CONTENTS
Tuesday, February 22, 1994
Bill C-219. Motions for introduction and firstreading deemed adopted 1649
(Motions agreed to.) 1649
Mr. Tremblay (Rosemont) 1649
Bill C-11. Motion for second reading 1650
Mr. Breitkreuz (Yorkton-Melville) 1655
Mr. Breitkreuz (Yorkton-Melville) 1660
Mrs. Dalphond-Guiral 1662
Mr. Breitkreuz (Yorkton-Melville) 1666
Mrs. Brown (Calgary Southeast) 1667
Mrs. Brown (Calgary Southeast) 1667
Mr. Scott (Fredericton-York-Sunbury) 1681
Mr. Chrétien (Saint-Maurice) 1684
Mr. Chrétien (Saint-Maurice) 1684
Mr. Chrétien (Saint-Maurice) 1684
Mr. Chrétien (Saint-Maurice) 1685
Mr. Chrétien (Saint-Maurice) 1685
Mr. Chrétien (Saint-Maurice) 1685
Mr. Axworthy (Winnipeg South Centre) 1686
Mr. Axworthy (Winnipeg South Centre) 1687
Mrs. Tremblay (Rimouski-Témiscouata) 1689
Mrs. Tremblay (Rimouski-Témiscouata) 1689
Mr. Breitkreuz (Yellowhead) 1691
Bill C-11. Consideration resumed of motion forsecond reading 1692
Mr. Axworthy (Saskatoon-Clark's Crossing) 1696
Mr. Breitkreuz (Yorkton-Melville) 1701
(The sitting of the House was suspended at 4.57 p.m.) 1708
The House resumed at 5 p.m. 1708
Mr. Martin (LaSalle-Émard) 1708
1649
HOUSE OF COMMONS
Tuesday, February 22, 1994
The House met at 10 a.m.
_______________
Prayers
_______________
ROUTINE PROCEEDINGS
[
English]
Mr. Derek Lee (Scarborough-Rouge River) moved for
leave to introduce Bill C-219, an act to amend the Immigration
Act (visitors' visas).
He said: Mr. Speaker, I am very pleased to present this bill
amending the visitor visa provisions of the Immigration Act.
The bill was presented in the past Parliament.
The bill would permit the Canadian relatives of visitors to
place a surety with the Government of Canada prior to the
application for visa by the non-Canadian visitor.
At present Canadians have no role in this process. I believe, as
do others, that their participation in the process by means of a
surety would enhance the prospects of the visitor obtaining a
visa and enabling the visit to take place.
The bill specifically provides that the absence of such a surety
will not be considered by visa officers so as not to prejudice all
others who are applying for visas who do not happen to have
relatives in Canada.
(Motions deemed adopted, bill read the first time and
printed.)
* * *
Mr. Peter Milliken (Parliamentary Secretary to Leader of
the Government in the House of Commons): Mr. Speaker, I
have three motions I propose to put to the House with unanimous
consent. I move:
That, if a recorded division is required during the budget debate on Thursday,
February 24, 1994, the said division shall be deferred until Tuesday, March 8,
1994 at 6.30 p.m.
(Motion agreed to.)
Mr. Milliken: Mr. Speaker, perhaps to save time I will read
the next two motions and then they can both be put because I
think there is agreement with respect to each. I move:
That, during the adjournment of the House from March 25, 1994 to April 11,
1994, if any appropriation bills that have been passed by the House have not yet
been granted royal assent, the Speaker shall be empowered to recall the House for
the sole purpose of attending the granting of royal assent to any bills, after which
the House immediately shall be adjourned until April 11, 1994;
That, in the event of the Speaker's being unable for any reason to act for the
purposes of this Order, the Deputy Speaker, the Deputy Chair of Committees of
the Whole House or the Assistant Deputy Chair of Committees of the Whole
House may act for him.
(Motion agreed to.)
Mr. Milliken: I move:
That, notwithstanding the Special Order of February 15, 1994, the division
on Government Order, Government Business number 8 shall be held on
Wednesday, February 23, 1994 at 3.00 p.m.
That defers the division today, Mr. Speaker, from three
o'clock until Wednesday at the same time.
(Motion agreed to.)
* * *
(1010)
[Translation]
Mr. Benoît Tremblay (Rosemont): Mr. Speaker, I have the
honour this morning of presenting a petition signed by close to
300 residents of my riding of Rosemont. They call on the
government to reinstate budgets for social and co-operative
housing and denounce the federal government's plans to
increase subsidized rents by 20 per cent.
In the riding of Rosemont alone, more than 1,000 families are
on the waiting list for social housing whereas all budgets have
been frozen.
As you undoubtedly know, Mr. Speaker, the Régie du
logement du Québec, taking into account overall housing costs,
has authorized the private sector to increase rents by only .5 per
cent to 1.1 per cent this year. It would be ridiculous if the public
1650
sector, which has a responsibility to protect the least fortunate,
were to authorize rent increases of 20 per cent.
With the budget only several hours away, my constituents in
the riding of Rosemont call upon the Minister of Finance to
uphold the commitments he made during the last election
campaign. It is vital that he dispel any uncertainty weighing on
the least fortunate and that he restore decent funding for the
construction of new social housing units.
Mr. Jean-Paul Marchand (Québec-Est): Mr. Speaker, I
have the great honour to present a petition signed by a few
thousand residents of my riding of Québec-Est and several other
areas of Quebec.
The petitioners ask Parliament to urge the minister of
immigration to reconsider his department's decision to deport
the Maraloï family of Vanier and to allow the family to remain in
Canada where, after three years, they feel completely at home.
I give my unqualified support to this petition and urge the
government to act on it.
[English]
Mr. Ronald J. Duhamel (Parliamentary Secretary to
Minister of Public Works and Government Services): Mr.
Speaker, I have a petition wherein the petitioners point out that
there is an extreme amount of violence on both radio and
television. They deplore the fact that violence is portrayed by
the use of foul language or physical acts and is in fact appearing
in an increasing kind of way.
The petitioners ask that the Parliament of Canada ensure that
the CRTC recognizes the need to enforce standards pertaining to
all forms of abuse, including the use of foul language and
excessive violence in all of its forms. They point out that if it is
not done, their efforts to raise the family in a sound environment
is in fact undermined.
* * *
Mr. Peter Milliken (Parliamentary Secretary to Leader of
the Government in the House of Commons): Mr. Speaker, I
ask that all questions be allowed to stand.
The Speaker: Shall all questions stand?
Some hon. members: Agreed.
1650
GOVERNMENT ORDERS
[
Translation]
Hon. David Anderson (Minister of National Revenue)
moved that Bill C-11, an act to amend the Excise Act, the
Customs Act and the Tobacco Sales to Young Persons Act, be
read the second time and referred to a committee.
He said: Mr. Speaker, I am happy to rise today to speak in
favour of Bill C-11. As Minister of National Revenue, I have a
responsibility to do all I can to maintain and protect the integrity
of the Canadian border and to ensure that Canadian tax laws are
respected. For these reasons, I have been deeply affected by the
dramatic increase in smuggling.
Some people still argue that it is a regional problem and that
the federal government's four-point program to fight smuggling
and tobacco use only hinges on regional interests. That is totally
false.
The growth of the smuggling trade in Canada, especially
tobacco smuggling, is a national problem requiring a solution at
the national level. Let us look at the facts.
Contraband tobacco amounts to some $5 billion or about 40
per cent of the $12.4 billion Canadian tobacco market.
(1015)
This means that about $1.6 billion worth of contraband
cigarettes are sold in our communities, on our streets and in our
schools every month. As a result, unfortunately, our young
people who want to start smoking now have practically
unlimited access to cheap contraband tobacco. This situation
clearly undermines the federal and provincial governments'
efforts to discourage tobacco use through high prices.
[English]
This means that smuggling is undermining both federal and
provincial efforts to discourage smoking. Unfortunately the
problem we are facing today does not stop there. Smuggling has
cost the federal treasury approximately $1 billion in the last
fiscal year. It cost the provincial treasuries another billion
dollars in the past year.
These are direct losses that cannot be recovered, but these
revenue losses have been increasing sharply in recent months.
Smuggling is therefore, in my opinion, undermining our fiscal
situation and our social programs at both the federal and
provincial levels. The problem is growing. This problem is
intolerable.
Revenue losses are not the whole problem. Because the
smuggling trade is increasingly run by organized crime and
according to enforcement agencies organized crime now con-
1651
trols most of the $5 billion tobacco smuggling trade, literally
billions of dollars are being funnelled out of the hands of
Canadian citizens and into the hands of criminals who also ply
their illegal trade in alcohol, paramilitary weapons, drugs,
immigrants and other contraband products.
[Translation]
In a nutshell, the only beneficiaries of the current situation are
the gangs of criminals who sell drugs in our schools, arm our
offenders and destabilize Canadian society. The losers are the
majority of Canadians who obey the law, pay their taxes and
want to live without fearing for their safety. The situation keeps
getting worse.
Smuggling also has a detrimental effect on law-abiding small
merchants; it is pushing these people to the brink of bankruptcy.
In short, smuggling penalizes Canadians who want to earn an
honest living.
Smuggling undermines the rule of law in this country and
hampers the government's efforts to reduce tobacco use, mainly
among young Canadians. It also robs federal and provincial
finance departments of important revenues.
As the Prime Minister said two weeks ago in this House: ``We
are dealing with a problem of law enforcement and organized
crime, with health issues, with federal-provincial relations-''
[English]
Yet despite the wide ranging breadth of the issue and the
impact it is having on our communities, on our social system and
on respect for the law, there are still those who argue that it is a
regional problem. These people point to the province of Quebec
and say: ``They have a problem but we don't''. The evidence
simply does not support such a simplistic position.
Let me go over some of the statistics for members. It is true
that the smuggling problem is currently most acute in Quebec
where it has been at least until very recently. It is also true that it
has grown and was growing in that province. It has been growing
alarmingly in every other province of the country.
I ask hon. members to consider the facts. The market share of
contraband tobacco was estimated at only 9 per cent in Quebec
four years ago. Today contraband represents an estimated 60 per
cent to 65 per cent of the Quebec market.
(1020)
Contraband tobacco represented about 12 per cent of Atlantic
Canada's tobacco market in 1990 or four years ago. Today
contraband constitutes approximately 40 per cent of that
market. In 1992, only two years ago, contraband tobacco
represented 13 per cent of Ontario's tobacco market and today it
represents close to 35 per cent.
In the west where the smuggling problem is clearly less acute
at the moment, contraband tobacco accounted for only 9 per cent
of tobacco sales a little more than a year ago. However today
contraband tobacco in western Canada has increased to 15 per
cent of the market. That in terms of growth is a 60 per cent
increase in one year.
It is perverse to continue to view this problem as a problem of
only one province. There is an obvious trend to which members
and the Canadian public must pay attention. Whether one lives
in the maritimes, in Ontario, in Quebec or in the west,
smuggling is growing at a rapid rate across the country and has
become a national problem.
I will now deal with lessons to be learned.
[Translation]
First, inaction is not a solution. It is no longer possible to
ignore the problem. Obviously, if we do not take energetic
measures now, the amount of contraband tobacco in our
communities will continue to grow and organized crime will
continue to grow rich from the illegal profits.
The former Conservative government let the smuggling
problem grow to such an extent that the present government
cannot tolerate it today. Our government refuses to look away
and pretend that the problem can be solved by half-measures.
We also refuse to pretend that the smuggling problem affects
only one region of the country.
Smuggling is a national problem, so the solution must also be
national in scope. We must take strong measures now. We cannot
allow cheap smuggled tobacco to continue to come into our
communities and into the hands of young Canadians. We cannot
allow the rule of law in this country to continue to be flouted. I
repeat: inertia and half-measures are not realistic solutions.
That is why today I support Bill C-11, an act to amend the
Excise Act, the Customs Act and the Tobacco Sales to Young
Persons Act.
The proposed amendments support the government's
four-point initiative to fight tobacco smuggling and use. With
these amendments, we will give Canadian police authorities
additional legal powers to fight smuggling. We will also
improve the government's efforts for young people's health.
Taken together, the amendments tabled in the House will help
establish the integrity of Canadian laws and the Canadian border
and, perhaps most important, stop the increase in smuggling in
regions of the country where it has not yet reached disturbing
levels.
[English]
Therefore the first amendment in the bill applies to the Excise
Act. It will effectively increase the resources that can be brought
1652
to bear in the fight against smuggling. It will do so by allowing
the government to give to police forces other than the Royal
Canadian Mounted Police the authority to enforce sections of
the Excise Act that allow for the seizure of tobacco, alcohol and
vehicles used in illegal smuggling activities.
(1025)
The government will be able to provide provincial police
forces-in particular the Sûreté du Québec and the Ontario
Provincial Police but also municipal police forces-as
appropriate with the additional legal tools they need to combat
smuggling and the organized criminals who control the
smuggling trade. This means there will be a substantial increase
in the level of police resources working with the federal
government to put an end to smuggling.
Second, the proposed amendments to the Customs Act and the
Excise Act will provide police forces with the authority to
destroy certain seized products without hindering the ability of
authorities to carry out prosecution successfully. This reduction
in the storage of contraband will save Canadian taxpayers over
$200,000 a year by eliminating the storage costs of the property
seized.
Third, we have a proposal to amend the Excise Act in order to
clearly stamp individual cigarettes on which taxes have been
paid. I might add that while there may be some technical
questions yet to be determined, it would also be possible to mark
individual cigarettes that are in duty-free shops or individual
cigarettes which have been exported. We will have a differential
ability to have individual cigarettes marked to indicate what
particular taxes have been paid on them. This will allow law
enforcement agencies to identify more easily those smoking
contraband tobacco products.
Fourth, we have two proposed amendments to the Tobacco
Sales to Young Persons Act. The first will make it illegal for
tobacco manufacturers to package cigarettes in packages
containing fewer than 20 cigarettes. This will effectively kill the
so-called kiddie packs of six or a similar number of cigarettes.
The second amendment to the Tobacco Sales to Young
Persons Act will prohibit the importation of tobacco products
into Canada by a person under the age of 18. This is
complementary to other measures that will be taken internally to
reduce the possibility of possession of tobacco by people below
that age.
As a result of these two measures and other provisions young
Canadians should find it greatly more difficult to obtain tobacco
products.
[Translation]
The four-point plan to fight smuggling and tobacco use is a
comprehensive action plan which deals with the whole
smuggling problem, and Bill C-11 is an integral part of this
plan. It deals with the need for tougher enforcement in the fight
against smuggling. It deals with the need to get rid of organized
crime which controls smuggling activities. It also deals with the
need to protect the health of young Canadians. In short, Bill
C-11 is an integral part of the government's solution to a
national problem.
For these reasons, I ask the House to support the passage of
Bill C-11.
Mr. Antoine Dubé (Lévis): Mr. Speaker, as the official
opposition critic for training and youth, I welcome this
opportunity to present the position of the Bloc Quebecois on Bill
C-11, an act to amend the Excise Tax Act, the Customs Act and
the Tobacco Sales to Young Persons Act.
As youth critic, I intend to address those provisions of the bill
that are aimed at reducing tobacco sales to young people,
because smoking is a very serious problem among young
people, and is probably one of the worst threats to the health of
young people today.
In fact, according to a study carried out in 1992 by Health and
Welfare Canada, 38,000 Canadians die each year of
smoking-related diseases. From 80 to 90 per cent of all cases of
emphysema and bronchitis are caused by cigarette smoking. I
say this because we often think of lung cancer, but there are
other diseases as well. Thirty per cent of young Canadians and
Quebecers are smoking today, about the same proportion as for
adults. It is a problem that is not going away.
(1030)
In 1989, it was estimated that young Canadians between the
ages of 12 and 19 spent more than $436 million on cigarettes,
and that amount is even higher today. Ninety per cent smoked
regularly, and by regularly I mean every day. Fifty-eight per
cent of young smokers had from 11 to 25 cigarettes daily.
Seventy-five per cent of teenagers who smoked developed the
habit before the age of 17, and the average age at which they
started to smoke-surprisingly, this figure is going down-was
13, in other words, they started smoking when they were 13
years old.
Other studies have shown that a gradual decrease was
reversed in 1989, when smoking by young people started to
increase. The age at which young people smoke their first
cigarette has continued to go down. In fact, according to the
National Clearing House on Tobacco and Health, between 1965
and 1989 smoking by young people in the 15-to-19 age group
dropped from 55 per cent to 21 per cent among males and 37 per
cent to 21 per cent among females. That was the good news.
However, since 1989, 23.8 per cent of all students surveyed said
they smoked daily, and the percentage was about the same for
both girls and boys. Smoking increased considerably in 1991
and 1993 among students, especially students in their first year
1653
of high school, rising from 6.1 per cent in 1989 to 9.4 per cent in
1993.
Furthermore, according to several studies conducted by the
National Clearing House on Tobacco and Health, there is
evidence that links poverty, unemployment, smoking,
alcoholism and drug addiction.
Education is also an interesting factor to determine the
population most likely to engage in such activities. Still
according to the National Clearing House on Tobacco and
Health, 34 per cent of individuals aged 15 and over smoke, as
opposed to 18 per cent of people with a university education.
Thirty-six per cent of the poorest members of our society
smoke, as opposed to 25 per cent of the wealthiest members of
that society.
The economic measures put in place by previous governments
in Canada since 1984 have had a negative social impact by
increasing poverty among Canadians. Young people have been
particularly affected by these measures. In 1990, 40 per cent of
young Quebecers were living in poverty. Today, youth
unemployment in Quebec has reached nearly 20 per cent.
However, I doubt that the figures I just quoted shed enough
light on the real causes of smoking by young people. I believe
more research is necessary for a more thorough analysis of a
phenomenon that is constantly changing. We have every reason
to be concerned about the future health of our young people and
the burden on our health system.
It should come as no surprise to hon. members that the
Official Opposition supports adopting measures to restrict
tobacco consumption in general and by young people in
particular. It should be a foregone conclusion for any political
party that is concerned about public health. However, we do
have a number of questions about the bill before the House today
and these concern its chances of succeeding if the legislation is
not properly enforced or if no effective measures are taken to
achieve the bill's objective.
There is, first of all, the matter of the government's timing in
tabling Bill C-11. It should be noted that this bill was tabled in
the House of Commons two days after the Prime Minister
announced, on February 8, various measures including tax
reductions to fight cigarette smuggling.
(1035)
We would almost think that, all of a sudden and off the cuff as
we see it, this government was trying to give the impression it
could solve every problem related to tobacco use.
Why dit it wait until February 8 to put into force the Tobacco
Sales to Young Persons Act adopted by the House of Commons
in third reading on February 12, 1993? That was a year ago, Mr.
Speaker.
Another fundamental issue is the will or capacity of the
federal government to enforce its legislation respecting tobacco
use.
This concern flows from this government's apparent
reluctance to fight propaganda and incapacity to react to this
rising problem. Other pieces of legislation also come to mind.
In an article published in Le Soleil on February 13 last, we
learned that, over a four-year period, the federal government
had not imposed a single fine under its Non Smokers' Health
Act, an act to regulate smoking in its own buildings, and this in
spite of innumerable complaints and no less than 102 violations
reported during the first three years of operation of this act. Not
one of the violation notices resulted in fines. The only action
actually taken seems to have been to hand out warnings.
As members of the Official Opposition, we are fully prepared
to contribute to the legislative process, but the government still
has to enforce not only the legislation Parliament passes from
now on, but also legislation passed previously.
It would be interesting to know what steps the government
intends to take to ensure compliance with certain provisions of
Bill C-11, including those relating to the requirement to stamp
all tobacco products individually and the manufacturing and
sale of cigarettes in packages containing fewer than 20
cigarettes. All this is fine. It is one thing to say you want to do
something, but how will you go about it? That is a very
important point, as far as I am concerned. How will the sale of
individual cigarettes be controlled? Cigarettes are very small
and easy to hide. How will the age of the buyer be ascertained?
Will ID cards be required? How does the government intend to
check the age of cigarette buyers? As we know, since old Bill
C-111 became law, the legal age is 18. But you still have to
check the ID card, the age of the buyer. Of course we are
wondering about the number of people who will be assigned to
enforce the law-the minister touched upon the subject-as
well as the costs involved.
It is very important to get an answer to these questions
because it relates to a central aspect of this legislation, namely
its enforcement. Incidentally, the minister did mention
enforcement at the beginning of his speech.
Also, we think that this legislation should be coupled with
positive measures to warn young people of the dangers of
tobacco use and encourage them not to smoke. We must beware
of the possible boomerang effect of a repressive approach on the
young in that area as in any other in fact. Several educational
1654
experts have said repeatedly that young people trying to grow up
and assert themselves could be attracted by the ``forbidden'', in
which they see a challenge.
I have recently consulted a number of young people and I am
convinced that, as far as stringent measures to restrict the use of
cigarettes among young people are concerned, they could be
construed as a form of provocation, thus inciting young people
to go against this restriction.
(1040)
We must help our young people to become more responsible,
not marginalize them even more by taking only traditional,
repressive approaches to problems.
This bill, which would restrict access by young persons to
tobacco products, should not be a reason for us to forget that
young people experience drug and alcohol problems on a daily
basis. According to Statistics Canada, 12 per cent of our young
people have serious drug addiction problems.
The range of illegal substances available in high schools
boggles the mind. On February 19 last, La Presse reported in an
article that high school students can purchase chemical
substances such as PCP for a mere five dollars per unit right on
the school premises. Pushers offer to sell drugs to children often
as young as 12 or 13 years of age, and the impact on their health
and on society is devastating.
As is the case with smoking, young persons who start to use
drugs early in their teens are much more likely to still use drugs
as adults. However, drugs are not the only products that are
easily accessible to young people. Alcohol is also readily
available to them.
In another article which appeared in La Presse on February 20
last, it was reported that teenagers can easily buy beer at the
corner store. The article is based on the findings reported in a
study involving high schools students aged 16 and 17 in
Montreal, and 18-year-old students in Toronto. Students in this
age bracket visited about one hundred convenience stores and in
85 per cent of the cases, merchants sold them alcoholic
beverages without asking for any identification. Mr. Speaker,
this is terrible!
Clearly, not everyone is complying with the legislation
governing the sale of alcohol to minors. Must we wait until the
same thing happens with the Tobacco Sales to Young Persons
Act?
We have said it before and we will say it again. We are not
opposed to the passage of Bill C-11. What we are concerned
about is how the legislation will be enforced.
Moreover, we must not be seen as sending a negative message
to our youth. Considering that in the speech from the throne, the
government announced plans to amend the Young Offenders
Act, young people could possibly see in this legislation a
message that society views them as the cause of the problem. In
my opinion, young people represent the future, indeed, our
future. It is up to us to ensure that the proposed measures are
viewed in a positive light.
I have another question, this time pertaining to section 66 of
the act respecting enforcement measures. As the minister
mentioned earlier, this provision stipulates that police forces
other than the RCMP can, if the minister deems it appropriate,
seize tobacco, alcohol and vehicles used for illegal contraband
activities. Does this mean that the police resources assigned to
fight contraband activities will be increased significantly? If it
does, how much will this increased presence cost?
I would also be somewhat surprised if the government were
able to obtain as easily as the minister claimed the co-operation
of police forces that do not fall under its jurisdiction. Most
provincial and municipal police forces have experienced staff
cuts and most claim to be stretched to the limit. Refusal to
co-operate is not always a sign of bad will. When police forces
have trouble just getting their everyday work done, it is difficult
for them to volunteer to do extra work for another level of
government.
It was also mentioned that seized property such as vehicles
could be auctioned off. Will the proceeds from such sales be
used to fight contraband activities and smoking?
(1045)
Section 112 of the old Tobacco Sales to Young Persons Act,
which relates to the immediate destruction of some of the
articles seized, will allow the police to immediately destroy
some of the articles seized, photos and videos liable to be used
as evidence at trials. This could, of course, reduce storage costs
significantly, but how do we make sure that these photos and
videos are secure? That is a question that we should be asking
ourselves.
Sections 201 and 211 of the act concerning the stamping of
individual cigarettes will amend the Excise Act to allow
authorities and law-abiding citizens to better identify products
that have been taxed and those that have not been taxed, but we
are told that these new stamping requirements for cigarettes will
be prescribed by regulations after Bill C-11 has been passed. We
hope that these regulations will be adopted and implemented
quickly, in any case faster than those related to last year's Bill
C-111.
Clause 7.1 of Bill C-11 will make it illegal to produce and sell
packages containing less than 20 cigarettes. In our opinion, the
effectiveness of this measure is reduced by the decline in
cigarette prices. A pack of 25 now costs much less than a pack of
15 before taxes and prices were slashed.
Clause 7.3 of Bill C-11 is aimed at prohibiting the
importation of tobacco products for and by people under 18.
This measure is self-evident is we prohibit people under 18
from buying these products within Canada's geographical
bound-
1655
aries, but how can we ensure effective customs controls so that
this measure does not amount to wishful thinking?
In conclusion, I would like to remind the House that the
Official Opposition supports Bill-11, but we want to emphasize
once again that it is important to take measures to enforce it.
First by adopting easy-to-implement regulations and then by
putting in place a better awareness program aimed at convincing
young people that tobacco is detrimental to their health and that
it can impose important costs on tomorrow's society.
[English]
Mr. Garry Breitkreuz (Yorkton-Melville): Mr. Speaker, I
have the honour to be the first speaker for the Reform Party on
this bill. As members know, I am new to the House and studying
this bill has provided me with an important lesson in the
legislative process of which all Canadians should be made
aware.
When the Prime Minister announced the government's
national action plan to combat smuggling and Bill C-11 was
introduced by the Minister of National Revenue, we assumed
that Bill C-11 would contain all the measures announced in the
national action plan to combat smuggling. Unfortunately it did
not.
In fact all the tax measures announced by the Prime Minister
in the national action plan to combat smuggling have been
implemented using ways and means motions.
Ways and means motions require the government to bring a
bill or bills before the House some time in the future. Ways and
means motions cannot be debated. Therefore the tax reduction
on cigarettes, the export tax on cigarettes and the health
promotion surtax are not in Bill C-11. In effect they will not be
seriously debated or subject to review and amendment by the
Standing Committee on Finance until the government decides to
bring in the other bills as required by the ways and means
motions.
As I said, it was an educational experience for me to see how
the government does things. The government is able to put its
agenda forward even though there may be very little debate on it
from its own MPs.
The measures introduced in Bill C-11 are fairly minor in
comparison. The main amendments to the Excise Act and the
Customs Act allow the government immediately to destroy
certain seized property, even when there is an unresolved claim.
It permits the government to give police forces the same seizure
power as the RCMP.
(1050)
Another amendment to the Excise Act requires cigarettes to
be individually stamped if they are manufactured or imported
into Canada in order to make sure that the duties have been paid.
It is a very good control measure.
Finally, the Tobacco Sales to Young Persons Act has been
amended to prohibit sales of tobacco products to any person
under the age of 18. It makes it illegal to manufacture, package
or sell cigarettes in packages containing less than 20 cigarettes.
This is also a good measure.
On February 8 when the Prime Minister announced his
national action plan to combat smuggling my constituency
office received 52 calls, 43 of which opposed the reduction of
taxes on cigarettes. Since the government made clear its
intention to reduce the tax on cigarettes I have received letters
from many different sources protesting the government's action.
Here are some of them: Saskatchewan Medical Association;
Canadian Medical Association; College of Family Physicians,
Saskatchewan Chapter; Saskatchewan Provincial Health
Council; Heart and Stroke Foundation of Saskatchewan; Heart
and Stroke Foundation of Canada; and the Canadian Cancer
Society.
Also opposed is the Saskatchewan Interagency Council on
Smoking and Health which includes all the following agencies:
Allergy Foundation of Canada; City of Regina Health
Department; Community Health and Epidemiology Department
of the University of Saskatchewan, Continuing Medical
Education, Continuing Nursing Education; Manitoba and
Saskatchewan Conference of the Seventh Day Adventists;
Saskatchewan Alcohol and Drug Abuse Commission;
Saskatchewan Education; Saskatchewan Health; Saskatchewan
Health Care Association; Saskatchewan Institute on the
Prevention of Handicaps; Saskatchewan Medical Association;
Saskatchewan Pharmaceutical Association; Saskatchewan
Public Health Association; Saskatchewan Registered Nurses
Association; Saskatoon Community Health Clinic; University
of Saskatchewan; Canadian Cancer Society, Saskatchewan
division; Heart and Stroke Foundation of Saskatchewan Inc.;
and Saskatchewan Lung Association.
We also received representations from Saskatchewan
Heart-Health which includes the following agencies and
organizations: Canadian Cancer Society; Canadian Diabetes
Association; Consumers Association of Canada; Coronary
Artery Rehabilitation Group; Coteau Hills Heart Health
Coalition; Heart and Stroke Foundation of Saskatchewan;
Interagency Council on Smoking and Health; Regina Health
District; Regina Heart Healthy Partners; Saskatchewan Council
on Community Development; Saskatchewan Diabetic
Association; Saskatchewan Health, Community Services
Branch and Health Promotion Branch; Saskatchewan Lung
Association; Saskatchewan Public Health Association;
Saskatchewan Medical Association; Saskatchewan Physical
Education Association; Saskatchewan Recreational
Association; Saskatchewan Registered Nurses Association;
Saskatchewan Restaurant Association; Saskatoon Tri-Hospital
Cardiac Rehabilitation Program;
1656
SIAST-Wascana Institute; and the University of Saskatchewan
Heart and Stroke Epidemiology unit.
This huge list represents many people. It shows the great
concern and the broad base opposed to the measures the
government is taking. All these organizations have expressed
their concern.
(1055)
A letter opposing the tax reduction also came from the
National Campaign for Action on Tobacco which includes the
following agencies and organizations: Canadian Cancer
Society; Canadian Chiropractic Association; Canadian Council
on Smoking and Health; Canadian Dental Association;
Canadian Home and School and Parent-Teacher Federation;
Canadian Hospital Association; Canadian Lung Association;
Canadian Medical Association; Canadian Pharmaceutical
Association; Canadian Physiotherapy Association; Canadian
Public Health Association; Canadian Society of Respiratory
Therapists; Canadian Teachers Federation; Heart and Stroke
Foundation of Canada; Non-Smokers' Rights Association;
Physicians for a Smoke-Free Canada; Canadian Association of
Optometrists; College of Family Physicians of Canada; Royal
College of Physicians and Surgeons; and the United Church of
Canada.
This represents a huge number of people who have objections
and concerns regarding this measure. I will not mention any
more but it gives an idea of how many people have concerns in
this area.
Seventy agencies and organizations have made
representations to me, just one member of Parliament. These 70
agencies and organizations are opposed to the tax reduction on
cigarettes. In contrast, I have received just nine phone calls and
one letter in favour of the measure announced by the
government.
At this time I would like to read some of the concerns
expressed in these representations. One letter comes from the
Saskatchewan Provincial Health Council. It is addressed to the
Prime Minister and reads:
We are puzzled and dismayed that your government is considering rolling
back tobacco taxes.
Every province in Canada is involved to some degree in health reform and
moving the emphasis from curing sick people to wellness initiatives and
prevention of ill health. We have assumed that these initiatives were supported
by our federal government.
Instead, we hear of your intended action which will reduce constraints and
ultimately encourage and facilitate people, particularly our young people, to
beginning or continuing an addictive practice that results in disease and death.
Please remember the following facts:
In 1989, tobacco smoking caused Canadians 9.5 billion in health dollars in the
workplace.
One-quarter of high school students who smoke had their first cigarette by grade
6.
There are 43 known cancer producing substances in tobacco smoke.
Nicotine has similar drug and behavioural addictive effects as heroin and
cocaine.
One hundred and seventy-five thousand teens will take up smoking if you roll
taxes back.
Surely your government does not want to be remembered for contributing to
the premature deaths of 250,000 people.
Another letter which is addressed to the Minister of Finance
states: ``We are writing to express our strong opposition to any
decrease in tobacco taxes''.
(1100 )
Here is another excerpt from that letter: ``Tobacco is the only
legal product available which when used as intended causes
premature death and disability. Tobacco use is the largest single
independent risk factor for heart disease, and heart disease is the
leading cause of death in Canada. It accounts for 12 per cent of
all hospital admissions, 20 per cent of patient days in hospital,
20 per cent of disability pensions paid by the Canada pension
plan and is responsible for 32 per cent of total future earnings
lost due to premature death''.
Where does this letter come from? It comes from the Heart
and Stroke Foundation of Saskatchewan. It has a concern in this
area.
It goes on to say: ``To decrease tobacco taxes now would
increase tobacco consumption by youth, decrease government
revenue and reward one of the major causes of the tobacco
smuggling problem, the actions of Canadian tobacco
manufacturers''.
I would like to read more excerpts from the Heart and Stroke
Foundation of Canada. This is a letter addressed to myself:
``Dear Mr. Breitkreuz: What you may not be aware of is that,
motivated only by profit, the tobacco industry has
misrepresented both the nature of the problem and the
consequences of its proposal to reduce taxes. Health groups, in
contrast, have nothing personal to gain from the position we
adopt on this issue. Our only interest is safeguarding the health
of Canadians by preserving the tremendous progress realized
over the past decade in reducing tobacco consumption. What
follows is a point by point rebuttal of the tobacco lobby's main
argument in favour of a tax rollback''.
I will not read the whole letter, but it addresses the myth that
there is a tax rollback that would stop the revenue leakage
caused by smuggling. It said that in fact governments would lose
substantially more revenue by lowering taxes.
Then it addresses another myth that tobacco tax increases
have no impact on reducing smoking. The fact is that tobacco
consumption has dropped dramatically in Canada over the past
10 years largely because of tobacco tax increases.
1657
The foundation goes on to say in this letter that tobacco
consumption in Canada has dropped 40 per cent over the past
decade, even with smuggled tobacco factored in, primarily as a
result of tobacco tax increases which rendered cigarettes less
affordable. Canada's 40 per reduction in per capita tobacco
consumption is significantly greater than that of the United
States at 27 per cent over the same period. We must take note of
these facts when we have this discussion.
Then it addresses another myth that tobacco is taxed at an
unfairly high rate in Canada. In fact Canada tobacco tax levels
are on par with most industrialized nations.
I would like also to read a brief excerpt from the Canadian
Cancer Society. It says: ``Dear Mr. Breitkreuz: We urge you to
speak up in caucus meetings against tobacco tax rollbacks which
would only benefit the tobacco industry and would be a public
health disaster''.
I have another letter here from the Saskatchewan Interagency
Council on Smoking and Health. I will read an excerpt from it:
``Very recently U.S. government researchers reported that while
heart disease and cancer may be listed as the nation's leading
killers, the biggest underlying cause of death is tobacco use. Let
us not forget that tobacco is the greatest cause of preventable
death in Canada''. Let me repeat that tobacco is the greatest
cause of preventable death in Canada.
Let us not forget that cigarettes cause health problems when
used exactly as intended. Canada must continue with its
combination of fiscal and health policies if we are to continue to
reduce tobacco use.
(1105)
We support very much what the government is doing, what its
intended use is, but we must question the things that have not
been included in the bill, the tax reduction measures.
Here is another news release from the National Campaign for
Action on Tobacco. Again I will not read the whole release. I am
just going to take an excerpt. David Sweanor, senior legal
counsel with the Non-Smokers' Rights Association, stated:
Reducing tobacco taxes would make tobacco products more affordable,
which would result in enormous increases in consumption, especially among
children and adolescents. The tobacco industry has lobbied itself into a win-win
position. The industry profits from supplying tobacco products that end up
smuggled back into Canada and, of course, the industry wins if governments
bow to pressure to lower tobacco taxes.
That is one of the primary concerns that people expressed in
those many phone calls we received. The government is bowing
and the industry is bowing to pressure from certain groups to
lower taxes.
Here is another letter from Saskatchewan Heart Health:
We are writing to urge you not to reduce taxes on tobacco products.
We believe that reducing taxes would not solve the smuggling problem, would
lead to greater consumption of tobacco products by Canadians, particularly by
youth, and would send the wrong signal to the United States at a time when they
are considering a tobacco tax increase.
We have heard on the news recently that the U.S. was
watching what we do in Canada and that it will encourage the
U.S. not to increase taxes there. It continued:
Canada has witnessed an unprecedented decrease in tobacco consumption
over the past decade, coinciding with significant increases in federal and
provincial tobacco taxes. Because youth tend to have limited incomes, price
increases have an even greater deterrent effect on them.
At a time when other countries view Canada as progressive in its tobacco
taxation policy and the resulting decreased consumption, it would seem to be a
very backward step to now decrease taxes.
This message comes from the Saskatchewan Lung
Association and it is marked urgent. I will read three main points
from its memo:
1. Reducing tobacco taxes would be an economic calamity.
2. Reducing tobacco taxes would escalate health problems.
3. Reducing tobacco taxes would not eliminate smuggling.
I have one more letter from a constituent in MacNutt,
Saskatchewan. I will not read the whole letter. It is addressed to
myself:
Dear Sir:
We are appalled at the decision that the federal government is planning to
remove some of the taxes on tobacco products. Again, just like previous
governments, they are trying to please Quebec. Why is there not more effort put
into the policing of smugglers? Also, why should Indian Reserves be exempt
from the laws and taxes of this country? Are we not all to be treated equally?
How would the lost revenue from cigarettes be made up? Who would pay for the
extra health costs incurred by the greater use of tobacco products?
That is an opinion expressed by one of my constituents. We
should be aware of what they are thinking.
As a Reform MP I am bound by the constitution of the Reform
Party of Canada to represent my constituents' wishes.
(1110 )
It is easy to see how I will vote when the government
introduces the bill on reducing taxes on cigarettes. While I am
also in favour of lowering taxes I do not believe we should lower
taxes until the budget is balanced.
Let us first reduce government spending, balance the budget
and then look at lowering taxes. Are Reform MPs the only
members of this House receiving phone calls and letters
opposed to the tax reduction on cigarettes? Am I the only one
being inundated with this kind of information?
1658
I wonder how many other MPs will be able to face their
constituents if they vote in favour of the tax reduction whenever
that bill is brought before the House. We have to listen to the
people of Canada. We have to hear their concerns and respond.
On February 8, after the Prime Minister announced the
national action plan to combat smuggling, the leader of our
party announced in the House that the Reform Party was in
favour of some aspects of the action plan and opposed to others.
Our leader said that we were in favour of stronger law
enforcement, that the Reform Party supported the government's
anti-smoking education campaign, that the Reform Party
supported the export tax on cigarettes, and that the Reform Party
was opposed to reducing taxes on cigarettes.
We supported three of the government's initiatives but we
were opposed to reducing taxes on cigarettes. Since the
government's announcement our Ottawa hotline has received
over 60 voice messages and faxes. The vast majority of those
have been opposed to reducing taxes on cigarettes.
I stand here today to announce to the House that I am
generally in favour of the position announced by our leader on
February 8, 1994 in the House and that this position is consistent
with the wishes of my constituents.
I am going to reserve judgment, however, on each of the
specific measures of the action plan on smuggling until my
colleagues have spoken and provided the government with their
analysis and introduced their constructive alternatives to the
government.
While Bill C-11 does not contain all the measures announced
in the government's national action plan to combat smuggling,
we are convinced we cannot delay the debate of all the measures
put forward by the government in its action plan.
We cannot wait another week or another month to debate the
tax related issues in the House and fully inform all Canadians of
the full impact and consequences of the action plan on
smuggling. We should be debating all of those things right now.
The debate should start today on all the issues concerning the
public and not just the few measures introduced into Bill C-11.
How many people will become addicted to smoking before the
real debate on tax reduction can begin?
In their calls and letters, people and the organizations they
belong to told me some very startling facts. They told me that
840,000 more Canadians who will take up smoking as a result of
the reduction of taxes this government announced.
This includes 175,000 new teenage smokers. They told me
that 250,000 of these Canadians would die as a direct result of
their addiction to tobacco products. They told me that in Canada
there are 40,000 tobacco related deaths every year. This is
before the 840,000 new smokers join the line-up at our
hospitals and funeral homes. They told me that when the price of
cigarettes goes up by 10 per cent, tobacco sales to adults drop by
4 per cent to 9 per cent. Sales to teenagers drop between 10 per
cent and 14 per cent. Therefore it comes as no surprise that
smoking will increase as dramatically when taxes are reduced.
(1115)
They told me the extra health care costs associated with
treating diseases in 840,000 new smokers could cost about $1.3
billion a year. Has the government taken this into account?
They told me they could not understand why a smuggling
problem in Quebec should require the lowering of cigarette
taxes across Canada. They told me they could not understand
why the government has taken such broad action when the
commissioner of the RCMP has confirmed that 70 per cent of
smuggled cigarettes pass through the three Mohawk reserves
between Cornwall and Montreal.
They told me they were concerned about whether the
government's increased enforcement would be applied equally,
regardless if the criminals live on or off Indian reserves. These
are all questions they are asking. They also told me they could
not understand why the Minister of Health could support the tax
reduction on cigarettes when so many health organizations and
most of the provincial ministers of health are so opposed.
That is from my own province where there is strong
opposition. They told me they were concerned about the impact
the government's measures would have on federal-provincial
relations and relationships between the provinces, particularly
Ontario and Quebec.
The Reform Party welcomes this debate so these issues can be
brought before the House and before the Canadian public. As
everyone can see we need answers to many questions. Will the
government agree to answer these questions for us and for all
Canadians?
In conclusion I want to pose some questions that Canadians
have. First, what are the cost revenue implications in the short
and long term? Has the government done a study? Do we know
what the cost revenue results of this action will be?
Second, what will be the impact on the provincial health care
programs and the federal government's share of these increased
costs? Will we be able to afford the increased health care costs?
Third, what will be the impact on our law enforcement, justice
and legal systems? We need to investigate all of these things.
Fourth, how many jobs will be affected in the tobacco
industry? Has a study been done on this?
1659
Fifth, how many tobacco farmers will be affected by this?
Sixth, if there are truly no ``no go'' zones in Canada, what
impact will the stopping of smuggling on the Mohawk reserves
have on self-government negotiations? Has anyone checked this
out? Did government ministers and the Liberal caucus consult
their own members from Ontario and across Canada before
implementing these measures? Were all people asked? Were
these MPs not receiving the same information that we as Reform
MPs were receiving? Will we have answers to some of these
important questions before we vote?
I appreciate the fact that we have the opportunity to debate
this bill. I commend the government on its openness. I am glad I
am able to express some of the views of my constituents and my
own personal concerns.
The Reform Party believes that the national action plan to
combat smuggling could be improved. Our speakers will be
proposing constructive alternatives the government might wish
to consider and bring forward as amendments during the
committee stage.
I thank you, Mr. Speaker, for giving me the opportunity to
express my views on the government's anti-smoking measures
in Bill C-11. I hope we have a good day as we debate these
measures.
(1120 )
The Acting Speaker (Mr. Kilger): I would like to remind all
members present and others who are possibly following the
debate that we are now entering the next stage of the debate
where members will have their speeches limited to 20 minutes
duration and subject to 10 minutes of questions and comments.
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada): Mr. Speaker, I
am pleased to rise today to support second reading of Bill C-11.
As the Minister of National Revenue said, this bill is an
important component of the government's national action plan
to combat smuggling, the plan announced by the Prime Minister
in the House on February 8.
In launching this initiative, we underlined our commitment to
taking a comprehensive and decisive approach to deal with the
smuggling problem. This bill is a further demonstration of that
commitment. The Minister of National Revenue has described
how the provisions of the bill will support the revenue aspects
involving his department of our national strategy. The Minister
of Health will describe its health aspects. However, as Solicitor
General I want to discuss the provisions of the bill that support
the law enforcement component of the government's national
action plan.
[Translation]
In announcing the government's strategy, the Prime Minister
made it clear that we were attacking a national problem
affecting all Canadians. He also clearly indicated that the rule
of law had to be respected and enforced and that it had to apply
equally to all citizens.
[English]
Given the seriousness of the smuggling problem, we knew it
was imperative that we give police and customs officers the
resources and powers they need to do their jobs properly to
dismantle the smuggling trade, especially as it involves tobacco
and alcohol.
For that purpose we doubled the number of RCMP and
customs personnel dedicated to anti-smuggling operations. We
knew that numbers alone would not solve the problem. We
realized the increase in personnel had to be part of a greater law
enforcement strategy, one that took into account the needs of the
various police forces involved in the fight against smuggling.
This bill answers those law enforcement needs in three ways.
First, the bill will allow the government to designate on an as
needed basis provincial and municipal police services to enforce
certain provisions of the Excise Act that formerly were within
the sole jurisdiction of the Royal Canadian Mounted Police.
[Translation]
This means that when smuggled goods enter Canada, the
RCMP is the only law enforcement agency legally authorized
now to confiscate alcohol and tobacco under the present Excise
Act. If there seems to be evasion of provincial taxes, this is an
infraction against provincial law and the provincial and
municipal police forces can intervene.
[English]
Given the seriousness of the smuggling problem, it is only
common sense that we have the flexibility to allow not only the
RCMP but also other designated provincial and municipal
police services to seize contraband alcohol and tobacco
wherever they may find it and also to seize the equipment used
to manufacture them in Canada as well as the vehicles used to
transport these products. This bill will make such action
possible.
[Translation]
The Quebec Minister of Public Security and the Solicitor
General of Ontario asked me to have the members of their
provincial police forces, namely the Sûreté du Québec and the
Ontario Provincial Police, empowered to enforce the Excise Act
as I have just described.
(1125 )
[English]
The bill responds positively to these requests. It will allow us
to improve and expand on existing co-operation with provincial
and local police and improve as well the efficiency of joint force
operations. It will improve the efficiency of Ontario and Quebec
1660
provincial police and other designated municipal forces
working on their own in anti-smuggling activities.
We have emphasized our commitment to working with the
provinces wherever we can to ensure that the fight against
smuggling, especially of tobacco and alcohol, is as efficient as
we can make it. This bill is a demonstration of that commitment.
Another key element of the bill is that it will help law
enforcement authorities mount a more cost effective campaign
against smuggling. It will do this through amendments to the
Customs Act and the Excise Act that will allow the Minister of
National Revenue to authorize officials to destroy seized goods,
primarily tobacco and alcohol, immediately after keeping
samples to be used as evidence in court.
This is being done to reduce the increasingly high costs of
storing seized goods as seizures increase as they have done in
recent months. This is particularly true in the case of tobacco
products.
I am told that in Ontario alone the current costs to the Royal
Canadian Mounted Police for storing alcohol and tobacco it has
seized is close to $2 million annually. In British Columbia the
RCMP has run out of existing warehouse space and has had to
take over part of an underground parking lot to meet new storage
needs. These increasing overhead costs as seizures of alcohol
and tobacco increase are unnecessary and avoidable. The
proposed amendments will help us to control and hopefully to
reduce them.
I do want to say that in cases where the courts ultimately
decide-and that may happen from time to time-that goods
were improperly seized and later destroyed, the bill will require
full compensation to be paid to the original owner of those
goods.
Finally, the current provisions of the Excise Act authorize the
marking of cigarette packaging but not the marking of cigarettes
themselves. This is not satisfactory because we have seen that
certain criminal elements have become adept at counterfeiting
package markings to make contraband cigarettes appear
legitimate. The bill would broaden regulatory authority to
include requiring the marking of cigarettes if they are for legal
use in Canada, thereby helping enforcement authorities to curb
counterfeit and therefore illegal packaging operations. In
addition, clearly marked cigarettes would make it easier for
police to identify the use of contraband cigarettes.
[Translation]
To conclude, these three provisions-increasing the
jurisdiction of provincial and municipal police; authorizing
officials to destroy seized goods immediately; and marking and
packaging tobacco products made in Canada in a way that will
help police recognize smuggled goods-will strengthen law
enforcement in the fight against smuggled tobacco and also help
fight liquor smuggling.
[English]
Together with the proposals regarding the prohibition of the
sale of kiddie packs of cigarettes and other related matters to be
discussed by the Minister of Health, the bill will continue to
further the government's national objectives of ensuring respect
for the law, especially the law against smuggling, everywhere in
Canada and also protecting the health of Canadians.
We promised Canadians that our response to smuggling would
be far reaching and comprehensive. Given the complexity of the
contraband issue, it must be so. The bill provides valuable tools
for us in the fight against smuggling, especially of tobacco and
alcohol, and it supports our commitment to protect the health of
Canadians, especially of young Canadians. This Bill C-11 is an
important aspect of our overall effort and I ask members on all
sides of the House to give this bill their support.
(1130)
Mr. Garry Breitkreuz (Yorkton-Melville): Mr. Speaker, I
appreciate very much what the hon. minister has to say and agree
very much with the necessary measures that he has had to take.
I wonder if he would be able to comment on a couple of the
questions that I raised not directly related to Bill C-11. What
would be the cost of the law enforcement and what would be the
impact on our entire law enforcement, justice and legal system if
these extra measures are put in place? Have there been any
studies done on this? Do you know what the implications might
be on this? What would be the cost revenue implications in the
short and the long term of the tax reductions and export tax
increases?
That is not directly related to Bill C-11 and you may not be
able to comment on the second-
The Acting Speaker (Mr. Kilger): Order, please. I would
just like to remind all members to direct their comments through
the Chair and not directly to members opposite.
Mr. Breitkreuz (Yorkton-Melville): My apologies, Mr.
Speaker. I will try to do better.
I had those two questions. I was virtually finished. I would
just like to know what the impact would be on our law
enforcement, justice and legal system and also what the cost
revenue implications in the short and long term would be on the
tax adjustments that have been made.
Mr. Gray: Mr. Speaker, I do not have these figures with me. I
will endeavour to speak from memory. My remarks will be
subject to correction either later in this debate or more
particularly when the bill is studied in detail in the appropriate
parliamentary committee.
1661
I think the initial cost of the law enforcement measures, the
additional customs officers, the additional RCMP officers, will
be in the area of $100 million to $150 million a year.
The revenue implications of the tax reductions in the first year
I think are in excess, again I am speaking from memory, of $300
million. We estimate that this revenue loss will drop sharply in
subsequent years as the anti-smuggling program takes effect.
I offer these figures subject to correction as we study this
matter in committee, but I think this is something in the ballpark
area for what we are talking about.
Mr. Jesse Flis (Parliamentary Secretary to Minister of
Foreign Affairs): Mr. Speaker, I enjoyed listening to the
comments of the critic for the Reform Party and then the
Solicitor General. The two are sort of connected because the
critic for the Reform Party did quote from 70 agencies and
organizations which are opposed to the tax reduction. I received
similar representations and so on. He did not address, which I
think the Solicitor General addressed, the concerns of the Royal
Canadian Mounted Police.
On February 8 the Prime Minister did table in the House the
letter from N. D. Inkster of February 3 wherein he states: ``We
are at a point where existing RCMP law enforcement resources
are virtually incapable of turning the tide in this rapidly
expanding problem, given our responsibilities across Canada''.
Seizures have increased. This is what everyone is calling for.
Why do we not increase our seizures? He says: ``While seizures
have increased dramatically the extent of the problem has been
rising at a much faster rate with the involvement of organized
crime groups and as otherwise law abiding citizens engage in the
criminal activity through the open purchase of contraband. I am
convinced that a comprehensive strategy is required to address
the smuggling problem which goes beyond an enhanced
enforcement initiative''.
Now that we have been into this process where we are seeing
the results of decreased prices and increased law enforcement,
in the opinion of the Solicitor General and in talking to the
RCMP and other police forces could this problem have been
resolved without reducing the price of cigarettes?
(1135)
Mr. Gray: Mr. Speaker, the advice we received from the
commissioner of the RCMP was that tougher enforcement
measures alone would not have been sufficient to deal with the
problem. We have to respect that advice, coming as it does from
the head of one of the most respected law enforcement agencies
in the world.
It is understandable why this advice came because we are
dealing with a problem national in scope. It is true that there is a
certain focus in eastern Ontario and Quebec, but the information
also was that some 40 per cent of tobacco consumed in the
Atlantic provinces was smuggled, some 35 per cent of the
tobacco consumed across Ontario was smuggled, some 15 per
cent of the tobacco consumed in the western provinces was
smuggled and these numbers were rising sharply.
The information was that thousands of people were involved
across the country in distributing this contraband tobacco. Tens
of thousands more were buying it and consuming it. This
involved increasingly organized smuggling rings which were
not only involved in tobacco but also alcohol, drugs and
firearms.
When the problem was of such scope we had to tighten up and
hit the smuggling rings through tougher enforcement measures.
We also had to get the profit out of the smuggling of tobacco as a
means of reinforcing the tougher enforcement measures. This is
why, even though we knew of all the problems and concerns and
even though we knew this was not an easy decision, we knew
there was no simple solution to a problem of this complexity. We
knew that our national plan had to have in it a component
involving the reduction of domestic taxes on tobacco in order to
take the profit out of smuggling. Along with that we knew we
had to impose an export tax on tobacco and an excess profits tax
on the tobacco companies to further squeeze out the profit but
also to generate funds for a major anti-smoking program. We
knew all these things had to be done.
We concluded, and it was not something I have to say we were
happy about, it had to be done in the public interest, that the
national plan to deal with smuggling could not depend on
enforcement alone. It had to depend on tax measures which as I
have said did not only involve the reduction of domestic taxes on
tobacco but involved substantial tax increases on the tobacco
companies, an export tax on the products they made here and
sent abroad, because we knew that was a source of a lot of what
was smuggled back, and also a substantial tax on these tobacco
companies to fund a major anti-smoking program.
I have the greatest respect for the organizations quoted by the
hon. spokesman for the Reform Party, but I think most of their
communications were published before our plan went into
effect. They feared we would ignore the tobacco companies.
They feared we would ignore the need for an anti-smoking
program and of course we did not ignore those key necessities.
They are parts of our national plan. I hope that these
organizations will take another look at what we are doing. As I
said, I respect their concerns about the implications of tax
reductions but a lot of the other things we are doing involve
measures that they themselves have called for for years and now
we are proceeding to do them.
To sum up, enforcement is a necessary part of our program but
it was concluded reluctantly that enforcement alone would not
do the job. This just says something about the complexity of
governing in a country like Canada. Sometimes problems arise
for which there are no simple or easy solutions. Whatever way
you go involves problems, but it still means that governments
1662
have to take decisions and operate in the best interests of the
country. Then when the time comes they must submit
themselves to the judgment of the public. We are happy to do so
in this case and with respect to the other things we have done and
will be doing with the intention of serving the best interests of
all Canadians, of people in every part of this country.
(1140 )
Mrs. Brenda Chamberlain (Guelph-Wellington): Mr.
Speaker, I would like to mention that the marking of individual
cigarettes was a Guelph based idea. It came from a gentleman
named David Kennedy who is not the city treasurer, I would
note. He is an individual citizen who is working very hard along
with my constituency to find positive solutions for our problems
in government. I really want to thank him.
I would also like to make mention of the anti-smoking
program that we are talking about initiating. I would like to ask
the hon. member if associations such as the lung association
may be contacted to help us in this educational process. It may
already have many good ideas or many educational components
in place. In order not to have a duplication of services, perhaps
organizations like this could help us in our anti-smoking
campaign.
I would ask the hon. member if he would comment on that.
Mr. Gray: Mr. Speaker, I do not want to get too much in the
area of the Minister of Health. I know she is going to speak and I
am sure she is going to confirm that she and the government
want to work co-operatively with groups like the lung
association.
I am sure she will confirm that we want to take advantage of
their ideas, programs and facilities. I look forward and I think
the government looks forward to increasing close co-operation
between the Minister of Health, her officials and groups like the
lung association. This co-operation is necessary to make our
program work.
Ms. Hedy Fry (Parliamentary Secretary to Minister of
Health): Mr. Speaker, I want to comment in the absence of the
Minister of Health that in fact the Minister of Health has been
meeting with the lung association, the Heart and Stroke
Foundation, the Canadian Medical Association and all the
anti-smoking groups to talk about new strategies.
Mr. John Richardson (Perth-Wellington-Waterloo):
Mr. Speaker, I would like to make a few comments. One is to
thank the hon. minister for the action taken and to review what
happened that led to this.
This was a genuine needs driven exercise. Society had been
getting out of hand. We had models set up on street corners. We
had big money being made. There were ostentatious homes
being built, not just in specific areas. Money was being made
illegally and it became a way of life. It had to be snuffed out if
society was to preserve itself and its integrity.
I was personally pleased to see such action taken, particularly
the diagnosis by the government, patiently building its case
involving all aspects of our society before it took action. Based
on that diagnosis the prescription was laid before us in a four
point plan which covered very thoroughly and very
comprehensively all aspects that undertake to eradicate this
disease in our society.
Finally, we saw the true action in concrete form here. I hope
that at some stage we will follow it up with a real evaluation and
seeing that society is back on track with law and order.
Mr. Gray: Mr. Speaker, with your permission I would like to
make a brief response to the comments by the hon. member.
We should remind ourselves that this problem did not begin in
the three months or so that this government has been in office.
We are talking about a problem that built up for years without
this kind of needed action by the previous Conservative
government.
This government, along with its famous red book of plans for
creating jobs and developing the economy, also has had to deal
with problems that are surfacing that built up under the previous
government. We should remember this in recognizing that this
government has been willing to take action to deal with
immediate needs and concerns like the smuggling problem.
Furthermore, we want to make sure that we do this in a
balanced way. I am glad that the hon. member has pointed out
for society the dangers of this problem we are dealing with. That
is why our program has all these components. Yes, it has a
tougher enforcement component. Yes, it has a taxation
component but it also has a very important health related and
anti-smoking component.
I look forward to the comments of the Minister of Health later
in the debate to build on what this is all about. I also look
forward to the committee study where we can provide further
detailed information.
(1145)
[Translation]
Mrs. Madeleine Dalphond-Guiral (Laval-Centre): Mr.
Speaker, last February 10, the Minister of National Revenue
tabled a bill to significantly amend three other acts of
Parliament, namely: the Excise Act, the Customs Act and the
Tobacco Sales to Young Persons Act.
1663
The purpose of the bill is to more or less balance, through
various pieces of legislation, the government strategy against
smuggling, which was announced in this House by the Prime
Minister, on February 8, 1994.
Several people working in the health field expressed concern
regarding this national plan to fight smuggling, because of the
adverse effects it could have on the health of Canadians and
Quebecers. These people, including practitioners and health
care specialists, fear an upsurge in tobacco use in general, but
more important increased consumption among young people.
Even though the federal government's efforts to eliminate or
at least better restrict access to tobacco products for young
people may be commendable, the fact is that the situation is
serious.
The government is proposing amendments which, it says, will
reinforce some provisions contained in Bill C-113, which was
passed on March 25, 1993. As you know, this legislation
prohibits the sale of cigarettes to persons under 18 years of age.
Just what are those provisions? Part III of Bill C-11 contains
three amendments to the Tobacco Sales to Young Persons Act.
Under section 10 of the bill, the long title of the Tobacco Sales to
Young Persons Act is replaced by the following: an act to restrict
access to tobacco by young persons. According to the
government, this new title implicitly expands the scope of the
act and reflects much more accurately the new approach of
restricting instead of prohibiting.
Clause 11 adds three new elements to Bill C-111. Clause 7.1
prohibits the sale of packages containing less than 20 cigarettes.
As of May 1, 1994 producing or selling what are commonly
called kiddie packages, that is packages containing 10 or 15
cigarettes, will be prohibited. Those packages, which are
usually sold at a good price, are extremely appealing for young
people. Their relatively low cost is also an important incentive.
It is easy to start smoking. You never know, it could be fun.
Clause 7.3 prohibits the importation into Canada of any
tobacco product by a person under the age of eighteen, whether
for personal consumption or for someone else.
In recent weeks, we have looked at the legal and tax aspects of
the question, and particularly at the thorny issue of cigarette
smuggling. In the process, we also put the health and well-being
of Canadians and Quebecers on the back burner.
According to Dr. Richard Lessard, who is the Director of
Public Health for Health and Social Services, Montreal Centre
branch, it would be a mistake to limit the debate to legal and tax
considerations. A major issue takes precedence over tobacco
smuggling, and that is the health of Canadians and Quebecers.
Dr. Lessard himself said that tobacco consumption is
currently linked to 40 per cent of deaths due to cardiovascular
complications-to 87 per cent of deaths due to lung cancer, and
to 80 per cent of respiratory diseases. Low birth weight is twice
as common among babies whose mothers smoke than among
those whose mothers do not smoke. And currently, the increase
in smoking is higher among young women.
(1150)
Young Canadians start smoking between the age of 11 and 15.
At fifteen years of age, 22 per cent of males and almost 30 per
cent of females are smoking. Also, 65 per cent of these teenagers
are paying for their cigarettes out of their own pockets. Any
public policy, whether it is non inaction in fighting smuggling or
lowering taxes on tobacco, if not linked to aggressive preventive
measures, does encourage these vulnerable teenagers to start
smoking.
According to Dr. Lessard, tobacco-related health problems
cost $2.5 billion to Quebec and $9.5 billion to Canada, even
though, before the current crisis, tobacco consumption had
decreased by 40 per cent since
Several health officials have criticized the decrease in sale
prices of cigarettes following the tax reduction announced by
the government. They think it will only encourage the most
vulnerable groups, teenagers and young women, to start
smoking.
My colleague, the hon. member for Lévis, mentioned and
rightly so the devastating effect of smoking among our young.
We think educational measures must accompany the legislation
which was announced. We must develop new programs and
support the current ones by investing in mass advertising.
We must also make businesspeople aware of their social
responsibility. Bill C-111 goes ahead by implementing
measures concerning tobacco sales. For example, the stamp
prohibiting the sale of tobacco products to minors is a step in the
right direction.
We also need to make some long-term investments in an
anti-smoking campaign. I am pleased to report that the Quebec
government has undertaken a major anti-smoking campaign to
urge young smokers to change attitudes. Several governments in
Canada have decided to follow suit.
Bill C-11 includes provisions concerning the Excise Act and
the Customs Act which confer new powers on the minister and
various police forces in Canada and in Quebec responsible for
enforcing the law throughout the country. According to the
government, these provisions will provide the new legal tools
which are needed to achieve better enforcement of the law and to
continue the fight against smuggling.
1664
One interesting provision of this bill is found in clause 9
which says that the minister may authorize an officer to sell or
destroy the seized goods.
It goes without saying that the government will never
proceed, I am convinced, with the sale of seized tobacco
products. This is commonly done in some American States but it
would be out of place in this country given the current situation.
However, the equipment and facilities used to carry or stock
these goods could, of course, be sold. This could become an
interesting source of funds to be reinvested in anti-smuggling
programs or in a public awareness campaign.
(1155)
In order to be successful in its fight against the harmful effect
of tobacco, the government must maintain the National Strategy
to Reduce Tobacco Use. As its title says, the main objective of
this action plan, developed in co-operation with the provincial
governments, is to reduce tobacco use.
Every member of the House knows that this strategy has three
objectives: to protect the health and rights of non-smokers, to
prevent non-smokers from picking up the habit and to help
smokers who want to quit smoking.
In this context, in order to effectively reduce tobacco use,
there has to be a concerted effort by all levels of government and
by non-governmental organizations.
We believe that the government must harmonize the various
legislative measures in place to combat the use of tobacco and
its effects. We believe that the measures proposed in Bill C-11
respecting the sale of tobacco to young people must be
accompanied by a genuine desire to eradicate smoking.
The problem of tobacco use will not be solved simply by
making it harder for young people to obtain tobacco products
through more or less coercive measures aimed at merchants,
producers and consumers.
The government must not shirk its responsibilities. As Dr.
Lessard said, our governments have already made a
commitment to health and have understood that making a
long-term investment in our collective health will help us, as a
society, solve our serious economic problems. During the
present budget cutting period affecting health care in Quebec,
and probably in other provinces, how can we explain the
omission of health considerations in the debate since the major
consequence of this crisis is sickness?
How can we fail to see that the only winners are tobacco
companies? Should our society yield to an industry which takes
our own health hostage and which economists say is steadily
losing ground in our economy?
We understand the important economic and legal issues
involved in the revolt of some elements of our population
against taxes, and the general outrage over smuggling and its
corrupting effects. Prompted by the rumblings of public
discontent, our ministers of justice and finance laid out some
very convincing arguments on that point.
It seems urgent and critical to ask the premiers to listen also to
the arguments of their health ministers and to renew their
commitment to the well-being of the population.
It is crucial to reintroduce social and human dimensions into
the present debate. No government should be allowed to forget
the health and well-being of its population for purely fiscal
considerations.
[English]
Hon. Diane Marleau (Minister of Health): Mr. Speaker, it is
my pleasure to speak to the section of Bill C-11 which will
amend the Tobacco Sales to Young Persons Act. Action on the
proposed amendment is one more important step in our ongoing
efforts to address the problem of tobacco consumption,
particularly among Canadian youth.
The Tobacco Sales to Young Persons Act was proclaimed into
law Tuesday, February 8, as a component of the government's
anti-smuggling initiative. It raises the legal age of purchase
from 16 to 18. It restricts the location of cigarette vending
machines to bars, taverns and similar beverage rooms. It also
increases the penalties for selling tobacco to minors.
(1200 )
A new range of fines has been established for any sale to
persons under the age of 18 and includes sales through a vending
machine. For a first offence the fine will be up to $1,000, for a
second offence up to $2,000, up to $10,000 for a third offence,
and for subsequent offences a fine of up to $50,000 can be
levied.
The amendment now before us relates to kiddie packs of
cigarettes, as they are commonly known. Kiddie packs are
packages that contain fewer than 20 cigarettes and are usually
available in packs of 15 and 5. I have seen these kiddie packs.
They often look like a chocolate bar. It is very surprising to see
these packages of cigarettes that could be any kind of a
chocolate bar being sold to young people with no questions
asked. It is very important we ban them.
[Translation]
Kiddie packs began to appear in Canadian stores in the late
1980s. Producers of tobacco products said at the time that they
had taken that approach to please adult smokers but, like
Canadian health organizations, I believe that their availability
increases the risk that young people start smoking.
Those packages have a special appeal for young people
because they look attractive and their price is lower than that of
regular packages. They are more affordable for young people
who do not have much money, and younger people find them
easier to hide from parents and teachers. As I said, some
1665
packages contain only five cigarettes, and look like a chocolate
bar.
A poll taken in Nova Scotia in 1990 indicated that the
majority of teenagers who smoke buy kiddie packs. Among
sixth grade smokers, in the 11 to 13 age group, almost half of
them buy kiddie packs. That research was done four years ago,
but the situation is probably the same today.
[English]
Bill C-11 will prohibit the sale of packages containing fewer
than 20 cigarettes. It will also prohibit tobacco manufacturers
from producing packages that contain fewer than 20 cigarettes.
For selling and for offering for sale kiddie packs, the legislation
provides for a maximum sentence on summary conviction of a
$2,000 fine or six months, or both. On conviction on indictment
the maximum sentence is a fine of $100,000 or two years, or
both. For producing kiddie packs the maximum sentence on a
summary conviction is a $200,000 fine or six months, or both.
On conviction on indictment the maximum sentence is a
$500,000 fine or two years, or both.
The government recognized that the action plan to combat
smuggling and the tax measures associated with it would pose
health risks. Let me assure members that we are just as
determined to deal with tobacco use as we are with the
smuggling problem. This amendment is just one more step in
our efforts to eliminate tobacco consumption.
The action plan included a very strong health component. One
element of that was legislative. In this area we have taken
immediate action through proclamation of the Tobacco Sales to
Young Persons Act and introduction of the amendment
concerning kiddie packs.
[Translation]
We are also moving to give more teeth to law enforcement.
Some 300 Health Canada inspectors have already been
designated under the law and, as an interim measure, they will
be available to monitor law enforcement while carrying out
other tasks. During the next two months, we will publish a
training kit and new inspectors will be hired to take over and
control the enforcement of the Tobacco Sales to Young Persons
Act.
Other ongoing enforcement activities include sending to all
retailers in Canada explanatory letters and signs. Those signs
must be posted in a prominent position in all places where
tobacco products are found or sold. Any retailer who refuses to
post those signs indicating that it is prohibited selling tobacco
products to persons less than 18 years old will be liable to a fine
up to $250.
(1205)
We will also put ads in newspapers to inform retailers of their
obligations under the new act.
[English]
As well we are looking at what action might be taken in such
areas as plain packaging and product standards. Plain packaging
contains no distinctive colouring, although it would permit the
use of trademarks. Many health advocates feel that plain
packaging, making products less distinct and promotion much
more difficult would be an effective deterrent.
In the area of products standards, we are looking forward to
bringing new regulations requiring manufacturers to provide
information on the packages about the chemical compounds
contained in tobacco and tobacco smoke.
A comprehensive educational campaign is also being
mounted. It will be aimed at the general public and at key
groups, such as young people and women, and will be developed
in consultation with the provincial and territorial governments
and the non-government health organization.
Action has already begun on a number of
promotional-educational activities. A national media campaign
began last week directed primarily at young people through the
radio and television stations they most often watch and listen to.
We will also be working closely with our health group and
provincial government partners to develop a system for
monitoring tobacco consumption, particularly by young people.
The acquisition of consumption information on a regular basis
will be essential in measuring the success of our initiatives and
planning the development of even more effective action in the
future.
[Translation]
Tobacco use among many groups which are hard to reach is
alarming. Those groups do not usually respond to traditional
anti-smoking ads. We will be making special efforts to reach
them.
We will also make more efforts to reach families, new parents,
health care people and other people who are important role
models for children. We will support education programs and
community activities.
A health surtax will be levied on profits of tobacco products
makers for three years to finance special initiatives. We believe
that tobacco companies are responsible and that they must pay
the price.
[English]
We are looking over the next three years at one of the most
concerted efforts ever undertaken in the health education field.
This is the toughest program that any jurisdiction has taken
against tobacco products. During the past several years our
co-operative initiatives have been very successful in reducing
consumption among the population over age 15. I am confident
these new resources will permit us to build on those successes.
1666
To do so will require continued co-operation and close
collaboration.
I have had discussions during the past two weeks with
representatives of health organizations and with provincial and
territorial ministers of health. At my recent meeting with
ministers of health I offered to work with them on the best way
to use the resources provided in the new federal anti-smoking
strategy.
My officials and I are committed to seeking the advice and
assistance of these groups as together we strive to reduce the
demands for tobacco, the number one cause of preventable death
in Canada.
[Translation]
Mr. Antoine Dubé (Lévis): Mr. Speaker, I listened very
carefully to the Minister of National Health and Welfare as I do
every time she answers questions in the House about smoking.
Here again, the minister means well with these measures to
prevent smoking, but as I said during my speech, the Official
Opposition is somewhat apprehensive about the enforcement of
these measures. You referred to the cost of so-called kiddie
packs-packages containing fewer than 20 cigarettes-which
will now be prohibited. I think we should remember that because
taxes have been cut, in Quebec at least, the price has gone down
considerably, so that today, a pack of fewer than 20 cigarettes is
much cheaper. In fact, a pack of more than 20 cigarettes is now
cheaper than a pack of 15 cigarettes used to be. In other words,
cost is an important factor.
(1210)
I would appreciate it if the minister could give us her thoughts
about this and whether she thinks this aspect was properly
evaluated, because there has been a drop in the cost of a pack of
cigarettes. We know that people who smoke more than 20
cigarettes a day are considered to be heavy smokers, which is
very dangerous to one's health.
The minister mentioned new inspectors. I wish she would
specify, if she is in a position to do so today, the number of new
inspectors to which she is committed and what this will cost. As
for the fines, I do not think they are all that severe. It all depends
on the offence and the extent of the offence. I would like to tell
you a story about the legislation to prohibits smoking in
government buildings.
At the CBC there was a massive operation to enforce the new
legislation as soon as the rule came into effect. The amount that
people were fined added up to a considerable amount of money,
and when employees protested, it all ended without anyone
paying fines.
My point is that when the government decides to enforce this
legislation, I hope it will do so fairly and squarely across Canada
and will have the requisite number of inspectors to do so. We
also have to provide for cases where one will not be able to count
on the co-operation of provincial or other police forces. We will
need a lot of inspectors to cover the territory involved. I am not
so sure they will be able to do that. There is also the risk of
partial enforcement.
I mentioned what happened at the CBC, but it could happen in
any other company or community, when all of a sudden
individuals are fined and notice that meanwhile, people
somewhere else can continue to smoke with impunity, and I am
thinking of young people particularly. This may produce a sense
of injustice, of being picked on while other people can go on
breaking the law without being penalized.
I would appreciate the minister's views on the subject.
Ms. Marleau: Mr. Speaker, I should explain that the fines are
imposed in the case of sales of cigarettes to young people. It is
true we now have inspectors, but we had them before. Their
mandate is to ensure that retailers do not sell to young people.
However, the objective is to make all retailers be very careful
about whom they are selling cigarettes to. As you know, some
young people do not look very mature. They look more like
10-year-olds when they come to the convenience store to buy
cigarettes.
Store owners should realize that these kids should not be
buying cigarettes, that they should not have them, and that it is
against the law. Of course we want the inspectors to do their job,
but we are convinced that most retailers are or will be aware of
the harmful effects of smoking. We want to ensure that young
people do not have easy access to cigarettes. That is very
important. So that is the other reason for removing kiddie packs.
As you know, when these kids come home with a package of
cigarettes, their parents notice. These kiddie packs are much
easier to hide. When you see a kiddie pack, you know it is
intended for kids. That is the whole purpose.
(1215)
Selling cigarettes to kids is the opposite of what we want to
do. We are sure we will get the co-operation of most retailers
because this is essential to the well-being of Canadian society.
[English]
Mr. Garry Breitkreuz (Yorkton-Melville): Mr. Speaker, I
commend the Minister of Health on her presentation. I
appreciate what the government is trying to do in this area. It has
taken a balanced approach and has tried to address all the issues
involved in this very complex problem.
My constituents have raised another health problem young
people experience which relates directly to this issue. Some
experts I have heard addressing this problem indicate that
alcohol could also be one of the great problems we will be faced
with. After all these measures are taken on tobacco, society's
criminal elements will be looking for new ways to profit. There
1667
is a large market in alcohol and they would target young people.
Smuggling could suddenly become very profitable.
In light of the fact that this is a big problem among young
people and is a potential smuggling problem, would the minister
be willing to commit to take similar initiatives in the area of
alcohol abuse and the smuggling which will take place as
tobacco becomes controlled? Would she be willing to comment
on or address this problem?
Many constituents are wondering about the domino effect.
Will the reduction of taxes on tobacco mean a reduction of taxes
on alcohol and many other products that are susceptible to being
smuggled?
Ms. Marleau: Mr. Speaker, we are determined to end the
smuggling network. That was the reason for bringing down the
prices on cigarettes.
While we realize some alcohol is coming through the same
network it is certainly not the same size of a problem, although it
is a problem. We are convinced we will win against the networks
in the law and order problem we are addressing.
When it comes to sales to young persons, liquor is not a
product that can be sold to young people anywhere in the
country. It is not legal now. In terms of sales of tobacco products
to young people, we are trying to establish the same kind of
limits. Then everyone knows it is just as illegal to sell tobacco to
young people under the age of 18 as it is to sell alcohol to them.
That is the basis of the changes we have brought forward. It is
very important that all the people of Canada co-operate in this
matter.
Mrs. Jan Brown (Calgary Southeast): Mr. Speaker, I too
appreciate very much the remarks of the Minister of Health.
I wonder if the minister could respond to my question with
respect to the briefing we had yesterday. This is not meant as a
challenge in any way. It is for my clarification.
It is my understanding that the manufacture of kiddie packs
will continue until May 1, 1994. That means there are still two
months of production left for this particular kind of package and
I understand it was for the transition for the manufacture of this
product.
It seems somewhat unusual, almost to the point of ludicrous
that we would have a package available in the marketplace for
two months when we are looking to enforce a particular law.
(1220 )
Could the minister give her assurance that she will look into
this and explain how she will ensure that the kiddie packs are not
sold to minors from now until May 1, 1994?
Ms. Marleau: Mr. Speaker, I share the hon. member's
concerns.
One of the challenges we face is that we are now debating Bill
C-11 and it is not yet law. The sooner this law can be passed the
sooner we can end the sale of these kiddie packs. It is not
unlawful to sell or to manufacture them until the law receives
final approval. It is essential that the bill move on as quickly as
possible.
The manufacturers are very much aware. The notice is out
there that very quickly it will be unlawful to produce and sell
them.
It would be well and wise if we could get this piece of
legislation through all stages very quickly including the Senate
and royal assent stages.
Mrs. Jan Brown (Calgary Southeast): Mr. Speaker, I rise
today as the elected representative of the constituents of Calgary
Southeast and as such I speak for and with them.
Having said that and anticipating this debate, I not only
tracked the calls and letters that came to me, but I also
conducted a poll in my riding. Of those polled, 58 per cent
opposed the government's proposed tax rollback. I am pleased
to bring their collective wisdom and opinions to the debate
today.
The motion before us has three components. I will speak in
particular to the amendments to the Tobacco Sales to Young
Persons Act. I do have some personal thoughts and insights I
would like to bring to bear as well. Before doing that, it is
critical to consider what this legislation is intended to
accomplish.
The government alleges it is concerned with the massive
smuggling problem facing our country today. Therefore Bill
C-11 has been put forward by the government as part of a
national action plan to combat smuggling. This legislation and
the accompanying plan to combat smuggling tell me four things.
First, the legislation shows that the Government of Canada
cannot enforce its own laws. Second, it shows that the influence
of the tobacco industry is highly sophisticated and tremendously
powerful. Third, Bill C-11 shows us that the deficit is not a
concern of the federal government. Fourth, the legislation
clearly shows that the federal government has little appreciation
for the health and welfare of Canada's youth.
I will deal with the first point, that the Government of Canada
shows us it cannot enforce its own laws. The government admits
there is a substantial problem with smuggling, that people are
going outside the law to maximize their own personal profits.
However instead of strictly enforcing the laws as they now exist,
the government chooses to change them. This is a vain hope.
This legislation may put an end to the high level of tobacco
smuggling but it is a half measure and will not stop the
smuggling.
1668
I believe in a good challenge to any debate. My first challenge
to the government is this: Why was the law so poorly enforced
that new measures are now required? Will these make the new
law any easier to enforce?
(1225 )
My next challenge questions the influence of the tobacco
industry. This highly sophisticated and powerful lobby has
finally succeeded in getting the government to backtrack on the
largest contributing factor to the decrease in tobacco sales. That
was high taxes on tobacco products. The people of Canada are
already cynical and have lost faith in the credibility of the
government. How will the government restore that faith given
that it appears to have bowed to the pressure of the tobacco
industry's lobby efforts?
The federal government in proposing Bill C-11 will forgo
revenue in an attempt to stop smuggling. In so doing the federal
government makes it clear that our deficit and our debt are not
priorities.
The Prime Minister admitted that in 1994-95 alone the
government expects to lose $300 million in revenue because of
the reduction in tobacco taxes. The Prime Minister goes on to
suggest the health promotion surtax on profits of tobacco
manufacturers will generate some $200 million over three years.
The government release on the action plan to combat smuggling
suggests this $200 million will fund a range of health promotion
activities, including measures to reduce smoking. This sounds
fine and good, but who will pay for it?
The government estimates the tax revenue lost to be $300
million in the first year alone. It then asserts it will generate
$200 million from taxes on the tobacco industry. These numbers
are questionable to me. At best there will be a shortfall of $100
million, not including the further cost of the health promotion
programs the government says are a priority. This immediate
shortfall of $100 million is substantial but does not compare to
the health costs to be incurred under the plan.
By reducing taxes we are encouraging existing smokers to
smoke more and we are making it easier for new smokers to get
hooked on the habit. Smokers will add further strain to our
health care system. They do not require care today, but 10 to 15
years from now the government will regret the day of this
decision.
Studies and experience over the past few decades have proven
there is a direct correlation between smoking and heart disease
and smoking and cancers of the lung, the oesophagus, the
mouth, the tongue and the larynx. It has also been shown that
smoking has a detrimental effect on unborn children.
What will be the eventual financial cost? The numbers just do
not work for this program.
The third challenge to the government is to decide how best to
address the problem of the deficit without complex tax
alternatives. This is not a solution to cigarette smuggling; quite
frankly it is just blowing smoke.
My fourth point is that Bill C-11 shows that the federal
government really has very little concern for the health and
welfare of the nation's youth. Taxes on cigarettes and tobacco
products were high for a reason: they brought the government
revenue. More than that statistics showed that high taxes
directly correlated to a decrease in tobacco sales especially
among our youth. Simply put, cigarettes became too expensive.
Health and Welfare Canada states that when the price of
tobacco products rises by 10 per cent, sales to adults drop by 4 to
9 per cent. More significant, sales to teenagers drop by 10 per
cent to 14 per cent.
(1230)
This legislation has some very serious implications for the
health of our nation, particularly our youth. Dr. Robert Allen is
the Canadian professor of economics who contends that if the
tax cut to the price of tobacco in Quebec is implemented in the
rest of Canada it will result in 840,000 more smokers and
175,000 of them will be teenagers.
The government contends that it has a plan that will keep our
youth from smoking. The idea, as I see it, is to keep cheap
cigarettes out of the hands of our young people. The
government, however, chooses to change a plan that was
working well. Smoking was on the decline in Canada and young
people including my daughter were being discouraged from
smoking.
My daughter, despite objections and at first unknown to us,
began smoking at the age of 12. She would smoke several
packages a week and nothing we said or did made any
difference. When we travelled in the United States she would
buy cheap cartons of American cigarettes and smoke like a
chimney until they were gone. However, back home again she
was back to her usual habit of a couple of packs a week. She
could not afford the high cost of cigarettes.
As these costs have increased, her usage has decreased. It
saddens me to think that a government action will now further
encourage my daughter's smoking addiction.
The government proposes another idea to reduce the number
of young people smoking and that is banning the kiddie pack. I
believe this idea to be ridiculous. As a young constituent
working in a local gas station confided, mostly it is the older
people who buy kiddie packs. The cool kids buy packs of 25 and
not kiddie packs.
There will always be a part of our population that tries to beat
the rules, and undoubtedly the moral hazard will take its toll on
this legislation. If young people want cigarettes, and thanks to
Bill C-11 they will be able to afford them, they will be able to
get them. They will lie in bed at night thinking about how. This
1669
government has only increased the age of prohibition and even
that becomes irrelevant when there is no commensurate will to
enforce it.
There has only been one measure that has worked in
minimizing the access of our youth to tobacco products, high
taxes. I challenge members opposite me and all my colleagues
on this side of the House to recognize the wisdom of this
measure. As a young adult recently said to me, the government
should raise taxes on those things that are bad for us and lower
taxes on those things that are good for us.
Governments must recognize their social responsibility to our
youth. When this happens, parents like me can say thanks.
Mr. Julian Reed (Halton-Peel): Mr. Speaker, I have a
couple of questions. I was listening to the hon. member and her
obvious genuine concern about the fact that smoking is an
addiction. I speak as former chain smoker. I ended that practice
about 25 years ago.
There is a little mythology that has to be cleared up here. I
wonder if the hon. member could tell us who she thinks is
smoking the contraband cigarettes, who she thinks is smoking
the cheap stuff.
(1235 )
If you go into schools you will find that counterfeit cigarettes
are being sold out of the trunks of cars.
The Acting Speaker (Mr. Kilger): Order, please. I remind
members once again of the wisdom of directing questions
through the Chair as opposed to what may seem a more personal
way of ``you in this'', ``you in that'' and ``un vous ici, un vous
la''. Put me to work or keep me in my chair but, please, through
the Chair.
Mr. Reed: Thank you, Mr. Speaker, for that correction. I will
start again. Pardon the oversight.
It is the young people who unfortunately have been buying
these lower priced contraband cigarettes. As a result, more and
more young people are being exposed to tobacco because of the
smuggling. Therefore attempts had to be made to correct the
problem.
I advise the hon. member that the situation in which the tax
has been dropped is considered a temporary situation and will be
corrected as soon as the issue of tobacco smuggling is corrected.
Mrs. Brown (Calgary Southeast): Mr. Speaker, I thank the
hon. member for his comments.
I want the member to acknowledge that I was speaking from
some personal experience and from the point that I wish to
challenge the change to the law, why we are changing the way
we have been performing our function and why the government
feels that laws which were in place prior to this one were not
good enough. I tried to make that point in my discussion.
I must say I did not realize this change was only a temporary
one. That really astonishes me. I thought we were debating a
change that was for the long term. I will just leave it at that.
Ms. Susan Whelan (Parliamentary Secretary to Minister
of National Revenue): Mr. Speaker, I inform the hon. member
with regard to a few of her earlier comments that she was
incorrect in saying the government was not concerned with law
enforcement. We are very concerned with law enforcement.
That is one of the main reasons behind the bill.
The RCMP commissioner has told the government that we
needed to take action and that is what this plan is. It is action so
that we can have law enforcement in the country.
I remind the hon. member that this problem started long ago.
When we came upon the scene a short 100 days ago, this
government was faced with a momentous problem. It was not a
small problem and it was not something that just started. It is
something that has been going on for years. We are taking
action. We are addressing the problem.
Second, I also remind the hon. member that we are concerned
with the deficit and that is why we are taking action. We are
losing over a billion dollars because of smuggled cigarettes.
There are 75 million cartons being smuggled back into Canada.
That is a serious problem that needs to be addressed and that is
what the government is doing.
Does the hon. member not believe that spending an additional
$185 million in health is not a good idea, is not the idea behind
education or is not an idea to promote the awareness of the
problems with smoking? Is that not a concrete answer to some of
the problems raised by the health groups? This government
looked at the whole package.
We looked at the effect of lowering the tax. We looked at the
concern from the health groups. We put together a whole
package. I would like the hon. member's comments.
Mrs. Brown (Calgary Southeast): Mr. Speaker, I have to ask
clarification from the hon. member on a couple of things. I
appreciate the comments from the other side. They very much
enrich the kind of debate we are having here today.
(1240 )
I believe the Solicitor General earlier in the discussion this
morning said tougher law enforcement would not have achieved
the desired result to end smuggling. Therefore I have to ask why
the hon. member suggested so strongly that my comments about
law enforcement were not completely correct.
I believe in my statement I gave a challenge to this debate
concerning why we are changing our laws at this point. Enforce-
1670
ment is a very important element of any law structure. It seemed
to me that those who are there to enforce the law have a
responsibility to do that to the full extent. I was just asking the
question about why we have to change the law. The Solicitor
General said that tougher law enforcement would not have
achieved the desired result. I am a little confused as to the point
the member was trying to make.
I concur with the hon. member that education is a very
important facet of what we are trying to accomplish. I believe,
however, that by opening the door to increased smoking we are
looking at a huge health problem further down the road.
Mrs. Rose-Marie Ur (Lambton-Middlesex): Mr. Speaker,
I address a few issues presented by my colleague. As a former
producer of the product and a health care professional and now a
politician, I can certainly look at this through many windows.
Being a member representing tobacco growers in my riding, I
felt I had to comment on some of the statements made earlier.
As to the fact of the government not being concerned with the
deficit, with the amount of contraband cigarettes we are not
collecting revenue the way it stands now. Therefore the option
given to us to roll back the taxes was an option that would help
alleviate this problem and perhaps down the road reintroduce
the taxes so that revenue would be regenerated.
With regard to the government's lack of concern for health, I
have always been a non-smoker. My husband was a smoker and
I have two children who are non-smokers. It was their decision
not to smoke. It was their choice. They were certainly exposed to
the element. We all are and it is our choice to do so. The
government has not legislated common sense.
Therefore I speak on the issue from the respect that it is a legal
product and we have to address it in that manner.
Mrs. Brown (Calgary Southeast): Mr. Speaker, I have
nothing to say except that those comments are well received and
well said. I thank the hon. member for them.
The Acting Speaker (Mr. Kilger): Before recognizing the
member for Scarborough-Rouge River, I wonder if he could
indicate to the Chair if he will be sharing his time or using the
full 20-minute complement.
Mr. Derek Lee (Scarborough-Rouge River): Mr. Speaker,
it is my understanding that members of the government side will
be splitting their time from here into 10-minute segments.
I am very happy to be able to speak to the issue involving the
government's initiative to address the very serious problem of
tobacco smuggling. It is my view the problem is not just a
smoking problem, not just a revenue problem.
In my remarks today I want to choose a perspective that would
target organized crime as the problem. Those who are
professional organized criminals would probably argue with me
that they are not the problem but rather simply a manifestation
or symptom of another part of the problem. I differ with them at
this time given the size and volume of the smuggling. In other
very obvious problems in our society, organized crime is very
much a part of the problem and I believe it is integral to the
solution to this program and integral to solutions to other
criminal problems we have in our society, which I will refer to
later in my speech.
Bill C-11 has been adequately described here by the ministers
and members from both sides of the House who have discussed
it. It will facilitate police enforcement of the anti-smuggling
measures. It will also permit authorities to begin or to continue
or to redouble their efforts against the incentive to smoke.
(1245)
These are some new tools provided by Bill C-11 which I
regard as relatively small in stature in dealing with the current
problems of cigarette and other types of contraband smuggling.
I think I agree with the previous speakers that enforcement is
very much a part of the solution. However, it is not the only
solution.
The measures announced by the Prime Minister on February 8
will hopefully permit us as a society in the short run and in the
long run to deal with the problem of cigarette addiction. At the
moment our initiative I believe deals with organized crime,
revenue and interdiction, re-establishing an orderly Canadian
market in the commodity of tobacco.
What is the background here? I sat in the last Parliament for
five years. Relatively early in that Parliament it became
apparent that cigarette smoking was going to be a very serious
problem. It grew and grew to the point where 40 per cent of the
existing $12.4 billion Canadian tobacco industry was being
controlled by smugglers. It was putting approximately $5
billion per year into the pockets of smugglers.
I point out that 95 per cent of the smuggling operation was
controlled by organized crime. That type of smuggling, the
volume of it, and the existence of organized crime was causing
very obvious social and economic distortions at least regionally
in our country and perhaps arguably across the whole country.
If action had not been taken at this time, I suppose we would
wish that action had been taken a year or two years ago. In any
event, we are acting now. If action had not been taken, it is
estimated that more than 50 per cent of the cigarette market
would have been dominated by the so-called smugglers,
organized crime, with a value to organized crime of $6.2 billion.
1671
Illegal tobacco seizures by the RCMP increased from 303 in
1990 to 5,044 in 1993, but even at that the RCMP told us that
they were only seizing about 1 per cent of the illegal tobacco
market.
Trafficking in illegal tobacco products had become an
extremely lucrative enterprise. The profits to be made were so
high that individuals involved in the drug trafficking trade are
now engaging in the smuggling of contraband tobacco products.
Traditional organized crime groups are also very much
involved.
I want to cite a remark by the President of Colombia, a
country that certainly knows organized crime very well, as I
understand it, and is very much involved in the very unfortunate
sequences that have befallen it in the drug trafficking trade. The
President of Colombia said that the only law drug traffickers
have not broken is the law of supply and demand. That is
essential to my perspective in this particular intervention.
With the profit potential from contraband cigarettes gone, the
organized crime elements that cause cigarette smuggling to
virtually explode in recent years in our view will likely
withdraw from the activity of smuggling cigarettes. With this
new initiative the problem of contraband cigarettes will be dealt
an effective and decisive blow.
(1250 )
Cigarette smuggling is not the root of the problem. It is only a
symptom, as I said before. The same applies to other problems
of smuggling involving alcohol, firearms, pornography,
prostitution, gun smuggling and gambling. The root of the
problem is the opportunity for profit that each of these areas
provides to organized crime.
When the Prime Minister responded, he responded by first
listening to the experts. The experts, the police authorities in the
country, told the Prime Minister that they, by using existing
enforcement methods, could not control the volume of
smuggling and illegal activity being fostered by organized
crime. The government's response therefore is one that is based
on the advice of the experts. We could see no other way to deal
with this.
Our program is strategic and not based on a simple issue of
profit or a simple issue of revenue or a simple issue of a person
deciding or not deciding to smoke. We must look at the whole
problem and I believe that is what we have done.
Organized crime has more monetary resources than many
police agencies. Crime organizations typically use sophisticated
equipment to identify intrusive devices and employ
countersurveillance methods to elude detection while they are
conducting their illegal transactions. They employ computers,
legal and financial experts and others to assist in the day to day
operations of their illegal enterprises. They use sophisticated
money laundering techniques to divert substantial portions of
their profits into legitimate businesses.
Organized criminals attracted by high income activities, and
these are high income activities, seek out crimes which produce
the highest profit with the lowest risk. Current illegal activities,
I have mentioned some of them, include not just tobacco, but
alcohol, guns, gambling, prostitution, alien smuggling and
pornography.
We could I believe literally fill our jails to overflowing with
drug addicts, drug dealers and smugglers. As long as there is
money to be made in the black market for any of these
commodities, organized crime will have an incentive to recruit
other people, other consumers and find other ways to carry on
their illegal activity.
Integral to our strategy is the need to disable organized crime,
at least in this field of tobacco smuggling.
Some examples of expert opinion are from Thomas O'Grady,
Commissioner of the Ontario Provincial Police. He states: ``Law
enforcement communities, the public and appropriate levels of
government'', that includes us, ``must continue to work together
in developing laws and enforcement programs to make it both
undesirable and unprofitable to organized crime groups to gain
inroads in areas of gaming operations''. There are similar views
from all around the world published in Canadian legislatures,
the United States congressional records, the United Nations
records, European records, all focusing on this serious problem
of profit as an incentive to organized crime.
I believe, much in the way we dealt with this particular
problem of tobacco, we must also deal with drug addiction. We
must be strategic. I would like to think that this government will
have the ability, the opportunity and the support of Canadians to
be able to deal with that other great evil of drug addiction by
looking at the entire picture of taxation, of interdiction, of
distribution of supply and demand, of all the laws when we
address this serious problem of drug addiction.
(1255 )
Ms. Hedy Fry (Parliamentary Secretary to Minister of
Health): Mr. Speaker, I rise to support Bill C-11.
As members know, part of this bill deals with the Customs Act
and the Excise Act and it therefore deals with issues such as
seizure, enforcement, identifying smuggled goods and in fact
with a lot of the law and order issues that pertain to smuggling.
The other part of this bill deals with the effects on young
people of the lowering of the tobacco prices. I want to say that as
a physician, my expertise has always been in the matter of
health. My expertise is also with regard to smoking and
anti-smoking issues. I have been involved in this issue for many
years.
When I came to this House I was only aware of my one
perspective. The issue to me was solely the effect of smoking on
health. That issue has been well related by everyone here in the
1672
House today. It is no secret to anyone that smoking is the single
most preventable cause of death and illness in the world.
It is no secret to anyone that the World Health Organization
has said that from the year 1990 to the year 2000 if smoking
continues at the rate that it is going, the number of people dying
in the world from smoking will be over 40 million people which
will be greater than all of the people who have died in all of the
wars in the 20th century. That tells members that smoking is in
fact a deadly disease and a deadly issue.
However, when I came to the House I was not aware of the
other side of this issue, the issue of smuggling. It is well
documented that in fact the increase in tobacco prices has had a
significant effect and is perhaps the biggest gun in the whole
strategy of anti-smoking legislation.
Increasing tobacco prices in fact decreases the access to
tobacco for young people. We know that between the ages of 13
and 20 young people having access to tobacco have a great risk
of addiction.
I was very concerned that one of the ways of dealing with the
smuggling of tobacco had to do with the lowering of tobacco
prices. However I am aware now of another group of experts in
law enforcement and smuggling. I am not an expert in that. I am
only an expert in health. Many people will say I am not but I
suppose I am. They have said in their advice to the government
that if one merely increases the export tax and uses enforcement
measures it will not in itself have an effect on smuggling.
We have now reached a critical point in our increase in
tobacco taxes. We had reached the point where we had almost
come to the point where prohibition had reached with regard to
alcohol when the United States had created a prohibition level.
We have seen exactly what happened then begin to happen here
with regard to tobacco smuggling.
Forty per cent of all tobacco sales was smuggled tobacco. Two
million Canadians were buying contraband tobacco and many of
those same Canadians were young people. The same young
people who had no access to tobacco as a result of the increased
prices were now having access to tobacco because of the cheap
smuggled tobacco. The whole strategy of high prices had been
undermined.
I support the bill because it deals with the issue of law and
order on the one hand and with increasing the ability to seize,
with increasing the ability to identify smuggled products and
with increasing the enforcement of this smuggling activity of
the RCMP and expanding this not only to RCMP and customs
officials but I understand to local police.
I also want to support the second part of the bill which deals
specifically with the government's understanding of the
complexity of this issue. The government understands that
lowering tobacco prices will affect the accessibility of tobacco
to young Canadians. It has taken steps to mitigate the lowering
of tobacco taxes via the Tobacco Sales to Young Persons Act.
The amendments to this act, which increase the age from 16 to
18, which decrease the ability of young people under 18 to bring
tobacco into this country, which remove vending machines from
everywhere else but bars, and which increase the enforcement
and the penalties to anyone selling tobacco to minors, have put
tobacco very clearly where it belongs and that is as a controlled
product alongside alcohol. I would like to see the time when
tobacco is treated like alcohol and sold only in liquor stores.
(1300)
The government has acted immediately and promptly to
address a problem that has been allowed to sit for four years
without any attention by the other government, so that it is now
in the crisis position that we see it in. The government has dealt
with a complex issue with sensitivity to both sides of the
problem and with a clear commitment to the health of
Canadians.
I hope that everyone here will see not only that this bill is
worth supporting, but that it is urgent we support it so that we
can get on with so many of the strategies that are necessary to
improve the health of Canadians and to prevent us from having
our young people have access to this lethal drug.
Mr. Jake E. Hoeppner (Lisgar-Marquette): Mr. Speaker,
today I am speaking as a representative of the Reform caucus
regarding Bill C-11. The House has already heard speeches
from Reform Party members on this important issue and I am
pleased to add my comments to this discussion.
The measures contained in Bill C-11 are secondary when
compared to those in the government's action plan to combat
smuggling. They allow the government to sell or destroy seized
property even when there is an unresolved claim, and allow the
government to give police forces the same seizure power as the
RCMP. The bill also requires cigarettes to be stamped properly
if they are manufactured or imported into Canada, to make sure
duties have been paid.
This bill makes it illegal to manufacture a package or sell
cigarettes in packages containing less than 20 cigarettes, the
so-called kiddie packs.
I agree with my Reform colleagues that the exchange of ideas
regarding all of the government's anti-smuggling measures and
not just those contained in Bill C-11 cannot be delayed. It is of
utmost importance to Canadians that they are studied in their
full scope immediately.
In the time I have been a member of Parliament this issue has
far outweighed any other in terms of number of responses from
my constituents, the vast majority of whom oppose the
government's action. Such is the magnitude of the impact these
changes promise to have on Canadians. These consequences will
be felt in many areas; law enforcement, justice, interprovincial
relations and of course health, particularly the health of young
Canadians.
1673
I would also make note of the fact that in Ontario tobacco
production in 1993 was 173 million pounds. This was 5.5
million pounds over the tobacco marketing board's quota of
167.5 million pounds.
Is it not interesting that at the time when tobacco producers
saw this large surplus, and this holds true also of the United
States and some other foreign countries, the government
introduced these measures which will undoubtedly increase
tobacco sales? Indeed this is excellent news for tobacco
companies.
As a farmer, I can tell the House that whenever there is an over
abundance of product, the price has to go down to compete on
the market. Here the tobacco companies are buying their inputs
at a low cost and selling more of their product because of
reduced taxes. They benefit first from low production costs and
second from lower taxation. They are the clear winners with
these measures and taxpayers are the losers because of the lost
revenue and higher health care costs. Not of less concern in all
of this is the financial implication of these measures.
(1305)
On February 8, 1994 the leader of the Reform Party gave his
initial response to the government's announcement. He pointed
out that the root cause of all these serious issues was the problem
of government overspending. This was what led to overtaxation
in the first place and brought about these ramifications.
While I recognize that financial implications are only one of
the serious aspects brought to light by the government's
anti-smuggling measures, I would like to focus on them today
along with the broader issue of the federal government's tax
policy. I believe the issues serve as an excellent example of how
the government's priorities should be reviewed.
Several questions have to be asked of the federal government
regarding these measures. First, I am interested to know what
will be the overall cost of these measures. I can see that they will
change many aspects of federal finances. One of the most
obvious questions that arises is: Where will the government
make up for the lost revenues from the rollback of cigarette
taxes? As we know there is no magic pot of money from which
this will be regained. Any extra revenue that has to be made up
will come in the form of new taxes. In fact, the tax burden
promises to create new taxation problems.
Another thing tax reduction promises is a public health
disaster. This makes it very hard for Canadian smokers to quit an
addictive habit and introduces the harmful habit to a whole new
generation of smokers. Aside from the human costs that cannot
be measured, what about the cost to the health care system?
We have a situation where the federal government has
decreased transfer payments to provinces for the past number of
years. In some cases it is not enabling provinces to keep up with
health care costs. Every Canadian knows that the health care
system currently faces huge financial challenges. Health groups
contend that extra health care costs associated with treating
diseases in new smokers could be approximately $1.3 billion per
year. I would like to know if the government has figured out
exactly how it is to pay for these increased health care costs.
All indications point to new taxes for Canadians. I wondered
how much thought went into this bill when I noticed that the
government was doing away with the so-called kiddie packs in
an effort to reduce smoking among our country's youth and at
the same time drastically reduce pack prices overall.
Simply put, kids are not stupid. They will quickly realize that
through the government's action they can buy a regular size
package of cigarettes at a lower price than their kiddie packs
cost. One statistic states that when the price of cigarettes goes up
10 per cent, tobacco sales to adults drop by 4 per cent to 9 per
cent and sales to teenagers drop by 10 per cent to 14 per cent.
These similar statistics were made available to the government
by health groups before its decision to reduce cigarette taxes.
It should come as no surprise that smoking will increase just
as dramatically when taxes are reduced. That the government
was made aware of this and still chose to lower taxes makes me
think that it either does not have an adequate grasp of the reality
of the situation or it simply does not care. Eight out of ten
provinces lobbied strongly for the government not to lower
cigarette taxes.
While on the subject of health care, I note that in my home
province of Manitoba, 25 per cent of kids go to school hungry.
Thousands of adults are forced to depend on food banks. Now we
have a government that has not addressed these problems
saying: ``We can afford to forgo a half billion dollars in revenue
by reducing cigarette taxes''. Would it not make sense for a
government to write off these losses by providing for lower food
costs so more hungry people could be fed as opposed to
providing cheap cigarettes to Canadians?
(1310)
It is a sad fact that governments in Canada have tried in vain to
get their deficit problems under control by raising taxes instead
of demanding better value from their spending. The notion that a
deficit can be reduced from government revenue increases alone
is a misguided one.
Higher taxes federally have failed to reduce the deficit and
have in fact stalled the economy by cutting the spending power
1674
of the consumer by dampening new investment and by diverting
growth into a flourishing underground economy.
Granted government measures are intended in part to address
an aspect of the black market, but would it not make more sense
to instead reduce taxes in an area that would spur Canada's
economic growth? For example, agricultural producers in my
riding have seen, with the rest of Canadians, a reduction in the
country's international competitiveness on agricultural
markets. This is not the result of low efficiency on the part of
Canadian farmers, but rather because of the high input costs
farmers face. This is directly attributed to tax policy.
I can give the House an example. In Manitoba the taxes on
clear gasoline that is not used in the agriculture industry are 11.5
cents provincially and 8.5 cents federally. For diesel it is 9.9
cents provincially and 4 cents federally. Fuel for farming use
however has no provincial tax but still has the same federal taxes
of 8.5 cents and 4 cents. There is no federal tax break at all. This
is just one example of how taxes are driving up input costs. In
the government's attempt to squeeze every dollar out of
Canadians, it is squeezing the life out of our economy. Where we
should see tax breaks, they appear and where we should tax
breaks, there are none.
An article in the Financial Post states this very clearly:
Federal policies are forcing more than one in five firms polled by the
Canadian Chamber of Commerce to move or consider moving business out of
Canada.
I have been told many times by entrepreneurs: ``Yes, I love
Canada and I do not mind paying my personal income tax here,
but my future and my profits, if government keeps on taxing
them this way, are going to be somewhere else''.
In the farming community many are forced to get 50 per cent
of their income from off farm employment because the business
of farming is no longer profitable. Farmers have to supplement
their income just to get by. Think of the effect this has on
unemployment levels. There is evidence across the country.
University educated professionals leave Canada for nations
where the income tax rate and the cost of living are lower, and
this is after we have paid to educate them.
What the government should be looking at is a tax break that
would help farmers, or for that matter any Canadian business or
industry, become more competitive and that would provide
incentive for professionals to stay and make their careers in
Canada.
I was shocked to learn recently that since 1961 Canada's tax
freedom day has advanced 73 days. It is of particular note that in
1961 the tax freedom day fell on May 3. Last year it fell on July
15. Very soon we will not have enough time to sit down and light
up a cigarette if this trend continues.
We are rapidly approaching a point where we will be working
for governments full time just to pay for their debt creating
policies and bad spending decisions. In the face of such serious
conditions, when the country is crying out for a large scale tax
reform, this is what the government offers: lower taxes on
cigarettes. Surely this cannot be what the government sees as
most beneficial to Canadians at this time. Recently the revenue
minister, vowing to kill the underground economy that costs the
government billions of dollars, hired a shock troop of 500
additional tax auditors. This really displays what is wrong with
the government's tax policy. Rather than give a tax break that
would help kickstart the economy, it has decided to spend the
money on hopeless efforts to regain revenue lost in the
underground market.
(1315)
In conclusion, I hope I have managed to show how this bill
and all its associated measures display how the government's
taxation policy should be seriously reviewed.
The problems caused by overspending cannot be solved by
overtaxation. Overtaxation of cigarettes has created the
underground market in the first place and this is just one
example of how high tax levels are stifling the economy.
By reducing the tax on cigarettes the government is opening
itself up to costs of about half a billion dollars per year just for
implementation. To this you can add billions more in increased
health care costs. How will this be paid for? I am afraid that it
can only be paid through increased taxes.
The actions do nothing to break the damaging cycle of taxing
to pay for spending. If we do not break the cycle soon and allow
ourselves to implement useful carefully considered tax breaks,
Canadians will see their income taxed out of existence.
Mr. Paul DeVillers (Simcoe North): Mr. Speaker, the hon.
member opposite indicated that he feels the reduction of taxes
would lead to a windfall in effect for the cigarette
manufacturers. He neglected to mention there are other parts of
the action plan such as the $8 a carton export tax and also the
surtax on profits to the cigarette manufacturers.
I would appreciate hearing the hon. member's comments on
what effect those measures would have on the cigarette
manufacturers.
Mr. Hoeppner: Mr. Speaker, I appreciate that question. It is a
well founded question.
What I was trying to point out is that after having 167 million
pounds of production quota and another 5.5 million pounds over
that, farmers are going to be forced to take a lower price for
tobacco if it works the same as it does in other commodities.
With this increased sale of tobacco of 173 million pounds,
that little bit of taxation that is going to be put on them by the
federal government will not nearly compensate for the gains
1675
they are going to make on the huge amount of sales in the
tobacco industry.
Mr. Glen McKinnon (Brandon-Souris): Mr. Speaker,
might I through you ask a question about the differential in price
between the American commodity and the Canadian commodity
before the imposition of this new bill.
Does the member opposite feel that is contributing to an
excessive amount of contraband smuggling?
Mr. Hoeppner: Mr. Speaker, I appreciate that question also.
As the hon. member will probably realize, Snowflake is one of
the best known smuggling ports in Manitoba. I do not think that
it is the price of the American product that really has caused this
underground economy.
It is the taxation on these products that has made it so
lucrative. It is not just cigarettes in Manitoba. Liquor smuggling
is twice as bad I would say as the cigarettes. If we look at the
statistics which tell us that 90 per cent of liquor sold in hotels or
restaurants could be smuggled, we start wondering what is next.
Another issue that we are addressing right now is gasoline. As
the hon. member will know the drive across the border to fill up
your tank is very lucrative or has been. With regard to farm
production costs, it would make a lot more sense to take the tax
off of gasoline so we could import our gasoline that we exported
out of the country at probably two-thirds of the cost of what we
are paying today.
(1320)
This is what I have been trying to point out. I do not think the
cost of the products is really the big issue here. It is the
overtaxation of these products. A lot of these products we
produce in Canada, export them to the United States and then
smuggle them back in because of the taxation problem.
Mr. Paul Szabo (Mississauga South): Mr. Speaker, I am
pleased to rise on the debate on Bill C-11. I rise wearing many
hats.
As a chartered accountant, I believe I have the ability to
understand the financial implications of Bill C-11. As a former
member of the Mississauga hospital board for nine years and
serving as its vice-chairman, the health impacts certainly were
of significant importance to the health care institution. As a
member of Parliament representing my constituents and
listening, as have many members, I have received numerous
interventions from them asking questions and making
suggestions on how we might further improve the legislation
with regard to the health impacts and indeed with regard to
smuggling.
I also speak as a father of three. I have three children aged 12
through 19. I am concerned of course about the implications to
my children and whether or not they will make the right
decisions for them. There is a choice for Canadians.
I have been somewhat concerned about the confusion that
may arise for the Canadian people as they listen to the debate
from the context of an excise tax reduction alone. I want to
clarify this. I think it is going to be very important for Canadians
to understand that we have here a complex problem that is being
addressed.
In my experience, for every complex problem there is a
simple solution and it is wrong. I would like to outline, as we
have already heard from the Minister of National Revenue, from
the Solicitor General and from the Minister of Health, that this is
clearly not a regional problem. It is a national problem.
Therefore the government on February 8 came forward with a
four point program to deal with this complex problem. It
understands that the cheap contraband tobacco has undermined
Canada's health objective to reduce smoking, especially among
young people. The issue is no longer how to keep prices high so
that young people do not smoke. That is not the issue. The issue
is how to keep contraband cigarettes out of the hands of young
people.
I would like to make sure that all members understand clearly
the dimensions of the problem. The problem is very severe. To
give an idea to all members in the House, between 1990 and
1993 the number of seizures by the RCMP increased from 303 to
5,044 over a four year period. With regard to the value of those
seizures, the increase went from $4.1 million in 1990 up to $53.5
million in 1993.
What about exports? We all have heard that the major source
of the contraband smuggling has been exports to the United
States, 90 per cent of which are coming back into Canada.
Exports in 1990 were 11.3 million cartons. Yet in 1993 the
exports were 62.8 million cartons. Clearly the dimensions of
this problem are immense and growing very rapidly.
Finally, with regard to the number of charges that have been
laid by the authorities with regard to smuggling, in 1990 there
were only 414 charges laid whereas in 1993 there were 3,389.
(1325 )
I am sure all members would agree we are not dealing with
ordinary circumstances. We are dealing with a major problem.
That must give members an idea of the magnitude of the
disrespect that has been shown for the laws of Canada.
As has been pointed out by many members, but it bears
repeating, illegal tobacco now accounts for 40 per cent of the
Canadian tobacco market. Organized crime controls up to 95 per
cent of contraband tobacco entering Canada.
1676
Furthermore, more than two million Canadians are buying
this contraband. More than $1 billion of federal revenue and an
additional $1 billion in provincial revenues has been lost as a
result of this smuggling activity.
Hon. members must ask themselves this. If we are losing to
our one taxpayer $2 billion of revenue that could go to health
care, social programs and employment initiatives, how can we
ignore the problem?
On February 8, the government did come down with a
four-point plan: the enforcement crackdown, a reduction of
consumer taxes, a special action on tobacco manufacturers and
also an initiative of the largest anti-smoking campaign in
Canadian history. That was the initiative of the Prime Minister.
He spoke in the House eloquently, outlining to Canadians that
having had full consultation with the provinces, having fully
assessed the input from all sectors with regard to this complex
problem, it was necessary for us to have a well rounded,
comprehensive solution to deal with all aspects and not simply
the health impacts as hon. members from the Reform Party seem
to have been suggesting.
Bill C-11 was introduced by the Minister of National
Revenue and the Minister of Health, both of whom spoke today
very well on the amendments that are being proposed to support
this February 8 initiative. Those amendments to the Excise Act,
the Customs Act and the Tobacco Sales to Young Persons Act are
all important complements to that initiative announced by the
Prime Minister on February 8.
The amendments will provide Canada's law enforcement
agencies with additional legal powers to end smuggling. It
protects the health of young Canadians by banning the
production of cigarette packages of less than 20 cigarettes,
which we have referred to as kiddie packs, and the sale of
tobacco products to persons under the age of 18. In addition, this
legislation will require that each individual cigarette must bear a
distinctive marking indicating that the duty has been paid.
Smuggling is a criminal activity that hurts all law-abiding
Canadians. As all members know, law and order in our society is
a very important issue. We were told throughout the election
campaign and we continue to be told that Canadians want our
laws to be enforced. They remind our government that we have a
duty and a responsibility to enforce law and order in Canada.
That is why we need these amendments. It is to provide our
police forces with the additional tools and flexibility that they
are going to need to crack down on smuggling.
Since the initiative of the Prime Minister on February 8 and as
a result of all the dialogues that have gone on since that time,
there have been a number of feedbacks from the community. I
have a couple here of notable news to share with hon. members.
The Canadian Association of Chiefs of Police has welcomed
the government's action plan. It says that by taking the profit out
of sale, organized crime will quickly lose interest. We also note
in the Montreal Gazette that it compliments the Prime Minister
on his plan saying that the high tax, high price policy had been
effective for a while in reducing smoking but it was no longer
working. It was being gutted by something far uglier than legal,
cheap tobacco, that is cheap tobacco from a large and violent
criminal network.
There are some key messages that we have received from the
Canadian public since the introduction of these plans. First,
criminal law applies to every person in Canada and enforcement
officers must and have been cracking down on smuggling
wherever it occurs. Second, the new legislation will strengthen
the ability of our police to enforce the law. Finally, the concerted
federal-provincial action is the best way to crack down on
smuggling.
(1330)
As a member of the Standing Committee on Health I would be
remiss not to address the health issue. There is no question. This
morning one Reform Party member in representing his party's
interest said that they agree with the legislation of Bill C-11,
except for the reduction in the excise taxes. I liken that to a table
with each leg representing one of the four points of the Prime
Minister's plan. The hon. member suggests that taking away one
of those legs would still make the table a stable foundation for
the activity to occur on it.
The hon. member will agree that by not having the excise tax
reduction in combination with the export tax which is being
applied, we would not have eliminated the profit motive for
smuggling. It was absolutely essential to make this gesture so
that from a financial perspective we could break the back of
smuggling and get a handle on this situation. Hopefully through
that, as the Minister of Health has indicated, we can return to a
process of making sure young people do not have the incentive
to smoke simply because of the accessibility of cigarettes.
I should acknowledge that the Canadian Medical Association
wrote to all members. It complimented the government on three
parts of the program but had concerns regarding the reduction of
the excise tax. It is supportive and I know it is in consultation
with the government and the Minister of Health. I know it
supports the government in spirit.
We must deal with this major problem so that Canada can
enforce its laws. Then we can get back to the creation of jobs and
economic growth in Canada.
Mr. Leon E. Benoit (Vegreville): Mr. Speaker, the hon.
member in his presentation indicated that a reduction in the
excise tax would reduce the profit motive for smugglers. Does
1677
he believe that a reduction in tax generally would improve the
situation for small business?
Mr. Szabo: Mr. Speaker, it is fair to say a reduction in the
excise tax alone, disregarding anything else in lowering the
price of a commodity would obviously make it more attractive
to the marketplace. The hon. member's premise, however, is that
having reduced the excise taxes it is hurting business. I do not
imagine he considered that the contraband smuggling taking
place had no impact on small business.
The idea of the government's initiative is to deal with
contraband smuggling because every Canadian and every
business in Canada is losing as a result of it.
Mr. Murray Calder
(Wellington-Grey-Dufferin-Simcoe): Mr. Speaker, there
has been a lot of conversation since the lowering of the taxes on
cigarettes that the government is losing money. Taking into
consideration the fact that 75 per cent of the cigarettes smoked
in Quebec were contraband and 35 to 40 per cent in Ontario were
contraband, could the hon. member explain something
concerning the money we are supposed to lose out of taxes?
Does that take into consideration the contraband cigarettes or
just the cigarettes that are being sold? Obviously there is an
increase in sales to the retail outlets in Quebec and Ontario.
There might not be any tax loss at all.
Mr. Szabo: Mr. Speaker, there is no question in the estimates
provided by ministry officials that in the near term there would
be a net cost. However I have to applaud the minister and the
Prime Minister for not anticipating some other benefits. One of
the problems governments have had is anticipating revenues or
benefits.
(1335)
As a clear example to the extent government introduces tough
measures to deal with tobacco smuggling, that same framework
and mechanism would also apply and create some benefits with
regard to alcohol, drugs, arms smuggling, et cetera. None of
these have been discounted or included in terms of the benefits
that will accrue to the country as a result of these initiatives.
I wish I could be more specific as to the economics of the plan.
Suffice it to say in the short term there may be an argument as to
net cost. Clearly however government officials, business,
industry and all Canadians believe the program is the right one
for the long term.
Mr. Jerry Pickard (Essex-Kent): Mr. Speaker, I wish at
some time we might have an easy issue to debate in Parliament
but this certainly is not one. What is the problem we are
addressing? It is a major health problem and there is no question
about that.
I for one would be most happy if the federal and provincial
governments never got one penny more in taxation from
cigarettes. Many Canadians feel the way I do. The reality is
however that there are people who smoke and will continue to do
so. As a result that habit has created a problem. Looking at this
rationally and reasonably we have to deal with that health issue
and this legislation is attempting to do that.
The problem is not only a health issue, it is an enforcement
issue. An underground economy, an illegal business or trade, is
being carried out in this country in monumental proportions.
There is absolutely no question when looking at the facts. In
Quebec over the last four years this contraband trade has gone
from 9 per cent to 60 per cent. In Ontario it has risen from 13 per
cent to 35 per cent. In the Atlantic provinces it has risen from 12
per cent to 40 per cent. Just last year in the west it increased from
9 per cent to 15 per cent, which is a 60 per cent increase.
There is an illegal trade going on which is very damaging to
the country. It is also providing megadollars to those people who
carry out many other illegal illicit trades.
When we hear about millions of dollars being made overnight
in illegal tobacco and the expansion of this across the country, I
do not think there is anyone in Canada who does not want to see
very strong measures brought against that trade to stop it from
continuing. Therefore there are certain steps to be taken which
everybody in the House can agree to.
There are other problems involved in dealing with this trade.
Number one is enforcement. How on earth do we stop this illegal
trade and at what costs do we carry out that enforcement?
This problem is certainly mixed up with many things. I have
received letter after letter from the cancer society, the medical
associations and different groups concerned about the health of
Canadians. They are very concerned that the excise tax has been
removed from cigarettes.
(1340 )
Let us look at what taxation has been put in place and the
reason for it. The federal government in looking at the problem
has thought the only way to stop the illegal trade in cigarettes is
to cut the profits of those organizations carrying out this
activity. The only way to cut the profits is to bring enforcement
upon them so strongly they can no longer function and to take
away their profit base.
The cutting of taxes takes away the profit base of the
contraband trade. Looking at the ability for them to function,
when we remove from a carton of cigarettes $10 of provincial
tax and $10 of federal tax taking the gross sale from $43 down to
$23, we reduce their profits substantially.
It is true that the Canadian government does not take in as
much revenue. However as this contraband trade has been
increasing the federal revenues have been declining
dramatically. When we talk about the percentage of losses in
Quebec and Ontario and other provinces, those are all losses in
tax dollars.
1678
In reducing the excise tax on cigarettes we are reducing the
profits of those people who sell illegal cigarettes.
When looking at the health problem we have to realize there
are implications for all of our communities. Smoking cigarettes
causes health problems in old and young people alike. Certainly
the government has moved to correct some of that problem.
Looking at the health problem in general stopping young
people from smoking is a major goal of this government. In
order to prevent young people from smoking, a regulation has
been brought in increasing the age for purchasing cigarettes up
to 18 years. That makes it impossible for young people to buy
cigarettes legally.
Members might say in some cases they can get cigarettes
anyway. I would submit if contraband cigarettes are easily
available, kids 11, 12, 13 and up will buy illegal cigarettes very
easily. The resultant factor is as long as we allow the illegal
trade to flourish and continue, more availability will be made
for young people to purchase those cigarettes.
Therefore continuing along the same line as in the past would
be counterproductive to health. There is no question it would
diminish our ability to control the commodity and therefore
allow more and more young people to get cigarettes at a very low
price and to purchase them at any age they wish. The two major
attacks on health would be gone.
The minister has also taken other steps to make certain there
are more controls which brings me to the enforcement level. The
RCMP has been given the power to work in larger numbers along
with Revenue Canada customs officers. They will work against
organized crime groups trying to stop the major suppliers of
these cigarettes at any point. They will better patrol the borders
by making certain there is 24-hour surveillance at many border
crossings where there is only short-time surveillance now.
There are steps to very carefully check the sale of cigarettes
across the counter within our communities in order to make it
more difficult for traffickers at the street level.
(1345 )
There is no question that it has to be a strong policing action
with the RCMP as well as strong policing action with Customs
Canada to create better enforcement. At the same time the bill is
trying to open up that enforcement to provincial scope as well.
Provincial officers in the province of Ontario and in Quebec
will be able to work hand in hand with the RCMP and customs
officers to try to curb this growing illegal industry. I might
remind people in this House as well that the profits of that illegal
trade do go into organized crimes. There have been very strong
suggestions that groups from Montreal and Toronto such as
Mafia organizations and Hell's Angels bicycle groups have all
been involved with the illegal trade of cigarettes.
When it is stated that 95 per cent of the profits of illegal
cigarettes goes into organized crime and works against
Canadian society, we must take every measure we can to stop
that from occurring.
There is absolutely no question when we look at the health
problem and solutions to the health problem, they are not easy
but the plan that has been put forth by the government is very
logical. It is not easy to suggest that we reduce taxes and look as
if we are caving in to organized crime.
At the same time it is taking the profits away from organized
crime and creating an environment where their sales will not
destroy more and more of the normal trade and therefore allow
organized crime to totally control cigarette sales in this country.
It is important to realize too that there has been a
manufacturers' tax placed on exported cigarettes to control the
flow of cigarettes out of this country which are being recycled
back into the country. The extra $8 on export tax will cost
anybody who is trying to buy those and bring them back into the
country more money to operate that illegal trade.
As we look at the whole picture, the government has tried to
take into account health measures, enforcement measures and
tax measures in order to resolve a problem, hopefully bringing
us to a more prosperous future.
[Translation]
Mr. Antoine Dubé (Lévis): Mr. Speaker, I would to start by
making a comment. The hon. member mentioned that one of the
provisions in this bill raises the legal age for purchasing
cigarettes from 16 to 18 years of age. I simply want to point out
that this measure was contained in Bill C-111 which was passed
last year. However, the legislation only takes effect this year.
The hon. member did, however, raise some interesting
questions about enforcement measures to control the sale of
tobacco products. At one point, he said did not know how we
would stop this illegal trade going on and what it would cost to
carry out that enforcement. Therefore, I would like to send the
question back to him and ask him to explain a little more how far
his government intends to go in enforcing these measures?
[English]
Mr. Pickard: Mr. Speaker, as far as the number of agents
goes, Customs Canada is presently putting an additional 350
people into increased enforcement. They are providing 24-hour
service at 22 ports to handle more than 99 per cent of the
commercial traffic in this country.
1679
When we talk about increased police enforcement, the bill is
to open the opportunity for provincial police forces to operate
under the excise tax rules and regulations. Therefore without
extra cost to the taxpayer, we are increasing the number of
people who can effectively work in this area by hundreds of
thousands when we consider the major police forces like the
OPP in Ontario and la Sûreté du Québec in Quebec. Therefore
policing has opened up very greatly as well.
(1350 )
When it comes to the implementation of the age 16 to 18 law,
it is very clear that there are different regulations in different
provinces. However, in this case we are allowing or forcing the
importation of cigarettes to be done only by people beyond their
18th birthday. Therefore we have changed the regulations and
forced that age up two years from what it previously was.
Mr. Jake E. Hoeppner (Lisgar-Marquette): Mr. Speaker, I
appreciate the hon. member's comments. He has pointed out
very vividly that there are two big problems in this situation.
One is overtaxation and the other is the law enforcement side.
I am wondering if the hon. member could comment on how we
should deal with the law enforcement issue. The overtaxation
issue I think we have dealt with because we have made it
unprofitable to smuggle cigarettes. These same people who have
been doing that will now be unemployed. I do not think they paid
into the unemployment insurance fund. Will they now take a job
at the minimum wage or will these people go somewhere else
and smuggle other products? Are we again going to lower those
taxes to do away with that issue?
Now we have lost revenue and probably created a health
problem. When are we going to address the issue of law
enforcement? That is the big problem that we have to look at
because these people are not ordinary law-abiding citizens.
Mr. Pickard: Mr. Speaker, I appreciate the question.
Without strong measures being taken, as this government is
doing right now, we would be caving in to chaos, as far as I am
concerned, and to a lawless society which openly-and we have
seen it very openly in this country-sells contraband products.
It has spread across this country very widely. We have to look at
some of the root causes of that.
I believe part of the root cause is the taxation structure. I
believe part of the root cause is the dissension people feel
toward taxes at this time in our history. I believe other parts of
the root causes are suggestions by people in authority that law
and order is not to be upheld or strongly adhered to.
It is very important for all Canadians to be sure that this
government will uphold the law and bring in whatever measures
must be taken in order to make certain that the law is enforced.
We do not worry about the people who would break the law.
We punish them.
Ms. Val Meredith (Surrey-White Rock-South Langley):
Mr. Speaker, thank you for the opportunity to debate Bill C-11.
Most of the elements of this bill are minor and insignificant.
There is very little in Bill C-11 that will combat smuggling. The
government believes it has eliminated the incentive to smuggle
with the initiatives that were implemented by ways and means
motion No. 3.
This may in fact be the case for cigarettes, but all it has done is
change the contraband of choice. We already are hearing about
increases in the smuggling of liquor. We know that guns,
narcotics and illegal persons are also a part of smuggling
organizations.
If the government were to follow the precedent it set with
tobacco smuggling, we can assume that taxes on alcohol
products will soon be dropped and that the laws against guns and
illegal persons will be changed to remove the monetary gains.
This is not a national action plan to combat smuggling. This is
capitulation.
Do we solve the problem of smuggling cocaine and heroin by
making them legal and selling them across the counter? It would
certainly solve the problem of drug smuggling, but are we
prepared to live with the social consequences of such actions?
These laws against smuggling are there for a reason and they
must be enforced. Taking the course of action that this
government is taking sends the wrong message. It tells
Canadians that if enough people engage in illegal activity, the
government will give in and change the law.
(1355)
With regard to the elements of the bill they are for the most
part insignificant. However there is one area of concern that I
have with the bill. My concern is with the amendments to the
Excise Act and the Customs Act that would allow seized
property to be sold or destroyed even if the claim is still
unresolved. We are told the reason for this is to reduce storage
costs and will apply mainly to tobacco and alcohol seizures, but
it will also apply to the seizures of the vehicles that brought in
anything considered contraband.
I am currently assisting a constituent who recently won a
Federal Court decision against improper customs seizure.
Unfortunately for this individual the court decision came 10
years after the seizure. Unfortunately for the Canadian taxpayer
a $200,000-plus award has grown to in excess of $400,000 with
interest payments.
1680
Rather than providing the minister with the authority to
dispose of seized goods, it may be in the best interest of both the
accused and the Canadian taxpayer to develop a dispute
mechanism which is made up of an independent assessment
authority which could hear such disputes and avoid enormous
court costs resulting from lengthy court challenges.
As for other aspects of the bill the amendment to the Excise
Act giving non-federal police forces the same seizure powers as
the RCMP is probably long overdue. Removing bureaucratic
barriers in enforcing the law is preferable to capitulation.
However it is with the amendments to the Tobacco Sales to
Young Persons Act that the government is operating at its
hypocritical best. It is trying to convince us that by making it
illegal to manufacture or package cigarettes in packages
containing fewer than 20 cigarettes that smoking among young
people will not increase. It is trying to convince us that by
making it illegal to sell or offer for sale cigarettes in packages
containing fewer than 20 cigarettes that smoking among young
people will not increase. It is trying to tell us that by prohibiting
the importation of tobacco products by or on behalf of persons
under the age of 18 that smoking among young people will not
increase.
The government is not telling us about one important issue,
that because it lowered the price of cigarettes that more young
people are going to start smoking. We have all seen the graph
and it clearly indicates that with a sharp increase in the price of
cigarettes, there was a proportionate drop in the number of
young people smoking.
I imagine that we will soon see a graph that shows that with
the dramatic decrease in the price of cigarettes there will be an
increase in the number of young smokers.
Will it be difficult to enforce these amendments to the
Tobacco Sales to Young Persons Act? I do not think so. Why
would tobacco companies want to make packages of less than 20
cigarettes today? Thanks to this government the price of a
package of cigarettes is now about half of what it was last
month. The amendment to prohibit the importation of tobacco
products by anyone less than 18 years of age is redundant. Why
would anyone go across the border to buy cheap smokes when
they can buy them at the corner grocery store?
If these amendments had been introduced prior to the
government capitulating in the ways and means motion No. 3
they may have had some meaning.
It is ironic on one hand to see the Minister of National
Revenue talk tough about eliminating smuggling and the
underground economy while on the other hand being part of a
government that is quick to capitulate. I wonder if the
government will likewise be willing to surrender to the ever
expanding underground economy. With more and more
Canadians involving themselves in the multibillion
underground economy, and probably many more will be ready to
join them after the budget comes down this afternoon, is this
government prepared to reduce all of its taxes?
Given the government's philosophy that lower taxes will take
away the incentive for illegal behaviour, it seems natural that the
government would reduce the tax burden to eliminate the
financial incentives for participating in the underground
economy. Of course it will not. Where would it get the money to
make up for lost tax revenue? Where is the federal government
and those provincial governments which are participating in this
joint program going to get the lost revenue from the cigarette
taxes?
(1400 )
Taxes on cigarettes were high but they were there for a reason.
The toll that cigarette smoking has inflicted on the Canadian
health system is even higher. Now all Canadians will have to
subsidize the increased shortfall.
I am afraid that what the government has done in this instance
has sent a loud message that if enough people are ignoring the
law, do not worry, we will change it. What the government
should have done is enforce that law and enforce all the laws that
were there. If a law has the support of Canadians it must be
enforced. There was support from the community for higher
taxes on cigarettes.
Calls to my office were six to one against lowering the taxes
on cigarettes. If my constituents oppose the lowering of any tax
we have accomplished something. They do not like taxes. They
want taxes lowered but they want them lowered in a sane and
reasonable manner across the board. The government should
have concentrated on enforcement, not on isolating tax cuts to
contraband cigarettes.
Unfortunately some Canadians need the occasional reminder
that there are laws in the country and that they have to be
enforced. There are laws against speeding in this country despite
the fact that most of us speed. The mere sight of a police car on
the side of the road is enough to slow must of us down.
The Speaker: It being two o'clock p.m., pursuant to Standing
Order 30(5), the House will now proceed to statements by
members, pursuant to Standing Order 31.
_____________________________________________
1680
STATEMENTS BY MEMBERS
[
English]
Mr. John Murphy (Annapolis Valley-Hants): Mr.
Speaker, recently the Students Union of Nova Scotia forwarded
to me a recommendation that federal education transfer
payments be made on the basis of the size of provincial student
populations.
1681
Presently federal funding for post-secondary education is
based on the overall population of each province. This formula
has worked against and is a detriment to Nova Scotia.
Due to the large number of out of province students studying
at institutions such as Acadia University in my riding of
Annapolis Valley-Hants, our provincial population has a much
larger ratio of students than most. Current funding, however,
does not reflect this reality.
I support the recommendation made by the Students Union of
Nova Scotia and I urge the government to give full consideration
to this important proposal.
* * *
[
Translation]
Mr. André Caron (Jonquière): Mr. Speaker, I would like to
draw attention to the publication of a guidebook called
Jonquière, mémoires et lieux that illustrates and interprets the
architectural heritage of the city of Jonquière, in the
Saguenay-Lac-Saint-Jean region. This book shows the
evolution of the city since it was founded in 1847.
The authors, Luc Noppen and Lucie Morrisset of Laval
University, mention the uniqueness of Arvida, home of Alcan
and now part of the city of Jonquière. Arvida, which was built
between 1926 and 1928, is distinguished by its innovative town
planning and its original architecture.
On the eve of their city's 150th anniversary, the people of
Jonquière worked in close collaboration to produce this book,
which commemorates architectural treasures often overlooked
and sometimes forgotten.
* * *
[
English]
Mr. Andy Scott (Fredericton-York-Sunbury): Mr.
Speaker, I would like to acknowledge that Stephen Gough, the
only Olympic athlete from New Brunswick, begins his first of
three short track speed skating competitions today in
Lillehammer. Stephen is from my riding of
Fredericton-York-Sunbury. I want to publicly wish him well
on behalf of the people of my constituency, the people of New
Brunswick and indeed all Canadians.
As one of 110 athletes representing Canada in the Olympics,
he is the the fourth skater in the 45 lap relay race.
Stephen has an impressive speed skating record. Just last
month he ranked second at the Lake Placid Pacific Rim meet,
placed fifth out of 66 in the pre-Olympic 500 meter race in
Norway and earned a first place ranking in the relay as well.
While he makes Canadians proud as a representative in
Norway, I know that he will be extremely successful during
competitions as well.
* * *
(1405 )
Mr. Andrew Telegdi (Waterloo): Mr. Speaker, I am pleased
to inform the House that Waterloo will be hosting the biggest
women's sporting event held in Canada, the Scott Tournament of
Hearts. It is the Canadian women's curling championship.
We are very honoured to be able to hold this prestigious event
at our newest facility, the Waterloo Recreational Sports
Complex, from February 26 to March 5. Teams from across
Canada will be represented, including Team Canada from
Saskatchewan which went on to win the world championship in
Switzerland last year.
We in the Waterloo region are very excited about hosting this
event. I would like to extend an invitation to my colleagues and
to all Canadians to come and join us in these festivities.
* * *
Mr. Jake E. Hoeppner (Lisgar-Marquette): Mr. Speaker,
on January 31 I urged the Minister of Human Resources
Development to declare grain handling an essential service.
Because of his failure to respond immediately, the grain
industry is now experiencing devastating losses of more than
$10 million. The canola, flax and rye business may have been
lost permanently. The elevator system is operating at 90 per cent
capacity, leaving many elevators plugged.
The strike's impact on grain flow to the west coast is difficult
to measure in dollars, but it is expected to take until June for
wheat barley movements to return to normal.
Now longshoremen at the port of Montreal and grain handlers
at Lakehead are in a position to strike.
The federal government must immediately enact legislation
that would declare grain handling an essential service to prevent
any further disruptions that would compromise our western
economy.
* * *
Mr. Brent St. Denis (Algoma): Mr. Speaker, the tourism
industry in Canada provides our national economy with many
opportunities for job creation and community development.
Right now it is a $28 billion industry.
1682
The future of tourism is bright but it is necessary that we take
steps now to ensure full realization of our national and regional
tourism potential.
In Algoma riding we are blessed with the north channel of
Lake Huron which is among the world's top ten boating areas.
We have pristine lakes and forests. Our Cambrian Shield
mountains are spectacular. We have a great number of Canada's
best trout lakes. My riding has fishing, hunting, sightseeing,
cross-country and downhill skiing, canoe routes, fly-in camps,
hospitality training and much more.
The Manitoulin, Espanola, North Shore, Elliot Lake, central
Algoma, Sault Ste. Marie and east Superior shore areas have
developed an excellent tourism infrastructure, but much more
needs to be done.
Let us recognize tourism for what it is, one of our best
opportunities for economic growth. Let us all start smiling
because Canada has all it takes to be a world tourism leader.
* * *
[
Translation]
Mr. Gilbert Fillion (Chicoutimi): Mr. Speaker, it only took
two weeks for the Ontario government to realize how
detrimental cigarette smuggling can be, a situation that the
Quebec government has lived with for nearly five years.
The Ontario government finally saw the light and announced
yesterday that it would join the federal, New Brunswick and
Quebec governments in their plan to fight cigarette smuggling.
In a moment of lucidity, Mr. Rae finally understood that the
smuggling plague has become a national problem in Canada. By
hesitating, the Rae government compromised the
implementation of a national anti-smuggling plan.
It seems that Mr. Rae forgot about the virtues of co-operative
federalism for several unfortunate hours.
* * *
[
English]
Mr. Lee Morrison (Swift Current-Maple
Creek-Assiniboia): Mr. Speaker, I have a copy of a letter from
Harvey Wiebe, one of my constituents, to the hon. Minister of
Finance. It reads:
As a small business person, I account for about 200 jobs. I know that many
people like me have already moved their money and their energy off shore. The
loss of these people is far greater than the loss from people who have gone
underground. Just think, 25,000 people like me could create 5,000,000 new
jobs.
Unlike big business, my group does not want subsidies. We can be compared
to a carpenter building a house. Every time we reach for a tool the government
has taken it away. We do not mind sharing our house, but for the sake of Canada,
let us keep our tools.
I believe that you know what you need to do. I also believe that you lack the
courage to do it. You will earn far more support if people have hope, than you will
by pandering to the wealth consumers.
* * *
(1410 )
Mr. Leonard Hopkins (Renfrew-Nipissing-Pembroke):
Mr. Speaker, it was 35 years ago Sunday, February 20, 1959, that
the Diefenbaker government cancelled the Canadian made Avro
Arrow aircraft which was the sleekest and most advanced
military plane of its day. Thus ended a second national dream for
Canada.
Janusz Zurakowski, who had a distinguished military career
in Poland, Britain and Europe, arrived in Toronto in 1952 and
became the first test pilot for the Avro Arrow. Jan and his wife
Anna own Kartuzy Lodge near Barry's Bay in my constituency.
When asked about flying so fast he said: ``It feels just like flying
slowly, only faster''.
The Arrow could fly at twice the speed of sound. It would still
have been a modern aircraft in the early 1980s when we spent
many times the cost to buy CF-18 aircraft from the United
States.
The Diefenbaker government ordered the six Arrows already
built to be cut up for scrap. All records, all factory facilities, all
plans of any kind were ordered destroyed. What a sad
commentary on a fantastic Canadian achievement.
As Canadians, let us build from our fires of success, not from
our ashes. The Janusz Zurakowskis will be glad to see the
change.
* * *
Mr. Peter Adams (Peterborough): Mr. Speaker,
co-operative programs are an approach to technical and
technological education which is flourishing in Canada. In this
approach students go out from their base in school to gain
experience in the workplace.
However, another approach, apprenticeship programs, is
doing very poorly here. In this case students are trained in the
workplace, reaching out for school programs as required.
The number of apprentices and the quality and relevance of
apprenticeship programs in Canada have declined drastically.
One industry in Peterborough which used to have hundreds of
apprentices now has only four. One reason for this is that
apprentices often receive qualifications which are restricted to
1683
their province. Only 14 per cent of apprentices in Ontario earn
licences to work elsewhere in the country.
This is a national disgrace and it is as tragedy for well trained
people who find themselves trapped in a province in which the
economy is slack.
I urge the government to move quickly on the national
apprenticeship program. We need a highly trained, highly
mobile, truly national workforce.
* * *
[
Translation]
Mr. Yvan Bernier (Gaspé): Mr. Speaker, to deal with the
problems of unemployment, the exodus of young people and the
over-exploitation of natural resources, the people of
Bonaventure in a byelection yesterday chose Marcel Landry and
the Parti Quebecois, thus showing their desire for change and
that they want to make Quebec a sovereign state.
As the great Quebec poet, Félix Leclerc, said so well: ``The
Gaspé is in all of us-a mysterious, silent, patient land. The cry
that will frighten everyone will come from there''.
After 37 years of Liberal rule, this byelection is a real
thunderbolt in the Quebec sky and we are pleased with it.
* * *
[
English]
Mrs. Diane Ablonczy (Calgary North): Mr. Speaker, I take
this opportunity to commend our Canadian athletes at the Winter
Olympic Games in Lillehammer, Norway.
These athletes deserve our full support and recognition for
their hard work and the commitment they have shown to
excellence in their sport.
I wish to make special mention of one such athlete, Susan
Auch, a resident of my riding of Calgary North who on Saturday,
February 19, 1994 captured a silver medal in the 500-metre
speed skating competition at Hamar Olympic Hall. Susan is the
first Canadian woman to win an Olympic medal in long track
since 1976.
On behalf of the residents of Calgary North I want to extend
sincere congratulations to Susan Auch for her outstanding
achievement.
(1415)
Mr. Benoît Serré (Timiskaming-French River): Mr.
Speaker, I want to address statements made in the House on
numerous occasions by the hon. Leader of the Official
Opposition.
The hon. member often refers to our country being divided in
two, with Quebec on one side and English Canada on the other,
thus implying that Quebec is French only and the rest of Canada
is English only.
I believe this is an injustice and an insult to the 20 per cent of
Quebecers who are not of French origin; to the over one million
francophones outside Quebec; and as well to the 35 per cent of
Canadians who are neither of French or English origin.
I call on the hon. Leader of the Opposition to respect all
Canadians of all origins and to please refrain from making such
statements in the future.
* * *
[
Translation]
Mr. Nick Discepola (Vaudreuil): In November, Mr. Speaker,
Statistics Canada published the findings of a survey of 12,300
women across Canada. The results are frightening: one woman
in two has been the victim of violence at least once since the age
of 16 and one in ten has feared for her life.
In my riding, the situation is even more serious because there
is no women's shelter. The riding of Vaudreuil has a population
of 110,000, 80 per cent of whom are French-speaking. Women
who need a shelter for themselves and their children must go to
the West Island of Montreal, an English-speaking community.
At present, La Moisson, a counselling and referral centre,
tries to help battered women, but it is only open five days a
week, during office hours.
In its last fiscal year, La Moisson responded to 478 requests
from battered women and the demand has doubled since
October.
The situation is serious and that is why I ask the Minister of
Public Works and Government Services to deal with this issue
and solve the problem as soon as possible.
* * *
[
English]
Hon. Audrey McLaughlin (Yukon): Mr. Speaker, these days
we hear a lot about youth crime and youth unemployment but
1684
what we do not often hear about are the successes. We do not
often celebrate the fact that when Canadian young people are
given a chance they can go on to achieve great things.
The Dawson City, Yukon, Stay in School Program is one such
success story. Under the dedicated direction of school
counsellor, Mr. Jim Johnston, the dropout rate has declined from
40 per cent to 1 per cent in three years.
The federal government has ended funding for this program in
Dawson City, Yukon. The government says that it wants to
tackle unemployment. One of the best ways is for our young
people to get a good education.
In the name of the young people in the Yukon territory and in
Canada I urge the government to reinstate funding for the Stay in
School Program in Dawson City, Yukon.
_____________________________________________
1684
ORAL QUESTION PERIOD
[
Translation]
Hon. Lucien Bouchard (Leader of the Opposition): Mr.
Speaker, my question is for the Prime Minister. According to
United Nations Protection Forces officials, dozens of Serb
heavy infantry weapons were still not under the control of UN
forces in Sarajevo yesterday, but the UN expected to gain
control over them some time today. All the while, Serb bombing
continues over Bosnian enclaves like Tuzla and Bihac, while
talks continue in Moscow and Washington in the hope of
achieving a peaceful settlement and bringing lasting peace to
Bosnia.
Can the Prime Minister tell us whether his government
supports the proposal to put Sarajevo under UN protection and,
in that context, is he prepared to reconsider the decision made by
the Government of Canada to withdraw Canadian peacekeepers
from Bosnia?
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker,
no decision has been made concerning central Bosnia following
France's proposal with regard to the status of the city of
Sarajevo. This is a very interesting proposal, but we are not
through consulting with other countries before making a
decision.
As for the presence of Canadian troops in Bosnia, a final
decision will be made by the end of the mission slated to end in
late March or early April.
Hon. Lucien Bouchard (Leader of the Opposition): Mr.
Speaker, I would also like to ask the Prime Minister whether he
is considering issuing further ultimatums to bring hostilities to a
stop in enclaves such as Tuzla and Bihac, or whether he trusts
that current diplomatic initiatives in Washington and Moscow
will be sufficient.
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker,
the decision made ten days or so ago respecting the ultimatum
and the siege of Sarajevo produced the expected results. So, for
the time being, should we pursue this course of action? I think
that the actions taken so far have been successful and that the
ideal solution would be for the warring factions to end this
distressing situation.
(1420)
Hon. Lucien Bouchard (Leader of the Opposition): Mr.
Speaker, by their firm and effective concerted efforts, the Allies
have demonstrated that the proof is indeed in the pudding. Is a
good solution in one case not worth a try in other cases? That is
the question and I think that the government will have to answer
it very soon.
Should the peace process require the build up of peacekeeping
troops in Bosnia and throughout the former Yugoslavia, would
the government be prepared to reconsider its decision not to
detach additional Canadians peacekeepers?
[English]
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker,
what the Minister of Foreign Affairs said last week is the
position of the government.
As a country we have the third largest contingent there. We
have been at every peacekeeping mission around the world.
Some countries have nobody there and it is a good occasion to
send some people. If more countries are involved it is better for
the world. Canada has always been quite generous, but others
should take their share of the load too.
* * *
[
Translation]
Mr. Michel Gauthier (Roberval): Mr. Speaker, yesterday,
during Question Period, the Minister of Indian Affairs twice
refused to answer our questions about Mr. Jerry Peltier's status
in the federal government during the Oka crisis. Now that he has
had time to inquire about this matter, can the minister tell us if
Mr. Jerry Peltier was working for the federal government during
the Oka crisis and what was his status?
[English]
Hon. Ron Irwin (Minister of Indian Affairs and Northern
Development): Mr. Speaker, as I understand it, the allegation is
that Mr. Peltier was employed by the former government at the
time of the Oka crisis. I do not know if that is correct or
incorrect. If my hon. friend has information to that effect, will
he please bring it forward and it will be examined.
1685
It is difficult in the daily operation of a band to go in and
interfere because of the inherent right of self-government. On
the other hand, we have an onus to make sure there are checks
and balances that work.
As minister I have instructed my officials to examine the
allegations carefully. Hopefully there will be some evidence
forthcoming from my friend. I am committed to bring fiscal
accountability to the House and present any reports that we
have.
[Translation]
Mr. Michel Gauthier (Roberval): Mr. Speaker, once the
minister has checked the facts, would he tell the House for what
type of services Mr. Peltier was paid $25,600 in retroactive
fees?
[English]
Hon. Ron Irwin (Minister of Indian Affairs and Northern
Development): Again, Mr. Speaker, if I might reiterate, this is
an allegation. Even though it is done in the protection of the
House and not outside, perhaps it should be treated a lot more
carefully but my learned friend obviously does not want to.
If the allegation is that there was an irregular payment to
anyone at a band level or with whom we are dealing with, any
place in government, then bring forward the evidence and we
will check it out.
At the same time I have asked my official to check out the
allegation and look into the books of the former Tory
government to see what is there. I am quite prepared to give that
information to my friend.
* * *
Mr. Preston Manning (Calgary Southwest): Mr. Speaker,
my question is for the Prime Minister.
Last night PQ candidate Marcel Landry stormed to victory in
the Bonaventure byelection.
Some hon. members: Hear, hear.
Mr. Manning: Bonaventure has been considered to be the
most federalist riding in Quebec. With a provincial election
looming on the horizon, does the Prime Minister acknowledge
the need for a new and more vigorous strategy to increase
support for federalism in Quebec?
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker,
the best decision to that effect was by the Canadian people on
October 25 when they replaced the former government with a
Liberal government.
Some hon. members: Hear, hear.
(1425 )
Mr. Preston Manning (Calgary Southwest): Mr. Speaker, I
have a supplementary question for the Prime Minister.
When Quebecers vote for sovereignists, does the Prime
Minister believe-we are seeking the advice of the Prime
Minister-they are rejecting federalism in principle or are they
simply rejecting the kind of federalism offered by traditional
federalist parties?
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker, I
am very pleased by the preoccupation of the leader of the
Reform Party. I am happy he wants to make a contribution. If he
wants to make a contribution he should support the policies of
this government in favour of bilingualism.
Mr. Preston Manning (Calgary Southwest): Mr. Speaker, I
know that the Prime Minister is concerned about this issue.
Therefore, I ask what specific steps, and I stress specific, will he
take between now and the upcoming provincial election to sell
Canadian federalism in Quebec?
Right Hon. Jean Chrétien (Prime Minister): Mr. Speaker,
the best way to sell federalism in Quebec is to have a good,
efficient, honest government in Ottawa.
Some hon. members: Hear, hear.
* * *
[
Translation]
Mr. Claude Bachand (Saint-Jean): Mr. Speaker, last
Saturday
La Presse reported that Kanesatake was in financial
straits. The Department of Indian Affairs reached an agreement
with the band council to address this financial crisis.
We have also learned that the government has ordered an
internal review on the management practices used by the band
council. Will the Minister of Indian Affairs agree to table in this
House the outcome of this review?
[English]
Hon. Ron Irwin (Minister of Indian Affairs and Northern
Development): Mr. Speaker, as I have indicated, certainly.
[Translation]
Mr. Claude Bachand (Saint-Jean): Mr. Speaker, could the
minister tell us the total amount of interest-free loans his
department granted to the band council of Kanesatake?
[English]
Hon. Ron Irwin (Minister of Indian Affairs and Northern
Development): Mr. Speaker, I am getting a lot of exercise
getting up and down that I am not getting at the gymnasium
which I cannot find. The answer is yes.
Mr. Jack Ramsay (Crowfoot): Mr. Speaker, I have been
advised that the Minister of Indian Affairs and Northern Devel-
1686
opment told members of the Slave Lake bands at their recent
meeting that he was going to abolish the Indian Act.
Would the minister tell the House what he intends to replace it
with?
Hon. Ron Irwin (Minister of Indian Affairs and Northern
Development): Mr. Speaker, if my hon. friend would care to
read it, this is a very important component of the red book. We
are committed to devolving and getting rid of the Indian Act in a
morally and pragmatic manner over a number of years. That is
what the non-native community wants. That is what the native
community wants. Hopefully the government with some
perseverance will be able to deliver.
Mr. Jack Ramsay (Crowfoot): Mr. Speaker, I have a
supplementary question. The Edmonton Sun reported that
during the same meeting the minister stated: ``The Reform Party
hates Indians and they want to be seen as the defender of the
white man''.
I ask the minister, did he make that statement?
Hon. Ron Irwin (Minister of Indian Affairs and Northern
Development): Mr. Speaker, again to the hon. member, I hope
that the Reform Party will show some consideration toward the
aspirations of the aboriginal people. I am prepared to work with
the Reform Party toward the inherent right to self-government.
Today I would ask the hon. member to stand in his place and
say that he believes the inherent right to self-government
belongs to the aboriginal people.
* * *
(1430)
[Translation]
Mr. Osvaldo Nunez (Bourassa): Mr. Speaker, my question is
directed to the Minister of Citizenship and Immigration.
Yesterday morning we heard that starting this fall, the
minister would begin replacing the landing record immigrants
currently receive with an identification card. The card would
contain information such as the immigrant's name, date of birth,
nationality and photograph.
Does the minister realize he is creating two classes of
Canadians: those who have to carry this ID card and those who
do not?
[English]
Hon. Sergio Marchi (Minister of Citizenship and
Immigration): Mr. Speaker, the ID card is not new. It was made
public last summer to NGOs and lawyers. The ID card simply
replaces the large piece of paper all immigrants are given once
they are landed.
There are two reasons we are replacing the big piece of paper
by the small card. First, the big piece of paper can be forged and
is easily duplicated. It is being sold at high cost on the black
market. The small card is a state of the art technique and will
certainly minimize that kind of fraudulent activity.
The second reason is that many landed residents have
requested small cards for their wallets to be used as ID cards
until they receive citizenship cards. Therefore it also has that
practical application which was asked for by the very people
who will be carrying them.
There is nothing untoward. Nothing more can be accessed
than what normally can from our normal passports. Is the
member also suggesting we not have passports?
[Translation]
Mr. Osvaldo Nunez (Bourassa): It is not the same card.
Immigrants did not ask for it.
Considering the threat to privacy such a card constitutes, will
the government agree to have a genuine debate before making a
decision that restricts people's right to privacy?
[English]
Hon. Sergio Marchi (Minister of Citizenship and
Immigration): Mr. Speaker, the member is making a silly
argument. I just finished saying that all landed residents now
receive a form.
I am sure Canadians and immigrants understand we are trying
to stop fraudulent duplication and to prevent those who so wish
from illegally obtaining those cards. It also offers the
prospective landed immigrant an ID card. We will not be able to
access anybody's dirty laundry through this form. We are simply
trying to make it better for those who use it and difficult for
those who want to abuse it.
* * *
Mr. Monte Solberg (Medicine Hat): Mr. Speaker, my
question is for the Minister of Human Resources Development.
As I mentioned last week, a recent segment of the TV program
``Venture'' referred to a departmental study that says the current
training programs under the human resources department are
not only not helping but may actually be hindering those people
who are trying to find work.
Will the minister table this document in the House of
Commons?
Hon. Lloyd Axworthy (Minister of Human Resources
Development and Minister of Western Economic
Diversification): Mr. Speaker, as I said last week, that
information has always been available if the hon. member would
avail himself of
1687
it. There is nothing secret or hidden. We would be glad to table
any evaluation that has been given.
I want to point out that the training programs are part of the
general review we have undertaken in this Parliament. There is
more than enough opportunity within the parliamentary
committee and in discussions with the provinces to take a look at
how we can apply training.
I would only make this small caution to the hon. member. I do
not think he should use a small segment of a media report to
make a general condemnation of a training program that has
provided opportunities for hundreds of thousands of Canadians.
Mr. Monte Solberg (Medicine Hat): Mr. Speaker, I have a
supplementary question.
If studies from his own department indicate that the current
training programs which cost billions of dollars every year are
not helping people get new jobs, why are taxpayers continuing
to fund them?
Hon. Lloyd Axworthy (Minister of Human Resources
Development and Minister of Western Economic
Diversification): Mr. Speaker, frankly the hon. member asks
the question out of ignorance. That is not what the report states.
(1435 )
The report says that in key areas such as workplace training,
skills training and literacy training this kind of expenditure
provides enormous service and opportunity for many Canadians
to upgrade their abilities. It provides a new investment in human
resources to give this country the kind of hope for the
productivity it needs.
I would say to the hon. member that to make that kind of
blanket criticism and condemnation without knowing what he is
talking about is doing a disservice to the many people presently
involved in the training programs.
* * *
[
Translation]
Mr. Jean-Paul Marchand (Québec-Est): Mr. Speaker, there
seems to be unanimous support in the dairy industry for
demanding that the federal government prohibit sales of the
BST hormone in Canada, since Canadians are worried about the
effects of this growth hormone on human health.
My question is directed to the Minister of National Health and
Welfare. Considering this unanimous position, could the
minister guarantee that there will be at least a six-month
moratorium on the sales of BST in Canada?
[English]
Hon. Diane Marleau (Minister of Health): Mr. Speaker, as I
explained before, BST is a biotechnological synthetic hormone.
It matches what cows already produce naturally. When injected
in cows it increases the volume of milk production.
My officials are now reviewing the drug. They are doing some
clinical studies on its effects. To date they have not issued a
notice of compliance. Once all the clinical trials have been done
and it is proven the milk is absolutely safe and there is
absolutely no difference, we have very little recourse but to
issue the notice of compliance at that time.
[Translation]
Mr. Jean-Paul Marchand (Québec-Est): Mr. Speaker, we
know the effects of BST, but the fact remains that the dairy
industry is very worried.
Could the minister give us guarantees that the interests of
consumers and the dairy industry will take precedence over the
interests of the pharmaceutical industry?
[English]
Hon. Diane Marleau (Minister of Health): Mr. Speaker, my
responsibility is for the health of Canadians and I take that very
seriously.
It is very important that all of the clinical trials be done on
BST so we can reassure Canadians that the milk is absolutely
safe. That is my role as health minister and I intend to fulfil it.
* * *
Mr. Herb Grubel (Capilano-Howe Sound): Mr. Speaker,
my question is for the Minister of Citizenship and Immigration.
I was an immigrant and I am now a citizen of Canada.
Some hon. members: Hear, hear.
An hon. member: Now you want to lock the gate.
Mr. Grubel: This question is in the name of Canadians
concerned about the country's financial crisis. Next year Canada
will admit 111,000 family reunification immigrants. Many of
them will be persons of an age where they will be unable to
contribute to Canada's social programs. These individuals are
entitled to free medicare.
Would the minister please tell the House what he expects the
cost of the medicare services required by these immigrants will
be?
Hon. Sergio Marchi (Minister of Citizenship and
Immigration): Mr. Speaker, this party mentioned in its red
book and Canadians accepted it democratically by the national
election that one of the building blocks of immigration policy is
the family class.
1688
There are two reasons. First, we believe Canadians do have a
right toward family reunification. Second, the family is also the
vehicle to more successfully integrate and settle the newcomer
without burdening the state.
The hon. member's party quite often talks about family
values. If the hon. member wants to cut the immigration levels
he cannot have it both ways. He cannot talk on family values on
the one hand and then berate family class immigration on the
other.
(1440)
Mr. Herb Grubel (Capilano-Howe Sound): Mr. Speaker,
may the people of Canada conclude from the minister's answer,
or non-answer, that decisions about Canada's immigration
levels are made without regard to the costs which the policies
impose on the already strained social programs of the country?
Hon. Sergio Marchi (Minister of Citizenship and
Immigration): Mr. Speaker, we said no such thing. In fact in our
levels announcement some days ago we said it was very
important not only to do levels in isolation but to do levels and
have a correlated two-year settlement and integration in dollars.
That was a very important distinction the former government
did not pay too much attention to.
We are worried about the financial implications to our health
system. However we are not prepared to conclude that family
class members who are landed should not have access to medical
services when independent skills applicants do. Is that what the
member is advocating? When people come here and are landed
residents we assume they contribute and through their
contribution they have a contract with Canada. It is a two-way
street.
* * *
[
Translation]
Mr. René Canuel (Matapédia-Matane): Mr. Speaker, my
question is for the Minister of Foreign Affairs. We learned in
La
Presse that federal Liberal members forced 15 members of the
European Parliament to cancel a series of meetings with Quebec
organizations and replace these visits with an official trip to
Ottawa and Vancouver, as part of the business of the
Canada-Europe Parliamentary Association.
The Speaker: Perhaps the hon. member could rephrase his
question, because it does not concern the government's
administrative responsibility in that it relates to a
non-governmental organization.
Mr. Canuel: My question is this: How does the minister
explain that his ambassador in Brussels was also involved in
convincing these European parliamentarians to act against their
will?
Hon. André Ouellet (Minister of Foreign Affairs): Mr.
Speaker, I think that you were right to remind the hon. member
that this kind of meeting of parliamentarians is organized by
non-governmental organizations. From time to time,
parliamentarians come to Canada under these exchange
programs.
As part of the visit which took place, it was planned that they
would come to Ottawa and go to British Columbia to study the
forestry issue which is now the subject of consultations at the
highest level.
So the parliamentarians who came here knew very well why
they were coming and what their agenda would be. One of these
parliamentarians, who probably has dealings with Quebec
separatists, made a side trip to Montreal and denigrated this
well-established parliamentary procedure of parliamentary
exchanges which had been approved in advance. All the others
were satisfied, except this black sheep who strayed in Montreal.
Mr. René Canuel (Matapédia-Matane): Mr. Speaker,
several people, parliamentarians from over there, told us the
same thing. Did other parliamentarians question the minister
when they came to see him?
(1445)
Hon. André Ouellet (Minister of Foreign Affairs): Mr.
Speaker, no doubt there will be other exchanges between the
European Parliament and the Parliament of Canada. No doubt
these European parliamentarians are quite welcome in all the
provinces of Canada, including Quebec.
Those who came here met the Prime Minister and discussed
Canadian issues and questions of interest for the European
Parliament.
Those who came here also had the opportunity to meet the
Deputy Prime Minister, who invited them to accompany her
since she was going to the province of Quebec herself. So those
who wanted to take advantage of that offer could have done so.
I repeat that only one parliamentarian found that procedure
unacceptable. He should have stayed home, since he knew in
advance that the trip would take them here, to Ottawa, and to
Vancouver, and he should join us for another visit that will
include a trip to the province of Quebec.
* * *
[
English]
Mr. John Duncan (North Island-Powell River): Mr.
Speaker, my question is for the Minister of Natural Resources.
The Canadian government recently funded a multimillion
dollar model forest in Mexico. Can the minister assure the
House that at the upcoming month-end bilateral conference in
1689
Mexico City the government will not commit further forest
research or other forestry funding to our new NAFTA partner?
Hon. Anne McLellan (Minister of Natural Resources): Mr.
Speaker, I thank the hon. member for his question.
The hon. member may be aware that Canada has pioneered the
concept of model forests. It is part of our commitment to
manage forestry and sustainable development. We think we are
very lucky that we have been able to enter into partnerships and
transfer this important technology and skill to partners, be it
Mexico or the former Soviet Union. I am going to be
encouraging my department, the Department of Natural
Resources, to enter into further partnerships to ensure that
globally we continue our strong commitment to sustainable
development in our forest sector.
Mr. John Duncan (North Island-Powell River): I have a
supplementary question, Mr. Speaker. Mexico is running a
budget surplus while we are struggling with a large deficit. Does
the minister agree that this government should not be funding
forestry projects outside Canada?
Hon. Anne McLellan (Minister of Natural Resources): Mr.
Speaker, I believe as a government we should work in
partnership with neighbours around the world to ensure that our
commitment to sustainable development is fulfilled wherever
possible.
* * *
Ms. Shaughnessy Cohen (Windsor-St. Clair): Mr.
Speaker, my question is for the Minister of Justice.
Over the past few months Canadians have seen several
examples of judicial gag orders. These orders have either
excluded the media and members of the public entirely from
criminal trials or have allowed them to observe but not to report
on the proceedings.
Could the minister advise us of any steps which he has
planned to review this situation in order to preserve the very
important public right to know what is going on in the criminal
justice system?
Hon. Allan Rock (Minister of Justice and Attorney
General of Canada): Mr. Speaker, the Criminal Code provides
and the general rule in law is that proceedings in court are held
in open and the public may watch and see what is going on. The
code also provides, and indeed the inherent jurisdiction of the
court provides as well, that when the interests of a fair trial for
the accused require it, there can be a ban on publication.
As my hon. friend knows from her own many years of
distinguished service as counsel in the courts, sometimes these
media bans on publication for specific periods of time are very
important in the interests of justice, for example in a
preliminary inquiry where the evidence is not published, so that
the trial itself is not prejudiced or where there is some quarrel
about the admissibility of evidence. The court does not want it
published so the jury will find out about it before the
admissibility of evidence is determined. Obviously there is a
balance. The Supreme Court of Canada has two cases under
advisement now in which it is considering the balance between
the freedom of expression in the charter and media bans. We are
going to await those decisions and read them with care. I can
assure the hon. member that we will do all things necessary to
ensure that the criminal law is administered fairly in this
country.
* * *
(1450)
[Translation]
Mrs. Suzanne Tremblay (Rimouski-Témiscouata): Mr.
Speaker, my question is for the Minister of Canadian Heritage.
The government does not seem to be troubled at all about
giving $350,000 to the National Arts Centre's director general,
after he was fired following a putsch organized by the Mayor of
Ottawa. The Minister of Canadian Heritage is washing his hands
of the whole affair by invoking the management autonomy of the
federal agency.
Does the minister recognize that it is up to the government to
determine the working conditions of crown corporation
directors, including severance pay, and that in this instance it is
the inordinate amount of this severance pay that we find
outrageous, just a few hours before a general tax increase for all
Canadians?
Hon. Michel Dupuy (Minister of Canadian Heritage): Mr.
Speaker, I can assure the hon. member that the Minister of
Canadian Heritage never washes his hands of anything. It does
not mean that his hands are dirty.
There is a point that should be made, because not everyone
knows it. The National Arts Centre is the only institution of its
kind whose director is elected by the board of directors rather
than appointed by the government. This situation is unique and
can explain many things.
The government and this institution have an arm's-length
relationship that I think the hon. member does not challenge and
that the government respects. However, the minister has some
authority; he has the power to appoint people to the board of
directors, to audit its finances and to amend the law if this is
deemed necessary. And the problem that was alluded to will, of
course, be considered within the measures that the government
can take regarding the NAC.
Mrs. Suzanne Tremblay (Rimouski-Témiscouata):
Besides the $350,000 severance pay, Mr. Speaker, can the
minister tell us whether it is true that the person responsible for
the placement agency in the Prime Minister's Office, Mrs.
Colle-
1690
nette, is desperately looking for a new job in the federal public
service for Mr. DesRochers?
Hon. Michel Dupuy (Minister of Canadian Heritage): Mr.
Speaker, there are procedures that we follow with respect to
agency heads. Whenever there is a vacancy, we make an
announcement in the Canada Gazette. We receive names and
these names are then taken into consideration.
As we speak, there is in fact a vacancy in a cultural agency of
the Canadian government, an announced vacancy that is not yet
effective but will become so a little later in the year; at that time,
when the position becomes vacant, appropriate procedures will
be followed.
* * *
[
English]
Mr. Bob Ringma (Nanaimo-Cowichan): Mr. Speaker, my
question is for the Minister of Indian Affairs and Northern
Development.
Earlier in question period my colleague, the hon. member for
Crowfoot, asked the minister a direct question about what the
minister did or did not say concerning the Reform Party. The
minister skated around the answer and did not come out with a
direct, clear answer.
Will the minister now please answer the question? Did you not
say what was alleged?
(1455 )
The Speaker: Questions should always be posed to the
Speaker. If the hon. member could simply rephrase the question,
it would be appreciated.
Mr. Ringma: Mr. Speaker, would the minister answer the
question now?
Hon. Ron Irwin (Minister of Indian Affairs and Northern
Development): Mr. Speaker, I do have some concerns about the
positions of the Reform Party. I have sat in the House watching
them attack immigrants. I have sat in the House and watched one
of their members put out a brochure in which he quotes with
favour-
The Speaker: Order. I would ask the hon. minister if in
answering the question perhaps he also could stay with a little
more general tone. If he could I would appreciate it.
Mr. Irwin: I am sure, Mr. Speaker, that the Reform Party does
not hate Indians. I do not think anybody in this House hates
Indians. But I would like the Reform Party to be a little bit more
generous in looking at the aspirations of one of the poorest, most
deserving groups of Canadians that we have in our country.
If we cannot together solve the problems of 1.5 million of our
citizens, then this nation has no hope.
[Translation]
Mr. Yves Rocheleau (Trois-Rivières): Mr. Speaker, my
question is for the Minister of Industry.
In the speech from the throne, the federal government
promised to regulate the activities and practices of lobbyists.
However, according to a recent CBC report, lobbyists are
putting enormous pressure on the government to involve them in
the new regulatory process, thereby safeguarding their interests.
Can the government confirm that it intends to table in the
coming weeks a bill on the regulating of lobbyists and can it
reassure the House that it is not being unduly influenced in the
drafting of the new regulations?
Hon. John Manley (Minister of Industry): Mr. Speaker, I
can assure the hon. member that we will soon be tabling draft
legislation respecting lobbyists and I hope that we can count on
his support so as to give some weight to the process of regulating
lobbying activities.
* * *
[
English]
Mr. Lee Morrison (Swift Current-Maple
Creek-Assiniboia): Mr. Speaker, my question is directed to
the Minister of Natural Resources.
In spite of the fact that there has been a constant reduction in
the number of licences to hold and handle radioactive material
in the country, the staff of the compliance division of AECB has
continued to grow.
It is now rumoured that there are plans to open regional
compliance offices in Vancouver and Halifax in spite of the fact
that there are only 370 licensees in B.C. and less than that in the
maritimes.
Can the minister confirm or deny these offices are being
planned and, if they are, can she justify it?
Hon. Anne McLellan (Minister of Natural Resources): Mr.
Speaker, I can assure the hon. member that this government has
no plans to open offices in Vancouver and Halifax.
* * *
[
Translation]
Mr. Michel Daviault (Ahuntsic): Mr. Speaker, my question
is for the Minister of Public Works.
On this, the 25th anniversary of the Office municipal
d'habitation de Montréal, Mr. John Gardiner, the housing
co-ordinator on Montreal's executive committee, has once
again condemned the federal government's withdrawal from the
social housing field. It should be noted that more than 10,000
families
1691
or households in Montreal are currently on waiting lists for
social housing.
My question is for the Minister of Public Works, who is
responsible for Canada Mortgage and Housing Corporation.
Since Mr. Gardiner has once again denounced the federal
government's withdrawal from this area, are we to understand
that his recent meeting with the minister was unproductive?
(1500)
[English]
Hon. David Dingwall (Minister of Public Works and
Government Services and Minister for the Atlantic Canada
Opportunities Agency): Mr. Speaker, I want to thank the hon.
member for the question. He is going to have to be patient and
wait for the remarks of the Minister of Finance who will be
delivering his budget at five o'clock. Thereafter the hon.
member, as well as other stakeholders, will have an opportunity
to review the decision of the Minister of Finance.
* * *
Mr. Cliff Breitkreuz (Yellowhead): Mr. Speaker, my
question is for the Minister of Transport and was inspired by Mr.
Creelman MacArthur of Halifax.
While the ports of Halifax and Saint John are ice free year
round, the federal government spends millions of dollars
annually to ice break the St. Lawrence. This creates a situation
of the government indirectly subsidizing inland ports at the
expense of those on the east coast.
At a time when the east coast economy is the hardest hit in
Canada, why should Halifax and Saint John have to compete not
only with inland ports but with the federal subsidies as well?
Hon. Douglas Young (Minister of Transport): Mr. Speaker,
obviously I am somewhat aware of the activities at the ports of
Halifax and Saint John. It has been a need for Canada to be able
to ship and receive goods from its major ports on the east coast
for the last 40 or 50 years.
I find it rather unusual that anyone would question the
activities of the port of Montreal, as essential as that port is to
the economy of Canada as a whole. Therefore we fully intend to
continue to provide services from the port of Montreal as we
hope we will be able to do with enhanced activity at the ports of
Saint John and Halifax.
* * *
Mr. Simon de Jong (Regina-Qu'Appelle): Mr. Speaker,
my question is directed to the Minister of Canadian Heritage.
Last Friday the minister announced approval of the sale of
Maxwell Macmillan and Ginn Publishing to Paramount
Communications. This sale reverses a long established policy
and, in the case of Ginn Publishing, is the first time in 25 years
that a Canadian owned book publishing firm has been allowed to
fall into foreign hands.
The Investment Canada Act requires that Canadians have a
full and fair opportunity to bid for a foreign owned Canadian
book publishing company yet Canadian publishers have
informed me that CDIC thwarted all attempts by them to bid on
these companies.
Could the minister explain to the House why the government
did not follow its own legislation and did not actively seek
Canadian investors? Also, could the minister kindly explain
what the difference is between his-
The Speaker: Order. I think two questions in a question are
okay, but when we get into three or four we have to draw the line.
Would the Minister of Industry care to answer the question?
Hon. John Manley (Minister of Industry): Mr. Speaker, on
behalf of the minister responsible for CDIC, let me indicate to
the member that the government shares his concern.
However, the obligation that CDIC had to sell 51 per cent of
its interest in Ginn was one which had been made previously.
Although a number of discussions have been held with potential
Canadian purchasers, none of those discussions developed into a
substantial indication of interest to the extent that an offer was
made that was acceptable to CDIC.
In the circumstances, the decision was taken to realize on
CDIC's investment in Ginn in accordance with the previously
made commitment by the previous government.
* * *
Mr. Herb Grubel (Capilano-Howe Sound): Mr. Speaker, I
rise on a question of privilege concerning some comments made
during question period.
I feel my personal integrity and credibility have been
attacked. During my question I said that I was an immigrant and
that now I was a Canadian citizen. The member for
Carleton-Gloucester shouted: ``Now you want to lock the
gate''.
This was neither the point of my question nor do I
recommend-
(1505 )
The Speaker: The hon. member may have a grievance that he
could put forward. I wonder if the hon. member would agree to
let me have a look at the ``blues'' and I will see just what was
said in the exchange. I will have a look at it at that time.
1692
1692
GOVERNMENT ORDERS
[
English]
The House resumed consideration of the motion that Bill
C-11, an act to amend the Excise Act, the Customs Act and the
Tobacco Sales to Young Persons Act, be read the second time
and referred to a committee.
Ms. Val Meredith (Surrey-White Rock-South Langley):
Mr. Speaker, I will try to refresh everybody's memory as to what
happened prior to question period.
I am afraid that what the government has done in this instance
is to send a loud message that if enough people are ignoring the
law, do not worry it will be changed. What the government
should have done is enforce the laws that were there. If a law has
the support of Canadians it must be enforced and there was
support in the community for high taxes on cigarettes.
Calls to my office were six to one against lowering the tax on
cigarettes and if someone can get my constituents to oppose the
lowering of any tax then he or she has accomplished something.
They do not like taxes. They want taxes lowered but they want
them lowered in a sane and reasonable manner across the board.
The government should have concentrated on enforcement, not
on isolating tax cuts on contraband cigarettes.
Unfortunately some Canadians need the occasional reminder
that there are laws that have to be enforced. There are laws
against speeding despite the fact that most of us speed every now
and then. The mere sight of a police car on the side of the road is
enough to slow most drivers back to the speed limit. If the
government had been in charge of the provincial motor vehicles
act it would not have called for increased enforcement. It would
have raised the speed limit and then boasted about how it got rid
of the country's speeding problems.
In conclusion, the Customs Act and Excise Act both provide
for significant penalties for those breaking the law. The
government should have given its law enforcement officers
some manpower and resources to have carried out its mandate.
The initiatives implemented by ways and means motion No. 3
were short-sighted and in the long term this decision will be
regretted.
It is unfortunate the government did not have the courage to
stand up and address the issue head on. I hope when the alcohol
smuggling issue comes before the government it is prepared to
stand firm and resist repeating the same mistake.
My constituency runs along the Canada-U.S. border. My
riding has two of the busiest border crossings in Canada, the
Pacific crossing being one of them. I know there is smuggling of
all sorts and I know that cigarette smuggling is not the main
concern at the Pacific and Douglas crossing.
Enforcement of Canada's laws is the only way to deal with
this issue, not giving in to the lawbreakers.
(1510)
Mr. Paul Szabo (Mississauga South): Mr. Speaker, I rise to
comment on an issue that has been coming hour by hour from the
Reform Party throughout this debate and it has to be stopped.
The argument being made is that the reduction of the excise
tax on tobacco is a singular event and has no consequence on
anything else the government did. The whole point of the
initiatives brought in by the Prime Minister, the Minister of
National Revenue and Minister of Health was to break the back
of smuggling.
To break the back of smuggling they had to eliminate the
profit motive. The combination of the reduction of excise tax,
the export tax that was levied and the surtax on manufacturing
collectively represent the elimination of the profit in smuggling.
If we eliminate the excise tax and apply the tax totally to
export taxes, if we allow export taxes and that surtax to deal with
it totally, all we are doing is shifting the burden from exports to
the U.S coming back into Canada and forcing the creation of
underground manufacturing facilities in Canada.
Members really have to open up their minds to understand
that there is a comprehensive approach to one of the most
serious problems that the government has had to face in its first
three or four months of operation.
Ms. Meredith: Mr. Speaker, I have a feeling the hon. member
forgot the first part of my speech which was over an hour ago.
My concern is not that the government has just reduced taxes.
My concern is that it did not enforce the laws that were there. If
it had enforced the laws we would not have this problem.
Mr. Speller: We weren't here.
Ms. Meredith: The member was here for at least 100-plus
days.
My concern is that this is only dealing with cigarette taxes and
that the government is not stopping smuggling. It is going to
have smuggling of alcohol. It is going to have smuggling of
alien persons. It is going to have smuggling of heroine and hard
drugs. We have it now.
If the government is not going to enforce the laws, it will
continue to have smuggling of these contraband items.
Lowering the taxes of one item is not going to stop smuggling.
Mr. Jim Silye (Calgary Centre): Mr. Speaker, I commend
my colleague on her speech and her point of view. It was very
well presented.
1693
However she said something in the first part of her speech,
which was over an hour ago, about this bill doing very little to
reduce smuggling.
Does she believe that by taking the profit out of smuggling it
will increase or decrease the activity?
Ms. Meredith: Mr. Speaker, I do not want to give the same
lecture to my hon. friend and seatmate but it will reduce perhaps
the incentive to smuggle cigarettes.
It will not reduce the incentive to smuggle hard drugs, alcohol
or illegal aliens. The problem of enforcement cannot be solved
by reducing the incentive to do it. One has to enforce the laws of
the land the same for all people. It is only through enforcement
that smuggling will be stopped.
Mr. Julian Reed (Halton-Peel): Mr. Speaker, I would like
to ask the hon. member how she expects by zeroing in on
enforcement alone she can enforce the laws on the world's
longest undefended border and the world's longest sea coast.
Ms. Meredith: Mr. Speaker, I mentioned at one time that my
constituency goes along the United States-Canadian border. I
have two of the busiest border crossings in my constituency and
this has not been identified as a major problem.
Yes, there is cigarette smuggling. I do not deny that, but it has
certainly not been a problem to the extent that it has been in
Ontario and Quebec. I do not think that problems are solved by
isolating a solution for one area and putting it over the whole
country. If there is a problem in one area of the country, solve it
if it is isolated to that area. Do not assume that this problem is all
across the country.
(1515)
I know at my border crossings cigarette smuggling is
certainly not at the limit it is in Quebec.
Mr. Murray Calder
(Wellington-Grey-Dufferin-Simcoe): Mr. Speaker, I
listened with great interest to the hon. member's speech and one
thing I picked out of it was the fact that she was pointing out
everything we have done wrong. I have yet to hear an alternative
from the hon. member as to how she would solve the problem.
We have watched contraband cigarettes grow from the late
1980s into the early to mid-1990s, a 60 per cent growth in less
than one year; 75 per cent contraband in Quebec, 35 per cent to
40 per cent in Ontario, 15 per cent in the western provinces and
growing. I stress the word growing. In on one box of cartons
there is a $500 profit. In a truckload there is a $500,000 profit.
We are creating a millionaire a day. All this money is seed
money for what the hon. member is talking about which is the
smuggling of alcohol, arms and drugs.
What we have done is stop that seed money. I would ask the
member regarding everything we have done wrong, how she
would do it right.
Ms. Meredith: Mr. Speaker, actually the hon. member has
also forgotten the first part of my speech in which I did
acknowledge that there are some things in this legislation that
are positive. One is giving the same ability to peace officers as
the RCMP in dealing with the problem.
However that is where to deal with it, in giving manpower and
support to the enforcement of Canadian laws, not giving in to
criminals and reducing the laws. To give in to criminals and
allow them to change Canadian law because of criminal activity
is sending the wrong message. Give more enforcement, more
support to the law enforcement people in the country.
Mr. Andrew Telegdi (Waterloo): Mr. Speaker, I wonder if
the hon. member is suggesting that we not follow the advice of
the commissioner of the Royal Canadian Mounted Police who,
as a professional law enforcement officer, the top one in the
country, said that if we are going to get a handle on the problem
then we have to narrow the gap between the price of cigarettes in
Canada and in the United States.
I wonder if the member does not recognize that our policies in
the past have been an incubator for organized crime and we were
actually growing the underground economy.
Given the position of the hon. member's leader when he
would say that there was a tax revolt brewing in the country, do
the members of the Reform Party not recognize a tax revolt
when it bites them in the derrière?
Ms. Meredith: Mr. Speaker, I guess my concern is that this
reaction of lowering taxes on one contraband item is not going to
solve the problem. I recognize that perhaps for the RCMP this
was an easy way to deal with an issue. However, are they also
going to suggest the same thing when we talk about the
smuggling rings taking on hard drugs or alcohol?
Are we also going to suggest that we should lower the taxes on
alcohol and that we should legalize heroin and hard drugs just
because it then makes the job easier?
I do not think that is the issue here. The issue is we have
Canadian laws for a reason and we should not be giving in to
criminal activity and changing our laws just to make it easier for
them to change products.
Ms. Susan Whelan (Parliamentary Secretary to Minister
of National Revenue): Mr. Speaker, I just wonder if the hon.
member has had the opportunity to read the entire action plan
which dealt with the very issue of enforcement. We have
increased customs officers by 25 per cent to deal with the idea
and with the problems of enforcement.
1694
I also inform the hon. member that the problem is not unique
to one part of Canada.
(1520 )
The busiest border crossing last year was the Windsor-Detroit
bridge which is just outside my riding. This problem is not
unique to Quebec. It is not unique to one particular part. It is
happening all across the country. We have a total plan to deal
with it, a plan that deals with enforcement, a plan that deals with
health. I hope the hon. member has a chance to read clause 3 of
the bill particularly.
Ms. Meredith: Mr. Speaker, I do not think I ever said that the
problem was unique to one part of Canada. I said that the other
parts of Canada have a similar problem but not to the same
extent.
There is smuggling in western Canada along our borders but
not to the same extent and it can be handled by law enforcement.
I am glad the border crossing staff is going to be increased. I
think the concentration of the policy should be on law
enforcement and not in relaxing the Canadian laws.
I repeat, we do not solve problems by giving in to the criminal
element. If we do it once we are going to end up doing it over and
over again.
There is a reason for laws and there is a reason to enforce
laws. When we start giving in to the criminal element and
changing the laws of the land we are in real trouble.
Mr. Jesse Flis (Parliamentary Secretary to Minister of
Foreign Affairs): Mr. Speaker, in her back-pedalling the hon.
member is really missing the boat. Let me quote for her from the
letter that was tabled by the Prime Minister from the
commissioner of the RCMP in which he very clearly stated:
Normally an enforcement only enhancement would work but, in this case, the
smuggling problem has become so pervasive that the number of additional
resources required to resolve the problem would be so intrusive as to be
unacceptable-
I do not have time to finish reading it, but I refer the member
to the letter from the commissioner that was tabled in the House.
We are attacking this. We are attacking on all fronts as
recommended by the RCMP and all the advice we have been
given.
The Deputy Speaker: Order, please. The question is clear.
The hon. member for Surrey-White Rock-South Langley,
please be brief.
Ms. Meredith: Mr. Speaker, I cannot say it any more than I
have said it before. We have laws in our land. There are reasons
for our laws. I do not think we solve anything by changing our
laws to give in to criminal activity.
Mr. Bob Speller (Haldimand-Norfolk): Mr. Speaker, I
want to say to the previous speaker from the Reform Party that
we do not solve any problems either by sticking our head in the
sand. We had a tough decision to make. That decision was made
on the basis of all the best information we had from the RCMP,
from Revenue Canada, from the different provinces, from the
different agencies involved. We had a tough decision to make
and we made it. Unfortunately other provinces in the country
have not seen fit to do it. I would suspect that in the very near
future we will see a lot more come on board after recognizing the
problem.
I do want to stand in support of the piece of legislation in the
House today. Mr. Speaker, you know from our previous time
here together that I spent a lot of time in the House talking
directly about this issue. I have studied it substantially because
of the make-up of my riding.
Haldimand-Norfolk has a number of tobacco farmers,
probably over 800 tobacco farmers out of the 1,200 left in
Canada. I also have the largest Indian reserve in the country, the
Six Nations which includes a number of places that sell tobacco,
over 200. It is a problem for me on both sides.
The fact of the matter is that when tobacco is smuggled my
tobacco farmer constituents do not make the same amount of
money because on that product they get less money for it being
exported to the States. They actually get a dollar less a pound. It
is a two-price system and so that product that actually is being
smoked in Canada has actually been exported.
I also have on the Six Nations reserve a large number of
people. I want to say to all members who might not have had an
opportunity to visit reserves in the country that the
overwhelming majority of people, at least on the largest reserve
in the country, want to get rid of the smuggling problem.
I get more people on reserve than off in my constituency
saying that we have to deal with that problem. It was very
important for me to get that message out. I get a sense in the
House from the other side that somehow this is just an Indian
problem. It is in a sense, but it is a sense that they want to solve
this problem.
(1525)
That is why I was happy to see the Solicitor General take our
advice on this side, sit down with native communities and try to
work out solutions to this problem.
There was a time in this House when members across the way
were essentially saying we have to enforce the law everywhere
in the country. Let us go in shooting and we can solve this
problem.
I do not think that is the solution. It is a larger problem than
just enforcement. Enforcement is very important and that is why
in this bill we have gone a long way to deal with the enforcement
issue.
1695
I have talked about taxation in the House as being really the
only way to dramatically solve the problem, but there are other
ways in which we can add to the solution. I want to go through
some of the things that we have done.
We have increased customs examinations of high risk
travellers. I think that is going to get a lot more smuggling than
just tobacco smuggling. I think it might even help us solve our
problem with the smuggling of guns and cocaine or other drugs
that come into the country. We have a large border. I would
suggest that over the years this problem has been a lot bigger
than even we in the House talk about.
The whole question of alcohol being smuggled is only a small
problem. We have guns. We have different products that are
coming across our borders that need to be addressed. I think this
goes a long way in helping to address those problems.
We are providing 24 hour commercial traffic clearance at 22
ports that handle 99 per cent of the commercial traffic. We are
examining the service charges for off hour service at these
locations. We are extending hours of service at a number of
existing ports. We are conducting border blitzes that target high
risk travellers and carriers.
I believe that in the bill we have gone beyond the taxation
question. We have put in very needed border restrictions to make
sure that we in the country control what comes into the country
and we know specifically what is coming in.
The real problem we have in the country today is not as much
with the smuggling but it is an acceptance by Canadians that
somehow not paying their fair share of taxes, ripping off the
government, is a good thing to do. Unfortunately when it starts
in cigarettes it continues. Canadians have to be told that it is not
only governments but their responsibility also to follow the law
and make sure that they contribute to the solution to this
problem.
I have never argued with the reason Canadians have been
buying smuggled cigarettes. If they can get cigarettes at a
cheaper price and feel that the government is not listening in
terms of the taxation questions, they are going to do it. It is a
question of taxation. We have to get it out of people's minds that
somehow it is easy and it is natural to rip off the government by
not paying taxes.
We have a $45 billion deficit. We have to attack that deficit if
we are to go into the next century and compete. In order to do
that people have to feel that the taxation system under which
they live is a fair system.
Canadians have not felt that excise taxes on cigarettes,
gasoline and alcohol have been fair taxes. As a result they have
been more than willing to go around the law and do this. I think
this tells Canadians that we understand these systems have been
unfair and we are ready and willing to work with them to come
up with real solutions.
Regarding the smuggling in the country, the only way to deal
with it was to bring down the taxes. There was no other answer.
In terms of the export tax on it, I have never supported an export
tax. Quite frankly it is not workable. The export tax in this
regard, because the provinces have come on board and because
the taxes have been slashed enough, will be irrelevant. We will
not be exporting that cigarette product to the United States.
Also in the bill there are exemptions for traditional exports.
Those real exports that go elsewhere outside the States or the
traditional ones that go to the States and are sold for
consumption in the States will be protected. Tobacco farmers in
my area were very pleased with that idea.
(1530)
In order to solve this problem we needed to do two things. We
needed to take a tough stand and we needed to bring down the
taxes.
There are those who argue that somehow lowering taxes and
lowering prices will let young people buy more cigarettes. I
have heard many young people on television say: ``Oh, good.
Now I am going to have easier access to cigarettes''. However
that is not the case. Right now they can get cigarettes as quickly
as they can buy a pizza in downtown Toronto. Cigarettes are
easily obtained in school yards.
However if we put in the enforcement making sure the
penalties are high for selling cigarettes to young Canadians and
setting the age at a certain point, young Canadians will be
protected. They will not have that access. That easy access now
is through smuggled cigarettes and they get them in the school
yard.
We have a good balance here. It is the balance of protecting
young people from smoking, the balance of dropping the taxes
so Canadians feel their taxation system is fair. At the same time
there is the balance in enforcement, making sure that those who
would illegally profit from this are caught. This approach will
go a long way toward solving this problem.
At the same time we have taken the opportunity to sit down
with Canada's first people to discuss this question with them,
rather than just going in hocus-pocus with guns blazing. We are
trying to work with Canadians and our aboriginal peoples to find
solutions to their problems.
At the same time we are throwing a lot of people, who have
been selling cigarettes granted illegally, out of work. It might be
incumbent upon the government to recognize that fact. Where
will they go if they are not selling cigarettes illegally? Most of
these people are not the normal law breakers. Most of them are
people who just want to make a buck. They did not have a job
and were looking for an opportunity to make some quick cash.
1696
This question must be raised. Not a lot of people are talking
about it as it is not something that really pops up in people's
minds. It is the question of making sure there is economic
development on our reserves so that those people who might
turn to crime because they do not have any other economic
activities would have some other alternative.
Mr. Chris Axworthy (Saskatoon-Clark's Crossing): Mr.
Speaker, cigarettes are the only product that when used as
directed kill.
Is the member in favour of cigarettes being included under the
hazardous products act?
Mr. Speller: Mr. Speaker, the hon. member knows that
question came up before. In fact I think our hon. Speaker was on
a committee that actually looked at that question.
Mr. Young: You cannot make them safe under the Hazardous
Products Act.
Mr. Speller: No, of course not. I think it was something an
NDP member raised in that committee. It is just impossible to
do.
If the government wants to outlaw smoking, fine. Compensate
my tobacco farmers for the value of their farms and for the value
of their future livelihoods and do it.
Governments are quite hypocritical in this area. On the one
hand they want all that big cash and on the other they say to my
tobacco farmers that they are doing a nasty and dirty thing. That
is not the case. All governments have to get off the pot on this
question and make a decision. If they want to outlaw smoking
then compensate my farmers. Allow my farmers to get on with
their livelihoods rather than slowly strangle them to death.
(1535 )
Mr. Don Boudria (Glengarry-Prescott-Russell): Mr.
Speaker, I start by congratulating the Solicitor General and the
Minister of Health for addressing what was obviously a life and
death issue in the constituency I have the honour and privilege to
represent in the House. I do not believe I am exaggerating the
point when I describe it that way. Over recent years literally
dozens of constituents of Glengarry-Prescott-Russell have
been murdered or have disappeared as a result of tobacco
smuggling and associated crime.
When we talk about the ill effects of tobacco on young people
I wonder how many of us have stopped to think of how many
times a teenager working in a cornerstore has had his brains
blown out so that someone else could steal the cigarettes from
the shelves of that store to resell on the contraband market. That
is not just in my riding. Unfortunately it has happened several
times in this country.
I want to describe the extent of this problem. It was
highlighted by another member earlier today. The commissioner
of the RCMP said in a letter tabled before the House: ``This
implies a need to reduce the tax on cigarettes significantly
enough to approach parity, thereby eliminating the profit motive
for smugglers''. In saying that he was telling us the time had
arrived whereby we no longer had the choice and this is what we
had to do.
It was not always that way. I remember when smuggling was
about one-tenth the amount it is now or that it was when these
measures were introduced. I remember on November 22, 1991
rising in the House and addressing a question to the previous
government.
[Translation]
This is what the then Solicitor General, Hon. Doug Lewis,
replied on the subject of smuggling: ``Obviously it still exists a
certain extent. We are doing everything we can to eliminate it''.
[English]
That is what was said at that time. In other words. do not
bother us. It is not very important. It is no big deal.
The last day Parliament sat before the election again I asked a
question. I had asked questions many times. I asked the
following and members might think the question was a little
dramatic or at least members thought so at the time. In
retrospect it certainly was not.
[Translation]
On that occasion, I said the following:
"Almost every night machine gun fire is heard and speedboats are running
the rivers at full speed in the dark with their lights turned off pursuing criminal
activity. I am not describing life in Sarajevo or Mogadishu. I am describing the
practice of tobacco smuggling on the St. Lawrence River near Glengarry in my
riding."
I made that statement in the House on June 13, 1993. And I went on to say:
``I want to ask a question of the Solicitor General on the last day of this
Parliament. What precisely does the government intend to do to stop this illegal
activity which endangers the lives and safety on my constituents? What is he
going to do to ensure that we stop losing billions of taxpayers' dollars in this
terrible process that is going on right now 50 miles from Parliament Hill?''
[
English]
Nothing was done. Yes, there was a time when we could have
done other things, federal and provincial governments, and in
Ontario Mr. Rae could have done something.
For two years the Ontario Provincial Police detachment at
Lancaster, a stone's throw from Lake St. Francis, was closed at
night. Only after I raised it publicly was the police station
reopened last November. Imagine that. The police station in the
area where all the criminal activity is taking place shuts down at
night, courtesy of Bob Rae's cutbacks. That is what happened.
He self-righteously said before the media last week and the
week before he did not know this was a problem in Ontario and
1697
that it was a regional problem in Quebec, as he or Mr. Laughren
put it. Those statements were a little less than totally honest. He
knew of the problem.
(1540)
My colleagues from western Canada will know of the report
on tobacco smuggling by the Mackenzie Institute. All of them
have received copies of the report. It explains to what extent this
criminal activity has gone on. If members have not received it I
will gladly provide them with copies.
Everything we hear today and have heard for the last weeks in
this House the Mackenzie Institute has been telling us for
months. However members were not listening. This government
has listened. For three years I and others tried to get the previous
government to act for the safety and security of Canadians and
for the respect of the law and nothing was done. Within three
months the new government did something and I am proud of it.
Some people claim tobacco smuggling is a victimless crime. I
want to read what Claude McIntosh, the associate editor of the
Standard Freeholder of Cornwall, wrote on July 3, 1993. He was
citing examples of victims of smuggling. He wrote the
following:
A Cornwall welfare recipient switched to a supplier selling cartons $1
cheaper than his previous supplier. His old supplier, fearful of losing other
``accounts'', paid him a visit. During the conversation he had his arm broken in
an ``accident''. He went back to the previous supplier. Welfare recipients are
soft because they are: 1) more willing to take the chance, and 2) available night
and day.
Listen to this one about young people. A teacher ordered a
disruptive student out of the classroom. On his way out the
student reached into his pocket, pulled out a wad of bills and
sneered: ``I don't need your education''. The student works as a
runner in one of the cigarette smuggling cartels with the
potential to earn more in six months than the teacher does in a
year.
That is the reality of smuggling. For those who wish to put
their heads in the sand and think that is not a reality, well they
are wrong.
What kind of message does it give to our young people when
the one who is smuggling cigarettes and selling them in schools
drives around in a corvette while the rest of the students walk
home at night? We are concerned about young people.
[Translation]
The social contract has crumbled. When 60 to 70 per cent of
cigarettes are sold illegally, as it is the case in Quebec-35 per
cent in Ontario, very close to 100 per cent in my riding and as
much as 25 to 30 per cent in Western Canada-I tell you that the
social contract has crumbled in that respect and that we have
returned to the so-called hobbesean state of nature: Every man
for himself.
[English]
Life is brutish and short, as Thomas Hobbes put it. That is not
the kind of society we want. We have to restore that social
contract. The way of doing that was to take every action
necessary, all governments together in concert. The federal
government and the Government of Quebec did it. The
Government of Ontario was dragged in kicking and screaming in
order to do that which it should have done in the beginning.
Nevertheless it has done so now.
There is another article from the Standard Freeholder. It was
written by Claudia Peel on February 16, 1994 and is entitled:
``Smuggling is down to a trickle'':
The volume of black market cigarettes moving through this region has
dropped significantly since the federal government's crackdown on smuggling
began one week ago today.
OPP Det. Insp. Chris Lewis said police have seized some smuggled smokes
since the federal anti-smoking plan went into effect last Wednesday. But the
volume of contraband seized in the past week has been ``quite a bit less'' than
police have been accustomed to seizing in a seven-day period.
(1545)
[Translation]
As you can see, Mr. Speaker, action was required. I do not
even have time to get into the whole issue of contraband, which
thrives on illegality and leads to smuggling not only cigarettes
but also drugs, alcohol and the likes.
Whether we come from western Canada, Ontario or
elsewhere, whether we are separatists, sovereigntists or
federalists, I think that we all have the same interests. In our
society, we want laws to be obeyed. What was done had to be
done. And to conclude, I congratulate the government, because
that action was necessary and was taken. I hope that we will soon
be able to say that we have managed to eliminate this evil that is
preying upon our society.
Mr. Ghislain Lebel (Chambly): Mr. Speaker, I do not know
if the previous speaker managed to convince himself after the
fact, as his government is now trying to do, but he would like to
convince us that the decision that was made was the right one.
I think that the government lowered taxes on cigarettes
because it did not want to tackle the real problem and stop the
distribution of contraband goods on the territory implicitly
affected by this bill; instead of dealing with the smugglers
themselves, they went after the product. Except that it will be
easy to replace that product with another, like alcohol, drugs or
cocaine. To justify themselves, they said that they asked the
commissioner of the RCMP, who told them to cut taxes. It is not
up to the commissioner of the RCMP to make the laws in this
1698
government, and you also need the political will to enforce the
laws. When there is no will to enforce the laws, we end up with a
bill like this one.
The government shot into its own net with this. There can be
no solution to this problem as long as there is no political will to
intervene and break up the distribution networks for cigarettes,
drugs, popcorn or whatever. We must break up the distribution
networks. That is what the government did not have the courage
to do.
I would now ask the hon. member who just spoke if he has a
personal solution to suggest to his government to break up the
distribution networks. That is where the problem lies.
Mr. Boudria: Mr. Speaker, I noticed that some hon. members
were applauding, but not the hon. member for
Argenteuil-Papineau, who, I think, shares some of my feelings
regarding the effects of smuggling. He can see these effects
from up close in his constituency. Besides, the hon. member who
just asked me a question also faces a similar situation.
He talks about the distribution network. It would be very
naive to think that this distribution network did not exist in all
parts of society before! In my own riding or, without even going
that far, how many parliamentarians know that illegal cigarettes
were sold right here on Parliament Hill?
In my riding, the day before the Prime Minister made his
announcement, I received a phone call from a constituent
complaining that the village's local smuggler had just made a
delivery to the parish priest's house. It is a sad, very sad
statement.
We saw the same thing in another region with the MATRAC
group, when similar statements were made by other people in
society sharing similar positions. These people did not see
themselves as criminals, yet they unknowingly were part of an
organized crime network.
(1550)
[English]
Mr. Dick Harris (Prince George-Bulkley Valley): Mr.
Speaker, the hon. member talked about realities. I would like to
talk about realities as well.
Reality number one is that, yes, smuggling is against the law.
Reality number two is that when people break the law, law
enforcement should ensure that they are caught and punished.
Reality number three is that in recent months it has been clearly
identified that 70 per cent of the cigarette smuggling was
occurring on the Mohawk reserves. Reality number four is that
the previous government failed to act on this smuggling. Reality
number five is that the current government has failed to enforce
the law that would curtail this smuggling as well.
The reality is that for whatever reason the government has
tied the hands of our law enforcement agencies, for political
correctness perhaps, maybe for other hidden political agendas.
The fact is that the RCMP has not been allowed to enforce the
law, which is what it is supposed to do.
Another sad reality is that the government has failed to do the
right thing: enforce the laws of the country. It has chosen instead
to do something totally opposite, to disregard the fact that there
are law breakers that have to be stopped. It has chosen to lower
the price of cigarettes. That is a far cry from enforcing the law.
In reality I can imagine criminals on seeing a precedent set
like this, saying: ``Okay, let's look for the next one and see if we
can get them to move away from law enforcement''.
Mr. Boudria: Mr. Speaker, I do not think there was a question
there. Let me add a reality number six or seven to what the
member has just said. The reality is that the laws that were there
have ceased to be laws because of the negligence of others in the
past.
Law and order had to be restored. It was done because it was
the right thing to do. Politically correct, my eye, I say this to all
my colleagues. When my constituents were being shot at and
when people were losing their lives over crummy packages of
cigarettes, it was time for governments to do something, and I
am proud of it.
Mr. Jake E. Hoeppner (Lisgar-Marquette): Mr. Speaker, I
appreciate the hon. member's comments. It almost astounds me
that we fail to realize what really has caused this problem.
In the 1970s when the government of that day allowed 24 per
cent interest rates, allowed farmers and businessmen to be put
out of business, I stood beside graves of people who committed
suicide because of the overspending and overmanipulation of
the political system. Today he makes a very emotional speech. I
wonder what he is going to tell his future great-grandchildren
when they have no food to put on the table and they shoot each
other because of it. Who will they blame then?
It is because the governments of the last 25 years have not
been able to make a decent decision to enforce laws, where
thousands of people died in two world wars, that is why we have
this problem today. We had better realize it or we will go down
in history as some of the worst decision makers ever in the
country.
Mr. Boudria: Mr. Speaker, I am not sure I understood the
analogy the member was trying to draw. If he is insinuating that
our ancestors fought for freedom and for respect for law, that is
exactly what I am advocating as well.
1699
(1555 )
Mr. Jim Silye (Calgary Centre): Mr. Speaker, this is just
getting good. I hate to spoil the party by speaking in support of
Bill C-11, an act to amend the Customs Act and the Excise Act
and the Tobacco Sales to Young Persons Act.
In my riding of Calgary Centre this issue has attracted some
concern and some comment. It is basically split 50:50. The
government's four point action plan on smuggling comes under
criticism where it lowers the price of cigarettes and that it
impacts upon the increase in health costs and such. That is a
concern and I have expressed it. Nevertheless in evaluating this
bill and the steps taken by the government I feel it is worth going
forward with it.
The federal government is currently losing a guestimate of
$60 billion to $80 billion per year to the underground economy.
This loss of revenue has a direct negative effect on the ability of
small law-abiding businesses to compete in the private sector.
In the end it is the Canadian taxpayers who end up paying for the
loss of revenue and the increased cost associated with the
lucrative practice of smuggling.
This problem is rooted in the fact that Canadians pay too
much tax and have lost faith in government's ability to manage
money, manage resources and live within its means. We will
find out this afternoon at five o'clock how much better the
government is going to do in managing resources and doing
something with the economy.
Canadians are finding it more and more acceptable to
purchase smuggled goods because of the taxes and surtaxes they
have had to pay legally on items. This problem is not limited to
just cigarettes. It is a problem related to clothing, alcohol,
groceries, jewellery, guns and the list goes on.
According to government statistics the average price of a
carton of cigarettes was around $45 to $48. The same carton
could be purchased in the United States for $15. This differential
made the cigarette trade appealing to many Canadian smokers
and to a large degree organized crime.
A single case of cigarettes containing 50 cartons can produce
at least $500 profit. A thousand cases per week could therefore
mean a profit of half a million dollars for suppliers. With this
kind of profit motive it is no wonder smuggling has become so
desirable.
Canadian cigarette companies were well aware of this new
market and as a result increased exports of cigarettes at an
incredible rate. In 1985, 3.5 million cartons were exported to the
United States. The figure now is over 62.8 million cartons per
year. This increase of over 1900 per cent in eight years is not due
to the fact that Americans have begun to love our cigarettes.
Having gone to California quite often I know most of them hate
them.
Cigarette companies knew there was a market for the product
and they were using it as a means to sell more cigarettes here in
Canada. It is estimated that between 85 per cent to 90 per cent of
the tobacco products destined for exports find their way back
here.
For non-smoking Canadians who do not feel that the problem
of smuggling affects them I ask them to think again. The number
of people charged by RCMP customs and excise has increased
from 414 in 1990 to 3,389 to date. The number of seizures within
this same timeframe has increased from 303 in 1990 to 5,044 to
date.
Increased enforcement and prosecution combined with the
loss of government revenues cost the government over a billion
dollars a year. In the end it is every Canadian taxpayer, not just
those who drink or smoke, who end up paying these costs in the
form of higher taxes.
My party strongly believes that the federal government has a
spending problem and not a revenue problem. Spending cuts
alone will not make the problem of smuggling go away. The only
way to truly eliminate the problem is to reduce the profitability
to smugglers. By reducing the cost differential between
smuggled and retailed cigarettes, ordinary cigarette smokers
will have less incentive to seek out and purchase illegal
cigarettes and on a larger scale organized crime will no longer be
able to profit from it.
Only when the profit is removed will smuggling be reduced.
Law enforcement alone, without the removal of the profit
margin, would not be enough to solve this major problem. Bill
C-11 is the first of many necessary steps toward the elimination
of the problem.
(1600)
It is estimated that over 70 per cent of smuggled cigarettes
come through native reserves in Ontario and Quebec. As we
know, this has become a major political issue over the past few
weeks in the House, in question period and in the country.
The fact is, however, that people of all colours and walks of
life are involved in the illegal cigarette trade. Also there has
been a smuggling stigma created by a small group of native
Indians who are breaking the law that is having a negative effect
on the majority of native Indians who obey the law.
As some of my colleagues have said earlier, law enforcement
on or off native reserves should be adhered to and should be
adhered to quickly.
There have been many concerns expressed by health
organizations and individual Canadians who believe that by
reducing the
1700
cost of cigarettes more people, especially younger people,
children, will begin to smoke. In my opinion by raising the legal
age to smoke, eliminating kiddie packs and limiting vending
machines to bars the government has taken a step in the right
direction toward the reduction of smoking for young people.
This fact in combination with increased fines for retailers who
sell to minors and fines for minors who are caught smoking will
help mitigate the problem.
We must not lose sight of the fact that this bill is primarily
targeted at the multibillion dollar smuggling market. Federal
and provincial governments tax cigarettes and liquor not just to
reduce consumption but to generate extra revenue for other
programs. These so-called sin taxes combined with health
awareness campaigns will not eliminate in its entirety the use
and abuse of these substances.
If we go back to before this act, what were the facts? The facts
were that people were smoking and that people were drinking,
except that the purchase of cigarettes went into an underground
economy. This is an attempt to bring it to the surface. It is up to
all Canadians to deal with this problem at home, in schools and
in their communities.
If further measures need to be taken by the government then
we should vigorously examine all of our options. The bill
addresses organized crime, the tobacco companies and respect
for the law.
The critics of the bill, including some of my caucus members,
have focused on health care costs rising, more young people
smoking and the loss of revenues at a time when government can
least afford it. There are other means available to deter smokers
without relying on taxation only. For instance, we could have
variable insurance premiums for smokers and non-smokers, the
same with alcohol drinkers and non-alcohol drinkers, the same
with automobiles in that the more accidents one has or the more
risk one is the higher the premium.
The issue with respect to children is being addressed because
to combat the lower price it is prudent and wise of the
government to raise the legal age, introduce fines, enforce them
on the school yards and restrict the use of vending machines to
those venues that must check the age of the customer. Also, as I
mentioned earlier, by eliminating mini-packs and labelling
cigarettes for export this will restrict the flow of illegal and
legal cigarettes to the youth of the country.
Furthermore, the advertising and education programs about
the effects of smoking should be recognized as an influencing
factor, although not an end in itself. Despite the many lectures of
parents to their children, despite the many TV commercials,
people still smoke.
We must remember that at the end of the day, try as
government might, it really cannot legislate through taxation
totally a country's social behaviour. It can only have an
influence.
Through this bill organized crime will be neutralized by the
removal of profit and greater law enforcement. The two go hand
in hand. My colleague, my seatmate, has indicated that law
enforcement is the cure and I agree with her. I also believe that
we have to lower the price to take the profit out of it.
The tobacco companies are also being addressed and in a way
punished for their past behaviour by the introduction of an
export tax of 8 per cent.
(1605 )
The increase in their corporate tax rate from 21 per cent to 30
per cent and a 3 per cent surtax on the tax paid portion, which
according to the Department of National Revenue will generate
$200 million more revenue to the government, are indications
that the tobacco companies are not getting away scot-free on
this.
In conclusion, law enforcement and respect for the law are
very imperative, despite what the hon. member from the Liberal
Party said earlier that they are doing it. They are not doing it. We
have not seen any evidence of it being done but the RCMP must
move swiftly to those known major areas of smuggling activities
to eliminate the perception of two sets of laws in Canada.
If this is not done and not done swiftly then all the critics of
this bill will prove to be right and the government will be totally
embarrassed. I do not smoke but I might go out and have one.
Mr. Julian Reed (Halton-Peel): Mr. Speaker, I listened
with interest to that contribution from the hon. member for
Calgary Centre.
He has taken quite an enlightened approach to this problem
and pointed out a problem that every member has in the House
which is that his or her constituents are split on the issue of
taxation and the impact of taxation.
It should be reinforced that the only reason tax reduction was
introduced was that simply to impose an export tax would only
look after about half of the cigarette smuggling problem.
Close to half of the product that has been coming across the
border as we all know now is counterfeit. It is manufactured in
the United States and it has very nice looking Canadian
packages and Canadian labelling. It is very difficult to tell it
from the real thing.
That was obviously the reason why that tax reduction was
introduced. One thing that we can do is convey to all the citizens
of this country through our constituencies that there was a
reason for it. It is not intended to knuckle under to the tobacco
industry. As a matter of fact it will be reinstated as soon as this
problem is brought to an end.
1701
It is also important to put on record that Mr. Clinton in the
United States with the introduction of his medicare bill has
made it clear that tax will be added to American tobacco. That
effort should help us a great deal. It behooves us all to encourage
Mr. Clinton to bring that new tax in in the United States sooner
rather than later.
This is where the member for Calgary Centre slipped. He had
my attention until he said there is no law enforcement. He will
find and we all will find very quickly that the law is being
enforced and it is being enforced very well. The RCMP is doing
its job.
Already we have a news report that in one area particularly
smuggling has been reduced to a trickle. The smugglers are
beginning to be put out of business. In the next few months we
will be standing in this House applauding the RCMP for the very
fine work it has been doing.
Mr. Silye: Mr. Speaker, I appreciate the member's opinions
and comments. We know where the lines of communication are.
The RCMP knows where they are. Why is there not a headline?
Why are the people who are doing it not captured?
I disagree that it has enforced the law. For months we have
heard the same thing from the Prime Minister. He said that there
is no such thing as a no-go zone and that the law will be enforced
across the land. We see on television time after time, as a lot of
the Bloc members brought up, that it is not being done.
I would like to see the law enforced. I would like to see the
police visual. I would like to see the police rather than the
politicians capturing the headlines. I would like to see these
crooks put in jail. That is what I would like to see but it is not
happening.
(1610)
The Prime Minister said he had a great reluctance to lower the
tax, fine. The person who talked him into it was the head of the
RCMP. This is what he needed in order to do his job, take the
profit out of it and then he will go and capture these guys. Fine,
the great RCMP can go and capture them. Let me see them
captured. I have not seen it yet.
Mr. Dick Harris (Prince George-Bulkley Valley): Mr.
Speaker, I can agree about 85 per cent with my colleague from
Calgary Centre.
First, I agree with him most emphatically that the law
enforcement the government has talked about simply has not
happened. I draw a comparison between what would happen in a
neighbourhood in most communities in Canada if there were a
suspicion for example that there was an illegal marijuana garden
in the basement of a house.
I can assure members that from seeing the results of such
activities in the papers over many years the RCMP is over that
residence like a swarm of bees. I suggest that growing marijuana
is breaking the law the same as smuggling cigarettes. I have not
seen the RCMP forces over the known areas of smuggling like a
swarm of bees like we would see in other communities. I suggest
that although law enforcement has been spoken about by the
government it has not been happening.
I also agree that a combination of law enforcement and tax
changes regarding cigarettes is necessary to solve this problem.
However I suggest a different formula.
I suggest that rather than reducing the taxes on cigarettes in
Canada we should have doubled the export tax that we presently
have to $16 a carton. With the extra $8 a carton we could use that
money to pay for increased law enforcement to cut down on the
smuggling. We could cover the areas where the smuggling is
taking place with a larger and more effective police force, one
that was being paid for by the export tax that should have been
added to the cigarettes.
Mr. Silye: Mr. Speaker, the member did not agree with me
100 per cent so I cannot have him as a seatmate.
Mr. Rompkey: Eighty per cent is not bad.
Mr. Silye: On his second point, as a constructive alternative I
do not really disagree with that suggestion. However it is not
within our power to makes those kinds of rules. I can say that by
admitting that he has agreed to 85 per cent of what I said, we will
have another Reformer voting for the bill.
Mr. Garry Breitkreuz (Yorkton-Melville): Mr. Speaker, I
do not know if I should put my hon. colleague on the hot seat, but
I would like to run this past him and see how he would respond.
There are many honest citizens in this country who object to
taxes but who do not break the law in order to make their point.
Here we have a government that has responded to illegal activity
and reduced taxes. There are many farmers who have supported
the Reform Party who really want tax reduction. Why does the
government not respond to them with the same urgency with
which it responded to a certain element in society?
I wonder what my hon. colleague would say if I said there are
many honest citizens in the country who really want tax
reduction but do not break the law in order to do that. How can
we reconcile what we have done here? If we support tax
reduction for this reason why do we not have that same urgency
in supporting it for the many honest people?
Mr. Silye: Mr. Speaker, that is a very difficult, tough
question. I guess a way that I would try to answer that is that the
number of smugglers is low. The people who are cheating the
system and who are developing this market are few, whether
native Indians, white Anglo-Saxons, Chinese or American. We
are not focusing on capturing the criminals. Where they sell the
smuggled cigarettes is into a marketplace that a lot of Canadians
have been willing to go because of the overspending of
government after government after government, Liberals,
Conservatives and now back again to Liberals. Instead of
people going to
1702
the store and paying somebody $48 a carton they will buy it if
somebody shows up at $22.
(1615)
To solve that problem, take the profit out of it and we have it
cured. If there is a health problem, there are ways that we can
solve the health problem. If alcohol becomes a problem, we can
solve that problem. It is not the honest farmers who are causing
the problem. It is the few and minor elements of society that are
making the many in society look bad and they are holding up the
many in society to ransom.
I hope I have answered the question somewhat.
Mrs. Dianne Brushett (Cumberland-Colchester): Mr.
Speaker, I applaud the hon. member for Calgary Centre and
congratulate him on his excellent speech. It was certainly very
intelligent and totally comprehensive of the entire package that
has been brought forward in this bill.
I would like to indicate to the member that he has convinced
me as to how I should vote on this bill. In terms of his
colleagues, I appreciate the point that he has brought out, that
we cannot legislate social attitudes and social behaviour. We can
do everything in our power in this House to look at each issue
comprehensively and try to find the best solution that serves the
majority of people who are law-abiding citizens.
I congratulate the member on the broadness and intelligence
of his approach. I hope that he can take this to his colleagues and
convince them of the merits of the bill.
Hon. Warren Allmand (Notre-Dame-de-Grâce): Mr.
Speaker, the hon. member in his remarks seemed to equate law
enforcement with the arrest and conviction of criminal
smugglers.
I want to ask him whether he thinks it is a more effective type
of enforcement where the measures taken deter or prevent the
smuggling from occurring in the first place. It seems to me that
is the type of enforcement that we have encouraged with the
broad range of measures which he seems to support. In other
words, through increased resources to the RCMP and to customs
agents, increased by lowering the price of the cigarettes, by a
wide range of measures that is in the program, we are deterring
continued smuggling at the level that it was at.
I want to ask the member if that is not a better type of
enforcement than having the crime take place and then
attempting to arrest the person after the fact?
Mr. Silye: Mr. Speaker, I appreciate the hon. member's
question. That philosophy and that argument is what is forcing a
lot of my colleagues to argue that the government was afraid to
enforce the law. The law was there. We knew where the
smuggling was taking place and nothing was being done about
it. Nobody was going there and arresting those people. They
were staying away from those areas.
The member's philosophy now is or he is suggesting that by
eliminating the profit out of smuggling that the smuggling will
not occur and therefore the arrest will not have to happen.
An hon. member: Plus increase police resources.
Mr. Silye: Plus increase the police resources and enforce it.
That is a fine argument, but we have not captured the people who
were responsible for the smuggling in the first place. They will
just find something else to smuggle now. If they knew who was
doing it, why did they not arrest them prior to the price
reduction?
Like the complete four point package, it is a package. I think it
is a way to solve this problem. To shy away from enforcing the
law-and the Minister of Justice is listening to us intently
here-is backing away and shirking your responsibilities. I am
not saying that the minister has shirked his responsibilities, but
somehow, and I am just repeating what has been said to me by a
lot of people, there is a perception that there are two sets of laws,
one for native Indians and one for on reserve and off reserve
natives. The RCMP has been reluctant-I am not saying it was
ordered not to-to enforce the law where the law was being
broken.
(1620)
This is a package to eliminate all that. With respect to the
members of my party who spoke out in terms of law
enforcement, this is the area where the government's action has
been weak; the argument about if the speed limit is being
broken, then raise the speed limit and the law is not being broken
any more. Let us enforce the law.
Some hon. members: Hear, hear.
Mr. Silye: My side woke up, finally.
I think it is imperative that the government not shy away from
its law enforcement duties even though it changed the law so
that the law will not be broken.
Ms. Susan Whelan (Parliamentary Secretary to Minister
of National Revenue): Mr. Speaker, as in past weeks we have
learned a lot today about the smuggling issue and we will
continue to discuss the matter, but discussion is not enough. To
the government members of the House the bottom line remains
that we have a responsibility to take action now against what has
become a national epidemic of problems created by smuggling.
That is why I am speaking today in support of Bill C-11.
As the hon. Minister of National Revenue pointed out earlier
today, smuggling has grown into a national problem requiring a
national solution. No longer is the smuggling phenomenon
restricted to specific regions of the country. It has been
evidenced today by many members in the House that it is wide-
1703
spread across Canada. It has spread to all parts of Canada and it
affects all Canadians.
History has shown us that if left unchecked, the problem can
only get worse. History has also shown us that empty threats and
promises are not effective against this phenomenon. It is time
for action now.
As well, we have learned over the past few months that the
costs of smuggling are staggering. Tobacco smuggling alone has
cost the federal government over a billion dollars in lost
revenue. The provincial governments have also lost a billion
dollars to tobacco smuggling.
This is revenue that was to be used for programs such as
health, social services and employment, revenue that has been
taken away from government thus reducing its ability to help
Canadians who need it the most, revenue that has been placed
into the hands of criminals and organized crime to finance their
elicit activities.
These activities are not restricted to contraband tobacco
products but also drugs, alcohol and weapons. Smuggling has
also cost the legitimate business operators in Canada who
cannot compete with the tobacco contraband market. These
businesses are losing more sales and in more areas of the
country as contraband sales steadily increase.
The costs are not all monetary. Smuggling is no longer just an
issue of tax avoidance by smokers. It has resulted in cheap
tobacco products being easily accessible to young Canadians. I
want all Canadians to know that the smuggling networks have
penetrated our school yards. They are offering cheap tobacco
products to young people. These same networks that used to sell
drugs and other contraband are used to sell drugs and other
contraband products to our youth.
Past government inaction and intolerance of tobacco
smuggling has resulted in a disregard for Canadian laws,
disregard not only from criminals but from Canadians who
would otherwise be law abiding citizens.
Bill C-11 is an integral part of this government's four point
anti-smuggling and anti-smoking initiative. The proposed
amendments that Bill C-11 will make to the Excise Act, the
Customs Act and the Tobacco Sales to Young Persons Act are
evidence of this government's resolve to act to restore respect
for our laws and to protect young Canadians.
I would like to describe again for those members present in
the House the basic elements of the bill.
(1625 )
The first amendment would allow the government to
designate provincial and municipal police forces as appropriate
with authority to enforce provisions of the Excise Act,
expanding the police resources to combat smuggling.
This will assist in cutting off the flow and distribution of
contraband products into the marketplace. These are the same
cheap products that are reaching our young Canadians and the
same cheap products that undermine anti-smoking initiatives
and drain revenues from legitimate public programs.
The second amendment, both to the Excise Act and Customs
Act, would allow for the immediate disposal of certain seized
products without hindering the successful prosecutions of the
criminals involved. This measure will save taxpayers
significant costs each year by reducing the cost of storage of
these goods and the resources needed to protect and monitor
them.
The third amendment to the Excise Act will require that each
individual cigarette that is to be sold in Canada be stamped to
indicate that the federal taxes have been paid. This amendment
will greatly assist enforcement agencies in identifying
contraband cigarettes. In addition law-abiding citizens will be
able to easily identify someone smoking contraband cigarettes.
We will be able to know if anyone in the room or our neighbour
has bought legal cigarettes.
The last two proposed amendments to Bill C-11 are to the
Tobacco Sales to Young Persons Act. The first of the two
amendments would prohibit the manufacture and the sale of
so-called kiddie packs of tobacco products in Canada. These
kiddie packs contain fewer than 20 cigarettes per package and
are targeted specifically to the young people of Canada.
The second of the two amendments will prohibit the
importation of tobacco products into Canada by anyone under
the age of 18. This will provide Canada Customs with the
authority to prevent young persons from importing tobacco that
they could otherwise not legally purchase in Canada.
As the hon. minister has outlined for everyone today, action
has to be taken to address the smuggling problem in this country.
Bill C-11 specifically supports two key elements of the
government's anti-smuggling initiative, enforcement and the
health and safety of young Canadians.
The proposed amendments to the Excise Act and Customs Act
will provide additional tools to police forces to help them crack
down on all facets of the smuggling trade. The proposed
amendments to the Tobacco Sales to Young Persons Act will
support the protection of the health and safety of young
Canadians.
This bill is an essential element of the government's overall
strategy. We certainly do not pretend that these proposed
amendments offer a complete solution to the problem. Rather,
they support the broader anti-smuggling initiatives that this
government has undertaken. Without these amendments the
government's efforts to combat smuggling would be
significantly undermined.
1704
The time to take action is now. As we can see from the debate
today, this is a very controversial topic. But as we can also see
from the debate today, there are many members on the opposite
side of the House who would agree with this government's
action. This action by the government reflects the responsibility
of all parties that have interest in this debate.
This government can no longer afford to allow the momentum
of this phenomenon to continue to accelerate. It is for this reason
that we ask all members to support the passage of Bill C-11.
Mr. Dale Johnston (Wetaskiwin): Mr. Speaker, I notice that
the hon. member mentioned smuggling of alcohol. The price of a
bottle of spirits in Canada is about $20 as opposed to about $10
in the United States. Eighty-seven per cent of the price of a
bottle of spirits in Canada is made up of taxes. An estimated four
million cases of 12 bottles are smuggled into Canada every year
from the U.S. and about 13 million cases are sold legally in
Canada.
Provincial governments and the federal government are
losing billions of dollars in revenue as a result of this
smuggling. I am wondering when the government is going to
come up with a plan to reduce the taxes on alcohol because there
is exactly the same scenario here. These cases are parallel in my
mind.
I would like to ask the hon. member when she would
recommend that taxes on alcohol be reduced.
(1630 )
Ms. Whelan: Mr. Speaker, this government's action plan has
addressed the issue of smuggling. We have addressed and
acknowledged that smuggling is not limited to tobacco. This
plan is set out with that focus in mind: to address all aspects of
tobacco, alcohol, guns, whatever. We are increasing
enforcement by 25 per cent. The bill allows certain sections of
enforcement to be expanded and given to designated police
forces to assist in combating smuggling, not just of tobacco but
of alcohol and other items as well.
[Translation]
Mr. René Laurin (Joliette): Mr. Speaker, I am very pleased
to note that most of the comments and arguments in support of
this bill are, as everyone will concede, quite logical. Sadly, these
arguments should have been made one, maybe even two, years
ago when the Government of Quebec requested Ottawa's help in
halting the spread of contraband activities and in eradicating
this problem.
We were experiencing similar problems with our young
people. They were dropping out of schools and joining
smuggling rings. However, the problem was not viewed as too
serious because it was occurring primarily in Quebec. Now that
Quebec, through the presence of 54 Bloc Quebecois members in
Ottawa, has forced the government's hand, forced it to take
action and support Quebec's position, others are starting to get
worried. It is as if suddenly, it is morally right to abolish a law
which had become punitive.
People no longer obeyed the law, not because they had
become thieves, but because they were no longer able to obey it,
Mr. Speaker. That is what we are trying to denounce today.
Steps should have been taken two years ago so that these
situations could have been avoided altogether. In some cases, it
is perhaps too late. Our young people have been drawn into these
smuggling networks. Perhaps the future of these 15 or 16 year
olds who make $1,000 a week through their involvement with
smuggling has been ruined forever.
The government should have admitted at the time that the
problem existed, not just or primarily in Quebec, and that it
represented a real danger for the rest of Canada. It should have
intervened.
If the government takes action that is too harsh, such as
imposing ill-considered fines, it runs the risk that these fines
will be paid under the table. If people start bribing officials, our
jails will never be big enough and we will have another problem
on our hands. That is what always happens. I hope that the
government has learned its lesson and that in its budget speech
this evening, it will not announce further ill-considered taxes
which will push citizens to the breaking point.
The Deputy Speaker: Does the parliamentary secretary wish
to comment?
[English]
Ms. Whelan: Mr. Speaker, I could not agree with the hon.
member more that if two years ago the government had taken
action we would not find ourselves in the situation we are today.
Unfortunately the government two years ago did not take
action. There are members on this side of the House who have
pressed this issue for the past five and six years. Unfortunately
the past government did not take action. However that is what
we are doing with our anti-smuggling and action plan. We are
taking action.
I would also like to inform the hon. member, in case he is not
aware, that this government was aware of the problem as an
opposition party. We took hold of the problem when we became
the government. We began addressing the problem immediately
after the October 25 election.
If the hon. member would refer to newspaper articles he
would see that before the House was recalled in January we had
already begun discussions. We are dealing with the problem.
Mr. Andrew Telegdi (Waterloo): Mr. Speaker, let me
congratulate the member for Essex-Windsor on a very
thoughtful presentation.
1705
The speaker previous to her started a debate that got picked up
by the member for Notre-Dame-de-Grâce. It relates to
enforcement. There are two ways of doing that. Looking at
policing nowadays, there is proactive policing which is being
promoted by all police forces versus reactive policing. The
concept of proactive policing is that we try to prevent crimes
from taking place versus reacting to a crime and trying to catch
the criminals after the fact.
(1635)
Has the member thought about the distinction between the
two and which she might find more preferable?
Ms. Whelan: Mr. Speaker, this government has addressed the
criminal aspect and how we can prevent it from happening.
As mentioned earlier, clause 3 of this bill allows for enhanced
enforcement of other police officers and other police forces
designated by the government. That will assist us in preventing
future smuggling and will stop it before it accelerates any
further.
Mr. Myron Thompson (Wild Rose): Mr. Speaker, I see from
the list I have been asked to speak on justice enforcement. I am
pleased to do that because I believe justice is one word which is
rapidly disappearing from Canadian society.
Justice to me has always meant that the wrongdoer is caught,
brought to accountability, prosecuted and when found guilty is
punished. And the punishment is supposed to meet the crime.
Seeing what is going on today with Bill C-11, we have really
shown these smugglers a thing or two. We have lowered the
taxes and has that not taught you a lesson, Mr. Smuggler? Boy,
you ought to be ashamed of yourself. I bet that frightens you.
I cannot for a moment believe we think this is justice. We have
a country full of smugglers who are happy to carry on with
smuggling cigarettes east and west as much as they can but will
probably move into other areas, maybe alcohol. They may have
to go to illegal drugs. Probably a lot of pornographic material
could be worked on. Smuggling has become a thriving industry.
But there is a tough government and if smugglers are caught it
will compromise.
We have become a country of compromisers. No longer do we
punish for wrongdoing. We need only to look at first degree
murderers. We have compromised to the point where a first
degree murderer can be back on the street in 15 years. Through
legislation we have compromised to that.
We have compromised so successfully that in my riding when
I tour around I see bars on the windows of the houses and stores.
We do not need bars on jails any more; we need them on the
doors of our homes and businesses so we can lock law abiding
citizens in while the crooks run around on the streets.
I really am concerned. What is wrong with the idea of justice?
We have a new bill, Bill C-11. This bill was brought about
because the government could not or was not willing to enforce
the current laws. We have laws against smuggling and now we
have a new bill. I am not sure whether this is a way of finding
work for certain bureaucrats. It will keep them busy producing
more paper for us to look at.
We certainly did not need a new law to enforce smuggling.
What we need is action from a government that has the political
will to say it is time to stop compromising with the criminal
element in the country and that justice will prevail regardless of
race, colour, creed or who one is. Criminals in the country must
pay the consequences.
(1640)
The Prime Minister admitted that 70 per cent of the cigarette
smuggling problem occurred in limited areas in Quebec and
Ontario. If that was known, why did the government not do
something about the law breaking under the existing law? ``Oh,
but we did. We lowered the taxes''. I keep hearing that. ``We
have stopped the smuggling cold. No, we did not want to go in
there with guns blazing. We cannot do that. We have to take
these other kinds of compromising positions''. It is going on and
on and has been going on for many a year.
The Prime Minister filled the House with sounds of fury the
other day, blustering about getting tough with smugglers. I am
waiting to see that happen. One moment the government
concedes that smuggling occurs in limited areas in Ontario and
Quebec. The next moment it is telling Canadians that smuggling
is Canada wide. I do not doubt that for a moment.
When are we going to address the fact that there are law
breakers out there? Instead of sitting back in our closets trying
to dream up some scheme that will cause them to quit, why not
bring punishment forward? Justice is one thing the country has
been proud of in the past and should be proud of in the future.
I really became discouraged when I heard a member a while
ago saying that enforcement was going to take place. Then he
talked about the young person who would have a pack of
cigarettes in his possession. Boy, we are really going to get that
young person if we catch him with cigarettes.
The other day we talked about a bill and how severe it was
going to be if a person was caught using an illegal drug. I did not
hear anything about what we were going to do to the suppliers,
not a great number of people, who put those things in the hands
of our youth. We never hear that.
We hear stories about car bombings that are supposed to be the
result of some organized crime associated with smuggling. Yet a
Canadian journalist cannot find this car bombing, if it took
place. I did not read anything in media reports about a car being
bombed because there was some kind of battle going on over
1706
smuggling territory. I did not read anything about it, but
apparently that is what happened. Why are these things so hush,
hush?
The Prime Minister states there are no no-go zones. Yet a
journalist reports of an RCMP officer having shots fired at him
while observing smuggling. I did not see any report anywhere
where the police had entered, searched or confiscated the
weapons used to fire upon that police officer. Is it not the law
that you do not fire upon police officers when they are trying to
do their duty? If so, why was that law not enforced?
The Prime Minister has stated that the warriors on the
Mohawk reserve have paramilitary weapons. Mr. Speaker, you
had better not have any paramilitary weapons up there in
Edmonton because they are going to come after you. Why is this
just being ignored?
I inquired and discovered that aboriginal Canadians on
reserves are bound by the same laws as all Canadians. When are
we going to treat it that way? I did not hear that police had
confiscated any restricted weapons that were documented as
being used upon members of the RCMP.
I have problems believing that any new law preventing
smuggling is going to be any better than the old law. Until we get
the political will in this House, until we get to the point where
we say justice must prevail, we have got to stop compromising
with criminals and start enforcing the law and making justice
happen. It has to meet the crime.
(1645)
Stopping the so-called kiddie packs is the one thing that is
excellent about this bill. The only problem is that we will not
have to worry about the kiddie packs any more because now they
can afford the 25 packs. Nothing was solved but it was a good
gesture just the same.
I really do not understand why we could not put a high import
tax on all Canadian manufactured tobacco products. If we would
have done that, the price differential between domestic and
smuggled cigarettes would have been so small that would have
stopped it. However, that still does not for one moment indicate
to me that is the answer. The smugglers can now carry on and
find something else to smuggle. They have now been punished
because we have made it impossible for them to smuggle
cigarettes.
I have looked at the whole issue. I am prepared to support Bill
C-11 if it will cause the government to go out there and uphold
the law and treat all laws with equality. Good for them, if that is
what it takes. However, I do not see where it is going to make a
lot of difference if it continues to have the same lack of will to go
out into our communities and tell the law-abiding citizens that
for once it is going to look after their needs and their best
interests because the bad guys are the ones who need to get
caught and punished. When are we going to start doing it? The
sooner the better.
I can recall not too many years ago when I saw people sell
booze to minors. Those people were arrested and put into jail for
30, 40 or 60 days. It was at a point when people would say:
``We'd best not do it because we can get into trouble''. There is
no fear of the law. I use fear in terms of respect. There is no
respect and it is bodies like this that cause that lack of respect.
Put the respect back into the law by giving the police and those
who are asked to enforce it the power that is necessary to support
them and concentrate on the victims.
I will support Bill C-11 simply because if that is what it takes
for the government to do something then I will support it. Law
enforcement and justice must prevail. I have not seen where it is
going to do it. I am waiting for the big day.
Mr. Morris Bodnar (Saskatoon-Dundurn): Mr. Speaker, it
appears that the gist of what the hon. member for Wild Rose has
been saying is that reduced taxation results in too much
disposable income in the hands of certain people and those
people then go and buy cigarettes and alcohol.
I wonder if it is the policy of the Reform Party that taxation
should not be reduced in any area because it will leave too much
disposable income in people's hands.
Mr. Thompson: Mr. Speaker, I see they listen as well now as
they do during Question Period. I never mentioned for one
moment that reducing taxes was going to cause any problems.
What I am saying is that reducing taxes is not what I call
justice for the criminal element. We are going to reduce taxes
and, boy, that will teach those guys a lesson. That is what is
hogwash.
Ms. Roseanne Skoke (Central Nova): Mr. Speaker, the hon.
member has been concentrating on law enforcement and talking
about the criminal element. I would like to take this opportunity
to make a comment and to remind the member that there is a
distinction between civil legislation and criminal legislation
and the enforcement of criminal provisions versus the
enforcement of civil provisions. This proposed bill does not
lessen or detract from the criminal law, nor does it detract from
the enforcement provisions of the Criminal Code of Canada. It
introduces a new authority to enforce the civil provisions of the
Customs Act, the civil provisions of the Excise Act and the civil
provisions of the Tobacco Sales to Young Persons Act.
1707
(1650)
No authority currently exists under the Excise Act to allow
police forces other than the RCMP to enforce civil provisions of
the act. What we are talking about today is the enforcement of
civil provisions of these acts.
Mr. Thompson: Mr. Speaker, I am sorry but I was distracted a
little bit. I did not get all of the comment. As far as enforcement
of the civil aspect, yes, we want that.
I am talking about the criminals, the smugglers. That is
criminal. That comes under the Criminal Code if I am not
mistaken. If you get caught for smuggling you should pay the
penalty. I have not seen that happen and it is high time it did.
Hon. Warren Allmand (Notre-Dame-de-Grâce): Mr.
Speaker, I listened to the hon. member and in his speech he
repeated several times that justice should prevail. Of course we
all agree that justice should prevail, but I notice that the hon.
member's definition of justice is to be as tough as we can on the
criminal and then everything will be just fine and dandy.
Some hon. members: Hear, hear.
Mr. Allmand: They all agree. It is my interpretation that the
purpose of the criminal justice system is to prevent crime from
taking place, to protect the public from crime.
In the southern United States they do just what the Reform
Party is suggesting, be tough and throw away the key. They have
the highest rates of violent crime in the civilized world. That is
what the hon. member is suggesting, be tough, but forget about
protecting the public from the crime that takes place in the first
place.
What you have got to do if you are interested-
The Deputy Speaker: Order, please. The hon. member for
Wild Rose.
Mr. Thompson: Mr. Speaker, if this member thinks for a
moment that all we have to do is go out there and say: ``You're
not going to be able to do this any more, you lawbreakers,
because we are going to lower the taxes'', and they are not going
to get engaged in some activity, then I do not know what he has
been thinking about.
It has always been in this country, as long as I can remember
since I have been here, that if one breaks the law one will pay the
price and the price of that lawbreaking must fit the crime.
Letting the criminal go on the streets is not doing that.
Mr. Bill Blaikie (Winnipeg Transcona): Mr. Speaker, I do
not want to presume to mediate between the government and the
Reform Party on this but the point that is trying to be made by
the hon. member is that what the government has done has in
some way subverted the rule of law by changing the tax structure
in order to deal with a problem which is essentially criminal in
nature and that is smuggling.
If we believe in the rule of law, it is not a question of how hard
we are on criminals, it is a question of whether we are hard on
them at all. In fact what we have done here is simply changed the
law in order to accommodate a circumstance that could have
been dealt with in other ways.
That is the point I certainly want to make and have the
member comment on. There are times when people break the
law and we change it because it reflects changing values and
changing circumstances, but I am not aware of changing values
and changing circumstances that say smuggling is all right and
we should therefore not try to deal with that simply by changing
taxes.
There is the fundamental question here that the government
has avoided. I can understand some of the reasons why it did
what it did, but it is fair to say that the rule of law has been
subverted by what the government has done. The government
has chosen not to enforce law. It has chosen rather to change it.
Mr. Thompson: Mr. Speaker, I believe that is what I tried to
say in my speech, but I do not want to leave out one factor. I will
repeat it once again. Lowering taxes, as the hon. member was
saying, as a method of stopping smuggling and then saying
smuggling is okay is the thing I oppose. Smuggling is not okay.
Smugglers must be caught, stopped and punished if we are going
to put an end to it. They are going to find other things to smuggle
and it will continue. You can mark my words.
Mr. Paul Szabo (Mississauga South): Mr. Speaker, it gives
me pleasure to rise on this matter because again we continue to
stray away from the fundamental thrust of the government's
proposal and that is to break the back of smuggling now, not to
deal with it after it has happened.
That is one of the reasons why the government introduced the
excise tax reduction, the export tax addition and the surtax on
manufacturers. It was to ensure that the combination of those
actions would eliminate the profit incentive to the smugglers
and break the back of smuggling.
The member has missed the point entirely and so has the
entire Reform Party. I am absolutely astounded that after four or
five hours' debate it continues to have such a narrow view of the
world.
Mr. Thompson: Mr. Speaker, I do not believe we did miss the
point of the debate, not for one little bit.
What the government is missing is that you do not
compromise with criminals and say that they are free to go and
do their thing again. Punishment has to come into play. I am
calling for justice along with all the other moves that the
government is making. That is only normal.
1708
Mr. Andrew Telegdi (Waterloo): Mr. Speaker, I have a
question for the member for Wild Rose. I wonder if he studied
sociology or the systems of the Soviet Union, Texas and South
Africa in terms of law enforcement.
The Speaker: Does the hon. member for Wild Rose wish to
respond?
Mr. Thompson: Mr. Speaker, I am not sure I got all that. It is
a little noisy. I am sorry.
The Speaker: I wonder, my colleagues, if we could simply
suspend for the last three or four minutes. May I have
unanimous consent?
Some hon. members: Agreed.
(The sitting of the House was suspended at 4.57 p.m.)
The House resumed at 5 p.m.
The Speaker: Order. It being 5 p.m., pursuant to Standing
Order 83(2), it is my duty to interrupt and adjourn the
proceedings now before the House.
[Translation]
The House will now proceed to consideration of ways and
means Motion No. 6 concerning the budget presentation.
* * *
[
English]
Hon. Paul Martin (Minister of Finance and Minister
responsible for the Federal Office of Regional Development
-Quebec) moved:
That this House approve in general the budgetary policy of the government.
He said: Mr. Speaker, Mr. Prime Minister, members of this
House, I certainly hope you stand up at the end of this speech.
I must say this is the fifth time that I have risen in this House
to speak on a budget. It is the first time there has been anybody
in the House when I spoke.
I am rising to table the budget documents, including notices
of ways and means motions. Details of the measures are
included in the documents.
Pursuant to an order of this House I will introduce a bill
seeking borrowing authority for the 1994-95 fiscal year. I am
asking that an order of the day be designated for consideration of
these motions.
(1705 )
This budget follows an unprecedented degree of consultation
with Canadians. We have gained a great deal from this process,
but one thing stands out above all others. Canadians seek
fundamental change. They want their government to have a
game plan and pursue it, a strategy for jobs and for growth.
[Translation]
Canadians know the kind of Canada they want.
Our goal is a Canada where every Canadian able to work can
find a meaningful job.
A Canada where government facilitates change rather than
blocking it.
A Canada where our public finances are in order, not ruin.
[English]
The days of government simply nibbling at the edges are over.
The practice of endless process without product is gone. Our
task is to put an end to drift. We need a new architecture for
government and for the economy. That will not happen by
leaning on nostalgia.
This budget sets in motion the most comprehensive reform of
government policy in decades. We are putting in place an agenda
for innovation in the new economy. We are responding to the
needs of small business. We are launching a strategy through
which government knows both when it can lend a helping hand
and, as important, when it should stand aside.
We are undertaking a major effort to build a responsible social
security system that is fair, compassionate and affordable, and
that means making fundamental changes to our unemployment
insurance system. It means overhauling the structure of
federal-provincial transfers for social programs. It means doing
so in a co-operative way with predictability built in, setting
aside the old tactics of stealth and surprise.
The cold war is over. This budget sets out immediate actions
attuned to the 1990s, actions that will be followed by a
comprehensive review of Canada's defence policy.
[Translation]
To succeed we must get monetary and fiscal policy right. We
have done the first. We are a low inflation country. We will stay
that way.
[English]
We are and we will remain a low inflation country.
It is now time for government to get its fiscal house in order.
For years governments have been promising more than they can
deliver and delivering more than they can afford. That has to end
and we are ending it.
The actions taken in this budget will reduce the deficit from
$45.7 billion this year to $39.7 billion in 1994-95 and $32.7
billion the year after.
This is a two-stage budget. Therefore, detailed fiscal
projections are presented to 1995-96 only. However, in terms of
deficit reduction we are not waiting for the second stage. The
1709
decisions taken today by themselves set us on a clear path to
achieving the government's deficit target of 3 per cent of GDP in
three years.
We will achieve this by using reasonable economic
assumptions, not rosy forecasts. We believe that it is more
important to meet a target than to declare an illusion and then
fall short.
Canadians have told us that they want the deficit brought
down by reducing government spending, not by raising taxes,
and we agree. The era of tax and spend government is gone.
(1710)
Over the course of the next three years, for every $1 raised in
new revenues, we are cutting $5 in government expenditures.
[Translation]
But success does not lie in government shutting down and
sitting on the sidelines. Success lies in careful and creative
engagement in the economy. It is not the principle of industrial
strategy that is wrong. It has been the practice.
[English]
This is a budget about jobs, jobs for today and jobs for
tomorrow. It is about implementing a strategy and taking
immediate action. This is a two-stage process, not a 20-stage
process. There are due dates, there are deadlines and there are
firm fiscal targets to guide our reform.
We believe that there are three central challenges to be met.
The first is to build a framework for economic renewal. The
second is to construct responsible social programs. The third is
to restore fiscal sanity to government so that it can devote its full
energy to helping Canadian workers and Canadian families
adjust to a world of change.
Let me begin with the first challenge, jobs, training,
innovation. We are keeping our word. The infrastructure
program is in place. It accomplishes what has been proposed
before but rarely done, getting Canada's three levels of
government working together for jobs.
We have restored full funding for literacy programs. To
support apprenticeship training, the department of human
resources is creating a youth internship program with the
provinces and the private sector. Finally, the Youth Service
Corps is being launched at up to 20 sites to give young
Canadians meaningful work experience.
The question, then, is once trained, where are these young
people going to find employment? The answer for most is in
small and medium size business. They are today's vital vehicle
for jobs. What does small business need? I will tell you one
thing, Mr. Speaker, it is not another massive government
program. Small business needs lower taxes, it needs access to
capital, it needs fewer regulations and less red tape.
Payroll taxes are a barrier to jobs. They are a disincentive to
go out and hire. In 1995, without action legislation it would
require that unemployment insurance premiums shoot up to
$3.30 from their current rate of $3.07. We will not let that
happen.
More important, after discussion with the Prime Minister and
the Minister of Human Resources Development, the government
has decided to roll back the 1995 UI premium from $3.07 to
$3.00. This will save industry almost $300 million a year,
money to be reinvested in new jobs.
Furthermore, as reform of the social security system kicks in
and further significant savings are realized, more reductions in
the UI premium rate will be possible and we as a government
will see to their implementation.
Small business must have access to adequate capital. New
practices, new attitudes on the part of the lending community
are essential. To that end, a joint industry-finance task force has
been set up to work with the banks and with small business to
address these issues. Their first task is to develop a code of
conduct for small business lending. That code will ensure that
the criteria for loan approvals are transparent and provide small
business for the first time with an instrument to exercise
complaints when loans are turned down.
(1715)
In addition, the Minister for International Trade and I will
soon be convening a meeting of the heads of the Canadian banks
and the Export Development Corporation to seek an enhanced
means of furthering the capacity of small business to export.
[Translation]
This government is taking other steps to help small business
grow.
We will intensify and accelerate the effort to reform and
remove regulations that create confusion and cost. We are
putting in place a task force to provide, on a fast-track basis, a
better regulatory regime that will improve the competitiveness
of business.
We have accelerated the process for GST reform.
One-stop shopping for government services will be
expanded, so that there will be a Canada Business Services
Centre in every province of Canada by next year.
[English]
This summer we will issue a declaration of quality service
delivery standards for all government departments.
Funding will be provided for a business networks strategy to
help small firms achieve together what they cannot achieve in
isolation.
1710
The Minister of Transport will implement needed
improvements to the service freight transportation system with
his provincial colleagues and stakeholders.
Finally, the residential rehabilitation assistance program, a
major contributor to the home renovation industry, is being
reinstituted. Furthermore, in consultation with the Minister of
Pubic Works and Government Services, we are replacing the
existing temporary home buyers' plan with a permanent
program that will allow first time buyers to use RRSP funds to
purchase a home.
These things are now underway. There remains much more to
do. Therefore today with this budget the Minister of Industry
and I, the government, are issuing a document that will serve as
the basis of an intensive dialogue with small business to
determine how we build from here. The 1995 budget will
incorporate the results of these discussions.
Innovation and ideas are essential for jobs today and in the
future. They are our country's new natural resources. The
federal government spends some $6 billion a year on science and
technology. Yet there is a major research and development
shortfall in Canada. Public and private sector performance must
be improved. We need to do better at getting ideas to market.
Therefore, after years of rhetoric and promises, the federal
government will put in place a true strategy for R and D, one
with real priorities, real direction and a real review of results.
We will develop a new long term space plan over the course of
the next 10 years, $800 million, that is both affordable and
which offers the best possibility of commercialization and the
creation of jobs. We will concentrate on areas of Canadian
advantage, such as satellite technology.
As part of the exercise, however, of putting in place new
priorities and because of very tight fiscal circumstances,
unfortunately we have had to make two decisions relating to
current R and D programs.
First, we are withdrawing federal support for the KAON
particle accelerator project.
Second, we have decided to negotiate an orderly reduction in
current commitments to the international space station program.
(1720 )
In today's circumstances we must focus our R and D spending
on areas where Canada has an advantage, areas where jobs can
be created and where a clear market exists.
[Translation]
To create jobs and to help small business get access to cutting
edge technology, we will create a technology partnership
program with universities and government labs, a Canada
investment fund to provide needed capital and an engineers and
scientists program.
The councils and agencies that fund university research are
being excluded from spending reductions contained in this
budget.
Funding for the National Research Council will be increased
in 1994-95 after years of cuts.
[English]
In the weeks ahead, the Minister of Industry will be putting
forward two papers; the first on the information highway, the
second on the government's priorities in terms of science and
technology. These papers will set the stage for an intense
national dialogue on the challenge that is required to take
existing resources and redirect them toward the creation of a
national system of innovation.
[Translation]
We believe that respect for the environment and economic
renewal go hand in hand.
In order to assist the establishment of mine reclamation
funds, we are proposing changes to permit mining companies to
deduct their contributions to these funds.
We are also improving the tax treatment of certain types of
energy conservation equipment and we are providing enhanced
incentives for newer, clean technologies.
[English]
This government is committed to sustainable development.
Later this year the Ministers of Environment and Industry will
put forward a strategy to encourage the growth of the
environmental technology and services industry.
Furthermore, we are establishing a task force involving
government, industry and the environmental NGOs to identify
barriers and disincentives to sound environmental practices and
to find effective ways in which to use economic instruments to
protect the environment. And this is but the beginning.
As a country, we must never put aside our compassion and our
obligation to help those who are in need. Our social programs
must be made more responsible so that they build bridges to
work, to independence, not dependence.
[Translation]
In the red book we proposed a prenatal nutrition program; an
Aboriginal Head Start program; a centre of excellence for
women's health; the restoration of the court challenges program
and the Law Reform Commission and proclamation of the
1711
Canadian Race Relations Foundation. This budget, Mr. Speaker,
keeps our word.
Charities play an essential role in Canadian society. To
encourage charitable donations, we are lowering the threshold
for the 29 per cent credit rate from $250 to $200. We
acknowledge this is a modest step, but we believe it goes in the
right direction.
[English]
As part of the strategic initiatives on social reform, the
Minister of Human Resources Development will undertake a
demonstration project in partnership with the Government of
Prince Edward Island and the Canadian Association for
Community Living. This pilot project will seek to achieve
enhanced opportunities for persons who have an intellectual
disability.
It is often women who bear the brunt of social stress and
economic dislocation. This budget begins to address existing
disparities by ensuring that low income earners with
dependants, most of whom are single mothers, are more fairly
treated by the changes to the unemployment insurance program.
(1725 )
Furthermore, the issue was raised of disparities that are
perceived to exist in the tax treatment of child support payments
as well as the issue of their levels and enforcement. A
federal-provincial family law committee is examining that
issue and will report this summer. We will respond immediately
to its recommendations.
In the months ahead, we will be releasing a paper that looks at
what an aging society will need in terms of services and what
changes are required to the public pension system to ensure that
it is affordable. That paper will also look at the question of
changes to the tax treatment currently in place for private saving
for retirement.
This will include the issue of pension plans and RRSPs and
the use to which the funds invested are directed.
[Translation]
The Prime Minister will chair a National Forum on Health to
foster a dialogue on the renewal of Canada's health system.
The Minister of Health will work closely with her provincial
colleagues. No further changes in respect fo EPF health
transfers are contained in this budget, in order to set the stage for
that discussion. Our commitment to maintain the principles of
the Canada Health Act remains firm and unaltered.
[English]
The government has announced its intention to renew and
revitalize Canada's social security system within two years. A
number of pilot projects will help pave the way.
[Translation]
This budget provides $800 million so that innovative
approaches can be tried in co-operation with the provinces and
territories.
[English]
Good public policy requires predictability and planning.
Beyond May of this year the previous government did not
provide for any funding to assist those whose livelihood
depended on the Atlantic groundfish industry.
This budget provides a five-year program costing $1.7 billion
in new funding and $200 million in reallocated funding for a
total of $1.9 million for long-term adjustment. As part of that
effort, the Minister of Fisheries and Oceans will with others
develop innovative approaches for creating long-lasting jobs.
The result of this effort will make an important contribution to
the reform of the overall social security system in this country.
Today as a government, as has already been indicated by the
Minister of Human Resources Development, we are advancing
social security reform by taking specific actions relating to
unemployment insurance and the federal transfers to the
provinces that support social security.
Earlier we announced a major rollback in unemployment
insurance premium rates. This will require immediate steps to
begin UI reform. These changes will reduce expenditures on UI
by $725 million in 1994-95 and $2.4 billion per year thereafter.
The maximum duration of UI claims will be reduced for new
claimants with weak attachment to the labour force.
The minimum entrance requirement will be increased from 10
weeks to 12. The benefit rate will be reduced to 55 per cent
except for individuals with modest incomes who support
children, an aged parent or other dependants. For them the
benefit rate will be increased to 60 per cent.
Furthermore, to improve fairness there will be amendments to
the provisions governing workers who quit their jobs voluntarily
or who were fired for misconduct.
Let it be clear. The focus of our changes to UI is unequivocal.
Our goal is greater fairness, a system that reaches out to the most
vulnerable in our society, one that is progressive and one that
helps get Canadians back to work.
(1730)
[Translation]
It is essential that social security reform leads to programs
that are more affordable and work better for Canadians. To let
1712
us get on with the job of reform, all of us need to know what the
limits on financial resources are.
[English]
For the federal government, transfers from the Canada
assistance plan and the post-secondary education component of
EPF must be no higher after reform than they are now. This will
save the federal government at least $1.5 billion in 1996-97
over and above the savings from UI reform.
Our targets are firm. If reform fails to achieve at least these
savings, then other measures will be taken to achieve them.
We also intend to restore greater fairness in federal support
for the whole transfer assistance system throughout Canada.
[Translation]
We want this reform process to be a co-operative one. We are
providing a two-year period of predictability and modest
growth in social security transfers to provinces while reform
goes on. As promised by the Prime Minister, we will build
towards a five-year period of stability in transfers.
It is time to restor fiscal responsibility to the public finances
of Canada. The debt and the deficit burden pose much more than
an economic challenge. This is a moral issue too. What right do
we have to steal opportunity away form our children, to demand
that they solve problems that we are too timid to face?
[English]
Stronger growth will reduce the deficit. But growth alone will
not bring it down enough. Direct budgetary action is required.
[Translation]
Following through on our platform, the government will be
reducing the operating budgets of government departments by
$400 million on 1994-95, increasing to $620 million per year in
1995-96 and beyond. In addition we are looking at every
government-appointed board, commission and agency. That
review will focus on size, scope, composition and cost,
including salaries paid to members. This review by the Minister
responsible for Public Service Renewal will be completed in
1994 and action will be taken immediately.
[English]
The solution to the fiscal challenge that is facing Canada must
be shared by all of us. As part of our deficit reduction exercise
we need to save an additional $1.5 billion from the operations of
government over the next three years.
We very much want to work with representatives of the public
service in achieving these savings. Therefore, the President of
the Treasury Board will immediately initiate discussions with
the appropriate bargaining agents of the public service. It is our
sincere hope that these very difficult decisions can be taken
collaboratively.
It must be understood, however, that these savings are not a
negotiating position; they are a bottom line fiscal requirement.
To ensure that they are obtained the government is therefore
announcing a two year legislative extension of the existing
salary freeze and a two year suspension of pay increments
within grade.
(1735)
[Translation]
To the degree that those savings are secured through a review
of government operations, leading to greater efficiency, the
government will shorten or lift those freezes.
Total savings in government operations during the next three
years will exceed $3 billion, over and above savings previously
planned.
The Minister responsible for Public Service Renewal and the
President of the Treasury Board will review all departmental
spending to identify where greater savings are possible through
the elimination or reduction of low priority programs.
[English]
During the election campaign we made clear the need to
reduce defence spending. The Minister of National Defence has
taken this mandate and has acted upon it decisively.
In addition to cancelling the EH-101 helicopter program
which was announced by the Prime Minister the day that we took
office, defence spending will be cut by an additional $1.9 billion
over the next three years. These savings, which include
professional services, will be secured through major
improvements in efficiency, productivity and cuts in defence
infrastructure, including bases that have exceeded any probable
defence need. A document attached to this budget provides
greater detail.
The results of these savings will be a more modern and
effective armed forces. With the end of the cold war and the
pressing demands being placed on the men and women of our
armed forces in the new world order, the Minister of National
Defence has ordered a review of our defence policy. The
government will report on the results of that review this fall.
[Translation]
This government is committed to continuing our tradition of
strong support for international development assistance.
However, the fiscal challenge requires additional restraint in
spending. Therefore, we will reduce spending on international
development assistance by 2 per cent for 1994-95. Spending
will be frozen at that level until 1996-97. International
assistance spending will still amount to $2.6 billion annually.
1713
[English]
This situation will be reviewed following the re-examination
by the Minister of Foreign Affairs.
[Translation]
Together with reductions in tax breaks for business, this
budget reduces subsidies to business in excess of the $225
million target contained in the red book.
[English]
Fiscal reality requires that the government review its policy
on funding interest groups. Our goal is to encourage greater
reliance on funding from other sources. To provide a period of
transition for these interest groups, notification will be provided
in advance. The full effects of this review will be seen in the
1995 budget.
I now turn to the question of revenues and taxation. I must say
to the Prime Minister that I have received a lot of advice in this
area.
The fundamental basis of a sound tax system is the reality and
the perception that everybody pays their fair share. When an
increasing minority avoid doing so, then the legitimacy of the
tax system itself begins to suffer. We will be strengthening
enforcement through special joint initiatives with the provinces
and the business community to improve taxpayer compliance.
As has been done in the past, specific measures will be
announced by the Minister of National Revenue.
One of the reasons for the growth of the underground
economy is that Canadians believe that taxes are too high and we
agree. We want Canadians to rejoin the legitimate economy, not
leave it. Our objective is to get the deficit down so that in the
years ahead taxes can be reduced. But we are not there yet.
(1740)
[Translation]
That is one reason why it is so essential to break the back of
the deficit. The bulk of the effort involves significant cuts in
government spending.
But part of it must also involve looking at the tax system to
ensure that all Canadians are paying their fair share. For that
reason, we are acting today to eliminate a number of tax breaks
that don't meet the standard of fairness that Canadians expect.
[English]
Accordingly, we are introducing today the following business
tax measures:
Large private corporations with capital of $15 million or more
will no longer be entitled to the low small business tax rate.
[Translation]
Deductions and credits for meal and entertainment expenses
will be reduced from 80 to 50 per cent. This will bring federal
treatment into line with that already in place in Ontario and
Quebec, as well as in the United States.
In addition, several regionally-based tax incentives have not
proven cost effective. Therefore, they are being reduced or
eliminated.
[English]
Certain Canadian corporations are not paying an appropriate
level of tax. Accordingly, we are taking measures to prevent
companies from using foreign affiliates to avoid paying
Canadian taxes which are otherwise due. We are taking steps to
ensure that the income of financial institutions is measured
appropriately for tax purposes. We are taking other decisive
measures to close loopholes in the current corporate tax system.
To reduce the deficit in the fairest possible way we are
announcing the following personal income tax measures:
The $100,000 capital gains tax exemption is being abolished
while allowing individuals to use their unused exemption for
gains accrued up until today. The $500,000 exemption for small
business shares and farm property will remain. The Minister of
Agriculture wins again.
We believe, however, that as circumstances permit, a general
lowering of the capital gains tax rate for small business and
farmers could provide a greater incentive to entrepreneurship.
For that reason a special study of the taxation of capital gains as
it applies to small business and farmers will be undertaken with
their full participation.
[Translation]
The age credit for persons 65 years and older will be income
tested, as is the case for certain other benefits. This will not
affect 75 per cent of seniors.
The tax exemption for premiums related to the first $25,000
of coverage under employer provided life insurance plans is
being eliminated.
Finally, many Canadians including members of this House,
have expressed the view that the taxation of family trusts should
be examined. This issue will be referred to the House of
Commons finance committee for review, as requested by the
Bloc Quebecois critic.
[English]
This budget is the result of the most open process of debate
and consultation that has ever been attempted in Canada. People
told us they want jobs. We have set the conditions for those jobs
to be created.
1714
(1745)
[Translation]
People told us we should freeze spending. With the spending
cuts in this budget, program spending in 1996-97 should be
lower than in any year since 1991.
[English]
People have said: Reduce the deficit but do not do it with
taxes. I repeat, in this budget for every dollar raised in revenues,
$5 have been cut in spending. We have consulted and we have
listened.
Furthermore we are publishing a report today providing a
response to the public consultations that have taken place and
we will open the budget process up even more in the future. We
believe that a free people will only support fundamental change
if they feel part of the decision-making process that led to it.
Next fall in a major departure from the past, the government
will release a comprehensive statement that will clearly lay out
changes in the economic and the fiscal outlook since this budget.
The government's economic and fiscal goals and broad
proposals and how they might be achieved in the next budget
will be made public.
Discussion papers on specific options for action will be
released.
[Translation]
This new step in the budget process represents major
progress. It will provide the basis for a serious, open, national
dialogue between the government and Canadians.
Following the publication of these new documents, I will
meet with my provincial colleagues. That meeting will assist all
governments in working towards common goals together, rather
than at cross purposes and apart.
The finance committee of this House will be asked to conduct
public hearings involving Canadians to obtain their views on the
direction for economic policy. The committee will report before
the end of the year, in time for inclusion in next year's budget.
As well, I will personally continue to openly consult with
Canadians across the country.
[English]
I would now like to conclude this presentation by setting out
the motivation that underlies this budget. The decisions outlined
here are about much more than the bottom line. They are about
facing fault lines and fixing them. The fault line that is caused
when the poor become poorer while the rich become richer. The
fault line that exists between this generation and the next. The
fault line that exists in moving from the old economy toward the
new. The fault line that is caused by the growing gap between
one class of Canadians with modern skills and another group
without. And finally, the fault line that exists when governments
spend more than the country can afford.
Fixing those fault lines is our challenge and fixing them is this
government's commitment to Canadians. The path to renewal
and to growth will not be easy. We cannot snap our fingers to
erase the deficit, nor can we put in place a new framework for
the Canadian economy, but neither can we delay with getting on
with the job any longer.
We are pursuing a balanced approach to fundamental reform,
to create jobs, to continue to care for those who are in need and
to get the deficit down. This requires a game plan, it requires
fairness and it requires being forthright with Canadians.
There will be those who will say we have not done enough and
there will be those who will say that we have done too much. For
those who would have us spend more, then Canadians deserve to
know where the money would come from. For those who
demand that we cut more, then Canadians deserve to be told the
extent to which that would hurt growth, hurt jobs and hurt the
less fortunate in our society.
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Tough times test our patience and our pocketbooks. They also
test our values and our worth. Some believe that the success of
Canada lies in leaving behind the values that have made us a
great people. They would have us put aside sharing. They would
have us put aside partnership. They would have us put aside the
common sense and the compassion that define this country. Now
is not the time to move away from our values. Now is the time to
return to them.
Despair has stalked this land too long. The time has come to
bring back hope. We have not become what we are by sitting
still. What has guided us as a country are the values we share and
the vision we have chosen to pursue together. So it falls to us,
this generation, in this House, in our time, to do what those who
came before us did in theirs, and that is to assume our
responsibilities to create opportunity today. And that in the end
is the standard by which we will be judged by those who come
after us.
[Translation]
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot): Mr. Speaker,
I do not understand why is Liberal government is so pleased. I do
not understand why the colleagues of the Minister of Finance are
so pleased, because bringing down a budget that is practically
meaningless is certainly nothing to be proud of. And there is
certainly no reason to be proud of this year's deficit forecast of
$39.7 billion, nearly $40 billion.
Considering past experience, it would not be unusual, in the
light of the quality of the forecasts produced by the Minister of
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Finance and his department, for this deficit to go over $39.7
billion. So there is nothing much to be proud to start with.
If we look at the tax revenue estimates, it is clear the Minister
of Finance is making the same mistakes as his predecessor. He is
still living in the middle 1970s and early 1980s, when tax
revenues were growing at the same rate as GDP.
(1755)
For instance, it is expected that every 1 per cent increase in
GDP will result in an increase of more than 1 per cent of GDP,
that is 1.2 per cent. The Conference Board of Canada has just
released a study which says that every time there is a 1 per cent
increase in GDP, tax revenues increase by only 0.5 per cent
because of the growing impact of the underground economy.
This is something the Department of Finance has completely
blocked out, which tells me and my fellow members of the Bloc
Quebecois that these estimates are off to a bad start.
Mr. Speaker, my colleagues and I are also beginning to
realize, what the Minister of Finance meant when he talked
about broadening the tax base. The Minister of Finance and his
government are broadening the tax base by slashing the incomes
of the middle class. That is where he wants to broaden the tax
base.
A few examples: Over the next three years, by taxing
employer contributions to various group life insurance plans,
the Minister of Finance plans to get at least $520 million, one
half billion out of middle income workers.
Another instance is when he talks about reducing or
altogether eliminating the age credit for retired taxpayers. The
Minister of Finance is broadening the tax base at the expense of
pensioners and, over the next three years, plans to get almost
$500 million in the process. He says that 75 per cent of
pensioners are not affected. But 25 per cent are affected. Do
these people deserve this, after having worked all their lives?
There is a third measure which shows the Minister of Finance
and his government have no social conscience. Over the next
three years, they want to get $740 million by reducing
deductions for entertainment expenses, but according to a study
released by Ernst and Young not long ago, about 80 per cent of
the people that take advantage of this deduction are not rich
taxpayers but middle income taxpayers, mostly self-employed,
and even blue collar workers.
I repeat, this government wants to get $740 million over the
next three years, mostly out of the pockets of self-employed and
blue collar workers, and that is a disgrace.
These and many other measures are widening the already
impressive gap between personal income tax paid by Canadians
and Quebecers and taxes paid by Canadian corporations. Whe
talk about corporations, we mean the big corporations.
Did we know that individuals in Quebec and Canada are
already paying seven times as much income tax as the big
corporations? Did we know that 72.5 per cent of the federal tax
base consists of revenues from private citizens and 27.5 per cent
of revenues from corporations? Twenty-five years ago, it was
already twice the tax revenue contributed by corporations.
Today, the measures tabled by the Minister of Finance are
further broadening this unfair gap between what is paid by
private citizens and what is paid by corporations.
With all the posturing on family trusts and tax shelters, why
did the Minister of Finance fail to announce in his Budget that he
was abolishing the disgraceful system of family trusts and the
possibility for large corporations to shelter their money in tax
havens like Barbados, for instance?
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It is almost beyond comprehension that the Minister of
Finance would immediately set out to attack middle-income
earners through the imposition of specific measures over the
next three years, while leaving unscathed wealthy taxpayers and
large corporations that did not pay any taxes at all in the late
1980s and that continue to rob the tax system today. This is
really rich!
The minister has not deviated from the path he initially
embarked upon. Since October 26, his statements about
restoring fiscal equity in Canada and in Quebec have been
nothing but pious wishes. All he will commit to is consultation
and more consultation. It has become his new mantra, almost as
powerful as the one he adopted during the election campaign
when he spoke of ``jobs, jobs, jobs''. The thing is, this budget
contains no additional job creation measures. On the contrary,
the government's tax grab over the next three years will hinder
any chance for a lasting recovery and for job creation in Quebec
and in Canada. This is unacceptable for a government that has
been claiming from the beginning that it is concerned about job
creation. I am completely baffled by this, as are my colleagues.
Some hon. members: Oh, oh.
Mr. Loubier: I would ask my colleagues opposite to show us
a little respect, just as we show our respect for them every day.
There is something even more shocking about this budget, and
I will tell you what it is. With this budget, the Minister of
Finance, who in reality controls human resources development
in Canada, has just put a straightjacket on the Minister of Human
Resources Development. He has accomplished this by
committing him to save $7.5 billion through social program
reform over the next three years. Various income security
programs will be reformed and outrageous changes will be made
to the unemployment insurance system, changes which he
criticized the pre-
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vious government for making. In other words, he is saying right
from the start to the Minister of Human Resources
Development, even before the committee undertakes its work,
that savings of $7.5 billion will have to be realized over the next
three years. Is that what the government calls restoring fiscal
equity?
Is this what the government calls restoring social justice in
Canada? In point of fact, it is attacking those who are most in
need, namely the least fortunate, those who are, in large part,
victims of the previous government and who are being further
victimized by the current government.
The leader of the Bloc Quebecois and Leader of the Official
Opposition was right. When the government party speaks about
reforming social programs and health care programs, what it is
really talking about is making cuts. Today, we have irrefutable
proof of this.
Middle income taxpayers and senior citizens certainly
deserved a tax break, but the Minister of Finance is not giving
them one with this budget. What about those who are
unemployed and the most disadvantaged? A total of 1.5 million
Canadians are out of work. The 437,000 Quebecers who are out
of work were expecting genuine job creation initiatives in this
budget, not merely stopgap measures such as the infrastructure
program which will create 45,000 part-time jobs. They were
hoping for real job creation initiatives.
This budget gives us no reason at all to hope. Aside from the
nice speeches and nice smiles from the Minister of Finance and
his colleagues, there is nothing in this budget to help the 1.2
million Canadians who are currently waiting for social housing
and who spend more than 50 per cent of their income on housing.
Nice speeches are all well and good, but when the time came to
restore $600 million in funding for social housing, an issue over
which they tore a strip off the previous government, their nice
words did not translate into concrete action. All we are left with
are nice smiles and nice speeches about social justice in Canada.
That is what Quebecers and Canadians hate in politicians. That
is why Quebecers and Canadians are cynical towards politicians
and political institutions. It is because of a lack of courage, a
lack of long-term vision that Quebecers and Canadians are
feeling alienated from politicians' promises.
Not only does this budget not include anything that the
government should have done, but its spending reduction targets
are ridiculous. In the next three years, there will be no spending
cuts in nominal terms.
I have the feeling that this government is living on another
planet, that it is not aware of Canada's excessive debt, which
puts it in first place about everywhere in terms of poor
performance. I get the impression that this poor performance
and this government are two totally disembodied things.
The Minister of Finance said that we would blame them for
not going far enough. We will not blame him for not going far
enough, but we will blame him for not doing what he should
have done, and that is even more serious.
We will blame him for sparing, once again, the government's
rich friends. But Quebecers and Canadians are starting to grasp
this government's vision.
I therefore move:
That the debate be now adjourned.
[
English]
The Speaker: Pursuant to Standing Order 83(2), the motion is
deemed adopted.
(Motion agreed to.)
The Speaker: Consequently, pursuant to Standing Order
83(2), this House stands adjourned until tomorrow at 2 p.m.
(The House adjourned at 6.07 p.m.)