CONTENTS
Thursday, September 26, 1996
Mr. Harper (Calgary West) 4711
Bill C-327. Motions for introduction and first readingdeemed adopted 4713
Mr. Harper (Calgary West) 4713
Motion for concurrence in 29th report 4713
Mr. Harper (Calgary West) 4714
Mr. Bernier (Mégantic-Compton-Stanstead) 4734
Mr. Leroux (Shefford) 4740
Mr. O'Brien (London-Middlesex) 4741
Mr. Harper (Simcoe Centre) 4742
Mr. Mills (Red Deer) 4743
Mr. Scott (Fredericton-York-Sunbury) 4744
Mr. Harper (Calgary West) 4746
Mr. Harper (Calgary West) 4746
Mr. Harper (Calgary West) 4746
Mr. Chrétien (Saint-Maurice) 4747
Mr. Chrétien (Saint-Maurice) 4748
Mrs. Stewart (Brant) 4748
Mrs. Stewart (Brant) 4748
Mrs. Stewart (Brant) 4749
Mrs. Stewart (Brant) 4752
Consideration resumed of motion 4753
Mrs. Stewart (Brant) 4757
Mr. Bernier (Mégantic-Compton-Stanstead) 4765
Bill C-230. Motion for second reading 4777
4707
HOUSE OF COMMONS
Thursday, September 26, 1996
The House met at 10 a.m.
_______________
Prayers
_______________
ROUTINE PROCEEDINGS
[
English]
Mr. Paul Zed (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker,
pursuant to Standing Order 36(8), I have the honour to table, in
both official languages, the government's response to two
petitions.
* * *
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, I rise in the House today to
announce that I intend to refer to the Supreme Court of Canada
certain specific questions of great importance to all Canadians.
Let me begin by reaffirming our deep conviction that our great
country will remain strong and united both into and beyond the
next century.
On two occasions in the recent past the majority of Quebecers
have voted for a united Canada. Notwithstanding those democratic
expressions of the popular will, the current government of the
province of Quebec seems determined to bring the issue to a third
vote at some future time. Moreover, it claims to be entitled to make
a unilateral declaration of independence to create a separate state of
Quebec.
In our view that position is contrary to Canadian law, is
unsupported by international law and is deeply threatening to the
orderly governance of our nation.
[Translation]
If another referendum is to be held, we are convinced that the
population of Quebec will note in favour of a united Canada a third
time, and that they will do so because a united Canada is the better
option, for themselves and for their children.
And just as Quebecers have chosen to stay within Canada in the
past when they were asked to make a choice, Canadians
everywhere know that Quebec's inclusion is essential to preserving
the country that we cherish.
As a Canadian who makes his home in Toronto, I can speak very
personally in saying that, without Quebec, the magnificent dream
and the shining ideal that is Canada would simply not exist.
[English]
However, we cannot avoid the serious difficulties created by the
Quebec government's assertion that there is a right to secede from
Canada through a unilateral declaration of independence.
The Government of Quebec has expressly stated that the
Constitution and the courts have no role to play in determining the
correctness of its position. As we have argued in court and as I have
asserted here in this House, we believe its position to be profoundly
wrong.
To leave this issue unresolved would pose a serious threat to
orderly government in Quebec and in the rest of Canada.
(1005 )
The Government of Canada does not argue against the
legitimacy of a consultative referendum. A referendum is an
opportunity for a government to consult with the people. But
however important that consultation may be, the result of a
referendum does not in and of itself effect legal change.
It is terribly important to remember that in the Canadian context
there is no political justification to argue for a unilateral
declaration of independence by the Quebec National Assembly.
In most countries the very idea of secession would be rejected.
But that has not been so in Canada. There have been two referenda
in Quebec. The leading political figures of all the provinces and
indeed the Canadian public have long agreed that this country will
not be held together against the will of Quebecers clearly
expressed. And this government agrees with that statement.
This position arises partly out of our traditions of tolerance and
mutual respect but also because we know instinctively that the
quality and the functioning of our democracy requires the broad
consent of all Canadians.
4708
Regrettably, the view of the current Quebec government on the
nature and the role of a referendum is quite different. We have
therefore concluded that the responsible and the effective thing
to do is submit this issue for determination by the Supreme Court
of Canada.
Let me be very clear. This issue is of enormous significance.
[Translation]
A unilateral declaration of independence would undermine
political stability, interrupt the prevailing order and cast into doubt
the interests and rights of Quebecers and all Canadians.
A unilateral declaration of independence would create the most
serious difficulties for ordinary Quebecers. There would be
widespread uncertainty within Quebec about which legal regime
was effectively in control.
For the average citizen, business or institution in Quebec, there
would be the greatest confusion. Individual Quebecers would be
uncertain what laws applied, what courts and law officiers to
respect, to whom to pay their taxes.
In such an environment, it is certain that Quebec society would
be deeply divided over the course the provincial government would
have adopted.
[English]
Moreover, such a unilateral declaration of independence would
have been made in the absence of an agreement with the rest of
Canada on such fundamental issues as recognition for Quebec
internationally, trade and economic arrangements, the rights of
citizens to move within the country, the sharing of public debt and
assets, the use of currency and scores of other issues.
Quebec would likely find itself, after a UDI, with no recognition
by all or most of the international community, unable to manage its
relations with sovereign states. Quebec would be unable to issue
recognized passports for its citizens or to represent their interests
abroad. Its unilateral act would make it virtually impossible to
issue public debt on international markets. In other words, the idea
of a unilateral declaration of independence makes no sense no
matter how it is considered.
The issue is not just a mere legal nicety. It is also of enormous
practical significance. Any government that suggests it would
throw Quebec and all of Canada into the confusion of a unilateral
declaration of independence is being profoundly irresponsible. It is
a formula for chaos.
I firmly believe we shall never reach the point of having to deal
with the reality of Quebec's separation. This nation shall endure.
(1010 )
Should such a day ever come, there is no doubt that it could only
be achieved through negotiation and through agreement. The
Government of Canada believes that both our Constitution and
international law protects us against the irresponsibility of a
unilateral declaration of independence, and that is the very issue we
shall be taking for determination to the Supreme Court of Canada.
[Translation]
As I have stressed, our nation is built on shared values of
tolerance, accommodation and mutual respect. Canadians are
admired throughout the world because of our understanding of the
need to accommodate one another to achieve our larger common
purposes.
In this respect, we share a commitment to using negociation and
orderly processes to work out differences-something that
Canadian individuals and businesses do every day. This
commitment is what the international community has come to
expect of Canada and to admire.
Canadians' shared values have guided us in the past and will
continue to do so in the future. All Canadians, including
Quebecers, can take pride in the civility and tolerence we have
shown one another in dealing with this fundamental issue. There is
every reason to believe that civility will continue.
Our insistence on resolving questions raised by the prospect of
Quebec secession through an orderly process and within the
framework of law is simply consistent with those values.
[English]
However remote the possibility that a future referendum would
reject Canada, it is essential that the legal framework that has
enabled us to resolve our differences as Canadians peacefully and
co-operatively be clearly established now, in advance of a
referendum.
That is the reason we became involved in the Bertrand litigation
before the Quebec superior court last May. It was only after the
attorney general of Quebec brought a motion last spring to dismiss
that litigation that we decided to involve ourselves, and then only
because of the grounds relied upon by the attorney general of
Quebec in bringing his motion.
The attorney general of Quebec based his motion on the
argument that neither the courts nor the Constitution of this country
have any relevance to the process that the Quebec government
intends to follow in advocating separation, but that international
law alone applies.
It was my obligation as the Attorney General of Canada, as the
custodian of the Constitution of our country, to respond in the
courtroom. There we argued that the Constitution is not only
relevant but governing, that the courts have jurisdiction to deal
with these issues.
4709
In addition, we argued that the Quebec government would have
no right either under international law or otherwise to make a
unilateral declaration of independence.
We submitted that while there are some limited circumstances in
which international law provides a people with the right to secede
unilaterally from an existing country, none of those circumstances
exist in the case of Quebec within Canada. I may point out that our
conclusions in that regard were largely consistent with the opinions
expressed by five experts in international law, retained in 1991 by
the commission dealing with the issues relating to Quebec
sovereignty, established by the Government of Quebec itself.
When I welcomed the decision of Mr. Justice Pidgeon of the
Quebec superior court on August 30 last, I noted in particular that
by deciding that the court had jurisdiction to deal with the
questions before it, Mr. Justice Pidgeon had confirmed the primacy
of the rule of law.
What is this rule of law? What is its practical meaning, its social
value? Is it simply a technicality used to overrule democratic
decisions that the federal government does not agree with?
(1015)
First and foremost, the rule of law, as it has developed in Canada
and in other democratic nations around the world, is not simply a
legal abstraction or a technical precept. It is a living principle that
is fundamental to our democratic way of life. In substance, it
means that everyone in our society, including ministers of
government, premiers, the rich and powerful and the ordinary
citizen alike is governed by the same law of the land. We are all
bound by the Constitution, by the Criminal Code, by acts of
Parliament and the legislatures. In cases of dispute regarding the
application or interpretation of law, the courts are the ultimate
arbiter.
[Translation]
The great value of the Rule of Law is that it is democratic. Its
substance is derived from our democratic institutions. It applies to
everyone without qualification. It also permits democracy to
flourish because it establishes a stable framework within which the
democratic process can work.
The separatist leaders argue that the Rule of Law is simply a ruse
by which the Canadian Government intends to defeat an expression
of democratic will by Quebecers-a trick to deny the results of a
lost referendum. They argue that to require an orderly process
within the legal framework would place Quebec in a straightjacket,
defeating the democratic result of a future referendum.
[English]
Such arguments are made for political effect. They are based on
the misunderstanding that the rule of law and democratic action are
somehow mutually exclusive. That is quite wrong. In fact, they
coexist in harmony. The safety of both depends upon the integrity
of each. The failure to observe either endangers the two at once.
Simply to insist upon an orderly process is not to foreclose the
acceptance of change. Let us be vigilant to ensure that the true issue
of the day is kept before us. The issue is not whether a democracy
such as Canada can keep a population against its will. Of course, it
cannot. The issue arises from the false claim by the Government of
Quebec that it alone, in a unilateral fashion that changes according
to its short term political interests, can decide the process that may
lead to secession.
Quebecers as well as their fellow citizens across Canada would
be dramatically affected by the break-up of our country. Everyone
has the right to be certain that the process is lawful, mutually
acceptable and fair to all.
That brings me to our decision to take steps intended to clarify
the legal issues that have arisen between the Government of
Canada and the Government of Quebec. It is my intention to refer
to the Supreme Court of Canada three specific questions for a
decision by that court on the fundamental issues that have arisen.
Here are the questions we will be asking the court:
[Translation]
Under the Constitution of Canada, can the National Assembly,
legislature of Government of Quebec effect the secession of
Quebec from Canada unilaterally?
[English]
Second, does international law give the National Assembly, the
legislature or the Government of Quebec the right to effect the
secession of Quebec from Canada unilaterally? In this regard, is
there a right to self-determination under international law that
would give the National Assembly, the legislature or the
Government of Quebec the right to effect the secession of Quebec
from Canada unilaterally?
(1020)
[Translation]
Third, in the event of a conflict between domestic and
international law on the right of the National Assembly, legislature
or Government of Quebec to effect the secession of Quebec from
Canada unilaterally, which would take precedence in Canada?
[English]
It will be evident that these questions build upon the
fundamental issues identified by the hon. Mr. Justice Pidgeon in his
judgment rendered last August 30 in the Bertrand litigation.
4710
While it would have been possible for the Government of
Canada to continue in the Bertrand litigation and to argue these
points at trial, we have, on such fundamental issues a duty as a
national government to ensure that they are brought to the courts
directly with a view to an early and definitive judgment. We have
therefore decided to go to the highest court in the land and to ask
it to address these questions as soon as conveniently possible.
I also wish to emphasize that the very questions we are putting
before the court and those that arose from the judgment of Mr.
Justice Pidgeon in Bertrand resulted directly from the position
taken by the attorney general of Quebec in the Bertrand litigation. I
have therefore referred to the Supreme Court of Canada in concise
form the fundamental matters put at issue by the Government of
Quebec itself in moving to dismiss Mr. Bertrand's lawsuit.
[Translation]
I have written to the Attorney General of Quebec urging him to
participate in the proceedings before the Supreme Court of Canada.
It is obvious that there are profound differences in our respective
views about these crucial legal matters.
In keeping with our long tradition in this country, consistent with
our values of civility and respect for democratic institutions, I call
upon the Attorney General of Quebec to join me in a full, frank and
open discussion of the very issues he has raised in the place where
they are best resolved: in the highest court of the land.
[English]
Let me emphasize something that this government has tried to
make clear from the outset. The rule of law is not an obstacle to
change. It permits change to take place in an orderly way. It allows
Canadians to alter and to adjust to their institutions in a fashion that
reflects our values of consensus, of dialogue and of
accommodation. I have every confidence that the courts will
endorse and accept the position that I have put forward.
Nonetheless, it is for the courts to make that determination and we
will of course respect and abide by the results.
There is every reason for Canadians across this great land to be
optimistic about the future of our country. We must continue to
work to avoid ever having to deal with an attempt at secession. The
world would never understand the failure of a country like Canada
which embodies in so many ways that which is best in the human
spirit. Indeed, Canadians would never forgive themselves.
Our common objective must be to continue to work together to
improve our government, to make the case for Canada in Quebec
and to celebrate the great distinctiveness of Quebec as a
fundamental characteristic of our country.
The Canadian government is committed to doing all of that in
partnership with all of the provincial and territorial governments
of this country. Whatever happens, we must continue to deal with
one another with respect, with tolerance, through accommodation
and within the law. That is democracy.
(1025)
[Translation]
Some hon. members: Oh, oh.
The Acting Speaker (Mr. Kilger): The hon. member for
Saint-Hubert.
Mrs. Pierrette Venne (Saint-Hubert, BQ): Mr. Speaker, we are
told that the federal government intends to seek the Supreme
Court's opinion on the legality of Quebec's eventual accession to
sovereignty.
Unlike what the Minister of Justice said at the beginning of his
speech, I am convinced, and so are my colleagues in the Bloc
Quebecois, that the people of Quebec will vote in favour of a
sovereign Quebec in the next referendum.
Some hon. members: Hear, hear.
An hon. member: Sixty per cent.
Mrs. Venne: They will do so because it is the best option for
them and for future generations.
The close results of the last referendum are probably behind the
federal government's decision to seek the opinion of the Supreme
Court on the legality of Quebec's sovereignty.
This reference to the Supreme Court of Canada is in line with the
federal strategy that subordinates the legitimate right of the people
of Quebec to accede democratically to sovereignty to the rule of
law.
Both the Bloc Quebecois and the Quebec government have
always said that accession to sovereignty is above all a political
matter and not one that should be decided by the courts.
Oddly enough, in August 1995, shortly before the last
referendum held in Quebec, the Minister of Justice said in a public
statement that it was important to respect the democratic vote of
Quebecers on the matter of sovereignty. To him it was a political,
not a legal question.
I think it is also surprising that last spring, the Minister of Justice
said that the federal government's participation in the Bertrand
case was basically motivated by the involvement of the provincial
government.
Since the Quebec government has withdrawn from this case,
why has he now decided not only to withdraw from the Bertrand
case but to pursue the matter alone before the Supreme Court?
[English]
It is because of the close results of the last referendum that the
federal government is now asking the Supreme Court for its
opinion on the legality of Quebec sovereignty. Resorting to the
Supreme Court is part of the federal government's plan B strategy
4711
which involves making the legitimacy of Quebecers' democratic
accession to sovereignty subordinate to the rule of law.
Now that it is afraid of losing, the federal government is trying to
throw doubt on the entire Quebec referendum process and to
impose its own referendum laws. The feds have lost the political
battle and are turning to the courts in order to save face.
[Translation]
The federal government's justification for its reference to the
Supreme Court is based essentially on the concept of the rule of
law.
(1030)
However, when referendums were called in 1980 and 1995, this
did not meet with legal objections from the federal government,
which was, in fact, a major participant.
We saw this as a political acknowledgment of the process
initiated by Quebec for its accession to sovereignty. In fact, it also
acknowledged the legitimacy of the exercise initiated by the
Government of Quebec.
The federal government must realize that the rule of law should
always be justified by a respect for the democratic values and
principles that prevail in our society. The rule of law should never
take precedence over the will and the legitimate right of the people
of Quebec to accede democratically to sovereignty.
We have said many times, and I say it again today, that the
exercise initiated by the province of Quebec needs no definition by
the courts.
[English]
Mr. Stephen Harper (Calgary West, Ref.): Mr. Speaker, I
begin today by indicating that the Reform Party is in support of the
reference of these questions to the Supreme Court of Canada.
Clearly the vagueness and unpreparedness of the country on this
profound question of the rule of law cannot be allowed to continue.
We offer this support in spite of the fact that we have profound
differences with the Liberal government about the nature of Canada
and the way this issue should be handled in other regards.
Reformers do not believe in its vision of a centralized and
unreformed Canadian Confederation. We also do not agree with its
approach on matters such as language policy, the approach it has
taken on national unity and we are still concerned about the
vagueness it has on many of the issues that relate not only to
keeping the country together but to contingencies in the event the
country should have to face the problem of Quebec secession.
I would also like to express to the minister, before I continue, not
just my agreement of his actions but that I appreciate his
co-operation in discussing these matters with us and in fully
informing us of the actions the government is prepared to take.
I also think it would be appropriate on behalf of all Canadians to
acknowledge the role of Mr. Bertrand in bringing this matter to the
attention of the courts in the first place.
Let me make a couple of comments about the specifics of the
government's reference. Generally the government has referred the
correct questions to the Supreme Court. I am concerned, however,
about some of the wording relating to international law, as the court
may be reluctant to express an opinion on that matter.
Also, the reference does not address the critical question of by
what means Quebec secession or the secession of any province
could occur under the Constitution and whether the Constitution
can be used to address that question. I do not see those in the
questions that the minister has asked the court and there is
somewhat of a deficiency in that regard.
We view this as only a first step. To the extent that the
government is increasingly prepared to look at plan B options, it
must be prepared to table a legislative framework for such a
contingency and also to take greater efforts to inform the Quebec
population of not just the possible cost but the consequences and
possible conditions of their secession.
(1035 )
I would point out that our position is not new and is not the result
of the referendum campaign. Indeed, we made our position on
these issues clear a very long time ago.
As early as October 1994, after the election of the current
separatist government, I raised questions in the House about the
legality and constitutionality of the Quebec secession question. I
point out that ministers and parliamentary secretaries refused to
answer. They said that the Constitution did not address these issues
and that the position was strictly hypothetical.
I would also point out that they went farther and I think to the
detriment of federalism in the last referendum campaign. They
denied the importance of these realities. The Prime Minister
indicated that a majority vote in favour of secession would not
necessarily lead to the separation of Quebec. This, in our view, was
a very dangerous factor in convincing the population of Quebec
that the yes option was not a risky one.
On referendum night we became aware that not only was the
Government of Quebec serious about its unilateral plans for
separation but in fact had made extensive arrangements and
preparations for a unilateral declaration of independence. Clearly
4712
this was not a hypothetical question from their point of view and
given the result of the referendum it cannot be treated
hypothetically now.
The minister is unclear or sending mixed messages when he says
that he views a possible yes vote in a future referendum as remote
or unlikely. We have to face the fact that we are dealing with this
question precisely because of the results of the last referendum. We
have to take the expression of the people of Quebec seriously and
tell them that when they vote yes it has consequences and those
consequences may some day be separation. We cannot just dismiss
the results of the last referendum. We must admit they are
responsible for the heightened awareness of the danger of this
problem throughout Canada.
I would also point out that not only have we supported this
position for some time, and we did discuss freely the implications
of unilateral separation in the last referendum, but we also,
immediately after the referendum, published our formal position
on these issues. We have published a document called ``the 20-20''
which includes not only our 20 proposals for the reform and
decentralization of Canadian federation, but also our 20 proposals
for contingencies for the rest of the country in the event that
Quebec should vote to secede. These are based on three very
fundamental principles which the government is finally expressing.
These are respect for democratic consent of the people, respect for
the rule of law and the primacy of the protection of the interests of
all loyal Canadians.
I realize that in making this decision, the Government of Canada
will face fairly serious criticism, indeed fairly serious political
challenges from its so-called federalist friends in Quebec. In
particular, I want to point to the leader of the federal Progressive
Conservative Party and the leader of the Quebec Liberal Party.
Members will recall that in the dying days of the last referendum
campaign, it is my view that these two individuals ambushed the
rest of Canada with their demands for special status. I believe
ultimately, although I do not imagine my colleagues will admit it,
they ambushed the Prime Minister also. They have maintained that
there is a necessity for a plan A that is extremely generous to
virtually any demand that comes from the Government of Quebec,
but they are not prepared to contemplate any aspect of a plan B.
This is, in our view, a tremendous contradiction: that the threat
of Quebec's separation is great enough that the country should be
prepared to make not just concessions but virtually any concession
to deal with it. However, it is not to be viewed as serious enough
that we should in any way plan any contingency to defend the
interests of the rest of the country.
These people are tremendous at flag waving and great PR events
when they want to get up and say to the rest of the country that they
oppose Quebec sovereignty. Today they are finally being asked to
show that they are prepared to support Canadian sovereignty. What
this issue is about and the reference of this case to the Supreme
Court, in our view, is precisely the opposite of what the premier of
Quebec has said. Canada is a real country. Quebec is a province of
that country, and that is nothing to be ashamed of.
(1040)
[Translation]
I would also like to speak of the position of the Bloc Quebecois. I
must point out that, over the years, the position of the Bloc and of
the sovereignist movement has changed. As one example, Mr.
Lévesque himself proposed a referendum solely as a public
consultation, admitting that he ought to negotiate Quebec's final
change of status with the rest of Canada.
It is also difficult for us in the rest of Canada to understand Mr.
Bouchard's position, when he says that he supports not only
sovereignty but also sovereignty-partnership with the rest of
Canada. To have a partnership, there must be partners. In this
world, partnerships need to be negotiated. This is impossible, and
evidence of the lack of maturity of the sovereignist movement, in
thinking that it can have a partnership that is unilateral. Not only is
this a misconception of human nature, it is also untrue to the nature
of relations between sovereign states.
I would also like to point out that the Bloc Quebecois is opposed
to this idea because, in its eyes, it supports the voice of democracy.
I must point out too that, on two occasions, the voice of democracy
has rejected Quebec sovereignty. I think I am in agreement with the
members of the government as well, in saying that it is time for the
government of Quebec to start respecting these expressions of the
voice of democracy.
[English]
I will conclude by addressing the questions and the fears we all
have as Canadians in the shadow of the last referendum. There are
those who continue to insist for whatever reason that the possibility
of Quebec's separation should not be taken seriously. There may be
votes, there may be upheavals, there may be dislocation, but
Quebec will never separate.
I have never taken this position. My understanding of Quebec is
that as profoundly as I disagree with the position of the separatists,
it is a position that is honestly held by many. While I think it is
unfortunate and historically was avoidable, there are good
explanations for the existence of this movement.
Will Quebec leave? I do not believe it will but it is possible.
However, it would be profoundly unfortunate should that occur.
We believe that the struggle occurring in the province of Quebec
today is a struggle that is going on in many parts of the world as we
emerge from the cold war. That struggle is one of whether we will
evolve toward greater forms of co-operation among all nations and
all peoples of the world, whether we will move toward structures
4713
and toward arrangements that address and support the idea of the
brotherhood and the sisterhood of humanity or whether we will
once again descend into the narrowness and the narrow view of
ethnic nationalism.
In my view, the choice of Quebec's separation is a choice for
ethnic nationalism and would be a choice to embrace the darkness
rather than to accept the light. This is a problem for Canada but it
does not mean the end of Canada. I profoundly disagree with those
who say that as tragic as Quebec's separation would be, it would
mean the end of this country. In my view that devalues this country.
This country has a strong history and remains strong to those who
support it not just in Quebec but elsewhere in Canada.
(1045)
A country does not live or die by its Constitution or its legal
arrangements. These are important for the management of its day
to day affairs and ultimately, as the minister has said, important for
the management of any profound change in those relationships.
However, countries live or countries die in the hearts of the people
who belong to them, particularly democratic countries.
Canada remains strong in the hearts of Canadians and, according
to two referendums, in the hearts of the majority of Quebecers. The
fact that it has died in the hearts of some or may die in the hearts of
others is no reason for us to ever give up on this country.
* * *
Mr. Paul Zed (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker, I
have the honour to present the 29th report of the standing
Committee on Procedure and House Affairs regarding the
membership of some committees.
If the House gives its consent, I intend to move concurrence in
this 29th report later this day.
* * *
Mr. Stephen Harper (Calgary West, Ref.) moved for leave to
introduce Bill C-327, an act to amend the Access to Information
Act (disclosure of results of public opinion polls).
He said: Mr. Speaker, this private member's bill was previously
Bill C-346 in the last Parliament and was originally tabled by the
then hon. member for Etobicoke-Lakeshore, Mr. Patrick Boyer,
and I want to give him credit for it.
I am pleased to introduce this bill, targeting the disclosure of
results of public opinion polls commissioned by the government.
This bill would amend the Access to Information Act and force the
government to disclose within a set time period the results of all
public opinion polls which the government itself commissions.
This bill would compel the designated minister to disclose the
issues dealt with in the poll, the questions and responses, the time
period during which the poll was conducted, the name of the person
or firm who conducted the poll and the costs of the poll to Canadian
taxpayers.
This bill will promote transparency of the government's actions
and specifically its relation to pollsters. I would point out that had
this bill been law the present Minister of Agriculture and
Agri-Food would have had to disclose the results of his polls on the
Canadian Wheat Board rather than having them painfully leaked
out to the public.
(Motions deemed adopted, bill read the first time and printed.)
* * *
Mr. Paul Zed (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker, if
the House gives its consent, I move that the 29th report of the
Standing Committee on Procedure and House Affairs, presented
earlier this day, be concurred in.
(Motion agreed to.)
* * *
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, I have
two petitions.
The first petition comes from Barrie, Ontario. The petitioners
draw to the attention of the House that managing the family home
and caring for preschool children is an honourable profession
which has not been recognized for its value to society.
(1050)
The petitioners therefore pray and call on Parliament to pursue
initiatives to eliminate tax discrimination against families that
choose to provide care in the home for preschool children, the
chronically ill, the aged or the disabled.
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, the
second petition comes from Bloomfield, Ontario.
4714
The petitioners draw to the attention of the House that the
consumption of alcoholic beverages may cause health problems
or impair one's ability, and specifically that fetal alcohol
syndrome or other alcohol related birth defects are 100 per cent
preventable by avoiding alcohol consumption during pregnancy.
The petitioners therefore pray and call on Parliament to enact
legislation to require health warning labels to be placed on the
containers of all alcoholic beverages to caution expectant mothers
and others of the risks associated with alcohol consumption.
Mr. Maurizio Bevilacqua (York North, Lib.): Mr. Speaker,
pursuant to Standing Order 36, I am pleased to present to this
House three petitions signed by the residents of York North which
speak to the rights of Canadians.
The first petition is about the Helms-Burton law. The petitioners
draw to the attention of the House that the Cuban liberty and
democratic solidarity act attempts to impose American domestic
policy on other sovereign states and therefore violates international
law.
The petitioners further draw to the attention of the House that
Canadian interests, rights and businesses must be defended with
strength and vigour.
The petitioners therefore call on Parliament to pursue all
avenues available to ensure the rights of Canadians are protected.
Mr. Maurizio Bevilacqua (York North, Lib.): Mr. Speaker, the
second petition deals with small businesses, the important role they
play in our economy, the challenges they face and what we as the
federal government can do to help them succeed.
The petitioners call on Parliament to continue to create a healthy
environment for small businesses, to ensure that they have access
to the financing they need and to help them explore and capitalize
on new opportunities.
Mr. Maurizio Bevilacqua (York North, Lib.): Mr. Speaker, my
final petition draws to the attention of the House that Canadians of
all ages view our health care system as a defining element of
Canadian society and that user fees do not work. Rather they
merely shift the burden to the most vulnerable in our society.
The petitioners therefore call on Parliament to continue to
uphold the fundamental principles of the Canada Health Act so that
public health care remains accessible, comprehensive, portable,
universal and publicly administered.
Mr. Stephen Harper (Calgary West, Ref.): Mr. Speaker, it is
my duty to present a petition signed by 28 residents mainly of
Calgary.
These petitioners call on Parliament to conduct a full public
inquiry into the relationship between lending institutions and the
judiciary, and to enact legislation restricting the appointment of
judges with ties to credit granting institutions.
* * *
Mr. Paul Zed (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker, if
Question No. 12 could be made an Order for Return, the return
would be tabled immediately.
[Text]
Question No. 12-Mr. Gilmour:
Concerning federal government owned or leased building/space for which Public
Works and Government Services Canada is responsible in Canada, would the
government provide: (a) a list of all buildings owned or space leased for Public
Works and Government Services Canada use in which 5 percent or more of useable
space remains vacant specifying in each case type of building/space (office,
warehouse, etc.), number of square metres vacant and address; (b) a list of all
buildings owned or space leased in which space is presently available for
renting/subleasing to a client/tenant specifying in each case type of building/space
(office, warehouse, etc.), number of square metres available for renting/subleasing
and address?
Return tabled.
[English]
Mr. Zed: I ask, Mr. Speaker, that the remaining questions be
allowed to stand.
The Acting Speaker (Mr. Kilger): Is that agreed?
Some hon. members: Agreed.
[Translation]
The Acting Speaker (Mr. Kilger): I wish to inform the House
that, because of the ministerial statement, Government Orders will
be extended by 43 minutes.
_____________________________________________
4714
GOVERNMENT ORDERS
[
Translation]
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ) moved:
That this House condemn the federal government's refusal to reveal the full facts on
the tax-free transfer of two billion dollars out of the country and its decision instead to
4715
attack the credibility of the Auditor General while opening the doors to other capital
transfers that will deprive the federal government of hundreds of millions, and possibly
billions, of dollars every year.
He said: Mr. Speaker, I am still shocked by the arguments used
by the Minister of Justice and the Reform representative, which, in
my opinion, smacked of demagogy and cynicism, belittled the
people of Quebec and denied their democratic rights.
The Acting Speaker (Mr. Kilger): I hesitate to interrupt the
hon. member simply to ask him to co-operate. I am aware that the
issue raised by the Hon. Minister of Justice, to which both
opposition parties have responded, is of great if not paramount
importance for all members of this Parliament.
(1055)
However, I must ask the hon. member to co-operate and stick to
his motion so the debate remains relevant. With all due respect,
despite its importance, the other issue should not be dealt with on
this opposition day but wait for another opportunity here in this
democratic House.
So I simply ask you to please co-operate and keep to today's
motion put forward by the hon. member for
Saint-Hyacinthe-Bagot.
Mr. Loubier: Mr. Speaker, I apologize. I sometimes have
trouble controlling my emotions, especially when deeply hurt by
the comments made by some of our colleagues.
I am happy to rise today to speak to a matter I care deeply about,
namely the scandal condemned by the auditor general on May 7,
whereby a rich Canadian family managed, in December 1991, to
transfer a $2 billion family trust fund to the U.S. without paying a
penny in tax on the capital gains from these assets.
This rich family was able to transfer its assets tax free because of
a so-called advance ruling by Revenue Canada. It is important to
understand what an advance ruling is. Wealthy taxpayers-and it is
essentially they who are involved financial operations of this
nature and this magnitude-can ask Revenue Canada for an
advance ruling on an interpretation of the Income Tax Act in order
to protect secure a financial transaction or their own interpretation
of the Income Tax Act.
This advance ruling, which was made on December 23, 1991,
when everyone was busy partying, was based on a distorted
analysis out of touch with the realities of tax laws by senior
officials from the revenue and finance departments.
Several unusual facts relating to this issue lead us to believe that
the government has some things to hide, that it does not want to
shed light on this episode. Indeed, even though the decision was
made under the previous Conservative government, it may be that
friends of the Liberal Party of Canada, major contributors to the
Liberals' election fund, very rich and influential people who
gravitate around the centres of power, such as the offices of the
Prime Minister and the Minister of Finance, have had some
influence, with the result that, today, the government wants to hide
things.
The first unusual fact is that senior officials from the revenue
and finance departments had several meetings before issuing this
ruling. During those meetings, they leaned on one side or the other.
First, they said that the family could not transfer to the United
States these assets of $2 billion tax free. However, in the end, on
December 23, after numerous representations had been made by
the tax experts representing the rich family involved, Revenue
Canada issued an advance ruling allowing this scandal to take
place.
Oddly enough, there are no minutes of these meetings, no report,
no written account of the arguments put forth by the two sides
before such a distorted interpretation of the tax provisions was
made.
The second unusual fact is that, to this day, the ruling, which
may have cost hundreds of millions of dollars to Quebec and
Canadian taxpayers, is not supported by any technical analysis.
There is no technical document.
(1100)
When it wants $50 from middle and low income taxpayers,
Revenue Canada does not beat around the bush. It issues a notice
and sends a long letter explaining that an amount of $50 is due and
payable. However, when hundreds of millions of dollars are at
stake, no technical document is to be found.
The third unusual fact is that, for almost a week, meetings took
place from morning until evening. On December 23, during the
holiday season, while everyone was at home relaxing and
celebrating Christmas and the New Year, some public servants
were at work. The result was that, on that day, Canadian taxpayers'
goose was cooked. Quebec and Canadian taxpayers are the ones
who, through their taxes, must pay the hundreds of millions that
were not paid by the family that transferred $2 billion to the United
States.
Two days before Christmas, a family in Canada had additional
reasons to celebrate, following Revenue Canada's ruling. However,
all the other Canadian families would, had they known about
this-because the government kept it a secret-have been
saddened by the shameless attitude of senior public servants, who
probably acted with the complicity of those in office at the time.
Another strange thing: while all advance rulings by Revenue
Canada are normally made public, available to everyone, it took
until last March 21, five whole years, for this advance ruling
delivered in December 1991 to be made public and for the auditor
general, on the basis of this very information, to bring to the
public's attention this two billion dollar scandal. Five years.
4716
Do you know what this means? It means that Revenue Canada
had things to hide, because it is truly incredible that all these
advance rulings were made public over the last five years with
one exception. Oddly enough, it was the most important one.
Oddly enough, it was the one that is costing Canadian taxpayers
hundreds of millions of dollars. It is definitely rather strange.
This implies as well that for five years a small group of people
knew, but that the bulk of the public did not. What is the word for
this? In the United States, they would be described as insiders,
people who were able to profit from their knowledge of the
existence of the December 1991 advance ruling, of the existence of
an erroneous interpretation, but one given by Revenue Canada
regarding certain tax provisions from which others in their limited
little group could have profited.
It means that the tax experts representing the very rich Canadian
family that transferred its two billion dollars to the United States
had a secret, a golden piece of information that they could sell all
over the place to other rich Canadian families, because let us not
forget that this 1991 ruling served as a precedent.
It means that, for five years, other rich families in Canada were
able to profit from this advance ruling, in order to do exactly the
same thing as in the case that concerns us, which is to not pay a cent
of tax, and have the rest of Canadian taxpayers compensate for the
fact that they were able to transfer billions out of the country.
Another strange thing in all this is the attitude of government
representatives. When the auditor general made this case public
last May, he did so in connection with the work of the House of
Commons public accounts committee.
The public accounts committee is the committee that looks at all
the recommendations, as it will today with the auditor general's
new recommendations, and the public accounts committee
examines all the chapters in the auditor general's report, analyzes
each of the recommendations, and calls witnesses, as well as
looking into the various scandals uncovered by the auditor general,
involving spending or the numerous examples of waste in the
departments, for instance, or situations such as those that concern
us today-a misinterpretation of the tax act. This is the mandate of
the auditor general.
(1105)
As for the information made public by the auditor general, you
have seen the performance before the public accounts committee
by the Liberal representatives, including the hon. member for
Brome-Missisquoi. You have seen them tearing out their hair in
front of the cameras, sending out press releases about how they
were going to get to the bottom of the circumstances surrounding
this advance ruling, the circumstances which made it possible to
avoid taxes because of a loophole in the Income Tax Act.
Two days later, the hon. member was nowhere to be found. The
story was that he had been called back to his riding on a very urgent
matter, and could not get back until the next week. Finally, he was
absent for two weeks. He could not be reached. And why? Because
he had received an order from higher up. He had been given orders
from higher up to button his lip, because some people linked to the
Liberal Party, perhaps even to the PMO or the office of the finance
minister, had, or might have, profited directly or indirectly from
this ruling. So he was told to keep quiet.
After that, everything went haywire. The Minister of Finance
announced he was transferring the case of the two billion dollar
trust to the finance committee, so that such an ambiguous
situation-as he referred to it- would not be repeated in future. He
called it an ambiguity in the tax law, whereas it is not; it is clear
that government employees were not entitled to make the
interpretation they did.
By transferring the matter to the finance committee, the Minister
of Finance was merely clouding the issue. And why? Because the
finance committee is not mandated to cast light on a specific case,
whereas the mandate of the public accounts committee is to carry
out a thorough investigation, to virtually convert itself into a royal
commission of inquiry. As for the finance committee, it is not
concerned with the day to day administration of tax policy, as the
public accounts committee is. Nor does it investigate cases raised
by the auditor general. Its focus is on the changes in taxation
policy.
By transferring the case to the finance committee, the finance
minister certainly was aware-having been an MP and the Minister
of Finance long enough-that it would not examine the specific
case from 1991, but would make recommendations on future
changes to policy.
When it did get to the finance committee, the Liberals' attitude
was really scandalous. First, the chairman of the finance
committee. When the auditor general appeared before the
committee, for more than an hour and a half he scolded the auditor
general, was derisive and tried to undermine his credibility by
taking the floor. This is unheard of in a committee of the House of
Commons: a chairman who decides to take the floor for an hour
and a half and tell off the auditor general.
The auditor general, and it is important for taxpayers to realize
this, is one of the most venerable institutions of this Parliament.
The auditor general is the watchdog of the public purse. He is
accountable to Parliament, not to the Liberal Party of Canada.
He judges the performance of managers, their good and,
especially, their bad decisions, and reports to Parliament. In other
words, he is accountable to the people. He monitors public finances
and the interpretation of tax laws in the best interests of the
4717
taxpayers of this country. And the only thing the government side
did was undermine the credibility of the auditor general.
Recently, this happened again. The report of the Liberal majority
on the finance committee, the very report ordered by the Minister
of Finance, said, more or less: ``The auditor general had no
mandate to do what he did''. However, he did have a mandate to do
what he did and he had done so many times. He has examined the
interpretation of tax laws at least seven times in ten years.
When the Liberals were in the opposition, they used the cases of
erroneous interpretation of the Income Tax Act by senior officials
that were raised by the auditor general. Today, they condemn him.
They say the auditor general has no mandate.
Second, they said he had no credibility. That is a serious charge.
The auditor general watches over the interests of all taxpayers. He
is accountable to Parliament and makes departments, ministers and
senior officials give an account of themselves, but they say his
analysis is not credible. What is their basis for saying so? They rely
on the opinion of six experts who appeared this summer before the
finance committee. I was there, and six out of eight experts spoke
out against the auditor general.
(1110)
Do you know why? Because the six of them, all of them, were
tax experts representing wealthy canadian families and helping
those families to take millions if not billions of dollars out of
Canada in order to avoid paying a cent of income tax on these
amounts. Now, has anyone ever seen people who are judge and jury
shoot themselves in the foot? Of course not, it would make no
sense. But the Liberals, pursuing their saga and their objective,
which is to hide the inside information in this matter, relied on
these experts.
There is more. Instead of closing the gates and saying that this
sort of wrong interpretation would no longer be tolerated, they said
that this distorted, wrong and cynical interpretation made by
Revenue Canada would become the rule. The borders will be
opened. Once the government accepts the report of the Liberal
majority, wealthy Canadian families will be able to do as they
please. They will be able to transfer millions and billions of dollars
without being bothered in any way by Revenue Canada. Mr.
Speaker, just try to take $ 2,000 out of Canada and open an account
in a foreign country to see if Revenue Canada will allow you to do
it. Just try.
The attitude of the Liberals in this matter is bewildering but
suggests that the government probably has many things to hide.
As I said earlier this week in this House, if we scratch the blue of
the decision taken by the Conservatives in 1991, we will soon find
some red underneath. In other words, some influential people in the
Liberal Party benefited from this decision. Furthermore, the fact
that the standing committee on public accounts cannot go into this
matter as thoroughly as it would like to and call witnesses, namely
senior officials and even politicians who were involved in this
decision in 1991, and even tax experts who were around at the time,
suggests that the government is trying to cloud the issue and hide
things.
The government has something to hide. There might be people in
the Prime Minister's office or in the finance minister's office who
do not want this thing to become public knowledge, but it is the
Canadian taxpayer who is paying for it, and probably for other
cases since, as I mentioned before, and this is very significant, the
1991 case has set a precedent for others. As soon as this kind of
advance ruling is handed down, and insiders get wind of it, and we
are dealing with insiders here and, by the way, insider trading is an
indictable offence in the United States, they may use it to other
people's advantage. They might have used it to benefit their clients
if they worked for tax consultants, for example.
As a result of this ruling, astronomical sums of money are being
transferred abroad without any interference from Revenue Canada.
In this case as in others that might have occurred, the government
must come to its senses and protect the interests of all taxpayers,
not only those who are millionaires or billionaires.
[English]
I would like to take this opportunity to announce to the House
that the official opposition is currently working to create a vast
coalition coast to coast. This coalition will be constituted of unions,
elderly people organizations, student organizations, groups devoted
to the well-being of underprivileged people, and Canadian citizens
who are fed up with the attitude of the federal government on this
issue. We hope this vast coalition will bring some sense to the
government.
[Translation]
In the meantime, let us hope that it will see the light, it is in the
best interest of all Quebecers and Canadians. It is outrageous for
the government to attempt to cover up this scandal, hiding behind
false arguments, instead of getting to the bottom of it.
(1115)
It is kicking a big fuss, trying all kinds of tricks in the public
accounts committee or the finance committee to make sure that the
truth will never be known.
I would like to take this opportunity to reiterate, on behalf of
Quebecers and Canadians, our trust in the institution of the auditor
general and the work Mr. Desautels did on this issue and many
others.
If there is an auditor who deserves the highest respect for his
work and his integrity, and who has in fact been supported by a
former auditor general, Mr. Kenneth Dye, it is Mr. Desautels,
4718
whom, I believe deserves to be applauded for his work instead of
having his reputation systematically tarnished by an unscrupulous
government.
[English]
Mrs. Sue Barnes (Parliamentary Secretary to Minister of
National Revenue, Lib.): Mr. Speaker, I am very pleased to make
a brief comment at this time. We have just heard the opening
speech on this daylong debate.
I want to make it known to Canadians that during this debate
they will hear more than the speculations and the fearmongering
that we have just heard. I hope they understand that this is an
extremely complex area of tax law.
An open public hearing was made at which time unfortunately
no evidence was put forward by the members opposite to prove any
of their speculations. So what we have today is a debate on the one
side where people are looking to find a problem that they could not
find when the hearings transpired. We have a tabled report and
what we are doing is open to debate today.
I ask Canadians to listen to members from all sides of this House
who will give their opinions. I believe the government, acting
responsibly and in a balanced manner, will be able to shed some
reality in this discussion.
[Translation]
Mr. Loubier: Mr. Speaker, when they talk about reason, when
they say that the government behaved reasonably, I must say it is
certainly not the case in this instance. Since the very beginning, it
is remarkable how many steps, how many measures the
government has taken to cover up, to conceal the situation.
Even in the public accounts committee, of which my colleague is
a member, they used every trick in the book; motions were
submitted, even a motion saying that light would be shed on this
issue in the fall was defeated by the Liberals. It takes some nerve to
do that. Every time my colleague, the member for
Beauport-Montmorency-Orléans and Chairman of the Standing
Committee on Public Accounts, tried to raise the issue, he was
turned down. They used the finance committee's analysis as an
excuse to say: ``Finance is working on it. Once they have done their
job, we will see''.
The Standing Committee on Public Accounts has the authority to
act almost as a royal commission of inquiry. Until now, I have not
sensed a willingness, on the part of the Liberals, to get to the
bottom of this issue. On the contrary; the finance committee report,
a Liberal majority report, and even the statements made over the
last two weeks by the Prime Minister and the finance minister,
show clearly that they want to cover up, and not shed light on the
issue.
Not only will they not shed any light, but they announced, in the
Liberal majority report which has now been recognized as the
government's position on the issue, that what was done in 1991,
that misinterpretation of the tax legislation, will now become the
general rule. From now on, this is how Revenue Canada will
officially interpret the tax provisions.
I want to ask Canadians to consider the so-called reasonable
attitude of the government. It is not a reasonable but a outrageous
attitude. These people practice patronage. I hope that Canadians
will see it some day. I hope that those Canadians that are now
Liberal supporters will raise the question in their ridings and ask
their members of Parliament for an explanation.
Sometimes I look at Liberal members and I wonder if they read
the reports of the committees and of their government. Sometimes
I hear things and wonder if I have not landed on another planet. I
feel they know nothing about the government's positions and their
implications. They just go along with everything.
They go along, they applaud, they smile and say: ``My my, we
are good''. They are in fact shooting themselves in the foot.
(1120)
They are here to represent their constituents but instead, they
applaud the government's positions when in fact that government is
only protecting a handful of rich friends of the party. That is not
normal. I hope they will wake up eventually because this is no way
to behave in politics. It is certainly not our way. And it is most
unfortunate.
[English]
Mr. Derek Lee (Scarborough-Rouge River, Lib.): Mr.
Speaker, the hon. member leads off debate on this important issue
today and he suggests that we have a scandal. The auditor general
has reviewed the issue. The Standing Committee on Finance has
reviewed the issue. The hon. member has spent 20 minutes or so
introducing us to the issue in the House. He suggests that it is a
scandal but all that he has done has asked questions.
It is a little too late in his remarks to do it but perhaps a
subsequent member will address this. However, I wish that
someone would please outline what element of the issue constitutes
a scandal. I put this to him and I ask for his reaction.
The advance ruling procedure that was used does not create any
new law or any new rights. It is simply a decision by the
department on what the tax law was at the time.
If this particular trust had simply changed its domicile without
seeking an advance ruling, I put it to him: Would not the
department have come to the same conclusion in doing an
assessment or making the decision not to do an assessment after the
change in
4719
domicile had taken place? It would have come to the same
conclusion that the tax law permitted the change in domicile
without the deemed dispositions that would otherwise have taken
place.
Where is the scandal? If there is a problem it may be in the
existing tax law. Unless the member can point to a problem, I
suggest to him that an advance ruling would have had the same
effect as an assessment would have had after the change in
domicile of this trust had taken place.
[Translation]
Mr. Loubier: Mr. Speaker, that is exactly what I was saying.
The hon. member, my Liberal colleague, did not read the
proceedings of the finance committee, did not read the testimony of
the people who appeared before the committee, most of all did not
read the auditor general's report and did not read the report of the
Liberal majority in the finance committee.
There is a scandal because the economy of the legislation
concerning taxable Canadian property-it sounds technical, but
that is the objective-the economy of the legislation said this
concept, which allowed the transfer of some public corporation
assets elsewhere in the world, free of tax, was to be applied only to
foreign residents, not to Canadian residents.
The concept of TCA, of taxable Canadian assets, was applied to
a Canadian family that transferred $2 billion outside the country
and did not pay a cent in taxes. When you talk about the
proceedings and the experts who were consulted, as I was
mentioning earlier, the six experts your friends claim to be are
people who represent rich Canadian families and who allow them
to export capital.
I will confront you with 15 experts who have no links with rich
Canadian families, academic tax experts, people who know their
business, and they will tell you quite the opposite. The auditor
general did his job, his interpretation of tax legislation is correct,
and it is Revenue Canada's interpretation that is wrong.
The proof of the matter is that Revenue Canada issued a notice in
1985 that said that, in a case such as this one, the TCA, transfers of
capital outside the country free of tax, could not apply to Canadian
residents. And what is rather strange, in 1991, within a week,
during the Christmas holidays, while everyone was celebrating,
Revenue Canada's decision was changed following discussions
with representatives of rich Canadian families. That is a scandal.
The other scandal is the attitude of the government, of Liberal
representatives who, instead of shedding light on this and closing
the borders to this flight of rich families' capital, open them wide
to favour their friends.
[English]
Mr. Maurizio Bevilacqua (York North, Lib.): Mr. Speaker, I
listened very carefully to the hon. member from the opposition and
I am still trying to figure out exactly what he is talking about.
Today he has certainly presented perhaps the weakest case that he
has ever presented in the House of Commons.
The auditor general raised important policy questions in an area
that Parliament had not really reviewed in over 25 years which
related to this issue. The committee as I understand it in turn
produced a report and submitted thoughtful recommendations
which the government is reviewing carefully.
(1125 )
I want this to be very clear for those Canadians who are watching
the House of Commons proceedings. There is no evidence of large
scale capital flight that is depriving this government of tax revenue
owed to it. Canada already has tough tax rules for people who leave
the country and these tax rules are much stricter than the ones in
almost every other country including the United States, the United
Kingdom, France and Germany. They certainly are tougher than the
ones in Japan.
Does the hon. member think that by repeating the words ``family
trust'' and ``scandal'' that somehow he is going to score political
points? Canadians are intelligent and clearly they will find that
what the hon. member is simply advocating is cheap politics.
[Translation]
Mr. Loubier: Mr. Speaker, there is a scandal, namely the
tax-free transfer of $2 billion abroad, when this kind of thing
should not have been done. There have been other such transfers
since then, and do you know why? Because the Deputy Minister of
National Revenue said so when he appeared before the finance
committee. He said that the decision on the first $2 billion may
have led to other transfers.
The other point is, you are saying we want to score political
points, you will see that the points scored will not be not political.
The coalition we are setting up includes organizations from across
Canada that are very interested in letting the government know
they disagree with this. As you will see, this coalition is apolitical
and the Liberals in each of their ridings will feel the heat.
The Acting Speaker (Mr. Kilger): In conclusion, I wish to
thank the hon. member for Saint-Hyacinthe-Bagot for his
understanding and co-operation, which I accept. As he pointed out
to the House, the circumstances were difficult.
[English]
Hon. Douglas Peters (Secretary of State (International
Financial Institutions), Lib.): Mr. Speaker, I am very pleased that
the hon. member has brought forward this motion. I must admit in
listening to him for the last half hour I was not sure whether I was
listening to ``This Hour Has 22 Minutes'' or that maybe I was on
another planet.
This does give the House an opportunity to see in black and
white just what the hon. member and his colleagues have been
shouting about for the past several days. As is so often the case, this
motion makes it clear that the hon. member is rather confused on
more than a few points.
4720
The motion asks the House to condemn the government for
failing to shed light on various transactions. I will have more to say
in a few moments about what those transactions were and how the
motion mischaracterizes them, but first I would like to take a look
at the suggestion that the government has somehow been
concealing things.
The auditor general issued his report on May 7 of this year. The
Minister of Finance immediately asked the House of Commons
finance committee to look at the important issues raised by the
auditor general.
The Minister of National Revenue announced an immediate
moratorium on the kind of advance rulings that had concerned the
auditor general. That certainly does not strike me, and I am sure it
does not strike Canadians, as the action of a government that
wanted to conceal something.
The finance committee was given an extremely broad mandate
and held several days of open public hearings. The committee
heard from the auditor general and members of the auditor
general's staff, a total of eight private sector professional and
academic experts, and senior officials from the Departments of
National Revenue, Finance and Justice.
The committee invited opposition members, including the hon.
member who brought forward this motion, and the auditor general
to suggest witnesses. During those hearings all committee
members, including the hon. member, were free to ask any and all
questions and to discuss any issue they saw fit. These hearings
were also open to the public. Is there any possible process that
could be more transparent than that?
In addition, the committee has tabled its report complete with
partially dissenting opinions from the opposition members. The
report is over 60 pages long and deals with every one of the issues
identified by the auditor general. Again, I fail to see how this
indicates a desire to conceal something.
(1130)
In response to the committee report, the Minister of Finance said
that the government would look seriously at the recommendations
contained in both the majority report and the minority reports and
would take action once there had been adequate opportunity for
consultation. In the meantime Revenue Canada's rulings
moratorium would continue.
How does all of this show any reluctance to shed light on an
issue? The fact is the government has acted quickly, transparently
and appropriately in response to the concerns raised by the auditor
general.
If anyone is afraid to shed light on these matters, it is the hon.
member and his colleagues. With their unsubstantiated claims of
scandals and billions of dollars worth of capital fleeing the country,
they are leaving Canadians entirely in the dark about what are the
real issues.
This brings me to the next part of the hon. member's motion. The
motion talks about a flight of capital; $2 billion in total that left
Canada free of tax. It suggests that even more money, billions even,
is sure to leave the country as a result of some unspecified thing the
government has done or the government has not done.
The hon. member is a colourful speaker and this is a colourful
motion. It has a vision of convoys of Brinks trucks lined up at the
U.S. border waiting to go south. Colourful as that image is,
Canadians deserve better than this. Canadians know that there is no
restriction or tax on moving money out of Canada. Apart from a
handful of countries with exchange controls, this is the way the last
half of the 20th century world is. Money moves freely and we are
all the better for it.
Having confused the issue, the hon. member will now back up
and say that what concerns him is not movements of money per se,
but movements of untaxed capital gains. Somehow he says $2
billion in assets left the country with no tax being imposed. Here
again the truth is considerably less exciting and a whole lot more
complicated.
The fact is Canada does tax people leaving Canada on any capital
gains their property has accumulated. We are one of only a few
countries that do this. Our rules in Canada are tougher than the
rules in the United States. Our rules are tougher than the rules in the
United Kingdom. Our rules are tougher than the rules in France.
Our rules are tougher than the rules in Germany. Our rules are
tougher than the rules in Japan. Our rules are tougher than the rules
in Switzerland and they are tougher than those in almost any other
country anywhere else.
We do not tax people who leave with gains on Canadian
property. That is because we will tax the gains on Canadian
property when they are actually realized or if a tax treaty applies,
the person's new country will tax those gains. This is not a
loophole. It is not something of which only rich people or only
trusts can take advantage. It is a basic part of our tax system and it
has been there since 1972. It makes good policy sense. Do not tax
on realized gains unless you have to tax. It is not the only policy we
could have and the committee has suggested that it be
reconsidered. But it hardly deserves the kind of scorn the hon.
member is heaping on it.
The issue that Revenue Canada had to rule on in 1985 and again
in 1991 under the previous Tory government was whether certain
shares were the kind of property which is known as taxable
4721
Canadian property. The issue is a complex, technical one. There
was no immediate clear answer. At the end of the day Revenue
Canada said the property was taxable Canadian property.
Last May the auditor general indicated that he was concerned
that this might not have been the correct answer in a technical
sense. As soon as the minister became aware of the auditor
general's concerns, he asked the all-party finance committee to
look at the issue with the help of experts. He did not hide from the
issue. He faced the issue squarely. He did not put it in an expert's
hand. He did not do any of those things. He put it in the hands of an
all-party finance committee and asked its members to consult the
experts, suggest witnesses and come back.
(1135)
The committee invited the opposition to suggest those experts
who might participate and the expert opinion was overwhelmingly
that Revenue Canada was correct. There was no tax free flight of
capital. Let me repeat, there was no tax free flight of capital.
The particular taxpayers concerned did not pay any tax, true.
That was because they did not owe any tax. I am sure that not even
the hon. member who proposed this motion really wants Revenue
Canada to collect tax it is not owed.
The motion goes on talk about other capital leaving the country,
as though the government had opened some secret door to let
people escape tax. That is absurd.
The committee found that in 1985 and 1991 the rulings did not
open any new avoidance opportunities. With the Minister of
National Revenue's continuing moratorium even in the unlikely
event that there was some yet undiscovered, secret way to exploit
the current rules, taxpayers could not be certain their avoidance
techniques would work because the Minister of National Revenue
has put a moratorium on advance rulings.
It is true that there is a flight of capital under way right now. That
flight of capital is into Canada. Business people and investors
around the world realize Canada is such a good place to invest their
money, to do business, and there is a flight of capital into Canada
these days.
Regrettably the separatist government in Quebec makes it hard
for that province to attract its share of this new investment. It is
understandable that the hon. member tries to distract attention from
what are the real issues. Those real issues are that the separatist
government in Quebec is not attracting the amount of money into
Quebec that could have attracted if there was another government.
The simple fact is that this issue, important as it is, does not
involve any flight of capital. The issue of tax is not a flight of
capital. People come into and leave Canada all the time. Some of
them are rich people, and some of them are poor people. Some of
them do not owe any tax but that does not mean that our system is
grossly deficient, much less that there is some government
conspiracy to let people off their legal obligations.
The motion also talks about the government attacking the
credibility of the auditor general. The hon. member said that the
committee denounced the auditor general. That is simply not the
case. That is pure unadulterated rhetoric.
The hon. member is well aware that the report of the finance
committee is just that, it is a report of the finance committee. The
committee is composed of members of Parliament from all
officially recognized parties in the House. The role of a
parliamentary committee is a vital one to our democratic process.
The work of the committee is the work of its members. Its work
does not represent government policy, it represents the work of its
members.
The government would not have it any other way. We value the
work of the committees of this House. Even the hon. member who
put forward this motion would not want to have a system whereby
the work of committees was not independent.
By ignoring this distinction I can only conclude the hon. member
does not wish to deal with the difficult policy choices that the
report implies, not when there is an easy headline, not by repeating
irrelevant accusations, not by simply defending the auditor general
against non-existent attacks. Those are the tactics of the opposition
members and they are certainly irrelevant.
In summary, this motion is an excellent written summary of
everything that is wrong with the official opposition's approach to
so many complex matters. It ignores the real question. It repeats
unprovable accusations. It denounces the government for acting
irresponsibly. It simplifies to a point of incoherence some very
difficult public policy issues. All of these are untrue. All of these
are ridiculous. The motion will be rejected by anyone who believes
in parliamentary democracy and believes in the rule of law.
(1140)
Mr. Monte Solberg (Medicine Hat, Ref.): Mr. Speaker, it is a
pleasure to speak to the opposition motion today. As I see it, there
are two major issues that flow from the motion and from this whole
issue.
First is the government's attempt to redirect criticism for the
handling of the affair by blaming the auditor general. That is the
first big issue. The second is how confusing Canada's taxation
system is, and the failure of the government to provide crystal clear
tax policy that prevents disputes of the type we are talking about
today. Those are the two big issues.
I want to say a couple of words about this specific incident. What
we have here is a curious set of events that led up to the tax ruling
in 1991 and a curious set of events that get us to this point in the
debate in 1996.
4722
A tax ruling was made that was not made public which had a
curious lack of documentation surrounding it. We know that this
ruling allowed $2 billion to leave the country in a circumstance
where, ordinarily, it may have been taxed. The final point I make
with respect to all this is that the auditor general looked at all this
and found that there was no wrongdoing.
While there are many unanswered questions, the government has
done a very poor job of making tax policy clear. It is very wrong
and irresponsible when its members turn around and criticize the
auditor general.
The Bloc Quebecois has gone way beyond the pale in suggesting
that there is some kind of great scandal here, that Canadians are
going to rise up. That is just a little hyperbole on its part.
However, the opposition motion gives us the chance to talk a
little more about these two issues, the government using the auditor
general to escape accepting responsibility for the lack of clear tax
policy and really how confusing our taxation system is.
What I regard perhaps as the most serious of the two issues is the
efforts of the government to blame the auditor general and to try to
redirect criticism to him so that it does not have to take the heat for
not being clear about tax policy.
This has become a theme, really, for the government. I point to
the recent responses to questioning by the Prime Minister with
respect to the Somalia inquiry. He is blaming the inquiry, in this
case, for some of the problems he is having. He is blaming it for
taking too long and for being too tough on witnesses.
I see a theme developing where the government is trying to
blame other people. In the case we are talking about, its members
are blaming the auditor general, an officer of the House and not
accepting responsibility themselves. This will catch up with the
government so that its members cannot continue to blame other
people, particularly independent agencies, when things go wrong.
There is no shortage of incidents where things have gone wrong
for the government and I want to talk about a few of those for a
moment if I might.
I hate to continue to raise this, but I feel duty bound to do so
because it is one of the things people have been talking about the
most over the last little while. It is something that Canadians are
very concerned about.
I go back to the whole issue of the broken promise on the GST.
We had a situation where the government was blaming the media
when it came to its broken GST promise: ``Oh no, we didn't
promise to scrap the GST. Look at our red book''. Of course, they
were on national television doing exactly that. Again, they were
trying to shift the blame. They did it on the GST on reading.
(1145 )
The Prime Minister wrote the don't tax reading coalition and
said he would remove the GST on reading materials. We have had
policy conventions since then, in 1992 and in 1994, where the
government said that it would remove the GST on reading. Now the
government is trying to say: ``You must have misunderstood. That
is not really what we meant at all''. This is despite the fact that it is
in Hansard and in all kinds of public documents. Again, the
government seems to have a problem accepting any responsibility,
just like in this debate over the auditor general and his criticism of
taxation policy.
We have a situation where the government promised to provide
150,000 day care spaces but it will not accept responsibility for
making that promise. I do not support the government when it
comes to providing these day care spaces. We believe that it should
take a different tact. However, that is not the issue. The government
made a promise in the red book and it is now trying to weasel out of
it.
During the recent debate over cuts to the CBC, there is a pledge
in the red book which states that the government will provide stable
funding for the CBC. The heritage minister has been one of the
most vociferous defenders of funding the CBC over the years. On
numerous occasions the minister has said that we must protect the
CBC. I do not agree with protecting funding for CBC Television,
not at all, but that is not the issue. The government is trying to
weasel out of its promise. It is trying to get out of accepting
responsibility for the promises that it made in the past. Again, that
is what it was trying to do with the auditor general.
The auditor general should not be investigating those policy
areas, the government is saying, he should not even be looking at
all those kinds of things because it makes it look bad. That is too
bad. It is the government and it has to start accepting some
responsibility.
Another issue where the government is trying to get out of a
previous promise and shift responsibility away is on the Canadian
Wheat Board. I remember very well during the election campaign
when we had the Prime Minister and the current minister of
agriculture saying they wanted a plebiscite on the wheat board
issue. However, there has been no plebiscite.
We also know that since then they have brought down a panel
that was going to review the whole issue of the wheat board, what it
should be involved in and should there be options for farmers other
than the wheat board. The minister hand picked these people and
said he was going to listen to their recommendations. Again he is
trying to get out of that responsibility. He and the Prime Minister is
now preparing Canadians for the fact that they will not meet their
promise. We again have the government trying to slide out of a
responsibility, a promise it has made.
4723
It does not end there. I want to talk about the big kahuna of
promises, the big promise that the government made during the
last election campaign. It was jobs, jobs, jobs. I just want to talk
about that in detail for a moment.
The Liberals won the election in part because of a promise to
create jobs, jobs, jobs. The issue we are talking about they have
again tried to redirect criticism from the public, from opposition
parties and from other interested people over the issue of family
trusts. They have tried to pin it on the auditor general. However, I
fail to see how the auditor general or the Somalia inquiry or any of
those other groups are responsible for the complete and utter
failure of the government to fulfil its promise to provide jobs for
Canadians.
We still have, as we did in 1993, 1.5 million unemployed
Canadians in this country. That is a scandal. That is what the Bloc
Quebecois should be calling a scandal because that truly is. It is not
just the unemployed Canadians, it is the underemployed
Canadians: 25 per cent of Canadians underemployed. Half of all
Canadians are worried about keeping the jobs they currently have.
There is scarcely a person in this country who does not know
somebody who is unemployed or very afraid of not being able to
get a job when they get of school. There is 15 per cent youth
unemployment in this country. There are people with Ph.Ds
working at minimum wage in jobs that certainly are well below
their qualifications. We need the government to start accepting
some responsibility for all these broken promises.
(1150)
Members across the way will say that on average unemployment
is going down. That is like saying, as the member for Calgary
Southwest says from time to time, that the guy with his feet in a
bucket of ice water and his hair on fire on average feels pretty
good.
When we talk about unemployment we cannot look at averages.
Unemployment in Newfoundland is up around 20 per cent, 25 per
cent, 50 per cent, 70 per cent in some communities. That is an
absolute human tragedy of monumental proportions.
Improvements in the job picture in Alberta do not help the people
in Newfoundland one bit. And so we must insist that the
government start to accept some responsibility for all the promises
it has made.
People in Atlantic Canada, people in Quebec are desperate to
find jobs. The government cannot continue, as it has done in the
finance committee report, to push the blame on to somebody else.
The government of the land is in charge of the levers of power. It
makes the decisions. It rode to power on the promise that it would
provide jobs, jobs, jobs.
Canadians have a right to know what the government is doing to
fulfil that promise, and if it does not fulfil that promise they expect
the government to take responsibility, not to shift the blame to
somebody else. It is time the government started accepting
responsibility.
When a six-year old child does not accept responsibility it is bad.
But when adult men and women, capable people, people who are
supposedly the cream of the crop, people who make up the caucus
and the cabinet of the country, refuse to accept responsibility for
promises that are on paper, which they campaigned on, it is
scandalous. It is ridiculous.
This government will pay a price. I personally am going to
ensure it does. When people make promises like the government
has made and refuse to accept responsibility when they do not fulfil
them, then they only contribute to the tremendous cynicism we see
across the country today when it comes to people's respect for
politicians. Is it any wonder people are so disrespectful of
politicians today? Hardly.
The government made another promise which it has tried to slide
out of, to weasel out of. The red book it states:
A Liberal government will appoint an independent ethics counsellor to advise
both public officials and lobbyists in the day to day application of the code of
conduct for public officials. The ethics counsellor will be appointed after
consultation with the leaders of all parties in the House of Commons and will report
directly to Parliament.
Three years have gone by since this government took power. Do
we have an ethics counsellor who reports directly to Parliament?
Hardly. We have someone the Prime Minister knows who reports
directly to him. The Prime Minister allegedly speaks to the ethics
counsellor when a scandal arises. Then the Prime Minister comes
back and tells us what was allegedly said. But this person is not an
independent officer of the House of Commons, not at all.
We have had situations like when the former heritage minister
met clients of his department for a fundraising dinner. We asked
that these situations be referred to an independent ethics
commissioner. What happened? Nothing, despite the fact that the
Prime Minister and the government promised in writing to do that.
Another promise in writing, another promise broken. And again the
government shifted responsibility and said: ``Perhaps we were
misunderstood. We really do not mean the words that are on this
paper''.
I do not buy that and Canadians do not buy it either. It is an
absolutely ridiculous package of-
Mr. Strahl: Use the right words now.
Mr. Solberg: I have to find the right words-misleading words,
which Canadians are simply not going to buy. Canadians are tired
of being misled on a whole variety of issues and they are not going
to accept it any more.
4724
(1155)
I have talked for a few minutes about one of the two issues that I
have identified as being ones that are important and which flow
from this whole debate over family trusts and the finance
committee's criticizing the auditor general. I have talked about the
attempt by the government to shift responsibility over to, in this
case, an independent officer of the House, the auditor general. In
other cases the government has tried to shift responsibility to
whomever it thinks it can.
The second issue I wanted to raise is the whole issue of the
confusing taxation system. The government has been in power for
three years. Why has it not clarified this particular fine point of
taxation law which is so much in discussion and part of the
controversy we are talking about today? The fact of the matter is
until this issue was raised nobody did anything about it, despite the
fact that the government has been in power for three years.
It is fairly clear that Canadians are concerned about how
confusing the taxation system is. As the hon. member for
Saint-Hyacinthe-Bagot pointed out a few minutes ago, when it is
$50 that the average guys owes the government goes after them
hammer and claw. It is no secret that the government has actually
cranked up its revenue department to go after anybody at all who
looks like they have missed including a penny on their taxation
forms. There is no question-and I am sure hon. members will
attribute to this-that there are more and more people who are
complaining to MPs about how vigorous the taxation department
has become in scraping every cent out of its pocketbooks so that it
can continue to bring more revenue into the government. That is
another issue which I will touch on in a moment.
The taxation system is extremely confusing. The Income Tax
Act is 2,000 pages thick. There are currently 10,000 cases before
the courts on the issue of taxation law. There are all kinds of people
who have very serious concerns about the complexity of the tax
system.
One of the promises which our party has made is that we would
look at the complexity of the taxation system. People have a basic
right to understand how the taxation system works. When the
government is taking half of a person's money in taxes, it is a basic
right for people to be able to understand why the government is
taking the money and what it proposes to do with it.
Since this government came to power we have seen 33 tax
increases. I have a feeling that people would be a lot more
sympathetic to the taxation system in general if overall taxes were
not so high. Right now somewhere in the range of 50 cents on every
dollar earned goes to pay taxes. That is scandalous. The Bloc
Quebecois was talking about a scandal. That is scandalous.
Perhaps people do not realize that since 1983, since the Tories
came to power and then the Liberals after them, we have seen
federal personal taxes increase $4,000 a year per individual
taxpayer. That is absolutely ridiculous. Then there are excise taxes,
which have increased another $1,100 a year.
The finance minister has talked about how he has not raised
personal taxes. That simply is not the case. He has raised personal
taxes. He has done all kinds of things to do that. There have been 33
tax increases of various kinds since the government came to power.
People have felt it in their pocketbooks.
Somebody suggested to me the other day that what should
happen for people to really appreciate how much governments are
taxing them is for them to write out a cheque every month to send
into Revenue Canada for their taxes, as opposed to having those
taxes come directly off their paycheques. Then people would come
to appreciate just how heavily they are being taxed. Many people
understand that.
The average family of four in Canada makes an income of
somewhere around $54,000. Roughly half of that, $27,000, goes to
pay taxes of all kinds. If someone had to write a cheque to Revenue
Canada every month for taxes, it would be well over $2,000 a
month. A mortgage payment of $1,000 is a pretty big payment
every month. But stop and consider for a moment that people
would have to cut a cheque for over $2,000 a month to pay the taxes
in this country. It is absolutely outrageous.
(1200)
We talk about people who are fearful for their jobs. We talk
about people who are afraid to start a business, afraid to risk any
money they have saved. And how can they save very much when
taxes are this high? We wonder why we have an unemployment
problem in this country. To me it is not a very complicated
problem. When we are paying that much in taxes, how is it possible
to save the kind of money that is needed to start businesses? It is
virtually impossible.
I will give another example of how the government is working
against the ability of people to save money and start businesses and
create jobs. This is a perfect example of how the government has
proceeded with its tax increases.
On April 22 there was a change in the tax rules affecting the
notional input tax credit. When I try to explain it, it becomes very
complicated and people just throw up their hands and their eyes
glaze over. The net effect of it is that it removes about a billion
dollars from the bottom line of small businesses. According to
some estimates it amounts to a billion dollars a year. That means
those small businesses have to find that billion dollars somewhere
else.
Where do they find it? They either find it by charging higher
prices to consumers and therefore that tax increase is passed on, or
they let people go or perhaps close down their business. Again
4725
people become unemployed. The government has done this over
and over and over again.
When we are talking about the taxation system and the point I
was trying to make a few minutes ago, I think people would be a lot
more willing to suffer with a complicated taxation system if they
knew that the government was not using the fact that the system
was so complicated and so mystifying to people to raise taxes in a
surreptitious way as it has done time and time again.
Another good example is the move to limit how much a person
can contribute to RRSPs. That is not a direct tax on personal
incomes but the effect is exactly the same as if the government put
a tax on personal incomes. What happens is that people end up
having to pay more income taxes because they cannot save the
money they have traditionally saved through RRSPs for their
retirement. On the other hand the Canada pension plan is really in
trouble and the government's response to that is to limit the amount
that can be put into RRSPs so that people can provide for
themselves in their retirement.
Why not give people the dignity of being able to save for their
retirement? But the government continuously works in
surreptitious ways against the interests of people who are trying to
provide for themselves, trying to create jobs by starting small
businesses, people who simply want to have a few dollars put away
so that perhaps they can take a vacation when they get older, put
their kids through university and have the things that back in the
1960s and early 1970s people just took for granted.
I do not think Canadians are demanding a lot. They do not want
some utopia in the future. They want the same kind of country we
used to have. They want a country where there are balanced
budgets, where governments live within their means, where there
are small governments which are not in their faces at every turn and
every step they take.
Canadians want some reasonable division of responsibilities
between different levels of government. Do we really need to have
different levels of government involved in every aspect of our
lives? Do we have to have three levels of government looking after
the environment? Do we have to have two levels of government
involved in mining, tourism and agriculture? People want smaller
government. They want a balanced budget. They want a taxation
system they can understand. I do not think it is being unreasonable.
(1205)
Canadians want taxes that are high enough I suppose, in that they
are willing to pay taxes to look after some basic social programs.
They want health care and some kind of a pension plan. But they do
not want taxes going into all these wacky social engineering
programs that we have seen in the past. They do not want tax
dollars going into job training programs that bear no fruit as we
have seen over and over again. They say let people who know how
to do it do it.
Canadians do not want to see tax dollars going into regional
development programs where we fund all kinds businesses which
in turn use those dollars to compete against the people who are the
ones who contributed the tax dollars in the first place. That is crazy.
We end up putting prosperous businesses out of work or putting
them under by subsidizing businesses that have been unprofitable
to that point. That is crazy yet the government somehow cannot get
the message.
I am grateful the Bloc has raised this issue today. I do think there
are two big issues that have come from it and I will just touch on
them briefly as I sum up.
The issue of the auditor general reporting on the apparent
irregularity in tax law points to a couple of different major issues.
One of them is the fact that the government has tried to shift the
responsibility away from itself on to the auditor general, someone
who has saved us billions of dollars in the past. We only wish that
everybody in the government would be so vigilant in finding waste.
The other big issue is our confusing tax system. Our member for
Calgary Centre has spent hours and hours speaking to people across
Canada about the need to reform our taxation system. We hope that
this issue will help bring home the need for government to do that.
I want to conclude by saying a word about the auditor general. It
is very important when we have these independent officers of the
House that the government think long and hard before criticizing
these people. It is no secret that the auditor general and successive
auditors general have saved the House billions of dollars over the
years.
The one final request I would make is for the government to
learn a lesson from the auditor general and to apply the same
powers to an ethics commissioner. Then as part of the opposition
we would not be talking about all the scandals we have to talk
about.
Mrs. Sue Barnes (Parliamentary Secretary to Minister of
National Revenue, Lib.): Mr. Speaker, I would like to make a brief
comment and then to ask the hon. member a question.
My comment stems from the fact that I have listened to a
rambling dissertation. At times I had a problem finding the
relevance to today's motion. Nevertheless the hon. member said
something that interested me and which I think is very reflective of
his party's position on many different topics.
He talked about Canadians wanting the government and country
they used to have. I find this a major problem. They are always
looking backward. Unfortunately the real responsibility of a
government is to look forward. This Liberal government is dealing
in business, in tax and in every issue. It is not looking backward
but looking forward to the future, forward for a better situation for
4726
Canadians. That includes very deliberate, well thought out,
practical management of a tax system, a system that is very
complex.
We in Canada are getting more and more of our jobs from
international trade. When the Liberals took office one in five jobs
in this country depended upon international trade. It is now much
closer to one in three jobs in Canada depending on international
trade. One of the things that has enabled us to do this, among many
others because Canadians are very productive people, is the fact
that we have a very sophisticated, advanced and by definition
therefore complex tax treatment. I know that simple is the way the
Reform Party likes things but some things are complex. Part of the
complexity of our tax treatment is the fact that we have to deal
internationally.
(1210 )
Many corporations today are international corporations. They do
not just do business in one country, they are multinational. This
applies also to the people in Canada. Our Canadians are gathered
from around the world. We get income and enhancement to our
economy from investment from outside of this country. People are
also leaving at different stages of their lives. Many people come to
this country, work for many years and then retire and leave it. They
do not want to dispose of all their property and pay tax at that point
in time. Some of them may want to keep property here and have the
income flowing from that property. There are very serious
complications to the broad range of the Canadian public on these
issues.
International tax agreements modify Canadian tax law. That is at
the basic concept of what happened here in the report of the finance
committee. It was a 60-page document. It dealt with process, it
dealt with policy, but at the heart of the document what we have is
an understanding that Canada has over 60 bilateral trade
agreements. That helps Canadians to do international transactions.
In fact, the Canadian tax act is modified by law by the international
tax agreements. For instance, with the United States we have 10
years after the migration to collect the tax.
My question for the hon. member is: Does the member of the
Reform Party believe in honouring our international tax
agreements for the benefit of Canadian citizens?
Mr. Solberg: Mr. Speaker, of course we believe in honouring
our tax treaties but I simply must respond to some of the things the
hon. member said.
She spoke with some conviction about how wonderful it was to
be involved in international trade, how it was providing jobs and
that kind of thing. I agree. It is a very important aspect of what we
do in Canada.
I am just curious to know why the hon. member and her
colleagues fought so hard against international agreements like
NAFTA and actually broke their promise to renegotiate it. Again I
find it fairly strange. I was talking about broken promises. I thank
the hon. member for reminding me of a major one that the Liberals
broke which was that they were going to renegotiate the NAFTA
agreement. Of course they completely and utterly failed to do that.
I do not know who they are going to blame that one on. They
cannot blame the auditor general for that one. I guess they will have
to accept some responsibility for that one themselves.
With respect to the complexity of the taxation system, we are not
suggesting that we can reduce thousands and thousands of pages of
tax rulings down to a single page. Hardly. We are suggesting that
after three years in government the government should have done
something to clarify that particular piece of tax legislation. The
government employs batteries of lawyers and accountants. By this
point in the government's mandate it is important that it look at all
its taxation policies and ensure that there are not big loopholes or at
least there are not issues that are up for dispute which would allow
people potentially to ship $2 billion out of the country without it
being taxed.
The Deputy Speaker: The hon. member for Mississauga South
has one minute and then the member has one minute to reply.
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, on the
tax issue, the Reform Party has long advocated a flat tax system
which allows for a basic exemption, no deductions, very simple.
Reformers have also advocated replacing established pension plans
with RRSPs. I see the member is nodding his head and he
acknowledges that these are two things Reform has talked about.
The fact is that a flat tax approach basically shifts the tax burden
from high income earners to middle income earners. How does the
member square that system which does not allow deductions,
including deductions for RRSPs, with Reform's other position that
we should have more RRSPs to deal with pension entitlements?
Mr. Solberg: Mr. Speaker, there is more than one version of a
flat tax.
The hon. member for Calgary Centre has presented a version
which would include RRSPs and would be a modified version of
the present system. It would be far simpler, far less complicated,
and people would be able to understand it a lot more. He is just
being reasonable. He is saying: ``Let's not throw out everything
that we have done up until now. Let's remember that the current tax
system is what undergirds different parts of the economy''.
(1215)
If we yank it out in one big sweeping movement, there will be all
kinds of implications throughout the economy. He has presented a
very reasonable way of simplifying the system, still allowing
people to save for their own retirement, especially at a time when
4727
the government has failed to do anything to preserve the Canada
pension plan, thus imperilling the future of many Canadians.
[Translation]
Mr. Richard Bélisle (La Prairie, BQ): Mr. Speaker, as we all
know, for nearly two weeks now, the Prime Minister and the
Minister of National Revenue have either evaded the official
opposition's questions about this scandal concerning family trusts
or attempted to trivialize the fact that $2 billion were transferred to
the U.S totally tax-free.
There is indeed a political scandal when, for three years, a
government prevented the auditor general from getting to the
bottom of this issue and, after the auditor general finally succeeded
in alerting the Canadian public to this financial scandal, the Liberal
majority on the finance committee found nothing better to do than
to attack this senior official who is accountable only to Parliament.
Instead of shedding light on this issue that reeks of political
opportunism and patronage, the Minister of National Revenue has
the gall to say that the Bloc Quebecois is misleading the public on
this issue. To inform the public is to mislead the public, is that it?
The government's approach is really quite amazing.
I would rather take the word of the auditor general, the real
ombudsman of those who pay taxes in this country, over that of the
Liberal revenue minister. According to the Canadian press, the
minister believes that the problem is not family trusts, but rather
the rules governing the transfer of funds abroad. What we know for
a fact is that $2 billion were transferred outside of Canada without
a penny being paid in taxes and that these funds came from family
trusts.
The Liberals are out to destroy the credibility of one of the most
important institutions of our parliamentary system: the Office of
the Auditor General of Canada. In their report, they arrive at a
distorted interpretation of the Income Tax Act in order to justify the
inconsistency of the revenue and finance departments, relying
blindly on the testimony of six experts from the private sector, who
are clearly in a conflict of interest position.
In its report, the Liberal majority on the finance committee
launched into an unprecedented attack against the Office of the
Auditor General of Canada, one of the most respected institutions
of our democratic system. Already, during the hearings of the
finance committee, we witnessed disgraceful scenes where, for
nearly two hours, the chairman himself outrageously and
arrogantly attacked the credibility of the auditor general.
Analyzing the auditor general's role and mandate, one
immediately sees the limits that the Liberal majority wishes to
impose. The Office of the Auditor General plays a key role in
making an independent evaluation of the information provided to
Parliament by the government. A Revenue Canada ruling, which
seems to contravene the spirit of the Income Tax Act, was made in
great haste, without any notes or minutes, one December 23, and
could cost Canadian taxpayers hundreds of millions, according to
the auditor general.
Should this issue be debated in the House of Commons? To ask
the question is to answer it.
(1220)
The act setting out the auditor general's mandate is clear.
Nevertheless, the Liberal majority attacks it, attempting to
discredit his role for purely partisan reasons.
In his 1984, 1985, 1987, 1990, 1992, and even 1993 reports, the
auditor general analyzed the application of the Income Tax Act,
without anyone at the time questioning his mandate, his expertise,
or even the appropriateness of his intervention. Quite the contrary,
the Liberals, who were then in the opposition, did not hesitate to
use the reports to attack the Conservative government. How is it
today that the Liberal majority is systematically attacking a pillar
of our system of parliamentary accountability?
The analysis of all the events which followed the tabling of the
report underscores the overt partisanship of the Liberal
government, which is attempting to hush the whole thing up.
Following the revelations of The Globe and Mail, the
government gagged the Standing Committee on Public Accounts
by referring the issue of family trusts to the Standing Committee on
Finance whose chairman is, of course, not a member of the
opposition.
For the Bloc québécois, it is obvious that this change of attitude
shows the bad faith of the Liberals, who are trying, through stalling
tactics, to hush up the scandal and, through unwarranted attacks, to
undermine the credibility of the auditor general himself.
During the two years I was the chair of the Standing Committee
on Public Accounts, I remember how much respect all the
members, even Liberal members, had for the auditor general. Why
this sudden change of attitude? Why have the Liberal members
who were sitting or are still sitting today on the public accounts
committee suddenly been silenced? This about-face by the Liberals
brings us back to the issue of influence exerted by partisan interests
and probably by friends of the Liberal Party and contributors to the
Liberals' campaign fund.
The conclusion to be drawn from this less than edifying saga for
the members opposite is that the government is trying to protect
people close to the top who benefited from the generosity of
Revenue Canada, or even to hide a possible conflict of interest.
4728
With the tabling of its report, the Liberal majority has shown
how little respect it has for parliamentary institutions and has
succeeded roundly in fuelling people's cynical view of politicians
who are more committed to party interests than to good
government.
Let us look at how this truly amazing story has unfolded. The
auditor general reviewed two advance rulings on the transfer to the
United States of assets worth at least $2 billion formerly held in
Canadian family trusts, despite what the revenue minister had to
say.
The Standing Committee on Finance was then asked by the
Minister of Finance himself to examine the ambiguous provisions
of the Income Tax Act pointed out in the auditor general's report.
Meanwhile, in order to analyze and interpret the law correctly, the
finance committee called several tax experts as witnesses. Now, in
its report, contrary to all expectations, the finance committee has
endorsed without reservation Revenue Canada's interpretation, and
based its findings only on the evidence given by six out of eight
experts called earlier this summer to give evidence before the
committee without even ruling on the appropriateness of the
evidence heard.
The Liberal majority accepted only those comments made by the
tax experts who were in a position to devise such a tax planning
scheme for their customers. However, the Liberals never saw fit to
include in the report the comments made by a disinterested
authority, like the distinguished Professor Brooks of the faculty of
law in Toronto.
(1225)
The matter the Standing Committee on Finance had to settle was
whether what Parliament intended was clear. Can Canadian
residents have taxable Canadian property or not? That was the issue
at stake.
As the Liberal majority put it in the report, the crucial issue on
which the decisions were ultimately to be based was whether such
property could be taxable Canadian property belonging to a
Canadian resident.
If the answer is yes, then it is possible for a Canadian resident to
transfer property abroad and to avoid paying taxes in Canada
immediately. In such a case, the taxes will be collected by the
American government instead of the Canadian government, if the
property transferred is sold more than 10 years after the transfer.
However, if the answer is no, as we believe it to be, it means that
the concept of taxable Canadian property cannot apply to a
Canadian resident and that the capital gain is deemed to be taxable
as soon as the property leaves the country.
Up until the advance ruling-because it was an advance ruling
Revenue Canada made in 1991-taxable Canadian property
applied only to non-residents. In all likelihood, Parliament
intended to control the taxation of capital gains earned by
non-residents. However, section 85(1)(i) of the Act stipulates that
capital stock of public corporations is taxable Canadian property
when it is received as consideration for capital stock of private
corporations.
That is what the trust argued in its request for an advance ruling.
However, according to the spirit of the law, this provision only
applies when capital stock of public corporations is bought by
non-residents. In the Act, when the application of the concept of
taxable Canadian property becomes relevant for a resident, it is
usually made very clear, as the following examples will show.
Section 48(1)(a) indicates, and I quote: ``any property that would
be taxable Canadian property if at no time in the year he had been
resident in Canada''.
Section 107(5) also stipulates, and I quote: ``property that is or
would, if at no time in the taxation year of the trust in which it was
so distributed the trust had been resident in Canada''.
In its ruling, Revenue Canada mentioned that residents can have
taxable Canadian property, which in itself sets a very dangerous
precedent based only on section 97(2) of the Act. The Liberal
majority report never questioned the use of a single paragraph of
section 97 concerning precisely the taxation of partnerships to
determine Parliament's intentions on such an important issue.
Rather, the Liberal majority was satisfied with the analysis by
six of the eight experts called who, as you will all remember, work
for firms involved in such transactions for the benefit of private
customers.
The proposal by the Bloc Quebecois could not be clearer: even
though the issue is essentially one of the holding by residents of a
taxable Canadian property, that matter was never examined by the
majority report. Section 97(2) to the effect that Canadian residents
can hold taxable Canadian property was never questioned.
Yet, in our opinion, invoking this section to determine the
taxation of family trust property transferred outside of Canada is
contrary to Parliament's intentions in the case of taxable Canadian
property. Only non-residents should be able to use this taxable
Canadian property concept, and that is well covered in the Act.
(1230)
Therefore, section 97(2)c) of the Act should be revoked, thus
eliminating this type of tax planning, which the Auditor General of
Canada so rightly condemned.
Our position is also shared by Professor Neil Brooks, a
consultant whose impartiality is absolutely beyond doubt. He said,
and I quote:
[English]
``My position is that the ruling the taxpayer received in this case
is wrong in law and policy and common sense''.
4729
[Translation]
This could not be any clearer, as was emphasized by Professor
Brooks:
[English]
``Wrong in law and policy and common sense''.
[Translation]
Not one of the other expert witnesses challenged this argument
by Professor Brooks. Parliament's intentions are crystal clear.
Moreover, the auditor general argued that the Act-specifically
sections 197(5), 115(1), 128(1) and 85(1)-shows rather clearly
that Parliament did not want Canadian residents to possess
``taxable Canadian property''.
Consequently, in view of the auditor general's findings and the
experts' testimony before the Standing Committee on Finance, we
are compelled now to put forward three recommendations-and, in
this regard, I fully support the three recommendations of the Bloc
Quebecois minority report as well as the motion on family trusts
tabled today by the hon. member for Saint-Hyacinthe-Bagot.
Section 97(2)c) must be revoked to eliminate the lack of clarity
pointed out by the auditor general in his report.
The definition of ``taxable Canadian property'' must also be
changed as soon as practicable so that residents cannot own
``taxable Canadian property''. This is the simplest and surest way
to eliminate any tax avoidance by transferring property outside
Canada.
Finally, the 1991 ruling must be cancelled so that no one can
ever again refer to it to avoid paying taxes due to all Canadian
taxpayers.
[English]
Mrs. Sue Barnes (Parliamentary Secretary to Minister of
National Revenue, Lib.): Mr. Speaker, I think it is necessary to
comment again on some of the matters that have been raised in the
hon. member's speech.
First, the finance committee's report as tabled in the House, a
public document, found that there was no loophole or tax evasion
involved here. Revenue Canada applied the law correctly.
Second, I must restate that Canada has one of the tightest
systems for taxing people who move abroad. The fact that Canada
does not tax some gains until they are actually realized is not a
loophole. Nor is it a loophole that our tax treaties give us the right
to tax some gains and our treaty partners have the right to tax other
gains. That is the important main element, the migration of people
outside the country. This is what we are talking about here, the tax
treatment of these people when they leave the country. There are
very definite rules in the Income Tax act.
As a lawyer I have never been told that one subsection has a
priority over another subsection unless it states that explicitly. So
to say that there is just a little subsection here, so do not bother with
it, is ridiculous. The experts backed that up in a very public, open
round table meeting that went on for over six hours last spring, and
members of the opposition were there.
Again we have a minority report from the opposition members
who have brought this motion today which is just politics. It does
not state reality. Reality of the Canadian tax law today in Canada is
a very complex situation. What any government should do is
constantly improve.
The report came up with very definite recommendations for the
finance minister to consider. The report has been tabled. Those
recommendations are on the table and they will be considered in
due course. Canadians deserve the best tax law that we can come up
with, but it has to be fair. The process has to be open. We have
certainly had an open process.
(1235)
I find it unbelievable that he thinks a policy decision concerning
tax should not be debated in the finance committee. He may not
even be aware that after tabling his report, the auditor general
himself sent a letter off to the chair of the finance committee which
stated that these sections of his report were under the purview of
the finance committee and that it might want to look at them. That
is the reality.
What we have here is politics. I understand that the opposition's
job is to play politics. Unfortunately for it, the job of government is
to govern and when we govern we govern with the real facts.
[Translation]
Mr. Bélisle: Mr. Speaker, the parliamentary secretary is telling
us that it is a public document and that the opposition's objections
are of a political nature. I would like to respond to the
parliamentary secretary by submitting to him the three following
elements.
First, I would like to inform him that the only ones who support
the government are six experts out of the eight who appeared
before the finance committee. And, as everyone knows, these six
experts have very close and direct connections with rich Canadian
families. Professor Brooks, whom I mentioned earlier in my
speech, did not agree at all with their position.
I would also like to point out to the parliamentary secretary that
the group Cho!ces, a newly formed group which agrees with the
auditor general's recommendation, intends to challenge Revenue
Canada's ruling in the courts.
4730
I would like to add that even if the legality of Revenue Canada's
ruling is questionable, I believe that we must also consider the
fairness of the ruling for all Canadian taxpayers.
I would now like to point out the third element. As my colleague,
the member for Saint-Hyacinthe-Bagot, said this morning, this
decision was taken on the sly 24 hours before Christmas. We know
that the notice had been rejected by junior officials for a few
months in 1991.
Suddenly, 24 hours before Christmas, as the member for
Saint-Hyacinthe-Bagot said, when the turkey was on the table
everywhere in Canada, senior officials from Revenue Canada and
Finance Canada examined the case and, at a few hours notice,
allowed the $2 billion out of the country. This is really outrageous.
[English]
The Deputy Speaker: The hon. member for Cariboo-Chilcotin
has about a minute to make a question or comment. Then we will
move on to debate.
Mr. Philip Mayfield (Cariboo-Chilcotin, Ref.): Mr. Speaker,
I would like to begin by thanking the hon. member and the Bloc for
bringing this motion to the House today.
I want to know if the members of the Bloc will be pointing to the
ongoing thrust of the government for more and more-
The Deputy Speaker: Is the member finished his question? If
not, could he please put his question now.
(1240)
Mr. Mayfield: I want to ask how members of the Bloc would
have the legislation changed to prevent the government from doing
this.
[Translation]
Mr. Bélisle: Mr. Speaker, I agree with what the Reform member
is implying. We should immediately change the Canadian
legislation, the Income Tax Act, to prevent, from now on, amounts
of money as huge as those transferred in 1991 being moved out of
the country a few hours before the end of the fiscal year.
I think that instead of trying to put the auditor general on the spot
and to prevent him from carrying out his mandate, from acting like
a real ombudsman for Canadian taxpayers, the finance committee
should immediately review this aspect of the act and prevent, in
future, anyone from transferring out of Canada and tax free such
amounts of money.
[English]
Mr. Jim Peterson (Willowdale, Lib.): Mr. Speaker, the auditor
general reported a short while ago to Parliament on some prior tax
rulings given by Revenue Canada, one in 1985 and another in 1991.
This report comes six years after the last ruling was given. The
essence of his report was: ``The rulings may have circumvented
the intent of the law''.
The auditor general was good enough to send me in a letter a
copy of his report to Parliament. As chairman of the finance
committee I took this very seriously, just as the government took
this issue very seriously. Here we had one of the most respected
and important institutions and individuals in the parliamentary
process saying there might have been a misinterpretation or
misapplication of the law as it existed. This is a very serious
charge.
Very quickly members of the finance committee called before us
the auditor general and his officials and asked him to explain
further what had happened. That was not the end of our
discussions. We called as well public servants from the office of the
Departments of Revenue Canada, Justice and Finance to assist us in
dealing with this issue.
In listening to the auditor general here is basically what he said:
``We have absolutely no evidence of impropriety on behalf of
Canada's officials. We have absolutely no evidence of political
interference, but we still think they misapplied the law''. This is an
extremely complex area of the law and as the auditor general said,
it is an area of the law which is very ambiguous.
There are provisions in the Income Tax Act which pointed in one
direction and there were other provisions which pointed in an
opposite direction. I wish it were not so, but our Income Tax Act is
very thick and there is not one practitioner in Canada today who
can in all honesty say they understand all aspects of that code. The
profession has had to break itself down into people who are experts
on particular areas of the Income Tax Act. To further complicate
the issue, it is not just the Income Tax Act, but on top of that was
the overlay of the Canada-U.S. tax treaty which involved a further
set of complications.
(1245)
What did we do as a committee? We decided that since the
auditor general and his officials had charged that there may have
been a misapplication of the law, and since we are not the experts,
or could ever hope to be the final arbiters of a dispute of this nature
we asked a group of tax experts, not just tax experts in general but
international tax experts to come before the committee. The auditor
general suggested certain experts. Professor Neil Brooks from
Osgoode Hall appeared before us at the request of the auditor
general. All opposition parties had an opportunity to suggest who
those experts should be.
We asked those experts if the prior ruling given by Revenue
Canada officials was a misapplication of the law? Out of the eight
experts there, one said it may have been. Professor Brooks said it
definitely was. The six others said in no way was this a
misapplication of the law. That is what we reported to Parliament.
4731
Overlaying this question of whether this difficult judgment
taken by Revenue Canada officials was correct or not was that
when the facts were released saying that the prior tax ruling
involved some $2 billion having been transferred out of Canada
by family trusts to the United States, almost immediately on
release of that report, speculation occurred regarding the precise
identity of the taxpayer. This raised tremendous concerns
throughout Canada's tax community. The essence of our voluntary
system of tax compliance and reporting is that the confidentiality
of the taxpayer must always be respected. It is a criminal offence
to breach taxpayer confidentiality.
Obviously, the auditor general was concerned about this. He
presented to us an opinion saying that what he had released had not
been a breach of the law. That was never a concern on the
committee. The concern expressed to us by Canada's tax
community was that, if you cannot go for a prior ruling without fear
of having your name disclosed in the press, then why go for a tax
ruling? If someone can contest publicly a tax ruling with the
possibility that the taxpayer's name can be revealed, what will this
do to the ruling process?
The auditor general, in his report to Parliament a couple of years
ago, said: ``It is so critical where there are complex and ambiguous
laws, the taxpayers need the certainty of prior rulings''. We
certainly agree with him.
(1250 )
Something we commented on in our report was that it is critical
that any of us as members of Parliament, members of the finance
committee, members of the government, members of the public
departments, be it revenue, justice or finance or be it the auditor
general, that we respect the confidentiality of taxpayers. It behoves
us in our actions in the House of Commons and elsewhere to make
sure that we respect that confidentiality in order to preserve the
integrity of a system of income taxation based on voluntary
compliance.
Members of the Bloc Quebecois have tried to make a great deal
out of this particular issue. They said that this breach of
confidentiality was not because of the release of all of this detailed
information to the public by the auditor general but that it was
``because of a source inside the federal government itself that the
names were divulged''. Never once did the Bloc Quebecois call
that person before us or say who it was. They are alleging that an
official in the government breached this confidentiality.
This is casting an aspersion on the entire revenue and finance
departments. If they are going to make this charge, then they have
the obligation to bring the name of that individual forward other
than to dwell on issues of allegation.
Bloc members have said as well that the government muzzled
the public accounts committee by transferring the family trust
issue to the finance committee. The critic for the Bloc Quebecois
approached me and said: ``We want to make sure that the finance
committee deals with this issue''. Why would he change his mind?
After all it was dealing with provisions of the Income Tax Act. Are
they not the purview of the finance committee? Had not the auditor
general asked us to look at it? Had not the government asked us to
look at it? These are the things that we are supposed to do.
Let us not pretend that we in the finance committee have been
trying to block discussion of this issue. We made the offer to all
opposition parties to hold any other sessions, to call any other
witnesses they wanted. They said that they had heard enough.
What did we do in the finance committee as a result of these
hearings? We reported what the vast majority of Canada's tax
experts, some of the leading names in the country, such as Davies,
Ward & Beck, Goodman & Carr, Ernst & Young, Coopers &
Lybrand, the people who deal with these issues on a specialized
basis, Davies, Warden & Beck, Stikeman Elliott, people who deal
with these issues on a daily basis, told us. They told us that the
ruling given by revenue was not wrong.
What did we also find out in our hearings? We found out that
before revenue ruled in this particular case it did a couple of things.
It called on justice for an interpretation of this complex and
ambiguous area in the Income Tax Act. Justice serves as the lawyer
to the Revenue Canada officials. Justice said: ``We believe that the
way the Income Tax Act reads, taxable Canadian property can be
owned by a resident of Canada''. That was the technical issue
involved. However, Revenue Canada did not stop with the opinion
of the lawyer of the justice department. It went to the finance
officials. It asked: ``What do you think is the intent of the law? Can
residents of Canada own taxable Canadian property?'' The finance
officials said, yes.
(1255 )
I ask members in the House to consider this situation. You are
working in the Department of National Revenue and are asked to
give a ruling. You realize that it is complex. There are ambiguities.
You consult the department's lawyers. Not only that, you go further
and find out from finance what it thinks the law was intended to do.
Should there be a higher duty imposed on you as a public servant
than to consult your lawyers and finance? Should it be the
obligation of anybody in any department of this government who
has doubts about anything to go and consult the auditor general in
advance?
What standard of care are we attempting to impose on our public
officials who are not here in Ottawa to get rich? We know they
cannot. Public servants have had a freeze on their salaries for five
years. If someone wants to get rich he or she goes into the private
sector. What standard of care are we as politicians attempting to
impose on them? I submit that no higher standard of care could
have been exercised by revenue officials when they consulted their
lawyers and finance, knowing that the law was not certain.
4732
What did we recommend as a finance committee? We said:
``Auditor general, in spite of the fact that we have some misgivings
about the way your disclosures resulted in speculation in the name
of the taxpayer and despite the fact that the experts we called
before us do not agree with your interpretation of the law, i.e. that it
should not have been ruled on such except for Professor Neil
Brooks who is a frequent witness before our committee, always at
the behest of the Bloc but this time at the behest of the auditor
general, while we do not agree that this ruling may have
misinterpreted the intent of the law, nevertheless, we think the
point you have made before us is critical. We think you have
discovered a loophole in the law. We think you have discovered an
area where we must act to change the law''.
That is why in our report we have suggested many changes in the
law, changes which go far beyond those proposed in the minority
report of the Bloc. Our suggestions for plugging the loopholes and
for tightening up the Canadian tax net go far beyond what the
opposition parties have suggested they would do. Therefore, before
they criticize us let them look to their own decisions and maybe
reconsider them.
Let us be very clear. Apart from having a very complex and
ambiguous tax law in this area, the testimony before us indicated
that Canada already has probably the tightest tax net when it comes
to taxpayers leaving our country, perhaps along with Australia and
Denmark. In spite of that, we recommended that the government
act quickly to make that tax net even tighter.
We said that we should look at deemed realizations for all
property when a taxpayer leaves this country. We might not collect
it immediately because that would be stupid. Sometimes people
leave this country and take up residence elsewhere but have shares
in a small business which is ongoing or they may own an apartment
building or a house. Is it right to charge them the tax the moment
they leave the country as opposed to when they actually sell that
property?
(1300)
We are not prepared to be stupid. We have to recognize that in
our tax systems different individuals and different circumstances
have different needs.
We came down fully and squarely against the type of thing that
happened, in terms of trusts being able to take large sums out of
this country. We have recommended that in the future that type of
provision not be allowed.
We have recommended that there be increased reporting
requirements for Canadians leaving the country so that in
circumstances where the tax system might not otherwise pick up
what those assets may be that are subject to future disposition and
which we may not be able to track in a coherent way, Revenue
Canada has a way of doing that. These recommendations were not
pulled out of the blue, they were based on expert testimony we
heard.
In conclusion, the majority report thanks the auditor general for
having brought these matters to our attention. The greatest
compliment, apart from thanking him, we could have paid to him
was that we said: ``We do not like the result. We are, therefore,
henceforth going to recommend to Parliament that the law be
changed''. We, as well as the auditor general I am sure, hope that in
the future there will be continuing access to the ruling process and
the speculation as to the identity of the taxpayer, the breach in
confidentiality, will not have a chilling impact on the need to have
these rulings.
I am pleased to report that the auditor general vindicated the
integrity of the process and the bona fides of our officials. I believe
we have all benefited from having this matter brought to light.
[Translation]
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ): Mr.
Speaker, basically, I have four points to make. I think that with time
and with the wearing effect of politics, the hon. member for
Willowdale, who is chairman of the finance committee, became a
misinformation expert.
He said that they took the issue seriously and that the auditor
general is one of the most respected institutions, but he does not
believe his own words. I say that because when the auditor general
appeared before the committee, the member for Willowdale, with
the complicity of senior civil servants who took part in the 1991
advanced ruling allowing the transfer of $2 billion outside of
Canada tax free, tried for an hour and a half to give him hell, catch
him off guard and undermine his credibility.
That continued when the liberal majority report produced under
the direction of the chairman of the finance committee was made
public. What do we find in that report? Two things. A major part of
it continued the attack on the reputation of the auditor general. He
was accused of violating confidentiality rules when the leak,
mentioned in the Globe and Mail a few days after the auditor
general made the scandal public, was traced back to Revenue
Canada. Maybe there are civil servants who have had enough of the
establishment and the complicity between the decision-makers
responsible for those advanced rulings and the wealthy Canadian
families. I think that is the truth of the matter. The report
denigrated the auditor general.
One other example of misinformation is the statement by the
chairman of the finance committee, the hon. member for
Willowdale, that the Liberal proposals go farther than those of the
Bloc. Sure they go farther in the sense that they open wide the
doors to massive capital transfers for Canadian millionaires and
billionaires. They certainly do go farther.
4733
We are saying that this loophole must be closed. We must put
an end to twisted interpretations, such as the ones we got from
the senior officials who made this shameful decision in 1991
without doing a technical analysis of the Income Tax Act and
without taking the time to write the minutes of the numerous
meetings they had for one week until December 23, 1991.
As for the experts, here is another thing that goes against the
credibility of the chairman of the finance committee. He is the one
who invited these experts. Six of the experts that were at that table
were invited by him.
(1305)
These experts have no credibility whatsoever, as far as I am
concerned. Do you know why? Because they come from the very
tax consulting firms which help rich Canadian families transfer
their money out of the country. On the word of these six experts
chosen by the chairman, chosen by the establishment of the Liberal
Party of Canada, the Liberal majority report says there is no
problem, there are no capital transfers.
Finally, when the member for Willowdale and chairman of the
finance committee says that the financial community is worried, I
can understand why because, for the first time in a very long time,
the auditor general and the official opposition have uncovered a
scandal, a conspiracy that has been going on for decades between
the deputy ministers, the assistant deputy ministers and the senior
officials responsible for advance rulings and the rich Canadian
families who want to take money out of the country. That was the
concern of the financial community.
I will never forget a certain Mr. Goodman, a tax expert invited by
the Liberal Party of Canada, by the chairman of the finance
committee, who said: ``The auditor general should have never
informed Canadians of these kinds of things. They are far too
complex''.
What that expert was saying really is that, when dealing with
complex issues, it is better that the public be kept in the dark. When
these kinds of scandals occur, they have to be hidden. Even the
auditor general, who is accountable to Parliament, to the people,
and who is the watchdog of our public finances, should have kept
his mouth shut because it was outside his mandate. That is the
reality of the situation.
It bothers me when I hear remarks like the ones made by the
chairman of the finance committee, which I think are misleading
and are the reason why this man is losing even more credibility not
only with his own committee members, but also with Canadians.
The picture painted by the chairman of the finance committee is
totally contrary to the facts.
[English]
Mr. Peterson: Mr. Speaker, there are a number of points which
have been brought up by the hon. member.
First, he said we are saying there was no flight of capital, that
through the committee process we were involved in a flight of
capital. What took place was under a former government. The
majority side on the committee said there was a flight of capital but
we must stop it. We are the ones who are saying this is not right and
we have recommended the changes to the law.
I find it passing strange that the hon. member, the chief financial
critic for the Bloc, would say the experts who were called before
our committee have no credibility whatsoever. In the same breath
he said the Liberal majority attacked the message bearer, the
auditor general.
Let me be very clear. It was not an attack. It was a mild rebuke.
We criticized the way the auditor general released the information
which led to speculation as to who the taxpayer was and according
to the experts before us could put a chill on the entire ruling
process.
We accepted the rulings. All the experts said that the ruling given
by Revenue Canada had been proper in the circumstances. A
fundamental aspect of our report was that we accepted his criticism
of a system that allowed that money to escape and we
recommended the loopholes be plugged.
I find it passing strange that his only attack on our report was
that we attacked the auditor general. We said exactly what I have
just said.
The member, as did all members, had the opportunity to bring
other experts before our committee to deal with the precise
complex and ambiguous tax provisions in question. Why does he
attack them? If he did not like them he could have brought others.
He had that opportunity. So for him to say we were attacking the
messenger is fundamentally how he is attacking our report. He said
he did not like the message and that these experts who came before
us were not able to give us proper advice.
(1310)
To say that, he is attacking the basis on which some of the
biggest and finest auditing companies and legal firms in this
country act. Their opinions have to be right. Their opinions are
relied upon by shareholders, taxpayers, by others, by the people
who buy shares in public companies. Their integrity and their
wisdom are critical to this process.
For him to attack the messengers the way he said we were, which
is a total mistake, a misinterpretation of the situation, is to me
totally inconsistent. I wish he would stick to the issues and I wish
he would join us in urging the government to plug these loopholes
as quickly as possible.
[Translation]
Mr. Yves Rocheleau (Trois-Rivières, BQ): Mr. Speaker, our
Liberal colleague, the chairman of the Standing Committee on
Finance, continues to insist that the present government is not
4734
touched by the December 1991 ruling, because the ruling was made
under the former government.
If that is true, why is the present government refusing to shed
light on everything that preceded this meeting? Why does it
approve of the fact that there were no minutes? Are we to
understand that this shows better than anything that they could say
that Canadian Conservatives and Liberals are as alike as peas in a
pod, that they owe their existence to the same slush fund, that they
are both in cahoots with financial circles, as was clear one evening
when I took part-as I will tell you shortly-in the farce at which
leading Canadian lights that advise wealthy families came to tell
elected representatives and the public that they should mind their
own business, that we were attacking the integrity of the Canadian
tax regime?
I would like our honourable colleague, whose arrogance
occasionally creeps through, to comment on this.
[English]
Mr. Peterson: Mr. Speaker, the hon. member is alleging that we
were trying to cover things up. The official opposition, the Bloc
Quebecois, was asked whether it had any witnesses to bring
forward. We said we will deal with any of these issues. We wanted
it fully dealt with in the finance committee, just as the Bloc had
asked us to deal with it fully in the finance committee. We
contacted it a number of times and it said ``no, we have no more
witnesses''.
How could we be the ones who are trying to cover up things
when we opened it up to discussion of any sort? We called the
witnesses asked for by the Bloc, the Reform and the auditor
general. We asked them: ``Do you want to have any more hearings
or can we get to the report stage on this issue?'' That is not a
cover-up. Would they please quit making innuendoes and
allegations which have no foundation whatsoever.
[Translation]
Mr. Maurice Bernier (Mégantic-Compton-Stanstead,
BQ): Mr. Speaker, before addressing the motion before us today, I
would like to begin by informing you that, henceforth, the Bloc
Mps will be dividing their time into two periods of ten minutes, and
that my colleague from Trois-Rivières will be speaking
immediately after me.
(1315)
When the matter of the family trusts resurfaced to become a
source of concern to all Canadians and all Quebecers, thanks to the
efforts of the members of the Bloc Quebecois-I shall come back
to this point-and when the official opposition suggested that this
opposition day be devoted to the matter of family trusts, I made it
known to my colleague from Ste-Hyacinthe-Bagot that I wanted
to intervene in this debate. I am far from claiming to be a tax
expert, which is why I will let others explain the matter in
detail-as my colleague for Saint-Hyacinthe-Bagot has already
done on several occasions, moreover-but I would like to draw the
attention of this House to the context surrounding this whole affair.
This matter of family trusts is one that has been of concern to the
Bloc Quebecois almost since its inception. In the last campaign, the
Bloc raised the issue on numerous occasions. After the Bloc
obtained 54 seats and gained recognition as the official opposition
in this House, the Leader of the Opposition at that time, Mr.
Bouchard, raised the question of family trusts on a number of
occasions during his interventions in this House.
The auditor general's report fully justifies our concerns, proving
that we were right to raise the issue in recent years, while the
Liberals on the other side of this House have clearly sought to stifle
this shameful scandal by every means possible.
I just heard the hon. member for Willowdale. I suggest that he
audition for the festival ``Juste pour rire'' next year in Montreal, or
``Just for laughs'' if he prefers, since there is an English version,
because his comments outside this House, in committee and here in
the House today should be good for laughs. We cannot afford to
take them seriously.
The auditor general put his finger on a major problem in the tax
system. The government may argue that the loophole pointed out
by the auditor general goes back to the previous government. As
the hon. member for Trois-Rivières just said, if the Conservative
government was responsible, why is this government reluctant to
shed every possible light on the problem?
It is pretty obvious, and this has been said time and time again,
that there is only one reason why the government does not want to
shed light on the matter. It wants to protect its own interests and the
interests of those who support it. It is a big joke to hear the hon.
member for Willowdale describe these experts as people whose
credibility is undisputed, although it is public knowledge that they
belong to companies that finance the Liberal Party and the
Conservative Party. That is public knowledge. It is not gossip or
libel. It is a fact that representatives of these companies finance the
Liberal Party.
(1320)
For the government to invite experts like these, competent
though they may be, is like inviting some foxes and asking them for
tips on protecting the chicken coop. That is what happened. They
invited experts who consistently provide funding for the Liberal
Party and told them: ``Could you tell us whether it is right to take
money out of Canada and invest it elsewhere, to avoid paying
4735
income tax?'' It would have been astonishing indeed if the experts
had not answered the way they did.
Take the Minister of Finance. A week ago on Radio-Canada, a
journalist asked him whether he had a family trust. He answer is on
the record-and I took the trouble of listening to the news bulletin
again to be sure I did not misquote him-and it was as follows, and
I will quote him verbatim: ``There are many family trusts. When
you have young children, you do that. In case I die, I would want
someone to take care of my children''. But that has no connection
with income tax.
When he said this, the Minister of Finance admitted that he
himself had a family trust, and that the reason was to protect his
children. But who in this House will protect the children of the
unemployed, victims of cuts that have been made for the past two
or three years? The same finance minister says, admits in each
budget he brings down that, with the unemployment insurance
fund, he makes $5 billion in profits every year at the expense of the
unemployed and of single mothers who do not have even enough to
support their children. Who is the Minister of Finance trying to
protect? The answer is obvious. Now who will protect these
families living on unemployment insurance which, contrary to
what the Minister of National Revenue said, cannot escape the
Income Tax Act because they cannot afford to have family trusts?
It takes some nerve to state, as the Minister of National Revenue
did in this House, that anyone can have a family trust. It may be
true of seniors who decide to move to Florida. What seniors in
Canada and Quebec can afford a family trust when their pensions
are being cut back? Who, among the unemployed, I repeat, can
afford a family trust?
They are mocking people. Mocking people and undermining the
credibility of our institutions. And because of that, the people have
lost faith not only in our tax system, but also in governments and
their elected officers.
I will conclude by reminding the House that the Bloc Quebecois
has given itself a mandate to promote sovereignty, and we will keep
promoting sovereignty. We have also given ourselves a mandate to
represent the interests of Quebec in this House. Our work on the
family trust issue is a perfect example of the kind of work we have
done here over the past three years. And the auditor general agrees
with the Bloc Quebecois. His message is that someone in this
House has to be free to stand up and condemn these unacceptable
actions on the part of this government.
Mr. Dan McTeague (Ontario, Lib.): Mr. Speaker, of course, I
listened carefully. It was difficult not to hear the passionate
comments made by the hon. member who spoke before me about
an issue that undoubtedly affects him and which he feels
passionately about.
(1325)
But I think it is rather interesting that this same member, pointed
first at the government benches instead of using the opportunity to
talk with his seven colleagues who were in the Tory government in
the last Parliament.
[English]
It seems to me to be rather inconsistent for this member to be
pointing a finger at this side of the House when he has not taken the
first step, a logical step, a rational step, to ask members of his own
caucus who were part and parcel of that problem in the early 1990s
when several of those members, including the former leader of his
party, were at the front bench of the government that made that
decision.
When will the hon. member start to talk to some of his
Conservative cronies in his own party and maybe ask them where
this process began, why they are not here asking the same questions
he is now asking rather hypocritically?
[Translation]
Mr. Bernier (Mégantic-Compton-Stanstead): Mr. Speaker,
again, we will have another representative at the Just for Laughs
Festival. I cannot believe the comments made by the hon. member
from Ontario, who, usually, takes positions that show he is capable
of thinking and also of being critical.
I understand that, when we are dealing with money, finances or
election funds, money talks. So, like all his colleagues, the hon.
member from Ontario must rise in this House to defend the foxes
lurking around the henhouse.
In response to the hon. member, who asked me why I do not look
at my colleagues and ask them what they are doing about family
trusts, I can tell him that I am quite happy to turn to my colleagues,
especially the former leader of the Bloc Quebecois who is now the
premier of Quebec. He himself raised this matter in this House
several times during the 1993 election campaign-we could show
you the many speeches he gave on this and the questions that were
asked about family trusts. No, I am not ashamed to turn to my
colleagues who used to be in the Conservative Party, because they
have done an extraordinary job as Bloc representatives in this
House. Those who are still among us continue to do so.
I wish I could say the same about our Liberal colleagues. Again,
I hope they will change their minds and shift directions. The
credibility of our institutions is at stake. Your credibility and that of
the finance and revenue departments is at stake.
When we ask people to pay taxes and to do their share to correct
the current situation, everyone must pull his or her weight,
including the rich.
4736
Mr. Yves Rocheleau (Trois-Rivières, BQ): Mr. Speaker, I am
pleased to take part in this very important debate.
As the hon. member for Mégantic-Compton-Stanstead just
pointed out, the Bloc Quebecois has long been concerned with this
issue. Our founding president, Lucien Bouchard, now the premier
of Quebec, had made it one of his primary concerns, as has our
finance critic-this is part of Canadian Parliamentary tradition.
Given the rule of secrecy and the lack of transparency, the Bloc
Quebecois lacked a source. Therefore, we must congratulate and
thank the auditor general for having had the courage to tell
parliamentarians and Canadians about this scandal, back in May.
We are not among those who seek to discredit, to condemn and
to attack institutions because we are not pleased with them, as did
former Liberal Prime Minister Trudeau-the Liberal party has a
long tradition in this regard-when he lambasted the auditor
general of the time for questioning the transaction whereby
Petrofina was to become Petro-Canada.
(1330)
The auditor general had to go to the Supreme Court to find out
what his real powers were, given Mr. Trudeau's arrogant and
contemptuous attitude. The chairman of the finance committee,
who used strong arm tactics with the auditor general as an
institution and as an individual, also displayed a similar attitude.
We will not get into this; we leave it to others in this House. We
feel that, by raising the issue of transfer, otherwise known as tax
evasion and the flight of capital, the auditor general should be
highly commended for bringing the public debate back on the issue
of family trusts. This is the point I want to focus on.
Family trusts promote a concentration of wealth in the hands of
some very rich Canadian families. Given the solid arguments made
against family trusts by ordinary people, it is time we led the debate
and the fight against secret investments. After all, our tax system is
supposedly based on a fundamental rule of fairness, whereby
everyone must pay his due to the taxman. Since the month of May,
this has given us an opportunity to learn a bit, not much mind you,
but a bit about family trusts and their very existence.
We learned from the public accounts committee and the finance
committee that, according to the revenue minister, and contrary to
what a deputy minister seems to have said in committee, family
trusts exist for those who want to be sure they can pay for a
retirement in some southern clime.
The finance minister sees them as a way of protecting his
children. Very original. As for the deputy minister, he said a
number of months ago that he did not understand the Bloc
Quebecois' obsession with family trusts, because they exist to
protect families with handicapped children.
We therefore learned, since the revelations of the auditor general
who asked the deputy minister of revenue how many family trusts
there were in Canada, that there were 100,000. A few weeks later,
at a meeting of the finance committee, this 100,000 became
140,000. When we know that two of them represent one billion
each and that their transfer to the United States has apparently
deprived the tax man of $400 to $600 million, we are not talking
peanuts. These are large amounts of money.
On the topic of family trusts of one billion dollars each, we asked
a deputy minister how many there were of $500 million and up. He
replied that he could not say, that he did not have that kind of
information. It is a scandal. It is a scandal because, according to the
spirit of the Income Tax Act, there is a fundamental rule, which is
perhaps tacit, that everyone must contribute according to their
means.
When they come up with strategies like these, with the backing
of the financial advisers whom we know, who advise wealthy
families in order to help them move their money out of Canada and
Quebec and to protect them even when they keep it inside the
country, that is what is going on right now, it is in order to help
people who have the means not to contribute their share. And
everyone else must therefore contribute that much more.
In the times we live in, as my colleague was saying earlier, with
public finances in the state they are in, the most rudimentary sense
of morality would require that everyone contribute according to
their means and that, in so far as possible, this type of strategy be
prohibited.
(1335)
We know about the cuts now being made throughout Canada in
the fields of health, education, social assistance, unemployment
insurance, culture, and public housing. We know about the cuts
being made to community groups that provide assistance to the
most disadvantaged. We know about the alarming increase in the
number of food banks across Canada. We know about the increase
in unemployment. We are aware of the whole ideological trend to
dismantling the state, to limiting the role of government, one of
whose main roles is precisely to better distribute the wealth, but
this is contradicted by the discourse, attitude and language of the
chairman of the Standing Committee on Finance, who criticizes
one of the taxation ombudsmen who exists in our system, which
works reasonably well when the rules are followed, furthermore,
which makes Canada a developed country, a great democracy.
When you make the claims that are made here, in this country, you
must be consistent all the way.
In these times when money is lacking-for what Canada has is
not a problem of spending but a problem of revenue-that problem
is highlighted in a most extraordinary way by the question raised
by the family trusts and the way they are reducing tax revenues. It
is therefore necessary to have a precise idea of family trusts, to
4737
know exactly how many have been set up following their creation
under the Trudeau government in 1972. The figures will have to be
broken down into categories, because not all family trusts may be
billion dollar ones. We would have to know how many involved
$100,000 or more, how many between $100,000 and $250,000,
how many between $250,000 and $500,000, and so on. How many
between $1 million and $5 million, how many between $5 million
and $100 million, how many $500 million and up, as well as details
on all the billion dollar ones. We would have to have precise
information on their impact on the Canadian tax system and on
each of the provinces of origin. It seems likely, for instance, that
there would be some such family trusts in the Maritimes, New
Brunswick, in particular. Without naming names, one might well
think that the government of New Brunswick may have been
deprived of some very considerable tax revenue by this sort of
subterfuge.
Ontario and Quebec, which have prominent families, also come
to mind. We are entitled at least to exact figures on the effort
required of other taxpayers, who have no choice about, for they
cannot afford to hire the top tax guns, those same people invited by
the chairman of the finance committee, who, despite all of their
unarguable qualifications, are clearly in conflict of interest.
We must know exactly what the situation is. We must know, for
each province, what the impact is of a measure that was introduced
by Pierre Eliott Trudeau, the man of the just society. We see the
dishonesty of these people who are prepared to sign documents, as
they did, to protect and reinforce the government's position.
I am nearing the end of my speech. Instead of trying to confuse
the issue, the government must examine not only the Revenue
Canada ruling of December 23, 1991, but the whole issue of the
existence of family trusts and their impact on the tax system, and
this in order to really protect the credibility and integrity of our tax
system, which, as I said earlier, was a big issue with one of the
experts. As a member of Parliament I attended this incredible
evening, this masquerade, when one of the Bay Street experts told
the chairman that he was shocked by the attitude and behaviour of
the auditor general, who should never have revealed to the public
and the Canadian people that such practices existed because it
would undermine the integrity of our Canadian tax system.
This means that they go along with it. There are mechanisms to
ensure that those who can pay their taxes, who should pay their
taxes, who have the means to pay taxes-We know that in Canada
today, there are people who do not have sufficient income to pay
their taxes. Those who do, those who are lucky and those who have
worked for their money, but must realize that others are not that
lucky and that we live in a civilized society. Wealth must be spread
around, and this has to happen through the government, because we
live in a society, and the government apparatus is a symbol of the
well-organized, civilized and developed society we have. It means
we have elections, elected representatives and mechanisms to
redistribute wealth. We must protect those institutions, but the
government's present attitude is very disturbing. We should not be
surprised when citizens become increasingly cynical and critical of
institutions like ours, when these institutions no longer appear to be
doing their job.
(1340)
[English]
Mr. Roy Cullen (Etobicoke North, Lib.): Mr. Speaker, I
listened with interest as the member of the Bloc argued this point
about the tax ruling and the situation surrounding it. I am quite
puzzled.
This is a highly complex area of tax law, despite the best
intentions of the members of the Bloc and members like me. As the
member for Willowdale pointed out, members of the Bloc had the
opportunity to bring in their own experts but instead chose not to.
When the members of the Bloc stand up in this House it is
usually to criticize members on our side for not answering their
questions, but they have not really dealt with the question of why
they did not bring in their own experts.
If they are saying the experts who were there were in the hands
of the members of this party, that is a serious affront to the integrity
of those professionals who did appear and it does not deal with the
question of why they did not bring in their own experts.
When the members of the Bloc get up in the House it is really not
to debate public policy. That has been my experience
notwithstanding my short period in this House. When they get up it
is to argue a parochial interest of the province of Quebec.
I wonder if their interest in this issue is not driven by fiduciary
policy or interests of the Government of Canada and the people of
Canada. Rather, they may be concerned about the flight of capital
from Quebec not necessarily to the United States but perhaps to
Ontario. It is known that this is happening which I think is tragic.
Perhaps the Bloc is positioning itself on this issue in terms of
flight of capital. I cannot understand why it would have any other
interest in this topic.
[Translation]
Mr. Rocheleau: Mr. Speaker, first of all, on the subject of
experts, I would like to reassure my hon. colleague from Etobicoke
North by telling him that, if ever the government stops covering
things up, as it just managed to do in the finance committee and is
trying to do in the public accounts committee, if the government
will take its responsibility and accept to shed light on the matter,
you will see that experts can be found, perhaps mainly in Quebec
but also in Canada, whose hands are not tied. They are not legion,
4738
but they are distinguished. The Bloc had identified a few; we found
some and I am told that they will testify.
But we must realize, and I have on good authority, that the
auditor general is having huge problems with high finance
officials, high finance advisors, because these people are not at all
pleased with the auditor general passing this kind of judgment on
their work, which goes against public opinion.
Perhaps my hon. colleague from Etobicoke North should bear in
mind that the auditor general is having a very hard time because
free-thinking advisors are hard to find. They are all related parties
because this is their livelihood.
As for the Quebec fact, I hope that my hon. colleague simply
misheard. When we talk about the Canadian tax system, about the
flight of $2 billion from Canada, about $400 or $500 million in
uncollected taxes, I do not think that we are talking only for
Quebec. I think that we are doing our job as the Canadian official
opposition, representing the interests of small taxpayers and
middle-class taxpayers, who are being bled dry and are paying for
those who should be paying more.
[English]
Mrs. Sue Barnes (Parliamentary Secretary to Minister of
National Revenue, Lib.): Mr. Speaker, I rise to speak on the
motion brought forward today by the official opposition. This
motion asks the House to denounce the government for refusing to
shed light on certain transactions. However, I would like to suggest
that it is actually the opposition members themselves who are
refusing to see the light in this matter.
The motion also contends that the government has attacked the
credibility of the auditor general while allowing millions of dollars
to leave the country.
It would appear once again that the opposition is more content
with promoting unfounded allegations and wild accusations than it
is with a substantive review of the real issue and the true facts.
(1345 )
The issues to which the motion vaguely refers were first raised
by the auditor general in his May 7 report that focused on
legislative policies and advance ruling procedures governing
taxable Canadian property, not family trusts.
Members will recall that immediately following the release of
the auditor general's report, the government acted quickly by
referring the issues raised in the report to the House of Commons
Standing Committee on Finance for review. That is where tax
policy is made and then followed up by the decisions of
government through its cabinet.
That review has now been completed and the finance committee
on September 18 issued a report and it is now tabled in the House.
It is a public document. The finance committee's report represents
a well documented and very thorough review of the important
issues identified by the auditor general. We thank him for pointing
out those policy areas. Its findings and recommendations directly
contradict the exaggerations and confused contents of the motion
before us today. However, it is a Bloc official opposition motion
today and we are obliged to debate the motion put before us.
The finance committee began its review on May 28. In the
course of the examination it heard from the auditor general and
members of his staff. It heard from senior officials of Revenue
Canada, the Department of Justice and the Department of Finance.
The committee also consulted eight of Canada's leading private
sector and academic tax experts whose views, the committee noted
in its report, greatly facilitated the committee's understanding of
some of the technicalities of the tax law in the area.
The finance committee is to be commended for acting quickly,
consulting broadly and producing a thorough and, I must say, long
report, including recommendations on so complex a topic in such a
short time. We realize this is an important issue to be dealt with.
Not surprisingly perhaps the committee determined that the law
regarding taxable Canadian property is complex. It noted that the
government has not reviewed the policy on taxpayer migration in
any substantial way for at least 25 years. Now we have done this.
However, rather than make cheap political points by trying to
confuse the issue even further, like today from the opposition
member, the committee has sought to clarify the issues by
recommending changes to the law. The report's five
recommendations for changes in the law aim at clarifying policy
regarding Canada's taxation of individuals who become or cease to
be residents of Canada. The report provides substantive advice to
the government on strengthening tax law.
While the policy and legislative recommendations are welcomed
and will be closely examined by the Ministers of Finance and
National Revenue, I want to focus my remarks today to the report's
procedural findings and recommendations.
I am very pleased to say that based on its expert assisted,
independent review of the facts, the finance committee has found
that Revenue Canada applied the law correctly and was justified in
issuing its 1985 and 1991 advance tax rulings. The committee's
report firmly supports the department's decisions in those cases.
4739
I believe the findings of the committee clearly confirm the
fairness and the integrity of the Canadian tax system and the
department's decisions in the cases and the administration by
Revenue Canada. I am especially pleased to note that the
independent experts consulted by the committee were almost
unanimous in stating that the rulings then correctly applied
existing law without evidence of any revenue loss resulting from
the rulings.
Of the eight prominent tax experts, six testified that Revenue
Canada's interpretation was a correct reading of the law. The report
quotes Mr. Wolfe Goodman, an expert in the field of international
tax law, as an example of the majority opinion. Mr. Goodman
states: ``The auditor general considers that this ruling circumvented
the intent of the law and, with respect, Mr. Chairman and members,
I think the ruling properly applied the policy of the legislation''.
Based on this and similar testimony, the finance committee saw
no reason to prefer the auditor general's view on this question to
the views of both its government tax experts and a strong majority
of tax professionals from the private sector. Also, contrary to the
auditor general's suggestion in his May 7 report, the committee
concluded that under its existing policies, Revenue Canada had no
basis for refusing to issue the 1985 and 1991 rulings and was
justified in doing so.
(1350)
It is evident that in these cases the process worked as it should
have. Any other decision or action would have circumvented the
law and infringed on the legitimate rights of the taxpayer involved
to fair and equitable treatment under our laws.
Further, the committee found no indication of political or other
interference with respect to the rulings. I must underline this.
While it should be noted that the auditor general never questioned
the integrity and professionalism of Revenue Canada officials, the
report confirmed there was no impropriety on the part of any
official. On this point the Minister of National Revenue has already
stated that she has met with the auditor general and asked him
directly if he thought there had been any political interference in
this file and he assured her there was none.
The finance committee heard a range of witnesses from all
departments concerned on this issue and they found no evidence of
impropriety. Therefore, we must be satisfied that there was no
impropriety involved here.
Also, importantly, the report concluded that the rulings did not
or are not likely to cost Canada any significant tax revenue. The
committee noted that the auditor general and his officials were
unable to identify any significant new tax avoidance opportunity
created for other taxpayers by these rulings. That is what the
auditor general tells us.
The issues raised by the auditor general have to be kept in
perspective. The auditor general said that Revenue Canada's 1991
ruling may have cost significant tax revenue, not that it did, but that
it might have. This was obviously a concern. The finance
committee looked at it carefully and concluded that there was no
evidence that the ruling cost Canada anything. Nor was there
evidence-and we are talking evidence, not speculation-that the
ruling opened up any new avoidance opportunities. There has been
no flight of capital, as opposition members seem to think. This
should not be surprising. Canada's tax rules for people who leave
the country are stricter than the rules of almost every other country
in the world.
In addition to this, the Minister of National Revenue placed a
moratorium on any further rulings on taxable Canadian property
while the finance committee was doing its very important review of
this area of the Income Tax Act. The minister has extended this
moratorium until the Minister of Finance has the opportunity to
consider the policy recommendations of the committee and to
make decisions concerning appropriate changes if they are
necessary. We heard earlier today that many people think we can
make improvements and I would agree with that. Is this not
assurance enough for the opposition that the door is not wide open
to the transfer of capital without paying appropriate taxes?
With respect to the question of the decision making process, the
finance committee observed in its findings that immediately on
publication of the auditor general's report the minister directed
Revenue Canada to take immediate steps to improve
documentation of its tax policy interpretations. In this context, the
department has revised its procedures to ensure that a proper record
is prepared of the considerations that play an important part of the
decision making process to issue an advanced income tax ruling or
an opinion.
When Revenue Canada issues a written request to the
departments of finance or justice it will continue to provide a level
of background information, explanation and analysis appropriate to
conveying a full appreciation of the issue and its potential impact.
Revenue Canada will also retain in the permanent advanced rulings
file the complete documentation and analysis required in support of
any interpretations.
It is evidence that through these steps the Minister of National
Revenue has acted quickly to improve the openness and the
transparency of the process. The finance committee also expressed
its full support for the decision of the minister to publicize all
advanced tax rulings as of January 1996 with appropriate editing to
ensure taxpayer confidentiality. I wish to point out once again that
decision was made even before this documentation, this report of
the auditor general, came out.
4740
(1355)
Revenue Canada electronically publishes and distributes all
advance tax rulings to various tax publishing houses in Canada and
provides them to the public at Revenue Canada's tax services
offices within 90 days of their issuance.
As for the report's second administrative recommendation,
Revenue Canada has already taken steps to ensure consistency
between its rulings and opinions dealing with similar areas of the
law. Since the 1985 ruling, the department has implemented an
electronic research database. This provides easy access to all
previous opinions and rulings for research and comparison
purposes. I think that is an important improvement.
I would like to emphasize that Revenue Canada is a world class
organization that enjoys an enviable international reputation and
record of success. It has worked very hard to establish this record
through its successful administration of over 185 acts and
regulations, incentives, credits and international agreements and
treaties.
The department employees over 40,000 professional and
dedicated public servants. In order to support their dealings with
their millions of clients, each employee requires the confidence
and deserves the respect of Canadians to do their job well. Fairness,
equity and integrity are the basic principles on which they must
earn the confidence and respect of Canadians.
The credibility of the department depends on its adherence to
these principles in everything it does and in every decision it
makes. That is why concerns raised in the auditor general's May 7
report have been fully addressed by the finance committee in order
to prevent any undermining of public confidence that is so crucial
to the successful operation of any tax system.
Since this system relies heavily on self-assessment and
voluntary compliance for its efficient operation, anything that
erodes confidence in the revenue administration weakens the
system as a whole. Therefore it is important to everyone in Canada
and to the day to day working of the department that there is both
actual and perceived fairness and integrity in the administration of
the Canadian tax system.
In conclusion, I would like to state that in my view Canadians
have been well served by the finance committee report on taxable
Canadian property. We have five practical recommendations for
change and improvement. We will be waiting to see the new policy
that those recommendations come up with.
[Translation]
The Speaker: Our colleague still has a few minutes left. She
may continue her speech after Oral Question Period.
* * *
The Speaker: Since it is almost time for members' statements, I
have the honour to table the Auditor General of Canada's report to
the House of Commons, Volume II, dated September 1996.
[English]
Pursuant to Standing Order 108(3)(d), this document is deemed
to have been permanently referred to the Standing Committee on
Public Accounts.
As it is almost 2 p.m., we will proceed to Statements by
Members.
_____________________________________________
4740
STATEMENTS BY MEMBERS
[
Translation]
Mr. Ronald J. Duhamel (St. Boniface, Lib.): Mr. Speaker, on
behalf of all my parliamentary colleagues, I wish to welcome the
pages and interns working on Parliament Hill this year.
[English]
We do not always realize the importance of our pages. They play
an integral part in this operation and many of us would be lost
without them. I congratulate them on their new positions and hope
that they enjoy their time here at the House of Commons.
[Translation]
I would also like to congratulate the parliamentary interns and
wish them an excellent year here with us.
[English]
I am sure that they will have much to contribute with their
energy, their creativity, their commitment to the parliamentarians
who they choose to serve.
[Translation]
On behalf of everyone, welcome to this House. We wish you a
wonderful year.
Some hon. members: Hear, hear.
* * *
(1400)
Mr. Jean H. Leroux (Shefford, BQ): Mr. Speaker, like its
predecessors, the 28th annual Granby International Song Festival
was a success. During the finals on September 20 and 21, a number
of singers and singer-songwriters dazzled the audience with their
talent.
4741
For fledgling francophone performers, the Granby International
Song Festival has become a popular springboard to a professional
career.
While millions of dollars are being wasted on flags, the Minister
of Canadian Heritage did not hesitate to cut her department's
subsidy to this international event by 20 per cent.
The minister should reconsider her decision and continue to
provide financial support for the festival at the same level as
before. In closing, I wish to congratulate all the organizers and
participants who made this cultural event possible.
* * *
[
English]
Mr. Dale Johnston (Wetaskiwin, Ref.): Mr. Speaker, I am sure
that you and many members of this House will remember the
popular 1950s radio broadcasts of W.O. Mitchell's award winning
short stories ``Jake and the Kid''. The stories chronicled the
adventures of the Kid, 11-year old Ben Osborne, in the fictitious
prairie town of Crocus, Saskatchewan.
The story has been brought to life again in a 13-week television
series filmed in my constituency of Wetaskiwin. Now in its second
season, ``Jake and the Kid'' is wholesome family entertainment and
a tribute to Alberta's growing film industry.
Albertans figure prominently in the cast, crew and writers. In
fact, 90 per cent of the cast and all the extras are Albertans,
including Ben's best friend and mentor, the hired hand Jake, played
by hometown boy Shaun Johnston.
Sets depicting the Osborne family farm and mainstreet Crocus
have been constructed on 160 acres of land in the district of
Glenpark, Leduc County.
This exceptional Canadian production with its warmth, humour,
intriguing plots and off-beat characters is proof that Alberta can
soon lay claim to the title of Hollywood North.
* * *
Mr. Simon de Jong (Regina-Qu'Appelle, NDP): Mr.
Speaker, the Liberal government never tires of telling the Canadian
public that it has been working to get the economic fundamentals
right.
Low inflation and drastic cutbacks to social spending were
supposed to have set the stage for future jobs. We have had very
low inflation for years and the government is ahead of schedule on
deficit reduction.
But Canadians are facing the highest rate of unemployment
during an economic recovery since the last depression. Where are
the jobs? When can we expect that bountiful harvest of jobs that the
Liberals have promised?
I commend the distinguished economist Pierre Fortin for so
convincingly showing Canadians in the past few days that the
harvest of jobs will never occur under the Liberal policies because
they have their fundamentals wrong.
While the American policy makers have tolerated 3 per cent
inflation in order to achieve near full employment, the Liberals
have inflicted the strait-jacket of 1 per cent inflation and high real
interest rates which have killed, according to Fortin, 850,000 jobs.
The Liberals cannot expect Canadians to believe the talk of jobs
when their actions of inflation are calculated to kill jobs.
* * *
Mr. Pat O'Brien (London-Middlesex, Lib.): Mr. Speaker,
this past summer, Canadians were very proud observers of an
outstanding performance by our Canadian Paralympic Team at the
1996 games in Atlanta. With a total of 69 medals, these games
proved to be most successful for Canada.
As the member of Parliament for London-Middlesex and on
behalf of all Londoners, I would like to extend our congratulations
and thanks to the following Londoners who represented Canada so
well in Atlanta.
Marie-Claire Ross who brought home two gold, one silver and
three bronze medals in swimming; Jeff Christy, silver medalist in
goalball; Lisa Stevens, gold medalist in basketball; Adam Purdy,
swimming; Paul Bowes, the men's basketball coach Dr. Douglas
Dittmer, the team physician.
To all of these men and women and to every member of our
Paralympic Team from every region of Canada, we say
congratulations to all. You have made us as Canadians very proud.
Some hon. members: Hear, hear.
* * *
Mr. Gurbax Singh Malhi (Bramalea-Gore-Malton, Lib.):
Mr. Speaker, small and medium size businesses in my riding and
across Canada are the engine behind this country's economic
growth and job creation.
A recent Industry Canada report noted that Canada's vibrant
small business sector created more than 80 per cent of the nation's
new jobs. Clearly the banks must do a better job in serving the
small business sector and contributing to its success.
4742
(1405 )
Unfortunately, the banks have failed to adapt to the changing
needs of small business and the economy. It is not easy for business
people to raise capital in today's economy, even when the need is
great and the purpose justified.
Meanwhile the banks continue to record billion dollar profits.
When they insist on only the most risk free loans, the banks are
downsizing their role in financing small firms, whose owners are
clearly feeling badly treated. This has to be changed.
* * *
[
Translation]
Mr. Benoît Serré (Timiskaming-French River, Lib.): Mr.
Speaker, I was sorry to hear about the untimely death of Franklin
Pickard, President and Chief Executive Officer of Falconbridge
Limited.
On behalf of the Minister of Natural Resources, the Hon. Anne
McLellan and the Government of Canada, I wish to convey our
sincere condolences to Mr. Pickard's family and to the employees
of Falconbridge.
Mr. Pickard had been head of Falconbridge since 1991. He was
well known and respected within Canada's mining industry and
everywhere else. Born in Sudbury, Mr. Pickard started out at
Falconbridge in 1957 as a metallurgical engineer. He performed
various duties in the company, gradually climbing the corporate
ladder. As a result of his excellent work, his leadership and his
great qualities, he became the head of this flourishing company.
Mr. Pickard developed a sense of family among Falconbridge
employees. He will be sorely missed by all those who had the
pleasure to know this great member of Canada's mining industry.
* * *
Mr. Maurice Godin (Châteauguay, BQ): Mr. Speaker, last
week, Saturne Solutions, which has plants in Canada, the United
States and Ireland, announced that it would invest $20 million in
Montreal's west end.
Mr. Campbell, the company's executive vice-president, spoke
highly of Montreal and the province of Quebec, saying that a
qualified manpower is available, that salaries are reasonable, that
rental and power costs are low, and that free trade is good for
Quebec.
At the same time, Montreal's major hotels were full, thanks to
the large number of tourists, participants at various conferences
and businesspeople from the United States, Europe, Canada and
Asia.
In spite of the Canadian government's plan B and the statements
made by the Minister of Intergovernmental Affairs to the effect that
Quebec's economy must be weakened in order to weaken the
nationalist movement, reality shows that investors recognize
Quebecers' skills and competitiveness, which are the primary tools
of economic success.
* * *
[
English]
Mr. Ed Harper (Simcoe Centre, Ref.): Mr. Speaker, last night I
had the pleasure of attending the first Reform nomination meeting
to choose a candidate for the next federal election.
Over 1,000 attended the meeting in Owen Sound for the Ontario
riding of Bruce-Grey. Of the three outstanding candidates,
Murray Peer was elected and will carry the Reform message to the
voters.
The enthusiasm and support shown for our candidate and our
policies was surpassed only by the profound disappointment
toward this government's lack of vision or any plans to deal with
job creation, tax reduction, criminal justice reform and the
separatist threat.
Murray Peer will not have to respond to broken promises on
jobs, the GST and MP pension reform. He will be able to assure the
voters that they will be listened to and have their voice heard in this
place. He will offer the voters a platform with a new vision for
Canada and an opportunity for a fresh start to building a new and
better country for our children and our grandchildren.
* * *
Mrs. Brenda Chamberlain (Guelph-Wellington, Lib.): Mr.
Speaker, all Canadians should be concerned about the issue of teen
smoking.
I recently met with Dr. Cunningham, director of the addictions
division of the Homewood Health Centre in Guelph. Dr.
Cunningham reminded me that new smokers are almost always
teenagers. It is extremely rare for adults over 20 to begin smoking.
According to the information we discussed, it takes only four
cigarettes, smoked in a row, for a young person to become addicted
to nicotine. Many people believe that tobacco is addictive. We must
all be vigilant where tobacco products are sold and advertised and
we must look at treatment programs aimed to help our kids quit.
Our children are our future. They deserve no less than an all out
effort to discourage them from smoking and to help those who
smoke quit. Let us give them a helping hand in the battle against
tobacco.
4743
(1410)
[Translation]
Mr. Nick Discepola (Vaudreuil, Lib.): Mr. Speaker, Quebec's
intergovernmental affairs minister, Jacques Brassard, said
yesterday that: ``Whether it is the Superior Court, the Appeal Court
or the Supreme Court, Quebec's position remains the same. A
judge remains a judge. We feel that this is not a matter for judges,
regardless of the level of the court''.
The PQ government just indicated that its independence project
is above the laws and the courts. It tells voters that a separatist
government can flout the laws of this country if they do not serve
its sovereignist cause.
Quebecers should wonder about the type of society and justice
that they can be guaranteed by a government which, in order to
justify its independence project, does not hesitate to disregard the
fundamental laws of our country.
* * *
Mr. Bernard Patry (Pierrefonds-Dollard, Lib.): Mr.
Speaker, like a schoolmaster drilling his students, I am going to try
to get a very simple idea across to my colleagues in the Bloc
Quebecois.
For 30 years now, you have been getting this message from all
the economic stakeholders in Quebec, from the analysts in credit
rating agencies, from a majority of Quebecers in the last two
referendums, and recently from certain union and political leaders
in Quebec.
Yesterday, it was the mayor of Montreal, Mr. Bourque, today it is
Paule Doré, the president of the Montreal chamber of commerce,
who has added her voice to all those who are calling for an end to
the political instability created by your plan to separate.
Perhaps if they hear it often enough, they will finally get it.
* * *
Mr. Bernard Deshaies (Abitibi, BQ): Mr. Speaker, this week
the Minister of Intergovernmental Affairs described the contract to
sell electricity from Churchill Falls as unfair. He almost went so far
as to advise Newfoundland to go back on its agreement, as that
province did once before, with Meech.
There are three facts regarding this contract that must be
remembered. Only Hydro-Québec was willing to invest in a dam in
Newfoundland in the mid sixties. In 1984 and 1988, the Supreme
Court of Canada upheld the validity of the contract for the sale of
electricity. Hydro-Québec's profits from the signing of this
contract are comparable to the profits made by the other dams built
during this period.
If he is looking for unjust causes, the minister has only to recall
how Newfoundland got its hands on Labrador. In 1927, his Liberal
predecessors ceded Labrador to Newfoundland, without Quebec's
permission.
The minister should therefore stick to the job he has been
assigned. He already has his hands full.
* * *
[
English]
Mr. Bob Mills (Red Deer, Ref.): Mr. Speaker, on behalf of the
Reform Party and all Canadians I would like to condemn the
growing violence on the West Bank in Gaza and call on the Israeli
and Palestinian leadership to spare no efforts in immediately
re-establishing peace in this very serious situation.
Years of effort in the Middle East peace talks are hanging in the
balance and the peace and security of all citizens in the affected
areas are in jeopardy. So the time for decisive leadership is now.
Canadians care deeply about what happens in the Middle East
and they deplore the kind of violence we see today. Therefore I call
on the Canadian government to immediately speak with Israeli and
Palestinian officials to forcefully urge an end to the violence and to
offer whatever diplomatic assistance that might be helpful in
restoring calm and restarting the peace talks.
Peace is a fragile thing and we must not stand by and watch it be
destroyed.
* * *
[
Translation]
Mr. Denis Paradis (Brome-Missisquoi, Lib.): Mr. Speaker,
the young students from British Columbia, Alberta, Prince Edward
Island, Ontario, Brome-Missisquoi and elsewhere who took part in
the interprovincial job exchange this summer join with me in
thanking the people at Human Resources Canada and Heritage
Canada for their enthusiastic support, Nancy Beattie, the
co-ordinator for her exceptional work, and especially the host
families and the employers who took them in.
The students and I would also like to thank Canadian air carriers,
as well as VIA Rail, not to mention Ontario Northland, who
allowed the students to travel for free. These young people earned a
4744
few dollars, improved their second language, and, above all,
learned to know and appreciate a culture different from their own.
A big bravo.
* * *
(1415 )
[English]
Mr. John Nunziata (York South-Weston, Lib.): Mr. Speaker,
15 years ago Clifford Olson raped and murdered 11 innocent
children.
This summer he applied for early release under section 745. Last
week we learned that 12 tapes were produced at the request of the
FBI and the RCMP so that Clifford Olson could explain how he
raped and murdered his victims. We also learned that five of those
tapes were released to Clifford Olson's lawyer. Clifford Olson has
written to me, offering to send me those tapes for $300.
Enough is enough. Not only did he offer to sell the tapes to me
and presumably to others, he forwarded hard core pornography in
his correspondence to me. How can a convicted killer and rapist
have hard core pornography in his cell?
Correctional Service Canada must be held accountable for the
treatment it is giving to Clifford Olson. Exactly what was the deal
in order to produce those tapes?
* * *
Mr. Andy Scott (Fredericton-York-Sunbury, Lib.): Mr.
Speaker, this summer was marked by the Atlanta Olympics. I want
to take this opportunity to offer my congratulations to Marianne
Limpert from Fredericton who did our country proud by winning a
silver medal in swimming in the 200 metre individual medley.
Marianne is the first New Brunswicker ever to win a medal at a
summer Olympic Games, and her hometown gave her a hero's
welcome when she arrived back, even naming a street after her,
Limpert Lane.
She now holds the Canadian record in her event and there will be
a Marianne Limpert scholarship fund launched on October 4. It is
important that we continue to support amateur athletes so they are
able to follow their dreams. I know Marianne has inspired many
young Canadians to attain their personal bests.
I look forward to meeting with Marianne when she and
Fredericton's Hal Merrill, Paralypmic bronze medalist, meet with
the Prime Minister next week.
* * *
Mr. Dick Harris (Prince George-Bulkley Valley, Ref.): Mr.
Speaker, it is a sure thing that Canadian taxpayers will be paying
the Pearson airport piper because of this Liberal government's
pathetic performance.
All indications point to a federal settlement where Canadians
will be expected to fork over in excess of $60 million for a contract
cancellation that this government guaranteed would not cost a
penny more than $35 million.
We can probably expect that Canadian travellers will be stuck
with a new tax in the future and will all pay it at the airport.
Three years of lost opportunity, multimillion dollar
compensation payments and a new airport tax, that is what the
people of Canada got from the Prime Minister's irresponsible
decision during the 1993 election.
They won the election but once again Canadians lose. It is the
Canadian taxpayer who will pay for the Liberal screw-up on the
Pearson airport deal.
* * *
The Speaker: Colleagues, in a departure from our usual
procedure, I wish to draw to your attention the presence in the
gallery of Mr. István Szent-Iványi, State Secretary of the
Hungarian Foreign Ministry.
Some hon. members: Hear, hear.
_____________________________________________
4744
ORAL QUESTION PERIOD
[
Translation]
Mr. Gilles Duceppe (Laurier-Sainte-Marie, BQ): Mr.
Speaker, today the Minister of Justice has decided to call upon the
Supreme Court on the referendum question, stating as his reason,
and I quote: ``To leave this issue unresolved would pose a serious
threat to orderly government in Quebec and in the rest of Canada''.
Could the minister explain to us why order and good government
would be threatened today, when this was not the case in 1980, nor
in the last referendum in 1995? If the government is going before
the Supreme Court today, is the real reason not that it has nothing to
offer Quebec and is afraid of losing the next referendum?
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, the questions being asked in the
referral to the Supreme Court of Canada are entirely based on the
position taken by the attorney general of Quebec himself in the
Bertrand case.
Everyone believed that the primacy of the rule of law here in
Canada was obvious, and the unilateral declaration of
independence by Quebec was illegal and irresponsible, yet the
attorney general of Quebec stated for the first time a few months
ago that
4745
the courts and the Constitution have nothing to do with the process
by which Quebec is proceeding toward sovereignty.
(1420)
It is, therefore, the responsibility of this government to clarify
and determine these basic questions. We have asked the questions
in this referral in order to clarify and precisely determine the
primacy of the rule of law in Canada and the fact that a unilateral
declaration of independence is illegal and irresponsible in Canada.
Mr. Gilles Duceppe (Laurier-Sainte-Marie, BQ): Mr.
Speaker, the minister also stated today, and again I quote: ``Any
government that suggests it would throw Quebec and all of Canada
into the confusion of a unilateral declaration of independence is
being profoundly irresponsible. It is a formula for chaos''.
But who are the ones being irresponsible? The Government of
Quebec for proposing, after obtaining a democratic mandate from
the people of Quebec to negotiate on an equal basis for the first
time in its life, or this government for wishing to impose the same
legal framework as was in place for Meech Lake, where a single
MP from Manitoba, or a province like Newfoundland, could decide
Quebec's future? Which is the irresponsible one?
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, what we want is the same thing the
people of Quebec want, that is to say an orderly process to settle the
challenge facing us. That orderly process is the primacy of the rule
of law, the courts and the Constitution, and in the aftermath of a
referendum we shall have the Constitution and an orderly process.
With the process the hon. member proposes, we will indeed have
chaos, because a unilateral declaration of independence is
irresponsible. On behalf of all Canadians, including the people of
Quebec, we have chosen to refer these questions in order to clarify
the underlying principle concerning the Canadian system.
Mr. Gilles Duceppe (Laurier-Sainte-Marie, BQ): Mr.
Speaker, some fine Constitution, one rejected by all Quebecers.
There is no political party in Quebec-be it the federalist Liberal
Party of Quebec or the Parti Quebecois-no government which has
recognized the Constitution. It was imposed upon us in the dead of
night by the Prime Minister.
The minister tells us that he is calling upon the Supreme Court
because Quebec has no right to declare its sovereignty unilaterally.
I wonder why Quebec could not make its decision to become
sovereign on its own, while Canada could make a unilateral
decision to keep Quebec in Canada against the will of Quebecers.
How can it be that some are allowed to do what others are not? Is
that what you call democracy?
The Speaker: Dear colleagues, let me remind you that you must
always address the Chair.
[English]
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, much as the hon. member wants it
to be, the issue here is not whether the population of Quebec can
express itself freely. That has never been in doubt. We have had
two referenda in the past and if the present Government of Quebec
has its way, there will likely be a third I suppose. However, that is
not the issue.
The real issue is that the present Government of Quebec states
that right after the referendum, if the result is what it wants, the
present legal order will come to an end and it will unilaterally walk
away from Canada, from this country. That is simply out of the
question.
Some hon. members: Hear, hear.
* * *
(1425)
[Translation]
Mrs. Pierrette Venne (Saint-Hubert, BQ): Mr. Speaker, my
question is directed to the Minister of Justice. During his minister's
statement this morning, the Minister of Justice said, and I quote:
The leading political figures of all the provinces and indeed the Canadian public
have long agreed that this country will not be held together against the will of
Quebecers clearly expressed.
Could the minister explain exactly what ``the will of Quebecers
clearly expressed'' means?
[English]
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, there were several ways in which I
referred to the clearly expressed will of Canadians this morning.
For one thing, it is the clearly expressed will of Canadians that
the interest of Canadians throughout the country be taken into
account on this question which affects them all. For another thing, I
emphasized that it is the clearly expressed will of all Canadians,
including those in Quebec, that we conduct ourselves in accordance
with the law.
I also emphasized that it is the clearly expressed will of
Canadians that when their leaders, including the leaders of the
Government of Quebec, address issues on the public agenda, they
do so in keeping with the values of Canadians: tolerance,
accommodation, discussion, dialogue. That is the way Canadians
want us to approach our issues, not by unilateral action, not by
standing up and walking away from the table unilaterally. That is
not the way we do things in Canada. That is the commonly
expressed will of Canadians.
4746
[Translation]
Mrs. Pierrette Venne (Saint-Hubert, BQ): Mr. Speaker,
unfortunately, the Minister of Justice did not understand my
question. I referred to ``the will of Quebecers clearly expressed''.
That was my question. He is talking about the will of Canadians. I
think the minister missed the point completely.
I think it would be only fair and reasonable to give him a second
chance. I will put my question to the minister again. Could he
explain exactly what ``the will of Quebecers clearly expressed''
means?
[English]
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, I can answer that question. In fact I
can say that if the hon. member wants to know what the clearly
expressed will of Quebecers is, then she ought to look at the results
of the last two referendums.
Some hon. members: Hear, hear.
Mr. Stephen Harper (Calgary West, Ref.): Mr. Speaker, I
should begin by commending the government and the minister for
finally taking this belated action in referring this matter to the
Supreme Court. We also note the strong support the government
has received from the Minister of Intergovernmental Affairs.
Even as other governments in the world are becoming concerned
about the rule of law in Canada, some in Quebec who call
themselves federalists have made it clear that they reject any
attempt to defend the rule of law in the courts and to defend
Canada's right to self-determination.
Supporting a unilateral right of the PQ to self-determination is
unacceptable to ordinary loyal Canadians across the country. What
steps is the government taking to persuade these Quebecers of the
importance of supporting this effort to assert Canadian
sovereignty?
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, I very much hope that our
federalist allies in Quebec will see the value of clearly determining
these questions that have now been put at issue.
(1430)
As to what we are doing about it, we are expressing our position
as forcefully and in as straightforward a manner as we can. We
have framed questions that I think captured clearly what is really at
issue here. Indeed, I wrote to one Quebecer this morning, Paul
Bégin, the attorney general of Quebec, to invite him to participate
with me in the Supreme Court of Canada.
[Translation]
I think it is very important for the attorney general of Quebec to
participate in this exercise before the court.
[English]
The fact of the matter is he and I have divergent views on these
important legal questions. What Canadians do when they have
divergent views on important questions is they put them before the
court for resolution. I have invited him to join me in the court so
that we can get his views there and get a judgment from the highest
court in the land.
Mr. Stephen Harper (Calgary West, Ref.): Mr. Speaker, I want
to explore whether this action represents the totality of the
government's plan or whether it has further plans.
Yesterday at a congressional hearing in Washington, Christopher
Sands of the Centre for Strategic and International Studies
speculated that there has been talk that the federal government
plans to put a secession clause in the Constitution after the next
election and that it would raise once again the issue of a national
referendum on this issue.
Is the federal government prepared to go further and to say that
all Canadians must have a say in their constitutional future and the
future of their country, and that such a policy would include a
national referendum?
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, we expressed our commitment
clearly in the speech from the throne, indeed in language very close
to that used by the hon. member.
We said that if there is to be another referendum, that the process
must be democratic, that we would ensure that the question is clear,
that all the facts are on the table, that the consequences are well
understood and that all Canadians would have a say in the future of
their country.
The step we took today is intended to address the most
fundamental legal question, namely, do we operate within the rule
of law or outside it? I am confident that the court will see that the
Constitution and the rule of law must prevail.
As to the hon. member's question specifically, I can say that we
shall take whatever steps are necessary in the months ahead to
comply with the commitment we gave in the speech from the
throne.
Mr. Stephen Harper (Calgary West, Ref.): Mr. Speaker, I
would like to follow up on the nature of that commitment.
Gordon Robertson, the former clerk of the Privy Council, has
said that the government needs contingency legislation to deal with
the possibility of an attempt at secession. The minister will know
that Patrick Monahan of Osgoode Hall has said the same thing.
Is the minister prepared to go further and to table a bill in the
House providing a legislative framework for any attempt by a
province at secession?
4747
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, for the present we are going to
pursue the fundamental issues that will now be heard by the
Supreme Court of Canada. I do reiterate that we are going to fulfil
our commitment expressed in the throne speech.
The hon. member has referred to two instances where
responsible Canadians have spoken out to raise approaches to these
difficult issues. That is going on all across the country. Canadians
are looking at these issues, they are producing constructive
responses and that is a very valuable process. We encourage and
support it.
We are listening carefully. We shall cull from that process the
best of the proposals. We shall bring them here for discussion. In
the fullness of time we shall embark upon a course to enable us to
fulfil the commitments we made in the speech from the throne.
* * *
[
Translation]
Mr. Gilles Duceppe (Laurier-Sainte-Marie, BQ): Mr.
Speaker, the Minister of Justice, in answer to a question from a
member of the Reform Party, said that he would consider the
possibility of having a national referendum on the future of
Quebec, like the referendum on conscription or on Charlottetown.
My question is directed to the Minister of Justice. Does he or
does he not intend to call a national referendum to determine the
future of Quebecers?
[English]
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, we are focusing now on the
fundamental legal issues raised by the attorney general of Quebec.
[Translation]
The questions referred to the Supreme Court of Canada today
must be answered because the attorney general of Quebec has taken
a position that is unacceptable under Canadian law. We intend to
take this opportunity to deal with this very important matter. We
will start with these questions and later, during the months to come,
we will meet our other commitments.
(1435)
Mr. Gilles Duceppe (Laurier-Sainte-Marie, BQ): In his
reply, the Minister of Justice started by referring to a national
referendum and now mentions he has other commitments, so could
he put all his cards on the table and tell us whether he intends to
have a national referendum with his ``rule of law'' in which
everyone outside Quebec will be able to determine the future of
Quebec? We had conscription, and we had Meech. Is this going to
be another example of so-called democracy?
[English]
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, the hon. member will know that it
was the hon. member from the Reform Party who raised the
cross-Canada referendum; it was not something which I
mentioned.
The hon. member opposite likes to pretend that anyone who
relies on the rule of law is speaking against the democratic
expression by the population of Quebec of its will. That is simply
not so. The people of Quebec have every right to express
themselves democratically in a consultative referendum.
Where my hon. friend goes wrong and where the attorney
general of Quebec goes wrong is to say that from that result they
can proceed unilaterally to walk away from the contract, just leave
the table. That is the crux of the issue.
Let us not confuse the issue. We respect the right of the
population of Quebec to express itself democratically, but we must
insist that there be no unilateral action, that we keep in mind that
this issue affects the interests of all Canadians and it will only be
resolved in accordance with principles that provide for its orderly
disposition.
* * *
Mr. Jim Hart (Okanagan-Similkameen-Merritt, Ref.):
Mr. Speaker, the Prime Minister supports the defence minister's
sleazy pork barrelling. Let me remind-
The Speaker: We are coming very close to unparliamentary
language. I will permit the hon. member to rephrase the question
without using the words ``sleazy pork barrelling''. Would the hon.
member please proceed.
Mr. Hart: Mr. Speaker, let me remind the Prime Minister of his
conflict of interest code which states in black and white that a
public office holder shall not accord preferential treatment in
relation to any official matter to friends or to any organization in
which they have an interest.
Thornley is a friend of the Liberal Party and he received
preferential treatment.
Will the Prime Minister show some leadership, enforce his own
code of conduct and put an end to this patronage contract?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, I just want to say as I said yesterday that these are within
the guidelines which apply to the spending of public money by a
minister.
For example, I know of a certain Stephen Green who has worked
for two years for the Reform Party. He is paid with public money.
He is a friend of the leader of the party. There is a very nice lady,
4748
Line Maheux, who ran and got clobbered in the election but she
was rewarded by the Reform Party with a job which she still holds
today.
Mr. Jim Hart (Okanagan-Similkameen-Merritt, Ref.):
Mr. Speaker, it is scandalous what is happening in the House today.
The Prime Minister is willing to follow Mr. Mulroney's guidelines
but refuses to follow his own guidelines. This Liberal government
and ethics continue to have a long distance feeling.
The defence minister's pork barrelling clearly breaks the Prime
Minister's conflict of interest guidelines and the Prime Minister
refuses to do anything about it.
Will the Prime Minister show some leadership today and live up
to his own ethical guidelines and cancel this contract?
Right Hon. Jean Chrétien (Prime Minister, Lib.): No, Mr.
Speaker. We are satisfied that the guidelines were followed, that the
person is competent to do the job which the minister asked him to
do and that it is within the budget approved by the House for the
operation of the office of the minister. I just gave an example of
people who have been rewarded. I think they must be competent. I
hope they are competent because this party needs a bit of
competence around. We are not complaining, because they are
doing their jobs. But they were rewarded. They were not known
until they ran for the Reform Party.
(1440)
I think that in this case the minister really has the option to do
that. It is all within the guidelines, the rules for ministers and
members of Parliament. Everything is above board.
* * *
[
Translation]
Mr. Michel Guimond (Beauport-Montmorency-Orléans,
BQ): Mr. Speaker, my question is for the Minister of National
Revenue. The report tabled today by the auditor general confirms
once again that Revenue Canada has become a real sieve. After the
family trust scandal, we learned today that Revenue Canada lost up
to $630 million to tax evasion in the area of excise taxes for
1994-95 alone.
How can the minister explain to taxpayers the fact that Revenue
Canada's carelessness allows the big oil companies and the tobacco
industry in particular to avoid paying up to $630 million in taxes?
[English]
Hon. Jane Stewart (Minister of National Revenue, Lib.): Mr.
Speaker, I welcomed the report of the auditor general. As an officer
of the House he provides me, as a minister, with information,
advice and examples of where I can continuously improve the
activities and the working of my department.
I note that in this report he has identified many areas where
Revenue Canada has evolved and actually made improvements. He
has also identified areas where we can continue to improve. I am
glad to say that we have tabled action plans in all of those areas
which he has accepted and endorsed.
[Translation]
Mr. Michel Guimond (Beauport-Montmorency-Orléans,
BQ): Mr. Speaker, this is incredible, this is a scandal. The minister
is trying to downplay the preferential treatment given large
corporations that make billions of dollars in profits. This is
incredible.
Instead of boasting, could the minister tell us what concrete
measures she will take to recover the amounts owed and stop these
abuses?
[English]
Hon. Jane Stewart (Minister of National Revenue, Lib.): Mr.
Speaker, absolutely. Let us put the auditor general's report into
context. I prefer to suggest that the glass is two-thirds full instead
of one-third empty in the area of commodity taxes.
In his report, he says that in 1993-94 there was tax evasion in the
area of commodity taxes, cigarette smuggling, to the tune of $1.5
billion. One year later that has been reduced to $500 million, a
reduction of two-thirds.
When we are talking about commodity taxes we are talking
about the criminal element, about people who do not have books
that we can go in and audit. The department is working very
effectively with the Solicitor General of Canada, the Minister of
Justice, the Minister of Health, the Minister of Finance to work out
a comprehensive strategy.
The auditor general has indicated that within one year it has
worked very effectively. I would like to say that we will continue
the great effort and commitment to reduce that $500 million to
zero.
* * *
Mr. Ian McClelland (Edmonton Southwest, Ref.): Mr.
Speaker, Kyle Brown, a private in the airborne regiment in Somalia
was jailed for five years and released from the military for his role
in the Somalia affair. He was tried, convicted and sentenced
appropriately.
By turning over the film of the atrocity Kyle Brown incriminated
himself but he prevented a cover-up.
How is it that the lowest ranking member of the military, who
prevented a cover-up, did not have military defence counsel while
4749
the chief of the defence staff has the best counsel that money can
buy to try to absolve him of his role in the cover-up?
Mr. John Richardson (Parliamentary Secretary to Minister
of National Defence and Minister of Veterans Affairs, Lib.): Mr.
Speaker, I recognize the question from the hon. member. Because
of the detail of that question, I will take it under advisement.
(1445 )
Mr. Ian McClelland (Edmonton Southwest, Ref.): Mr.
Speaker, if I may, I would advise the parliamentary secretary that
Private Kyle Brown is still paying off the bank loan that he had to
take out to pay for his defence while he was in Somalia.
Sergeant Mark Boland was arrested, taken from his home by the
military police, tried, convicted and sentenced to one year in jail
and discharged from the military for his role in the Somalia affair.
Although he was off duty and asleep when the events took place,
Sergeant Boland was held accountable because the atrocity took
place during his watch. He should have known and he was held
accountable.
My question is for the Prime Minister. What kind of leadership
example is set for Canadians when the chief of the defence staff is
able to pass off responsibility for events that occurred under his
watch, yet he continues to enjoy the support of the Prime Minister,
the minister of defence and of the government?
Mr. John Richardson (Parliamentary Secretary to Minister
of National Defence and Minister of Veterans Affairs, Lib.): Mr.
Speaker, because of the nature and the detail required, had I been
given advance notice of that question, I would have answered it. I
will take it under advisement.
* * *
[
Translation]
Mr. Pierre de Savoye (Portneuf, BQ): Mr. Speaker, a few
moments ago, the Minister of National Revenue hid behind
criminal enterprises to say that their books cannot be audited. The
oil companies are legitimate businesses whose books must be
audited. The minister has no excuse.
Furthermore, while wealthy taxpayers were able to receive
services from Revenue Canada on December 23, 1991, the auditor
general revealed today that, nine times out of ten, ordinary
taxpayers cannot get telephone access to Revenue Canada's
services.
How can the minister justify the preferential treatment given to
the rich by her department when ordinary taxpayers cannot even
reach Revenue Canada by phone?
[English]
Hon. Jane Stewart (Minister of National Revenue, Lib.): Mr.
Speaker, the hon. member refers to telephone access to my
department. It is of concern for us. All members have either
anecdotal evidence or personal experience about the difficulties of
getting through on the phones.
I would like to point out that one week in July last, we received
two million phone calls. It would have taken 4,000 agents to
respond so hiring more people does not make sense in this case.
What we are doing, however, is looking at automation. We have
had pilot projects in place using automated inquiry systems. They
will now be spread nationally and our anticipated implementation
date is over the course of 1996. With that program in place, it is my
expectation that this issue of access to the department will be
relieved.
[Translation]
Mr. Pierre de Savoye (Portneuf, BQ): Mr. Speaker, I see that,
according to the Chief Electoral Officer's report, large corporations
make generous contributions to the Liberal Party's coffers.
Can the minister tell us if there is a link between that fact and the
fact that Revenue Canada has become a provider of favours and
dispensations to the rich and to the big companies?
The Speaker: If I understood the question correctly, it concerns
the Liberal Party. If the minister wants to answer, I will allow it. If
not, it will be disallowed.
* * *
[
English]
Hon. Warren Allmand (Notre-Dame-de-Grâce, Lib.): Mr.
Speaker, my question is for the Acting Minister of Foreign Affairs.
This week in a historic event, Canada and 79 other nations
signed the comprehensive nuclear test ban treaty at the United
Nations.
Unfortunately, some of the nuclear threshold states, including
India, have stated that they would not sign. Could the minister say
what steps Canada is taking to bring India and these other countries
on side and to ensure that this important treaty comes into force as
soon as possible?
(1450)
[Translation]
Hon. Pierre S. Pettigrew (Minister for International
Co-operation and Minister responsible for Francophonie,
Lib.): Mr. Speaker, first of all, I want to recognize the excellent
work done by
4750
the hon. member for Notre-Dame-de-Grâce, who has been an
advocate of international disarmament for many years.
In fact, just this week, Canada became one of the first countries
to sign the comprehensive nuclear test ban treaty. With this treaty, a
long-standing objective of our foreign policy has finally been
achieved. Canada will continue to play a leading role in
implementing the treaty as soon as possible. A binding
international standard banning all tests is already in place under the
treaty. This standard will provide strong political and moral
leverage in the coming years, leverage that will also be brought to
bear on non-treaty countries.
* * *
[
English]
Mr. Jim Abbott (Kootenay East, Ref.): Mr. Speaker, outside
the House the heritage minister clearly and specifically stated that
neither she nor her department lobbied Liberal backbenchers to
defeat the bill on banning negative option billing by the cable
companies. However, I have the minister's memo in hand which
specifically endorses negative option billing and encourages
Liberal members to vote against the negative option ban.
Further, I have a document on the minister's letterhead which
specifically states that the members should vote no, government
position, nay.
With this evidence in hand, how can the minister explain the
discrepancy between what she was saying outside the House and
the written evidence?
Hon. Sheila Copps (Deputy Prime Minister and Minister of
Canadian Heritage, Lib.): Mr. Speaker, I said last week, I said
this week and I will say it again next week that the Liberal
government opposes negative option billing. We opposed it last
year. We oppose it this year and we will oppose it next year.
The chairman of the CRTC, in assigning the new specialty
licences, has also gone on record as opposing negative option
billing. Therefore, the issue has been dealt with.
Mr. Jim Abbott (Kootenay East, Ref.): Mr. Speaker, not since
the minister's broken GST promise has there ever been as loud a
public outcry as there was against against negative option billing
on the part of ordinary Canadians. It is clear, on the basis of this
documentation, to anyone that the minister and her department are
working hand in hand with the cable industry.
How can she deny that her government position was opposed to
the negative option bill when I read here: ``Government position,
no?''
Hon. Sheila Copps (Deputy Prime Minister and Minister of
Canadian Heritage, Lib.): Mr. Speaker, you are absolutely right,
the government was opposed to the negative option billing.
* * *
[
Translation]
Mr. René Canuel (Matapédia-Matane, BQ): Mr. Speaker,
my question is for the Minister of Fisheries and Oceans.
More than three weeks ago, Restigouche Micmacs started
fishing lobster illegally, out of season. On Monday, after tolerating
the situation for more than three weeks, the Minister of Fisheries
and Oceans decided to issue the Micmacs a communal fishing
licence they never asked for, aggrieving local fishermen.
In light of the fact that the Micmacs have the clearly stated their
intention of developing a commercial lobster fishery and do not
recognize the authority of Fisheries and Oceans in that area, how
does the minister justify issuing this permit?
[English]
Mr. Ted McWhinney (Parliamentary Secretary to Minister
of Fisheries and Oceans, Lib.): Mr. Speaker, it is a fact that the
Listuguj First Nation, in claiming historic rights, as was amply
vindicated in the jurisprudence of the Supreme Court of Canada,
asked for a permit. It was issued a communal licence by the
department. The communal licence established very serious
restrictions in the interest of conservation measures, limits as to the
number of catch, limits to the type of gear to be employed. Those
restrictions are enforceable under the Fisheries Act.
We are aware of complaints of violations and these are being
investigated. If necessary the restrictions will be enforced.
Obviously it is in the interest of all of us to achieve an amicable
settlement. The hon. member will agree with that. The department
is examining that with all parties. However, the regulations will be
enforced if necessary.
(1455)
[Translation]
Mr. René Canuel (Matapédia-Matane, BQ): Mr. Speaker,
Fisheries and Oceans Canada just authorized 2,000 members of the
community to catch 300 pounds of lobster each. That is 600,000
pounds of lobster in Chaleur Bay. That is a lot of lobster.
How can the minister ensure the conservation of the resource, in
concrete terms, in the subarea located between New Richmond and
Pointe-à-la-Garde, where the Micmacs are currently fishing?
4751
[English]
Mr. Ted McWhinney (Parliamentary Secretary to Minister
of Fisheries and Oceans, Lib.): Mr. Speaker, as has been stated,
we are aware of the conservation imperative. It is the prime
obligation of the department. The issue is under investigation.
If violations occur they will be prosecuted under the Fisheries
Act. I can assure the hon. member that we will still try to achieve,
allowing for the political facts here, the amicable settlement which
we all desire. But if necessary, the regulations will be enforced by
prosecution.
* * *
Mrs. Diane Ablonczy (Calgary North, Ref.): Mr. Speaker,
yesterday in the House, the natural resources minister expressed
outrage at the very idea that a federal government should interfere
in private contracts. Yet that is exactly what the Liberals did with
the national energy program.
I ask the minister, are we to understand that her position is that
the Liberal national energy program was a huge mistake?
Hon. Anne McLellan (Minister of Natural Resources, Lib.):
Mr. Speaker, I have no intention this afternoon of dwelling on the
past.
Some hon. members: Oh, oh.
Ms. McLellan: We should think about the future. I have in front
of me a document from the Reform Party called ``Twenty Proposals
for a New Confederation''. Let me read one small part which is
under the heading ``Realigning The Powers''. It says: ``To make
government more effective we propose eliminating federal
interference in the following areas-''.
The first area enunciated is natural resources.
Some hon. members: Oh, oh.
Ms. McLellan: Say we allow exclusive provincial control over
resources like energy.
We could ask ourselves why the third party, the Reform Party,
has changed its mind on this fundamental point. Perhaps it is
nothing more than political opportunism.
Mrs. Diane Ablonczy (Calgary North, Ref.): Mr. Speaker, we
want provinces to control their own resources, not have other
provinces control them.
The minister cannot have it both ways. As I said yesterday,
Liberals have no problem interfering with fair contracts. It is just
unfair contracts they have a problem dealing with.
The Liberals defend selling Alberta down the river but they
refuse to take action as the people of Newfoundland are forced to
go over Churchill Falls in a barrel.
Can the minister explain this incredible contradiction to the
people of Canada?
Hon. Anne McLellan (Minister of Natural Resources, Lib.):
Mr. Speaker, as I have said, it seems to me that the contradiction
here is between the expressed position of the Reform Party and
what it is now saying.
We respect the jurisdiction of the provinces over their natural
resources. The provinces have the ability to enter into contracts in
relation to the sale and disposition of those natural resources.
* * *
Ms. Jean Augustine (Etobicoke-Lakeshore, Lib.): Mr.
Speaker, in the past clinical drug trials in Canada have not required
that women be included.
If the Minister of Health really believes that women's health is a
priority, what has he actually done or what is he doing to make sure
drugs are not allowed on the Canadian market before their effects
on women are fully assessed?
Hon. David Dingwall (Minister of Health, Lib.): Mr. Speaker,
the hon. member is well known for her interest and advocacy of
women's rights. I believe the hon. member as well as other
members of the House will be happy to learn that my department
has now changed the policy.
(1500)
In the past it was not mandatory for women to be included for the
purposes of drug trials. As of yesterday it is now mandatory that all
drug companies will have to include women in their various test
trials before they make submissions to have their drugs approved.
* * *
[
Translation]
Mr. Réal Ménard (Hochelaga-Maisonneuve, BQ): Mr.
Speaker, my question is for the Minister of Industry, so that we do
not forget he actually exists. In its budget speech delivered on
March 6, the federal government announced the creation of
Technology Partnerships Canada. According to the minister, this
program was to help in the conversion of the aerospace and defence
industries. In order to help the minister manage this program and
assess projects, an advisory board was to be set up.
Can the minister tell us how many Quebec businesses from the
aerospace and defence sectors have so far been helped by
Technology Partnerships Canada?
4752
Hon. John Manley (Minister of Industry, Minister for the
Atlantic Canada Opportunities Agency, Minister of Western
Economic Diversification and Minister responsible for the
Federal Office of Regional Development-Quebec), Lib.): Mr.
Speaker, the projects supported by Technology Partnerships
Canada will soon be announced.
The hon. member is well aware that, through its programs, the
federal government provided support to the development,
particularly in the Montreal region, of companies such as
Bombardier, Pratt & Whitney, and CAE. We are currently
witnessing Canada's success in Montreal.
* * *
[
English]
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, the auditor
general's report, which was tabled today, demonstrates the
government's incompetence in tax collection that is causing
Canadian taxpayers to lose faith in the system.
Once again this government is focusing on the little taxpayer and
squeezing him until he hurts, but we find that not one tobacco
company has been audited in the last five years.
Revenue Canada knows that auditing large tobacco companies is
an easy and efficient way to collect millions of dollars, yet it turns a
blind eye to them while collecting every penny from ordinary
Canadians.
My question for the Minister of National Revenue is why?
Hon. Jane Stewart (Minister of National Revenue, Lib.): Mr.
Speaker, Revenue Canada performs its audits based on risk
management. In the five years which the auditor general questions
we redirected our initiative to the area of the underground economy
and the anti-smuggling initiative. The auditor general applauded us
for those initiatives and identified real returns to the fisk.
I would say that when we are talking about these companiesthey do represent about 85 per cent of the excise taxes and Ihave directed the department to include them in our large corporate
audit. They will be reviewed every two years for the twoyears previous and everything will be managed effectively and
efficiently.
* * *
Mr. Vic Althouse (Mackenzie, NDP): Mr. Speaker, my
question is for the minister of agriculture, who said yesterday that
he is relying on New Zealand, Argentina and Australia to be his
Cairns group allies in defending our wheat board and our dairy
commission and some other boards in the 1999 trade talks.
Since Argentina has already abandoned its marketing system and
New Zealand and Australia are changing theirs to take the state out
of them, is he planning similar changes here or what is it exactly
that holds this alliance together?
Hon. Ralph E. Goodale (Minister of Agriculture and
Agri-Food, Lib.): Mr. Speaker, at the Cairns group meeting in
Cartagena earlier this summer, the 14 nations that make up that
group had an extensive opportunity to discuss their various trade
strategies heading toward the next round of GATT negotiations at
the turn of the century.
The topic of state trading enterprises was one of the subjects
under discussion. There was very significant support all around the
table not just from Canada, not just from New Zealand, not just
from Australia; the general consensus of the group was to take a
position in defence of the rights of countries to have and to
maintain state trading enterprises that suit their respective
circumstances.
On this topic I would invite the hon. gentleman from his
privileged position in the House to help explain to his neighbours
over there in the Reform Party that when it comes to the policy of
the Government of Canada that is set in Ottawa and not in
Washington.
* * *
Mr. John Finlay (Oxford, Lib.): Mr. Speaker, my question is
for the Minister of Natural Resources.
My private member's bill passed this House in November 1995
and called on the minister to improve access to government boards
and agencies in the public interest so that better decisions will be
made.
(1505 )
What action has the minister taken to ensure that Canadians have
fair and equal access to hearings before the National Energy
Board?
Hon. Anne McLellan (Minister of Natural Resources, Lib.):
Mr. Speaker, the hon. member raises a very important issue and
that is in relation to funding for intervenor landowners before the
National Energy Board at pipeline facility hearings.
As the hon. member knows, I instructed the National Energy
Board to look at non-legislative means by which financial
assistance could be provided to landowner intervenors. The NEB
undertook that report. It reported to me earlier this year. I asked it
to make the report public and seek comments. It is in the process of
doing that.
4753
The interest has been so great in this issue that the NEB has
had to extend the period for public comment twice. However, I
hope to receive the report later this year.
In addition, I should tell the hon. member that I have been
working with the pipeline association and I have asked it to
consider a voluntary pilot project in which it might provide funding
for intervenors.
* * *
The Speaker: I draw to the attention of hon. members the
presence in the gallery of a delegation of members of the
Federation Council of the Federal Assembly of the Russian
Federation, led by Mr. Yegor Stroyev, Chairman of the Federation
Council.
Some hon. members: Hear, hear.
* * *
[
Translation]
Mr. Gilles Duceppe (Laurier-Sainte-Marie, BQ): Mr.
Speaker, here is the question of the week. I would like to know
what the government has on the agenda for the days to come.
Hon. Alfonso Gagliano (Minister of Labour and Deputy
Leader of the Government in the House of Commons, Lib.): Mr.
Speaker, on Friday the House will consider the legislation on
marine transport, that is Bill C-44. If we have time, we will go back
to the list of bills for the week and we will carry on our usual
discussions with members from the opposition parties.
[English]
Monday shall be an allotted day. On Tuesday we shall return to
our list: Bill C-45, Bill C-53, Bill C-49, Bill C-26 and Bill C-41.
Bill C-60, the food inspection legislation, and Bill C-55, the high
risk offender bill, will be added to the list for next week.
We shall discuss the precise order with our friends opposite with
a view to moving this legislation along, which is something the
House has not been accomplishing since its return from the
summer adjournment.
_____________________________________________
4753
GOVERNMENT ORDERS
[
English]
The House resumed consideration of the motion
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, it is an honour to
enter into debate on the motion of the day by the Bloc Party.
It is interesting that it should use its day for this particular topic.
It is illustrative of one of the things which is wrong with the
country. The very fact that we have in the House a large number of
members whose set goal is to remove themselves and their part of
the country from the rest of us shows that there are some problems
and that we as legislators ought to be paying attention to them.
There is no doubt in my mind that if this federation were to work
properly, we would not be here debating these kinds of questions.
(1510 )
Bloc Members have raised an issue which is on the minds of
many people in Canada, fair taxation. They have done it in a very
specific case and with respect to an auditor general's observations.
The issue they are drawing attention to is a very important one, that
there is unfair taxation.
During my short time as member of Parliament, this being my
first term, I have listened to a large number of people from across
the country, but primarily in my own riding of Elk Island. One
thing I hear often is that people are no longer content to allow half
of their earnings or more to be spent on their behalf by people who
do not listen to how that money should be spent. Over and over we
hear individuals and small business people talk about the taxation
system and how it is a great detriment to their personal welfare or
the well-being of their business. It is onerous. It is too heavy a
burden for the people of this country. It is based on a false
supposition that there is someone in far away, distant Ottawa, a
politician or bureaucrat who knows better how to allocate those
funds that they have earned than the people do.
That is the large assumption which has been made by successive
Liberal and Conservative governments, and we are shackled by it.
We have come to the point where too many of us are struggling to
make ends meet. Meanwhile our taxes must be paid. We will end
up working into the middle of July for this thing called tax freedom
day, the day when finally we can begin to earn for ourselves and
our families.
I admit that some of the tax money is used for good purposes. I
would not deny that. I am very happy to be in this country. I am
very grateful that we have a good infrastructure system in this
country. Our highways are very good by international standards.
We have excellent communication facilities and our taxes go to pay
for all of that.
That is not the question. The problem is the large amount of
waste, the large amount of money which is spent on programs
which do not carry the support of the majority of citizens but are
foisted on us by a bureaucrat or politician in a distant city.
Consequently, I hear more and more disgruntlement and discour-
4754
agement with the way the government is managing its affairs.
People are overtaxed and they are getting tired of it.
How should we react to this? According to members of the
official opposition party today taxation should be fair. I agree with
that component. There should should be no large amount of
earnings which would go untaxed while other earnings are taxed at
excessive rates.
Not very long ago someone told me that he is now in some
financial and employment difficulty. He said that if had been able
to pay less in taxes over the last number of years he would have had
a nest egg put away which would have helped him through a
difficult time. Instead, because of high taxation over the years his
personal nest egg is much less than he would like it to be, and so he
is thrown on to government programs. Unfortunately the
government, with its continued policy of overspending and
borrowing, adds to the load of taxpayers and our taxes keep rising
and at the same time we experience the downsizing of the very
government programs which were supposed to be provided by the
taxes that we are being asked to pay, I should say coerced to pay.
(1515 )
The bottom line is that in areas like the Canada pension plan, UI
which is now called employment insurance, premiums over the
years have gone up a lot. I know in the last year or so there has been
a small turn downward in the UI premiums and that is a very
commendable step but it is too tiny a step.
In other areas we are asked to pay a great deal and there is a
decreasing assurance that the government programs we have paid
into will actually deliver for our needs. I do not believe that this is
at all the real nub of the issue for the members of the Bloc in terms
of their wanting to separate, but I believe it adds to it.
I believe that if we in Ottawa were to run our fiscal affairs in
such a way that government overspending was eliminated so that
this government like all other governments in Canada would have a
defined goal of living within its means, then there would be much
less of a cry by provinces like Quebec that say: ``We do not want to
swim with you guys anymore, we want to go it on our own''. It
would be just too expensive for them. Whereas the way it is right
now, being part of this confederation is an increasing burden for
many of us.
I appreciate the members of the Bloc. I do not know if that will
be misunderstood so I need to explain. I am actually very grateful
they are here. It is a reflection of the fact that we have a free
democracy. I wish they were not here for the reasons they are here,
but each one of them as far as we know was properly and
democratically elected. They have as much right to be here as any
one of the rest of us.
What we really need to do is to get to the root of the problem.
Why did the people in Quebec elect them? Why were they sent
here? It is inescapable that they were sent here because of the fact
that Quebecers increasingly perceive that Ottawa is not doing for
them the job they want done.
When we come to this whole question of taxation and
government spending, certainly one of the areas is that taxation
should be fair. The government has the right to tax us and by
common consent to provide programs that Canadians want and the
taxation load should be made as equal as possible for all of the
members of the taxpaying public. I believe there are some 13.5
million taxpayers in this country. Each one of them has a vested
interest. They are shareholders in this country so to speak, in this
company called Canada. They deserve and have a right to demand
that the money be spent carefully.
In saying something else about the tax system, whether we
recognize it or not, taxes and taxation are a very inefficient way of
looking after people's needs. Generally when people spend other
people's money, the amount of accountability goes down. I have
observed that around here since the time of my election. I have
certainly seen it by observing the way even senators and members
of Parliament spend money. It is easy to spend money which is not
your own. It is more difficult to spend your own.
This is one of the reasons I am a firm advocate of a free
enterprise system and a system which permits us to meet each
other's needs through private enterprise and private initiative. I
remember way back when I was just a youngster there was not this
proliferation of government programs. In fact the generation in
which I grew up was one in which most people would deny the help
that was offered to them by government because of a large amount
of personal pride and self-sufficiency, at least in the part of the
country in which I grew up, out in the west.
In those days when someone had a problem we who had the
ability to help would help in the way in which we could. I
remember as a youngster one of our neighbours was unfortunately
killed in a farm accident. My dad was one who helped organize the
neighbours. They immediately went to help this newly widowed
lady do her harvest. They did her harvest first and then they did
their own. They could afford to do that because at that time there
was enough money left over despite the taxes. Sure, times were not
easy on the farm but they had the financial ability to help someone
in need.
(1520)
I have experienced this personally. Acquaintances of mine have
fallen into hard times and I wished that I could have helped them
more than I did. Unfortunately, what with the municipal taxes, the
provincial taxes, the federal taxes and GST, by the time all these
taxes are removed from my earnings and after I meet the basic
4755
necessities of life for my own family, the amount of money I have
left to give charitably to people who are in need is greatly
diminished.
Now my way of helping people is to say: ``Let us go down to the
government office and see what kind of assistance is there for
you''. That is wrong. I am very distressed about it. We have
allowed governments at all levels to take over from us as
individuals the expression of compassion which we as Canadians
value.
I hear expressions especially from the Liberal side that they do
not want to cut these social programs because they are
compassionate. If that is really true, if the government were to
reduce its involvement in those compulsory programs which we
have no choice but to support, then each one of us individually
could do so much more. We could help people in a much more
genuine way than a government department somewhere trying to
help people in a wholesale way with reduced budgets.
The last issue I want to talk about in my little time here is the
question of debt. I am always reluctant to give the Liberals great
accolades when they have not done the job adequately. Usually
what I say is when we were elected in 1993 and when all this
present batch of Liberal MPs were elected, we understood that the
deficit, the amount of government overspending, was around $35
billion or $40 billion a year. It was in that range.
It is interesting how whenever there is a change of government
the last year of the previous government is always tremendously
bad and then it gets better. I have often wondered how that happens
mathematically under accounting rules.
We had a large deficit. Now we have a deficit which has been
reduced and everybody is cheering: ``We have reduced it to $27
billion''. Unfortunately, I do not believe this is being properly
communicated to Canadians. There are a lot of people who think
that our debt and deficit problems are solved with this Liberal
government. Unfortunately, that is not true.
What has happened is that the government has reduced the rate at
which we are going into debt. We are still adding $100 billion to the
debt during the term of office of this government. We have added
approximately $10 billion a year to mandatory interest payments.
Those payments are not going down because the debt is still
increasing. That means that next year our interest payments are
going to be even higher than they were last year. Even though the
debt is increasing at a slower rate, it is still increasing. The amount
we owe is going up, up, up.
It is becoming urgent that through proper and fair taxation
techniques and through the reduction of government involvement
in programs which Canadians do not support that we downsize
government. It is urgent that we return to the people of Canada the
autonomy that comes when they can spend their own money for
purposes they themselves choose rather than for purposes that are
chosen by someone else.
I encourage the Liberal majority government on the other side,
all those individual backbenchers to really exercise the authority
they have as elected members of Parliament. I would like to see
them throw off the shackles of party discipline and really hold their
own government accountable in areas of deficit reduction. It is
shameful that after four years we still do not have a definite date on
which it is planning to say: ``We will not be borrowing next year.
No more borrowing''. Would that not be a wonderful day?
(1525)
I should not mention my son, so I will not, but it is as if when he
got a speeding ticket for going 80 in a 60 zone he said to the officer
that from now on he would only go 75. It would not wash. If the
speed limit is 60, he should be going 60. It is not sufficient to
reduce it just by a little bit. It is the same thing with the borrowing.
It is not acceptable until our borrowing has stopped, until our
budget is balanced and our deficit is zero. That is the only
acceptable goal.
I do not know why this government has been so unwilling to
state a definite target date to aim for on that and to actually reach a
goal that it has set instead of these wishy-washy, floating, moving
targets that the government may reach if everything goes well and
if it does not go well it will happen more slowly. I am distressed
with that and the politicking that goes on while Canadians in
general are going into debt and are being asked to pay $500 a
month per taxpayer just for interest. That is not acceptable.
In conclusion, I am someone who is committed to doing my part
in government. It is incumbent on all of us to spend the taxpayers'
money as though it were held in trust, to spend it as though it were
our own, to be careful and frugal. It is incumbent on all of us to do
everything we can in order to eliminate the deficit, to stop the
borrowing, to start reducing the amount we owe, reducing the
amount of interest that is payable, reducing taxes and giving that
boost to the economy that would provide jobs and dignity to people
who are currently unemployed. Our country would be in so much
better shape.
Mr. Alex Shepherd (Durham, Lib.): Mr. Speaker, I would like
to ask some questions and make some comments on the speech by
the hon. member for Elk Island.
There is this concept, which is also part of the motion we are
debating today, that somehow the Canadian taxation system is not
fair. In fact I heard the hon. member start off with that in the first
part of his speech.
I would just like to comment on the fact that recent statistics, if
we study them, show that the top 30 per cent of Canadian taxpayers
are paying 66 per cent of the total of all taxes in this country. We
have a system in Canada which is called progressive taxation so
that the more one makes the more one pays. The reality is that our
system has been regarded as fair and progressive from years back.
It is also part of the Bloc motion that we are somehow taxing the
4756
poor and letting the rich off. This just is not borne out by the
statistics of reality.
I would like to address some of the issues that have been brought
forward by the Bloc motion and which have also been mentioned
by the hon. member.
Our system of taxation is based on voluntary compliance. What
voluntary compliance means is that 13 million taxpayers agree to
file their tax returns every year and have them assessed by Revenue
Canada.
(1530)
This is a process which is accepted in western democracies. It is
a very efficient system. In a sense it is based on the honour system.
There are some internal controls and some checks and balances but
basically it is run on the good wishes and goodwill of taxpayers.
There is one big feature about that. When people file their tax
returns they believe they are confidential. I would like to take the
opportunity to read the section of the Income Tax Act which
addresses this matter. I would be interested in the member's
comments on it.
It states concerning the provision of information in section 241:
``Except as authorized by this section, no official shall knowingly
provide or knowingly allow to be provided, to any person any
taxpayer information, knowingly allow any person to have access
to any taxpayer information or knowingly use any taxpayer
information otherwise than in the course of the administration of
the enforcement of this act, the Canada Pension Plan Act and the
Unemployment Insurance Act''.
The purpose of this is to give people assurance that when they
send their information to Revenue Canada that it is confidential.
This matter that has been brought forward by the Bloc today, and
I would be interesting in the member's comments-
The Speaker: I wonder if the hon. member would perhaps let
the hon. member for Elk Island answer some of the questions that
have been raised. I would not want it to be all questions and no
answers. I will go to the hon. member for Elk Island and if we have
time I will come back.
Mr. Epp: Mr. Speaker, I guess in principle we have a reasonable
tax system in this country. I would agree with that.
It is not working the way it ought to work. As the hon. member
mentioned, and I hope I heard him correctly, there are a lot of
people, at least our perception is so, who earn an awful lot of
money who pay little or no tax. Then of course there are those
people who make very little money who pay little or no tax, but the
bulk of the tax burden is on the middle wage earner and we pay
dearly.
Every one of us, even without being able to go into the tax
records of others, can think of examples of people who are very
well off. I remember when my wife and I were first married, which
is now over 35 years ago, we had a reasonable mid-sized car, some
borrowed furniture when we were first married, and I had to pay
my taxes. In fact, it was deducted from my earnings every month. I
was making a little over $400 a month and $35 a month, as I recall,
went to the tax man.
We developed a friendship in the new town in which we lived
where there was a couple who were very well off. He drove a large
luxury car. They had a beautiful home with all the newest
furnishings. He told me that he did not pay any tax ever because he
was a successful businessman. He was able to write all of this off. I
objected to it at the time. I said I did not think that was fair. He said:
``I'm only using the tax rules. I am not doing anything illegal''.
There is one example.
A much more recent example has to do with the MP pension
plan. When Reformers came here, we said and we were directed by
our voters, that the members' pension plan is too rich. It costs the
taxpayer too much relative to how much we personally put in. On
principle we said we wanted out.
The day I went to do my payroll stuff when I was first elected I
asked: ``Can I opt out of that plan?'' I was told that I could not. Two
years later the government tinkered with the legislation and
included in it a small window of opportunity for those who felt
strongly about it to be able to opt out. The unfairness was that for
two years we were cut out of RRSP room because we were forced
to be in this plan, but when we got the money back we had to pay
income tax on the whole amount and were not allowed to roll it into
an RRSP equivalent to that same amount. That is an unfairness in
the tax system. I think it is a very serious unfairness to me
personally. There are many others who would not share that great
concern.
There are those inequities. They need to be fixed up. I really
believe that the motion before us is an indicator of an unfairness in
the system where some individuals can earn large amounts of
money and through one method or another can avoid paying their
fair share of tax on it. That needs to be corrected.
(1535)
The Speaker: We have about a minute left, perhaps about 30
seconds, for a very brief question.
Mr. Shepherd: Mr. Speaker, I do not think he really addressed
one of the questions I posed to him. The Bloc Quebecois is talking
in its motion about revealing taxpayers. How does the member feel
about the Bloc's attitude about revealing the identity of taxpayers
as they also proposed in their motion before the finance commit-
4757
tee? In other words, expose taxpayers to possibly a witch hunt
much like Nixon did in the United States when he chased after
political enemies. Does he agree that is an acceptable process?
Mr. Epp: I certainly agree with the hon. member that
confidentiality in the tax reporting system is valuable, particularly
for businesses.
It guards commercial security and information which I think is
right. But I still believe it would be quite fair for us as ordinary
Canadians-I still consider myself to be one-to know exactly
what we need to do in order to earn large amounts and not to have
to pay tax on it.
The only group I know of that can really get away with it right
now-I hate to repeat this-are members of the MP pension plan. I
have made some calculations. The amount one would have to put
away in order to provide that is several thousand dollars a month.
In all practicality it is a deferred income scheme. It allows MPs to
take part of their earnings now and receive them later at which time
they would be taxable. That is not available to other Canadians.
The question the Bloc has raised today is an issue based on the
same principle. Here is something that is available to one group of
Canadians. Why is it not available to another group of Canadians?
That is the part that we would like to see clarified.
Hon. Jane Stewart (Minister of National Revenue, Lib.): Mr.
Speaker, let me say how much I welcome the opportunity to discuss
this motion as it has been presented to the House and to shed light
on the real and substantive issues that the case before us demands.
The members of the opposition have really gone out of their way
to distort the issues, to confuse the Canadian public. What they
forget to say time and again is that this decision was a decision
made by the former government, the Tory government in 1991. It
was brought to our attention by the auditor general and now we
have to deal with it and ensure that the integrity of the tax system is
maintained and improved. That is what the opposition forgets to
talk about.
The other thing it forgets to talk about is that we did take action.
When the auditor general brought this to our attention we
responded immediately to the issues and presented them to the
finance committee for review. It is a very public body with
members from all the elected parties in this House that represent
this country from coast to coast to coast.
The opposition members forget to talk about the fact that we
have actually acted on the results of that committee report, that we
are making changes, that we are committed to having a fair and
equitable tax system.
The thing they continue to talk about, the myths they continue to
perpetuate are these. They think that if they keep repeating the
words family trust and scandal over and over again they can make
something out of nothing. But in fact this topic has nothing to do
with family trusts, nothing at all.
I sat on the finance committee with the member who proposed
this motion, the member for Saint-Hyacinthe-Bagot. When we
focused specifically on the issue of family trusts, we heard
witnesses, we talked to experts, we listened to testimony, reviewed
the implications and made recommendations to the Minister of
Finance how we should change family trusts in this country. The
Minister of Finance read that report, as he reads all the reports of
the finance committee, and in fact went further than our
recommendations to deal with that particular tax strategy.
(1540)
In fact, the government, in response to the issue of family trusts,
has eliminated the election to defer the 21 year deemed disposition
rule which was introduced by the Tory government. It is gone. It is
not part of the legislation any more. We did that. It is gone.
In addition, the government eliminated the preferred beneficiary
election for trusts. This ensures that trust income cannot be
arbitrarily allocated to a beneficiary instead of being taxed at the
trust level just because the beneficiary is at a low marginal income
tax bracket. That has all been changed. Family trusts have been
dealt with.
I was part of the committee. The Bloc member who has proposed
the motion to the House and who keeps talking about family trusts
was there as well. He knows that these changes have been made. I
want to assure Canadians that they can have confidence in the
system and that that tax loophole does not exist for the advantage
of the wealthy any more.
In addition to making the changes to family trusts, the
government has gone even further in terms of increasing the
fairness of the tax regime. In fact, we have tightened the rules on
tax shelters. We have improved our large business audits. We have
eliminated the $100,000 capital gains exemption. We have
introduced draft legislation to strengthen the reporting of world
income in order to prevent the use of offshore tax havens and the
evasion of taxes.
The Minister of Finance mentioned last week that he has
implemented to date 30 different improvements to the Income Tax
Act to make it more fair and equitable. That is the kind of
government we are. We are improving fairness to ensure that all
Canadians have appropriate opportunities to make their
contributions and to benefit from the taxes which they pay.
This is not about family trusts. I cannot say that more
emphatically. What this issue is about is how we tax the property of
Canadians who emigrate and how we tax the property of people
4758
who are not Canadians but who hold Canadian property. It is about
the thing we call taxable Canadian property, that is, and let us be
clear, property that remains taxable in Canada even though the
owner may not live here and may not reside in the country. Taxable
Canadian property is an extremely complicated notion. It is an
extremely complicated aspect of the Income Tax Act.
As the Minister of National Revenue, I received the report from
the auditor general on this topic. As I read the chapter I took it very
seriously. I met with the auditor general for three hours to go
through, line by line, his concerns as written in the report. We
began by talking about his concern of how the department ruled on
the issue of taxable Canadian property. He talked to me about the
fact that he understood the complexity of the legislation. He
understood that, in fact, it is very unlikely that any law had been
broken. He was asking whether or not the ruling was reflective of
the intent of Parliament when it drafted the legislation.
He was not suggesting anything inappropriate. He was not
suggesting anything illegal. He was suggesting that in the ruling we
may have highlighted something which needed to be drawn to the
attention of the House for its consideration.
That is particularly an issue for the Minister of Finance. It is an
issue of policy, not of administration. I met with the Minister of
Finance and suggested that an appropriate response to the auditor
general in this regard would be to send this part of the Income Tax
Act to the finance committee for a full and open review. That is
what we did.
I would like hon. members to understand that this was the first
time in 25 years that this part of the act had been reviewed. It was
timely. It was appropriate. The finance committee reviewed it in its
fullest context. They had expert witnesses who are credible
internationally look at the circumstances, to review the decisions.
Six out of the eight said there was nothing inappropriate in the
decision, that the ruling was correct as the law is written.
(1545)
The finance committee looked at it and asked: ``Is this really the
way we want things to work in Canada or should we make changes?
Is it time to make changes? Should we clarify our intentions?''
Members of the committee made some very clear suggestions to
the Minister of Finance that he is now reviewing and considering
and will act on in due course.
There was a second concern which was raised in the auditor
general's report relating to this topic. The concern spoke directly to
my responsibility as the minister of revenue. He talked about the
way in which the ruling proceeded. He gave the dates, the timeline.
He indicated that he was confused about where and when and by
whom the decisions were made. As I read the report I was
extremely concerned.
In the course of the three hour discussion I had with the auditor
general I asked him if he was suggesting that there was political
interference in this case and was he asking me to investigate
political interference. He responded: ``I have no reason to doubt the
integrity of your department''.
We went on and discussed the issues he was concerned about. He
was concerned that there was no documentation which directed my
attention to how the decision was made. It was not clear, not full in
its nature. We must have that kind of documentation if we are going
to have a fair, open and transparent system. I immediately agreed
with the auditor general and I immediately directed my officials to
ensure and build a new plan of action to be implemented
immediately to ensure that documentation of all our decisions was
clear, full and made available when requested. That was an area of
real concern.
The auditor general expressed his concern about consistency,
highlighting the particular example of the matter where an opinion,
not a ruling, was given in another part of the country on a similar
topic at a different time which was different than the ruling in 1991.
He indicated some concern about the consistency of decisions
within my department. Again I agreed and said that we must have
consistency. Canadians must be able to rely on the rulings. No
matter where they are they must get the same answer from the
department when a similar question is asked.
As a result and subsequent to 1991 the department has made very
credible changes to the way we operate, primarily using technology
so that all the rulings and opinions are listed in a data base which
can be accessed. Now any department officials who are making
rulings can refer to the data base, see what decisions had been made
in the past and ensure that there is consistency and integrity in the
responses given to Canadians.
Third, he was concerned about the transparency of our decisions.
He was concerned that we made decisions and then did not
publicize them for the broad benefit of all Canadians. We changed
that some time ago. Our concern originally was with the integrity
of confidentiality which we must maintain for all Canadian
taxpayers. We must ensure that every individual's details and
circumstances remain with us and are not exposed to broad public
review. When we get these rulings we have to sever them and
present them publicly in a way so that there is no connection
between the individual tax filer and the decision. We have found
ways of doing that and we have implemented that strategy in our
day to day process.
When we look at the issue there are really two sides to it, one of
policy which was dealt with very effectively by the Finance
committee. It has made recommendations to the minister and he is
considering them.
4759
(1550)
The second area was administration. The finance committee
decided on its own to look at those issues, to hear from witnesses,
to talk to the auditor general, his assistant, the deputy in my
department and the deputy of finance to talk to them about that
system of decision making. Their conclusions were the same as
those of the auditor general. In fact, the auditor general when
questioned in the public accounts committee said: ``I have never
had the occasion or the need to ever question the integrity of senior
officials at Revenue Canada'', a reiteration of what he told me. In
the finance committee the assistant auditor general said: ``We have
seen no evidence of bad faith and we have seen no evidence of
wrong doing''.
Committee members heard that testimony and reported to me as
the minister that they saw no evidence of scandal. The only people
talking about scandal reside in the opposition. All they talk about
are these two things, family trust and scandal. They are not part at
all of the discussions presented to me by the auditor general.
I would like to take the opportunity as we are discussing the
integrity of the tax system to tell members a little more about what
we are doing in Revenue Canada to respond to the needs and the
wants of Canadians. Most recently, my department is undertaking
the largest re-engineering project in Canadian history. There are
40,000 employees in 800 offices across this country engaged in a
structural change that will bring together two very separate
organizations.
Traditionally in my department the tax side was distinct, the
customs side was distinct. They had their own deputy ministers,
their own policies and procedures, their own penalties and interest,
their own publications, all quite separate. As a result of changes
made by my colleague, the former minister of revenue and now the
Minister of Transport, we have redesigned our whole department.
We have brought the sections together under one administration
and that is contributing to a savings of $300 million to the
Government of Canada and the taxpayers. Together we are
providing a system that is going to give the Canadian public a real
competitive advantage.
I was in the United States in March and met with 500 exporters
and importers. I said to them that they had to understand that in
Revenue Canada I have responsibility for what is effectively their
IRS, their customs administration and their trade administration.
They sucked in their breath. They could not believe it. I said yes,
and you could not do that in the United States but because of the
way we have organized ourselves, because of our size we could
bring and house these separate entities together so that our citizens
can contact the government more effectively and efficiently.
This whole issue of horizontal management becomes real and
alive. Canadians no longer have to call and someone says ``I am
sorry, that is someone else's business''. In my department
everybody can respond to those issues: a single window. That is
what
Canadians want. They want effective government, a government to
respond to them as citizens, to provide that service, and that is what
we are doing. It is a tremendous challenge but the employees of
Revenue Canada are rising to that challenge.
Today the auditor general in his report completed a whole
chapter talking about our administrative consolidation. He praised
us for the approach we have taken. He praised us for the
contribution that change is going to make to the fairness and
effectiveness of the system, for the return to the taxpayer. He
indicated that our activities should be a model for other
departments and agencies.
It is a pleasure for me to receive that report and to say to the
employees who are in the service of the Canadian public in my
department, thank you. You are making a difference to the way this
government responds to Canadians, to the way we are serving the
Canadian public. It is real and it is tangible.
More specifically, there are other things that we are doing on the
revenue administration side.
(1555)
Members will know that different tax regimes were developed
individually in their own silos, the personal tax structure, the
corporate tax structure, the consumption tax structure; all separate,
all with their own penalties and interests, all with their own
management teams.
We are breaking that down as well so that we can now look at a
Canadian citizen, a Canadian business as an entity. They do not
have to deal with Revenue Canada with four business numbers. We
can look at them in total. Their tax positions can be understood
completely by us.
That is a real competitive advantage. It is a responsive, positive
change in the way of doing business. On the customs side, the same
thing is happening. Very effectively, we are now moving to
understand that we have to facilitate effective trade to let the good
things pass through our border quickly and efficiently. But by
golly, to keep the bad things out, firearms, drugs, people we do not
want in our country, we have to have a smart border.
Our strategy is to maximize the potential of our employees, to
use new technologies, to build partnerships with the private sector
and yes, with other levels of government and other governments to
provide Canadians with the most competitive revenue and customs
administration they can possibly have.
I am very proud of the work of my department. I am very proud
of the response that my department took to these issues directed to
us by the auditor general. I want to make clear to the Canadian
public that the opposition is full of political huffery and puffery on
this item.
4760
Again, it is not about family trust. We have dealt with that
effectively. It is not about scandal. There is no indication of
scandal. What this is about is our government's taking efficient,
effective, immediate action when concerns are drawn to our
attention. It is about a government that believes in the fairness and
equity in the tax system.
It is a government that believes it can make a difference and will
make a difference. It will provide Canadians with the tax regimes
they deserve.
Mr. Philip Mayfield (Cariboo-Chilcotin, Ref.): Mr. Speaker,
I very much appreciate the comments of the minister. There is
another side to this. She mentions there are two sides to the
argument. I intend to follow that for just a moment.
We have listened to the minister and other members of the
government side speak of the due diligence they have paid to this
problem in the revenue department. We have heard the chairman of
the finance committee mention how they have called witnesses.
They have invited the opposition parties to call more witnesses.
They have looked at it as thoroughly as they could in depth.
There has been a lot of talk, talk, talk about this issue. I am
pleased they are coming to some resolution. The issue is not
entirely family trusts. In my mind the issue related to that which is
perhaps more important is government accountability. To whom is
it accountable?
There is a disturbing trend. For example, as legislation is being
amended I hear members of the legal community saying that one of
the concerns that they have is that the government is seeking less
and less accountability in rather small and obtrusive ways.
For example, little words like ``shall'' are being modified to
``may'' where there is less accountability, and phrases like ``in the
opinion of the minister'', which is not challengeable in any court
because how does one challenge someone's opinion?
Relating to the issue of revenue generation and family trusts, and
going one step beyond that, I have seen how the government has
looked carefully over a long period of time at this issue, but there
are other instances also.
For example, when a farmer took a truckload of grain across the
border, he was taken to court. There is nothing wrong with that.
When the judge said there is nothing wrong, the regulations were
changed in a flash. It did not take weeks and months and years. The
government acted immediately.
(1600)
Another example: Shortly after this Parliament convened after
the election, we were confronted by a crisis of smuggling tobacco
products. What happened? The government acted very quickly by
lowering the duties collected on tobacco products and dealt with
the smuggling problem in this manner. It acted very quickly. The
consequence of that however is there are thousands of young
people now involved in smoking. They have taken up this highly
addictive habit and face years of suffering trying to get away from
it. The medical costs of caring for them later on have not been
calculated but they will be high.
The difficulty is not simply family trusts, it is government
accountability and to whom it is accountable. Is it willing to be
accountable to the law as all citizens are, or is it seeking to be less
and less accountable? It is my contention that this is the case.
In this instance the Liberal government has spent a long time
talking about the issue. I will be interested to see exactly what the
outcome is. Hopefully it will be that large family trusts will not be
able to leave the country without paying due taxes as the rest of us
do.
The government is quite properly looking to claim all legitimate
revenues. Forms are being sent out to people to tell stories about
other people who may not be paying their taxes, who may be
escaping their taxes through the underground economy. Are we
asking our citizens to be stool-pigeons while other people are quite
legally removing their money from the country? There is a matter
of fairness that Canadians really object to.
These are the concerns which I have as I talk about government
accountability. I ask the minister if she would please respond. Is the
government prepared to be accountable in all areas, or simply in
the areas where it is most convenient for it?
Mrs. Stewart (Brant): Madam Speaker, let me say that yes
indeed the government is prepared to be accountable in all aspects
of its responsibilities. When we talk about accountability I would
like to share with the House something else we have done in the
department which responds directly to the member's concerns.
It is only fair when we ask Canadians to open their books to us as
we collect their taxes and look at their position, that we do the
same. As a result of that I have asked my department to take the
time to prepare on the basis of an internal audit, reports for this
House, for members opposite and for their constituents on the
different programs we take responsibility for.
Most recently we did a full report on the tax filing year that
indicated the positives, the fact that people are getting their refunds
much faster now as a result of E-mail and other changes to our
system, that we have implemented new strategies like E-filings,
telephone filings which make sense to Canadians and respond to
them. At the same time this report identified areas of weakness
where we have to make improvements and respond more directly to
Canadians.
4761
Most recently we have issued our second report, a report on the
child tax benefit. The hon. member may be interested to know that
the newest line of business in Revenue Canada is providing
benefits to Canadians, returning revenues back to Canadians as
appropriate: the issue of the child tax benefit and the GST credit
for example. We have done a review of our child tax benefit
program and strategy. We have found aspects that are very positive
about it, but aspects that yes indeed we have to improve.
These are the kinds of measures this government is taking to
respond to the concern of the hon. member in the area of
accountability.
(1605 )
Mr. Ken Epp (Elk Island, Ref.): Madam Speaker, we are
privileged to have the minister here responding to the motion and
answering questions. I thank her for her very lucid communication.
I commend her for her style of speaking.
She indicated that this particular issue which has been brought
up by members of the Bloc has been solved by her department, that
the loophole has now been closed and that it is no longer permitted.
I presume if the same attempt were to be made now, the tax revenue
would not be forgone by the Government of Canada.
Was there an attempt made to reassess the tax payable on the
amount that was taken out of the country?
Mrs. Stewart (Brant): Madam Speaker, I should clarify a
couple of things.
The concerns of the auditor general were really two. One dealt
with policy: the issue of taxable Canadian property; how we apply
it; how we should not apply it. The other was the issue of deemed
disposition and when taxes should be paid on Canadian property.
Those issues were reviewed by the finance committee and
recommendations were given to the Minister of Finance, whose
purview it is to deal with the policy of the Income Tax Act. He is
currently reviewing them. As he does, I have in my department
maintained a moratorium on rulings of taxable Canadian property.
It is only appropriate and prudent that we give the minister time to
make those considerations and ensure that the issues do not come
before my department simultaneously. We want to ensure that the
intentions of the members of the House and their concerns about
this particular aspect are reviewed, given a full airing by the
minister and then, when he makes his decisions, we will again
return to the normal process of rulings, given the changes to any
legislation.
Beyond that I would say we have taken further action on the
administrative side. Very clearly the auditor general and the
committee were concerned about three things: the transparency of
our decisions; the consistency of our decisions; and the
documentation which we have in our files around all the decisions
we make. I am glad to confirm to the House and to all Canadians
that we have taken action in all three of those areas, as I indicated
in my speech. I believe that should add comfort and assure the
integrity of our taxation system.
[Translation]
Mr. Pierre de Savoye (Portneuf, BQ): Madam Speaker, it is a
pleasure to address the House this afternoon on the controversial
topic of family trusts, and, more particularly, of the auditor
general's report.
There is no getting around the fact that it was very ill-considered
of the finance committee, which is obviously controlled by the
Liberal majority, to have criticized the auditor general and his
report, because the auditor general is an institution that must, at all
times, be above criticism.
I appreciate the fact that the minister recognizes that the auditor
general is doing a good job. Beyond the fact that I know that the
minister is the soul of honesty, I must say that the scheming that
has come to light in her department and that she says she is trying
to rectify, is not going to encourage the public to have great
confidence in the federal revenue department.
Beyond the technical considerations the minister laid out earlier,
the fact still remains that the average citizen does not necessarily
have great confidence in the federal tax system. If you met a
businessman anywhere in this great land and you asked him
whether he was treated fairly by the tax system, I am not sure you
would find him very enthusiastic. On the contrary, he would point
out a number of situations that he finds disgraceful, a number of
measures that he finds unfair.
(1610)
And even if we were to give him a technical explanation for
certain situations, he would be no more convinced.
When average citizens, the men or women who work five days a
week, who have families to raise, file their tax returns at year's end,
do they think they are being asked to pay their fair share of taxes, or
do they think they are being asked to pay more than the more
fortunate members of society?
So you can understand that when the auditor general tells us that
a rich family, with the help of what is known as a family trust and
by means of tax provisions permitting money to be moved out of
the country, has used these tax rules to shelter a sum of two billion
dollars from taxes, average citizens do not understand. They do not
understand why the act allows something like this to go on while
they must pay every last cent of taxes they owe.
You will agree with me that they have reason to worry. The
legislative tax measures that are in place and that are administered
by Revenue Canada cannot be justified solely from a technical
4762
point of view, but must also demonstrate respect for this country's
citizens, whatever their income.
Basically, the problem is that people who have money are able to
get the technical expertise they need to find legal ways to save on
their income tax. Technically speaking there may be nothing
wrong, but the fact remains there is something distinctly immoral
about this.
The average person is not in a position to say, with a big smile,
that everything is okay because it is legal, because all the rules and
regulations have been observed and the experts said it was all right.
How can you make it morally acceptable to someone who earns a
modest weekly wage and pays provincial and federal income tax of
up to 20, 25, 30, 35 or 40 per cent and more, that someone can take
two billion dollars, transfer it to the United States and not pay a
cent of income tax? That is hard to swallow.
For the benefit of the minister, I will tell you about a letter I
received a few days ago. It was from a woman in Saint-Raymond,
in the riding of Portneuf, a woman with a family, who last year had
a job under a program managed by Human Resources
Development, commonly referred to as DEPS and section 25s.
(1615)
I hope the minister will listen for a few moments, because I think
the situation will interest her and help her understand why some
people feel the family trust issue is particular shocking.
This woman, who worked under a job readiness program of
Human Resources Development for many months, hired a
babysitter so her children would be looked after at home. Instead of
paying this person under the table, thus making her work illegally,
she paid her a reasonable amount so she agreed to give her name
and this woman from Saint-Raymond could claim child care
expenses as a tax deduction. In other words, she acted like a law
abiding citizen so she could claim this deduction.
But there is a problem because the money to pay for her salary
comes out of the Unemployment Insurance Fund. So she is not
entitled to this deduction. So, imagine, this woman who spent more
to avoid hiring someone illegally was denied the deduction to
which all other workers who have a job are entitled.
There are numerous technical reasons, and the minister will
agree, for which this woman is not entitled to that deduction but
fundamentally, morally, and I hope the minister is listening
carefully, that woman feels very angry and frustrated and is
disappointed by a tax system she finds unfair.
That is what is outrageous. On one hand, the auditor general tells
us that a wealthy family was able, through a family trust and with
rules on taking money out of the country, to shelter $2 billion. This
is three times the cost of the disaster in the Saguenay. That is a lot
of money. Three times the cost of the disaster in the Saguenay: $2
billion.
On the other hand, this woman I just talked about is losing the
equivalent of $1,000. I realize my time is running out but I believe I
have demonstrated that what is outrageous is not that some things
are legal but that the law has more consideration for the rich than
for the poor.
I hope the minister will be able to address this situation as soon
as possible.
Mr. Michel Guimond (Beauport-Montmorency-Orléans,
BQ): Madam Speaker, I am pleased to speak to the Bloc
Quebecois' motion on this allotted day, particularly as I am
Chairman of the Standing Committee on Public Accounts.
I believe it is our duty, when we have the floor, to put things in
perspective, so that our listeners can understand what we are
talking about.
On May 7, 1996, the Auditor General of Canada, Denis
Desautels, tabled a report. Under an Act of this Parliament, the
auditor general is expected to submit three reports each year. In this
report, one chapter in particular caught our attention, not only the
attention of the official opposition but also that of all the members
of the Standing Committee on Public Accounts.
Let me explain. I am talking about Chapter I, entitled ``Other
Audit Observations''. This is a kind of catchall, not so much in
terms of its content but because it contains a variety of
observations.
(1620)
This chapter described two particular cases. The auditor general
had examined two particular cases relating to the transfer of assets
from one family trust to another family trust in the United States.
The figure was astronomical. The principle would also have been
unacceptable had the figure been smaller, but the very fact that it
was a tax-free transfer of $2 billion made it even more so.
The Standing Committee on Public Accounts met, as it does
each time the auditor general tables a report, and as it did today, in
fact. In committee, we try to determine which priorities we should
look at, study and call witnesses about.
You will understand that the official opposition wanted to study
these two family trusts quickly, I must stress this fact, right from
the beginning, as the Chairman of the Standing Committee on
Public Accounts, the only committee to be chaired by a member of
the opposition. The rules of our democracy entitle the official
opposition to chair that committee which acts together with the
auditor general. This committee monitors the government and the
4763
different departments to ensure, for Canadian taxpayers, that their
taxes are being spent efficiently. In fact, such is the role of a state
where taxes are collected. We pay the taxes and we make sure that
we get our money's worth.
We wanted to examine this issue on a priority basis and that is
why we, in the official opposition, decided it warranted further
debate in the House, because we were unable to find out in detail
what really happened in these events we now call a scandal. This
term was not necessarily chosen by the official opposition. The
Parliamentary Secretary to the Minister of National Revenue said
that the government members do not like to hear us using the word
``scandal'', but we are not the ones who first used this term. It was
first used by neutral and independent reporters who happened to
examine the case. We could quote Martin Leclerc, from the Journal
de Montréal and the Journal de Québec; we could quote Gilles
Gauthier, from La Presse. They are not in the pay of a specific
party. They were the ones who said this situation was outrageous,
that it did not make sense.
We can tell you that, again today, as a result of delaying tactics,
the official opposition is not in a position to do its job properly
because, as we speak, we cannot find out what really happened.
As my colleague, the member for Portneuf, was saying earlier,
we have a few questions of our own. Why, when it is time for two
rich families to transfer, tax free, $2 billion, are all the officials, all
the senior officials at Revenue Canada available to meet with them,
help them win their case and proceed with the transfer?
This is what worries us about the 1991 decision. It was handed
down on December 23, 1991. If there are questions or comments
later on, I already know that Liberal members will say: ``This did
not happen while we were in power, it happened under the
Conservatives''. Quite true. Nice try. Indeed, the Liberals were not
in power in 1991, but they will not be able to get away with what
was made public today by the auditor general in his report.
Revenue Canada is going to have to account for $630 million worth
of tax evasion. The auditor general mentioned that this is due to a
lack of auditing of major oil companies and the tobacco industry;
$630 million in 1994-95 alone.
(1625)
This means that the Liberals' argument that they were not here in
1991 still holds. However, what practical steps have they taken to
close the door?
The Liberals want us to stop reviewing chapter 1 of the auditor
general's report, claiming that the Standing Committee on Finance
has already done so. They want the Standing Committee on Public
Accounts to work on something else. I know some members here in
this House could say: ``Yes, but the committee agreed to hold only
one meeting on family trusts''. Maybe the Liberal majority
members are smarter than I, but, as I said to the Standing
Committee on Public Accounts, I do not feel that one single sitting
is enough to shed light on what really happened on December 23,
1991.
Because we, the members of the official opposition, have always
believed in the institution personified by the Auditor General of
Canada, we also find it unfortunate and deplorable that the
Chairman of the Standing Committee on Finance and member for
Willowdale tried twice to discredit, to corner, to trip up the auditor
general and his colleagues. He never assumed such an attitude
towards the Deputy Minister of Finance, Mr. Dodge, or the Deputy
Minister of National Revenue, Mr. Gravelle. This is what we call
double standard. Instead of showing some respect for the Office of
the Auditor General of Canada,an independent and democratic
institution that has no political ties, he chose to play party politics.
The member for Willowdale is well-known for the way he
conducts the proceedings of the Standing Committee on Finance.
As Chairman of the Standing Committee on Public Accounts, I do
not need the member for Willowdale and Chairman of the Standing
Committee on Finance, telling me what to do.
The fundamental issue is the issue of the accountability of senior
officials. This is regrettable, but I must tell you that the question of
accountability of senior civil servants will not be studied by any
parliamentary committee. The Standing Committee on Public
Accounts, of which I am a member, will not be able to do it in one
single sitting any more than the Standing Committee on Finance
did. In a democratic society, it is of considerable concern when
people are not accountable for their actions and their decisions.
We will never know neither the circumstances which led to the
transfer out of Canada of $2 billion, tax free, nor all the reasons
surrounding these improprieties. I am not the one mentioning
improprieties in this context, it is the auditor general.
To conclude, if we go beyond this case, it is the whole process of
external audit of the government which has to be reviewed. Maybe
Liberals are longing for the time when they were in opposition.
They were more aggressive then, more lively, perhaps, and they
will probably be there again after the next elections. The only
committee chaired by an opposition member is being side-tracked
despite its formal mandate to study the auditor general's report.
The auditor general is under attack and will not have any forum to
defend his indictment of this government, if the Standing
Committee of Public Accounts is not able to shed light on this
question.
I will conclude by saying that this is a frontal attack on the
principle of government accountability to Parliament.
4764
[English]
Mr. George S. Baker (Gander-Grand Falls, Lib.): Madam
Speaker, I listened carefully to the hon. member from the Bloc. In
its position as the official opposition to the Government of Canada,
the job of the Bloc is always to hold the government accountable.
Its job is to ensure that any legislation coming before the Chamber
will be accountable to the people of Canada. In particular, its job is
to watch the public purse. In particular, the Bloc motion states that
the government is opening the door to other capital transfers that
will deprive the federal government of hundreds of millions, and
possibly billions, of dollars every year.
(1630)
I cannot understand the Bloc political party. Only a year ago the
transfer of money across the border to the United States was under
discussion in the committees and in this Chamber. Changes were
suggested to the tax treaties between Canada and the United States.
The general public has to understand that these are reciprocity
agreements which apply to Canadians and Americans.
A suggestion was made by the Senate banking committee in the
form of a bill that came to this Chamber eventually. This political
party was asked to pass judgment on a major change in tax policy
that would mean a reduction in the withholding tax on
multinational corporations that sent their money from their
subsidiaries to their parent company in the United States. Do you
know what the Bloc said, Madam Speaker? The Bloc said on page
14707 of Hansard that it was a wonderful thing because now our
capital could freely flow into the United States.
I ask the hon. member to justify his position in view of what he is
saying today. Here is what was said at page 15541 of Hansard:
``The bill does not specifically say how many millions and billions
of dollars are at stake in this protocol. We do not know which
country, Canada or the United States, will benefit the most from
this tax liberalization protocol but we support these proposed tax
changes''.
How does the hon. member support the position of the Bloc
when it supported the movement of capital out of this country and
at the same time put in the words of this motion today and present
this picture to the people of Canada?
[Translation]
Mr. Guimond: Madam Speaker, in Quebec, when the Canadian
Broadcasting Corporation gives us the time programs will start, it
always says ``one hour later in the maritimes''. That is confirmed
by the statements of the hon. member for Gander-Grand Falls,
one hour later in the maritimes, but he did not make any relevant
comment on the issue.
I would like you to ask the Speaker if he would be kind enough to
send me the page in Hansard where I spoke on this bill. I cannot
recall saying what the member says I did. It could just be my
memory, but I really do not recall saying that. But there is one thing
I remember saying and I have repeated it. What we want, and the
hon. member did not understand that, is to shed some light on what
really happened on December 23, 1991.
[English]
I will mention to the hon. member that I worked 14 years for
Abitibi-Price. That company had a paper mill in Grand Falls,
Newfoundland, in his riding. I ask the member, when he returns to
his riding this weekend, to ask the paper maker, the guy who works
in the boiler room, the guy who works in the chip mill if they
accept the fact that the rich can move $2 billion U.S. without
paying income taxes. Is it normal, is it acceptable to the paper
maker in the Grand Falls mill?
(1635 )
Mr. Barry Campbell (Parliamentary Secretary to Minister of
Finance, Lib.): Madam Speaker, it is a pleasure to be sharing my
time with the hon. member for Renfrew-Nipissing-Pembroke,
the dean of this House.
It is time to ask what is really going on here. What is the real
motive behind the Bloc Quebecois' fascination with this issue?
When smart people do odd things, it ought to make a person
suspicious. I am just a little suspicious about the motives operating
here.
It cannot be that the Bloc wants to embarrass the previous
government. That is a rather bizarre thing, not that I object.
It cannot be that the Bloc believes that the government has not
acted on the auditor general's recommendations because it has
done so. First, there was a moratorium on additional tax rulings;
second, a referral to the finance committee; third, a very serious
piece of work from the finance committee and, from that will
undoubtedly flow action on the recommendations of that
committee.
This fascination of the Bloc cannot be because its members think
we have not responded in a timely fashion. We have.
The fascination cannot be based on some perception of
interference or wrongdoing in the decision making process because
the auditor general has admitted that there was no such thing.
The fascination with this issue cannot be because there is
something wrong in taxpayers seeking advance tax rulings on
complex transactions. As they well know, the auditor general in
previous years has reviewed and praised the advance ruling
process.
If the taxpayers in question wanted to do something untoward,
wanted to get away with something, they certainly would not have
4765
come to Revenue Canada and asked for a tax ruling. I suggest that
they would have done it.
One of the reasons the auditor general praised the tax ruling
process was that it provided, if you will, a heads up to Revenue
Canada about transactions and actions out there so that Revenue
Canada would be right up to date on the things that were
happening. This taxpayer talked to Revenue Canada. He or she did
not have to do that.
The fascination of Bloc members can be understood. It is not for
any of the reasons above. It is because of who they believe the
taxpayer is. Maybe it is someone rich, they say. Maybe it is an
anglo. Maybe it is an ethnic. We can draw a lot of lessons from
their fascination with this issue.
What lessons can we draw from the way the Bloc has handled
this matter about the kind of society it would build in Quebec? Let
me tell members. Based on its performance on this matter, its
members would build a society in which being successful would
bar a person from fair treatment.
They would build a society in which there would be no taxpayer
confidentiality. They would build a society in which envy would be
the basis for policy, a society led by accountants that envy,
bookkeepers of offence, measurers of science. What kind of
economy would be left in Quebec in that environment?
What kind of society would they build? Based on the Bloc
Quebecois' minority report on this issue, I will say what kind of
society it would be building: a society in which expertise and
experience is dismissed if someone's opinion disagrees with its
ideology.
In their minority report, Bloc members dismiss out of hand the
seven out of eight tax experts who appeared before the committee
and concluded that the opinions Revenue Canada provided, based
on the law and regulation as it then was, were incorrect.
What kind of society would they build? It would be a society in
which your opinion would be unassailable if you agreed with their
ideology. They cite Professor Brooks, the other of the eight who
supported the Bloc's position and disagreed with the seven other
experts.
His opinion, of course, was unassailable but the other experts, in
the Bloc member's opinion, had a conflict of interest. How
convenient.
(1640 )
What kind of society would Bloc members build? A society in
which minorities in Quebec might hope to be tolerated but never be
quite equal. We are all minorities. It just depends where you draw
your borders.
What kind of society would it be? It would be a society led by
historical revisionists recasting and perverting history for their own
ends. The francophone history in Canada is not one of shame but
one of which to be proud. It is one of building a great country
together, of opening a continent. What do they want to do? They
want to lock francophones up in Quebec.
What kind of society would they build? It would be a society in
which someone else is always responsible for the problems: the
anglos, the rich, the ethnics, the federalists. Who will they blame if
they go it alone?
It would be a society built on an insecurity so severe that they,
the separatists, attempt to insulate themselves from criticism,
labelling those who have criticized them as sellouts or part of some
great overarching conspiracy, a society where government would
decide when to suspend the rule of law, and the rule of law is all
that stands between us and tyranny.
They would also build a society where it appears, based on the
separatists own actions and statements, that there is collective
responsibility. The Jewish community is responsible for Mr.
Galganov, but the separatists and the francophone community are
not responsible for Mr. Parizeau's comments about ethnics, for Mr.
Landry's treatment of ethnics or Mr. Villeneuve's comments.
I am pleased to have had this opportunity to participate in this
debate but I weep for Quebec, for the decent, hardworking, fair,
open people of Quebec who are demeaned by the behaviour and
attitude of the separatists as we have seen in this debate and in so
many other debates.
I have confidence in the people of Quebec. They will never allow
themselves to be led down the garden path to the narrow, stifling,
miserable future the separatists have in mind for them.
[Translation]
Mr. Maurice Bernier (Mégantic-Compton-Stanstead,
BQ): Madam Speaker, I listened to my colleague from St. Paul's
comments on the motion before us today. It is hard to believe that
the hon. member for St. Paul's can make such insulting comments
not only about Bloc members but about all Quebecers.
This shows-as the people listening to us will realize-how the
Bloc was justified in putting forward the issue of family trusts, how
this hurts the Liberal government across the way, how they are not
defending the interests of taxpayers in Canada and Quebec. It is the
interests of those who contribute to their election fund they are
looking after.
In 10 minutes, he managed to talk about the experts he claims the
Bloc Quebecois is denigrating. He forgot to say that the experts
who appeared before the finance committee were invited by the
committee chairman himself and that these experts come from
firms that, as we said before, contribute generously to the Liberal
Party's coffers.
4766
When someone as credible as the auditor general came before
this committee to shed light, to tell the truth, he was harassed.
They would have fired him if they could, because he had dared
to tell the truth.
Then the hon. member for St. Paul's paints everything with the
same brush. This is called condemnation in-
An hon. member: In absentia.
Mr. Bernier (Mégantic-Compton-Stanstead): Not in
absentia, as my colleague said, but they are trying to link people
who are not linked in any way. He criticized Mr. Parizeau for the
comments he made the night of the referendum; he also criticized
Mr. Landry's comments and those made by Mr. Villeneuve, which
were condemned by everyone in Quebec.
(1645)
Our colleague's remarks were dishonest and, if he is an
honourable man, he will withdraw them.
He should tell us why someone who is so pure, so intent on
finding the truth, is not asking his government to disclose all the
facts on the family trust matter. This is what the Bloc Quebecois
wants, what the auditor general wants, what the people of Canada
and Quebec want: to shed light on the huge amounts of money
leaving the country without a penny in tax being paid, as we have
been saying for the past three years. Year after year, they cut over
$5 billion a year from the programs aimed at the unemployed.
That is what we want to know. We do not want to be treated as
the hon. member, who talks through his hat more often than not,
has treated us.
[English]
Mr. Campbell: Madam Speaker, I will be brief. I think members
can express views on either side of this side. The hon. members for
the opposition never hesitate to speak their minds and provide us
with their interpretation of facts, history and reality. I think we are
entitled on this side to do the same. If they do not like how it
sounds or how it feels, I cannot help that.
I might add one other item to my list of what sort of society they
might be talking about. That is one where one's professional
competence and professional ethics are attacked if one does not
agree with their opinion because that is what they are doing with
respect to the experts before the committee.
I remind the hon. members that one expert was invited by the
Bloc Quebecois, which was entitled to have as many others as it
wanted. It could only come up with one.
This issue is about taxpayer migration. This government has
dealt with family trusts in the last budget to the extent that family
trusts impact this issue of taxpayer migration. I think the finance
committee has done an excellent job of addressing those concerns.
Mr. Leonard Hopkins (Renfrew-Nipissing-Pembroke,
Lib.): Madam Speaker, as I rise to speak on this motion today I am
really amazed with its content. It has been some time since I saw a
motion in this House that is worded in the way this one is today. It
is really trying to get at rulings that were made in 1985 and 1991
relating to the immigration of taxpayers and the distribution of
Canadian trust property to a non-resident beneficiary. It is also very
much about migration taxation.
The opposition motion today tries to convince people that the
doors are open for other transactions to leave the country and they
talk of this in terms of hundreds of millions and even billions of
dollars. This is an absurd assumption. What they are trying to do is
create a perception of a loss of tax dollars. The finance committee
has brought an excellent report into this House and found no such
transactions taking place.
As I have said, this is an absurd assumption. Are billions of
dollars leaving the country tax free? The answer is a clear and
unequivocal no. Revenue Canada is not aware of any similar
transactions since 1991, and the finance committee confirmed it
found no indication of large revenue losses or tax planning
opportunities that occurred because of the 1991 ruling.
The minister of revenue, as she said today, has placed a
moratorium on any such rulings in this area of the Income Tax Act
until such time as the government plugs the loopholes.
(1650 )
The hon. member for Beauport-Montmorency-Orléans
indicated today that the Liberals would be blaming this on the Tory
administration. The Canadian public has already passed judgment
on the Tory administration. It did that on October 25, 1993 in the
general election. Therefore we do not have to pass it on to it, it was
there during its time. However, there was no evidence found of
wrongdoing on the part of tax department officials in this ruling.
That is in the report that the finance committee brought into this
House.
I want to emphasize that the Minister of National Revenue has
stated that we have a moratorium on any such procedures until the
government plugs the loopholes. This is in effect a freeze on all
procedures, and no decision to let money out of this country can be
taken while that moratorium is on. How do we get fish out of a lake
when the lake is frozen? We have to drill a hole. But the finance
minister and the Government of Canada are saying they are going
to plug the hole. The Bloc can try as it likes but it will not be able to
drill a hole in the ice on that lake and get the fish out. The
Government of Canada is going to review these tax laws which
have not been reviewed for 25 years. It has already taken many
measures in this regard.
4767
Therefore let us not get carried away with the idea that
something terrible is going on today because the finance
committee, the auditor general and other officials, six leading
auditors of this country, have said there was no wrongdoing. The
Department of National Revenue says that nothing has happened
since 1991.
If they are trying to put a hole in the Liberal armour in Quebec,
they will have to try harder than this. The people of Quebec are
smart enough to know they are not being led down the garden path
by tactics such as this. Just reading that motion is the worst bedtime
reading anybody could possibly have.
The government has stated on the floor of this House that the
problem today is how to treat capital gains when someone, an
immigrant, a person, a trust, a company or a partnership wants to
leave Canada. That is the question. That was the auditor general's
main point. The majority finance committee report of the House
endorsed it by saying action must be taken. The Minister of
Finance said: ``We agree and we intend to take action''.
At another place in Hansard on September 20, the government
said that the majority finance committee report was very thorough
in the way it dealt with this point and that the government intends
to take action. The Minister of Finance, on behalf of the
government, said: ``We wanted to shed some light on the matter
and the majority report of the finance committee did so, and we
intend to act''.
It becomes very clear that the motion which the House is
debating today has been placed on the Order Paper by the official
opposition as an example of straight crass politics, and that is why
it does not mention the positive approaches that have been taken by
this government to update the Income Tax Act. The average
Canadian needs the facts surrounding this issue and they are getting
them. They do not need the kind of political rhetoric portrayed by
this motion.
I repeat that a moratorium has been placed on all rulings with
respect to taxpayer migration until the government has introduced
legislation and taken other steps to plug the loopholes. It wants to
study the finance committee report in depth.
(1655 )
Let us compare ourselves with other countries. In the House we
are always downgrading ourselves in many ways. I want to
compare Canada's tax laws with those of other countries.
Our tax laws are tighter than those of other G-7 nations. Our tax
administration system is the most highly respected of any today. It
is pure speculation that money has been lost. There is no evidence
from any source that money has been lost.
It is another matter when we come to a debate such as this to
examine the issues in their full complexity, not just in simplistic
statements such as those stated in the motion today. It is another
matter to examine the actions of hardworking and dedicated
officials in the context in which those actions occurred.
It is very easy to criticize somebody, talk about the good and the
bad, put people into categories of heroes and the villains. But that is
why it is absolutely necessary to explain the whole issue on the
floor of the House. It is quite another matter when we consider that
one of the central issues we are examining today relates to the
highly complex and frequently uncertain area of the tax treatment
of taxpayers who migrate.
Chapter 1 of the auditor general's report issued on May 7 of this
year raised issues related to income tax rulings and in particular
Canada's tax policy as it relates to persons who become or cease to
become resident in Canada.
The fact that these concerns dealt partially with family trusts
should not obscure the fact that the principal issue in this matter is
the tax rules relating to taxpayer migration.
I think this is something which is very relevant. It has been said
that the period since the end of the second world war will be
regarded by historians as the twilight of the nation state and the
dawn of the single world economy.
According to Webster's Dictionary the term globalization did not
even exist until 1944. Today it is the defining watchword of our
modern world. Yet surprisingly tax rules relating to taxpayer
migration were not enacted by Parliament until 1971 and have not
been significantly reviewed in the 25 years since they were
enacted.
[Translation]
Mr. Ghislain Lebel (Chambly, BQ): Madam Speaker, I am
somewhat disappointed with the remarks made by the hon. member
for Renfrew-Nipissing-Pembroke, whose career as a politician
is coming to an end. I am sad to see him make remarks that can
only bring shame on parliamentarians.
I wonder if the hon. member, as a former chair the Standing
Committee on Public Accounts and a senior member of this House,
with 36 years of service, could tell us what message he thinks he is
sending the Canadian people with remarks like that. When he
chaired the public accounts committee, would he have let the
auditor general's report be torn to pieces along with the auditor
himself, who simply did his job and nothing more?
Why was this issue, which was before the public accounts
committee, referred to the finance committee, an obscure
committee controlled by the Liberals? The Liberals are the
majority on the finance committee. Right there, there is cause for
concern, there is something fishy.
4768
A member with 36 years of experience in politics just does not
lend himself to this kind of thing. Either he stays put or, better
yet, he stays home because these goings-on were downright
unacceptable. He mentioned experts, tax experts, the same experts
who participated in the making of the December 24, 1991,
decision.
(1700)
In what way were the rules of law adhered to and the wish to get
to the bottom of this issue respected, this issue raised by the auditor
general, who, thankfully, is not working for the Liberal Party but as
an agent of this House.
They shot the messenger with red hot bullets to shut him up.
They tried to discredit him. Why is the ruling party doing that?
Could it be that the auditor general has uncovered something he
was not supposed to uncover? Did he express suspicions he should
not have expressed? What need was there to attack the auditor
general and deal with this matter on the quiet in a finance
committee controlled by the Liberals, who are, as we know, the
major players on these committees?
Does the hon. member, who has 36 years of experience in
politics, take pride in what he is trying to have Quebecers and
Canadians alike believe? He should not have a hard time
convincing them, seeing that the scandal was revealed by
sovereignists, members of the Bloc Quebecois. It is easy to
convince the Canadian public, terrified of the BQ, that it was a bad
thing the BQ uncovered. But the auditor general is not a member of
the Bloc. He is probably the man with the highest moral authority
in all of government. This is the man that they have tried to tear to
pieces for possibly putting his nose in something he should not
have put his nose into.
I urge the hon. member to make amends and acknowledge the
fact that the Standing Committee on Public Accounts should have
given the matter full consideration, reported to this House and
recommended an enquiry.
[English]
Mr. Hopkins: Madam Speaker, I just want to say to the hon.
member that it is quite obvious that I got through to the true
intention of the Bloc Party in the House of Commons today when
he turns around and makes a personal attack on me. My hide is
thick. I can take that. But I can also dish it out.
I am going to say to him today that the Auditor General of
Canada has always had the highest respect from the member for
Renfrew-Nipissing-Pembroke.
I have no hesitation in saying that it was this government which
took the initiative. It was not the Bloc. Do not stand and say that the
Bloc took the initiative. The Government of Canada took the
initiative and referred the matter to the finance committee of the
House of Commons and the finance committee brought in the
report.
[Translation]
Mr. Claude Bachand (Saint-Jean, BQ): Madam Speaker, first I
wish to inform you that I will share my time with my colleague
from Chambly, so I have ten minutes for my speech.
My first three words in the present debate are: shame, shame and
shame.
I listened to the hon. member for
Renfrew-Nipissing-Pembroke and I totally disagree with the
chronology that he just described. I have the course of events
written here, showing how cynical the government's methods were.
First of all, on December 23, Revenue Canada issued its ruling,
that is to say, officials held discussions leading to a decision. In his
report, the auditor general mentioned that at least four meetings
were held that day. This was already preferential treatment for the
kind of companies, or rich families we are discussing today.
This was also done behind closed doors. Two days before
Christmas, when everybody was celebrating, officials were called
together four or five times to try and to see what could be done for
friends. We will prove later that they were friends of the Liberal
Party.
On December 24, they issued their ruling. When asked for a
ruling or when a ruling is appealed, revenue officials rarely issue a
ruling within 24 hours. That happened in the case discussed today.
In 1993, the auditor general ordered Revenue Canada to publish
its rulings, because he realized that it did not publish its rulings
regarding family trusts. I also totally disagree with the hon.
member who spoke just before me, the hon. member for
Renfrew-Nipissing-Pembroke, because family trusts have been
in the Bloc Quebecois' platform since the very beginning, since its
founding-and I was there-and also during the election
campaign.
(1705)
We realized there was a major problem. The middle class and the
poor were hit by all kinds of taxes and measures, while other
Canadian families were benefitting from the government's
generosity. We pointed this out from the very beginning and we
started doing something about it, since we were elected in October.
The hon. member can look at the record: the Bloc Quebecois' first
questions in the early days of this Parliament related to the issue of
family trusts, which was part of our platform.
Finally, on March 21, five years after the beginning of this saga,
Revenue Canada made its ruling public. On May 7, the auditor
general released his report, in which he alludes to a precedent that
could cost Canadians hundreds of millions of dollars.
4769
Following the release of the auditor general's report, the Bloc
continued to ask questions. In a very unfair move, the government,
rather than asking the public accounts committee, chaired by a
Bloc Quebecois member, to review the issue, as should have been
the case-although it would have been risky for the
government-asked instead the finance committee to shed light
on these events.
There is no surprise. The revenue minister often hides behind the
report of the finance committee, because it was prepared by the
Liberal majority of course, but she never talks about the minority
report of that same committee. The minister claims the exercise
was conducted according to normal practices.
Not so. The public accounts committee is the one that should
have been instructed to examine the issue. And what did the
finance committee do as soon as it convened? It asked experts to
come and testify. My colleagues told you about this. I have the
names of these experts.
The committee invited officials from Ernst and Young, Stikeman
Elliott and Coopers and Lybrand. These are all tax consultants who
give advice to rich Canadian families so they can avoid paying
taxes to Revenue Canada. This is tantamount to putting the wolf in
charge of the sheepfold. And this is what happened.
Once the report appeared, everybody said: ``This has been done
democratically, the finance committee has reviewed the issue,
there is no problem, experts were called on to give evidence.''
Nobody tells us that foxes were called to tell us how to mind the
geese. As a result, we might never know where those two billion
dollars went and what families were concerned. That too was
disclosed, the names of the families. Again, those are
presumptions. What is sure is that it happened and maybe it keeps
happening right now. Yes they can talk about ice and holes in the
ice that can be plugged.
In our opinion, that keeps happening and were it not for our
colleagues' intervention, our colleagues for Saint-Hyacinthe, for
La Prairie and for Beauport-Montmorency-Orléans, we would
still be allowing fortunes to move out one way or the other. We
would ignore it. That is not exactly how we want things to be done.
Earlier, my colleague for Portneuf talked about the
importance-I would rather call it the appearance-of tax equity.
Is there appearance of tax equity?
An hon. member: Not at all.
Mr. Bachand: Not at all.
Think about the blue-collar worker employed by the City of
Saint-Jean who looks at his pay cheque on Friday and sees that a
third of his pay goes to income tax and various other taxes, and who
knows that at the end of the year Revenue Canada will show its
claws if he contravenes the law. Can he phone Revenue Canada
and ask for a ruling? Can he ask whether it is legal to do such a
thing? We just got an answer this afternoon: no.
But if your name is Bronfman, if your name is Conrad Black-
Mr. Bernier (Mégantic-Compton-Stanstead): Or Paul
Martin.
Mr. Bachand: -or Paul Martin, you can give a call not only to
Revenue Canada, but also to the Prime Minister of Canada, and ask
them for some kind of sweet deal.
Actually, what we would like to know is precisely what they are
refusing to tell us. The young woman who is a white collar
employee of the city of Saint-Luc or the bus driver working for the
bus company in my riding are just fed up. They keep telling us they
have had it with taxes, they are overburdened. How can a small
family with a combined annual income of $45,000 and no tax
loophole consider that the tax system is fair, when they hear about
blatant inequities like the one being debated today?
The tax system should have the appearance of fairness. A
principle of justice is that justice should appear to be done. Today,
we do not even have a semblance of tax fairness.
(1710)
Even the finance minister dared to say: ``There is no problem
with family trusts. I have my own.'' And we know it too. Bronfman
and Conrad Black are sure to have one too, and their children will
benefit from it for generations to come.
But what about the man on the street, the blue or white collar
worker, the bus driver, the subway train operator, or the average
worker in a company? Can they leave millions of dollars to their
kids? I do not think so.
It is unfortunate that the hon. member for Nipissing has left,
because the Liberal Party is so arrogant that it behaves as if it owns
the House of Commons in a system where there are no rules to
govern those who sit here. If it were not for the minimum rules we
have around here, I think the Liberal Party would say that it owns
the House of Commons and that it no longer wants an auditor
general. Of course, because he does not always agree with them.
But he is a watchdog; it is his role not to always agree with the
Liberal Party.
The philosophy of the Liberal Party of Canada is quite simple:
its members will continue to protect their rich friends. I think that
we, in the Bloc Quebecois, will continue de protect the middle
class citizens who are tired of being taxed and witnessing such
unfairness. We will continue to protect the needy who are affected
by the cuts, because, in order to balance the tax base and the
budget, the government cuts programs for the underprivileged,
taxes the middle class and turns a blind eye to all those rich
families who flee the country with all their money.
4770
This is not the philosophy of the Bloc Quebecois, but the
philosophy of the Liberal Party of Canada. It will come back to
haunt them in the next election. If they do not change their minds,
the people will realize that such unfairness does not make any
sense and the Liberal Party might meet the same fate as my hon.
colleague for Renfrew-Nipissing-Pembroke wished upon the
previous Conservative government earlier on.
It is all very well to have power, but not to the point where one
becomes domineering and arrogant. The people will realize it some
day. We sit here, in opposition, to make Quebecers and Canadians
aware that they are much better served by an opposition party, by
an auditor general who acts as a watchdog, as some kind of
opposition, and wants to help the party in office to get back on
track.
[English]
Mr. Philip Mayfield (Cariboo-Chilcotin, Ref.): Madam
Speaker, I note that the member of the Bloc Quebecois does not
take credit for raising this issue. It is the auditor general.
I would like to express my appreciation for his acknowledging
that. The auditor general does have an extremely important role in
holding the government accountable.
This issue raises for me the lack of accountability of this
government and its intention to be even less accountable as we
proceed through its mandate.
I think of the changes in legislation that are coming through
where the government is seeking to have more discretion in its
power as it governs. It is interesting how power seeks power.
There are little changes like changing in the legislation a ``shall''
to a ``may'', which leaves more discretion; a comment such as ``in
the opinion of the minister'' in the legislation, which leaves no
latitude for appeal.
There are a couple of issues that I would like to raise about
government accountability in my own constituency. There is the
appointment of returning officers. What is the accountability of the
government in this?
In my constituency there have been two returning officers
appointed by this government. As far as I can tell neither of them
has had any public input.
As I read the qualifications, I read that the work is by nature
impartial, non-partisan: ``The returning officer must conduct all
business accordingly. Returning officers must abide by the
government's conflict of interest code and Elections Canada code
of professional conduct and must abstain from all activities of a
politically partisan nature''.
(1715 )
Yet it is well known in my community that both people who were
appointed-one has since resigned and the other remains
appointed-are indeed part of the Liberal organization. Where is
the accountability there?
I would also like to raise the issue of the Nisga'a treaty and the
agreement in principle where a large portion of the province of
British Columbia has been set aside without consultation of the
people of British Columbia. Included in this agreement are
educational matters, justice matters, infrastructure matters,
commercial fishing matters. Where did the government include
people in this? Where is the government's accountability to the
people who elected it? This is the issue.
As we talk about family trusts, people are extremely nervous
because of the way the Liberal government has gone about
governing the nation, not in a fair manner at all.
[Translation]
Mr. Bachand: Madam Speaker, I am pleased to see that the
Reform member shares our view on this matter. We rarely agree,
but on the subject of the government's responsibility regarding this
iniquity, we share the same opinion. For the record, though, I
would like to say that the Auditor General released his report on
May 7, but that this was part of the Bloc Quebecois' electoral
platform in 1993 and that, by chance, we reached the same
conclusions. Of course, when the Auditor General tabled his report,
we agreed with it.
I want to give the Bloc Quebecois credit for this because it had
already identified the problem. The fact that the Auditor General
confirmed this, put us in agreement. We too have criticized the
accountability of the government, which continues to hide behind
committees that, until now, have been pretty phoney.
Mr. Ghislain Lebel (Chambly, BQ): Madam Speaker, honestly,
I cannot say that I am happy to speak today on the motion tabled by
the official opposition. This is not the first time that I have
criticized apparent conflicts of interests, flagrant iniquities against
ordinary taxpayers by the current government.
I need only mention the Pearson Airport episode. There was even
one Liberal, alleged be the revenue minister's father, who said that
there were plenty of apparent conflicts of interests and shady
dealings that should be investigated. And this is not from a Bloc
member but from the father of the current Minister of Revenue, a
very well-known Liberal named Nixon, who had made that
recommendation to the government. The government did not pay
heed. It was as if he had not said anything.
I remember the then Minister of Transport, who said that it was
no use to dig up such things. And yet, they dig up things when they
4771
find a low income earner who defrauded unemployment insurance
of $200. They will pursue him even into his grave. It is worth their
while to dig up such things. But matters involving billions of
dollars is only wheeling and dealing.
The Pearson deal is not the only example. Do the members
across the way remember Power DirecTv? A decision was reversed
even though it had been taken by the authorities responsible for
overseeing these things. The Cabinet changed it. It just happened
that there were people at Power DirecTv who were close to the
Prime Minister and his entourage.
In the case of Ginn Publishing, they did not even wait for the
lawyer's report to again return things to friends of the government
party and its leaders.
I could go on and on. I remember a minister who was in Los
Angeles at one time and who came to ensure that Canadians had
truly taken control of a film distribution company. He was ready to
swear and put in writing that this company was really a Canadian
company.
(1720)
There are many examples, and everything leads us to believe that
there will be others.
The Standing Committee on Finance. I was watching the
Liberals pull out their hair earlier: the Standing Committee on
Finance has decided this; the Standing Committee on Finance does
not want to know anything, it does not want to find anything, as in
the case of Pearson Airport. There is none so blind as he who will
not see. This is the case of the Standing Committee on Finance. If
the members opposite can convince other Canadians of this, it is
their problem. But, as the member for Saint-Jean said, I am not sure
they will not get their comeuppance royally in the next election, as
other parties that have done similar but not such bad things as this,
I would say. With some 177 seats, a government can devise laws
benefiting the wealthy, and the opposition, official or not, can do
nothing about it. That is what has happened in the three years since
the government came into power. It is a shame involving
everybody.
We come here to implore the common sense of independent
experts, of six independent experts who probably were involved in
a series of decisions, the one taken on 23 December 1991 in
particular. They were at the party held on December 23, and we are
asking them if, in their opinion, everything was done according to
the rules. My colleague called that a just application of tax equity.
The government is not even trying to give an appearance of
clearness and cleanliness. It does not care. ``We are too strong, they
will never dare to destroy us, because we are the ones who decide
in the end.'' And even the Minister of Finance said: ``I do have a
family trust.'' Indeed, and it is made up of taxable Canadian
property. The day he sends his ships for a trip in the South with the
intention of not bringing them back, how will we look, since he is
the Minister of Finance?
That is almost what happened with the $2 billion. Can you
imagine how much tax $2 billion represents? ``No, we cannot do it
because this is a friend. Scratch my back, I will scratch yours''.
That is how it works across the way.
At one point, Canadians will have to realize that they are being
bamboozled as they have never been in the history of Canada. We
have already seen governments making timid attempts, but today,
we are seeing people taking the cash and laughing all the way to the
banks-overseas. Two billion dollars! It does not make any bloody
sense at all.
Still today, I thought that the haemorrhage had been staunched,
but no. Today, we saw in the auditor general's report that there is
still $630 million worth of loopholes of all kinds. We are not
talking about petty thieves, but about big tobacco companies. It is
all the same gang. When we dig a little bit, we can find the
connections. People will attend a $3,000 a place fundraising dinner
to have a look at the Prime Minister and have the opportunity to rub
shoulders with him in the men's room.
It is terrible to say, but when you are on the government's side,
no threat of any kind can rattle you, not even from the auditor
general. That man was demolished. It is as simple as that. If you do
not like the message, just shoot the messenger.
Not only must laws be implemented in a fair and reasonable way,
but they must appear to be implemented in a fair and reasonable
way, just as with justice. We operate under the rule of law, like the
justice minister said this morning, and the courts established the
rule of law long ago. Not only must justice be administered, but it
must appear to have been administered. But appearances do not
matter in this case. Old chums received a little help, and I would
not be surprised if not many family trusts were left.
A provision that was reasonable and, in a certain way, logical
was used ill-advisedly, it was used in a way not intended originally.
It is all a sort of institutionalized misappropriation of funds with
the wealthy members of society, who make off with the money, the
next one with his boats, no doubt, it is probably one of the last
remaining, but an inquiry must be called.
(1725)
When the truth is what you want, you do what is necessary to
obtain it. An independent inquiry, a royal commission if necessary,
must be called, and independent experts brought in, not those who
took part in the ruling. The RCMP should be involved, and the bank
accounts of those who had anything to do with this ruling
scrutinized closely.
When you want to find something, you look for it. In this case,
they do not want to find anything, and so they are not looking. They
are saying: ``This is just a bunch of separatists who have stumbled
over something. Nothing to worry about. The people of
Newfoundland, westerners and easterners will never dare to believe
separatists, so the way is clear. We can have the rink to ourselves
and do as we please''. That is what is scandalous about this affair,
and the Liberals can tell me what they like, but it is not going to
wash. It will not wash. Something stinks in this business and we
will not let up until we find out what it is.
4772
[English]
Mr. George S. Baker (Gander-Grand Falls, Lib.): Madam
Speaker, I have just a few words on this motion put forward by the
Bloc. In looking at this motion, I think it is first, a condemnation of
the Tories and second, a condemnation of the Bloc itself. I say that
because what the Bloc is talking about are family trusts.
Bloc members are talking about family trusts and trying to
blame the Liberal government for a report given by the finance
committee. Where they are wrong is in their accusations against the
Liberal government. It was the Liberal government that brought in
the capital gains tax on family trusts. It was the Liberal government
that brought in the rule that would supposedly close the loophole
created by forming a trust because a trust does not die. This was the
problem facing Canada back in 1971. Prior to that, we had the
inheritance tax in Canada. We had the estate tax in Canada, as in
the United States today. It also has the capital gains tax.
We had the inheritance tax and the estate tax in Canada and along
came a royal commission that recommended substantial changes,
the Carter commission, but those recommendations were not
followed at the time. I wish some of them had been but they were
not. The Liberal government at that time brought in a capital gains
tax that would affect family trusts at half the normal taxation rate
of income.
When that was brought in a problem came up, as it always does
when one changes the law. There were ways around it, especially
for paying taxes. The way was found around it by putting assets in
trust so that when somebody died you would not have to pay the
normal capital gains tax that was imposed by the Government of
Canada in 1971.
At that time the Liberal government, in order to close the
loophole, said that at the end of 21 years, regardless, the taxes that
would normally have been paid on the increased value of the assets
would then become due in 21 years. That was during the Liberal
administration, to close the loophole of wealthy people being able
to hire very expensive law firms and accounting firms to get around
the tax law.
(1730)
What happened? For 21 years assets had been put into a trust. On
January 1, 1972 the new law came into effect and all of a sudden we
are now in 1992, and guess what? That money would now be owed
to the Government of Canada. It was estimated to be in the
hundreds of millions of dollars.
I and other members of the opposition went through access to
information and we discovered that expensive consultants were
hired during the Tory regime to try and convince the government to
lift that 21-year rule that the Liberals brought in, to make
everybody pay up.
In looking at the correspondence to the then ministers of finance
of the Tory government, you could see that a man who had $100
million in trust was going to have to pay $11 million in 1992.
Another man who had $200 million might be liable for $15 million;
another man with $70 million was going to have to pay $7 million.
They were pleading with the Tory government: ``Don't let this
happen. I do not want to have to pay all this money. After all I only
have $100 million''. It almost made you want to cry. This was in
letter after letter after letter.
Then came the consulting firms. We also received the surveys
that were done by the consulting firms. I will not mention their
names because if I do perhaps it will give them more business
because they were very successful in changing the mind of the
government of the day.
The problem became, what could somebody do with a family
trust, with this magic 21 years coming up and the taxes having to be
paid? Could it be rolled over? An anti-avoidance rule was brought
it. A person had to go before a judge and prove that it was not being
done to avoid taxes. All of these rules were there to prevent it from
being done.
It is in that setting that we discuss these family trusts. A great
many of them did not mind paying the taxes. From the documents
that we received at that time from access to information some were
quite willing to pay the tax. I recall one gentleman who owed $12
million writing to the agency that was trying to change the law
saying: ``I have to pay $12 million but there is no problem''.
In 1985 the government of the day made a decision. The
government has to be held responsible for what bureaucrats do. If
the Department of Finance and Revenue Canada do something, the
ministers and the government are held responsible. A decision was
made.
(1735 )
In 1991 they moved $2.2 billion in this one instance across the
border to the United States. If the purpose was to escape the
21-year rule, which I do not know if it was but I rather suspect it
was not, they should not have worried at that time. They should not
have worried because we had a government in power which, as sure
as you are sitting there, Madam Speaker, was going to change the
rules so that all of this money would not become due. That is the
Tory way of doing things.
4773
The Tories always supported, as the Reform Party does, the very
wealthy in our society, the people who have loads of money and
the people who they identify as keeping the economy moving.
A change was made. The change I am talking about took place
on December 23, 1991. A couple of weeks later they actually
removed the 21-year rule. In other words, all of these family trusts
were supposed to pay taxes after 21 years. A decision of the
Government of Canada said that all of this money which would
have become due after 21 years would not become due until the
death of the youngest member of the family.
That was the Tory government, the same Tory party that is trying
now to regain power in Canada. They want to become popular
across the country again, that same Tory party with those same
Tory principles, the same as the Reform. Some people say the
Reform Party is worse.
The Tory party said: ``All of that money is not going to come due
now which the Liberals proclaimed''. The Liberals closed the
loophole. The Trudeau administration brought it in. All taxes that
are avoided will come due in 21 years. That is why it was called the
21-year rule.
At the last moment the Mulroney administration gave a reprieve.
They said: ``Oh, no, you won't have to pay up''. At the last minute
in 1992 they said: ``It's okay. You won't have to pay up because we
are going to bring in a tax change and we are going to change it so
that the money will not become due until the death of the youngest
person in the family''.
The Tories were replaced by the Liberals. In the debate before
the House today the Bloc say it pertains to family trusts. What did
the Liberals do when they got in? It was the Liberals who closed the
loophole. Along came the current finance minister and he changed
the law again. The door that was opened up by the Tories has been
closed. The Liberals said: ``You won't be able to do that any more.
We are going to give you a few years until 1999 but at the end of
that, no more''.
The Bloc stands in this Chamber on a motion and criticize the
Liberals for creating loopholes on family trusts. It was the Liberals
who closed them. It is this Liberal government and this Minister of
Finance who have once again closed the family trust loophole.
(1740)
The second portion of the motion is an outright condemnation of
the Bloc. The reason it is a condemnation of the Bloc is because
that party is supposed to be the official opposition in the House of
Commons. I am not supposed to be. Liberal backbenchers are not
supposed to be. We have had, on occasion, to delve into the facts to
take the place of the official opposition. Why did we have to do
that?
The Bloc's motion talks about condemning the Liberals for
something which the finance committee suggested. It condemns
the Liberals for the tax free transfers of family trusts when it was
the Liberals that closed all the loopholes. The Bloc is condemning
the Liberals for what the Tories did and what the Tories would do
again if they ever got back into power. If the Reform Party got into
power the same thing would happen.
What did the Bloc do? I have gone over the record of that
political party just to see the way it has treated the transfer of
hundreds of millions and possibly billions of dollars every year.
The Bloc claims that the Liberals opened the doors. It is an absolute
total outrage.
What did the Bloc say about the transfer of funds across the
border into the United States?
The Liberals took action on the transfer of $2.2 billion, which
involved, as the auditor general said, secrecy. There was secrecy in
Revenue Canada on the rulings. Let us not forget that if the ruling
in 1985 had become public the tax auditors and the tax lawyers
would have been on to it and all of a sudden Revenue Canada and
the Government of Canada would probably have realized they had
a problem.
What did the current minister for Revenue Canada do? First, she
said that rulings will be made public. What did the finance minister
do? The finance minister closed the loophole again, just as the
Liberals had closed it before the Tories opened it up again.
We had a response from the finance minister. He is perhaps the
greatest finance minister in the history of the country. The minister
for Revenue Canada is doing a fantastic job. They responded in
concrete ways. Not only that, I understand that there are perhaps
even further measures going to be taken to ensure that this will not
happen again.
There are two sides to the argument. People talk about the
transfer of money across borders. It is the thing to talk about these
days. The borders are opening up. Barriers are being dropped.
Withholding taxes are disappearing, at least between certain
nations in the industrialized world. We are into globalization. We
are into a situation in which multinationals control over half of the
trade in our world today. What we are doing is removing barriers.
(1745 )
What did the Bloc members say when the United States received
what it wanted through the Senate banking committee? What did
Bloc members say about the announcement on the withholding tax
on dividends, that is, the payment from subsidiaries to their parent
companies in the United States and from subsidiaries in the United
States to their parent companies in Canada-not many of them,
most of it goes the other way.
4774
What did Bloc members say when the tax rate was dropped by
50 per cent, amounting to about $700 million? They said the same
thing to that as they said to the other proposition that was in the
same agreement which said that the tax on interest gained would
be dropped from 15 per cent to 10 per cent. The tax on royalties,
even copyright royalties would be bifurcated so that they could
be dealt with individually.
What did they say with that great loss of revenue? The Bloc said:
``It does not specify how many millions and billions of dollars are
at stake in this protocol. We do not know which country, Canada or
the United States, will benefit the most from this tax liberalization
proposal. We do not know, but we support it''.
What did Bloc members say when the Americans wanted, and
we changed, the estate tax relief that was granted to a wealthy
person in Canada who had property in the United States including
stocks and bonds through a Canadian bond agency? What did the
Bloc say when the suggestion was made that a tax credit would be
given in Canada for somebody if they had a billion dollars worth of
property in the U.S. and were subjected to the U.S. inheritance tax,
estate tax?
What did they say? I have it here. The Bloc said: ``We are proud
and happy to participate in this development in supporting this
Senate proposal because it goes in the direction that we have
always advocated. The only way to live side by side is to support
legislation that will make more harmonious relations between the
two nations''.
I will conclude. The Bloc members are frustrated. What are they
frustrated about? They are frustrated about the popularity of this
Liberal government. They are frustrated because we are the best
performing economy in the industrialized world.
[Translation]
Mr. Antoine Dubé (Lévis, BQ): Madam Speaker, the member
for Gander-Grand Falls, as we have come to know him, has often
shown his support for the most disadvantaged, for the people of his
riding, of his province. I have the utmost respect for him. His
commitment to certain fundamental things with regard to social
programs and unemployment insurance, and the fact that, several
times, he expressed his disagreement with the government have
forced him to remain a backbencher within the Liberal Party.
I know that an election will be called some time soon. One year
or maybe less from an election, the member is trying, in the
presence of his whip and other colleagues who are listening to him,
to improve his image within the party because he wants to run
again in the next election, which is perfectly normal.
Even though he likes us and often tells us so, why not pick on the
members of the Bloc Quebecois a little. They have not said all they
should have said about possible loopholes for rich people.
With respect to family trusts, he tells us that the matter will be
resolved in 1999. We will have other arrangements then. What does
that say? It tells wealthy families that they have another three years
to prepare for the forthcoming changes.
(1750)
I will tell you that, as in the Pearson deal and many other
instances, the bad things that the member says came from the
former Conservative government, where some people benefited
from certain advantages, are more often than not related to these
wealthy families. Oddly enough, in these cases, the friends of the
Conservative Party have become the friends of the Liberal Party.
Why is that so? One just has to read the report of the Chief
Electoral Officer on political party funding. One can see that large
corporations also contributed to the Liberal Party of Canada's
funding, equally in most cases. This is less true of the Reform
Party, which gets 80 per cent of its funding from private
individuals. In the Bloc Quebecois, our funding comes solely from
individuals, as is the case for the Parti Quebecois.
Would the member, who supports the have-nots, who seeks
political correctness, be in favour of correcting the impression of
inequity in this whole issue? That is what the Bloc is asking for.
Frankly, I ask the member if he can blame us for supporting the
Auditor General of Canada when he says that there is a need to shed
some light on what has happened and to inform the public.
How can he blame us for wanting to shed some light on
something very obscure? If nothing is found, then so be it. At least
the public will be reassured, as well as the 100,000 people that the
Government of Canada is suing for unemployment insurance fraud
in the amount of $100 or $200. Of course, the member for
Gander-Grand Falls is not saying a word about that one year away
from an election. Last year, he was talking about it. Why is he not
talking about it this year? Is he so eager to improve his image
within the Liberal Party? In that case, he will lose my respect.
[English]
Mr. Baker: Madam Speaker, the Bloc members at times, very
rarely but at times, do show some indication that perhaps they want
to make the government accountable, something other than their
trying to figure out a way to break the country up. There are rare
occasions.
That is why I bring to the attention of the hon. member, to the
attention of the House, to the attention of the Speaker, and through
the Speaker to the people of Canada that this official opposition
really does not belong in the situation we are in. They stand up
4775
here today and talk about tax changes and blame the Liberals, when
it was the Tories who did it and would do it again if they ever got in
office.
Then the hon. member does not like it. He does not like it
because what I have taken out of Hansard is something which I
could never understand but I do know why they did it. That is how
the official opposition could turn around and approve and support it
and say: ``Bring it on. We love it. It is just as good as sliced bread''.
Massive tax changes that they were supposed to be objecting to.
They supported the very thing today they blame the Liberals for,
for more flows of capital into the United States. They asked for
more. Why? They asked for more because during the debate in the
House where I took these quotations from they said that they were
preparing for separation. Therefore they would like to have lots of
ways of getting capital into the United States because they want to
deal directly with the United States. That was the logic used.
According to that logic they are not fulfilling their duties as the
official opposition.
What the Bloc members are scratching about now is when they
realized the Government of Canada has been so fantastic as to lead
the industrialized world in economic growth, the member
complains about contributions to the Liberal Party. The official
figures show that Canada leads Italy, France, the U.K., Germany,
Japan and the United States and stands all alone in economic
growth for next year. At that rate one would expect the
contributions to increase.
(1755)
Mr. Don Boudria (Glengarry-Prescott-Russell, Lib.):
Madam Speaker, I heard the most eloquent discourse of our
colleague from Gander-Grand Falls.
[Translation]
Mr. Dubé: Give him a good rating.
[English]
Mr. Boudria: It is hard to give anything else but a good rating to
such a fine speech, and I thank my colleague across the way for
bringing that up.
My colleague referred to the growth of Canada during recent
times and the forecasted growth for next year. I wonder if he is
aware that Canada's forecasted growth for next year in terms of
employment is such that it is predicted it will exceed all the
European G-7 nations put together. Is he aware of that? Is that not
in itself testimony to the kind of leadership that has been given to
this country by the hon. Minister of Finance?
There is an excellent proposition I want to bring to his attention.
Next year Canada will have the lowest deficit to GDP ratio of any
G-7 nation.
In terms of net cash requirements, there will not be any net cash
requirements next year. We will not be borrowing any funds from
abroad. We are in this enviable position thanks to the fine
leadership of the Prime Minister and the Minister of Finance.
Mr. Baker: Madam Speaker, I want to add one thing to the
excellent dissertation that was just given.
As the hon. member is aware, those estimates were not made by
the Fraser Institute or the Canadian association of accountants or
any Canadian organization. All of those estimates the hon.
gentleman just gave were made in Paris. Who made them?
Economists representing 27 nations in the world, the OECD.
Twenty-seven of the nations in the developed world whose job it is
to sit down and to realize the economic growth in the world and to
promote those excellent standards and lo and behold Canada leads
all the rest.
Mr. Don Boudria (Glengarry-Prescott-Russell, Lib.):
Madam Speaker, I am pleased to participate in this debate. I was
anticipating such an opportunity but I did not know it would come
so quickly. I want to share my time with the hon. member for
Gatineau-La Lièvre.
[Translation]
We have been hearing today that the members of the Bloc
Quebecois want to denounce the government for all sorts of reasons
that they have been telling us about. At the same time, in their
speeches, the members of the Bloc Quebecois and also those of the
Reform Party, the members of the opposition, have pulled out all
the stops in a vain attempt to show that the government did not, in
their view, act properly with respect to family trusts.
Nothing could be further from the truth. First, the member for
Gander-Grand Falls gave a very good overview of the issue just
now in his most excellent speech. Furthermore, it must be recalled
that the question is not about family trusts, but about exporting
assets when a Canadian decides to move out of the country. This is
where the problem arises.
(1800)
It is the same problem, albeit with different amounts, whether we
are talking about a Canadian who suddenly decides to move from
Montreal to Boston, a so-called ordinary Canadian, or a wealthy
individual who leaves a large Canadian city with all his assets, his
millions and so on.
It is also important to remember that the controversy that has
apparently shocked the member across the way, a former organizer
for the Conservative Party, if memory serves-
Mr. Dubé: Me? Never in my life.
Mr. Boudria: The action that has so shaken the hon. members
across the way took place in 1991, when Mr. Mulroney was Prime
Minister of Canada. As the member for Gander-Grand Falls has
4776
pointed out, the Canadian finance minister has done everything
required, in order to plug this sort of loophole in future.
Second, we have heard about the moratorium announced by the
revenue minister. Third, we have also heard that in future this sort
of ruling will be made public.
[English]
Therefore we have seen that the government has been vigilant,
notwithstanding the attempts of members across the way to
demonstrate otherwise.
What we should note is that the auditor general did not say that
the present Government of Canada had done anything wrong. He
made no suggestion at any time to that effect. That has not been
said by the members across the way. However, I think some
members across have adopted the strategy that if enough mud is
sent toward the government some of it is bound to stick and the
objective will be achieved.
Maybe some of that is true, although I think it is holding
Canadians in rather low esteem to try to use this strategy, but by
and large it is not true and Canadians will see what those people
across the way are up to.
There is also another interesting proposition when we are talking
about money leaving Canada and going elsewhere. We all recall
during the referendum of last year when the separatist provincial
Government of Quebec attempted at the time to speculate on its
own loss using provincial taxpayer money. In other words, what the
government did at the time was it bought huge amounts of
Canadian dollars and then resold them later, making money in the
process and participating in an exercise that could be best described
as betting on its own loss.
That was a rather strange thing for a separatist government to do.
In other words, it went at it this way: ``We will surely lose so let us
participate in this exercise and rake in the profit that will be created
by moving money across the Canada-U.S. border in two different
ways and in a very short period of time''. That was the exercise in
which that government participated. In the flurry of activity that
occurred at that time not much was said about it, but the fact still
remains that it is true.
I have in front of me the Nesbitt Burns ``Economic Research
Provincial Handbook'' produced by David Rosenberg, senior
economist for Nesbitt Burns, dated September 1996, in which he
describes the economic outlook of Canadian provinces. This is not
designed to be a commercial in any way, but I really recommend
this book to all colleagues because it is, after all, not published by
the government. It is produced by an organization in the financial
area and presumably when things do not go the way of the financial
community it does not take too long to remind Canadians of its
thoughts.
(1805 )
Here is what I read from the general overview. I will get into
some of the provincial summaries a little later. In this document it
states, from page 3, which refers to the economic growth of
Canada:
Growth should be more conducive to an improved fiscal performance in both
1996 and 1997. The real GDP is expected to advance 2.9 per cent next year after this
year's 1.8 per cent uptick, marking the second strongest gain this decade. Alberta
will retain its growth leading status of the past five years, with 2.5 per cent growth
this year, and 3.5 per cent next, while strong population gains should keep B.C. a
close second at roughly 3.2 per cent in 1997.
It goes on to describe the Canadian growth that will occur and it
complements the position that Canada is in. It is clear from this
document that we are into some major growth over the next few
years. I look at my own province of Ontario:
Ontario's auto production and exports are on track for another record
year-which will likely be surpassed in 1997-as assembly capacity is in the process
of being dramatically enhanced. Parts makers and assemblers already invested more
than $13 bln in new plants and machinery during the first half of the 1990s, and
more investment is on the way. The new $300 million Honda minivan plant in
Alliston, now under construction with production to commence in the fall of 1998,
will have an annual capacity of 100,000 vehicles. Toyota is spending $600 mln to
expand its Corolla production and its Cambridge facility. Chrysler is consolidating
its entire North American production of LH line at its Bramalea plant, in conjunction
with a $500 mln overhaul of its operations as the firm gears up to build the new line
of mid-size sedans for the 1998 model year.
It goes on to describe the great things that are occurring in this
country everywhere. The unemployment situation is stated in the
document. Of course we know about the 669,000 new jobs created
by the government since we came to office. It also mentions the
major gains in the area of reducing unemployment next year.
[Translation]
So, you see that the affairs of state are being well managed by
this government, that the Minister of Finance, the Minister of
National Revenue, the Prime Minister, and the whole cabinet, are
doing an excellent job of managing the country's assets. Members
may try to persuade the people of Canada to think otherwise, but, as
usual, they are mistaken.
Mr. Antoine Dubé (Lévis, BQ): Madam Speaker, I would never
be ashamed to admit to having been a Conservative Party organizer
if I had been, but that is not the case and I would just like to
reassure the government whip. I just wanted to clarify that.
Moreover, I was a Nationalist Party candidate in Quebec in 1984.
The government whip then goes on to say that I was too critical,
that the Bloc Mps have been too critical. Here we have one of the
four ratpack members, the one whom, when they were in
opposition, the media labelled as the most aggressive, almost
harassing,
4777
member of the bunch. In fact he ran after ministers, even trying to
break up their press conferences and other such antics.
Now he takes a holier-than-thou tone, speaks quietly, no
aggression. He is the House whip now, and adopts this manner
because he would like to cool down the emotions of the hon.
member for Lévis.
(1810)
This is the same hon. member who is heavily involved just now
in collecting money for the poor souls accused by the director of
elections for Quebec. They have been told that they spent money
they ought not to have during the Quebec referendum last year. He
is assuming that attitude, perhaps, to attract the sympathy of
Quebecers, but they will not forget that.
Now, not knowing what more to say on the matter-he is
probably tired, and has every reason to be-he starts to read a
report that has nothing at all to do with today's question on
economic growth. But let us talk about economic growth.
I have had the time to read another report, one that could well
have worried the hon. member for Newfoundland just now, one
which tends to show that investments are not very high in Quebec,
among other things. Some say that the share of investments in
Canada is only in the 11 or 12 per cent range, from its previous
level of 17 per cent. This report indicates that 59 per cent of private
investments are made in Ontario, his province.
The people in the other provinces ought to be really worried
about this, since it means that all of the efforts of this government
on the economic level are probably linked to the number of Liberal
MPs in the province. In Ontario, practically all members are
Liberals, so it flaunts the fact but does so discreetly so the other
provinces will not notice. We all know this government has a very
soft spot for Ontario.
I am from the riding of Lévis. When defence contracts are
announced, MIL Davie is asked to tender its bid against another
shipyard, but recently, when it was time to order army tanks, there
was no call for tenders and the contract was awarded directly.
People in other provinces have the right to hear about that.
The Bloc Quebecois, whatever members opposite may think
about it, is the official opposition, and as such we condemn the
treatment of family trusts. We did so during the last election
campaign. We did not wait for the auditor general's report. We said
this should be investigated.
At the very beginning, when the auditor general expressed its
concerns about $2 billion that were transferred to the United States,
all we asked is that the government shed some light on the
question. The government whip can say anything he likes, but we
in the Bloc Quebecois intend to keep insisting that this government
do everything that is necessary to clarify the situation around the
transfer of $2 billion and that it take all necessary steps to ensure
this does not happen again. We will not give up.
Mr. Boudria: Madam Speaker, I duly noted the accusations
made by the hon. member across the way, who is condemning me
for daring, with other Canadians, of course, to assist those who
helped keep our country together last year. Last week, Bloc
members accused us in this House of violating Quebec laws. The
Bloc found us guilty even before the trial had started.
I see the hon. member for Saint-Hubert across the way. I think
that, as a legal expert, she should talk to her colleagues and teach
them that one is generally innocent until proven guilty, especially
before the trial. The judge has not ruled yet, he has not even heard
the case, but they have already found these people guilty.
I am not about to apologize for defending Canadians. This
concert will be held on October 27 here in Ottawa; Canadians can
all get tickets by calling Ticketmaster at 755-1111.
The Acting Speaker (Mrs. Ringuette-Maltais): It being 6.13
p.m., it is my duty to inform the House that proceedings on the
motion have expired.
The House will now proceed to the consideration of Private
Members' Business as listed on today's Order Paper.
_____________________________________________
4777
PRIVATE MEMBERS' BUSINESS
[
English]
Mr. Darrel Stinson (Okanagan-Shuswap, Ref.) moved that
Bill C-230, an act to provide for a national referendum to authorize
the government to negotiate terms of separation with a province
that has voted for separation from Canada, be read the second time
and referred to a committee.
He said: Madam Speaker, it gives me great pleasure to rise in
support of my private member's bill, Bill C-230, which is entitled
an act to provide for a national referendum to authorize the
government to negotiate terms of separation with a province that
has voted for separation from Canada.
Repeatedly we have seen severe impacts right across Canada
when the Government of Quebec has decided to ask Quebecers to
vote to leave Canada. The possibility of such a separation has
brought severe repercussions for its own province and all the
people of Canada, including both short term and long term impacts
4778
on investment, from housing prices to business and industry, on the
value of our dollar, on the rate of interest which must be paid to
induce people to invest here and on the sense of personal comfort
and well-being of our people. Even the threat of Quebec separation
has been like blackmail hanging over our heads.
However, I want to make clear from the beginning of my
comments today that I have had this legislation drawn up not to
encourage Quebec to leave Canada but instead to promote
discussion and eventual agreement on the ground rules for such a
secession in order to prevent repeated referendums and the chaos
which surrounds them. We must avoid the bad effects for our entire
nation if a separatist government in Quebec again tries to pull the
wool over people's eyes about the true meaning and full
consequences of what a vote to separate from Canada will mean.
I know from many discussions with people outside Quebec that
such separation will not be quick, it will not be simple and it will
not be easy. Perhaps most important, such a separation will not lead
to increased economic well-being for the people of a foreign
country called Quebec nor for Canada.
For example, the North American free trade agreement was
originally negotiated with a strong Canada. How would a foreign
country called Quebec and a weakened Canada fare against U.S.
negotiators in an entirely new round of NAFTA bargaining which
would be required if Quebec separates?
To look at just one aspect, what would happen to the current
Quebec dairy quota if Quebec decided to become a foreign
country? No longer a part of a great nation, which despite our
lingering internal trade barriers, today is a great economic union.
Once the people of Quebec are given the true facts about what
separation from Canada would mean, it is extremely unlikely they
would decide to leave. Nevertheless it just may happen although
passing Bill C-230 would help to prevent that.
The government has done virtually nothing to prevent it. By
contrast, as an example of a prudent government response,
yesterday United States congressman Tom Campbell, a Republican
from California, had a U.S. congressional subcommittee hear
testimony from academics about the possible consequences for the
United States if Quebec separated from Canada.
Mr. Campbell's researchers emphasized this morning that their
witnesses confirmed that an entirely new NAFTA would be
required if Quebec separated from Canada.
(1820 )
Other international consequences would be its affect on NATO,
the UN, the St. Lawrence Seaway and American purchasers of
Canadian and Quebec debt. How ironic that the Government of
Canada by contrast with the U.S. Congress has chosen instead of
preparing people to bury its head in the sand and has neglected to
bring forward legislation on this critical bill. Even debate on this
private member's bill has been limited to one single hour today.
However, the topic has met better fate at the hands of many
serious thinkers across Canada since I introduced Bill C-230 on
March 8 of this year.
This summer the C.D. Howe Institute released a commentary
entitled ``Coming To Terms With Plan B, 10 Principles Governing
Secession''. It began with the following:
The silence of the federal government during two Quebec referendums has left
the Parti Quebecois free to describe how it would achieve secession. Maintaining the
silence is irresponsible and will lead to chaos if Quebec tries to declare independence
unilaterally.
I also find it ironic that the Quebec premier has repeatedly
indicated that he believes neither the courts nor the law of Canada
should be applied with regard to the possibility of a unilateral
declaration of independence by his province.
He is only too willing to use the law and the courts as his defence
with regard to the Churchill Falls contract with his neighbouring
province of Newfoundland and Labrador. Obviously the Quebec
premier has chosen to cherry pick which laws he will respect and
which laws he will ignore.
Most Canadians respect the law and at this time there is no
Canadian law which would allow the province of Quebec to
separate legally. As the C.D. Howe commentary points out, the
lack of such channels within the Constitution:
-is a case for deep concern. Canada is a democracy whose ultimate legal and
political foundation is the consent of Canadians to be governed under the Canadian
Constitution and Canadian law. If a significantly large and determined majority of
Canadians in a particular province withhold that consent then the absence of
appropriate legal wording to achieve secession will not prevent them from realizing
their goal. Thus, the absence of an agreed upon procedure to govern secession will
lead to confusion and conflict over the legitimacy of any proposed secession.
Clearly Quebecers have a big stake in ensuring that a vote to
secede is regarded as legitimate. Otherwise consequences could be
disastrous. The best way to avoid confusion and conflict would be
to accommodate the legitimate needs and aspirations of the
province of Quebec within Canada. That does not mean giving into
blackmail which says do what we want or we will leave.
On behalf of the people of my own riding of
Okanagan-Shuswap I want to emphasize that we want Quebec to
remain in Canada as one of 10 equal provinces whose citizens are
equal before the law. The people of Okanagan-Shuswap respect
the fact that Quebec is different from us in many ways. However,
we totally reject the idea that Quebec should be offered any kind of
powers or status greater than what is offered to every other
province of Canada.
4779
If the people of Quebec reject the idea of remaining within the
revitalized Canadian federation, the break up will cost all of us
a great deal of pain.
One way to lessen that pain would be to pass a law like Bill
C-230 so that a majority of Canadians agree in advance on the
ground rules for negotiation with regard to separation. Also trying
to avoid Quebec separation the Reform Party has released a
position paper called ``20/20'' which presents many ways that all
provinces would be given greater powers simply by administrative
decision with no need whatsoever to reopen the Constitution.
However, in the event that such changes either are not made or
do not satisfy the people of Quebec, it is our responsibility as the
Parliament of Canada to have legislation in place which will serve
as the ground rules for how a legal separation could be
accomplished and that will clearly tell Quebec voters what a vote to
separate will mean.
Personally I believe that the law must respect the will of the
people.
(1825 )
I firmly believe that my fellow Canadians would be willing to
look for a way to allow the people of the province of Quebec to go
their own way, if in fact it could be clearly demonstrated that it was
the will of the majority of the people of Quebec to become a
foreign state; to give up their Canadian citizenship and their
Canadian passports; to lose their unrestricted right to enter, travel
and work in Canada; and, to lose their right to send some of their
brightest and best people to Ottawa to represent them in the
Parliament of Canada and in many of the highest ranking positions
in the Public Service of Canada.
What has been done so far? Due to the lack of foresight of this
government, there is not even a subcommittee of either this House
or the Senate currently discussing this critical issue.
Regarding this lack of foresight, after examining the
international experience, the C.D. Howe Institute basically said
that advance planning in the event of secession could avoid
violence and hardship later by establishing a consensus on the
terms.
To promote such a consensus by encouraging debate I draw
members' attention to Bill C-230 itself. It begins with a preamble,
which states that the principles should exist in law to determine
whether a vote to separate is a legitimate expression of the wishes
of the people and that the provincial electoral districts where there
is not the majority vote to separate must have their wishes
respected equally with districts where the majority of the people
vote to separate.
Simply stated, if Canada can be divided because of the will of
the people, then Quebec can be divided because of the will of the
people.
Pundits have urged that Cree and other aboriginal people whose
traditional lands lie within Quebec have a fiduciary relationship
with the Government of Canada which could only be ended with
their consent.
Personally, I believe no political unit should be forced to leave
Canada against its will whether aboriginals or simply strong
federalists. Their decision to remain in Canada must be every bit as
binding on the Government of Quebec as the legitimate Quebec
vote to leave Canada should be binding on Canada.
Bill C-230 spells out how I believe we could be sure that a
separation vote was legitimate. Of course, a serious problem with
my beliefs is that I cannot tell the separatists in Quebec what to do.
However, this Parliament not only can but must tell the
Government of Canada what to do.
If Bill C-230 were passed into law, it would say that unless
certain conditions are met, the Government of Canada cannot
negotiate separation. It would tell the Government of Canada that it
must hold a binding national referendum within one year if elected
parliamentarians agree that a fair vote was held in the province
wanting to separate. Note that while I include an elected Senate, an
appointed Senate is excluded because it represents only political
patronage and not the will of the people of Canada.
Bill C-230 says that we must have a national referendum but
only if Parliament agrees that the provincial vote to leave Canada
was conducted according to the conditions set out on pages 3 and 4
of this legislation.
Some details about the process would include: full and fair
advanced advertising and printing on every ballot that a vote to
separate means a vote to become a separate state, foreign to
Canada; cease to be a province of Canada; cease to have
representation in the Senate and in the House of Commons; lose the
right to be citizens of Canada; lose the right to hold a Canadian
passport; and lose the right to unrestricted entry and travel within
Canada and the unrestricted right to work in Canada.
They must also notify provincial voters that the Government of
Canada cannot negotiate separation of any electoral district in
which a majority of at least 50 per cent of the votes cast, plus one
vote, are against separation from Canada; nor could provincial
electoral boundaries have been changed so that the number of
native people or non-francophone people was significantly altered
from the preceding election.
This House and an elected Senate would have to agree by a free
vote, that is, a vote in which the party whips told their members
they are free to vote their conscience.
4780
I have included many provisions in Bill C-230 to ensure that
this issue is decided with the maximum respect for the wishes of
the people. The ultimate respect for the wishes of the Canadian
people will be shown by referring this entire issue to their final
judgment by means of a binding national referendum.
After all, it is their country being carved up. They feel just as
strongly about it as some Quebecers do about the partition of
Quebec.
(1830 )
According to Bill C-230, the question to be put before the people
no later than one year after a legitimate provincial vote to separate
should be as follows: ``Do you agree that the Government of
Canada may negotiate terms of separation between Canada
and-?'' The name of the province would be inserted here.
Once again the nationwide ballots would have to repeat that
electoral districts which did not vote to separate would not be
included in the separation. This would help keep separation within
the realm of politics and promote a peaceful resolution rather than
the wars and/or major civil disobedience likely to follow if, for
example, Quebec tries to force primarily English speaking sections
in and around the city of Montreal as well as the aboriginal peoples
mostly living in northern Quebec in the region known as Ungava to
leave Canada against their will.
Many people have argued that the Ungava region was only given
to the province of Quebec to administer on behalf of Canada and
that Ungava certainly did not form part of the province at the time
Quebec joined Confederation. They say, therefore, that it must not
be included in a foreign country called Quebec. I prefer that the
issue be settled by vote and not by academics arguing.
Finally, Bill C-230 would allow elected representatives of the
people of Canada to include additional questions in this binding
national referendum, for example a formula for dividing the
national debt.
During the last referendum we came very close to losing this
country. I have had to sit here in the House many times and listen to
the government on the other side, which buried its head and said
that everything was fine, talk about us as Reform members not
doing anything with regard to that situation. It knew full well that it
begged and pleaded with us not to interfere because it had the
situation under control in the province of Quebec and we would
only get in the way and hinder the process.
Unfortunately, I have to admit, I along with many other
colleagues fell into the trap that the Liberals laid for us in the
House and we believed them. Look what almost happened. They
now use that against Reform whenever they feel like it. They are
forgetting quite conveniently how they pleaded with us to let them
please handle it and it would be brought under control. Shame.
In conclusion, I repeat that the federal government should take
reasonable actions to satisfy the legitimate aspirations of the
people of Quebec within Canada. However, if Quebec still votes to
leave it is essential to pass legislation like Bill C-230 to make the
separation process as orderly as possible.
I would now like to ask for unanimous consent from the House to
make this bill votable.
The Acting Speaker (Mrs. Ringuette-Maltais): Do we have
unanimous consent of the House to have Bill C-230 a votable bill?
Some hon. members: No.
Mr. Paul DeVillers (Parliamentary Secretary to President of
the Queen's Privy Council for Canada and Minister of
Intergovernmental Affairs, Lib.): Madam Speaker, Bill C-230
tabled by the member for Okanagan-Shuswap is aimed at giving
Canadians the impression that the Reform Party has a serious,
carefully thought out plan for preserving national unity.
While our government is pursuing a positive strategy of
renewing the federation and giving all Canadians hope for the
future, the third party is telling Canadians to throw in the towel, to
launch themselves into a negotiation process in the wake of a
referendum that has not and may not take place.
This demonstrates yet again that the Reform Party does not have
a real strategy for national unity. To put it simply, it has no vision
for national unity and no vision for the country. The third party has
patched together a series of third rate ideas and calls it a plan.
At a certain level I think I understand why this bill is being
brought forward today. My hon. colleague, like many Canadians,
was shaken by the last referendum. He is trying to respond to the
concerns of Canadians but has chosen a misguided approach.
(1835)
[Translation]
Our government's strategy is, above all, to deal with the real
issues concerning all Canadians: economic growth, job creation,
maximum government efficiency, as well as the protection of our
social programs and our environment. But the federal government
is also committed to providing certainty and legal clarification
regarding the issues arising from Quebec's possible secession.
Earlier this year, we became involved in a case submitted to the
Superior Court of Quebec by Guy Bertrand. We were forced to do
so partly because of the Quebec government's position in this case.
That government claims that the issues related to Quebec's
secession do not come under the jurisdiction of the courts, that
they have nothing to do with Canada's laws or Constitution, and
that
4781
Quebec can unilaterally determine how it will secede without
taking Canada's Constitution or its judicial system into account.
Given the Quebec government's position and Judge Pidgeon's
ruling, our government announced that it would refer to the
Supreme Court the basic issues raised by the Pidgeon ruling.
[English]
Under that procedure the federal government is submitting to the
supreme court questions of law and fact that it deems important for
the court to hear and consider. We made this decision because the
federal government owes an obligation to all Canadians to provide
social, economic and legal stability. This obligation requires the
federal government to provide certainty and legal clarification
regarding the issues surrounding Quebec's possible secession.
Now is the time in this period of relative calm, with a future
referendum not immediately looming, to seek judicial clarification
of these issues.
[Translation]
By referring these issues, we are asking the Supreme Court to
establish a legal framework and a common understanding that will
allow us to address certain fundamental issues surrounding
Quebec's secession.
Our decision to use this approach at this time does not in any
way bring into question the right of Quebecers to express their
views on their own future through an advisory referendum. We are
appalled by the Quebec government's decision to place itself above
the law and outside the jurisdiction of Canadian courts.
[English]
As for the result of the reference, the most important outcome
will be that we finally have some certainty on the fundamental
legal issues arising from the Quebec government's plan for
secession. Nevertheless, the Government of Canada is pursuing its
commitment to renew the federation through a wide range of
constructive, well thought out initiatives.
In the February speech from the throne, our government
indicated its willingness to withdraw from areas such as labour
market training, forestry and mining development, social housing
and recreation. Further progress was made during the constructive
discussions and the first ministers meeting in June. This work is
ongoing and we are on track with our plan.
At the first ministers meeting it was agreed that our government
would continue to work with the provinces in the coming months,
building on the work of the ministerial council on social policy
reform and renewal to develop a new partnership for securing and
modernizing the social union.
In the weeks following the first ministers meeting the federal
and British Columbia governments agreed to a full bilateral review
of the responsibilities and roles of the federal and provincial
governments in the management of the Pacific salmon fishery.
These are the types of measures that build goodwill, measures
brought about through partnerships based on mutual respect and
the desire to enter the 21st century as a renewed, united federation.
[Translation]
These measures may not be flamboyant enough for my colleague
across the way, but they show that the Canadian federation is
flexible and benefits all its partners.
(1840)
We are proving that Canada works and that separation is not a
solution. We are proving that another choice is available, namely
the renewal of our federation, and that it is a best choice. Polls
show that most Quebecers favour this option. I would therefore
urge the third party to support this option.
This is the kind of positive attitude we need, in Canada, to see us
into the 21st century, all the while remaining united. This is the
attitude we, in the Liberal government, have. We do not sink into
negativity; we are not afraid to take positive measures.
We want to unite Canadians, not divide them. We are also
resolutely committed to a national reconciliation process.
[English]
We are putting in place initiatives that will lead to greater
co-operation among governments and will reinforce the economic
union and social fabric of this country. We are taking a step by step
approach to bring about real practical changes. In so doing we are
demonstrating the flexibility of the federation and undermining the
myths that build support for separatism. This is how we will
achieve national reconciliation.
[Translation]
The Premier of Quebec himself, Lucien Bouchard, has realized
that he had better set his separatist designs aside and focus on
concerns regarded as priorities by Quebecers: the economy, job
creation and putting the fiscal house in order.
According to a Gallup poll released earlier this month, no fewer
than 45 per cent of employed Quebecers are afraid to lose their
jobs. That is the kind of concern that must be looked into and that
we, in our government and our party, are presently looking into.
Quebecers want their government to take part in the discussions
with the federal government and the other provinces, so that the
interests of Quebec are represented.
4782
They want change, of course, but change within Canada. That
is the message they conveyed in the October referendum and this
government, our party, is in the process of acting of on this
message.
[English]
The bill proposed by the hon. member for Okanagan-Shuswap
does not respond to this message, nor does it correspond to the
wishes of Quebecers and other Canadians who are asking their
politicians to work together constructively to renew the federation,
promote economic growth and work toward creating a climate
suitable for job creation.
It is a far cry from the measured approach our government is
taking to clarify issues and allow for a constructive dialogue to take
place well in advance of a future referendum. The leader of the
third party may believe he has 20-20 vision on national unity issues
but this bill shows he has a big blind spot.
For these reasons I cannot support Bill C-230.
[Translation]
Mrs. Pierrette Venne (Saint-Hubert, BQ): Madam Speaker,
Bill C-230 introduced by the member for Okanagan-Shuswap is
entitled An Act to provide for a national referendum to authorize
the government to negotiate terms of separation with a province
that has voted for separation from Canada. It proposes rules which
would apply to a referendum on the separation of a province from
the rest of Canada.
In spite of its neutral wording, it is obvious that this bill
primarily seeks to impose on the province of Quebec rules for its
next referendum on sovereignty.
What the member for Okanagan-Shuswap proposes is
strangely similar to the secession act passed in 1990 by the Soviet
regime, in the former USSR. I will remind the member of certain
facts regarding the passing of this act. Unlike Canada's
constitution, the constitution of the Union of Soviet Socialists
Republic included a clause granting republics the right to freely
separate from the USSR, without any procedures or conditions.
(1845)
At the beginning of the nineties, following the crumbling of the
Gorbachev regime and of the Berlin wall, some sovereignist parties
took office in certain republics. Given this situation, president
Gorbachev quickly had the Soviet government pass an act on
secession.
The act, which was passed in April 1990, set the conditions for
separation. In fact, it sought to make it impossible to exercise this
right by the means proposed in Bill C-230. For example, the Soviet
legislation defined the referendum procedure to be used by the
republics, including the type of initiative allowed, the voting
procedure and the number of ballots required for the decision to be
valid.
The bill proposed by the member for Okanagan-Shuswap gives
the House of Commons and the Senate the right to rule on the
eligibility of the question and its wording, should the yes side win.
Indeed, should the yes side win, the Senate and the House of
Commons will determine whether the question that was put was a
simple and direct question; whether an affirmative vote was cast by
a majority of at least fifty per cent plus one; whether the
referendum was held in compliance with the laws of the separating
province and whether its results were recorded on the basis of the
electoral districts of the province; whether notice of the referendum
appeared in the Canada Gazette and in at least one major
newspaper in each riding of the province which, of course, means
Quebec; whether the effect of a vote in favour of separation was
clearly stated on the ballot including: the fact that the province will
become a separate state, foreign to Canada; that it will cease to be a
province of Canada; that it will cease to have representation in the
Senate and House of Commons; that its residents will lose the right
to be citizens of Canada; that they will lose the right to hold a
Canadian passport; and, finally, that they will lose the right to
unrestricted entry to and travel within Canada, and the unrestricted
right to work in Canada.
By granting the House of Commons and the Senate the right to
review the holding of a referendum, the bill proposed by the
member for Okanagan-Shuswap gives the two houses a veto over
a province seeking to achieve sovereignty. Indeed, this bill
provides that the conditions I just listed can only be met if the
House of Commons and the Senate render a favourable decision.
In the current context, it would be surprising, to say the least, to
expect members of this House and the other place to make an
objective decision. In addition, the bill gives the House of
Commons and the Senate the authority to refer to the Supreme
Court any question relating to the holding of a separation
referendum.
In point of fact, this bill allows the process whereby a province
wishes to become independent to be defined by the courts. Should
the will of a people to decide on its own destiny be relegated to
questions of a legal nature?
The referral to the Supreme Court must please the Minister of
Justice, since he confirmed only today that he intends to seek the
opinion of the Supreme Court by submitting to it, by way of a
constitutional reference, the question of the legality of Quebec's
sovereignty. In fact, any legal strategy intended to thwart the will
of a people must be eclipsed by the freedom of that people to
democratically decide on its political future.
(1850)
Nonetheless, once the Senate and the House of Commons have
determined that the sovereignty referendum is valid, the Governor
4783
in Council shall hold a Canada-wide referendum that is binding on
the Government of Canada within one year.
The question in this Canada-wide referendum will be whether or
not the people of Canada authorize the federal government to
negotiate the terms of separation of the province wishing to secede.
The legislation on secession passed by the Supreme Soviet of the
former USSR that I mentioned a little earlier provided for the same
consultation mechanism.
In the event that a republic voted in favour of sovereignty, this
legislation required the results to be submitted to all the other
republics in the Union. Like Bill C-230, the Soviet legislation on
secession also made provision for the right of partition of certain
groups within the Republic. These groups were literally given the
right to secede from another group that was seceding.
The right to self-determination is an attribute of peoples and of
nations. Quebec being a nation within the Canadian federation, it
follows that, should it become sovereign, its borders would be
guaranteed against any challenge by Canada, the corollary of this
right to independence being the respect of the territory associated
with this people or this nation.
It is illogical to say that a riding within the province could take
advantage of that right, just as francophone populations outside
Quebec could not demand to be linked back to Quebec.
Finally, we all know what happened to president Gorbachev's
plan; the independentist republics simply ignored it. Let us be
straight with ourselves, however: Canada cannot be compared to
the former USSR of 1990. The mere fact that Bill C-230 is oddly
inspired by such an authoritarian model does, however, give one
pause, even though this trend is not a great surprise to anyone.
The Bloc Quebecois has always defended the principle of
sovereignty of the provinces and their respective legislatures on
their own territory. Provincial governments, being the elected
representatives of the population, have the authority to achieve
sovereignty, provided they receive a democratic mandate from
their population to do so.
As I said a while ago, this bill is aimed primarily at Quebec.
Should there be another referendum in Quebec, the bill is aimed at
not only submitting the provincial government to the authority of
the federal government, but also at preventing Quebec from
exercising its right to sovereignty. The Bloc Quebecois has always
been opposed to any move by the federal government to hamstring
the Government of Quebec by dictating the conditions for access to
sovereignty.
Mr. Mauril Bélanger (Ottawa-Vanier, Lib.): Madam
Speaker, Bill C-230, introduced today by the hon. member for
Okanagan-Shuswap, would provide for a national referendum to
authorize the government to negotiate terms of separation with a
province that has voted for separation from Canada.
It is the second time within only a few months that the Reform
Party has proposed a debate on a variation on the same theme. It is
clear that by introducing this bill, the third party favours
confrontation over national reconciliation.
[English]
Whereas the government is working to improve the federation so
that it better responds to the real concerns of Canadians, the
Reform Party seems to be interested only in the hypothetical
scenario of secession. That being said, the practical constructive
approach the federal government is focusing on to renew the
federation does not prevent the government from understanding
and sharing some of the concerns expressed today by the member
for Okanagan-Shuswap.
I probably do not need to remind the member that the federal
government has made a commitment to clarifying the legal
questions relating to the possibility of Quebec secession.
(1855)
[Translation]
I nevertheless wish to recall why our government intervened in
the Bertrand case. We did so to defend the rule of law, to express
our profound disagreement with the position of the Attorney
General of Quebec, who maintained that Canadian courts had no
role to play in issues concerning separation and that these issues
had no connection with Canadian laws or our Constitution.
In the light of the position taken by the Government of Quebec
and the ruling by Judge Pidgeon in the case of lawyer Guy
Bertrand, our government announced that it asked the Supreme
Court of Canada to give an advisory opinion on the fundamental
issues relating to separation which arose from the Pidgeon ruling.
It is reassuring for all Canadians to note that the Superior Court
dismissed the main arguments of the Government of Quebec,
which maintained that accession to sovereignty had nothing to do
with the Canadian Constitution. The judgment pointed out, first of
all, that the case is an important one, and that it cannot be rejected
without a hearing; second, that the legal aspects of secession are
complex and important and therefore deserve to be heard on the
merits of the case; and third, that the courts play a fundamental role
in protecting the rule of law.
Let it be clear that the government's decision to ask for a
reference to the Supreme Court of Canada in no way challenges the
right of Quebecers to decide on their own future through a
consultative referendum. What we want is to establish a framework
based on legal certainties that will permit us to reply to certain
fundamental questions to do with a possible secession.
4784
Contrary to what the government of Quebec is advocating, this
is a responsible action on the part of our government, which must
ensure social, economic and legal stability for Canadians. As long
as there is a question of another referendum in Quebec, our
government will assume its responsibility of ensuring that all the
cards are on the table.
[English]
We are thus on the one hand fully assuming our responsibility
and on the other hand and as a priority pursuing our plans to renew
the federation step by step which is what Canadians want. On the
contrary, rather than making a constructive contribution to the
debate and helping Canadians to come closer together, the Reform
Party has a tendency to exploit the differences that divide for
partisan ends.
The issues of concern to Canadians are economic prosperity,
jobs, social programs and the unity of our country. They are also
the priorities our government has set for itself.
Canadians want their government to work together to bring
about the changes that will make the federation work more
effectively and more efficiently. They want gradual changes that
will yield direct, positive results. The government is forging ahead
with the measures to make the Canadian federation work better
which were announced in the speech from the throne in February
and the last budget and discussed at the first ministers meeting in
June. In that regard, allow me to summarize for the benefit of my
hon. colleague the initiatives for change that have been announced
or implemented.
[Translation]
The federal government is pursuing its efforts with the provinces
and territories for a review of the roles and responsibilities of the
various levels of government. It has therefore undertaken to
withdraw from areas of activity that are more properly the
responsibility of the provinces, municipalities and other
stakeholders, such as job training, certain sectors of transportation,
mining, forestry, recreation and public housing.
In this regard, the proposal made last May by our colleague, the
Minister of Human Resources Development, is a concrete example
of delivering on a promise that was important for our government
and for most of the provinces, which have, for some time now, been
asking for more responsibility in this area.
It is a practical example that will make it possible to tailor
programs to the particular needs of the regions, thus marking an
important step towards a more flexible federalism.
[English]
With respect to social programs, the government is committed to
ensuring that all Canadians can continue to rely on a secure, lasting
social safety net. We are working with the provinces to ensure that
Canada's social programs continue to express the national
objectives, values and principles cherished by our fellow citizens.
Again, with a view to co-operation and dialogue, a
federal-provincial-territorial committee on social policy and
national standards was proposed at the first ministers meeting in
June and was endorsed by the provinces in August in Jasper,
Alberta. Alberta recently appointed the co-chair of that committee.
Our colleague, the Minister of Human Resources Development,
together with the Minister of Health will thus be able to pursue the
discussions on this matter which is of key importance to all
citizens.
(1900)
[Translation]
As far as the economy is concerned, the government will
continue to work with the provinces to reduce the barriers to
internal trade and manpower mobility.
It is also in the interest of better serving the public interest that
the federal government is proposing the creation, in co-operation
with the interested provinces, of new mechanisms to reduce
overlap in the sectors of securities, revenue collection and food
inspection.
[English]
In the environmental field the federal and provincial
governments have agreed on a renewed partnership to develop
effective management objectives and principles. In the field of
tourism the provinces and territories have welcomed the private
sector's co-operation in connection with the activities of the
Canadian tourism commission.
These are a host of tangible examples of the progress that can be
achieved through co-operation between the different orders of
government. Discussions are evolving to renew the immensely
successful national infrastructure program. The federal
government is working with the provinces and territories to
develop a proposal that is acceptable to all. This matter will be
discussed at the upcoming finance ministers meeting next month.
[Translation]
Furthermore, our government is committed to restricting its
spending power in areas that are the exclusive jurisdiction of the
provinces. It will no longer use its spending power to create new,
shared-cost programs in areas under provincial jurisdiction without
the consent of the majority of the provinces. Provinces that opt out
and establish a comparable program will receive compensation. It
is the first time the federal government has offered to limit its
powers outside the context of formal constitutional talks. This
commitment marks a turning point in the history of federalism.
[English]
This is how our government is renewing the Canadian
federation, by proposing constructive solutions to the issues which
concern Canadians in an atmosphere of co-operation, dialogue and
4785
respect. We believe that the spirit of co-operation and openness
will enable us to further Canadian unity.
[Translation]
Therefore, for all the reasons I enumerated previously, I cannot
support the bill introduced today in the House by the hon. member.
Again, I do not dismiss the concerns about the possibility of
another referendum in Quebec. Our government is well aware of
them and is acting responsibly, as was pointed out in the throne
speech.
However, I believe that co-operation, not confrontation, is the
way to bring about the changes Canadians want and to guarantee
the unity of our country.
We will continue to demonstrate that as we gradually improve
the way our federation works, we will be in a better position to
respond to the needs and aspirations of all citizens.
If the Reform Party wants to do everything it can for national
unity, we urge it to drop the confrontational rhetoric and work on
national reconciliation and the renewal of our federation, in the
best interests of all Canadians.
[English]
Mr. Dick Harris (Prince George-Bulkley Valley, Ref.):
Madam Speaker, I am pleased to speak to Bill C-230 today, put
forward by my colleague from Okanagan-Shuswap.
As I sat here listening to these last two Liberal speakers I got the
distinct feeling that these two hon. members must have been living
in a complete vacuum over the last three years. This separatist
group here has been standing in this House every day since the 35th
Parliament started, saying: ``We want to secede from Canada. We
want to separate from Canada''. I wonder if these hon. members
have been hearing that.
This is why we got into so much trouble in the referendum in
Quebec. This government appears now, after listening to the
member for Simcoe North and the member for Ottawa-Vanier, to
prefer to just carry on the with status quo. Let us just try and keep
doing what we have been doing.
That is what almost lost us the referendum in October 1995. This
government, these Liberals, would not face up to the fact that these
separatists and the Quebecers they duped into following their line
want to separate from Canada.
(1905)
What does it take to get the message across? I do not want that
province to leave Canada. That province belongs as much to British
Columbians, Nova Scotians, Albertans, Ontarians and
Saskatchewanians as it belongs to Quebecers. It part of Canada,
even though only one part.
This Liberal government, the member for Simcoe North, says
that we want to proceed with positive and constructive measures.
That is Liberal talk for we want to have more appeasement and
more accommodation for the province of Quebec.
I cannot believe the member for Ottawa-Vanier said the
Reform Party talks about a hypothetical scenario of secession. The
Bloc and the Parti Quebecois in the province of Quebec just went
through a referendum in 1995 to determine whether the people
wanted to separate. There is nothing hypothetical about that. What
is the member for Ottawa-Vanier thinking about? He says it is
absolutely important that we ensure that all cards are on the table.
We stood in this House day after day leading up to the
referendum in 1995 and told the Prime Minister and this Liberal
government, whose members were sitting on their hands: ``For
goodness' sake, put the cards on the table for people who are
thinking about leaving Quebec by voting yes. Put the cards on the
table''.
There were no cards on the table. We came that far from a yes
vote because this Liberal government did not have the backbone
then to put the cards on the table. It obviously does not have it now
to put the cards on the table.
The member for Ottawa-Vanier made another incredulous
statement that the Reform Party would like to exploit the
differences between Canadians. What an incredible statement.
There has been no political party in the history of Canada that
has done more to foster the differences between Canadians than the
Liberal Party of Canada in any Parliament at any time of our
history since 1867.
Continually, day after day, year after year, the Liberal
government, whatever it was of whatever year, has done more to
foster the differences between Canadians than to bring Canadians
together as one people.
That is on record a million times. How can the member for
Ottawa-Vanier talk about the Reform Party's wanting to exploit
the differences when this party has built its political career by
fostering the differences between Canadians? What an incredible
statement.
The reason the member for Okanagan-Shuswap put forth Bill
C-230 was that this government does not have the guts to deal with
these separatists on a face to face basis. It would rather beat around
the bush and try to smooth things over.
We are talking about a group of Quebecers-thank God not all
Quebecers, a majority want to stay in Canada-who have been
duped by a small group of politicians into believing that there is
some nirvana out there if they should leave Canada, a nirvana
called Quebec nationhood.
4786
I say thank goodness the referendum failed in 1995. Unless this
Liberal government gets its act together, it may not win the next
referendum the separatists hold. If it continues on a path of do
nothing, say nothing and hope the problem will go away, its
members are going to lose.
Now we get down to the issue of Bill C-230. I say that Quebec is
part of Canada and always has been. Since we became the country
of Canada, Quebec has been a part of it. It has enjoyed the benefits
of Canada as Canada has enjoyed the benefits of the province of
Quebec. We have a country here. We have a nation.
But some people in Quebec have decided that somehow they will
be better off if they leave this great country of ours. Somehow they
have managed to convince a number of people in the province of
Quebec that this would be a good thing to do.
In 1995 in the last referendum, did they talk about separation
leading up to the actual voting day? No. They talked about some
fuzzy sovereignty association. The Liberal government would
hardly even mention the word separation in this House unless we
dragged it out of them.
This separatist group that wants to break up this country did not
have the courage to put a simple question to the people of Quebec:
Do you want to separate from Canada, yes or no? It referred to
some bill that had been passed in the Quebec legislature that dealt
with some sort of fuzzy sovereignty association, negotiating some
arrangement with Canada.
The separatists say they want to separate but they did not have
the guts to go to the people of Quebec and ask them if they wanted
to leave Canada, period. That is what the question should have
been. If that had been the question that was put, the no vote would
not have squeaked by like it did. The no side would have won by a
huge majority because the people would have clearly understood
the question. It would not have been some convoluted question that
the separatists came up with, but it would have been a clear
question.
The Reformers stood here and talked to the Prime Minister. We
said: ``Why do you not tell the people of Quebec what they are
voting for? Why do you allow the separatists to put this convoluted
question before them? Why is the Liberal government not saying
something about it? Why are you not clarifying it?'' Why did they
not put all the cards on the table like the member for
Ottawa-Vanier was talking about? That is what we demanded of
the Liberal Party. In response the Liberals said: ``You Reformers
keep out of it. We know how to handle it''.
We saw how the Liberal government handled it. It just about lost
it. We came close to losing the vote in Quebec because of the
Liberal government's inaction. The Liberal government did not
have the courage to deal with these separatists head on.
The majority of the people of Quebec do not want to separate
from Canada. We cannot believe what this separatist group has
been telling us. We cannot believe what Mr. Bouchard in Quebec is
saying. We cannot believe that.
The people of Quebec are Canadians who happen to live in the
province of Quebec. I would say that if the Canadians who live in
the province of Quebec had a clear question put to them: yes or no,
do you want to separate from Canada, it would be an overwhelming
no. That is what we are demanding in Bill C-230: that this Liberal
government have the backbone, the courage to talk about the real
question and not to let people get suckered in by these separatists
here.
[Translation]
The Acting Speaker (Mrs. Ringuette-Maltais): The period set
aside for the consideration of Private Members' Business has now
expired and the order is dropped from the Order Paper.
It being 7.13 p.m., this House stands adjourned until tomorrow at
10 a.m., pursuant to Standing Order 24(1).
(The House adjourned at 7.13 p.m.)