county, the member for Windsor
West and Windsor St. Clair and the members for Kent-Essex and
Durham and I have worked on this together along with other
members on this side of the House.
I have heard from people in my riding in Essex, which is a
border community, from seniors with upper incomes and others.
They want to pay their fair share. They want to ensure that the
Canadian health care system and other social benefits continue
for those who are less privileged. The seniors I talked to
recognize and appreciate the benefits they have received
throughout the years of working and living in Canada. In order to
balance the books all Canadians have to participate.
We hear today that this is a hidden tax increase. That is
ludicrous. It is not a hidden tax increase. We are talking about
treating Canadians equally and fairly and about tax fairness for
all Canadians. I believe it is urgent that we deal with this
issue today.
I heard the member for Surrey say that we should not end the
debate. I would like him to talk with the woman I spoke with on
Saturday in my hometown of Amherstburg who has been waiting for
this change. I told her that this would be coming before the
House on Monday. I will be happy to go back and tell her that
the Reform Party thinks we should debate it a little while
longer. This lady is one of the low income seniors that they
talk so much about, one of those who because of the provincial
government has had her housing costs increase by 10%, while we
are still trying to get back the 25%. She would like that money
back as quickly as possible, not next year or two years from now.
She would like it back as soon as this passes in the House and as
soon as it is ratified in the U.S. However, if the Reform Party
has its way we will be debating this for months to come. We do
not have time.
Those low income seniors they speak so highly about do not have
time to wait. They have issues facing them right now in their
homes and apartments with regard to what they can and cannot
afford. They want to know that the tax relief we have promised on
April 9, 1997 is coming to them quickly. I want to be able to go
back and tell them that this side of the House will ensure they
get that money back into their pockets as quickly as possible.
They also want to know that they will still have the benefits to
which Canadians have become accustomed.
I know that hon. members across the way cannot disagree that low
income seniors need that money. Why would they want to delay the
debate and suggest that there has not been adequate debate.
I can send them newspaper articles. I can send them letters I
have received. I can send them copies of my correspondence if
they want to read about it.
1345
They had members in this House in the last two years. They had
the opportunity to raise this issue over and over and over again.
They had the opportunity to have ample time for debate when they
chose what they would talk about on their days of debate in this
very House of Commons. Therefore for them to stand up today and
say there has been no time for debate I think is a fallacy.
Canadians want to know that these people who are being affected,
these 60,000 people who are receiving U.S. social security
benefits are going to have the opportunity to get their money
back as quickly as possible and that their tax fairness will be
restored. Again, I think it should be known that all Canadians
want to be treated equally and fairly and all Canadians want to
have access to systems.
The people in my riding who are receiving U.S. social security
benefits want this resolved as quickly as possible. They want
the proposed new rules to come into effect. They understand that
it may not be what they thought was the perfect solution. We are
not going back to the old system. They knew that from the very
first time I met with them. They were told up front that we
cannot go back. This is negotiated between two countries. We
went too far and now we are going to negotiate back to what is a
level of fairness. We took back the taxation to our own country
so that there can be that level of fairness in this country.
They knew from the first day that this problem was raised that
we were not going back to the old system, that the old system was
not fair to their Canadian neighbours receiving Canadian
benefits. The old system was not fair to everyone in Canada as
well as to those in the United States.
Finally, I want to emphasize one last time the fairness this
change will effect. This change will be retroactive for people
living in Canada. If they would not have paid any tax in Canada,
they will get a full refund. If they would have paid less tax
with the U.S. 25% flat rate, they will get a refund of the
difference. If they would have paid more than the 25% flat rate
that the U.S. withheld, the Canadian government in fairness will
not pursue those taxes for those two years.
I want to conclude by saying that the change was a mistake. Once
the mistake was recognized, Windsor and Essex county MPs, those
from Windsor West, Windsor—St. Clair, Kent—Essex and myself, as
well as many other members on this side of the House,
particularly the member for Durham, worked very hard to ensure
that the Canadian government renegotiated the Canada-U.S. tax
treaty as fast as possible and that it would be retroactive to
the day this is implemented. Those in need will get that money
back. Those who have had to borrow from their friends and
families will be able to pay those dollars back. Those living on
a tight income will finally see some relief that they need.
Mr. Gary Lunn (Saanich—Gulf Islands, Ref.): Mr.
Speaker, the member for Essex has recognized there was a problem
and that they have attempted to fix it.
I am going to reiterate my earlier comments that this is a tax
grab. I will explain to the member why the Minister of Finance
is smiling these days. He continues to take bites out of our
wallets.
What concerns me the most is that—and I am saying this after
the House has been in session for only three or four weeks—the
government seems to be stuck on the number 70%. In Bill C-2, the
largest single tax grab, they are going to raise the taxes of the
working Canadians by 70%. There will be a 70% increase in those
premiums, over 70%.
The inclusion rate was 50% in the 1984 protocol which was up
until 1995, but now we are going to see that 50% inclusion rate
raised to 85%. What does that amount to? A 70% tax increase.
This government is stuck on raising our taxes by 70%.
The member for Essex keeps bringing back the rich versus the
poor. In Bill C-2 it was the working against the retired. This
is not what this is all about. It is about arithmetic and the
numbers do not add up. This party stands for the poor, believe
me, more than anyone on that side of the House.
There are tax provisions that we wanted to implement.
We would have taken people making below $30,000 right off the tax
rolls.
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We are not suggesting that low income people should pay tax on
this at all, by no stretch of the imagination. What we are
suggesting will ensure that this will be dealt with fairly and
that is not what is being done. It is another tax grab.
I ask them to show us the numbers. The Minister of Finance can
show us those numbers. I am sure it is another tax grab by the
government.
Ms. Susan Whelan: Mr. Speaker, I listened to the comments
of the member opposite and I wondered when he said that it is not
an issue of the rich and the low income earners. It is not an
issue of the rich and the low income earners. I said very
clearly throughout my statement that it is an issue of treating
all Canadians equally, Canadians from coast to coast.
We have a tax system in Canada. Our income is placed in the tax
system to determine the level of tax that is payable.
The numbers are out there, if the hon. member cares to know.
Someone with a $14,000 income or lower will pay no tax. Does he
care about those people? I am starting to wonder.
They talk of $30,000 as some magic cut-off. We know what
happened in Ontario with the magic tax relief its government gave
to people. It took with one hand and it took back with the
other. Low income Ontarians are now realizing that the tax
relief they thought they were getting is not there. There is no
such thing. The moment the teachers go out on strike, the low
income people will have to pay for child care. Why will those
teachers go out on strike? Because the province of Ontario did
not listen to them. Tax relief is not necessarily what it
implies.
We are talking about fairness, fairness and equality for all
Canadians from coast to coast.
Mr. Jason Kenney (Calgary Southeast, Ref.): Mr. Speaker,
the remarks of the hon. member for Essex are shameful. She
admitted that there was a flaw in the bill which her party voted
for.
The Liberals were asked whether this would increase taxes on
U.S. social security recipients. I am sure that before the 1997
election they were asked about it. The deputy prime minister
said no, that it would be revenue neutral. He misled those
people. The government said it would not increase taxes and it
did. She asked where we were in 1986. We were right here
believing the government when it told us there would not be a tax
increase, just as her constituents were.
Why are we opposing this measure today? Precisely because the
hon. member for Essex and the other members from Windsor will not
represent their constituents. I have a file full of letters from
her constituents, letters to the papers in her riding, opposing
this bill and this tax grab.
Let me get one thing perfectly clear. The member suggests that
we are somehow trying to raise taxes on the lowest income people
and trying to drag out debate on this issue to prevent them from
getting their cheques. Let me say to her what I said to the hon.
member for Durham. We will agree to vote for this bill and pass
it right now if the government would agree to our amendment,
which we will be proposing, which would treat all social security
recipients equally in what they receive in terms of the inclusion
rate in the United States.
The proposal we made in the election was to take the bottom one
million taxpayers off the tax rolls altogether.
Why will the member not allow those cheques which are now being
withheld to be sent out to the low income people while at the
same time reduce the inclusion rate to what it was in 1995?
Does she deny that Bill C-10 will increase federal revenues?
Why is it falling on me to represent her constituents? Shame on
her. Shame on the government.
Ms. Susan Whelan: Mr. Speaker, I would like the hon.
member for Calgary Southeast to know that I do represent my
constituents. I represent the majority of my constituents. And
the majority of my constituents who are low income earners have
told me that they accept this change. They want this change and
they want it now.
If the Reform Party wants to be led by the special interest
groups and the high income seniors, go right ahead. I will go to
sleep at night knowing that I represent the majority of my
constituents. I represent all of my constituents, not just those
receiving U.S. social security. All of my constituents want to
pay equal taxes. Not just those receiving U.S. social security
should get a break.
The hon. member should know that when the deputy prime minister
made that statement he asked a very specific question. The
question to the finance department was based on those who were
paying income tax.
However, there was a group of numbers that was missing. We have
recognized that error. There was no misleading in any election
campaign. The statement was made after the campaign. The member
should know that as soon as we recognized that error, and we have
recognized it, we began negotiations with the United States to
make that change. That is why we are here today. It is to make
that change.
1355
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, it is my
understanding that prior to this bill being passed, that is under
the rules that are now in place, 50% of the security income was
taxed and now 85% of that income is going to be taxed. If we are
going to tax a greater proportion of the income, it seems to me
that will result in a tax increase. I would like the member to
explain if that is not so, how that would come about.
My second question is with respect to the retroactivity. The
government claims that its bill is going to be retroactive. I
would like to know what specific procedures are going to be
followed to make sure under the retroactive rules that those who
have paid taxes will no longer be accountable for how they will
get their refunds or rebates and how they will be looked after.
These are two very serious questions and I would appreciate a
response.
Ms. Susan Whelan: Mr. Speaker, first and foremost I have
never said that all people receiving U.S. social security will
pay less tax. I have acknowledged from the very beginning that
low income Canadians receiving U.S. social security will be
better off under this change. I have acknowledged since the very
beginning that those in the upper end who are including 85% of
their income will probably pay, or some will pay, more tax.
However they will still pay less tax than their Canadian
neighbour with the same income level.
I have also been working very closely with the finance
department to ensure that this process will happen quickly once
this is passed in our House and in the United States to ensure
that those people who need to get refunds and who are entitled to
refunds will get them in a very timely fashion. It is my
understanding that the process is in place the moment the
legislation is passed in both houses.
The Speaker: As it is almost two o'clock we will proceed
to Statements by Members.
STATEMENTS BY MEMBERS
[English]
BUS ACCIDENT
Mr. Rick Casson (Lethbridge, Ref.): Mr. Speaker, I rise
today on behalf of all Canadians to reach out to the citizens of
St. Bernard-de-Beauce in Quebec. The families and friends
affected by the tragic bus crash have been in the thoughts and
prayers of all Canadians.
It is imperative that safety concerns be immediately addressed
and it is encouraging to see the Quebec government is doing just
that. This is of little consolation to the deep pain and sadness
engulfing the community of St. Bernard-de-Beauce but if stronger
safety standards can avert another disastrous accident, they must
be implemented.
The families of the 43 victims of the accident will need time to
heal from their terrible loss.
Mr. Speaker, I ask for a moment of silence to pay our respects
to those lost in this tragic accident and to those whose reserves
of courage are desperately needed at a time like this.
* * *
SMALL BUSINESS
Ms. Sarmite Bulte (Parkdale—High Park, Lib.): Mr.
Speaker, this week is Small Business Week.
Small business is the engine of our economy. Today in Canada
there are more than 2.4 million small businesses generating over
40% of Canada's economic output. Small business employs over 44%
of the labour force.
As a founding member of the Women Entrepreneurs of Canada and as
a member of Les Femmes Chefs d'Entreprises Mondiales, I believe
it is important that we acknowledge that a large majority of
successful small businesses in Canada are women owned.
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The success of Canada in the global marketplace requires that we
support the growth of small business, and the government is doing
just that.
The student connection program and Strategis are two initiatives
that Industry Canada has undertaken to help small business make
the most of the new technologies of the Internet.
Partnership between government and small business creates a
fertile environment for innovation and entrepreneurship, the
winning formula for Canada's continued economic success.
* * *
STRATFORD IN BLOOM
Mr. John Richardson (Perth—Middlesex, Lib.): Mr.
Speaker, I rise on behalf of the people in the riding of
Perth—Middlesex. I am honoured to pay tribute to the city of
Stratford.
This month the home of the Stratford Festival competed in
an international competition in Madrid called Nations in Bloom.
Cities from Italy, England, Ireland, the Netherlands and the
United States were invited to compete against one another to
achieve the status of the most beautiful city in the world.
The competition is designed to highlight good urban landscaping,
to encourage investment in city improvements, to promote
international standards and to celebrate excellence in quality of
life.
I am proud to inform the House that our own Stratford has been
named the most beautiful city in the 10,000 to 50,000 population
category.
Stratford was in tough competition. The finalists were
Niagara-on-the-Lake, Ontario, Botany Bay, Australia, St. Bruno,
Quebec and Fairhope, Alabama. Stratford's finish is certainly
impressive. What is more impressive is that three of the five
finalists were Canadian cities, proving that Canada is the best
and most beautiful country in the world.
* * *
LAND MINES
Mr. Janko Peric (Cambridge, Lib.): Mr. Speaker, prior to
my election to the House of Commons in 1993, I spent 25 years as a
member of the Canadian auto workers union.
I was pleasantly surprised to read a recent article in the
Globe and Mail announcing that the CAW had offered $1.25
million for the removal of land mines in Mozambique.
Having just returned from Bosnia-Hercegovina where I was an
election observer, I can say land mines have had a devastating
affect on many innocent civilians in that region.
I would like to compliment my union brothers and sisters on this
honourable initiative and I encourage other such organizations to
be as proactive.
* * *
STRATEGIS
Mr. Walt Lastewka (St. Catharines, Lib.): Mr. Speaker, this
past summer Strategis went platinum. Over one million Canadians
have opened the door to the government's online business
information source.
In fact, Strategis has become one of the top 4% of the busiest
Internet sites in the world. Industry Canada is working to bring
even more Canadian businesses in touch with Canada's largest
business site through the student connection program.
Under the student connection program college and university
students show business people how to use the Internet and make
the most of new technologies like Strategis.
This being Canada's national science and technology week, it is
fitting to promote the proactive work the government is doing to
help businesses. Together we are working to ensure Canadian
businesses are on the leading edge of information and technology
and are ready for business in the 21st century.
* * *
HEALTH
Mr. Grant Hill (Macleod, Ref.): Mr. Speaker, some people
say that all Canadians are apathetic. Today I have an example
that proves this is not true.
Kevin Crigger believes that natural supplements are too
important to let bureaucrats artificially remove them from the
shelves in Canada. He walked all the way from Dryden, Ontario to
Ottawa for that issue. Thirteen hundred kilometres of blisters
on his feet tell me whether he thinks this issue is important.
He is typical of many young Canadians who say that bureaucrats
shall not be the ones who control health supplements in Canada
without good reason. He knows that an informed consumer is a far
better judge of our health care needs than some distant
bureaucrat in Ottawa.
Kevin is in the gallery today. I salute him for his fortitude,
his dedication and for his willingness to speak out.
* * *
POVERTY
Mrs. Judi Longfield (Whitby—Ajax, Lib.): Mr. Speaker, I
rise before Parliament today to pay tribute to the United Nations
Association in Canada and to commend it for promoting the
international day for the eradication of poverty.
The Government of Canada takes poverty very seriously. The new
national child benefit system and the announcement in the Speech
from the Throne that we will double our additional investment in
this initiative for Canadian children are reflections of our
commitment to eradicate the conditions among our youngest
citizens that can lead to lives of deprivation and despair.
1405
From our earliest days as a nation, Canadians have always
understood that ensuring our mutual welfare is critical to the
survival of the country. We have consistently responded with
compassion.
Today in this country we are being called on to wage a battle
against child poverty and I have every confidence that Canadians
will rally to the call.
The international day for the eradication of poverty is a time
to rededicate ourselves to this crucial cause. I urge all
members of the House to help ensure a brighter future for Canada
by working with this government to take steps to eradicate
poverty
* * *
GOVERNOR GENERAL'S AWARDS
Ms. Carolyn Bennett (St. Paul's, Lib.): Mr. Speaker, I
was proud to attend the 1997 Governor General's Awards in
commemoration of the Persons case earlier today. The awards are
given annually to individuals who have made an outstanding
contribution toward promoting the equality of women in Canada.
The awards were established in 1979 to commemorate the lengthy
legal and political battle by five Alberta women for Canadian
women's constitutional right to be recognized as persons. On
October 18, 1929 the British privy council declared Canadian
women to be persons.
The recipients of this year's award are Dr. Marguerite Ritchie
from Ottawa, Ontario; Hedwidge Landry from Caraquet, New
Brunswick; Sheila Genaille from Edmonton, Alberta; Dr. Margaret
Fulton, Salt Spring Island, British Columbia; and my friend
Nancyruth from Toronto, Ontario. I know my colleagues in this
House and all Canadians join me in congratulating the Famous Five
of 1997.
* * *
LIEUTENANT-COLONEL JOHN MCCRAE
Mr. Peter Goldring (Edmonton East, Ref.): Mr. Speaker,
national treasures ought not be marketed to the highest bidder.
They belong in our nation's museums for public viewing and
contemplation.
Few examples of inspirational significance have been born by
the horror of human conflict. “In Flanders Fields” is one. The
author, Lieutenant-Colonel John McCrae, penned this poem in the
thick of battle 82 years ago. Now his medals, the recognition of
his heroism and symbols of his service to Canada whilst he
moulded these words, are on the auction block. Why?
As the poem says if ye break faith with us who die, we shall not
sleep. The House should listen to these words.
* * *
[Translation]
INFRASTRUCTURE PROGRAM
Mr. Guy St-Julien (Abitibi, Lib.): Mr. Speaker, once again,
the Government of Quebec and the separatist MNA from Val d'Or in
Abitibi-Est, André Pelletier, are taking their time approving
projects under part II of the Canada-Quebec infrastructure
rehabilitation program.
There are over $7 million in projects from the riding of
Abitibi-Est on the desk of Minister Rémi Trudel. Separatist MNA
André Pelletier is still holding up approval of these 1997
projects. He is playing hide-and-seek with the people of the
municipalities of Val d'Or, Barraute, Senneterre, Sullivan, and
Malartic and area, making joint announcements of these projects
difficult.
The people of Abitibi-Est would like the Government of Quebec to
give more than 50% approval for these projects worth $7 million.
* * *
ÉBOULEMENTS TRAGEDY
Mr. Gérard Asselin (Charlevoix, BQ): Mr. Speaker, on Monday,
October 13, all of Quebec was shaken by the terrible accident in
the riding of Charlevoix, more specifically in the small
municipality of Éboulements, in which a bus plunged into a
ravine.
In my own name and on behalf of the entire population of
Charlevoix, I would like to extend sincere condolences to the
families of all the victims devastated by this tragedy, and to
all the inhabitants of Saint-Bernard, who have been sorely tested
these last few days.
As well, we wish the five survivors the strength and courage to
overcome this ordeal and to make a speedy recovery.
I would also like to pay tribute to the first aid workers and to
all those who helped rescue victims, and to the solidarity of the
people of Charlevoix and of the town of Saint-Bernard.
It is a shame that it took an event such as this to focus our
attention on the changes needed to this section of highway in
order to prevent a recurrence of such an accident.
* * *
[English]
ATLANTIC CANADA
Mr. Peter Mancini (Sydney—Victoria, NDP): Mr. Speaker, I
rise in the House to address the prime minister's recent remarks
in Moncton about tough love. The prime minister was quoted as
being unrepentant about the severe effects of his government's
deep cuts and boasted that the Atlantic region was better off as
a result of these cuts. It looks like the tough love has
resulted in the children leaving home.
1410
The east coast population is shrinking. In recent census data,
2,700 people between the ages of 18 and 24 left Cape Breton over
a five year period and have not returned.
The number of young families leaving Cape Breton and Atlantic
Canada echoes Steinbeck's depression era novel The Grapes of
Wrath. I would submit that if unemployment is down then it is
due to the fact that the population is leaving the region.
Liberal policies have created a nation of migrant workers. I
call on the government to wake up and take immediate action to
implement a real economic strategy for Atlantic Canada—
The Speaker: The member for Beauport—Montmorency—Orléans.
* * *
[Translation]
COMMISSION NATIONALE DES PARENTS FRANCOPHONES
Mr. Michel Guimond (Beauport—Montmorency—Orléans, BQ): Mr.
Speaker, the Bloc Quebecois wants to pay tribute to the hundred
or so francophone parents from outside Quebec who met in Ottawa
over the weekend to work on putting in place a French language
education project in provinces where English is the language of
the majority.
These parents are showing unfailing determination in spite of
the major difficulties they face: continuing to send their
children to French schools, obliging them to take long bus rides
to school, uprooting them, investing time and energy in trying
to compensate the lower level of education provided. These are
the kind of problems francophone parents and their children are
facing daily if they want to continue living in French in a
predominantly English speaking country.
This is another attempt by the Commission nationale des parents
francophones to give parents the tools they need to have their
children educated in French in Canada. The Bloc Quebecois salutes
the tenacity and perseverance of the Commission nationale des
parents francophones and its members.
* * *
[English]
STORNOWAY
Mr. Denis Coderre (Bourassa, Lib.): Mr. Speaker, I feel
very sad today. One of my deepest dreams, one of my main goals
in life was to play bingo with the Leader of the Opposition at
Stornoway.
In the past I believed the Leader of the Opposition when he
proposed that great passe-temps.
My dream almost became reality when he spent over $60,000 to
redecorate that place.
But now I am depressed. The man who proclaimed himself l'homme
du peuple, the populist, wants to be alone.
He decided to build a huge fence around Stornoway to isolate
himself so nobody would bother him. The Leader of the Opposition
can't stand people anymore.
We should organize a chain letter to make him change his mind,
but I think that won't work. Stornoway will never be the same.
* * *
SMALL BUSINESS
Mr. John Herron (Fundy—Royal, PC): Mr. Speaker, today
marks the beginning of small business week.
This government can say all it wants about helping small
business but the fact remains that the tax burden is higher in
Canada than in most competing jurisdictions.
High payroll and corporate taxes form a barrier to jobs and
growth because they tax business for every new job created. Small
and medium enterprises are struggling in today's global economy
and this means fewer jobs and opportunities for all Canadians.
The government could do a lot more for job creation if it
actually allowed small business to grow. But its high EI payroll
taxes, its whopping increases to CPP payroll taxes and its high
small business and corporate tax rates only stifle growth and job
creation.
The Progressive Conservative Party believes small and medium
businesses are the real job creation engines of this country.
When it comes to taxation less really means more, more growth and
more jobs for all Canadians.
* * *
DURHAM IN BLOOM
Mr. Ovid L. Jackson (Bruce—Grey, Lib.): Mr. Speaker, I
rise today to congratulate the town of Durham for winning the
national Communities in Bloom competition this year. This
achievement is all the more noteworthy considering that the town
of Durham suffered a devastating flood that caused more than one
million dollars in damage last year.
The people of Durham have courage and character. They
maintained the beauty and quality of their town despite the
adversity.
I know my colleagues in the House join me in congratulating the
town for a job well done.
ORAL QUESTION PERIOD
[English]
TAXATION
Mr. Preston Manning (Leader of the Opposition, Ref.): Mr.
Speaker, the finance minister threw himself a little party last
week, but many Canadians don't feel much like celebrating.
1415
The budget is almost balanced but 1.4 million Canadians are
still out of work. The average Canadian family is making $3,000
a year less after taxes than it did before the Liberals took
over.
My question is for the finance minister. He set out a future
spending plan with dollars and details attached. He set out a
plan for increasing payroll taxes by 73%. When will he set out a
specific detailed plan for substantive tax relief?
Hon. Paul Martin (Minister of Finance, Lib.): Mr. Speaker,
one slight correction in terms of the Canada pension plan. I set
out a program not only to preserve the Canada pension plan but to
preserve all its qualities. I also set out a premium increase
that is substantially less than any independent analysis of the
Reform Party program.
One should understand that. I would hope the leader of the
Reform Party would take that into consideration. In
addition—and I notice I only have five seconds left—we also set
out a very clear plan stating that we would reduce taxes when the
country—
The Speaker: The hon. Leader of the Opposition.
Mr. Preston Manning (Leader of the Opposition, Ref.): Mr.
Speaker, the truth is that the Liberal government starts taxing
the incomes of Canadians at a lower level than any other
government of the G-7. It starts taxing the incomes of single
people as soon as they make around $6,500 a year. The government
collects almost $2 billion a year from people who earn $15,000 a
year or less, many of them old people, many of them young people
and many of them poor people.
My question is for the tax man. How can he ignore the calls for
tax relief when the government is taxing lower income people more
heavily than any other government in the G-7?
Hon. Paul Martin (Minister of Finance, Lib.): Mr. Speaker,
let us understand the tax plan of the Reform Party. It has said
that for a single family with an income of about $30,000 a year
it would reduce its taxes by $175. For a family with an income
of $250,000 it would reduce its taxes by $4,000 a year.
Let it be very clear. We will reduce taxes for Canadians and we
will begin with lower and middle income Canadians.
Mr. Preston Manning (Leader of the Opposition, Ref.): Mr.
Speaker, it is the Reform Party's tax relief plan that takes 1.3
million people off the federal government's—
Some hon. members: Hear, hear.
Mr. Preston Manning: Ordinary Canadians cannot afford to
hire tax accountants and lawyers. They cannot relocate their
assets in low tax countries. They cannot fly their assets under
flags of convenience to escape overtaxation in this country. They
cannot escape the tax man. If the minister does not provide them
with tax relief there will be no tax relief.
One million families in Canada make $30,000 a year or less. Most
of them pay federal income tax. When can—
The Speaker: The hon. Minister of Finance.
Hon. Paul Martin (Minister of Finance, Lib.): Mr. Speaker,
let us examine again what Reform would do to pay for those taxes.
It would cut the CHST by $3.5 billion. Middle income Canadians
depend on health care which Reform would cut. A lot of those
people live in Manitoba and Saskatchewan. Reform would cut
equalization by $3 billion a year, driving up income tax in those
provinces.
Reform would cut old age pensions by $3 billion a year. What
would happen to the senior citizens on fixed incomes?
Why will Reform not tell us—
The Speaker: The hon. member for Edmonton North.
* * *
RCMP INVESTIGATIONS
Miss Deborah Grey (Edmonton North, Ref.): Mr. Speaker,
let us examine some Liberal scandals.
Back when Mulroney's government was committing crimes with its
fundraising group, the Liberals absolutely blew a fuse. The
present government House leader when in opposition said “Whether
or not there is an RCMP investigation does not mean that this
minister is no longer responsible for the administration of his
own department”.
Hear, hear, Mr. Speaker.
Let me ask the same government House leader the question today.
Why was the Tory scandal back in 1989 so terribly unacceptable to
him but a Liberal scandal in 1997 is just business as usual?
1420
Hon. Herb Gray (Deputy Prime Minister, Lib.): Mr. Speaker,
the Reform member is doing what she did last week, making
insinuations and innuendoes that are totally not based on the
facts.
Last week she failed to apologize after misinforming the
House—and I am not saying deliberately—that somebody got a
grant in the prime minister's riding after making a donation.
That was wrong. Then she went on to insinuate that the companies
involved in the investigation were located in the prime
minister's riding. That was wrong, and she still has not
apologized.
I say that anything the hon. member says is nothing more than
Reform rubbish.
Some hon. members: Hear, hear.
Miss Deborah Grey (Edmonton North, Ref.): Mr. Speaker,
let us look at the facts for just a minute.
The fact is that companies were told to pay up to the Liberal
Party or they would not get government contracts. The fact is
that, even after the RCMP were alerted to the shakedown that was
going on, the Liberals kept their fraudulent fundraiser on the
payroll until well after the election.
Some hon. members: Oh, oh.
The Speaker: Sometimes I do not know exactly where an
hon. member is leading in a preamble. I ask you to be very
judicious in your choice of words in the question period and in
the answers.
I would like the hon. member to go directly to her question.
Miss Deborah Grey: Yes, I will, Mr. Speaker, and I will
be judicious by asking a simple question.
Why, who, when, what? They can answer any question they like.
Who was the cabinet insider giving Corbeil the inside track?
Hon. Herb Gray (Deputy Prime Minister, Lib.): Mr.
Speaker, the hon. member is again abusing the process and
privileges of the House by making assertions that are totally
unwarranted in light of the investigation that was completed with
charges against one individual who is not an employee of the
government or a member of a minister's staff or connected in
that capacity with ministers or MPs.
Once again the hon. member has not said anything that justifies
having confidence in any of her remarks or any of her questions.
Her remarks are not only Reform rubbish. They descend into
Reform rot.
* * *
[Translation]
THE DEFICIT
Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ): Mr. Speaker,
last week the Minister of Finance said he was off by over $10
billion in his forecasts concerning the deficit. It is not
peanuts.
With the additional $10 billion that he suddenly found last
week, will the minister, who made savage cuts to unemployment
insurance, give back some of the money to the unemployed who are
hard hit by the massive cuts imposed by the government?
Hon. Paul Martin (Minister of Finance, Lib.): Mr. Speaker,
the hon. member should look at what the government did. In June,
we decided to give back to the provinces, over a five-year
period, an amount of $6 billion for health, education and
welfare.
At the same time, my colleague promised another $850 million to
help poor families with children. In addition, the Minister of
Industry put money into technology partnerships, in order to
create jobs.
1425
Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ): Mr. Speaker,
it is rather extraordinary to hear that the government gave $6
billion. The fact is that, instead of cutting $48 billion, it is
cutting $42 billion. It is easy to give money that way.
I ask
the minister, who exceeded his budget forecasts by $10 billion at
the expense of the unemployed, whether he is prepared to perform
a humanitarian act and give some of the money to the unemployed,
by reducing contributions and increasing benefits, which
currently stand at 37%, compared to 62% when the Liberals took
office?
Hon. Paul Martin (Minister of
Finance, Lib.): Mr. Speaker, again the hon. member should
look at what we did. When we came to office we reduced employment
insurance contributions. We prevented them from rising to $3.30
from $3.07, before reducing them to $3.00 and later to $2.90. The
Minister of Human Resources Development and myself have announced
that, in November, we will lower contributions to $2.80. We are
in the process of doing so. Therefore, we reduced employment
insurance contributions by $4 billion over a two-year period.
* * *
EDUCATION
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, when they
announced their cuts, they ought to have said that the biggest
drop is in the number of people entitled to draw unemployment
insurance. That is the drop the Liberals are responsible for.
Last week, the Minister of Finance was nailed by educators in
British Columbia, who spoke out against his plan to interfere in
this area.
How can the Minister of Finance justify another intrusion by the
federal government into education, when this is a provincial
jurisdiction, when the one responsible for the problems in this
sector is, in fact, himself?
Hon. Paul Martin (Minister of Finance, Lib.): Mr. Speaker, how
can the hon. member be accusing us of interference when, a year
ago, it was the Bloc Quebecois that was calling upon us to help
students finance their debts, which we are now in the process of
doing?
Is the hon. member telling us that research and development is
not a federal jurisdiction? Is the hon. member telling us that
helping parents to save for their children's education is federal
interference? I believe it is the duty of a government to help
its young people finance their education.
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, that is
where the federal government's problem lies. When it is asked to
lower income taxes to make things easier for the parents of
students, it understands that it is being asked to intervene and
to grant scholarships. It understands everything backwards, that
is its problem.
How many more provinces will it take, on top of Quebec and
British Columbia, to get the federal government to understand
that we want it to mind its own business in the area of
education? How many provinces will it take, before it gets the
message?
Hon. Paul Martin (Minister of Finance,
Lib.): Mr. Speaker, once again, the hon. member ought to listen
to the provincial ministers of education. It is the provinces
that have asked us to sit down with them to help students finance
their loans. We are in the process of doing so, in partnership
with the provinces, including Quebec.
* * *
THE DEFICIT
Ms. Alexa McDonough (Halifax, NDP): Mr. Speaker, the
Minister of Finance could have reduced the deficit without
making massive cuts in the health and education sectors.
According to an independent study, economic growth and low
interest rates alone could have eliminate the deficit within the
time frame set by the minister.
In this context, why did the minister make useless cuts that
hurt Canadians for no reason?
Hon. Paul Martin (Minister of Finance, Lib.): Mr. Speaker, the
researcher who conducted the study says it is because of
economic growth and lower interest rates.
All economists agree
that we would not have had these lower interest rates and this
economic growth had the government not acted quickly in 1995 and
1996. We did so, and the results are there.
1430
[English]
The Speaker: Forgive me. The hon. member for Halifax.
Ms. Alexa McDonough (Halifax, NDP): Mr. Speaker, my
supplementary question is for the Minister of Finance. The
government is so busy congratulating itself that its members will
not admit they have screwed up. The fact is that Canadians are
worse off today than they were at the beginning of the decade.
There is more unemployment. There is more poverty. There are
more personal bankruptcies. There are more families losing
income.
Why does the government persist in its inflation obsession when
its higher interest rate policy will cost $70 billion in lost
economic growth over the next five years, condemning close to 1.5
million Canadians to continuing unemployment?
Hon. Paul Martin (Minister of Finance, Lib.): Mr. Speaker,
the leader of the NDP ought to look at the facts. There are over
one million more Canadians at work today than there were when we
took office.
She talked about interest rates. Interest rates are down five
percentage points for the first time in 20 years. Our interest
rates are lower than those in the United States. Not only are
our short term rates lower, but for the first time since our
longer term bonds came out, our 30 year rate is lower than in the
United States, our 10 year rate is lower than in the United
States.
The NDP ought to get better researchers.
* * *
[Translation]
RCMP INVESTIGATIONS
Mr. André
Bachand (Richmond—Arthabaska, PC): Mr. Speaker, thanks to the
efforts of the Conservative opposition, a public statement was
made on October 1, confirming that an investigation into
allegations of influence peddling was indeed under way.
Last
week, charges were laid by the RCMP—a very serious business.
Unfortunately, there is a missing link in all this: Who gave the
information to the person who was charged? The missing link could
be sitting across the way.
In order to preserve the integrity of this government and this
House, I would ask the President of the Treasury Board whether
he can confirm before this House that no employee of his Montreal
office was interrogated by the RCMP or directly linked to the
investigation.
Hon. Marcel Massé (President of the Treasury Board and Minister
responsible for Infrastructure, Lib.): Mr. Speaker, the RCMP has
concluded its investigation. Only one person was charged, and it
was clearly indicated that no more charges would be laid.
Responding to the same question in a press conference, the RCMP
Inspector said: “This is covered in the report we have forwarded
to the crown counsel”.
Since this will be addressed in a case
—going to court, I think it is sub judice. We should not—
The Speaker: The hon. member for Pictou “Antigonish”
Guysborough.
[English]
Mr. Peter MacKay (Pictou—Antigonish—Guysborough, PC):
Mr. Speaker, a lot of questions remain unanswered about this
matter. The government may have hoped that the RCMP
investigation and its completion would put this matter to rest.
I would suggest that today is an opportunity for the government
to explain itself by answering a few straightforward questions.
I would direct my question to the President of the Treasury
Board. Can he tell the House how did someone who was organizing
riding associations, building up membership lists and helping
fundraising know which companies applied for government grants,
the stage of the applications and on which ministers' desks these
applications were sitting?
The Speaker: I always hesitate to intervene in any questions
that are posed or any answers that are given. However, we must
remember that we do have a general convention in the House—it is
not a rule—that we should be very precise in our questions and
also in our answers so that in no way would there be any
prejudice on any person who might have business before a court of
law.
With that in mind, I am going to permit the question. If the
President of the Treasury Board wishes to answer it, he may do
so.
Hon. Marcel Massé (President of the Treasury Board and
Minister responsible for Infrastructure, Lib.): Mr. Speaker,
once again, the RCMP has stated that it has fully investigated
the matter.
1435
After a full investigation, including that aspect, it has come
up with only one charge. That was against Mr. Corbeil. The RCMP
has indicated that that was part of the whole case that will come
out to be judged before the courts. I am sure that my hon.
friend does not want to prejudice the rights of the accused or
the right to a fair trial.
* * *
POLITICAL CONTRIBUTIONS
Mr. Chuck Strahl (Fraser Valley, Ref.): Mr. Speaker, in
1993 the Montreal accounting firm of Raymond, Chabot, Martin and
Paré gave $6,000 to the Liberal Party of Canada. In 1994 it gave
$5,000, in 1995 it gave $4,000 and then in 1996 it gave $86,000
to the Liberal Party. In that same year it received $20 million
in contracts from CIDA.
My question for the government is this. Is it just a happy
coincidence that the firm that donated $87,000 to the Liberal
Party of Canada also got $20 million in CIDA contracts?
Hon. Don Boudria (Leader of the Government in the House of
Commons, Lib.): Mr. Speaker, as minister responsible for the
elections act or at least its passage through the House, we all
know that anyone can make contributions to political parties
providing they satisfy the criteria that they are Canadian
citizens or taxpayers in Canada. People donate to the Reform
Party, the Liberal Party and all other parties, including people
in the corporate sector who give now and then to people on all
sides of the House.
Mr. Chuck Strahl (Fraser Valley, Ref.): Mr. Speaker,
apparently Liberals believe in that old adage that membership
does have its privileges.
I will put the question again. A Liberal accounting firm gave
over $87,000 to the Liberal Party at the exact same time that the
minister was personally involved in awarding $20 million in
contracts. The minister at the time hand picked a short list of
contractors.
Why is it that huge donations given to the Liberal Party of
Canada seem to go hand in hand with huge government contracts?
Hon. Don Boudria (Leader of the Government in the House of
Commons, Lib.): Mr. Speaker, I repeat the answer that I gave
before. People can give money to political parties and they are
encouraged to do so to all members of the House and to all
candidates.
As for the allegation of a short list to which the member
refers, that system has been abolished and he knows it.
* * *
[Translation]
OPTION CANADA
Mr. Pierre Brien
(Témiscamingue, BQ): Mr. Speaker, my question is for the
Minister of Canadian Heritage.
The recent supreme court ruling
on Quebec's referendum legislation confirms the need to strike a
balance between the spending of the “yes” camp and the spending
of the “no” camp, as well as the need to limit spending by other
parties involved in the referendum.
In light of this ruling, how can the heritage minister justify
the over $9 million spent by Option Canada and the Council for
Canadian Unity, money from her department, let us not forget,
while the referendum was in full swing?
Hon. Sheila Copps (Minister of Canadian Heritage, Lib.): Mr.
Speaker, my answer today to the question about the money given to
Option Canada is exactly the same as the answer I gave last
spring.
Mr. Michel Gauthier: She no
longer remembers her answer.
Mr. Pierre Brien (Témiscamingue,
BQ): Mr. Speaker, perhaps the minister does not remember.
Since
early October , the minister has had in her possession an
internal audit report regarding these large amounts. Is she
going to release it to the public without delay so that we may
know, once and for all, to what use this money, which I repeat
was from her own department?
Hon. Sheila Copps (Minister of Canadian Heritage, Lib.): Mr.
Speaker, my answer regarding the money spent by Option Canada is
exactly the same as that given by the Government of Quebec
regarding Option Quebec.
* * *
[English]
SOMALIA INQUIRY
Mr. Art Hanger (Calgary Northeast, Ref.): Mr. Speaker,
the aftermath of the Somalia report is far from over.
The defence minister knows there is a coverup in his department.
The information commissioner, the privacy commissioner, the
Somalia commissioners tell of deliberate attempts to hide the
truth from the public, yet this minister tossed aside the one
recommendation in the Somalia report which would have cleaned up
the whole mess.
Why is the minister afraid of creating an accountable,
independent inspector general? What is he hiding?
Hon. Arthur C. Eggleton (Minister of National Defence, Lib.):
Nothing is being hidden, Mr. Speaker. In fact we want more open
and transparent operations. In the response to the Somalia
inquiry report we indicated that there will be six new annual
reports that will be made public and will be available to
Parliament so it will be able to scrutinize what is happening in
the Canadian forces.
1440
We did not agree with one specific recommendation. We agreed
with 83% of the recommendations. But even on the one on the
inspector general, we put in place alternate forms of creating
full accountability, fairness, open and transparent operations.
Mr. Art Hanger (Calgary Northeast, Ref.): Mr. Speaker,
it is interesting that those reports will end up in the lap of
the minister. The defence minister has a responsibility to prove
to Canadians that his department is accountable. National
defence gets one bad report card after another and what does the
minister do? He turns a blind eye. Our troops deserve better.
Why will the minister not create an office of an inspector
general and force his department to account to Parliament? Is
the minister afraid of someone looking over his shoulder maybe?
Hon. Arthur C. Eggleton (Minister of National Defence,
Lib.): Mr. Speaker, I am very pleased to be accountable to
this Parliament for the Canadian forces and for any problems we
have as well.
We do not need a super structure. We have put in place an
independent ombudsman and an independent external grievance board
procedure. We have put civilian oversight in place in many
different aspects of the Canadian forces which is going to
provide the kind of accountability the hon. member is talking
about.
* * *
[Translation]
SINGER RETIREES
Mr. Claude Bachand (Saint-Jean, BQ): Mr. Speaker, my question
is for the Minister of Human Resources Development.
Last December he said he was in a hurry to finally resolve the
matter of the former workers of the Singer company. He seemed to
be prepared to recognize the urgency of acting on humanitarian
grounds.
How is it that this matter has not yet been resolved, despite
the minister's fine promises and given the advanced age of the
aggrieved workers?
Hon. Pierre S. Pettigrew (Minister of Human Resources
Development, Lib.): Mr. Speaker, we have always recognized
the extreme delicacy and difficulty of the situation involving
the Singer workers. And if we are today before the courts, it is
not my doing. What I said was that our department would work as
hard as it could to clarify the situation under our
responsibility as quickly as possible. So we are not holding
things up, as the hon. member knows very well.
The Singer pensioners are receiving and have received exactly
the amounts due under the Annuities Act, including all
accumulated interest and the benefits of a 7% rate increase.
The Speaker: The hon. member for Saint-Jean.
Mr. Claude Bachand (Saint-Jean, BQ): Mr. Speaker, the
minister knows very well also that the route through the courts
could take six or seven years. In the case of the Singer
workers, whose average age is 82, this means there will be no one
left at the end of the line. The employees are aware of this too,
because they proposed a settlement out of court to the minister.
In the light of the very modest out of court settlement proposed
by the former Singer workers last spring, and given the
humanitarian aspect of the issue, why does the minister not
resolve it in the next few days with the former Singer workers on
the basis of what they proposed to him last December?
Hon. Pierre S. Pettigrew (Minister of Human Resources
Development, Lib.): Mr. Speaker, the government's responsibility
was simply to administer the money entrusted to it. In the
situation before us we risk creating a precedent, and my
responsibility as minister is to ensure that the pension plan is
managed according to the relevant laws and with regard to the
rights of all the parties involved.
The government cannot go beyond this responsibility right now,
and this is why we are taking this action now. It seems to me the
most responsible approach in terms of the country as a whole.
* * *
[English]
THE ENVIRONMENT
Mr. Bill Gilmour (Nanaimo—Alberni, Ref.): Mr. Speaker,
this December in Kyoto, Japan a legally binding treaty will be
signed to set reductions in greenhouse gas emissions. We have
less than two months to go, yet Canadians have no idea of the
government's position.
On the one hand the environment minister has warned Canadians to
be ready for “drastic measures.” On the other she announced
that we will try to negotiate a special, softer deal for Canada.
Canadians want and expect straight answers.
Will the minister clearly state the position Canada will take to
Kyoto this December?
Hon. Christine Stewart (Minister of the Environment,
Lib.): Mr. Speaker, I am pleased to respond to the question
which is very serious for all Canadians.
1445
Canada has agreed that we will negotiate medium term, legally
binding targets for the Kyoto, Japan meeting in December.
In my four months in office, I have been crossing this country
from coast to coast to coast meeting with partners who must come
together to agree on exactly what Canada's position will be. In
the international forum, Canada is taking a role of trying to
find a large consensus in the international community so that we
do have a strong, firm and legally—
The Speaker: The hon. member for Nanaimo—Alberni.
Mr. Bill Gilmour (Nanaimo—Alberni, Ref.): Mr. Speaker,
the global warming treaty has major economic ramifications for
Canada. Canadians have a right to know our position and medium
term answers do not give us the specifics we need. Our
governments are sending mixed messages all over the place. The
U.S. president is openly consulting Americans. Our prime
minister and environment minister have not been actively
consulting Canadians. The provinces have been left out of the
formula.
Will the minister ensure that all the provinces are in agreement
before, not after, the agreement is signed in Kyoto?
Hon. Christine Stewart (Minister of the Environment,
Lib.): Mr. Speaker, I would like to correct the erroneous
impression that provinces have not been consulted. I have met
with all of my provincial counterparts to discuss this issue of
climate change. I will be meeting with them in a telephone
conference call on Wednesday of this week. They are engaged with
me on this issue. Addressing climate change will incur costs for
all Canadians. I would like everybody to understand that not
taking action will also incur serious costs for Canadians.
* * *
[Translation]
SECURITY IN GOVERNMENT BUILDINGS
Mr. Stéphane Bergeron (Verchères, BQ): Mr. Speaker, my
question is for the Minister of Public Works.
Last weekend, the facilities put at the disposal of the Bloc
Quebecois for its research, documentation and communication
services were visited, searched and broken into for the second
time in less than four months.
How can the minister justify that the building which houses the
Bloc Quebecois' research, documentation and communication
services is one the very few government buildings around
Parliament that is not constantly protected by security guards?
Hon. Don Boudria (Leader of the Government in the House of
Commons, Lib.): Mr. Speaker, the building in question, at least
where the offices are located, belongs to the House of Commons
and, as spokesperson for the Board of Internal Economy, I, like
all members, am sorry such a break-in occurred.
I understand that, earlier today, House of Commons officials
already took measures to improve security. If it is the hon.
member's wish, we can again raise the issue with the Board of
Internal Economy to implement other necessary measures.
* * *
[English]
HUMAN RIGHTS
Mr. John McKay (Scarborough East, Lib.): Mr. Speaker,
this is a question directed to the Minister of Foreign Affairs.
As this House knows, the Prime Minister of Canada is in Russia
today. Recently the Russian parliament passed legislation which
will significantly disenfranchise religious minority groups other
than Russian Orthodox. This is a clear affront to those who
believe in religious freedom, human rights and democratic values.
What action if any is Canada prepared to communicate its
displeasure at this action taken by the Russian parliament?
Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.):
Mr. Speaker, I can report to the House that in the discussions
that the prime minister has had with the president, the prime
minister and the speakers of the Russian houses, the matter has
been directly raised with them expressing our concern that the
legislation does discriminate. We will continue to take the
matter in front of the OSC tribunal on human rights to make sure
that we have proper observation and protect the rights of
religious minorities in Russia.
* * *
MEFLOQUINE
Mr. John Cummins (Delta—South Richmond, Ref.): Mr.
Speaker, my question is for the Minister of Health.
Canadian troops in Somalia were administered the experimental
drug mefloquine. DND got the antimalarial drug because it agreed
to participate in a safety monitoring study. It ignored its
commitment.
Has the minister taken any action against either the
manufacturer who is responsible for supervising the safety
monitoring study or the military who acted illegally in
prescribing the drug?
Hon. Allan Rock (Minister of Health, Lib.): Mr. Speaker,
the facts are not yet clear. As the member should know, efforts
are being undertaken at the moment to determine the facts of the
matter.
1450
I can tell the hon. member that at the time the drug was put in
use, those responsible for supplying it believed on the evidence
at the moment and in good faith that it was appropriate for the
indicated conditions.
The responsible thing to do is to await the outcome of the
investigations which, as the hon. member should know, are
continuing.
Mr. John Cummins (Delta—South Richmond, Ref.): Mr.
Speaker, the facts were clear at the time the drug was
administered and it was clear there was a problem.
DND participation in the safety monitoring study would have
alerted Health Canada of the sometimes intolerable side effects
of the drug mefloquine which were well documented at the time by
Canadian military doctors.
Can the minister tell the House why his department did not
insist that DND participate fully in the safety monitoring study
before licensing mefloquine for general use by Canadians?
Hon. Allan Rock (Minister of Health, Lib.): Mr. Speaker,
hindsight affords the hon. member the luxury of characterizing
the facts as he sees fit.
As I have already said, investigations are continuing to
determine all the facts of the matter. I think the responsible
thing to do is to wait until all the facts are at hand before
coming to any judgment.
* * *
NATIONAL DEFENCE
Mr. Dick Proctor (Palliser, NDP): Mr. Speaker, my
question is for the Minister of National Defence.
The minister's refusal to accept the establishment of an
independent office of inspector general means the truth about
Somalia will likely never be told. The minister has caved in to
the senior military brass, the same group that so recently
elevated secrecy and lack of accountability to an art form.
Will the minister reverse his misguided decision and appoint a
truly independent inspector general with a mandate to report to
parliament on a regular basis?
Hon. Arthur C. Eggleton (Minister of National Defence, Lib.):
Mr. Speaker, as I previously indicated we do not need a new
superstructure. We do need refinements to the current system.
We are putting in place an ombudsman who will report
independently and will operate as a citizen independent from the
military. We have the same in terms of the grievance board. We
have the same in terms of a military police complaints
commission. We have a new monitoring committee to look at the
recommendations and to ensure they are all implemented, again an
independent civilian oversight. We have substantial civilian
oversight of the Canadian military. Together they are a better
system than the one that was proposed.
Mr. Dick Proctor (Palliser, NDP): Which is it, Mr. Minister,
these warm fuzzy assurances today or what you said last week
that—
The Speaker: I remind the hon. member that all questions
are put through the Speaker. I ask the hon. member to please put
his question.
Mr. Dick Proctor: Mr. Speaker, will the minister admit
that no inspector general effectively means no inspection of the
generals?
Hon. Arthur C. Eggleton (Minister of National Defence,
Lib.): Absolutely not, Mr. Speaker. There is substantial
oversight, unprecedented in terms of the Canadian forces.
Substantial oversight by independent civilian entities is
proposed and will be carried out to provide the same kind of
independent oversight that the hon. member has been talking
about.
* * *
THE ECONOMY
Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Speaker, my
question is for the Minister of Finance.
Last year the deficit was $8.9 billion. Expanded revenue growth
combined with lower interest rates on a smaller marketable debt
could very well balance the books this fiscal year.
Would the Minister of Finance after his recent mushy economic
statement advise the Canadian public if the finance department's
own internal forecast indicates a balanced budget this fiscal
year?
Hon. Paul Martin (Minister of Finance, Lib.): Mr. Speaker, I
thank the hon. member for his question.
As has been outlined by the prime minister, we will balance the
books by no later than next year. I think Canadians can take
enormous satisfaction in the fact that in the first five months
of this year we actually have paid down $11 billion worth of
marketable debt. I also think that Canadians take great
satisfaction by the fact that the net worth of households is
rising, that consumer sales are up, that more and more
Canadians—
1455
The Speaker: The hon. member for Brandon—Souris.
Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Speaker,
figures tabled by the government last April announced a $12.5
billion cash floor on the CHST. They showed that Manitoba's cash
transfers were to fall from $600 million last year to $487
million within the next five years. Not only has Manitoba
suffered a $250 million cash transfer loss since 1994-95 but it
is facing a health care crisis. In fact the community of
Delorine, Manitoba has lost all of its doctors and its citizens
do not have access to health care.
Can the minister explain, despite the floor and in spite of a
balanced budget, why seven out of ten provinces will continue to
get less money for health care—
The Speaker: The hon. Minister of Finance.
Hon. Paul Martin (Minister of Finance, Lib.): Mr.
Speaker, may I simply point out to the hon. member that as a
result of the federal government's actions, interest rates are
down by over $2 billion in which the province of Manitoba would
share.
May I also point out that Manitoba is sharing not only in the
original but in the extension of the infrastructure program. May
I also point out that the Foundation for Innovation will give the
great universities in Manitoba a chance to get more money for
research and development. May I point out that the Minister of
Health has a series of announcements of money going directly into
Manitoba to help health care.
Unfortunately, Mr. Speaker, we need more time for these answers.
* * *
SCIENCE AND TECHNOLOGY
Mr. Reg Alcock (Winnipeg South, Lib.): Mr. Speaker, in
the Speech from the Throne the government made a commitment to
support innovation and to assist in the commercialization of new
technologies. I ask the Secretary of State for Science and
Technology what action has been taken to ensure this commitment
is acted upon.
Hon. Ronald J. Duhamel (Secretary of State (Science, Research
and Development)(Western Economic Diversification), Lib.): Mr.
Speaker, a lot has been done. First the Canada Foundation for
Innovation has been set up to strengthen research capacity.
Second, centres of excellence have been financially stabilized.
Third, the government has made a commitment to hook up all
schools electronically, including all libraries, to a number of
communities by the year 2000.
We are this week celebrating science and technology week.
Everyone can help to appreciate it.
[Translation]
Science and technology are for women as well as men, and in
French as well as in English.
* * *
[English]
JUSTICE
Mr. Jack Ramsay (Crowfoot, Ref.): Mr. Speaker, earlier
this month a well-known gangster from China named Wing Fu
strangled a five-month old Vancouver baby and then backed over
the child repeatedly with his car. This criminal was ordered out
of Canada 18 months ago but the Liberal government allowed him to
stay. I ask the justice minister how many more people will Wing
Fu have to murder before the Liberals get him out of this
country.
[Translation]
Hon. Lucienne Robillard (Minister of Citizenship and
Immigration, Lib.): Mr. Speaker, it is very clear that the
Department of Citizenship and Immigration has a policy concerning
the deportation of people. The priority is definitely the
deportation of criminals.
I am pleased to say that the percentage of criminals who were
deported this year has gone up, in comparison to last year.
This being said, we can only deplore the tragic event that
occurred in the Vancouver area.
* * *
KIDNAPPING OF CHILDREN
Mr. Benoît Sauvageau (Repentigny, BQ): Mr. Speaker, my
question is for the Minister of Foreign Affairs.
The children of Mrs. Suzie Robitaille, who were kidnapped by
their father two and a half years ago, are still being held in
Egypt, despite the promise made by the Minister of Foreign
Affairs last spring that he would look into the matter
personally.
How can the minister explain that, six months later, nothing has
been done and Mrs. Robitaille's children are still being forcibly
held in Egypt? What concrete action does he intend to take to
repatriate these children?
Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.): Mr.
Speaker, I have spoken frequently with the Egyptian Minister of
Foreign Affairs. Unfortunately, there is no treaty between the
two countries that would ensure the children's return.
However I hope, in the next few months, to be able to travel to
Egypt and make a personal representation to the Egyptian
government.
* * *
1500
[English]
PRESENCE IN GALLERY
The Speaker: I draw the attention of hon. members to
the presence in the gallery of four recipients of the Governor
General's Award in commemoration of the Persons case.
I will call out their names and ask them to stand. I ask
members to withhold their applause until I have finished.
Dr. Marguerite Ritchie, Ottawa, Ontario; Hedwidge Landry,
Caraquet, New Brunswick; Sheila Genaille, Edmonton, Alberta; and
Dr. Margaret Fulton, Salt Spring Island, British Columbia.
Some hon. members: Hear, hear.
The Speaker: I also draw your attention to
the presence in our gallery of His Excellency Nathan M.
Shamuyarira, Minister of Trade of the Republic of Zimbabwe.
Some hon. members: Hear, hear.
* * *
[Translation]
PRIVILEGE
SECURITY IN GOVERNMENT BUILDINGS
Mr. Stéphane Bergeron (Verchères, BQ): Mr. Speaker, I would
like to bring to your attention a question of privilege directly
related to a question put during oral question period to the Hon.
Minister of Public Works and Government Services and answered by
the leader of the government in the House.
The Speaker: I know that the matter raised by the member took
place during question period but, in my view, it was the member
himself who asked the question. Therefore I would ask him to give
me notice and we will be able to hear his question of privilege
tomorrow rather than today.
A tragedy took place last week in one of our provinces, the
Province of Quebec, and I received notices that there would be
tributes paid today regarding this tragedy. The first member to
whom I am going to give the floor is the hon. member for Beauce,
and then we will proceed as usual.
* * *
ÉBOULEMENTS TRAGEDY
Mr. Claude Drouin (Beauce, Lib.): Mr. Speaker, as the Liberal
member of Parliament for Beauce, I rise today on behalf of the
government to extend to the families of the 43 victims of the bus
crash in Les Éboulements our deepest condolences on their loss.
1505
What explanation or
comfort can we offer? What can we say to help these families
understand and accept such a tragedy? If I had the answer to any
one of these questions, I would have rushed to share it with my
constituents and friends of Saint-Bernard de Beauce.
Neither I nor anyone
else has the power to explain that which cannot be explained or
to prevent pain and suffering. To all the children,
grandchildren, spouses, brothers and sisters, nieces and nephews,
uncles, aunts, cousins, friends and neighbours left bereaved by
this tragic accident, we offer our friendship. We will stand by
them and listen to them.
It is unfortunate that it takes a tragedy like this one to have
us realize how strong the ties are between the hearts of all
Canadians and how sensitive we all are to the pain of our fellow
citizens.
I very closely monitored reports of the accident in Les
Éboulements and I spoke to several members of the victims'
families. They all mentioned the extraordinary generosity and
solidarity they witnessed during this ordeal. Many messages of
sympathy were sent from every part of Canada, throughout last
week.
All our kind words and our words of encouragement will not bring
back those who died last week. However, I persist in believing
that the friendship, solidarity and respect displayed so far
will, in time, ease the pain and sadness of the people of
Saint-Bernard.
Some will say that things will never be the same again in
Saint-Bernard de Beauce and that the tragic death of the 42
residents and the serious injuries to five others will finally
kill the spirit of this magnificent town. I cannot agree with
them because, after visiting the place, after meeting and
comforting members of the families of the victims, I have to tell
you that the essence of the Beauce spirit was not lost in the
accident.
This harmonious mixture of pride, solidarity, generosity and
ingenuity mobilized the entire community within a few hours of
the accident. It is this strength of spirit that gives us the
courage to carry on and that ensures that the people of
Saint-Bernard de Beauce will dig in even harder and will together
survive the worst highway tragedy in Canada.
I reiterate in closing our most sincere sympathy for the
terrible drama they fell victim to and our wishes for a speedy
recovery for those still in hospital. I can assure them that both
I and my government will always be there to help them lighten
ever so slightly the burden of sorrow they carry.
[English]
Mr. Preston Manning (Leader of the Opposition, Ref.): Mr.
Speaker, I rise to join with you and other members in expressing
our profound sympathy for the victims of the tragic bus accident
in Quebec last Monday and for their grieving families.
[Translation]
On behalf of my colleagues in the official
opposition, I offer our deepest sympathies to the families of the
people who died and wish those injured a speedy recovery. We will
be thinking of the residents of Saint-Bernard de Beauce in the
days and weeks to come and we will pray they find the strength
and courage they need to bear their terrible losses.
[English]
Most of the victims of this terrible tragedy were older people.
They were part of a generation of Quebeckers for whom religious
faith was real and tangible. Many of them could therefore
identify with the words of St. Paul who suffered much himself
when he referred his readers to “the God of all comfort, who
comforts us in all our tribulations”.
Our prayer for their friends and families is that this God of
all comfort would be especially close now and in the days ahead.
1510
[Translation]
Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ): Mr. Speaker,
words can scarcely describe the sorrow felt by everyone in Quebec
this past week in the wake of the tragedy at Saint-
Joseph-de-la-Rive.
Forty-two members of the golden age club in the small locality
of Saint-Bernard de Beauce, along with their bus driver André
Desruisseaux, lost their lives in the worst highway accident in
the history of Quebec.
The families of the victims and the five injured survivors have
been in our thoughts throughout the entire week. We wish the
survivors a rapid recovery.
The Government of Quebec acted with a diligence that echoed
Quebeckers' sensitivity to this tragic accident, by instituting a
public investigation. The exact causes of this tragic event will
soon be known to us. Recommendations will be made with a view to
preventing another such tragedy from happening.
In closing, I would again like to reiterate, on behalf of the
Bloc Quebecois, our sincere condolences to the victims' relatives
and to all the people of Saint-Bernard. I would also like to
honour the people of Les Éboulements who came to the assistance
of the bus passengers.
Hon. Lorne Nystrom (Qu'Appelle, NDP): Mr. Speaker, I would
like to join with my colleagues in expressing my distress and
sorrow at the accident that occurred last week in Les Eboulements
in the Charlevoix region, in the province of Quebec.
This accident took the lives of 43 people, 42 of them from
Saint-Bernard de Beauce. This is the worst bus accident in
Canada's history, and tragically it occurred at almost exactly
the same place as another accident, which occurred nearly 20
years ago just beside Les Eboulements.
The Quebec premier called for a public inquiry. We hope that it
will provide some answers and that its recommendations will help
prevent another similar tragedy in the future.
On behalf of my party, the New Democratic Party of Canada, I
would like to offer our deepest sympathy to all of the families
and friends of the 43 people who lost their lives last week.
I would also like to express our solidarity with the people of
Saint-Bernard de Beauce and the member for Beauce and offer them
our moral support.
Mr. André Harvey (Chicoutimi, PC): Mr. Speaker, on Monday,
October 13, one of the worst highway accidents of this century
took place in Quebec.
I would like to take the opportunity afforded me today to
express to the families of the victims on my own behalf and on
behalf of my colleagues in the Progressive Conservative Party my
deepest sympathies and my support during this very difficult
time.
We are hard pressed to find the words when such tragedies occur.
Our sorrow is so great that our emotions become inexpressible. We
must simply gather our thoughts and pray that our pain,
especially that of the families affected, may soon be eased by
the many happy memories that these victims leave behind them.
It is very difficult to provide answers to things that are
beyond human reason.
It is better to speak of the lives of the victims and of what
awaits them.
Highway safety is everybody's business. Everyone in this country
must be on the watch. I simply hope that, after an accident like
this, everyone will pay even closer attention to highway
conditions that are often difficult and that require co-operation
from all levels of government.
In closing, I would like to say to the sorely tested communities
of Charlevoix and Beauce that they are not alone in their
suffering and that we are all here to share it with them.
ROUTINE PROCEEDINGS
1515
[English]
ORDER IN COUNCIL APPOINTMENTS
Mr. Peter Adams (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker, I am
pleased to table, in both official languages, a number of order
in council appointments made by the government. Pursuant to
Standing Order 110(1), these are deemed referred to the
appropriate standing committees, a list of which is attached.
* * *
PATENT ACT
Mr. John Solomon (Regina—Lumsden—Lake Centre, NDP)
moved for leave to introduce Bill C-248, an act to amend the
Patent Act.
He said: Mr. Speaker, I would like to extend my appreciate to
my colleague, the member for Winnipeg North Centre, for seconding
this very important bill.
I am pleased to introduce a bill entitled an act to amend the
Patent Act. The bill will limit the life of patents for medicines
to 17 years and allow for compulsory licences to be granted to
the manufacture and sale of medicines after the original patentee
has had the medicine approved for marketing for four years.
It also states that the royalty rate is to take into account the
amount of medical research carried out in Canada by the applicant
and the patentee. There is a provision for refusal or deferral of
a licence if a patentee has been unusually delayed in
comercializing the medicine.
In essence, this bill will reduce prescription drug costs to
Canadians, create more jobs for Canadians, provide competition
from Canadian generic drug manufacturers and reduce the rising
cost pressure high drug costs have created in our health care
system.
The bill addresses Bill C-91, the Drug Patent Act, which has
caused prescription drugs to skyrocket in costs. It has affected
our medical care system by driving up the cost of prescription
and hospital drugs and other drugs to individual users.
(Motions deemed adopted, bill read the first time and
printed)
* * *
INCOME TAX ACT
Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.)
moved for leave to introduce Bill C-249, an act to amend the
Income Tax Act.
He said: Mr. Speaker, I would like to thank the hon. member for
Oxford for seconding the bill.
Every day in Canada volunteer firefighters donate their time and
risk their lives for the good of their communities. Often they
receive an allowance to reimburse them for the expenses they
incur in discharging their duties. There is no income tax on the
first $500 they receive as part of their expense allowance but
they must pay tax on any amount exceeding $500. This bill would
double the tax exemption from $500 to $1,000. It would mean that
volunteer firefighters would not be taxed on reasonable expenses
incurred in their work, work which requires them to risk their
lives to protect their fellow citizens.
In our communities today we are relying more and more on
volunteer firefighters to perform these services.
(Motions deemed adopted, bill read the first time and
printed)
* * *
1520
PETITIONS
TELEPHONE RATES
Mr. Peter Adams (Peterborough, Lib.): Mr. Speaker, I have
a petition from hundreds of citizens of the Peterborough region
who are concerned about the proposed increase in the basic
telephone rate.
They point out that each incident of increase harms those on
fixed incomes whose lifestyle has already been downsized. The
phone service is a lifeline, a prerequisite for services such as
health care, safety and community.
They point out that the incidence of increases has become more
frequent with the advent of technological change. They say the
cost of such changes should be borne by the users and should be
segregated from the basic rate.
Therefore they call on Parliament to intercede on behalf of
seniors and low income families to rescind the decision of the
CRTC to raise local telephone service rates.
* * *
QUESTIONS ON THE ORDER PAPER
Mr. Peter Adams (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): I ask, Mr. Speaker,
that the all questions be allowed to stand.
The Acting Speaker (Mr. McClelland): Is that agreed?
Some hon. members: Agreed.
GOVERNMENT ORDERS
[Translation]
INCOME TAX CONVENTIONS IMPLEMENTATION ACT, 1997
The House resumed consideration of the motion that Bill C-10, an
act to implement a convention between Canada and Sweden, a
convention between Canada and the Republic of Lithuania, a
convention between Canada and the Republic of Kazakhstan, a
convention between Canada and the Republic of Iceland and a
convention between Canada and the Kingdom of Denmark for the
avoidance of double taxation and the prevention of fiscal evasion
with respect to taxes on income and to amend the
Canada-Netherlands Income Tax Convention Act, 1986 and the
Canada-United States Tax Convention Act, 1984, be read the second
time.
Mr. Yves Rocheleau (Trois-Rivières, BQ): Mr. Speaker, it is
with great pride that I rise to make my maiden speech in this
36th Parliament.
I would like to take this opportunity to thank
the people of the riding of Trois-Rivières for once again placing
their trust in me, and in particular the people of the new area
in the Trois- Rivières riding that takes in Louiseville,
Maskinongé and Saint-Léon-le-Grand, who placed their trust in me
for the first time. I intend to keep doing a good job, as Mr.
Duplessis once said, and to try to represent my constituents to
the best of my ability by taking to heart their hopes and their
problems, and by devoting a good part of my energy, for this is
also fundamental for me, to promoting, in keeping with the Bloc
Quebecois' mandate, the sovereignist proposal, which we feel is
the best status for the people of Quebec in the international
community.
I am also happy to speak to Bill C-10. If I may, I will read the
purpose of this bill, an act to implement a convention between
Canada and Sweden, a convention between Canada and the Republic
of Lithuania, a convention between Canada and the Republic of
Kazakhstan, a convention between Canada and the Republic of
Iceland and a convention between Canada and the Kingdom of
Denmark for the avoidance of double taxation and the prevention
of fiscal evasion with respect to taxes on income and to amend
the Canada-Netherlands Income Tax Convention Act, 1986 and the
Canada-United States Tax Convention Act, 1984.
The main purpose
of this bill is to prevent tax evasion. Its fair and equitable
purpose is to prevent double taxation when a company pays taxes
in a country with which Canada has signed a treaty.
This is, therefore, a measure aimed at ensuring fair and
equitable taxation for residents and non-residents, as well as at
encouraging trade and investments between countries.
These
treaties must not, however, open the door to abusive tax evasion.
It must be kept in mind, moreover, that the purpose of tax
conventions is to eliminate double taxation; in other words,
profits and income earned in one country covered by the
convention will be taxed in that country alone. A Canadian
company earning 50% of its profits in the United States will be
able, under certain conditions, to bring those profits back to
Canada without being taxed once again by Revenue Canada.
This is more or less what the bill is all about. It will define
financial and trade relations between corporations.
1525
There are some things that bear repeating on the operation of our
taxation system, and I will address it by using the May 1996
auditor general report as my main inspiration. First of all,
however, I would like to make you aware that in Canada we have a
bad example, coming from our No. 2 man in politics, the
finance minister who, as a businessman, has a major interest in
Canada Steamship Lines.
We were given some valuable
information in Le Soleil on April 24, 1997 on the actions of
that company, no doubt carried out by the agents of the Minister
of Finance. Canada Steamship Line, until 1981, oddly enough,
operated exclusively in Canada; since then, it has diversified,
with globalization, and now deals, strangely enough, with
countries that have very little taxation, countries known as tax
havens.
As we saw earlier, tax treaties should be signed by economies
which are more or less on a par, with the understanding that some
gains and losses will result, thus the consequent dealings on tax
issues. However, there are countries in this world where one can
make profits, pretend to pay taxes and come back to Canada saying
I paid my dues over there«, just like in well-structured
countries where people really pay taxes. Such countries are
called tax havens.
So, Canada Steamship Lines expanded its operations to three
countries that are tax havens and banana republics, namely
Bermuda, Liberia and Barbados. In Bermuda, there is no tax on
revenues, with a possible exemption until the year 2016. Canada
Steamship Lines does business there.
In Liberia, there is no tax on ship operations. There is only an
annual tax of $350 U.S., but no tax on ship operations.
In Barbados, a decreasing tax is imposed. Believe it or not, the
rate goes from 2.5% down to 1%. Canada Steamship Lines pretends
to pay taxes in these countries and then tells Revenue Canada
that it indeed paid taxes, but this is against the spirit of the
law.
It is very unfortunate. There are probably not too many
countries in the world where a finance minister, albeit very
honourable, can behave in such fashion.
People in certain circles have been saying for quite a while that
this situation should be addressed and it has not been addressed.
A kind of conflict of interest therefore exists which we have a
right to denounce.
I would now like to quote extensively from
the auditor general's report of May 1996, an entire chapter of
which deals with tax avoidance. The very fact that an entire
chapter deals with this issue shows that there is a deep
uneasiness with the way revenue collection is managed in the
Prime Minister's great big Canada.
On page 11-9 of his report, the auditor general prefaces the
chapter by stating that “Amending tax law is crucial”.
Paragraph 11.12 reads as follows:
Paragraph 11.13 states, and I quote:
Because there are discussions between these people; information
flows between them. The finance department we mentioned earlier
is at the heart of the whole process.
11.13
We noted that
Revenue Canada has brought to the attention of the Department of
Finance many situations suggesting that the law needed to be
strengthened.
When this is the case, it is customary for both departments to
exchange views on the best way to modify the tax legislation.
He goes on to give examples of delays. The auditor general
criticizes among other things the fact that action is slow in
coming despite the urgency of the situation with regard to the
tax base, which he himself referred to.
1530
We can see the practical repercussions on the tax base. This is
why there were so many cuts and why, on the back of the provinces
and the most disadvantaged, the most vulnerable in our
society, and I'll get back to this in a few minutes, the deficit
was cut.
The auditor general said:
That was in 1989: “The changes are still under consideration”.
In 1990, changes to rules dealing with forgiveness of debt were
requested; the change was introduced in 1994 and became effective
in 1995.
In 1991, changes to the rules dealing with tax shelters were
requested. These have not been finalized.
Paragraph 11.15 is very interesting, and I quote:
11.15 Our 1990 report à this was written in 1996—noted that
the law enables a private foundation to loan back to a
non-arm's-length donor all funds donated. Interest payments on
the loan may also be loaned back to the donor. Revenue Canada has
reassessed some cases where donations were loaned back, and is
pursuing other cases, no legislative action has been taken yet to
stop these abusive schemes.
This is tax evasion. It deprives the tax system of funds it is
entitled to and obliges the government to penalize those who have
no money. Thus the auditor general tried as well to look at the
government's political intention to really collect the funds due
it to ensure greater fiscal justice.
He went to the offices of Revenue Canada in Toronto.
In paragraph 11.25, the report states:
Only one referral was made by the large business tax auditors in
Toronto, where many large businesses are located.
Finally, the West is not left out where money is concerned. The
Reform Party ought to be thrilled to hear that.
The auditor has a kind thought for the westerners in paragraph
11.30 of his document, where he states, this time about Calgary:
11.30 Calgary tax avoidance auditors have identified avoidance
schemes in the oil and gas sector involving the inappropriate use
of losses totalling $826 million.
This time it is a matter of tax evasion compromising the tax
base. This is nothing but talk, at a time when the decision has
been made to put our fiscal house in order, a time when the
decision has been made that the welfare state is no more, at a
time when it is announced that there will be no more money paid
out unless we know where it is going, at a time when systematic
cuts are being made in services which would, normally, be useful,
unemployment insurance primarily.
There was no hesitation here, as in the rest of the western
world, to cut unemployment insurance, which they have blithely
renamed employment insurance. Now fewer than 50% of unemployed
people can get unemployment insurance. This is scandalous in
itself, that people pay in and criteria after criteria after
criteria are created with the result that, when people do get
into the vulnerable position of losing their jobs, they are
deprived of something they have paid into for so many years. The
result of this is that today fewer, far fewer, than 50% of those
who end up unemployed are entitled to unemployment insurance.
1535
We know the shameful cuts that have been made in all provinces,
cuts that have put the provinces in difficulty and that have
forced them to make cuts to health care throughout Canada.
Provincial governments have been forced to make cuts in education
and in sectors fundamental to a civilized society. And for what
reason? But the tax base is being destroyed, as we have just
shown, through evasion.
Yet, we know about the many women who
are single parents in Canada right now and about the rampant
poverty. We know about the staggering growth in food banks—they
are almost doing more business than any of Canada's other banks.
We know about the crushing level of individual debt—and if there
were a new increase in interest rates, you know what would
happen. We know about the terrible situations in which people
find themselves, and which drive too many of our fellow citizens
to take their own lives. We know about the number of people
burning out in our society today. We know that the ranks of the
poor have swelled by 300,000 since the Liberals came to power in
1993. We know that 1.5 million people are unemployed in this
wonderful country called Canada, and that the Prime Minister
makes disgraceful claims here in the House and abroad, as though
there were no problems, as though he were uninformed. We know
about the record number of personal bankruptcies being declared
in our economy right now, which undermines both individuals and
their families.
Things are not going well in this country. Why? Because the
government is too lax and too soft with those who hold financial
power, those who can develop schemes such as the ones condemned
by the auditor general because they deprive our tax base of its
ability to better redistribute wealth. This scandal is a daily
occurrence and, even though it was condemned by the auditor
general, it has yet to be corrected.
There is the issue of tax avoidance. There is the issue of
family trusts, which is another major scandal. What emerged was
probably the tip of the iceberg, once again thanks to the auditor
general's work.
We know that, on December 23, 1991, a series of discussions
secretly took place between Finance and Revenue officials, with
Revenue Canada almost refusing to comply with the finance
department's order to practically amend its Income Tax Act
regarding the transfer of assets from the Canadian economy to the
American economy, because this is exactly what happened.
The Canadian tax legislation is very clear. There are two times
when each and everyone of us must normally à and I mean normally
à pay our dues to the Canadian tax man: when we die or when we
leave the country.
Following this undue pressure from the Department of Finance,
once again, one very big, or perhaps two à it is all very
nebulous à family trusts were able to take assets worth $1
billion Can. each and transfer them to the United States without
paying taxes.
This is a very serious action, whose implications are
unfortunately yet unknown because everything is so nebulous and
kept secret at the expense of low income earners.
This has led to the cuts that
we know about, depriving the government of hundreds of millions
of dollars in tax revenue, anything between $350 million and $700
million depending on the interpretation. That is how, in this
great big country, we have come to make cuts at the expense of
the less fortunate and at the expense of the provinces, which, in
turn, have to make more cuts at the expense of the less
fortunate.
What this means is that an in-depth tax reform is required in
Canada to ensure that all Canadians pay their fair and equitable
share of taxes according to their means, their individual wealth,
in a spirit of social justice, this social justice about which we
have heard so much rhetoric by the likes of Pierre Elliott
Trudeau, as the members across the way know very well.
In a fair
society, wealth is distributed equitably instead of being
increasingly concentrated, because wealth that is not distributed
does not evaporate, it is concentrated.
1540
It is safe to say that wealth is
increasingly concentrated in Canada, as well as throughout the
western hemisphere, where, unfortunately, approximately 200
boards of directors or families are gaining more and more control
over the planet, subjugating government more and more everywhere,
in the western hemisphere and around the world.
According to a
UN report—and I will conclude on this—if I remember
correctly, there are 358 billionaires controlling 45% of the
global wealth. We have problems in Canada, Quebec and the western
hemisphere.
It is high time
that governments freely generated revenue and communicated more
so that we can have, around the world, in this country and in the
new state that Quebec will be, a fairer and more equitable
society where everyone contributes according to his means.
[English]
Mr. Jerry Pickard (Kent—Essex, Lib.): Mr. Speaker, it is
a pleasure for me to speak to Bill C-10. It is a bill that is
wrapped in fairness. There is absolutely no question that when
people are treated in an unfair way that the unfairness be
corrected.
Quite frankly, when the Canadian government examined what had
happened in the tax agreements with the United States—by the way
several other countries are involved in this tax agreement—in
1995-96, it realized there was an imbalance in the way Canadians
paid taxes.
This is the background history to Bill C-10 and what the
benefits will be. I would like to compare Canadians from 1984
onward who worked in the United States. Take for example
security guards working in Michigan earning $20,000 and security
guards working in the House of Commons. When these people added
up their retirement benefits, those who worked in the United
States had been given 50% of their benefits tax free, but those
people who worked in Canada had to pay tax on 100% of their
income.
It is a common thought by every one of us that if there is to be
fairness, if each person earns $20,000 and is paid equal
benefits, the taxation should be somewhat equal. It is very
difficult to justify a 50% reduction for those Canadians who
worked in the United States but who claimed their taxes in Canada
where every other Canadian had to pay on the full 100% of their
income.
Maybe I could explain the reason why that structure existed.
The United States had a rule at that time that it would tax only
50% of social security benefits. It was able to say to all those
who received benefits such as social security, family benefits or
disability benefits it would only charge on 50%.
We have a totally different system in Canada. Our system says
“For you folks who need that extra support, we will pay health
care. We will pay the benefits that this country gives over and
above a tax break in the dollars you receive”. Our structure was
designed to make sure that Canadians got the basic services that
they wanted. We look at the health care, the drug plans, the
benefits that seniors have in this country. That is not the case
in the United States.
However, as we go along with this process and as we looked at it
we thought that in order to bring fairness we would write a tax
treaty with the United States before 1996.
In that change to the tax treaty what the finance minister tried
to implement was a system where if you drew your benefits from
the United States you would pay the normal United States taxation
and if you drew your benefits from Canada you would pay the
normal Canadian benefits.
1545
The problem that occurred at that point was that the United
States, rather than stay with that, charged all Canadians who
were receiving social security benefits from the United States
25.5% taxation on those benefits and put a clause in stating that
those taxes would be non-refundable. Even if under United States
law they were not required to pay that much money, it still taxed
them at a rate of 25.5%, which myself, all of the members in the
Liberal caucus whom I talked to and the finance minister all
agreed that the United States was being very unfair to Canadians.
Here is the scenario that the United States implemented. It was
charging its own folks in their own country one rate, but
Canadians working in that country were charged a higher rate.
That was very unfair. They could not file to get the 25% back.
If they were not supposed to be paying more than 10% they could
not make a tax filing and get the 15% back. They were just taxed
a flat rate of 25.5% which made it that Canadians who worked in
the United States and received social security were being treated
very badly.
The finance minister then looked at what was transpiring and
said he would correct it. This is a result of a lot of
negotiations with the United States and a lot of negotiations in
Canada to try to come up with a policy which states that all
Canadians will be taxed in a fair and just way and Americans who
actually earn incomes here in Canada, the U.S. can tax them in a
fair and just way. However, we do not want to see Canadians who
work in the United States taxed unfairly.
The result was that Bill C-10 was negotiated with the United
States over the last many months. We have worked on trying to
correct those problems that were there and were being used in a
very unfair way for taxation policy.
There are things that we did to try to correct that policy. That
hardship of a 25.5% withholding tax in the United States on
Canadians is totally eliminated. The unfairness of that system
is gone. Canadians who earn social security in the United States
will have that social security come back to Canada and here in
Canada they will be taxed at the regular Canadian rates. What it
really means is that instead of being overtaxed in the United
States, all Canadians now will be taxed by the Canadian
government and they will be taxed on the basis of fairness to all
Canadians.
There is one slight benefit for those people who receive social
security benefits in the United States and come back and are
taxed in Canada. They will only be taxed on 85% of the income
that they receive from the United States. In other words they
are still a little bit better off than all other Canadians, but
it is certainly a much more fair and just system that has been
put in place.
The people who are hurt by this 25.5% rule that the United
States put in were mainly those folks who earned less than
$30,000. The lower your income in Canada by the time you take
your benefits off and look at the portion of your income that you
pay in taxes, it reduces. As your income is lower, so is your
tax percentage lower. As a result we are trying to get a policy
in place by C-10 that gives more fairness to low income
Canadians.
The result of that move really makes a big difference with a lot
of Canadians. Under the new rules several thousand Canadians
will pay less taxes than they did before under the other
agreement. In fact there will be several thousand Canadians who
will not have to pay any taxes at all on that income.
It is a real benefit for low income Canadians, particularly those
who have an income of $30,000 or less.
1550
Once this policy is approved by the Canadian Parliament and the
U.S. Senate, Canadian authorities will be able to work to ensure
that refunds are given to those who were overtaxed in these last
two years. In other words Revenue Canada is going to take on the
job of checking what they paid to the United States and what they
should have paid under Canadian law and make certain that they
get refunds. Those refund cheques will go out as soon as this
bill becomes law.
The bill will become law when it is passed in Canada and in the
United States. The sooner the bill is passed the sooner we will
get fair treatment for lower income Canadians. That is why there
is an urgency to move the bill ahead quickly now.
There is no question that for most residents of Canada, refunds
will be handled by Revenue Canada. As a result they will not have
to make application to the United States. We are trying to
simplify the process as much as we can. Where those calculations
show they receive money back, cheques will be sent to those
residents by Revenue Canada as expediently as possible.
I also should point out that in some cases people with very high
incomes would probably under the rules which exist have to pay
more taxes in the last two years than they actually paid. We
have agreed in that convention that no one, no Canadian will pay
more than the U.S. government taxed them in the first place. No
Canadian will pay more than they have already paid. Many
Canadians will get a refund and will be better off. Those will
primarily be low income Canadians. Not just seniors as was
pointed out earlier, but also the disabled who have benefits
coming from the U.S. and spouses who receive benefits from the
United States will receive tax refunds as well. There are many
avenues by which these benefits will be calculated and paid back.
When we really look at it, we have taken a tax law which in many
ways may have been a loophole whereby some people were not paying
anywhere near what others were paying in the tax system and with
Bill C-10 we are bringing people to a fairness where all
Canadians will be paying approximately the same in taxation. All
Canadians will be treated fairly rather than unfairly. In the
future no Canadians will be allowed to be overtaxed by a
government not in this country. That is a really important issue.
The Canadian government is taking back control of taxation for
Canadians. That is another extremely important point that
everyone should realize.
I have received several telephone calls from people about the
tax rule. I had friends come to me and say that the tax
agreement that has been struck with the United States is unfair.
After talking with them about the unfairness of the tax agreement
which was put in place in 1996, they all said the reason it was
unfair is that it is taxing them in a disproportionate way to
everybody else and it had to be corrected. It was mentioned
earlier that there are large lobby groups that are very upset
that Canadians were being treated unfairly by the U.S.
government. Bill C-10 corrects that.
The faster we can get Bill C-10 passed through the House and the
Canadian Senate and through the U.S. Senate, the quicker we can
get fairness for all Canadians.
Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, I
noticed that there is a competition going on here in terms of the
word fairness and the word equitable.
1555
When we take a reporting of income from 50%, jack it up to 85%
and somehow call that fair, I do not see the fairness in that.
The Liberals are going after the elderly in this bill. They are
taxing people who have the least ability to pay. These people
cannot go back into the workforce. They have retired based on
the understanding that they are only going to have to report 50%
of what they bring in through their social security cheques. This
government has gone ahead and jacked it up by 70% and Liberal
members sit their with smug smiles on their faces trying to
justify this. How can they justify it?
Mr. Jerry Pickard: Mr. Speaker, I am really surprised
that a member of the Reform Party would stand and say that
because a person has worked in a factory in Detroit they should
pay less money than if they worked in a factory in Windsor. I am
astonished at his viewpoint.
Fairness in taxation should be fairness for all Canadians, not a
few. When we are talking about fairness in taxation there is
absolutely no question that if we only charge taxes on 50% of the
income, those folks who are only paying the tax on 50% of their
income are being taxed less than every other Canadian. There is
no logical reason for that to happen here in this country. When
we talk about fairness it is not that we have changed the rate.
Fairness is that all Canadians whether they earn their income in
the United States, Great Britain, Canada or Germany, should pay
their Canadian taxes in some equal and fair fashion.
The Reform Party is suggesting because we are putting up
somebody's taxes a slight amount that it is not fair. That is
incorrect. They did have a tremendous extra benefit that made no
sense in Canada. We gave all of those folks who earned their
income in the United States and came back to Canada their health
care, medical care, the social benefits that they receive in
Canada and at the same time we are asking them to pay
approximately the same amount of taxes as all other Canadians.
I do not understand why the Reform Party would suggest that some
Canadians pay less taxes than others on the same income. That is
unfair.
Mr. Rob Anders: Mr. Speaker, somehow I knew the Liberals
would justify a tax increase because that is the Liberal way of
doing business in this country. They bellyache about how they
think this is fair. They think that charging people or having
them declare 85% of this is fair.
Is it fair that these people are going to lose thousands of
dollars of their income when they do not earn very much yet
members across the way collect millions of dollars in their gold
plated MP pension plans? Brian Tobin alone, the current premier
of Newfoundland and a former minister of fisheries, is collecting
$3.4 million as we speak. The premier of Newfoundland along with
the actions of the highest pay for a premier in any province in
this country is making over $200,000 a year in aggregate. How
can they possibly justify this, all of them smug with their MP
pensions? Why should these people be suffering the blows to the
tune of thousands of dollars while they all collect their super
rich pensions?
Mr. Jerry Pickard: Mr. Speaker, it is interesting how the
Reform Party member turns away from the real point when the issue
gets a little straightforward and a little tough to deal with.
Does the member feel it is important that some Canadians get
taxed at lower rates than other Canadians? Does he feel that it
is fair that somebody, and we are talking of low income
Canadians, works and receives social benefits in Canada at
$10,000? The Liberal Party believes that one should be taxed the
same as somebody who worked outside Canada and comes into Canada.
I believe that taxation should be fair and equal for equal
incomes. I believe that we should make certain that this issue
is not an issue of inappropriate change.
It is an issue of bringing fairness to the system where some
folks are taxed at very close to the same rate as other
Canadians.
1600
We are not talking about low income or high income. Low income
Canadians under this bill will be the ones who pay no tax.
Middle income Canadians will pay less than they paid before. The
point is that all Canadians should pay approximately the same tax
rate. There is no question but that Reform members missed that.
I wonder if they go back to their constituents and say “I
argued the point that if John had a job in the United States he
pays less tax than you, my neighbour next door”. Are you
telling your neighbours next door that? If you are, listen to
their answers.
The Reform Party is saying it wishes to tax Canadians who work
outside Canada at a lower rate than those who work in Canada. I
think that is wrong.
The Acting Speaker (Mr. McClelland): I remind everyone we
should address each other through the Chair and that we should
not refer to other members in the House by their names.
Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, it is
interesting to hear the Liberals talk about fair taxation. They
bellyache over the idea of people paying different levels of tax
in order to justify raising taxes. By that same logic would the
Liberals take people who pay 17% and 22% in federal taxes and
raise it to 29% to match those who pay the highest level of
progressive income tax because that is fair, because there are
different levels of taxation?
If they bellyache about differing levels of taxation will they
come clean and support a flat tax for income taxes like the
Reform party has been advocating for everybody?
Mr. Jerry Pickard: A fair tax is our policy. There are
good reasons to believe that we have a system in place that has
been very productive and has provided Canadians with a pretty
good standard of living.
We move away from the point of looking at how taxes work. Taxes
are paid but Canadians benefit greatly from the taxes we pay.
Look at the seniors benefit, at the OAS benefits, at all the
benefits we provide. We make certain that those tax dollars are
spent wisely.
After seeing what it is like in other countries, I know in
Canada we have the highest standard of living in the world. We
have a good record of defending the weak, helping the sick,
defending the poor, helping the seniors, helping the disabled. We
have been world leaders in social policy. You cannot deny that,
nor can anyone else.
Year after year the United Nations has pointed to Canada as
being the best country in the world. All that comes about
because of the policies that are put in place by governments in
this country. We have run the country extremely well. When you
can tell me any country that is better off than Canada, then you
can preach the way you are. But until you can tell me a country
that is better off than this country, I do not buy your argument.
Mr. Brent St. Denis (Algoma—Manitoulin, Lib.): Mr.
Speaker, it is a privilege for me to join the debate, especially
after listening to the comments of my colleague, the
Parliamentary Secretary to the Minister of Public Works. As
usual he is correct in what he says. He makes it easier for me
to pursue this subject.
Bill C-10 is another example of the government's caring about
Canadians, not only for our young people and future generations
but for Canadian taxpayers who are out working every day, paying
taxes and supporting a country that is unquestionably the best
country in the world. According to recent new reports, Canada is
also the best country in the world in which to invest.
1605
A government which puts people first is a government that will
ultimately provide Canadians with the services they deserve in
exchange for the payment of taxes, which at all times taxpayers
begrudge. However, when the services are good and when
government leadership is good they will accept paying taxes in
the knowledge that they are contributing to ensuring the safety
of our social safety net for the future, our pension system, our
employment insurance system and our health system.
Bill C-10 is an example of the government continuing to be a
caring government. When the amendment to the treaty was passed a
couple of years ago it is acknowledged that there was an
oversight or a mistake. I had a number of constituents who were
adversely affected by the measure which allowed their U.S.
pension income to be taxed at source, but did not provide them
with any means to get a deduction through the tax system because
they could not file in the U.S.
One of my colleagues from Windsor said earlier that the Liberal
MPs in the Windsor area got together and talked to the finance
minister. I applaud their efforts in bringing this issue to his
attention. For my part, I also brought the matter to the
attention of the finance minister, as I expect did many Liberal
members. Being the kind of finance minister he is, being the
kind of government that we have, the response was “Let us
acknowledge that we have a difficulty here. Let us do something
about it”. This is an example of a government which listens.
This government cares about the people it serves.
Even though, in terms of numbers, there may only be a few
thousand Canadians who are adversely affected, it does not matter
that there are only a few thousand. There could be a million or
there could be ten. The problem is that these seniors have been
adversely affected and if as a government we can do something
about it, that is what we have set out to do.
I applaud the efforts of the finance minister in responding to
the appeals from his colleagues on this side of the House to do
something about the oversight. Canadians can expect that the
government will listen to them in future sessions of this
Parliament and hopefully beyond.
In recognition of the oversight, the new rules provide for the
change to be retroactive to January 1996, so that no one who
found themselves caught in this unfortunate trap will at the end
of the day pay a penalty. In fact, I understand that Revenue
Canada will make every effort to automatically correct this
problem for Canadians who have been adversely affected.
Let me use this opportunity to say a bit more about why the
government is caring and why it has taken the measure which it
has in Bill C-10.
Not so long ago we had the Speech from the Throne. It contained
numerous initiatives which, as we head into the next millennium,
indicate nothing else but that we want all citizens to benefit
from the turning tide, from the growing economy and from the
social safety net which past governments and all Canadians have
worked so hard over the decades to create. It is in getting the
financial matters on a strong footing that we can most
effectively take measures to protect valuable programs, such as
the health care system, the pension system and the employment
insurance system.
1610
Let me speak for a moment about the health care system because
it is the very client group, the very citizens who have been
helped through this protocol in Bill C-10. In most cases this
group has been worried about the health care system. I believe
they can find in the leadership of the government, the health
minister and the Prime Minister the very best of intentions, the
very best of plans to ensure that the health care system
continues to be the finest in the world.
I had the chance to visit an Asian country a couple of years
ago. While there I discovered that as its economy was growing,
its citizens came to a point where they wanted to institute a
national health plan. They looked to Canada's plan and
implemented a health care system for their country that is
modelled after Canada's.
Even though we have our detractors, mostly those from south of
the border who do not want to see the U.S. move into a national
universal health care system, when they really get down to it
these detractors have to admit that the system in Canada costs
less per capita on the basis of a percentage of GDP than the U.S.
system and covers everybody from coast to coast.
It is a system that Canadians have come to value. They may even
take it for granted. It is wonderful that you can take for
granted a system that will take care of you and a system that
does not require that you pull out your Visa card or chequebook
when you go to the doctor or to the hospital. The very citizens
who were adversely affected initially by this protocol will now
be favourably impacted by Bill C-10. We want to get the message
to them that they should not be worried about the health care
system.
Yes, changes are taking place at the provincial level. Provinces
are for their own and different reasons taking measures to
rationalize the health care system and its delivery in their
provinces. I believe there is a universal commitment from coast
to coast to maintain the five principles even though there may be
some debate between the federal government and certain provinces
from time to time on the interpretation of those principles. Very
few Canadians would want us to step back to decades past with one
system for the rich and another for everybody else.
As an extension of the concept of a caring government taking
this initiative with Bill C-10, I take as an example the
pharmacare system we talked about in the campaign. I grant this
is not something that will happen overnight. Maybe it will take
five or ten years, maybe longer, to implement a national
pharmacare system. If we do not start talking about it now we
will never get there. A national drug plan, a plan which would
provide all Canadians with equal access to medically necessary
drugs is a plan that is typically Canadian, a plan that reflects
the values of sharing our wealth and of sharing our vision for a
country that cares about its individual citizens.
Along with the pharmacare plan I know there have been some
discussions about a universal home care plan. I see it as simply
a mechanism to allow our health care system to extend into our
neighbourhoods and into the homes of Canadians. That too is a
logical extension of the kind of thinking we see from this
government consistently.
In my riding of Algoma—Manitoulin in northern Ontario, which is
quite a large, beautiful Great Lakes riding, I have about 18
First Nations communities. Very few Canadians would disagree
that our First Nations add so much to the culture of our society.
At the same time there needs to be a change in the relationship
between the federal government and our First Nations which would
allow our First Nations to more readily achieve their full
potential.
1615
What we heard in the throne speech and what is exemplified by
Bill C-10 is the willingness to work with first nations so they
can benefit, using their own leadership and their own resources
in partnership with the federal government and with the province
where appropriate, as can all Canadian communities from the vast
riches of the nation.
As we approach the next millennium no Canadian will be left
totally behind. We want a society where perhaps there are some
who are richer than others but the gap is not a widening gap but
a narrowing one. No Canadian will ever complain about being left
behind due to illiteracy, health problems or the fact that they
live in one area of the country or another.
Even though some critics have said that we have been too focused
on deficit reduction, those critics are few and far between. Last
Friday a constituent, a leader of a community on Manitoulin
Island with its own challenges that is doing very well, who might
have had reason to say otherwise told me very sincerely that the
government and finance minister were doing a terrific job with
the deficit.
They started with fundamentals such as managing their own books
the way they would want their own family books to be kept. That
starts a domino effect that can do nothing but favourably impact
on all other segments of society.
In getting our deficit under control and balancing the books as
we will in the next year or so, the government is not out there
competing for borrowings with the private sector, which helps
keep interest rates down. If there is any better economic
development tool than low interest rates, I challenge my
colleagues opposite to tell me.
Most of us remember the days of high inflation and high interest
rates not only in our country but around the world. Nobody would
ever choose to go back to those times. The combination of low
interest rates and low inflation has provided an environment of
confidence that I have not felt for a long time. I appreciate
the opportunity to be part of a government that has a vision, a
plan and the will to carry out its agenda.
In 20 minutes it is difficult to say all the things we want to
say, but I will pick out the most important ones as I go along.
As I listened to some of my opposition colleagues, particularly
those in the Reform Party, I heard them use Bill C-10 as a
vehicle to talk about their alleged grief over the CPP and Bill
C-2. They are rolling that issue under the umbrella of Bill
C-10. They have had ample opportunity to say their piece about
very necessary changes to the CPP Canadians want us to make but
they repeatedly talk about a tax grab.
As I have said earlier, when workers put money toward their CPP
and the employer does likewise, it is an investment in a plan
that is the envy of industrialized nations around the world. We
are one of the few industrialized nations that has taken hold of
the pension problem and has taken steps to correct it.
1620
We heard much particularly from the official opposition, the
Reform Party, about this 9% plus rate. It will not acknowledge
that a private super RRSP plan may require 13% to 15%
contributions by Canadian workers without the necessary
protection we need for workers who become disabled.
Many constituents have come to see me because they look toward
the Canada pension disability program to assist them at a time of
great need because of a heart attack or some other medical
condition that has rendered them unable to work.
When we put all this together it states that the government
cares about the people who have worked so hard to build the
country: seniors and the people of my generation and the
generations after who will take the baton and continue to build
the country. No country anywhere should stop its effort to
build. This country is no different. We must continue to
contribute in whatever fashion we can to make the country
stronger and stronger.
The actions of the government clearly are actions that will make
the country stronger. If we have to put up with a bit of
criticism along the way, it comes with the territory. It comes
with being responsible for governing the country. If it were not
for our willingness to take up that challenge and make some tough
decisions from time to time, the country would be in a very sorry
state.
As I attempt to wind up, let me reiterate the people we are
attempting to assist through Bill C-10 are our neighbours, our
grandparents and our parents. These people got caught
inadvertently in a trap. Our colleagues across the way can look
to the government and honestly admit that it has listened.
It is not the first time and it certainly will not be the last
time. It is incumbent upon us as a government to continue to
listen to the people. My colleagues are regularly in their
ridings listening to their constituents either in travelling
office hours like I do or at town hall meetings. By that process
we know what people are saying. I know my colleagues' doors are
always open to their constituents as are the doors to my riding
office and to the travelling office I maintain on a regular
basis.
The citizens of the Algoma—Manitoulin riding are looking to the
government to continue its leadership. I certainly get
complaints from time to time which are justified. No government
is perfect. I would be the last one ever to say that. I can say
with honesty that there is no alternative for the country at this
time than the kind of government we are capable of offering to
the people. I am proud to be part of the government.
Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, we are
talking today about increasing the taxes to be paid by people who
receive social security from the United States. The government
is perfectly willing, as it pointed out today, to tax people who
have worked outside the country at some point in their lives.
I just want to see if I can get a commitment from the
government. Is it willing to commit that it will never increase
taxes on those people who solely collect the CPP or other
programs in Canada?
I would like to get that in Hansard today. In that way,
if the government does it in the future, we can point to the
record and say that it did not tell the whole truth on that one
too.
Mr. Brent St. Denis: Mr. Speaker, it would be
presumptuous of me or any member to try to speak for the entire
government.
If we look at the performance of the government since first
being elected in the fall of 1993 we would have to conclude the
taxpayers are in very good hands. It has not increased personal
income taxes one iota since being elected. If we project that
into the future I would say to my colleague across the way that
his bets are best with us.
1625
The fact that persons work outside the country and we have been
able to repatriate them into the domestic tax system so that they
will be better off is a sign that the government cares.
We had an alternative method in the previous system. The U.S.
government was the taxer and our citizens were inadvertently the
victims. We have corrected that. In most cases the citizens
affected by the bill will pay less taxes.
If my colleague across the way looks carefully at the record, he
can presume the taxpayers are in very good hands and will be for
a long time.
Mr. Rob Anders: Mr. Speaker, I would like to make a
comment about the government since it was elected in 1993, about
how it claims to have done such a good job with taxes and about
how taxes have not gone up.
Government members seem to forget that the tax on life insurance
premiums were extended. At the low end it brought in an extra
$120 million a year and at the high end $210 million. They seem
to forget that the lifetime capital gains exemption was
eliminated, which at its high point brought in $415 million in a
given year.
They seem to forget deductions for business meals were reduced,
which resulted at its high in $275 million more to the
government. They forget the changes to the tax treatment of
securities which resulted in $60 million more per year. They
forgot about the air transportation tax which resulted in $41
million in its highest year. They forgot about the accelerated
capital cost allowances and the $45 million it brought in, in its
highest year. The excise tax on gasoline brought in $500
million. The excise tax on tobacco increased by $65 million per
year.
They forgot about the reduction on the RRSP overcontribution
which brought in $10 million per year. They forgot about the
world income tax of non-resident pensions that brought in $10
million per year. They forgot about the RRSP withdrawal age
dropping down to 69, which brought in $45 million. They forgot
about another increase on tobacco that brought in $100 million.
They forgot about the overseas employment credit which brought
in $10 million. They forgot about the EI premiums for part-time
workers which brought in $1 billion. They forgot about EI
premiums going from 3% to 3.07%, which brought in $400 million,
and the bracket creep which resulted in them redefining income
and bringing in $3.6 billion more. That was just the last time.
When the increase to the CPP was brought in it was the 37th tax
increase. This one is the 38th. How can they possibly say they
have reduced or kept taxes decent?
Mr. Brent St. Denis: Mr. Speaker, as I listened to my
colleague across the way the first thought that came to mind was
whether he agreed with closing tax loopholes.
Mr. Jim Abbott: Is the excise tax on gas a tax loophole?
Give me a break.
Mr. Brent St. Denis: The litany of tax measures he talked
about were things his own party called for. They go on and on
about the CPP increase being a tax. If we throw enough mud at
the wall some of it will stick.
By way of a reminder, it is an investment. We still do not know
what the super RRSP rate of the Reform Party will be. Some say
it will be 13% to 15%. How can they unfavourably compare that to
9% plus is beyond my comprehension.
1630
I think they only have to look at their own program to
understand that the government, in a very responsible, very
people oriented and caring way, has implemented changes to the
tax system which will lead to more fairness and the closing of
loopholes.
At the end of the day it will lead to greater confidence by
investors outside the country and investors domestically on what
they should do to invest in the country. At the same time it
will create more confidence among workers, seniors and everyone
else in society who believes this is the best country in the
world and it will remain so.
Mr. Randy White (Langley—Abbotsford, Ref.): Mr.
Speaker, I think I am beginning to understand what this is all
about.
I think we said that a tax is an investment. I do not know, I
am only an accountant but the last time I looked we never
classified a tax as an investment. I do not think that the
average tax paying citizen who has to pay out of their pocket,
take their wallet out and pay taxes, is looking at this as an
investment.
I ask the member opposite, from the Liberal Party for those who
are listening, if he could reconfirm that the Liberal government
sees taxes as investments.
Mr. Brent St. Denis: Mr. Speaker, I think I am getting
through. I appreciate this exchange for no other reason than now
some members opposite are asking themselves what is the
difference between an investment and a tax.
When they talk about the super RRSP, they talk about people
investing. They do not talk about the rate. I will tell members
what the rate will be. The rate will be something like 13% to
15% and they use the word investment in their private super RRSP
of the individual Canadian.
If it is an investment for their super RRSP, it must also be an
investment, at a much lower and reasonable rate, in the Canada
pension plan. Clearly my colleague across the way, and I believe
he is or was an accountant, should know that an investment is
something which gives you a payback in the future. I expect he,
along with other Canadians, will be able to get Canada pension
payments back when he retires.
I am really glad that my colleagues across the way are getting a
little anxious about this. I have a sense that some
understanding is coming into their minds on the issue. It is
nice to be holding a flashlight for them.
An investment, for the benefit of my colleagues across the way,
is something that provides a repayment in the future. They along
with their colleagues in other parties will understand the very
big difference between a tax and an investment. Payments to CPP
are an investment.
Mr. Peter Mancini (Sydney—Victoria, NDP): Mr. Speaker, I
am pleased to address this bill in the House. Before I do I feel
I have to make some comments with regard to the statements made
by the previous two speakers, the members of the government.
I take the hon. members at their word when they talk about
things like fairness and a caring government. I feel it
incumbent on me to point out that if they do believe benefits
should be distributed fairly and the government is actively
pursuing this I can point out numerous examples where benefits
have not been distributed fairly.
1635
I could begin with the people in Atlantic Canada who are
seasonal workers. I could go on to the members of the merchant
marines who are seeking the same kind of benefits as other
veterans from the second world war. I could go on to talk about
the First Nations people who are seeking the same kind of
employment opportunities that those in central Canada benefit
from. I believe them when they say their government is committed
to those things and I look forward to their introducing some
legislation that might move us in that direction.
That being said, I feel incumbent to talk a bit about the
importance of this bill to the people in my riding. It is an
important bill because I represent a large number of seniors in
Sydney—Victoria. There is a disproportionate amount of seniors
if we look at the demographics in terms of population. We have a
large number of seniors living in my riding, some of whom receive
social security from the United States.
The reason that many of the seniors in my riding receive that
income is telling. Many of them are seniors who went away 30 or
40 years ago to find employment in what we used to call the
Boston states, to find employment in New York. The adage or the
picture of the maritimer going down the road is as old as I can
remember and indeed many of the seniors who would benefit from
U.S. social security do so because there were no employment
opportunities for them back in the 1940s and 1950s in Atlantic
Canada, and unfortunately they have come home to retire to see
many of their nephews and nieces and grandchildren going down the
road again.
It is with some interest that the seniors in my riding who do
receive this type of income will review this legislation. I
cannot help wonder as we move to amend this legislation if what
we are really doing is preparing the next generation of Atlantic
Canadians for their U.S. social security benefits that they might
collect in the event that they were fortunate enough to retire
back to the land that they did not want to leave in the first
place but had to because of the policies of the government that
were referred to by the previous speakers as caring and fair.
That being said, it is also interesting to see the beginning of
what I would call a harmonization tax system between us
and the Americans. In light of recent free trade agreements, in
light of recent developments it is not surprising that we are
beginning to see a harmonization of tax systems between the two
countries.
The previous speaker went to great lengths to talk about the
health care system, how important it was to Canadians and how
there may be some opposition and some concern about American
giant corporations moving into that health care system. As we
look at the harmonization that has taken place in terms of
economic policy and the integration of the North American
economic factions that this government is so proud of it is no
surprise that we see today the beginnings of some type of tax
harmonization.
I will now move directly to the bill. I am interested and
pleased to say that in the New Democratic Party we have always
fought to prevent fiscal tax evasion and we have always fought
for fairer taxes. Unfortunately the same cannot be said of
government. In the province I come from, if the government is
concerned about fair taxes, I believe that we can begin this
debate.
1640
I believe the government has finally given us a bit of a
beachhead to begin the debate that we took to the Canadian public
in the last election on fair taxes. If the government is truly
interested in that it should look at some things like the GST
and, in the province I come from, the harmonized sales tax, which
is an unfair tax. If the government were committed to fair
taxation it would begin implementation of fair taxation by
scrapping those taxes.
Government members may think this is rhetoric from the NDP and
from the opposition benches, but I cannot help but notice that in
the last provincial election in my home province of Nova Scotia
the hon. premier, Russell MacLellan, who was a government
member who voted in favour of the GST, during his leadership
campaign thought better of it. I cannot help but notice that the
former provincial finance minister, the hon. Bernie Boudreau, who
negotiated the harmonized sales tax with this government, began
his leadership campaign to be the Liberal premier of Nova Scotia
by saying that he had thought better of it. The conversions on
the road to Damascus were amazing for the people of Nova Scotia
to behold. They will have their say on it before too long.
If we want to talk about the beginnings of fair taxation, we
could look at some of those policies.
With respect to the bill, parts I through V which attempt to
avoid double taxation we have no problem with. We can support
those parts in principle.
Part VI amends the Canada-Netherlands Income Tax Convention Act,
1986 and adds provisions concerning mutual assistance in the
collection of taxes and the elimination of withholding tax on
patent and knowhow royalties, which are technical amendments. We
may be able to find our way to support those.
Part VII, however, contains superficial revisions to the
legislation from the previous Parliament and I think that we
would find it difficult to support that section of the bill.
The group Canadians asking for social security equality lobbied the
government to take the legislation back to pre-1996. People made
their retirement plans based on the structure as it was at that
time. There was one set of conditions that these seniors planned
their retirement on and it has now all changed. I am concerned
about the consequences to the ordinary taxpayer who cannot now
change their retirement plans the way the government can change
legislation.
Those people who planned for their retirement under the rules of
the pre-1996 legislation will not be returned to their same
situation but will find themselves taxed at 85% of their income.
They are justifiably concerned and justifiably outraged.
My colleague has indicated that there should be a grandfathering
clause for those individuals and I would support that. The NDP
will always support legitimate tax reform and has always been the
first advocate of real tax reform.
Again I note that the hon. member for Essex, who spoke in the
House prior to question period, talked about how this legislation
came into being. She said that her constituents lobbied her,
phoned her, and then the MPs got together and persuaded the
Minister of Finance to listen to their concerns. I only wish
that the fairness talked about by government members and the
method of introducing change could be so easily accomplished by
those of us from outside the Ontario region.
My constituents have called me to lobby me concerning changes to
the employment act, changes to fisheries and the TAGS program.
Every time we attempt to have the Minister of Finance so
graciously change his legislation, or the Minister of Human
Resources Development, we are not met with quite the same
friendly hand.
I admire the hon. member for Essex for her tenacity. I remind
the government that we are all in this House elected members and
I would hope that we would receive the same consideration from
the Minister of Finance.
1645
Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, I
congratulate the member for his speech in opposition to the
government legislation. I will also ask a question. The
socialist to my far left talked about his opposition to the
harmonized sales tax. I wonder if he could muse out loud for
Canadians his thoughts on wealth taxes.
Mr. Peter Mancini: Mr. Speaker, I have given my views on
the harmonized tax. The hon. member is correct. I welcome his
question because in terms of a tax on wealth, some of the
government members used terms like every Canadian should pay
exactly the same amount of taxes and at the same rate and at the
same percentage. Of course I do not share that view, and that is
why I oppose the harmonized sales tax.
If an individual is buying children's clothing or if a senior is
paying for oil or electricity on a fixed income at the same rate
as an individual who is wealthy, it is not a fair tax system. In
terms of taxing the wealthy, I think they should pay their fair
share which would be considerably more than many of the people in
my constituency who are on fixed incomes.
Mr. Jim Abbott (Kootenay—Columbia, Ref.): Mr. Speaker,
the question my colleague asked the NDP member is very important.
Unfortunately it seems as though the member did not quite hear
it, so I will spell it out specifically for him.
We are talking about what the NDP government has done in the
province of British Columbia. Businesses come to the province of
British Columbia. By virtue of the fact that they put an
investment into machinery or equipment or into inventory, the NDP
provincial government goes ahead and charges them a tax for the
privilege of actually having that inventory there. Believe it or
not, this tax is applied to inventory and assets that the
business does not necessarily even own. In other words there may
be mortgages, there may be liens, there may be any number of
things.
Take the example of an automobile inventory for a car
dealership. Believe it or not, that NDP government turns around
and actually charges a 1% charge on the value of the inventory.
The inventory has not been sold. If the inventory is sold, the
business actually reduces its tax rate by virtue of that amount
being taken off.
What is this member's position as he sees it relative to a tax
on wealth, a tax on assets? Let me make the specifics of what we
are talking about crystal clear for him. Let us say that an
individual had a home in greater Vancouver. It is not unusual
for a home in greater Vancouver to run in the $200,000 to
$300,000 range. Another individual may have an equivalent home
in Winnipeg that is in the $100,000 range. These are the assets,
the wealth we are talking about. Would he and the NDP at the
federal level see going after taxing wealth in the hands of
Canadians?
Mr. Peter Mancini: Mr. Speaker, given that the province
of British Columbia probably has the most robust economy of any
province in Canada, and given that is a direct result of the NDP
government in that province, far be it for me to second guess the
minister of finance for British Columbia and his policies.
The hon. member should know as to taxing property in Vancouver
versus property in Winnipeg versus property in Sydney—Victoria,
these are property matters that are left to another authority
other than those in this House.
I welcome a real question. I would suggest that the hon.
members discuss the policies of the minister of finance in
British Columbia with him. They might find it in their hearts to
adopt some of them.
Mr. Randy White (Langley—Abbotsford, Ref.): Mr. Speaker,
some days we really get enlightened in this place. Coming from
British Columbia I find it really difficult to accept the premise
that British Columbia is doing well at all under the NDP
government. I think the member should know that this is very
likely the last term for those folks for a long, long time to
come. It is maybe even the last term for this young group here
for a long, long time to come.
1650
I know the NDP is interested in putting more money into
education, culture, health and other social programs. I would
like to ask him whether it is the NDP's philosophy and proposal
that we raise the money for these extras which they are expecting
by way of additional taxes.
Mr. Peter Mancini: Mr. Speaker, I will be pleased to
answer the hon. clairvoyant member who seems to have a crystal
ball with which he determines who will and who will not be
elected.
With regard to his question, the NDP has always been concerned
about education, culture, health care and social programs, the
things that have always made this country great, the things that
this government tried to take credit for in a prior comment.
Regarding where the money would come from, it would come from a
fair taxation policy for the hundreds of corporations and wealthy
individuals who pay no tax to this country for those programs
now. It is a simple answer to a simple question.
Mr. Jim Abbott: Mr. Speaker, indeed it was a simple
answer which belies the fact that perhaps he did not understand
the question.
I will ask the question again and I am looking for a very
specific answer. There have been proposals floated by the NDP
government and their advisers in British Columbia that they could
turn around and start to take a percentage applied to the wealth
that people have in their possession.
We recognize that in Canada there are many people who are barely
making ends meet. There are many people who have minimum income
salaries. We recognize that, but on the other hand there are
people who are in what we would call the middle income bracket
which would be in the range of $35,000 to $60,000 a year. Over
the lifetime of those people by virtue of property appreciation
particularly in centres like Toronto and Vancouver, they have
seen their wealth accumulate by virtue of capital gains on their
principal residence.
It is not unusual for people who are currently making $50,000 or
$60,000 a year to have RRSPs in the values of $300,000 to
$400,000. They are the backbone of our community in terms of
being the people who are working for their wages but who have
accumulated a certain amount of wealth. We are talking about
wealth.
I ask the member the question again very specifically. Would he
see an NDP government going ahead and applying a percentage tax
on the wealth of Canadians in the same way that the NDP
provincial government has done in the province of B.C. on the
capital in the possession of various companies?
Mr. Peter Mancini: Mr. Speaker, there was a great deal of
preface to the simple question dealing with middle income
Canadians who earn between $50,000 and $60,000 a year. I guess
they are middle income Canadians in the province of Alberta. They
may be considered wealthy Canadians in other parts of this
country.
Mr. Jim Abbott: You earn $64,000.
Mr. Peter Mancini: I do not for one minute indicate that
I am not in many ways better off than many of the people I
represent. I understand that. These members ought to understand
that as well. Like the people I represent, I have no problem
paying a fair share of taxes because of the many benefits that I
think this country can give me and the people I represent.
I do not think the people in these members' ridings who earn
$50,000 or $60,000 or $70,000 a year mind paying their fair share
of taxes because they know it derives health benefits and
transportation for them and education for their children. I
think those people would not be opposed to a fair taxation
system.
1655
Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Speaker,
perhaps I am in the wrong debate in this House. I thought that
C-10 was going to be discussed. However I heard a lot of
comments about CPP and Bill C-2 over the last couple of speakers;
harmonized sales tax, which I thought was a rather interesting
comment; RRSPs; and capital tax, which was really quite
interesting but does not have a lot of bearing on Bill C-10.
I particularly enjoyed the comment about housing prices in the
city of Winnipeg. I do not know how it relates to C-10 but I can
tell the hon. member who brought it up that in fact in Brandon
our housing prices are 15% higher than those in the city of
Winnipeg. They are perhaps not quite to the level of those in
Vancouver but that is okay.
I would like to bring this back to C-10. The issue quite
frankly is very relevant to me. My constituency has a very large
seniors population as do a number of constituencies throughout
this country of ours, but my riding in particular through
demographics has identified a very large seniors population.
It never ceases to amaze me that when the government tries to
fix a wrong it does it for the right reasons but unfortunately
when the legislation is brought forward the wrong seems to be
exacerbated in some areas which it has been with Bill C-10.
In an attempt to respond to the protests of CASSE and CARP,
which is the Canadian Association of Retired Persons, on the
non-refundable 25.5% U.S. withholding tax imposed on social
security payments to Canadian residents under the 1995 tax
protocol which was brought in by the existing government, the
finance minister announced on April 9, 1997 the signing of a new
tax protocol with the U.S. Following ratification this protocol
will be effective retroactive to January 1, 1996, the
implementation date of the contentious 1995 protocol. Under the
new protocol, the taxation power in respect of social security
payments to Canadians will be returned to Canada while the U.S.
will again assume power to tax CPP and OAS receipts of their
residents.
Initially the finance minister's announcement brought great joy
locally as it appeared we were returning to the 50% inclusion
rate that prevailed prior to January 1, 1996. Further, the
finance minister announced that upon ratification of the new
protocol, refunds would be available to those Canadians whose tax
in 1996-97 social security payments would be reduced under the
new protocol. Apparently the two governments are working
together in this regard.
CASSE's joy however turned to bitter disappointment when it was
learned that under the finance minister's new system the income
inclusion rate for the social security would now be 85%. This
represents a 70% increase in the rate of taxation of social
security jumping from a 50% inclusion rate to an 85% inclusion
rate for everybody but those retirees who are not taxable having
under $11,000 in income.
This new inclusion rate will also be retroactive to January 1,
1996 for the purposes of determining refunds, although no one
will be required to pay more tax for 1996 and 1997 than the U.S.
withheld. Low income Canadians who have been hit by the 25.5%
U.S. withholding tax should not have to wait for both the
ratification of the new protocol and then until the summer of
1998 for the processing of their return seeking a refund for tax
withheld in 1996 and 1997. Retired people in this income bracket
need the money now. Our government should undertake to do that
forthwith through the GIS system.
The finance minister told CASSE that the first change to a
withholding tax system was revenue neutral. No numbers however
have been released as to the revenue earned by the Canadian
government in the old system or what revenue was realized in
imposing withholding tax on OAS and CPP to U.S. residents or what
revenue will be realized under the new system in the 1997
protocol. These numbers are necessary for any policy debate in
this area and we should be pressing the Minister of Finance to
reveal these numbers immediately.
1700
Not having the numbers means that we do not know whether the 70%
increase in tax on social security first effectively occurred
with the imposition of the withholding tax system in the 1995
protocol or with the changes announced with the 1997 protocol or
a combination of both.
However, if the finance minister's budget is not based on the
1997 protocol just signed which affects 1998 and subsequent
years, our party should be prepared to roll back in taxes
immediately that portion of the revenue increase caused by the
1997 protocol.
Finally, after the year fiscal year 2000 when our budget moves
into a surplus, which I believe very strongly should be this
fiscal year, we should undertake to return to the old system of
the 50% inclusion rate which reflects the fact that contributions
to the U.S. system are made out of after tax dollars and that
under the finance minister's protocol, cross border workers are
being doubly taxed on their retirement income.
I would like to commend the government for recognizing the
mistake that was made in 1995. I would further like to state
that it is a sight for sore eyes that while it recognizes the
mistake it made, it actually decided to do something about it. I
wish I could commend the government further, however a few
important items seem to be missing from this discussion.
The Progressive Conservative Party will not support this bill
with the pittance of information that we seem to have here and
without a much more significant, in depth discussion to determine
the real effects of this bill on retired people.
The finance minister stated previously that this is a revenue
neutral bill. The minister has further entered into a tax treaty
increasing the income inclusion from a 50% inclusive rate to an
85% inclusion rate. The remove of the withholding tax is a step
in the right direction.
The PC Party understands that some income earners, especially
the lower income earners, may actually see a decrease in their
level of taxation. This is another step in the right direction.
The Progressive Conservative Party further notes that some income
earners will see a huge increase in their levels of taxation. We
in this House do not condone that action.
It is unfortunate today that after seeing the government
recognize and correct the mistake in a positive and progressive
manner, it must dig further into the pockets and raise tax levels
like this. I hope this bill is in fact revenue neutral as the
finance minister would have us believe.
It is with dismay that the PC Party must rise against this bill.
However, I hope that through more in depth discussion and some
changes we will be able to see a corrected mistake that will
actually reduce taxation levels rather than raise them.
Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, I
would like to address the speech just made by the not so
Conservatives.
This morning their member for West Nova stood before the House
and talked about how Bill C-10 was something good and that they
were supporting the technical amendment that the government was
putting on seniors. Later this afternoon the member for
Brandon—Souris stood and said that they are in favour of it.
Indeed, at the beginning of the day it was supposed to be the
finance critic for the Conservative Party who was to stand and
say they were opposed to it.
Now we have had one speech in favour of Bill C-10 and one speech
against it. Where do they stand on this? Are Conservatives in
favour of a tax hike or not?
Mr. Rick Borotsik: Mr. Speaker, the hon. member was
obviously not listening to the full body of my presentation.
There are some good things within the proposed legislation. I am
sure even the hon. member would agree with that. Unfortunately
there are inconsistencies in the bill, particularly the one with
respect to the inclusion.
My colleague from West Nova indicated that very thing, that we
could accept some of the proposed changes, good changes which the
Liberals have put forward but that we could not accept them based
on the facts, figures and numbers we have at this time with
respect to the taxation rates which will be attached to this
bill.
1705
I spoke previously and I rise again as my colleague from West
Nova did. We will speak and vote against this legislation until
we are assured by the government there will not be any additional
taxes raised on the backs of retired people.
Mr. John Bryden (Wentworth—Burlington, Lib.): Mr.
Speaker, we on this side of the House are able to express our
opinions freely in debate and look for the pros and cons of
legislation. We do not commit ourselves to restricting what we
say simply because of the party line. A healthy debate on all
sides of the House is a sign of an active Parliament.
I address my comment and question to the member who just spoke.
In my riding office I received a number of elderly constituents
who are receiving U.S. benefits and they spoke of hardship
because their benefits were being taxed in the United States. I
felt powerless to help them and told them this was a matter of
U.S. administration and could only be resolved by a treaty
between Canada and the United States.
A treaty is in the process of occurring. We have a bill before
the House. I accept that some members may feel it has some
inadequacies.
Does the member agree that in addressing the concerns of low
income seniors receiving benefits from the United States the bill
is a good thing?
Mr. Rick Borotsik: Mr. Speaker, my answer is unequivocally
yes. I said in my preamble that it is nice to see a positive
attempt to change an injustice. In saying that, the injustice
was put in place by that very government in 1996 and it is trying
to correct it now.
When you accept the fact that a mistake was made, trying to fix
that mistake is very positive. We thank you for that. The
unfortunate part is that there are still unknowns.
I am sure a number of these issues will be dealt with in
committee and some fine tuning will be done to the bill at that
point. I am sure the government would agree that if there are
some inequities in the legislation they should be changed prior
to the passage of the bill. That is democracy and I do
appreciate that.
In saying that, as part of the body of my talk I also suggested
that the timing for a lot of those very people that you talk
about is still extended. Instead of a solution today we are
looking to the summer of 1998 when a lot of these people who have
already paid 1996 and 1997 taxation levels will not be able to
get that refund. We are suggesting that perhaps the government
should consider refunding those dollars to the people who need
them. They are at the lower level income areas and perhaps we
should refund those now rather than wait until the summer or fall
of 1998.
Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, I
address my question to the member from the not so Conservatives.
It turns out that the party has in its later thoughts this
afternoon decided that they are now opposed to the bill. I
congratulate them on that.
Since they are not voting in favour of this tax increase, how is
the member from Brandon—Souris going to get the money to pay for
some of the money he was begging from the government in question
period for his constituency in Manitoba? He was bellyaching about
not enough money being given to them. How is he going to pay for
that?
Mr. Rick Borotsik: Mr. Speaker, the hon. member confuses
a lot of issues. The question during question period was with
respect to transfer payments to provinces. Even though the
transfer payments have been decreased and the budget is balanced
we still do not have sufficient funding to go into the health
care system. If we wish to talk about health care, I can do
that. But this is Bill C-10.
Quite frankly, the revenues that are generated by this
legislation are not sufficient to cover off the $250 million that
has been a shortfall in Manitoba since 1994 for health care
services as well as for shortfalls in other jurisdictions.
Seven out of ten provinces have had shortfalls in their transfer
payments from the 1994-95 budget period up until today. There
are ways of coming up with efficiencies and finding other
revenues which can be forwarded to the health care system. It
does not speak to Bill C-10. I believe that this legislation
must stand on its own.
1710
Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, I
wonder how much longer the not so Conservatives think they can
both suck and blow on the issue of taxes.
On one hand, they sometimes say that they are not in favour of a
tax hike. On the other hand they want to get the money. I have
heard this continually, whether it was a meeting of their leader
along with other Progressive Conservatives leaders in Atlantic
Canada talking about how they wanted more money as well.
I think we have to come to a firm determination that they are
either opposed to taxes or they are in favour of taxes. They
cannot suck and blow at the same time. You cannot ask for
programs but then say you do not like taxes. Where do they stand
on this?
Mr. Rick Borotsik: Mr. Speaker, the Conservative Party
has always been a conservative party and will always be a
conservative party. Certainly it is recognized by a great number
of people in this country as being a national alternative as
opposed to a regional party.
The Conservative Party realizes that there are inefficiencies
within government. Those inefficiencies could be cut and save
dollars in certain areas. Perhaps things like fences around
Stornoway need not be developed. Those dollars could go into
areas such as health care and education.
Bill C-10 speaks to an inordinate amount of taxation to the
wrong sector of our society. We will continue to oppose any
types of tax increases of this nature. In fact, we have
suggested quite frequently that tax decreases are the way the
government should be heading. We should be giving dollars back
into the pockets of those people who pay.
We are in favour of decreases in taxes. We believe in
efficiencies. I am sure there are other parties in the House who
do not believe in the same efficiencies as is proven by some
extravagant expenditures in the past. I am sure that some of
those dollars could be put into the programs that Canadians
really want: health care and education.
Mr. Roy Cullen (Etobicoke North, Lib.): Mr. Speaker, I am
very pleased to join the debate of Bill C-10.
This bill will benefit all Canadians by amending double taxation
treaties between Canada and a number of countries. These nations
are the United States, Sweden, Lithuania, Kazakhstan, Iceland,
Denmark and the Netherlands.
I am particularly pleased to see the amendments to the tax
treaty with the United States. We often hear, sometimes in a not
very complimentary way, about the role of backbenchers in the
government caucus. This agreement responds to the concerns of
many members of Parliament who were concerned that many of their
residents were paying double taxation on U.S. social security
benefits.
Many people in Canada live near the border with the United
States and many of these individuals have lived and worked in the
United States and then retired in Canada. Many of them are in my
riding of Etobicoke North. Over the last while I have had a
number of constituents complain that they were being taxed doubly
on their social security benefits.
A number of my colleagues and I went to the Minister of Finance.
We stated, in a very strong way, that this was not fair. People
should not be taxed doubly, particularly low income seniors who
were being jeopardized as a result. The finance minister
listened. It is because of that we have the amendments to the
taxation agreement with the United States.
This area can be a very dry topic. I would like, for the
record, to present what the bill does from the government's side.
It is important for Canadians who are watching this debate to
appreciate what the legislation does and what it does not do.
Paying taxes twice on the same income or gain is not very fair.
That is why these initiatives will avoid double taxation.
1715
The treaties essentially reduce the rates of withholding taxes
applicable to dividends, interest and royalties, and eliminate
double taxation by allocating taxation rights between the country
in which a taxpayer is resident and the source country of the
income or gain. For example, where income or gains remain
taxable in both states a convention would normally provide that
the state of residence will give credit for the tax paid in the
other country.
Other ways to eliminate double taxation would consist of
ensuring that the income or gain is taxed only in the source
country or the country of residence. This serves to promote
trade and investment which, in the absence of a treaty, could be
discouraged by the possibility that returns would be taxed twice.
As well the conventions generally include provisions for the
exchange of information between revenue authorities to prevent
tax avoidance or tax evasion.
Canada now has double taxation conventions in force with 61
countries. While the provisions of each treaty necessarily vary
from one country to another, their common denominator is that
they benefit Canadian taxpayers.
The Canada-United States double taxation agreement is a case in
point. This is the fourth protocol to the convention between
Canada and the U.S. with respect to taxes on income and on
capital, commonly known as the Canada-U.S. tax treaty.
With the approval of parliament and the ratification of the
United States senate the protocol to the convention will deliver
significant tax relief to thousands of lower income Canadians who
receive U.S. social security benefits which are subject to U.S.
tax rates.
Most Canadians and many Americans reside within 80 miles of the
49th parallel. Many have worked in one country and as I said
retired in the other. Consequently both Canada and the United
States pay social security benefits to large numbers of people in
the other country.
To avoid double taxation the Canada-United States tax treaty
sets out which country can tax these benefits. Currently the
country that pays the benefit can tax all of it while a country
where the recipient lives can tax none of it. This results in
hardship for many lower income Canadians who receive U.S. social
security benefits because the United States taxes outbound social
security benefits at a flat withholding rate of 25.5%. This is
what constituents came to me and spoke about, this withholding
tax of 25.5% which was very high and very unjust.
Conversely outbound Canada and Quebec pension plans and old age
security benefits are taxed at a rate of 25%. While the old age
security recovery rate applies, any non-resident pensioner can
file a Canadian tax return at ordinary Canadian tax. As a result
many low income U.S. recipients pay little or no Canadian tax on
their Canadian benefits. I would add that other than U.S.
citizens and resident aliens the U.S. does not allow non-resident
pensioners to file tax returns.
The protocol proposes that the country of residence have the
exclusive right to tax social security benefits. That means
several thousand low income Canadians will no longer pay any
income tax at all. Thousands more will pay less tax than they do
now, particularly in light of special rules exempting from tax
15% of U.S. benefits paid to residents of Canada. For U.S.
recipients of Canadian benefits, Canadian benefits that are
exempt from tax in Canada will also be exempt in the United
States.
Prior to 1996 the country that paid a benefit to a resident of
the other country could not tax the benefits at all. The country
where the recipient lived could include only one-half the benefit
in the recipient's taxable income. That meant that one-half of
the benefits were tax free. It also meant that those rules did
not stand the test of tax equity with neighbours receiving
similar levels of benefits but paying vastly different levels of
taxes on those benefits.
Under this agreement with the United States the new rule would
apply as of January 1, 1996, the date the current rule came into
effect. Excess tax collected since then would be refunded to
social security recipients in both countries. However there will
be no retroactive tax increases for that period.
1720
The government will limit applicable 1996 and 1997 taxes for
Canadian residents to ensure that they do not exceed the tax the
U.S. collected. For 1998 and beyond the Canadian tax that
recipients pay will reflect their total incomes. After
ratification both nations will work together to ensure that
refunds can be paid out as quickly and efficiently as possible.
A second proposed amendment to the Canada-U.S. tax treaty
pertains to the taxation of capital gains. In 1995 Canada
proposed to amend the Income Tax Act to tax the gains of
non-residents on shares of non-resident corporations and interest
in non-resident trusts where most of the value of the shares or
interest is attributable to Canadian real estate or resource
property. Although it has not yet done so, the United States
could under current tax treaty rules impose a comparable tax on
residents of Canada.
In a classic quid pro quo the protocol will apply the proposed
tax change to United States residents in exchange for United
States agreement that its real property interest laws will not
for residents of Canada include shares of corporations that are
not resident in the United States.
This change which will apply as of April 26, 1995 means that
Canadians who invest in U.S. real estate through Canadian
companies will continue to pay Canadian tax rather than any
possible future U.S. tax when they sell their shares. U.S.
investors and U.S. companies that hold property in Canada will
still pay U.S. tax when they sell their shares rather than
Canadian tax.
Turning to the Canada-Sweden tax treaty, in the bill we propose
a small number of amendments to the double taxation and the
convention that has existed between Canada and that country since
1984. However while the number of amendments is small the
benefits are very real. Taxpayers will pay less taxes as a
result of reduced tax rates, which will also result in increased
trade and investment between our two countries. The revised
convention will enter into force when both Canada and Sweden have
approved the amendments and exchanged instruments of
ratification. The provisions would then apply on the first day
of January subsequent to the exchange.
With respect to Lithuania, Bill C-10 seeks parliament's approval
to enter into a tax treaty with that country. As there is
currently no double taxation convention in force between Canada
and Lithuania, there are a number of double taxation problems for
which the proposed convention provides needed and equitable
solutions.
The proposed convention does not reinvent the wheel. Rather it
generally follows the language and the pattern of other tax
treaties Canada has concluded. It also largely reflects the
format and language of the model convention prepared by the OECD.
Of more interest than structure are results. In that regard the
provisions of the convention will produce results, reduced tax
rates leading to increased trade and investment that will mirror
those of other concluded conventions and will help to promote
economic development in both nations, in particular in Lithuania.
Concerning Kazakhstan, tax relations between Canada and that
nation had been governed by the 1986 tax treaty between Canada
and the U.S.S.R. However, as of January 1, 1996 Kazakhstan
ceased to apply that treaty. Accordingly Bill C-10 seeks
parliamentary approval to enter into a tax treaty with
Kazakhstan. Again the proposed treaty generally follows the
language and pattern of tax treaties already concluded by Canada.
Trade and investment between Canada and Kazakhstan are expected
to increase upon the conclusion of the convention which will
enter into force on the date of the exchange of the instruments
of ratification. Its provisions will apply on or after the first
day of January 1996.
The proposed double taxation convention between Canada and
Iceland is also a new tax treaty but contains somewhat similar
provisions to those I have addressed. For example, it provides
for a reduced withholding tax of 5% applicable to dividends paid
to a company that controls at least 10% of the voting power in
the company paying the dividends and a rate of 15% in all other
cases. The rate of the branch tax will also be reduced to 5%.
Entry into force will entail each country first notifying the
other that the procedure required to bring the convention into
force, the attainment of royal assent in Canada, has been
completed. The convention will then enter into force 30 days
after the date of the latter of these notifications. The
provisions will apply on or after the first day of January
subsequent to the entry into force.
1725
The penultimate country included in the legislation is Denmark.
A double taxation convention is currently in force between Canada
and Denmark. First signed in 1955 and amended in 1964, it is now
appropriate the convention referred to as the 1955 convention be
amended further to increase trade and investment opportunities
between Canada and Denmark. To those ends the current
withholding tax rate of 15% on dividends, interest and royalties
will be reduced to 5% on direct dividends and to 10% on interest
and on royalties. The rate of the branch tax will also be
reduced from the existing 15% to 5%. The revised convention also
provides for a number of exemptions at source, which I will not
go into today.
With respect to pensions, currently all pensions are taxable
only in the country of residence of the recipient. The revised
convention provides for the opposite. Specifically all pensions
including social security pensions will be taxable only in the
source country. Moreover, the two year exemption provided under
the existing convention for visiting teachers will be eliminated.
The 1955 convention also does not contain any rules for the
taxation of capital gains. As a result they are taxable in
accordance with each country's respective legislation.
Accordingly and in line with rules found in other tax treaties
concluded by Canada, the revised convention includes rules for
the taxation of capital gains.
With respect to Canada and the Netherlands, which is the last
country but certainly not the least that I will be speaking on
today, the legislation proposes amendments to the existing
convention between Canada and the Netherlands.
The 1993 budget announced Canada's willingness to eliminate on a
bilateral basis its withholding tax on royalties on computer
software and patent and information concerning industrial,
commercial or scientific experience.
Consistent with that statement, the protocol provides that the
rate of 10% withholding tax on such royalties in the country of
source will be eliminated or remain at zero in the case of
computer software, which was already covered in the protocol
signed in 1993.
The protocol also introduces a new article in the convention
providing for mutual assistance in the collection of taxes in
each country. Patterned on the corresponding article found in
the Canada-United States tax treaty, it differs only in that it
applies regardless of the nationality of the person concerned.
There are other modifications to the convention as well. This
protocol will enter into force 30 days after the date on which
the governments notify each other that ratification has been
completed. Its provisions will then apply in Canada from the
date of entry into force of the protocol.
As I have spoken for some time I will keep my concluding remarks
brief. I appreciate that for some the matter of international
tax treaties may seem arcane, complex and dry. However, that
being said, they are extremely important and they have real and
direct financial impacts on Canadian taxpayers. I know the
legislation will positively affect the taxpayers of my riding.
Clearly my address articulated that in the instance of Bill C-10
its impact on Canadian taxpayers will be overwhelmingly
beneficial. As such, I very much urge members of the House to
accord speedy passage of the legislation so that those benefits
may be realized sooner rather than later.
Mr. Jim Abbott (Kootenay—Columbia, Ref.): Mr. Speaker,
I will surprise the hon. member for Etobicoke North by telling
him that I agree with him in the area of people coming into our
constituency offices.
I recall very vividly a couple of years ago very low income
people coming into our offices, many of whom for whatever reason
were deriving a major portion of their income, meagre as it was,
from the United States. All of a sudden, unannounced, out of the
clear blue sky, their income was decreased in some instances by a
few dollars and in other instances by $100. When a person is in
as low income bracket as many of these people were, $100 is an
awful lot of money.
I also agree with him that amendments to the regulations in 1996
created a situation where the taxes relative to the income were
very high and very unjust. I ask the member if this is not an
indictment of the finance minister. Is this not an indictment of
his government?
1730
He stands and says that the Liberal backbenchers went to work
and made something happen here. Indeed the finance and revenue
departments will have letters on file not only from my office but
from members from all over this House about this issue. The
movement under the finance minister was a bad move.
Is the member not really saying with his speech that yes they
were very high and they were very unjust and the people were
being treated unfairly, but the Liberal government of the 35th
Parliament that brought this in did a very bone-headed move and
actually created a serious problem for many low income seniors in
our country?
Mr. Roy Cullen: Mr. Speaker, I thank the member for two
out of three of his comments and for his remarks.
The Minister of Finance is like any other individual or
government and from time to time it takes some courage for a
person to say that maybe we need to move in a slightly different
direction. Rather than being an indictment of the Minister of
Finance, I think this is a clear statement that our Minister of
Finance in fairness listens not only to members of his caucus but
to members opposite. I am sure he received a number of
representations from members opposite.
As a result of some work within our own caucus and other
representations, the minister has made some adjustments. As the
member noted, they will be very beneficial to the vast majority
of Canadians who are in this position, particularly low income
Canadians. I see it as a very positive step where we can move
forward. I applaud the Minister of Finance for having the
courage to move in this direction.
Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, I
would like the Liberal member opposite to turn his frame of mind
if he would to those people who are being affected by this.
Imagine that in a sense he had retired based on the 50% rate of
inclusion, that he had planned his retirement based on that
understanding and then all of a sudden, watch out, here comes the
Liberal government with a tax hike that is going to move that up
to 85%, a 70% increase. Would he feel somewhat similar to all
those taxpayers who were surprised by the breaking of the GST
election promise? Would he feel wronged in the same way as the
people who felt wronged about the GST and in the same way that
retired people who are receiving social security from the United
States feel wronged about it jumping to 85% from 50%?
Mr. Roy Cullen: Mr. Speaker, I thank the member opposite
for the question.
The 50% inclusion rate is an issue that has been raised a number
of times in this House. What we need to look at in tax policy
are movements that result in the greatest tax equity. We cannot
have everybody coming out in a net-net-plus position.
The difficulty with this change is that if we had not made these
changes in concert with the changes in the tax treaty, some
people would have received a huge windfall gain. That would not
have been equitable to those Canadians who are not subject to the
same rules who are receiving Canada pension funds. We would have
created an uneven playing field so we had to make the adjustment
at the same time.
I am pleased to say that this tax treaty and the moves that are
made within it will benefit the vast majority of Canadians. In
particular, low income seniors will benefit.
While I agree with the member's comment that we need to provide
some kind of stability in terms of tax planning, unfortunately
the world is not perfect and we have to deal with the world as it
is. The minister has made some very positive changes here that
we should all be thankful for.
[Translation]
Mr. Pierre de Savoye (Portneuf, BQ): Mr.
Speaker, it will be recalled that, some 20 months ago, our
colleague François Langlois, the Bloc Quebecois member for
Bellechasse at the time, raised the problem of pensioners in
receipt of pensions from the United States who were being taxed
disproportionately by the Americans.
1735
These people were therefore seeing their
meager pension incomes being made even more meager. Mr.
Langlois made vigorous representations in this House at the time
to have the situation remedied.
I would like to see our
colleague from across the way explain to us if, indeed, this
legislation before us now will ensure these people, particularly
those living just on our side of the U.S. border—so we are
speaking of the southern portions of Bellechasse, of Beauce and
of the Eastern Townships—of pensions that will be taxed
reasonably rather than unreasonably.
I await the answer of our
colleague across the way.
Mr. Roy Cullen: Mr. Speaker, I must thank my Bloc Quebecois
colleague for his comment.
[English]
This tax treaty and the amendments to the tax treaty really deal
very specifically with the concern many members in this House
have had, including members from parties opposite. It will allow
Canadians a withholding tax of 25.5% on their social security
benefits because they had lived and worked in the United States
but who are now retired in Canada. Perhaps they are from the
member's riding of Bellechasse or from places close to the U.S.
border in the province of Quebec. I am sure people there are
affected as well.
This will be extremely beneficial. I would not want to leave
the impression that other members opposite did not have similar
concerns. It is one advantage in being the government of the
day. If people elect members who are part of the government,
they have a chance to speak very directly to members of our own
caucus. In that sense, I suppose all members had a role to play
but I think the Minister of Finance is to be commended on a very
progressive move.
Mr. Jim Abbott (Kootenay—Columbia, Ref.): Mr. Speaker,
is the member saying that we should be thankful that the finance
minister having seen the error of his ways has decided to make a
revision? Bearing in mind that the very low income people we are
talking about did not know this was going to be happening, are we
supposed to be thankful? Or should we not be critical of the
finance minister by virtue of the fact that he is doing the
legislation retroactively? Why in 1997 when the 35th Parliament
was sitting, did the finance minister not come forward and give
these people a little relief?
Mr. Roy Cullen: Mr. Speaker, having been elected in 1996
I was only a member of the last Parliament for a very short
period but I certainly would not use that as a cop-out.
I see it the opposite way. Perhaps this is what differentiates
Reform members from Liberal members. I see the glass as half
full not half empty. I see some courage in members of our caucus
saying that we have to make changes so that we can move forward
to the benefit of all Canadians.
Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, once
again we continue on the saga of Bill C-10, the Liberal tax hike
on those people who receive social security benefits from the
United States.
I would like to read portions of a letter from Olive E. Smith,
one of those seniors who will be particularly hard done by in
terms of the changes with Bill C-10 and all the others who are
involved with Canadians asking for social security equality. She
says that because of the raise in inclusion the Liberals are
hoisting upon her, it will result in a whopping 70% increase from
what she was paying previously. She begs me here. She says
“Stand up to this Liberal tax grab and persuade the finance
minister that this is neither fair nor moral”. On her behalf
and on behalf of others who are involved with Canadians asking
for social security equality, I am going to do that.
1740
First, these are people who cannot go back to work. They cannot
make up this shortfall any other way. These are people who
planned for their retirement at a 50% rate of inclusion and the
government wants to jack it up to 85% so it can get its precious
tax dollars to spend on its precious programs and it is doing it
on the backs of these people. The government should be ashamed.
I would also like to talk about how many people this affects.
Eight five thousand Canadian residents receive U.S. social
security. It actually affects about 100,000 people when we take
into account those across the border and all the intricacies of
the plan. This affects a lot of people. It is not even a
question of numbers. If it affected 10,000 people or a million
people, the thing is that it is just plain wrong to go ahead and
hike the taxes of these people who can little afford it.
Imagine losing 25.5% of your total income when you have already
barely been surviving and have been forced to move if you are
old, sick or handicapped. These Liberals gloat about how they
have been able to cut down the deficit but they have done it with
36 tax increases. Bill C-2, the CPP tax hike which will bring in
$10 billion, was their 37th tax increase. This is their 38th tax
increase and it is being done on the backs of seniors.
What are they going to do about those people who will choose to
leave this country rather than live under conditions like that?
What about the job spin-off as a result? They do not express any
concern about that.
I would also like to look at their initial reaction when this
whole issue first reared its ugly head, when they passed a bad
law. And now they are coming before the House to try and rectify
it. Indeed it is not a rectification. Two wrongs do not make a
right. If there is a screw up in the first place and the
Liberals then come back to the House to beg for a tax increase,
they are not improving the situation at all. That is exactly what
the Liberals across the way are doing.
The Liberals' first reaction when seniors told them how this
would impact on them was they said that the seniors did not
understand the changes. This from local MPs in the ridings
particularly affected, those surrounding Windsor. They said they
did not understand.
The second knee-jerk reaction on behalf of the Liberals was to
blame the Americans. The third was to blame the previous
government and say that it was Brian Mulroney and the
Conservatives who had done them harm. Fourth, we hear today that
they are blaming the seniors and how these people are getting
some sort of unequal treatment and they have to be taxed the same
as everyone else and pay more.
That is the way it went. First the Liberals did not know what
they had done. Then they blamed the Americans. Then they blamed
the previous government. And now they are blaming the seniors.
I would also like to quote the Minister of Finance. In his
letter he says, “I can understand that some recipients are not
in favour of the new arrangement since it means that after 1997
they may have to pay more tax than they have in the past. I
believe that it will ensure that the tax system treats everyone
fairly.” He admits that it is a tax increase and then he has
the gall to go on and say that it is fair.
By that logic the Liberals would say that the people who are
paying 17% or 22% federal income tax should all be paying the top
progressive rate of 29% because that is fair, there cannot be
different rates of taxation. That is Liberal fairness, Liberal
tax equity. That is a joke but unfortunately the seniors who are
being hurt the most by this are not the ones who are laughing. It
is the Liberal MPs across the way who are collecting their gold
plated pensions. It is a back door tax grab.
The Liberals talked about how in 1995 they had to make changes
and now in 1997 because they did not think it through very well
the first time, they are coming back begging the indulgence of
the House to give this an easy passage the second time around. I
reiterate, two wrongs do not make a right. If they messed it up
the first time and have the gall to come back the second time to
the House and say they have something better but they are
sneaking in a tax hike through the back door, that does not make
it right.
1745
What about those who fall through the cracks? What about those
people? The Liberals talk about refunds because they recognize
they have really gouged these people heavily. What about those
people who have died? What about those people who have moved?
As a result of those two incidents, either death or moving, those
people will fall through the cracks and those rebates that are
owed them, their families and their estates will not be paid. The
government will keep that. We can bet our bottom dollar on that
and the finance minister will gloat in this House over the
results on something like that.
When the government first brought through its changes it
resulted in roughly $2,000 in increases and now this time around
it is probably average out around $1,000 in increases and it
calls that revenue neutral.
Local MPs in Windsor refer to this whole plan as revenue
neutral. How does $2,000 out of your pocket and then another
$1,000 out of your pocket for a total of $3,000 out of your
pocket make it revenue neutral? That is a joke.
I want to reiterate that this is the 38th tax increase that this
government has brought forward since it took power in 1993. It
is not the first time it has attacked pensions. It has done it on
numerous occasions before.
The government has attacked people in terms of their withdrawal
time from RRSPs, moving it down to the age of 69. It is going to
bring in at the top in any given year $45 million just off that.
That is another one of its attacks on pensions and seniors in
this country.
Then when it reduced the $8,000 RRSP overcontribution for those
who were hoping to collect and use their RRSPs to bolster their
retirement income, that was another $10 million tax on pensions.
When we add all these things up, with Bill C-2 to increase the
Canada pension plan contributions to nearly 10%, and with what
the Liberals are doing now to try to sneak this through in Bill
C-10, they do not like old people, they do not like young people
and I do not know who they like. They like the Minister of
Finance but not much else.
I am going to go through a few questions that I think the
Liberals should have asked when they were putting this bill
forward and when they were considering it. First, who wants it?
Do the seniors who are having a tax increase off this want to see
this bill come forward? No. It is the finance minister who does
but certainly not the seniors.
How much is it going to cost? That is another question that we
have to level at the Liberals today. If it affects only 10,000
people with $1,000 each, that is at the bare minimum $10 million.
If it affects 85,000 people at $2,000 each, that is $170
million.
Once again we have had no production here in the House today in
terms of how much money this is going to cost, but nickels and
dimes, millions and billions and when we add it up, pretty soon
it is real money and it is on the backs of the seniors.
Does it solve the problem? The problem was that the Liberals
put through a bad bill in 1995. Once again they are putting
through a bad bill as a tax hike. They complained about double
taxation. Instead they have replaced it with higher taxation.
Does that in any way solve that problem, the problem being
seniors who are having a tough time meeting ends meet and who are
having a tax foisted on them when they are prepared for only a
50% rate of inclusion?
Would it pass a referendum? Would it pass popular consent?
Would it carry the consent or the will of the people? Would it
pass the judgment of fellow citizens? Does it have democratic
consent? If the Liberals put this to a referendum of seniors who
are affected by it, it would lose overwhelmingly. Indeed most
Canadians would not vote for a tax increase.
The Liberals have often talked today about how taxes are
investments. How wrong can they be? Taxes are not investments.
Whether it is a tax to hoist up $10 billion out of the Canada
pension plan or whether it is a tax that brings in tens if not
hundreds of millions of dollars in terms of those seniors who are
collecting social security benefits from the United States, taxes
are not investments.
The gall of this government to do all these things in the name of
tax fairness; there is no fairness in a tax hike or a tax
increase.
1750
It might be more principled for the government to lower some
other seniors taxes. It would be principled if it came out and
talked about the tax decreases that it promised in the election.
Is it going to renege on that in the same way it reneged on its
promise to scrap, kill and abolish the GST? Who can trust the
Liberals? The seniors can't. The young people can't. We cannot
buy their election promises because they break them right, left
and centre.
Mr. Jim Abbott (Kootenay—Columbia, Ref.): Mr. Speaker,
I have a very tough question for my colleague. Before I pose it
I wonder if we are not really talking about some kind of sense of
security for Canadians. The movement of this bill is as quickly
through the House as the Liberals can do it. We are not about to
let that happen because we want Canadians to see the duplicity of
this government and the way it tries to sneak these things
through.
We are doing this because we are concerned that Canadians at all
income levels should have the ability to be able to plan for
their futures. I will touch back on this bill in a second but I
cite by way of example the way the government went about
changing the time rules. It rolled age 71 back to age 69
under the RRSPs, thereby effecting a $40 million or $50 million
tax grab from unsuspecting seniors.
Typically, not always, seniors who would have RRSPs might be in
the middle to the upper end income bracket. Those people are now
faced with the situation of having to make major changes to the
way their incomes as retirees will be coming to them. They have
had to do a complete revision. The net result of this supposedly
no tax government is the fact that the government will
incidentally end up with another $30 million to $50 million.
Those are the middle income people. The concern I have in this
instance is with the people at the bottom end. Those are the
people who were approaching me in my office. I believe the
member for Etobicoke North also admitted that these were the
people who were approaching him. They are the people at the
bottom end of the scale who suddenly had the rug yanked out from
under them.
The very tricky question I have for my colleague is does he have
any idea at all why in the world the finance minister, having
realized that he had completely goofed and made a major mistake,
would not have immediately changed this legislation? Why now
after virtually two years is he finally getting around to doing
this, restoring a small semblance of order to the lives of these
very low income people? Why in the world would he have waited so
long?
Mr. Rob Anders: Mr. Speaker, sitting on this side of the
House it is often difficult to get into a Liberal's mind and
understand why they do what they do. One thing I do know about
Liberals is that they are very shortsighted. They see only as
far as the next election. It is funny to note that Bill C-2 to
raise the CPP tax and Bill C-10 to take money off the backs and
to break the backs of seniors receiving social security benefits
from the United States both happened right after the election.
It makes me think. Other governments in the past have had a
certain practice of bringing through their most draconian tax
increasing legislation right after an election in the hopes that
taxpayers will forget the wrongs done them. But it will not
happen because these things have long tails, very long coattails
indeed.
1755
When you raise the CPP tax from 5.85% to 9.9% over a period of a
few years, taxpayers will not forget it because it is still
coming off their paycheques. Mark my words, those pensioners who
have felt a 70% tax bite increase by this government will not
forget that come election day.
Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Speaker, I
am duly impressed with the member's foresight, with his all
encompassing knowledge and with his understanding of the
situation.
His party was in the House during 1995 when the original
legislation was passed. With such foresight, with such vision,
with such crystal ball gazing, where was the hon. member when the
original legislation was put through the House?
Mr. Rob Anders: Mr. Speaker, when there is bad
legislation a party should oppose it. Unfortunately in this case
we did not see all the flaws in the bill.
There is a direct relationship with what is happening today. The
government approached the opposition parties and said “It is a
minor technical amendment. Other people want it. The seniors
want it. The Americans want it. Everybody wants it. Trust
us”. We made the mistake of trusting the Liberal government.
However, I am not going to make it again.
That is why today the Reform Party stands opposed to this bill.
No, we are not going to go along with kid gloves with the Liberal
government with respect to a tax increase on the backs of
seniors, unlike the Tories who just this morning were fawning
over what a great bill this was, over how it had so many
arrangements with other governments and how it ended tax
duplication so that the Liberals could raise taxes. Liberal,
Tory, same old story.
We are opposed to it. They were a little confused about it this
morning, we are not.
Mr. Darrel Stinson (Okanagan—Shuswap, Ref.): Mr.
Speaker, I was in here a little earlier and I heard a government
member say that the government has never raised personal taxes. I
know the government has raised taxes 38 times, including this
time.
When I go to a gas station and I pay extra tax on gas, I find it
very personal. I do not know about government members. I guess
they do not. Government members, and we can all read it in
Hansard, have stood in the House and said that the
government has never increased personal taxes.
The hon. member mentioned taking away the $100,000 capital gains
tax exemption. I think that $100,000 capital gains tax exemption
was put in place for average workers. It gives them the hope of
saving something. The government said no, it is for the rich. I
guess maybe Liberals do not understand that the rich with
$100,000 buy cars for their sons and daughters. The incentive
for the average worker to hope to save $100,000 so the government
cannot get its claws on it was taken away.
I look at all tax as legalized theft. If the mafia had this
government as an example—
The Acting Speaker (Mr. McClelland): With respect, the
Chair does give a certain amount of leeway, but not that much. I
would ask you to withdraw that comment.
Mr. Darrel Stinson: Yes, Mr. Speaker. I withdraw it. You
are quite correct. They could not have learned anything from
this government.
Does the hon. member see this as a tax grab or as a benefit to
society?
Mr. Rob Anders: Mr. Speaker, the Liberals have touched on
this and I am going to touch on it again, and I thank the hon.
member for touching on it one more time, the idea of whether
something is an investment or a tax hike.
1800
When the government raises gasoline taxes I do not consider that
an investment, in respect to the hon. member. When it cuts back
the age at which somebody can contribute to an RRSP before it
converts over to a registered retirement income fund from 71 to
69, that is not an investment either. When it cuts back the
over-contribution rate of $8,000 or the amount one can
over-contribute, that is not an investment either. When it taxes
the worldwide pension income of people, which has now been three
times, aside from C-2 and C-10, that is not an investment either.
No, I do not think any of these things are investments. They are
tax hikes.
The question comes up: What does the government use it for?
Where is all the money going from these tax hikes? I look across
the way and I see a whole field of members who have taken the MP
pension plan and do not allow others to opt out. I look around
on this side of the bench and I see people who stood on principle
and have given up the trough. The government has people over
there who will be collecting millions of dollars in MP pensions.
Mr. Bob Kilger (Stormont—Dundas, Lib.): Mr. Speaker, I
will be splitting my time with the Parliamentary Secretary to the
Minister of Industry.
Bill C-10 will help a large number of low income Canadians who
need this quickly. Therefore, pursuant to Standing Order 26, I
move:
That the House continue beyond the ordinary hour of daily
adjournment for the purpose of considering Bill C-10.
The Acting Speaker (Mr. McClelland): The House has heard
the terms of the motion. Will those members who object to the
motion please rise in their place?
And fewer than 15 members having risen:
The Acting Speaker (Mr. McClelland): The motion is deemed
to be adopted.
(Motion agreed to)
1805
The Acting Speaker (Mr. McClelland): On a point of order,
the hon. Parliamentary Secretary to the Minister of Industry.
Mr. Walt Lastewka (St. Catharines, Lib.): Mr. Speaker, I
move:
The Acting Speaker (Mr. McClelland): I would ask the
Parliamentary Secretary for the Minister of Industry for
clarification. Was he rising on a point of debate?
Mr. Walt Lastewka: Yes.
The Acting Speaker (Mr. McClelland): It is confirmed that
it was on a point of debate. Debate.
Mr. Jim Abbott (Kootenay—Columbia, Ref.): Mr. Speaker,
one of the most interesting things that goes on in this House is
the kind of games we end up playing. We do not really have any
idea why, on the question of Bill C-2, that the government
insisted the issue come to a vote immediately and we end up with
it going to committee and being hidden.
Now we have this situation. The government, with all of its
wonderful leadership by people like the House leader and the
parliamentary whip, ends up with this kind of parliamentary
manoeuvre so that it can slip this through just as quickly as it
possibly can.
We have, within Canada, an understanding that democracy stands
like a three-legged stool. It stands on the principle of people,
politicians and the press. The difficulty comes when we have a
bill like this, or a bill like Bill C-2, and the government turns
around and moves things through the House at light speed.
The press does not have an opportunity to come up to speed or
perhaps is deficient in not being able to come up to speed. If
the press does not do its job or if the government gets away with
moving these things through the House of Commons at light speed
as they are prone to do, we end up with a failure in democracy.
The failure in democracy comes when people do not realize what
the government is attempting to slip past them. When this happens
we drive the cynicism toward the entire political process.
Cynicism ends up building apathy.
The problem in Canada right now is that people have lost faith
in the parliamentary process.
People have lost faith in politicians because of the games that
politicians and the parliamentary process play with them. Many
Canadians approach me and say “We have no idea what is going on,
nor do we understand what is going on, nor do we believe that we
can actually impact any kind of a change”.
1810
The last time I looked the democratic process actually was under
attack, a very subtle attack. I would never accuse the Liberals
of deliberately trying to undermine democracy. But with this
kind of action of making things move through the House at the
speed of light so there is no way the political process can come
under the scrutiny of the press, Canadians end up not believing
in the process any more.
What we see going on at the start of the 36th Parliament is the
pizza parliament the pundits were talking about. The government
is creating the kind of conflict that will lead to a pizza
parliament.
The problem is not with this side of the House. The problem is
with a government that is trying to jam things through the House
in such a way that this side of the House is going to have to
react. We will react.
We have already seen it when the government rammed through Bill
C-2 to hide the changes to the Canada pension plan out of sight
of everyone. By doing that it is hoping that Canadians will not
realize that they are going to be ripped off an additional $700 a
year. The government is doing it in a very sneaky way. It is
doing it at a rate of only 1% a year.
Canadians have to realize that if they are only going to be
taxed at 1% a year, the government is treating Canadian taxpayers
like live frogs. How do you cook a live frog? You put it into a
cold pot of water and slowly increase the heat and pretty soon
you end up with a cooked frog.
By the government increasing the CPP rip-off, this massive tax
increase, at 1% per annum starting in January 1998, Canadians are
going to be poorer at the end of ten years by about $100 billion.
This is the kind of action that is going on.
The official opposition is attempting to slow things down enough
so that Canadians will be aware that the government is trying to
ram things through the House of Commons. I think it is
scandalous that the government is using all these parliamentary
procedures in order to put grease under the skids of legislation.
I object in the strongest terms to the action that the
government is taking.
We are debating at this time the issue of the government pulling
parliamentary procedures out of a hat so that it can get
legislation through the House quickly and Canadians do not
realize what is actually happening. I do not blame the people of
Canada. I believe they respect the fact that we have a democracy
here. I blame the Liberal government.
The Liberal government is treating the House as a rubber stamp
and that simply cannot be. We must be prepared to stand up and
be counted against it trying to create a rubber stamp process.
It is the role of the official opposition, of all the opposition
parties, to ensure that the people of Canada understand what the
government can do. We understand governments have the
opportunity to enact legislation as they see fit in a majority
government. With the lack of backing we have had from the Bloc
Quebecois to date it is going to be a very difficult job for the
rest of the members in the House to hold the government
accountable.
If the Bloc Quebecois continues to act in the way that it is, it
will be darn near impossible to hold back the juggernaut of the
Liberals.
1815
If I think about the 35th Parliament for a second, I realize it
was the Liberals who propped up the Bloc Quebecois as Her
Majesty's Loyal Opposition. What a joke it was that the Bloc
would be Her Majesty's Loyal Opposition.
Why were Bloc members here? They were here at the behest of the
Liberal government. Why did they have the role of vice-chair in
all the committees? Why were they put into an exalted position
in this Parliament?
It was because the Liberals wanted them here. They did not want
an official opposition that believed in a united Canada from sea
to sea to sea, that was patriotic toward Canada and would stand
for a united Canada.
[Translation]
Mr. Louis Plamondon: Mr. Speaker, the remarks of the member
who just spoke are completely anti-democratic. He was not
elected to comment on the relevance of the role played by each of
the parties in the House. We have obtained our role
democratically from those who elected us to office.
There are rules in this House whereby the party that finishes
second is given vice-chair positions and the title of official
opposition. That is why we were the official opposition«
[English]
The Acting Speaker (Mr. McClelland): The Chair questions
whether that is a point of order or a point of debate. The hon.
member for Richelieu will have ample opportunity to make that
point at a later time.
Mr. Jim Abbott: Mr. Speaker, on a point of clarification
for myself, I believe we are debating the motion moved by the
parliamentary secretary. Is that correct?
The Acting Speaker (Mr. McClelland): We are debating Bill
C-10.
Mr. Jim Abbott: Mr. Speaker, I believe a motion was put.
The Acting Speaker (Mr. McClelland): The hon. member is
quite correct. A motion was put. The motion was carried and we
resumed debate on Bill C-10.
Mr. Jim Abbott: Mr. Speaker, in taking a look at Bill
C-10, as I mentioned in my previous interventions, the problem
was that the action the government took was exceptionally
unfortunate action.
I speak on behalf of the people who came into my office, people
who are in a very low income situation. All of a sudden out of
the clear blue sky there were changes created to the way in which
taxes were extracted by the U.S. before they came into Canada.
Because the protocol was negotiated a difficulty was created for
low income people, and I speak for them.
As I discussed in debate with the member for Etobicoke North,
the difficulty I have is that the government would like to see
itself as being saved harmless in this debate. In other words,
like it was not the current finance minister, like it was not the
current prime minister, like it was not even the former revenue
minister who now sits as the fisheries minister, like it was not
these people of the government in the 35th and 36th parliaments
who actually brought in the legislation. It was this government
that goofed.
Maybe it is nice to be able to say it is great they have been
able to own up to it. They have said “Let us make some
changes”. That is like hitting your head against a brick wall
and stopping because it feels good. It just does not make any
sense that Liberal backbenchers would stand to say they have made
a wonderful change. What they are really saying and what the
people of Canada have to know they are saying is that they agree
with us that the finance minister, the prime minister and the
revenue minister did not know what they were doing then and I
submit do not know what they are doing now.
1820
Mr. John Bryden (Wentworth—Burlington, Lib.): Mr.
Speaker, I heard the remarks of the member opposite. Is he
suggesting, because there has been a problem in the past, that we
should not try to correct it as quickly as possible?
Simply because he feels the government made a mistake in the
past and even though he is siding with the people who are
adversely affected by the current tax regime with respect to
social benefits coming from the United States, is the member
prepared to vote against legislation that will correct that
inequity?
Mr. Jim Abbott: Mr. Speaker, in answer to the second
question, all we ask is that he support the Reform Party
amendment which would clarify the entire issue.
In answer to the first question, he and the rest of the
backbenchers cannot get away with saying that we are supporting
this change, recognizing that the finance minister, the revenue
minister, the prime minister and the entire government did not
know what they were doing in the first place and goofed. They
made a very serious situation.
[Translation]
Mr. Pierre de Savoye: Mr. Speaker, our colleague, the member
for Kootenay—Columbia, mentioned just now that he had
unfortunately not had the support of the Bloc Quebecois to block
a move by the Liberal Party.
I would like to say two things. First of all, we are in
agreement with the bill. We therefore have no wish to see this
debate go on indefinitely, as long as it is conducted
respectfully.
Second, we are no longer the official opposition. We are not
the party with the second largest number of members. The party
with that distinction is the Reform Party. They have 60 members.
It is up to them to assume their role, through their presence and
their numbers. This is their role now. We assumed it when it
was our turn, and now it is theirs.
Some hon. members: Hear, hear.
Mr. Pierre de Savoye: Again, we are in agreement with the
bill and, if you require our assistance, you will have to speak
to us ahead of time.
[English]
Mr. Jim Abbott: Mr. Speaker, it is very telling that
Liberals were applauding the Bloc member. I go back to what I
was saying previously about the three legged stool. If one of
the legs is shortened, the stool will fall over.
We are talking about people, politicians and press. Bloc
Quebecois members are probably siding with the politicians on the
other side of the floor. That is fine. They have been
bedfellows before. I am sure they will be bedfellows again.
The difficulty is that the government is trying to ram through
legislation at lightening speed so that the three legged stool
falls over and the politician ends up with the ability to get
away with murder in this case.
Far be it from me to tell an intelligent member like the one
from the Bloc how to conduct himself, but the reality is that if
the debate had finished today and had not gone into committee,
which it is now destined to do as a result of the lack of Bloc
support, there would have been at least one more day of debate
and hopefully Canadians would have been given the opportunity to
know what was going on in this place.
The Bloc should have sided with us to stop the government from
ramming through this stuff as though it were grease under skids.
[Translation]
Mr. Pierre de Savoye: Mr. Speaker, the Bloc Quebecois is not
regularly or even often in agreement with the government. This
time, however, we are. And I would like to remind our colleagues
in the Reform Party that, during the 35th Parliament, the Bloc
Quebecois raised these issues. This is not the first time that
they have been discussed in the House.
1825
Our colleague, François Langlois, the fondly remembered former
member for Bellechasse, regularly raised questions on the floor
of the House. This is why we feel that the government's bill is
very much in the interest of Quebeckers who are affected by tax
matters. We are prepared to do whatever is necessary to ensure
this legislation is passed by the House.
Our colleagues in the Reform Party may see things differently, I
respect that, but they too must respect the fact that we have
acted in good conscience.
[English]
Mr. Jim Abbott: Mr. Speaker, the issue is not the
difference of opinion between the Reform Party and the Bloc with
respect to the legislation. The issue is that the people of
Canada will not have an opportunity for this matter to be brought
to their attention.
It may well be that the judgment of the people of Canada might
side with that of the Bloc and that of the government. That is
entirely possible. However the light speed in which the
government is attempting to jam this complicated piece of
legislation through the House of Commons, in particular with
respect to trying to save the embarrassment of the finance
minister, the revenue minister and the prime minister, is the
issue. As an issue of parliamentary procedure we have to give
the people of Canada an opportunity to know what the Liberals are
attempting to pull off.
In this case the Liberals are attempting to correct a wrong that
their government, the same finance minister, created in the first
place. Now they are trying to clean it up as quickly as
possible.
I am rather surprised from a strategic political perspective
that the Bloc Quebecois did not realize the official opposition
and members of the other opposition parties were attempting to
bring awareness of the issue to the level of competence of the
minister and his department.
The Acting Speaker (Mr. McClelland): If the House will
indulge the Chair for a moment, the Chair has benefited from the
wise counsel of the Clerk who advises me, and I shall advise the
House, that debate is on the motion. The motion will also
include the bill being debated so that members can feel quite
comfortable in debating the motion that the question be put.
The Chair would also like to correct the record. The motion was
moved by the hon. member for St. Catharines and seconded by the
hon. member for Victoria—Haliburton.
Hon. Don Boudria (Leader of the Government in the House of
Commons, Lib.): Mr. Speaker, I wish to take but a few moments
to debate this important piece of legislation. The legislation
is before the House today after wide consultation with Canadians,
which led to the excellent proposal of the Minister of Finance to
proceed with the tax convention between Canada and the United
States of America.
Let us remember what we are doing. We are presenting a bill to
the House today to provide tax relief. It has the approval of
the vast majority of members of the House in most of the
political parties represented here.
Let me say it again because it is a word that seems to enthral a
number of members across the way. It will provide tax relief to
lower income Canadians who worked in the United States and
retired in Canada. Those lower income Canadians were taxed at
source in the United States and could not get their money.
We are in favour, as is the majority of members of the House, of
proceeding with the legislation.
1830
The measure now before the House is that we continue to debate
this issue. Only four parties out of five are in favour of it. I
know that, as do most Canadians. But the Reform Party knows
better.
Coming back to the point, we are so in favour of this
legislation as are most members that most parties in the House
have agreed to stay to debate it tonight in order to have it pass
second reading. Most parties in the House were even in favour of
debating this issue at all stages, including report stage, in
order to have passage quickly to provide tax relief to Canadians
as soon as possible. But we know who is against providing tax
relief to lower and middle income Canadians. The Reform Party is
filibustering a bill for tax relief. It is unbelievable. Shame
on the Reform Party.
The situation which we have before us is one in which we could
say without fear of contradiction that duplicity, thy name is
Reform.
Mr. Speaker, I know that you, being the very independent,
objective, neutral person that you are, will agree with me that
the actions of the Reform Party are totally unreasonable today.
All right-minded Canadians and most MPs in this House want this
bill to pass. Most MPs are willing to sit longer so that the
bill can pass and provide the necessary assistance.
[Translation]
So this is what is before us today. This bill provides what most
Canadians want. What voters in the Cornwall region, so well
represented by the chief government whip, or the region right
beside Cornwall that it is my honor to represent, or the region
of Vancouver, the south shore of Montreal or elsewhere, want. At
this time, whoever has worked in the United States and paid into
an American pension plan has their money taxed at source and
retained by the American internal revenue service.
The Reform Party is opposed to a measure that would put an end
to a plan that withholds money for American taxes. The Reform
Party therefore supports the fact that the American government
keeps money from Canadians. I would like the Reform Party to
explain that to Canadian taxpayers.
[English]
Mr. Werner Schmidt: We have not voted yet.
Hon. Don Boudria: Mr. Speaker, the hon. member across
says he has not voted yet. There is still time to repent.
Members opposite can do that. I know that a large number of them
rose in their place. They were against extending the debate.
Maybe that means they are in favour of closure. Heaven forbid
that Reformers do not want more debate. They are against
extending debate.
Let us get this straight. Reformers are against more debate.
They are in favour of taking Canadian taxpayers' money and giving
it to the American government and they do not want to help poor
and lower income Canadians. That is the position of the Reform
Party. How could that be reasonable?
Mr. Speaker, a very neutral observer like yourself would no
doubt agree with most right-minded Canadians that this is very
wrong. It is very wrong and it needs to be corrected.
We on this side of the House will stand as we have in support of
the hon. Minister of Finance, who has been so valiant in
producing this tax treaty with the United States. This treaty
needs to be adopted by both houses of Parliament as soon as
possible so we can give that kind of protection to Canadians.
That is what all of us want.
I believe that the five hours of debate has now expired so I
will end my speech.
1835
[Translation]
Mr. Michel Guimond
(Beauport—Montmorency—Orléans, BQ): Mr. Speaker, I would like
to start right off by telling the Reform Party that the Bloc
Quebecois has nothing to learn from them about democracy. That
is the first thing.
I agree fully with the Government Leader in
the House when he says that this party ought to get its act
together. In Quebec, we have a wonderful motto: Je me
souviens, I remember. I remember that party was opposed to the
gag imposed on debate on Bill C-2, among others.
When the vote came on bill C-2,
however, that party unanimously emptied its seats.
The westerners elected members from the Reform Parity for a
reason: to sit in their seats, and from those seats to make
their dissatisfaction known, not off in the corridors, not off in
their offices. That is how to make oneself heard.
The Bloc does
not, therefore, have any lessons to learn from the Reform Party
when it comes to strategy and to democracy. If we agree to an
extension of this debate, it is for the men and women who work in
the Bellechasse region, in the Kamouraska—Rivière-du-Loup, in
Lévis, in the Beauce. First and foremost, we represent human
beings, which is why we have agreed to extend debate on this
issue. We have no lessons to learn from the Reform Party.
Hon. Don Boudria: Mr. Speaker, I have no intention of taking
part in the debate to decide which opposition party has something
to teach the other parties in opposition. This is not my role.
However, I will say that it was at the request of a colleague
from the party of the member for Kamouraska—Rivière-du-Loup—
Témiscouata—Les Basques that we considered the possibility of
debating all stages in a single day. I thank the hon. member's
colleague for the proposal.
Most parliamentarians agreed. Most were in agreement up to last
Friday. I think it was the proper approach.
Today we are having a sort of filibuster in an effort to block
this bill.
However, at this eleventh hour, if we may continue, I still hope
that we might look at the bill at all stages and be done with it
so we may give Canadians and particularly people who are retired,
senior citizens who today live in Canada but who worked part of
their life in the United States, this tax relief. People should
not have their assets seized—in fact this is just what is
happening right now—at source as deductions that are not only not
returned to the taxpayer but not to Canada either.
[English]
Ms. Val Meredith (South Surrey—White Rock—Langley,
Ref.): Mr. Speaker, I would like to ask the hon. member from
across the way whether he feels that it is fair to Canadians on
important issues such as seniors pensions that this House debate
the issue for five hours. Do you honestly feel that five hours
of debate is adequate?
The Acting Speaker (Mr. McClelland): The Chair would
gently remind all hon. members to address each other through the
Chair. The hon. House leader for the government.
Hon. Don Boudria: Mr. Speaker, I am not sure what the
purpose of the question is but if the hon. member wants to debate
it longer, we have even provided for an extension of the hours so
she does not have to be limited to five hours.
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, I am
quite surprised that this early in the game after the House has
resumed since the election, first we had closure brought in by
the government on Bill C-2, the very first bill by the way. And
now we have to debate this all night. The government must have a
legislative agenda as long as your arm, Mr. Speaker, because I do
not know what it will bring in next in order to allow room for an
opportunity to debate.
However we find out the government is rushing another bill
through the House of Commons. This has to do with tax
conventions, primarily one with the United States.
1840
I think back to last year when we were debating a thing called
family trusts. There was a loophole that allowed one particular
family in this country to move $2 billion out of this country tax
free. When it was brought to our attention the Minister of
Finance left that loophole a mile wide, wide open for three
months before he closed it which allowed others perhaps with the
same amount of wealth to do the same type of thing.
I read in the papers over the weekend that now we find the
loophole the Minister of Finance closed has been closed in such a
way that small entrepreneurs who want to leave this country are
now going to find that they are taxed disproportionately because
the bill was not debated and examined properly in this House when
the amendments were forced through by the Minister of Finance and
this government.
I want to ask the House leader whether this type of issue, where
he is forcing the closure on debate, is going to again allow
loopholes to work to the disadvantage of Canadians and the people
who have to pay tax in this country and allow the rich families
who support the Liberals to go home free? Is the intention of
this legislation to allow that type of thing or are we going to
find common sense debated in this House where we have an
opportunity to look at the legislation, examine it closely and
ensure that this type of nonsense that has already gone through
this House will not happen again?
Hon. Don Boudria: Mr. Speaker, I have a couple of points.
First I know the hon. member is conversant with the rules as is
the hon. member for South Surrey. Being as familiar with the
rules as they are, they will know that the motion was passed to
extend the hours to hear all of the brilliant discourses the hon.
member and his colleagues are willing to give to us.
An hon. member: Tomorrow.
Hon. Don Boudria: I am glad the hon. member referred to
tomorrow's speech but it is an opposition day. This issue is not
on the agenda of the House for tomorrow.
The second point very briefly is that if the hon. member across
thinks that this bill is closing a loophole, then presumably he
would be in favour of it.
This bill is about allowing lower income Canadians to get their
money back that right now is seized by the Government of the
United States.
The Acting Speaker (Mr. McClelland): The first five hours
of debate have concluded. Therefore pursuant to Standing Order
74, all further interventions will be of 10 minutes duration and
there will be no questions and comments.
Ms. Val Meredith (South Surrey—White Rock—Langley,
Ref.): Mr. Speaker, I have found the conversation to be quite
interesting. The member is quite right. We do know the rules of
the House. However perhaps Canadians do not know that this
extension of hours is a procedural manipulation of debate to make
sure that this debate ceases to exist after this evening's
sitting however long that may be, instead of giving Canadians the
opportunity to understand what this government is trying to do to
them by deferring the debate a couple of days hence. That is the
issue here. The government is closing the debate much sooner
than it would have gone on if this procedural motion had not
taken place.
The concern that I have is for the many seniors in my
constituency who are just finding out about the changes that this
government is proposing to seniors benefits, to CPP and now they
are being thrown another change. They are worried and concerned
because they are the most vulnerable people in our society. They
are older people who no longer have the opportunity to go out and
work in order to supplement an income that they see diminishing.
These seniors are very concerned that their government is not
giving them the opportunity to understand what it is that it is
doing to them.
1845
My concern as a member of Parliament is that the government does
not seem to want to allow time so that the people in our
constituencies can understand what the government is proposing
and understand the arguments against the proposals. What is the
rush? Why is the government so reluctant to allow Canadians to
fully understand what is happening to them?
The fear and concern of our seniors are real. That fear and
concern are often based on lack of knowledge and understanding.
The government seems to continually do procedural things to
prevent seniors from having that understanding, so that they can
accept change and understand why the changes are taking place.
It is that fear we have to live with on a daily basis as they
come to our offices asking us “What is happening to our incomes?
Why does the government continually change the system after we
have ceased to work? Why is the government always changing the
rules on us? When we go into retirement we have planned it with
careful preparations to look after ourselves, then the government
changes the rules. Why?” I cannot tell them why.
Is the government trying to fix a mistake that was made in the
last Parliament? One would ask why that mistake was made in the
first place. Did the government not allow ample opportunity for
consultation with Canadians who are caught in the bind of income
from another country? Why did the government not consult with
the people who are affected before coming up with the legislation
to deal with it? Why did the government not allow for open
consultation with the public, with the people who are affected,
with tax consultants and others who would be brought into this?
Why did it make that mistake in the first place in the last
Parliament?
I would hasten to suggest that perhaps it is the same reason we
are faced with today, that the government is reluctant to allow
for timely discussion to allow citizens to understand what their
government is doing. I would suggest that it is my
responsibility as a member of the opposition to constantly ask
the government these questions. Who has it consulted? In what
way has it consulted? How does it know that what it is doing is
the right thing if it does not allow the process for people to
question what it is doing and to suggest change?
We owe it to Canadians, to our seniors who are the most
vulnerable in our society an opportunity to understand that these
changes may be to their benefit, but that they may have a
disastrous effect on them and they may lose some of their income.
They need to understand so that they may have the opportunity to
prepare, not so that they can live a wealthy lifestyle travelling
and whatnot, but so that they can put food on their tables, pay
their rent, look after their health needs and the care of their
loved ones who may be in a care situation and where they pay
their own expenses and those of their loved ones in a care
facility. They need the opportunity to understand what the
effect will be on them.
In essence the government has closed the debate. It will
continue this evening before running out of time. It will not be
resumed two days hence. It is unfortunate that we will not have
that opportunity to continue it in two day's time so that we can
get the information out to more concerned Canadians.
I move:
1850
The Acting Speaker (Mr. McClelland): Pursuant to section
25 of the Standing Orders this motion to adjourn is not in order.
Mr. John Williams: Would you mind explaining why it is
not in order?
The Acting Speaker (Mr. McClelland): The Chair would be
pleased to explain. When it is provided in any standing or
special order of this House that any business specified by such
order shall be continued forthwith, disposed of or concluded in
any sitting, the House shall not be adjourned before such
proceedings have been completed except pursuant to a motion to
adjourn proposed by a minister of the crown.
Mr. Jim Abbott: Mr. Speaker, I heard what you read and I
believe I heard from the text that the House not be adjourned. I
do not believe I heard that the debate not be adjourned. The
motion from the member from South Surrey was that the debate be
adjourned.
Mr. Guy Saint-Julien: That is a good point.
The Acting Speaker (Mr. McClelland): The Chair recognizes
the member from Kootenay—Columbia has raised an interesting
point. Such point will indubitably be raised in further meetings
of the clerks as this is considered.
For the moment the Chair, in consultation with Table officers,
has concluded that this motion pertains also to the term debate.
Mr. Chuck Strahl: Mr. Speaker, I rise seeking
clarification. As near as I can tell, with your ruling you have
said that any motion that we may put forward on this side of the
House is out of order because of Standing Order 25.
Standing Order 25 is very specific. It specifically says there
shall not be a motion entertained to adjourn the House. There
may be many motions, debatable, votable motions made from this
side of the House through the course of the evening until
midnight. If you rule as you have that everything is out of
order because of Standing Order 25, you have in essence said the
opposition cannot propose anything else.
With respect, I am not sure how you can extrapolate that meaning
from this standing order.
1855
The Acting Speaker (Mr. McClelland): Order. Again, after
consultation with the Table officers, it is brought to the
Chair's attention that the House leader of the opposition is
quite right. The House cannot consider any further motions until
the motion on the floor has been dealt with.
Mr. John Williams: Mr. Speaker, I rise on a point of
order—
The Acting Speaker (Mr. McClelland): The Chair will not
recognize any further points of order on this subject. Resuming
debate.
Mr. Werner Schmidt (Kelowna, Ref.): Mr. Speaker, the
motion before the House makes me almost sad because of what it
seems to imply. It seems to imply a strategy on the part of the
government to confuse the people of Canada.
The issue is very significant. Very often what happens when a
change is made in one aspect of legislation, especially one that
affects such wide ranging provisions as senior citizens' benefits
such as pension plans, taxation structures whether income taxes,
capital gains taxes, property taxes or whatever, is that it
affects other pieces of legislation.
The government can go to the public through its representatives,
the parliamentarians, and say “We have consulted widely. We
have consulted in depth. We have heard what the people have
said” but they have asked them only one question. The one
question was would they like the Government of Canada to change
the convention that would allow the Government of the United
States to collect or withhold certain social security taxes
rather than collecting them at home when our provisions apply.
What the Liberals did not ask is what are the implications for
those who are in a higher income tax bracket? What are the
implications for those who are in a medium income tax bracket?
What are the implications for other pension plans, the Canada
pension plan, the old age security benefit? What are the further
ranging implications? They did not ask that question.
The government provided us with legislation on the Canada
pension plan. It wanted to change this legislation. It did not
indicate either what the implications would be to RRSPs.
Did it tell us about the clawback provisions when it came to the
old age security benefits currently existing to those that will
take effect on January 1, 1998? Unless the government tells the
whole story, it could be confusing to people.
In fact, if the Liberals tell only part of the story without
telling the whole story with the view to changing the attitude of
the people and their direction, they could be charged with
deliberately leading the people in a direction in which they
would not go if they understood the whole story.
That is the danger behind this legislation before us today.
Then they are forcing the issue so that we cannot tell the people
of Canada what is involved. This misleads them and creates a
situation that is false from the beginning. It creates a
foundation that is wrong and creates doubt in the minds of the
people. What is this government really all about?
Canadians will find out. The day is coming when they will pay
their taxes and recognize “What in the world happens now? I
have to pay this tax. I have to pay that tax. I have to pay
another tax and what I thought I was going to get, I don't get.
What's going on here?”
They call it an income tax. They call it a surtax. They call it
a clawback. They call it a reduction in benefits. They call it
a shift in emphasis. All of them lead to one thing, more money
in the general treasury of the Parliament of Canada. It is
wrong.
It confuses the people. It distracts their attention and makes
it impossible for them to make well-informed and solid choices.
1900
I cannot help but hearken back to a letter the Minister of
Finance wrote not too long ago. In fact it was written last
spring. In the letter he referred to the excise tax for
gasoline. Guess what he said? He said that excise taxes go into
the consolidated revenue fund of the Government of Canada and
were necessary to reduce the debt.
The government has been in office since 1993. It has not
reduced the debt one cent. In fact, $100 billion were added.
What did the Minister of Finance say in Vancouver just last
week? He said that the deficit would only be $8.9 billion. Only
$8.9 billion more will be added to the debt of Canada. He should
have said that our debt had increased by $8.9 billion in the last
year. That is what the government is giving Canadians and it
does not help.
The difficulty is that again the Minister of Finance is
confusing the people. There is confusion on taxes. There is
confusion on seniors benefits. There is confusion in the way in
which the government rams things through the House. There is
confusion because people thought their representatives would be
able to represent their point of view accurately, concisely,
honestly and in a truthful way. What did they discover? We have
to shut up. That is wrong.
We need to get to the point where the government tells the whole
story when it presents a program or legislation. It should tell
the whole story. That is the truth. It should not tell part of
the story or lead in a particular direction and actually end up
saying something, presenting something or creating a perception
that is false. That is going on here.
I decry that kind of thing. It should not happen. Are there
certain provisions in the proposed legislation that could be
supported? Absolutely there are. There really are.
One of my major concerns is that the legislation does not treat
all people equitably. It does not treat them fairly. As a
consequence we have to vote against the bill.
Does it mean we object to everything in the bill? No, it does
not mean that. It means the bill ought to tell the whole story
and it does not.
The time has come for every parliamentarian to examine every
piece of legislation on the basis of three things. Is it the
truth? Does it treat people fairly? Does it create the kind of
perception that will give wisdom and courage to the people so
they can go to their children and grandchildren and tell them
what they have done for them and what benefits they have been
given. Liberal member and opposition members need to develop that
kind of orientation in parliament.
Legislation like this bill and the way it is being presented
proposes an arbitrary manipulation of the rules of the House to
get a particular point of view across. It confuses and misleads
the people of Canada. It creates cynicism on the part of people
who ask what parliamentarians are up to anyway. The time has come
for them to be able to say that parliamentarians represent what
they want honestly, fairly and completely. That is missing this
afternoon.
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, I rise
on a point of order. I move:
1905
The Acting Speaker (Mr. McClelland): The motion is in
order. Is it the pleasure of the House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Mr. McClelland): All those in favour
of the motion will please say yea.
Some hon. members: Yea.
The Acting Speaker (Mr. McClelland): All those opposed
will please say nay.
Some hon. members: Nay.
The Acting Speaker (Mr. McClelland): In my opinion the
nays have it.
And more than five members having risen:
The Acting Speaker (Mr. McClelland): Call in the members.
1950
(The House divided on the motion, which was negatived on the
following division:)
YEAS
Members
Abbott
| Ablonczy
| Anders
| Bailey
|
Benoit
| Blaikie
| Breitkreuz
(Yorkton – Melville)
| Bryden
|
Casson
| Cummins
| Davies
| Desjarlais
|
Dockrill
| Doyle
| Elley
| Epp
|
Forseth
| Godin
(Acadie – Bathurst)
| Goldring
| Grewal
|
Grey
(Edmonton North)
| Hart
| Johnston
| Kenney
(Calgary - Sud - Est)
|
Laliberte
| Lill
| Lowther
| Lunn
|
Mancini
| Manning
| Martin
(Winnipeg Centre)
| Matthews
|
Meredith
| Morrison
| Nystrom
| Penson
|
Proctor
| Ramsay
| Robinson
| Schmidt
|
Solomon
| Stinson
| Strahl
| Thompson
(Wild Rose)
|
Wasylycia - Leis
| White
(Langley – Abbotsford)
| Williams – 47
|
NAYS
Members
Adams
| Alcock
| Anderson
| Assadourian
|
Augustine
| Bachand
(Saint - Jean)
| Baker
| Bakopanos
|
Bergeron
| Bonwick
| Borotsik
| Bradshaw
|
Brown
| Caccia
| Cannis
| Catterall
|
Charbonneau
| Clouthier
| Collenette
| Cullen
|
de Savoye
| Debien
| DeVillers
| Finlay
|
Folco
| Gagnon
| Goodale
| Grose
|
Harvard
| Herron
| Keddy
(South Shore)
| Kilger
(Stormont – Dundas)
|
Knutson
| Lastewka
| Leung
| Lincoln
|
Maloney
| Marchand
| McLellan
(Edmonton West)
| McTeague
|
Ménard
| Mitchell
| Myers
| Paradis
|
Peric
| Peterson
| Phinney
| Pickard
(Kent – Essex)
|
Robillard
| Rocheleau
| Saada
| Scott
(Fredericton)
|
St. Denis
| Steckle
| Stewart
(Northumberland)
| St - Julien
|
Thibeault
| Vanclief
| Wilfert – 59
|
PAIRED
Members
The Acting Speaker (Mr. McClelland): I declare the motion
defeated. Resuming debate, the hon. member for Fraser Valley.
Mr. Chuck Strahl (Fraser Valley, Ref.): Mr. Speaker, it
is a pleasure for me to speak to this, not because I think we
should be debating this bill at 7.50 p.m. but because I would
like to set the record straight as to exactly what has gone on
here.
I am sure a good number of the members over there have no idea
what they just voted for. They were told to vote and they did.
Be that as it may, the general public should understand exactly
what has happened here tonight. We have a system of doing
business here in the House of Commons. We have an orderly order
of business for a regular day. It starts at a certain time and
ends at a certain time. We have an orderly calendar. Week in,
week out we know where we are going to be on which week and at
which time.
This allows the order of business to be conducted with some
decorum and some decency in this place. With the odd exception up
until recent years that was kept day in, day out by the
government side. It realized that if it wanted this place to be
productive it would work in co-operation with the opposition.
For the record this is what has happened with two successive
bills. We have dealt only with two bills in this Parliament, and
what has been done? On the first bill the Liberals brought in
time allocation which means the end of debate. One day of
debate, seven hours of debate, and it is finished. It is
shuffled off. If the government had its way, the bill would be
shuffled off and forgotten. Because the first bill was the
pension bill we were not prepared to do that.
Furthermore, it was without any consultation by the other side
that it brought in time allocation on the first bill. Kaboom,
she comes in, no consultation, no debate. It is just the end of
the debate. Canadians who wonder why this 73% increase in CPP
premiums, why the changes to the seniors benefit, why all these
tax law changes that affect seniors. They are not given a full
hearing in the House. They are told “too bad, no debate in the
House”. They sent members of Parliament here to debate but they
are not allowed to debate because the idea of debate for those on
that side of the House is debate just for a little while and then
hopefully nobody will notice and we can shut down.
What have the Liberals done today? They have pulled another
procedural stunt. At the last hour of debate the government can
stand up and move a motion.
It made the motion to extend hours indefinitely, day and night,
until this bill is dealt with.
1955
This is another pension bill, another tax bill for seniors whom
the government
should be concerned about, another bill that the opposition on
this side of the House says it wants to hold debate on over two
or three days. Is that too much to ask? Of course it is not.
Canadians want us to debate tax bills and important
international tax bills before the House. On behalf of our
constituents, it is our duty to stand on our record and stand up
here and be counted. What happens over there is that the
government says “We cannot have that. One day is enough. One
day is all you get”. It then moves this motion to extend the
hours day and night as if the proper way to conduct business is
until the lights go out or until the day is done and not even
then; all night it wants to debate. It is telling us if we want
to debate we must stay up all night.
That is not orderly business. Orderly business is ladies and
gentlemen on both sides of this House asking each other how many
speakers they have.
An hon. member: Honourable ladies and gentlemen.
Mr. Chuck Strahl: Honourable. Some of them are. However,
they could ask how many members want to speak. Once we are down
to five hours we are down to 10 minutes debate with no questions
and comments. How many speakers can there be? If everybody in
the Reform Party spoke we would only be looking at another 20
speakers, more than we already have.
Instead of another day of debate on Wednesday after the supply
day or even a half a day—
Mr. John Cannis: Mr. Speaker, on a point of order. The
hon. member, with all due respect, referred to “honourable
members, some of them”. I would like to think that every member
in this House is an honourable member. If he tells us who is
not—
The Acting Speaker (Mr. McClelland): With respect, that
is not a point of order, that is a point of debate.
Mr. Chuck Strahl: I would like to thank the hon. member
for voting for me earlier so I could continue this speech.
Just so the public knows, there are procedural things that can
be done on that side of the House to make difficult the
opposition's job of pointing errors or omissions in bills, things
that should be improved on, amendments, consideration for the
public, raised public awareness; all those things that we are
supposed to do on this side of the House are disallowed when that
side of the House says that there can only be one day of debate
per bill.
So far the government has a perfect record. There have been two
bills in the House and both bills have had restrictions on debate
for this side of the House to even speak on the issue. There is
something wrong with its idea of democracy when it says it is one
bill and shove it through the House. They do not understand that
the role of the opposition is to critique a bill, to try to
improve a bill and to improve public awareness. It is a whole
gamut of jobs given to us by the Canadian public to do.
When that side of the House says we cannot do it what are we
supposed to do? We have to try to resort to procedural games
ourselves. What a ridiculous thing they force us to do.
That side of the House should sit down and negotiate the number
of speakers we have left, what day we are going to bring in the
bill, how long it will go through the House, we can go back and
forth because we want to make sure you get your business done.
But we have a job to do on this side of the House to do all those
things I listed earlier.
If the government feels compelled to use procedural shenanigans
on every single bill, and it has a 100% track record so far, this
is going to be a long four years. Canadians gave this party a
job to do. They gave the other parties jobs to do as well. Those
jobs are to hold the government's feet to the fire, to make it
accountable, to propose amendments in order to help it design
better legislation and to raise public awareness; all those
things that all of us on this side of the House have been elected
to do. There are almost as many of us on this side of the House
as there are on that side.
In other words, one day soon there will be a vote that this
government is going to be awfully close to losing. There are
going to be many votes, some of them unfortunately without
negotiation, without notice and without any negotiation between
what I hope are hon. ladies and gentlemen all around. We will
have to resort to the last resort which is to start out with the
standing orders, then with Beauchesne's and then start duking it
out on the procedural side.
What a shame. We should be debating and voting on the issues of
the day and trying to build a better country with this House of
Commons. When we are not allowed to do that, then this party and
many others on this side of the House will not stand down. We
will rise to the challenge. We will not let the government ram
this stuff through.
2000
If the Liberals think they have won the day on this, let them
remember that there is yet to come committee work, report stage,
third reading. The idea of co-operation which makes this House
work well will instead become confrontation. What a shame.
[Translation]
Mr. Guy St-Julien (Abitibi, Lib.): Mr.
Speaker, I rise on a point of order.
The Reform Party member
claims that they will rise to the challenge. It will be noted
that there are 30 Reform members here tonight. The rest are off
to Monday night bingo.
[English]
Mr. Bill Blaikie (Winnipeg—Transcona, NDP): Mr. Speaker,
I begin by saying that the Liberal member was formerly a Tory and
was formerly in the House. I reserve commenting on the
attendance of other parties when I look at the government bench,
but I did not rise to talk about that. I did rise to talk about
how unfortunate I think it is that so early in this Parliament we
have arrived at the state of affairs we have tonight.
While there is an obvious tendency on the part of all of us to
enjoy this parliamentary “silly-buggers”, it is unfortunate in
the sense that I do not think any of this is really necessary.
The government has not sought to engage in serious negotiations
with respect to legislative planning. It has done things without
consulting the House leaders of the other parties. The Liberals
seem to have it in their heads that one day of debate is enough
and that they are entitled to take whatever measures are
necessary after a day's debate to speed things along.
I just think this is a very bad sign for a Parliament which I
had hoped had considerable promise even though it had been dubbed
by the media as various things, that it would be a fractious
Parliament, a pizza Parliament, that it would be this kind of
Parliament or that kind of Parliament. I thought we had a
challenge here as five parties to see if we could work together.
We started off well but we came to a very unfortunate place in
that progress with the closure on the Canada pension plan. And
now we have today's situation.
I say to the government that all of this would be completely
unnecessary with a little bit of good faith negotiating about
what the other parties require and a little less impatience on
the part of the government with respect to its own legislation.
I want to say a word to my Reform colleagues because so far I
think they have liked what I said.
It has become easier and easier for governments to do this kind
of thing because the value of Parliament and the value of
politics per se has been so consistently debased by the kind of
anti-political, anti-politician ethos that has been stimulated,
enhanced and encouraged by many of my colleagues in the Reform
Party. The fact of the matter is that governments have found it
easier and easier to do this because so little premium is put on
political and parliamentary activity.
So much of a premium is put on efficiency and not wasting the
taxpayers' money by paying all those people to go on and on and
on. But these are the very people who now want to go on and on
and on because they think that they came here to say something
and that what they have to say is important. Now they are
feeling the flames of a fire that they have added fuel to over
the last 10 years.
2005
They have fed this cult of efficiency in trying to streamline
the public sector and devalue what goes on in political life, in
Parliament and in the public sector. It all makes it easier and
easier for the kind of despotism that we see increasingly over
there on the government side.
They know they have a public out there which has been
conditioned to say “Oh well, it is just politicians. Oh well,
it is not very valuable anyway. The real decisions are made in
the private sector. What decisions that are made should be made
fast and efficiently, like they are in a corporate boardroom”.
This is not a corporate boardroom. This is Parliament. This is
where people talk. That is what Parliament means, parl-iament.
This is the place where we come to talk things out. To the extent
that we devalue that function of Parliament, we make it easier
for governments and we feed a fire that will ultimately consume
all of us, including the democratic process.
Mr. John Herron (Fundy—Royal, PC): Mr. Speaker, the hon.
member for the Reform Party mentioned that we have entered into
this debate because Reformers believe that the government has
been usurping the parliamentary process.
What Parliament has to do is to talk about the issues that
actually concern Canadians: that of less taxation, that of
providing Canadians with balanced budget legislation, that of
providing Canadians with a national health care guarantee.
I would like to point out to members of the Reform Party that
initiatives in terms of theatreship as opposed to leadership with
respect to legislation and the votes which we wasted time on
after the throne speech do not provide Canadians with less
taxation. They do not provide Canadians with a national health
care guarantee. This sort of thing, to actually prove a point,
deters the professionalism of Parliament. Therefore, I would
encourage all members of the House to work in a more constructive
manner. We do not have to have showdowns and take people on on a
day to day basis.
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, I too
would like to add my voice to that of the hon. member for Fraser
Valley who indicated that it does seem to be this is not going to
be a fractious Parliament but perhaps a raucous Parliament if the
government continues in this vein of trying to impose its will
without Parliament being given the opportunity to debate and for
the people who were elected to come here and speak to be given
the opportunity to speak.
This piece of legislation was introduced today. It is 138 pages
long. It is an amendment to quite a number of international
treaties. When we read it of course it does not make a lot of
sense because it talks about deleting a paragraph and adding a
new paragraph in its place. It jumps over to another part of the
treaty to delete something else and amend something else. We
cannot read this as we read a book.
This has only been in the public domain for one day and the
government wants to pass it on to committee stage and bring it
back here no doubt by next week. It will be through to the
Senate before we know it. The public at large and experts will
not have the opportunity to go through this with a fine toothed
comb and add their professional opinion as to any potential flaws
which might be in Bill C-10 with all of its amendments to the
individual treaties.
I would like to draw the attention of the House to the issue
last year regarding the Canada-U.S. tax treaty and the taxation
of a family which took $2 billion out of this country. As far as
we know they took it to the United States and paid no tax.
While it was debated about whether the family should or should
not pay tax, the Minister of Finance deemed the situation serious
enough that it had to be dealt with by the finance committee. He
brought in amendments to the Income Tax Act to ensure that it
would not happen again. He allowed the situation to remain in
the public domain for over three months so that anybody who
wanted to take advantage of the same opportunity obviously could.
Then he amended the tax act to prevent any other usage of the
same methodology of transferring money out of the country.
2010
I read in the paper on the weekend about the situation that the
amendments brought in by the Minister of Finance dealt with the
taxation of privately held companies. Because of the amendments
the Minister of Finance brought in, the article suggested that
small business people who move to the United States will now find
themselves subject to double taxation. When people leave the
country, it will be deemed to have been disposed of and they will
pay taxes on it. If they retain the asset for a period in excess
of five years and dispose of it after that, the United States
will tax it again because it only goes back five years.
Now we have a very simple situation. Our business people are
being compromised because legislation was rushed through this
House, pushed through this House by the Minister of Finance in
response to an issue that had erupted.
I draw the parallels to this document, all 138 pages of it. We
have not had the opportunity to go through it in detail. We have
not had the opportunity to check with the professionals who make
a living analysing and working with these documents to get their
opinion on the validity of the changes. We have not had that.
Yet the government wants to stand up tonight and say “If you do
not speak tonight, you will not be able to speak on this bill
because it will go off to a vote and off to a committee and so
on”.
I agree with the member for Winnipeg—Transcona who talks about
the debasement of Parliament. I too am very concerned about the
debasement of Parliament and the fact that we are now being
perceived as an addendum to government, one of the things that
has to be tolerated.
A bill has to bypass its way through Parliament but that is only
a perfunctory process. It will become law because those members
deem it will become law. Not so, because Parliament is here to
debate the pros and cons of this type of legislation. Complex
though it may be, we are here to debate it and not to have it
shoved down our throats by a government that wants to continue
doing something else tomorrow.
That is not the way democracy works. We are here to uphold it.
The fact that we have other members of my party around here who
want to speak proves that we want to be heard not just on this
issue but on all the bills coming forth that we want to debate.
We want to have the time to go back to our constituents and say
“This is the legislation that the government is proposing.
Should we take a stance for or against this piece of legislation?
Is it good legislation? Is it legislation that needs amendment
before we can call it good legislation? Is it legislation that
we disagree with entirely on principle?”
We have to be able to ask these questions of our constituents if
we are to do our job. Yet it is in and out of this House in one
day flat. We do not even have an opportunity to phone our
constituents to find out what they are saying, far less
distribute the contents or the principle of this bill and find
out what our constituents think.
It is not a good day for democracy when we find that the
government in the first two to three weeks of its new mandate
wants to adopt this type of procedure and attitude. That is why
we have to take a stance. We tried to take a stance on Bill C-2.
We registered our opposition by refusing to be counted on the
vote.
We stand again today saying here is a government riding
roughshod over the democratic rights of 301 members in this room,
all who have the right to speak on this bill but who are going to
be denied the opportunity. All of them have the obligation to go
back to their constituents to find out what they think of this
bill and to check with the professionals to find out if there are
more loopholes in this bill before we vote on it, but no such
luck. Here they go again.
2015
That is why it will be a long four or five years. We must
remember that their very small majority may wear thin. When we go
back to our constituents and tell them how we are being run over
and how their rights are being trampled, they will tell members
on the government side that enough is enough and this has to
stop; that they are supposed to have a decent debate in the
House.
I hope they will have a change of heart, withdraw the motion and
let us continue debate on this bill until all have had a chance
to speak. Then we will know exactly what it contains so we can
talk competently and intelligently about the fine print. I have a
summary of the bill prepared by a research department but I have
not had a chance to go through 138 pages. Have you? I doubt it.
Has anyone else on the government side? I doubt it.
As somebody said before we had the last vote, stand up and vote
and say yes because that is what you are told to do. That is not
good enough. We are not here as stooges to do what the
government tells us. I hope the backbenchers on the government
side will not follow that procedure but will stand up and say
“Excuse me, what does this thing say?”
I want the government to give me time to read this before I pass
judgment on whether I am supposed to vote yea or nay on this
bill. That is how this House works rather than as a rubber stamp
the day the legislation is introduced.
Unfortunately I look forward to a raucous four years. I am
going to do my bit to be heard in the House.
Mr. Jason Kenney (Calgary Southeast, Ref.): Mr. Speaker,
I spoke to Bill C-10 during regular debate earlier today. I
opened debate on the bill on behalf of the official opposition
and outlined our arguments for opposing the bill. As we
hopefully come to a close in this sad affair, I would like to
review the chronology of how this unfortunate conflict came to
be.
It is often the practice of government to hope that opposition
parties will accept the rapid passage of technical bills which
make so-called housekeeping amendments to legislation. Bill C-10
amends various tax conventions and was presented to us and the
other opposition parties as precisely such a bill.
Two years ago a similar bill was brought forward to the House,
an amendment to the U.S.-Canada income tax convention. It was
presented to the opposition then as a mere housekeeping bill, one
without real substantive effect, one that we did not have to
debate at any great length, one that could be passed if we were
all to get along and do our business efficiently.
What that bill did by establishing the third protocol for the
treatment of social security payments to both Canadian and
American residents was to impose a considerable and burdensome
and prejudicial tax increase on virtually every single Canadian
collecting U.S. social security.
The members of the government, undoubtedly in good faith, took
the mistaken advice of their officials who had drafted the
legislation, advice which said this would not prejudicially
affect Canadian seniors, that it would be revenue neutral, that
none of them would end up paying higher taxes than they paid
under the second protocol before 1995.
We took that on good faith. Seniors took that on good faith.
The current deputy prime minister, the second highest authority
in his government, said several times on the record that the
third protocol would not increase taxes.
What happened? When Canadian residents got their social
security cheques after that bill had been passed, many of them
were financially devastated. Many were thrown into poverty.
Members of the government know this is true. That is why we are
debating this bill today. That is why we are trying to amend the
mistake it made.
I go over this history not to be redundant but to make the point
about what it is we are doing with procedure now.
2020
It is necessary for opposition parties to identify flaws in
bills that are presented to the Canadian people as merely
technical amendments. Sometimes it is necessary because the
government, lo and behold, does not actually get infallible
advice from it officials. That was demonstratively the case in
the passage of the third protocol two years ago.
Mr. Randy White: I rise on a point of order, Mr. Speaker.
I would like to ask if there is a quorum in the House to listen
to my hon. colleague.
The Acting Speaker (Mr. McClelland): We have a quorum.
Mr. Jason Kenney: Mr. Speaker, the third protocol was
amended by the House two years ago. The government presented
amendments which were supposedly innocuous and benign in their
effect. Low income seniors got clobbered and hammered by that
bill precisely because the opposition and the government members
trusted the advice they received that the bill did not contain
any deficiencies.
That is why we need to take these bills seriously. That is why
we cannot rubber stamp them. That is why we cannot treat the
House, as the hon. member from Winnipeg said, as some kind of a
board room. Every piece of legislation that comes before the
House is coming before the highest chamber of democratic
deliberation in the country. These debates must be taken
seriously.
I know it may not matter to the members opposite because they,
like I, do not have the time to read 138 pieces of legislation. Most
of them, when they do get up to speak, read the speaking notes
given to them by their departmental officials. But that does not
change the fact that this place has a history hundreds of years
old based on parliamentary responsibility.
It is ultimately here that the
buck stops. We cannot shirk that responsibility.
We are not standing up using these tactics out of some whimsy. I
do not particularly want to be here at 8.30 p.m. debating
technical bills, but I saw a flaw in this one. As I am the
critic responsible for it I advised my colleagues that, because
it was a major tax increase for the Canadian recipients of social
security benefits, we ought to oppose it. We ought to take it to
committee eventually and have witnesses appear. We ought not to
rush through committee of the whole without the people affected
being able to have a voice in it. That is what taxation with
representation is all about. That is what the democratic
traditions of the House are all about.
I want to invite my colleagues, as I did earlier today, to look
seriously at not just this bill but all similar technical tax
amendments to see what they really say. Forget the advice you
receive from finance department officials. It is our job as
members to dig to the bottom of this, to debate these things and
to look at the affect they are going to have on Canadians.
I want to correct one thing the members opposite have been
saying. They have been suggesting that somehow the official
opposition has been trying to stall the payment of retroactive
tax payments to low income seniors who will benefit from the
retroactive elimination of the huge mistake the Liberals made
under the third tax protocol. That is not at all what we are
proposing to do.
We would like to approve those retroactive payments as soon as
possible, but within the context of a bill that treats all
seniors fairly and does not increase taxes to any of them. That
is a simple principle on which I was elected by 60% of the voters
of my riding to come here and advocate. My colleagues and I have
a prerogative. We have a privilege and indeed an obligation to
do that.
On behalf of my constituents I want to put the government on
notice. If it tries to pull fast ones like it did today we are
going to play these games. Our role as opposition is to defend
the privileges of this place, the traditions of democratic
deliberation which this House represents. No amount of
arrogance or abuse of parliamentary power by the government is
going to stop us from taking that responsibility very seriously.
2025
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, it is with
mixed feelings that I stand at this time of the day to debate
this bill because we need to have an opportunity not only to
debate it in this House, not only to have experts who look at the
many ramifications of the hundred pages of legislative change,
but we should also have an opportunity to take it to the people
back home whom we have been elected to represent.
It is devastating for me to find that my role as a
parliamentarian is being limited by a government that again
thinks it knows everything and that it cannot make a mistake.
That is what is presumed here. If it puts forward a motion and
says that it wants it all finished today I would hope that what
it is saying is that there is no error in this legislation, that
there is nothing that can be made better for the people of
Canada, that it is a perfect piece of legislation, so let us just
get it on the way.
I would have to concede that there would come occasions where
there is a small technical change to be made where that may be
the truth, but we do not know that. As my colleague from Calgary
indicated, that was the assumption made a couple of years ago
when the legislation was passed that we are now trying to undo.
How can the government carry on with this premise? I am
insulted by it and I am hurt by it. Our respect for the
parliamentary process and for this institution is being reduced.
We have an obligation to maintain the integrity of it.
I feel so strongly that not only myself but also the members on
the other side—we call them affectionately the Liberal or the
government backbenchers, those who do not have a say in
government—all have an obligation to provide scrutiny to these
bills. These things have a tremendous impact on our society, on
the citizens of this country, on the taxpayers of this country.
For the backbenchers to go along with this charade and to say
“No, we are willing to abdicate our responsibility and not
provide that scrutiny” I think puts them also in dereliction of
duty.
It is incredible to think that the ministers who sit in the
front rows really do know everything. If that is really true
then perhaps we ought to save the taxpayers a lot of money and
just have a 20 seat Parliament and let them run it. We can just
call it a cabinet and let them run the show. Let us call it what
it is, an elected dictatorship between elections. That is what
it boils down to.
I would like to see those backbenchers on the other side—what
term do I use now. It was going to be a four letter word that
starts with g and ends with ts but I cannot use that.
I wish they had the internal fortitude to actually stand up and
say “I'm sent here to represent the people who elected me” and
to stand up against the front bench of their party when they pull
these kinds of shenanigans. This is really despicable.
One of the greatest concerns we have in our ridings, at least I
am hearing in my riding, is the concern of seniors with respect
to their personal financial security. It is being eroded big
time. They plan for their future and for their retirement given
certain parameters. Now those parameters are being changed
rapidly and they do not have an opportunity to make adjustments
to their earnings, to their savings plans. Certainly they cannot
anticipate all of the different and additional taxation rules
that the government is giving to them.
It behoves us as members to show some genuine concern for the
seniors in our society, those who are most affected by changes in
these rules, those whose very continued livelihood depends on
their financial security.
2030
We ought to show a great amount of scrutiny and care when we
propose to change bills. This is an affront to us. I am ashamed
members opposite are going along with this kind of a charade and
still claiming they won the election and can do whatever they
want. That is not good enough.
The people of Canada will rise up and revolt against this kind
of a government. They will say “Enough of this. We want a true
representational government. We want a government where MPs are
sent to Ottawa to represent the people”. They should take their
voting orders from the people who elected them and not from their
party bosses who think they know everything and will not even
contemplate that perhaps one of their bills or motions should be
subject to amendment, improvement or perhaps even defeat.
It is time that happens. I invite Canadians everywhere to wake
up to what is happening in this place. It is a sham and it is a
shame.
Mr. Randy White (Langley—Abbotsford, Ref.): Mr. Speaker,
this should be a very peaceful and articulate presentation. It
should be but maybe it will not be. At least it will be
articulate.
Is there a quorum in the House?
And the count having been taken:
The Acting Speaker (Mr. McClelland): We have quorum.
Mr. Randy White: Mr. Speaker, with regard to Bill C-10—
Some hon. members: Oh, oh.
Mr. Randy White: Mr. Speaker, listen to the rabble over
there. The people at home should hear what is going on in the
House. The process by which we have to debate the bill is bad
enough. It is anti-democratic.
An hon. member: What are the Reformers doing behind the
curtain? What are they hiding?
Mr. Randy White: I want to speak on a couple of issues
before I address what is wrong with the process we saw tonight.
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, I rise
on a point of order. It is inappropriate for members to refer to
the fact that other members are not in the House. I heard a
member from the government side talking on that basis. I would
ask you to mention to him to refrain from doing so.
The Acting Speaker (Mr. McClelland): It is an established
convention that members do not refer to the absence or presence
of other members in the House.
Mr. Randy White: This afternoon I heard from one of my
honourable colleagues in the Liberal government that a tax was an
investment. Upon further questioning the member said that the
pay back of these taxes is more taxes. It is no wonder we are
limited on debate of this issue and the Canada pension. These
folks across the way have some distorted understanding about
taxes. They think tax is an investment. Tax is an appalling
affront to Canadians. That is what it is. It is not considered
an investment. I want hon. members across the way to understand
that.
Being the House leader of the official opposition I am usually
involved in discussions about closure, about any technicalities
in the House.
2035
Today, as my colleagues have said, we have not been involved at
all. I have not been asked. The problem is not just today. How
will these folks opposite operate for the next four years? They
have to deal with people like me on an ongoing basis to get
approval and to make the House run smoothly and quietly. An
individual can only take so much. I think members across the way
are running out of brownie points. This could be a pretty rough
House of Commons for the next four years.
An hon. member: Sit down.
Mr. Randy White: One of the backbenchers as far back as
one can get has asked me to sit down. That is just arrogance
from the Liberal Party. I represent the people of Langley and
Abbotsford in British Columbia who do not wish me to sit down. I
am here to speak my piece.
I bring to the attention of the House a couple of other problems
the government has. Recently the government bypassed the House
of Commons and delivered bills directly to the Senate. Again it
shows the arrogance of the government in its understanding of the
House of Commons, its rights, privileges and responsibilities.
It is bad enough that closure is called in the House. It is bad
enough that through other technical means debate on legislation
such as Bill C-10 is limited. It is worse and it is appalling
that already four bills have gone directly to the Senate and have
not been initiated in the House of Commons.
There are more bills in the Senate than we have debated in the
House of Commons. I wonder what the government is thinking.
Mr. Jason Kenney: It is not democracy.
Mr. Randy White: That is right. It is not democracy. Is
it thinking that the people who were elected to the House of
Commons to debate bills are not worthy enough to debate them? Is
that what we are talking about? Why on earth does the government
send legislation directly to an unelected, unaccountable body
called the Senate or sleepy hollow, as I would call it.
Bill C-10 represents taxation to some Canadian people. My
colleagues in the House have a right to debate it. They want to
debate it as long as they feel it is necessary. It is not
incumbent upon the government to limit such debate. It is not
right the government should limit such debate.
The message is becoming very clear. The government whip should
know it will take co-operation from all sides of the House to
work on legislation. The message is coming to us loud and clear.
It is not just legislation that will have a problem in the House.
There are all kinds of committees, bodies and other means whereby
we work together.
Surely the government does not want to work like this for the
next four years. If it does, I guess it will be a long, long
time in here and it will not be very pleasant.
We have requests from the government to fly all over the world.
We can cancel their votes in the House of Commons. The fact of
the matter is that there is such a slim majority in the House of
Commons the government will be in the House a lot more than it
was before, and it had better get used to it.
2040
It looks like with Bill C-10 some people are going to end up
getting taxed in this country. They are going to wonder why they
were not well informed. The answer is those members in
opposition who critique these bills did not have an adequate
opportunity. That is the real answer to all of this. It is
really too bad because I think we all came here to present lively
articulate debate on these issues. I guess the government just
consists of a shameful group of people who have come here to push
legislation because they have a majority. One of these days in
this House they will neither have a majority nor a government. I
am looking forward to that day.
Mr. Gary Lunn (Saanich—Gulf Islands, Ref.): Mr. Speaker,
there is a part of me that wanted to go home but I could not
leave without making a few comments.
I apologize to my colleagues on this side of the House for
keeping them here but it is important for me to make these
comments. I can talk about Bill C-10. I have read it. I can
talk about the technicalities, what the bill really does, how it
will really increase taxes and how it will really increase
revenue for this government, but I want to talk about what the
government is doing.
I admit that I am a new member in this House. I have been here
only a few weeks. I had my maiden speech prepared on Bill C-2.
My constituents asked me to speak on it. It is a huge concern in
the riding where I come from. I come here and I am silenced.
That is wrong because we live in a democracy.
I am saying this from my heart because I really do believe this.
I followed Parliament and I was going to speak on Bill C-10
Wednesday but I have been silenced. The hon. member for Calgary
Southeast said I am in the line-up. It may happen today or it
will probably happen on the next speaking rotation. I read up on
the bill and studied the effects of taxes being raised. However,
I am being silenced and not given a true opportunity to debate
this in the House because of the government's tactics.
We have been here only a few weeks. I say this very sincerely
from my heart. They can laugh and they can make all the rhetoric
they want, but on two occasions I have been silenced. That is a
dictatorship. There is no other word for it.
Why are we even here if the government just does what it wants?
On Bill C-10 we could go into the technicalities of it. We
could talk about how this government has the figure 70% stuck and
ingrained in its brain. That is the one thing I have come to
learn from both of these bills that I was going to talk about.
The government will have raised the premiums by over 70% in Bill
C-2.
Now when I study Bill C-10, if you want to talk about it let us
do that. Prior to 1995, 50% would be included in your taxable
income. Now, guess what? It is going to be 85%. It is a simple
case of arithmetic, a 70% increase. Imagine that. This is not
rocket science.
We can debate this bill. I know the Minister of Finance is
probably off smiling and padding the government coffers where all
this money is coming into. I am sure the government knows how
much extra revenue this will create. This is wrong.
The government stands up on the other side time after time and
says there have been no tax increases but they are all sneaky
hidden tax increases. What is even worse, it will not even allow
debate in this House. It just rams them through and uses any
tactics it can.
I could not leave without standing up and saying that I was
prepared to speak on both these bills. What I see in this House
is wrong, wrong, wrong. It is absolutely deplorable what this
government is doing. It is silencing the opposition. It is
trying to run a dictatorship and it is going to have to be
accountable to the people of Canada whether it likes it or not.
The government members can stand there and laugh but I can
remind them that the Tories once sat on that side of the House
and laughed too and they paid a huge price and those guys are
well on their way to going down that same path.
2045
The Acting Speaker (Mr. McClelland): Is the House ready
for the question?
Some hon. members: Question.
The Acting Speaker (Mr. McClelland): Is it the pleasure
of the House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Mr. McClelland): All those in favour
of the motion will please say yea.
Some hon. members: Yea.
The Acting Speaker (Mr. McClelland): All those opposed
will please say nay.
Some hon. members: Nay.
The Acting Speaker (Mr. McClelland): In my opinion the
nays have it.
And more than five members having risen:
The Acting Speaker (Mr. McClelland): Call in the members.
And the bells having rung:
The Acting Speaker (Mr. McClelland): The vote stands
deferred until tomorrow at the end of Government Orders.
It being 8.45 p.m., this House stands adjourned until tomorrow
at 10 a.m., pursuant to Standing Order 24(1).
(The House adjourned at 8.46 p.m.)