CONTENTS
Thursday, April 10, 1997
Bill C-94. Motions for introduction and first readingdeemed adopted 9513
Bill C-398. Motions for introduction and first readingdeemed adopted 9513
Bill C-399. Motions for introduction and first readingdeemed adopted 9514
Bill C-400. Motions for introduction and first readingdeemed adopted 9514
Mr. Scott (Fredericton-York-Sunbury) 9514
Mrs. Stewart (Northumberland) 9515
Mr. Hill (Prince George-Peace River) 9532
Motion agreed to on division: Yeas, 115; Nays, 58 9541
(Motion agreed to, and bill referred to a committee.) 9542
Mr. Martin (LaSalle-Émard) 9542
Mr. Chrétien (Frontenac) 9543
Mr. Speaker (Lethbridge) 9544
Mr. Leroux (Shefford) 9545
Mr. Chrétien (Saint-Maurice) 9546
Mr. Chrétien (Saint-Maurice) 9547
Mr. Chrétien (Saint-Maurice) 9547
Mr. Chrétien (Saint-Maurice) 9547
Mr. Chrétien (Saint-Maurice) 9547
Mr. White (Fraser Valley West) 9548
Mr. White (Fraser Valley West) 9548
Mr. White (Fraser Valley West) 9548
Mr. Martin (LaSalle-Émard) 9550
Mr. Martin (LaSalle-Émard) 9551
Mr. Axworthy (Winnipeg South Centre) 9552
Mr. Axworthy (Winnipeg South Centre) 9553
Mr. Axworthy (Winnipeg South Centre) 9553
Bill C-93. Consideration resumed of motion 9555
Bill C-82. Report stage 9570
Motions Nos. 1, 3 and 5 9571
Division on Motion No. 1 deferred. 9574
Division on Motion No. 3 deferred. 9574
Division on Motion No. 5 deferred. 9574
Motions Nos. 2, 4, and 6 9574
Division on Motion No. 2 deferred. 9579
Division on Motion No. 4 deferred. 9579
Division on Motion No. 6 deferred. 9579
Bill C-205. Report stage 9579
Motion for concurrence 9579
Motion for third reading 9580
(Motion agreed to, bill read the third time and passed.) 9580
Bill C-324. Motion for second reading 9580
Mr. Leroux (Shefford) 9586
9513
HOUSE OF COMMONS
Thursday, April 10, 1997
The House met at 10 a.m.
_______________
Prayers
_______________
ROUTINE PROCEEDINGS
[
Translation]
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 10 petitions.
* * *
Mr. Bernard Patry (Parliamentary Secretary to Minister of
Indian Affairs and Northern Development, Lib.): Mr. Speaker,
pursuant to Standing Order 34, I have the honour to table, in both
official languages, the reports of the Canadian section of the
Assemblée internationale des parlementaires de langue française as
well as the financial report concerning the meetings of the
Assemblée's Commission politique et de l'administration générale
and its executive in Beirut, Lebanon, on November 20 and 21,
1996.
* * *
[
English]
Mr. Tony Valeri (Lincoln, Lib.): Mr. Speaker, pursuant to
Standing Order 108(2), I have the honour to present, in both official
languages, the second report of the Standing Committee on
Government Operations dealing with government contracting.
In response to concerns expressed by representatives from the
public and private sectors, our committee sought to ensure more
effective parliamentary oversight of government contracting,
particularly with regard to the open bidding service. We have made
a number of recommendations with a view toward making the
contracting process more transparent, accessible and competitive,
thus ensuring more effective management of the process by the
government itself.
Pursuant to Standing Order 109, we are requesting a
comprehensive government response.
* * *
Hon. Herb Gray (Leader of the Government in the House of
Commons and Solicitor General of Canada, Lib.) moved for
leave to introduce Bill C-94, an act respecting DNA identification
and to make consequential amendments to the Criminal Code and
other acts.
He said: Mr. Speaker, as it is customary for the mover of the
motion to say a brief word about the purpose of the bill, I want to
say that this bill proposes the establishment of a national DNA
databank. This is the second phase of our strategy to enable DNA
evidence to be used in solving crimes. The first step was the
legislation to enable DNA samples to be taken by warrant, which
was passed a year ago.
I am very pleased to continue our commitment and to table
legislation to carry out the second phase of the creation of a DNA
databank.
Finally, I wish to inform the House that I propose to move that
this bill be referred to committee before second reading, pursuant
to Standing Order 73(1).
(Motions deemed adopted, bill read the first time and printed.)
* * *
Mr. David Iftody (Provencher, Lib.) moved for leave to
introduce Bill C-398, an act to amend the Bank Act
(amalgamation).
(1010)
He said: Mr. Speaker, it is my pleasure to rise in the House today
to present my first private member's bill, an act to amend the Bank
Act respecting amalgamation.
This bill addresses recent proposals by a number of Canadian
large banks and financial institutions to merge with smaller
institutions in Canada.
The primary substance of the bill is to prohibit that process only
in limited circumstances, for example where one of the institutions
9514
under the advisement of the Superintendent of Financial
Institutions could demonstrate insolvency.
The health of the Canadian financial sector would not be served
by these kinds of amalgamations. Most Canadians feel very
uncomfortable with some of the banks, particularly at this time,
amalgamating even more power. With the help of my colleague, the
hon. member for Trinity-Spadina, we propose to table this today.
We believe it will contribute in a very substantial way to the
ongoing debate in financial institutions in Canada.
(Motions deemed adopted, bill read the first time and printed.)
* * *
Mr. Darrel Stinson (Okanagan-Shuswap, Ref.) moved for
leave to introduce Bill C-399, an act to repeal the Firearms Act and
to make certain amendments to the Criminal Code.
He said: Mr. Speaker, it is a pleasure today to table my new
private member's bill which would repeal Bill C-68, a gun control
bill masquerading as a crime control bill, which imposes an unfair
and unjust requirement for law-abiding owners of rifles and
shotguns to pay new fees and register their legal firearms while it
does nothing to punish the criminal misuse of firearms.
My new private member's bill will restore the Criminal Code as
it was before the introduction of Bill C-68 and replace Bill C-68
with serious minimum penalties for the criminal misuse of
firearms.
My bill will amend the Criminal Code to require a minimum
sentence of five years for using a firearm to commit a crime or to
escape from a crime scene, that penalty increased to ten years if the
gun is fired. People convicted of such criminal misuse of firearms
would receive a lifetime prohibition against owning a firearm,
ammunition or an explosive device.
(Motions deemed adopted, bill read the first time and printed.)
* * *
Mrs. Anna Terrana (Vancouver East, Lib.) moved for leave to
introduce Bill C-400, an act to amend the Canada Elections Act
(registration of political parties).
She said: Mr. Speaker, I am pleased to introduce a bill entitled an
act to amend the Canada Elections Act. The intention of this bill is
threefold. First, the bill amends the Canada Elections Act to allow
registration of a political party by the Chief Electoral Officer when
the party nominates candidates in at least 12 electoral districts
throughout the country, down from the present requirement of 50
electoral districts.
Under the present act, the Chief Electoral Officer must
deregister a party that does not meet the conditions set out in
section 28(2) of the act.
Second, the bill removes the obligation placed on the chief agent
of a political party to liquidate the assets of that party when it is
deleted from the registry of political parties by the Chief Electoral
Officer of Canada.
Finally, the bill lowers the amount required for deposit with the
returning officer at the same time the nomination papers are filed.
(Motions deemed adopted, bill read the first time and printed.)
* * *
Mr. Andy Scott (Fredericton-York-Sunbury, Lib.): Mr.
Speaker, I have the pleasure, pursuant to Standing Order 36, to
table five petitions signed by some 600 constituents of
Fredericton-York-Sunbury calling on Parliament to legalize
cannabis.
(1015 )
Mr. Art Hanger (Calgary Northeast, Ref.): Mr. Speaker, I
have several petitions, the first containing 162 names. It calls on
Parliament to enact legislation that will register all pedophiles.
The second petition is a similar type of request. The petitioners
call on Parliament to eliminate the right of convicted pedophiles to
be let out of jail on bail pending an appeal. This would ensure the
protection and safety of the victims and the community from such
convicted offenders. There are 165 names on this petition.
Mr. David Chatters (Athabasca, Ref.): Mr. Speaker, I would
like to present a petition from my constituents. They bring to the
attention of the House that they believe the provocation defence, as
it is currently used in wife slaughter cases inappropriately and
unjustly changes the focus of the criminal trial from the behaviour
of the accused's intention to murder to the behaviour of the victim
who from then on is identified as the one responsible for the
accused's violence.
My constituents do not believe that any amount of provocation
should excuse the act of murder. Therefore, the petitioners request
that Parliament review and change the relevant provisions of the
Criminal Code to ensure that men take responsibility for their
violent behaviour.
Mr. Joe McGuire (Egmont, Lib.): Mr. Speaker, it is my
pleasure to present a petition on behalf of the constituents of
Egmont.
9515
The petition states that because there are over 30,000 nuclear
weapons on earth, the petitioners pray and request that Parliament
support the immediate initiative and conclusion by the year 2000
of an international convention which will set out a binding
timetable for the abolition of all nuclear weapons.
Mr. Ian McClelland (Edmonton Southwest, Ref.): Mr.
Speaker, it is my honour to present three petitions. The first petition
begs the Government of Canada to upgrade its highway system and
spend more money on the repair and maintenance of highways.
Mr. Ian McClelland (Edmonton Southwest, Ref.): Mr.
Speaker, the second petition states that children have a moral right
to be loved and nurtured by both parents and by members of both
extended families.
Consequently, the relevant and legal rights and obligations
should be fundamentally the same for both parents before and after
separation or divorce.
Mr. Ian McClelland (Edmonton Southwest, Ref.): Mr.
Speaker, the third petition follows the one presented by my
colleague from Athabasca. It has to do with the murder of a woman
by her husband and then allowing the husband who committed the
act to claim provocation. This is patently unjust. It does not make
sense. It speaks against the notion of fairness.
This petition, signed by over 300 residents primarily of my
constituency, asks that the government review and change that law
so that persons who attack and kill their spouses are not able to
claim provocation as a justified defence.
Mr. Gar Knutson (Elgin-Norfolk, Lib.): Mr. Speaker, I have
five petitions. The first petition has been signed by 26 people. It
calls on Parliament to support unequivocally the enlargement of
NATO to include all countries of central and eastern Europe that
wish to join, excluding none a priori.
Mr. Gar Knutson (Elgin-Norfolk, Lib.): Mr. Speaker, the
next four petitions signed by approximately 180 people calls on
Parliament to join with the provincial governments to make a
national highway system upgrading possible in 1997.
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, I have
two petitions today. The first comes from Victoria, B.C.
The petitioners would like to draw to the attention of the House
that our police and firefighters place their lives at risk on a daily
basis as they serve the emergency needs of all Canadians. They
also state that in many cases the families of police officers and
firefighters killed in the line of duty are often left without sufficient
financial means to meet their obligations.
The petitioners therefore pray and call on Parliament to establish
a public safety officers compensation fund to receive gifts and
bequests for the benefit of families of police officers and
firefighters killed in the line of duty.
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, the
second petition comes from Whitby, Ontario. The petitioners
would like to 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 our
society.
The petitioners therefore pray and call on Parliament to pursue
initiatives to assist families who choose to provide care in the home
for preschool children, the chronically ill, the aged or the disabled.
* * *
Mr. Paul Zed (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker, I ask
that all questions be allowed to stand.
The Deputy Speaker: Is that agreed?
Some hon. members: Agreed.
* * *
(1020 )
On the Order: Government Orders:
April 9, 1997-The Minister of Finance-Second reading and reference to the
Standing Committee on Finance of Bill C-92, an act to amend the Income Tax Act,
the Income Tax Application Rules and another act related to the Income Tax Act.
Hon. Christine Stewart (for the Minister of Finance, Lib.):
Mr. Speaker, I move:
That Bill C-92, an act to amend the Income Tax Act, the Income Tax Application
Rules and another act related to the Income Tax Act be referred forthwith to the
Standing Committee on Finance.
[
Translation]
Mr. Barry Campbell (Parliamentary Secretary to Minister of
Finance, Lib.): Mr. Speaker, I am pleased to be able to start off the
second reading debate on Bill C-92, the Income Tax Budget
Amendments Act, 1996.
The Minister of Finance has asked the House to approve this
procedure so that it can be passed quickly, while allowing members
to examine the bill in detail.
We cannot emphasize enough how important it is for this bill to
be passed quickly. It includes a whole series of important measures
for increasing the fairness and effectiveness of the Canadian tax
system. The measures were initially unveiled in the 1996 budget, a
9516
budget that received the support of the Canadian public and of this
House.
[English]
Since that time a large number of Canadians have planned their
affairs on the basis of these measures, many of which are of a
relieving nature.
The introduction of this bill was delayed for an important reason.
Most of my colleagues will recall that the 1966 budget included
provisions to enhance the working income supplement of the child
tax benefit, the so-called WIS.
In the period following the 1996 budget it became clear to the
government that it had the opportunity and the obligation to do
more to advance the well-being of Canadian children. This meant,
among other things, revisiting the proposed changes to the working
income supplement set out in the 1996 budget.
After extensive discussions with the provinces and territories,
the federal government decided to propose in the 1997 budget the
Canada child tax benefit. This new benefit would eventually
combine the working income supplement with an enriched child
tax benefit. This proposal represented a major step toward a
national child benefit system. As a result, the changes to the WIS
that would have otherwise been contained in the bill have not been
included.
The bill was available to taxpayers in draft form late in 1996.
Since that time, in keeping with the government's usual practice,
taxpayers have had the opportunity to comment on the legislation
and consult with the Department of Finance.
Let me now review briefly some of the measures included in the
bill before us. As the legislation deals with taxation, probably the
most important point to note is that it does not raise taxes, not
corporate, not excise, not personal. Indeed, as my hon. colleagues
know, the government has never raised personal income tax rates in
any of the four budgets it has brought before the House. This is no
small achievement, given the magnitude of the fiscal problem we
inherited. Moreover, the Minister of Finance has made it clear we
will lower taxes once we can afford to do so and once we know that
it is permanent.
What the government has done in the meantime, and what was
done in the 1996 budget, was to propose a number of measures to
enhance the fairness of the tax system and ensure that it operates as
effectively as possible. These measures included changes affecting
registered pensions plans, RPPs and registered retirement savings
plans. Those changes will help to ensure the sustainability of those
programs while better targeting assistance to modest and middle
income Canadians.
For instance, the bill proposes the elimination of the seven-year
limit on carrying forward any unused portion of a maximum
allowable RRSP contribution. This will make it easier for many
Canadians who find it hard to make full RRSP contributions in
their younger years to eventually benefit from the RRSP system
when they can afford to do so. This is a very important change.
The bill also proposes to increase tax assistance to students and
their families.
(1025 )
First, in the area of registered education savings plans or RESPs,
the bill proposes to increase the annual contribution limit from
$1,500 to $2,000 per beneficiary. It would increase the lifetime
limit from $31,500 to $42,000. The 1997 budget proposed to
enhance tax assistance delivered through RESPs further still. The
bill also proposes to increase the amount in which the education tax
credit is calculated from $80 to $100. Once again this is an amount
the 1997 budget has proposed to increase still further.
The bill will also increase from $4,000 to $5,000 per year the
limit on the unused tuition fees and education amounts that
students may transfer to spouses or parents. This measure will also
be further enhanced by the proposals in the 1997 budget.
Today's bill will also improve access to training and retraining
for many Canadians who have young families to care for.
Specifically, it proposes to broaden eligibility for the child care
expense deduction by allowing parents who are full time students
to claim the deduction against all types of income.
The bill will also raise the age limit for children for whom child
care expenses may be claimed from 14 to 16, thereby providing
increased tax savings for families with older children. A further
measure in the bill that will benefit taxpayers caring for children is
the change to the rules governing child support. The bill provides
that child support paid under a court order or written agreement
made after April 1997 not be deductible by the payer nor included
in the recipient's income. This change reflects the widely held view
that the old system of deduction inclusion was not working for the
benefit of children.
[Translation]
This tax measure is one in a series of measures affecting child
support payments that were recently approved by the House. In
addition to the tax changes in the bill, this series of measures
includes guidelines for the fair and uniform awarding of child
support, as well as new measures for enforcing related orders.
Not only does the bill increase support for education and
assistance to children, but it also increases tax assistance to the
charitable organization sector. The bill reflects the government's
policy of giving charitable organizations the tools they need to do
their work.
9517
[English]
For that reason the 1996 budget increased from 20 per cent to50 per cent the annual limit on the amount of a taxpayer's net
income eligible for tax assisted charitable donations. Once again
this is an area in which the 1997 budget has further substantially
increased tax assistance.
I will skim very quickly over some other major measures in the
bill. I begin with labour sponsored venture capital corporations.
Generous federal and provincial tax credits have helped these
funds, sponsored by labour organizations, attract large amounts of
venture capital for investment in small and medium size
businesses. By the time of the 1996 budget they had more than a
three-year supply of capital. In view of the substantial level of
capital accumulation, the bill includes a range of measures that will
help keep the level of special tax assistance to these funds in line
with current fiscal realities.
The bill also includes some important measures for the energy
and resource sectors. For the oil, gas and mining industries, the bill
would modify rules relating to the resource allowance, thereby
resulting in a more stable and consistent tax structure. As for the
oil, gas and mining industries the bill proposes significant
improvements to the flow through share regime, improvements
that will make the system less restrictive and will remove existing
incentives to economically inefficient corporate decisions.
The bill also includes measures designed to promote sustainable
development of energy resources by providing an essentially level
playing field between certain renewable and non-renewable energy
investments.
The measures I have outlined will make the tax system fairer and
more efficient. They were announced as part of a budget that has
been debated and approved by the House and favourably received
by Canadians. Sending the bill to committee before second reading
will expedite its passage while it enhances the ability of this House
to review the bill intelligently. With these considerations in mind I
have no hesitation in urging my hon. colleagues to approve today's
motion.
Mr. Monte Solberg (Medicine Hat, Ref.): Mr. Speaker, I am
pleased to rise to address this issue.
(1030 )
I must answer the parliamentary secretary's comments. He
asserted at the beginning of his speech that the government had not
increased personal tax rates. That is true but there are more ways
other than raising personal tax rates to take more money from
Canadian taxpayers. It is very important to point that out.
Another way the government can take money away from
Canadian taxpayers is to change how it defines income. That is
exactly what the government has done, and we must point that out.
The 1997 budget documents say that the only way to judge the
impact of taxes is to measure the increase in taxes against growth in
the economy. That is a good way of doing it. When we look at the
growth in personal income taxes in Canada versus the size of the
economy since the government came to power they have gone up
over 14 per cent. The government has done that by redefining
income. It has removed legitimate deductions so that overall
Canadians have faced an increase in taxation. Ultimately that
means that Canadians are paying more and more money.
That is why revenues have gone up over $24 billion in four
years. That was not because of growth in the economy. Growth in
the economy would not come anywhere near to accounting for that
growth in revenue. Obviously the government has closed up
legitimate deductions that Canadian families rely on. The result has
been that the government does not need to make the cuts in
departmental spending that it promised to make in the 1995 budget.
In other words the government cut the heart out of health care
and higher education. They were cut by 40 per cent. It has closed
more hospitals in the country than any premier. That is a fact. It has
cut the heart out of higher education. Many university students are
struggling to pay back loans because the government has cut back
so dramatically in areas of higher education.
When it came to departmental spending, when it came to cutting
in its own backyard despite its promise that it would cut by 19 per
cent, the government failed to cut anywhere near that. It came up to
about half that amount. The government went on a spending binge.
It spent money on flags, on television production funds and all
kinds of ridiculous things. It gave away money to Bombardier
which just announced a $400 million profit.
The government has completely failed Canadians in the vital
areas where the government should be responsible. It failed to
provide the levels of health care funding that Canadians deserve
and want. It failed to provide levels of higher education funding
that Canadians truly deserve.
Contrary to what the parliamentary secretary says the budget
deserves even more debate. We need to talk more about all these
changes. We do not need to force it through committee before
second reading. We need to have some real debate.
I want to follow up a bit more on what the parliamentary
secretary said. He talked about personal income tax rates and I have
addressed that. He failed to mention the government raised taxes in
other areas: $1.5 billion for fuel taxes. We cannot ignore that.
Canadians drive a lot. It is a big country. That impacts on all kinds
of people.
9518
Let us not try to suggest that because the government did not
raise personal income tax rates people have not felt the rise in
taxes. That is ridiculous.
Let us also talk about the massive $10 billion increase in CPP
premiums the government has spearheaded. We just had the former
parliamentary secretary for finance, the member from Winnipeg,
saying in the newspaper in Winnipeg the other day that in 15 years
we would have to revisit CPP. As he pointed out, young Canadians
know that the changes being made are simply not adequate. They
do not address the concerns of young Canadians. It is just like 30
years ago when the Liberal government brought in the CPP on an
unsustainable footing. We will be put in the same situation because
of the changes the Liberal government is bringing in now. We will
be put in that same situation.
(1035)
The member from Winnipeg has been honest with Canadians in
pointing that out. There have been $10 billion in increases on hard
working Canadian taxpayers. Ultimately the Canada pension plan
will not be put on a sustainable footing. I am glad the member from
Winnipeg had the courage to point that out. He deserves some
credit.
I want to talk about some specifics in Bill C-92, for example the
child care expense deduction. The government will raise the
maximum age of children with respect to who may claim the
deduction from 14 years to 16 years of age. How many people put
children who are 16 years old in child care? Is that really a good use
of precious government resources right now? It is ridiculous.
When people in Ontario were polled a margin of 7:1 said they
would much prefer tax relief for the entire family as opposed to
putting more money into child care. Effectively that is what this
change does. Instead of listening to the bureaucrats, instead of
using our own petty reserve of judgment which the government has
done, let us listen to the Canadian people. They are telling us, said
by a margin of 7:1, that they want tax relief for the entire family.
Not coincidentally that is exactly what the Reform Party
proposed in our fresh start platform. We say that parenting is
valuable irrespective of whether the child goes to day care or a
parent chooses to stay at home and raise children. We proposed
changing the child care expense deduction to a credit and extending
it to every family in the country who has children 12 years of age
and under. That will put more money in the pockets of all
Canadians and not discriminate against those people who choose to
stay at home with their children. I cannot believe the government
allows that to continue when Canadians have spoken out so clearly
in favour of the plan we propose.
Another change in Bill C-92, which I noticed the parliamentary
secretary did not focus on, was government was requiring RRSPs
to mature at age 69 rather than at age 71. The Canada pension plan
is under tremendous pressure today. People have admitted in the
Liberal caucus they do not have confidence the Canada pension
plan will be there to serve them well. This is what the member from
Winnipeg was talking about the other day.
Why in the world are we saying that from here on in people will
only be able to contribute to their RRSP until age 69? The two
years between 69 and 71 are precious years for compounding. That
is when they have the most money in their RRSPs. If there is
another two years to contribute and to allow compounding to
happen it would mean a lot more income. Unfortunately the
government seems to take the approach that people should be
penalized for trying to provide for their own retirement.
I fail to understand why we should be allowing the bill to be
pushed through so quickly when it is an important issue. Canadians
obviously feel very concerned about the viability of the Canada
pension plan, especially considering the sorry record of previous
federal governments and this one too in ensuring that the Canada
pension plan has the necessary funding to provide for all
Canadians.
I will touch for a moment on the issue of foreign reporting rules.
I will allow my hon. friend from Calgary Centre to speak on this
issue in a bit more detail. With respect to foreign reporting rules the
government is proposing that people with offshore assets of over
$100,000 must declare them and fill out the paperwork. I do not
deny that there are some people who abuse the reporting of income
from assets held offshore. Undoubtedly that happens. It happens in
Canada as well. That is why we have auditors who go around
checking these things. To all of a sudden make the assumption that
all people are cheating and we have to record all their assets is
absolutely ridiculous. If we apply that principle we should be doing
it in Canada as well.
(1040)
The government should be focusing its resources on doing more
audits, if it is suspicious about people not reporting income, instead
of creating one more massive bureaucracy. There will be
truckloads of forms that will have to be filled out. It will ultimately
cause some people to leave the country because they will not want
to face that kind of scrutiny from big brother.
My time is up, but I invite my colleagues in the Reform Party to
have another go at this ridiculous bill.
[Translation]
Mr. Roger Pomerleau (Anjou-Rivière-des-Prairies, BQ):
Mr. Speaker, I am pleased to speak to Bill C-92, which in a way
brings the Income Tax Act and another act related to the Income
9519
Tax Act in line with the 1996 budget, last year's budget in other
words.
Before I begin, I would like to indicate my agreement with my
hon. colleague from the Reform Party when he says:
[English]
``This government closed more hospitals than was ever done
before by any other government''. He is absolutely right. That is
the reality of things.
[Translation]
There was absolutely nothing new in the 1996 budget and, ever
since it came to the House, the Bloc Quebecois has, as you know,
been calling for a complete reworking of the Canadian taxation
system in order to bring it up to date. Since our arrival, we have
been recommending an item-by-item analysis of all government
expenditures.
This was not to be found in last year's budget, nor will it be in
this year's. At the very most, the Minister of Finance announced in
the last budget the creation of a technical committee on corporate
taxation, or more specifically on tax havens.
The mandate of this committee is, however, too narrow for these
recommendations to lead to the changes required to get Quebecers
and Canadians back to work. It contained no measures specifically
related to employment or to ensuring an equitable division of the
tax burden between individuals and businesses on the one hand,
and major corporations and small and medium size businesses on
the other, the latter being the true creators of employment in both
Canada and Quebec.
There are still serious doubts about the objectivity of the
members of this committee. Several come from big private
companies which advise wealthy clients and major corporations on
how to avoid paying taxes. Certain members of the committee are,
therefore, in a definite conflict-of-interest situation, and we spoke
out against this situation last year.
We know that this committee has had an extension and must
table its report by the end of 1997, after the election of course, and
we also know that the majority of members of the committee
examining the use of tax shelters by corporations themselves make
use of tax shelters, and often have businesses in the tax havens they
are supposed to be studying.
Yet, in its 1996 budget, the government attacked one tax
measure, perhaps the only one, while unemployment is still
rampant, and the Liberals have not succeeded in meeting their
election promise of jobs, jobs, jobs. It has not been said often
enough, nor can it ever be said often enough: the Minister of
Finance has directly attacked a priority tool for job creation. The
Liberal government has cut the tax assistance to workers' funds, in
particular by reducing the federal tax credit linked to these funds,
and by decreasing the annual maximum that can be invested in
them.
The Bloc Quebecois was very critical of this decision, as you
know, and even suggested, when tabling its documents on tax
reform, that the maximum annual amount should be restored to the
level it was before the cuts were made. We must not forget that the
purpose of these funds is to create or protect jobs, mostly in
Quebec. The FTQ fund alone was able to preserve or create 38,000
jobs.
The government remains inconsistent. It talks about job creation
and then savagely attacks the only tax measure we could be
absolutely sure would create jobs. This measure, as we said before,
mainly affects Quebec, because half of the money in these funds
comes from Quebec. The Bloc Quebecois has constantly been after
the government on the tax system. We did so in the case of family
trusts, and although the response was not always satisfactory, we
have done this systematically. We did so in the case of the GST, a
government promise that was not kept, and in the case of the
shocking abuse of tax havens.
(1045)
From the outset the Bloc has been asking for a thorough review
of both corporate and personal taxes. This aspect of our tax system
has not been updated for many years.
But we did more than criticize. Since we were well aware that
last year the government did nothing and had no intention of doing
anything in this year's budget, which has been confirmed, the Bloc
did some research and drafted two papers, one on corporate
taxation which received the approval of the Minister of Finance,
who said we did a professional job. He took the report we wrote but
has now probably dumped it in file 13.
We produced two analyses that consider all aspects of corporate
and personal taxes, something that normally should have been done
by the government. I may remind you it has been quite some time
since Canada's tax laws were reviewed. I may also remind you that
this is the first time an opposition party did the government's job
by doing its own analysis of the tax system, something the
government should have done.
The opposition parties have a relatively small budget for
research and compared with the government, their resources are
extremely limited. Nevertheless, we took the trouble to produce
this study and do a full analysis of the tax system.
I would like to give you some idea of the work that was done on
corporate taxation, for instance. But first, I would like explain, for
the benefit of our listeners, what a tax expenditure is. When we sit
on committees, the first thing tax experts tell us when they come to
meet members and individuals sitting in is: ``Tax laws are
extremely complicated. You will need our help plus a whole
battery of lawyers to understand the system''. I would say that tax
laws are
9520
purposely obscure so the general public cannot understand what
they mean.
I recommend reading Linda McQuaig's book recently published
in English in Toronto as The Lion's Share and translated into
French as La part du lion. The book shows, over a period of 30 or
40 years, precisely how wealthy Canadians used tax leverage to
their advantage and to the disadvantage of the ever poorer middle
class.
Fiscal spending occurs when a tax deduction is accorded for
some reason to a corporation or an individual. When an individual
is accorded a tax deduction of $1,000, it is as if the government
sent them a cheque for $1,000-because this amount was owing to
the government-as in the example given, but it looks better.
Clearly if the government sent a $50,000 cheque to a company,
the public would understand what was happening and would object,
so it gives a $50,000 tax credit under some provision described in a
book somewhere in a huge pile of books. Nobody sees what goes
on, but the $50,000 will be paid by someone other than the
company-the general public.
So, if this sort of tax arrangement is made for all companies,
which is what is happening in Canada, little by little, the tax burden
is displaced and transferred from corporations, the rich, to the
middle class, which is becoming poorer for having to pay others'
taxes.
I would like to point out that we used the Carter report from
1962, which remains valid today in many cases, to prepare our
analysis, which comprises some 100 pages on corporate taxes
alone. We have clearly shown this in a table based on statistics on
personal taxes for the 1993 taxation year taken from government
documents.
(1050)
We have clearly shown that, since 1950 to date, more and more
taxes have been transferred from companies that should be paying
them to individuals who are in fact paying them now. I would like
to cite five key dates as examples, even though the trend remains
constant from year to year. These five dates reveal the extent to
which the tax burden has shifted from the companies-the
wealthy-to individuals: in 1952, 51 per cent of Canada's income
taxes were paid by corporations; in 1962, 36 per cent; in 1972,20 per cent of taxes were paid by companies; in 1982, 17 per cent;
and, in 1992, 7.6 per cent. These figures are from Statistics Canada.
As we can see, from 1950 on, the burden has shifted, with the tax
load being transferred from the rich to the middle class. So, today,
when we look at the number of unemployed, the number of people
on welfare and the number of poor people in Canada, we see that
the rich have succeeded in transferring their tax debt to the people
in the middle class, who are becoming increasingly poorer.
We would have liked the Minister of Finance to really examine
and utilize both last year and this year the reports we provided,
which he himself described as highly professional and which are
based on Statistics Canada figures.
I close on this point. In the 1996 and 1997 budgets, we saw no
effort by the minister to look hard at Canadian taxation.
[English]
Mr. Derek Lee (Scarborough-Rouge River, Lib.): Mr.
Speaker, I am pleased to engage in the debate on this motion which
would advance the government's bill to implement elements of the
1996 budget.
I could not help but reach a conclusion earlier this morning that
some of the opposition comments are bordering on the hysterical. I
refer to some remarks of colleagues in the Reform Party. Some of
the remarks are less than accurate.
I want to attempt to put some balance into the record. For
example, there was a suggestion that there was a 40 per cent
reduction in the transfer payments from the federal government to
the provinces which impacted on education, social programs and
health care.
What the Reform Party fails to acknowledge, and I stand
corrected if I am wrong, is that at the time those transfers were
renegotiated with the provinces there were tax points transferred as
well. Tax points are the equivalent of cash.
This is a process whereby the federal government actually turns
over to the province the equivalent of a tax point, 1 per cent or a
portion of a point of taxes. That is worth money, just as a transfer of
cash is.
For someone to stand in the House and not include that in their
remarks in discussing transfers to the provinces, whether
equalization or the old CAP or whether it is under the current
Canada health and social transfer, is less than accurate.
There was also a remark that the federal government has closed
more hospitals than the premiers. This could not possibly be a fact.
Most Canadians know that the federal government does not
administer hospitals.
Hospitals are administered locally and by provinces. To my
knowledge, the federal government has not closed a single hospital
unless there is some reference to the national defence medical
centre which is not closed but which continues.
(1055 )
I think that is less than accurate, if I can continue to use that
euphemism, in suggesting it. It is utter nonsense for the Reform
Party of Canada to say, and I am quoting what the hon. member
said, that the federal government has closed more hospitals than the
premiers. Please set me right if I am wrong on this.
9521
An hon. member: You are wrong.
Mr. Lee: The member will have an opportunity to speak later.
I am also struck by the degree and amount of what I will call the
retropromise. It seems that anything that has moved within the last
three or four years is now being characterized by the almost
hysterical Reform Party and sometimes members of the Bloc
Quebecois as a promise. If I per chance two or three years ago had
told someone I intend to be in Ottawa on Thursday, hon. members
opposite seem to have a penchant now for characterizing those
words as a promise.
Day in and day out now in this debate we have constant reference
by members opposite to what I call the retropromise. If it moved it
was a promise and in the event that I did not happen to show up in
Ottawa on Thursday, I broke my promise. That is not fair. I think
Canadians see through that.
Aside from these deliberate acts, misleading revisionism
involving the retropromise, there are a couple of other areas I could
not help but note and I think Canadians noted as well. They are
references to tax increases. I have heard members opposite talk
about increases in taxes. What they are really talking about is that
there has been growth in the economy, there has been population
growth, there have been increases in business revenues. Everyone
knows that when that happens there is an increase in tax revenues.
If hon. members opposite want to call that tax increases, they can
do it but I do not think that is fair. I think that is misleading. When
this government says that it has not increased taxes in a certain
area, that is the truth. When members here say that, it is the truth
and they mean it. When members opposite say there has been a tax
increase, they seem incapable of speaking straight on the issue and
what they really mean is the economy has grown, business
revenues have increased, the population has increased and
therefore tax revenues have increased.
I hope members opposite will forgive the growth in the economy
and forgive the increasing prosperity of this country for generating
more tax revenues.
I do not have any illusions that my remarks today will make
much of a difference in the rhetoric around this place, but I thought
I should put that on the record.
I want to address as well one of the items in this important bill
dealing with the budget. I want to talk about the proposal to reduce
the age limit for maturing registered pension plans, RRSPs, the
reduction in the age for contributing to those plans from 71 to 69.
What that means is simply that individuals will not be able to
contribute to RRSPs or accrue pension benefits after age 69. They
will also have to start drawing income out of those plans by the end
of the year in which they turn 69.
This change is being made for a number of important reasons.
The first reason is that it will help to move the maturation age for
retirement savings and pension plans closer in line with the ages at
which most Canadians will start retiring. The simple fact is that
very few Canadians are saving for future retirement when they are
in their seventies.
(1100)
A second and closely related consideration is that the proposed
measure will limit the use of RRSPs for estate planning purposes,
that is, what will happen to a person's cash and assets after they are
no longer with us. The use of the RRSP for that purpose is outside
of scope of what was originally intended. The RRSP is for the
living. It is for the person who is retiring, and the type of generous
tax assistance provided to the RRSP mechanism was never
intended for estate planning purposes.
There is the broader question of cost. The federal revenue cost of
tax assistance for retirement savings is now quite significant.
Technically, inside government it is called tax expenditure. It is
really a question of tax revenues forgone in assistance of the
retirement savings mechanism. In 1993 that tax expenditure
totalled nearly $16 billion. As the finance minister has made very
clear, the government is firmly committed to preserving Canada's
retirement assistance program which serves a vital function. It does
so in a very effective way, measured in both Canadian and world
standards.
However, steps had to be taken to ensure that this program
remained financially sustainable. The cost of the program was
limited while assistance was targeted where needed. Even with the
changes announced in the 1996 budget, the system will remain a
generous one.
As this is an important debate on important legislation, I return
to my opening theme which is to encourage colleagues in the
House to try to stick a little closer to the straight line of accuracy
when they use terms like those I have mentioned. I respect the need
of the opposition parties to hit hard at things. They do not think our
policies are the way they should be but it would help us all if we
would use a standard of rhetoric and a standard of language. We
should use terminology that keeps us straighter to the line and that
allows Canadians to better understand the public policy issues that
we debate here.
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, I rise to add
my two cents worth to this debate and to talk about the 1997
budget. I will discuss five or six points.
First, the budget projects a deficit of $19 billion. That is an awful
lot of money. Yet the government is bragging that this figure means
that the back of the deficit has been broken. It spends $19 billion
more than it brings in and it claims that it has broken the back of
the deficit. It came in with a deficit around $42 billion. It boosted it
to $42 billion from $38 billion. It has reduced it to $19 billion
9522
which is a little over half. It has taken the government four years to
cut the deficit by $23 billion. In my estimation that is just half a
job. It is only half good which means it is also half bad.
It is a shame this finance minister brags to the nation that our
finances are in good order. We are spending more than we bring in.
He is giving the Canadian public a false sense of security. It is one
thing to hold out hope-which is important-but it is another thing
to claim victory before you have won the battle.
There is another thing I do not like about this budget and the
finance minister. The finance minister plays games. He cooks the
books. He does what the previous member just talked about. He
borderlines on representation and sometimes comes close to
misrepresentation. He reduced the social transfer by $7.5 billion,
which I believe is an accurate number. I believe it covers health
care, welfare and education. I believe it affects all the provinces. I
believe it means they have less money to put into health care,
education and welfare, which means they in turn have to do
something and the problem has been transferred to them. It is
called downloading, I believe. I believe all those statements are
accurate and true and not a misrepresentation.
(1105)
To justify this painful decision, which I also agree had to be
done, the government said it would cut $9.5 billion or $9.8 billion
from departmental program spending. That is the amount of money
that is spent, excluding these transfer payments to provinces. After
four years only $4.6 billion has been cut. There are $5.2 billion
missing.
The President of the Treasury Board tried to explain it to our
finance critic and our deputy critics. He almost had them
hoodwinked. Talk about misrepresentation. Talk about cooking the
books. Talk about keeping on the straight and narrow and being
honest with the people and telling them the way it really is.
I am not going to distort this, I am going to be very accurate.
What really happened in this case is that the government, in order
to come up with an explanation on why it is $5.2 billion short of its
projected $9.8 billion promise after four years said, ``wait a second,
there is another year''. Plus the government has changed the
definition of departmental spending between what it was in 1995
and today. That is accurate because it came right from the Treasury
Board officials when we met with them.
That is how the government can claim that it kept to 18.8 per
cent and how $4.6 billion now represents 18.8 per cent in program
spending reductions versus the $9.6 billion, the definition in 1995.
This is how the government plays games, and I am tired of it. I
hope that the Canadian public is tired of it as well.
The finance minister has gone against generally accepted
accounting principles. The auditor general slapped his wrist for it
in the last budget.
The public accounts committee will be meeting in two weeks. I
have asked for finance minister's presence but he cannot make it
because he is busy. However, the deputy minister will be there. I
want to know how they can get away writing off $961 million on
the harmonization of the sales tax in the budget two years ago when
the money just went out last October.
There are $800 million for the foundation for innovation that
will be spent over the next five years which is written off in this
budget. That is not right. There had better be a darned good
agreement with that foundation. There had better be a darned good
signed agreement with all the provinces on where the money is
going and who is going to get the money for innovation. If not, the
books are being cooked. Public sector companies get fined by
Revenue Canada for doing things like this.
Money cannot be written and charged off to a year's expenses
unless that money has been spent or there is an agreement in
writing in which the money is committed to be spent in a short
term, meaning one year, not five. We will see. The meeting is
coming up in two weeks.
I have already heard government members say twice now that
the government has not raised personal taxes. I agree. It is a true
statement. Then the finance minister and even the Prime Minister
in question period say, ``We have not raised taxes,'' which is a
much different statement. Is that not misrepresentation? Is that not
borderline with what the member just talked about and that he
wishes members would not do? I wish he would talk to his finance
minister and to his Prime Minister and tell them not to do it
because they are giving Canadians a false sense of reality.
Finally, after being pushed by our finance critics they agreed:
``Yes, if you mean that we have eliminated loopholes for wealthy
companies, yes, we have increased taxes. If you mean that we have
done insurance things, yes, we have increased taxes''. We finally
got it out of them. Then a day later they said: ``We have not raised
taxes''.
There are two ways to raise taxes. If it is the personal tax rate,
they have not done it. I agree. But they have raised taxes through
the elimination and reduction of the sizes of exemptions and what
can be deducted. Therefore, they have raised taxes 35 times.
Let me give another example of the games they play. My
colleague from British Columbia submitted a petition prior to the
1995 budget about not raising taxes on gasoline. We are afraid of it,
and were saying, do not do it. They claim they have not raised
excise taxes. We know they have. We know that two years ago they
9523
raised the excise tax on gasoline by 1.5 cents. Is that true or not
true?
(1110)
An hon. member: That's true.
Mr. Silye: A Liberal said: ``That's true''. They raised excise
taxes on gasoline by 1.5 cents per litre, which amounts to an
increase in government revenue of $1.2 billion to $1.4 billion. That
is a tax increase, is it not? It is a tax increase. I got that concession
as well.
In response to the petition, here is what the Department of
Finance, perhaps under the influence of the finance minister,
claims: ``-that the past two budgets presented to the House of
Commons in March 1996 and February 1997 contained no tax
increases in any area. In particular, these budgets did not propose
any increases in the excise tax on gasoline''.
It went on to say: ``Since taking office the government's budget
savings have been secured principally from expenditure reductions
rather than tax increases. Ninety-one per cent of the $28 billion
reduction in the 1998-99 deficit is due to expenditure reductions.
These budget initiatives will enable the government to keep
moving toward budget balance''.
Let us see how close that is to the truth. Let us see how close that
is to borderline misrepresentation.
These are bureaucrats that work for the Canadian people. Are
they not supposed to be honour bound? What they said in the first
sentence is true. They did not increase the excise tax on gasoline in
this budget or in last year's budget. The increase was contained in
the budget previous to that.
That is playing mind games. That is playing word games. We all
know that. This kind of stuff makes me sick. It is one of the reasons
I am getting out of politics. We do not have enough people who are
prepared to tell the truth and hold the course. That is why
politicians are held in such low esteem in the country. They do not
keep their election promises.
Provincially it is slowly changing. Alberta especially has done
an excellent job of holding the line. Ontario appears to be
following, although it might be wavering on a few promises
because of the pressure of the 98 federal Liberals in Ontario who
want the Ontario government to start spending money.
There have been 35 tax increases. The department says there
have not been revenue increases, but that there have been
expenditure cuts. That is not true. Tax revenues have increased by
$30 billion. Yes, a lot of it is due to growth in the economy.
Let us talk about that wonderful growth. It is 2.5 per cent. Boy,
that is a booming economy. Darn, that is almost the rate of
inflation. It has been just a bit higher in the last couple of years.
Boy, they have done a great job. Two per cent per year for four
years. That is wonderful. We should all clap and be happy.
Yes, that has increased tax revenues. However, the 35 tax
increases, which represent $30 billion in revenue, amount to about
$12 billion in extra tax revenue due to tax increases. It is not all
attributable to growth in the economy. If any member opposite says
it is all due to growth in the economy they are misrepresenting the
issue. He knows that.
Do I have time to wrap up my comments, Mr. Speaker?
The Deputy Speaker: The hon. member may not wrap up his
comments as his time has expired.
[Translation]
The hon. member for Portneuf.
Mr. Pierre de Savoye (Portneuf, BQ): Mr. Speaker, I am
pleased-
[English]
The Deputy Speaker: Excuse me. With the rotation principle,
the hon. member for Mississauga South has the floor.
[Translation]
Mr. de Savoye: On a point of order, Mr. Speaker. The member
who spoke before the hon. member from the Reform Party was a
Liberal member. If there is to be rotation, it should be-
The Deputy Speaker: Unfortunately, the rotation is from one
side of the House to the other. It is a matter of numbers-
Mr. de Savoye: It is your call, Mr. Speaker.
[English]
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, I am
pleased to rise in support of Bill C-92, an act to amend the Income
Tax Act, the Income Tax Application Rules and other acts related to
the Income Tax Act at second reading.
The Deputy Speaker: I am sorry to interrupt the hon. member
for Mississauga South. Rotation in this type of debate is not back
and forth across the floor, it is the parties going round and round.
[Translation]
I will recognize the hon. member for Portneuf. He was right.
Mr. de Savoye: Mr. Speaker, once again, I am pleased-it is not
everyday that we get to start over the same speech-to speak to Bill
C-92 to amend the Income Tax Act.
9524
(1115)
The subject of income tax raises the spectre of government
digging into the pockets of individual and corporate taxpayers in
order to cover its expenditures.
I cannot help but notice that our finance minister's insatiable
appetite is caused by the fact that, for many years, government
spending has exceeded government revenues. The Minister of
Finance spends more than he earns. In fact, he is like the captain of
a boat that is taking on water. Because the Minister of Finance has
failed to plug the holes, the ship is sinking.
The finance minister did reduce the deficit. He did slow down
the rate at which the water is flowing in. But do you know how he
did it? Not by plugging the holes, but by throwing bucketfuls of
water onto the provinces' ships. His financial needs and appetite
remain unsatisfied. He needs more and more money, which, of
course, comes out of the pockets of taxpayers.
It must be realized that the overall situation as regards taxation
and public spending, both at the federal and at the provincial level,
including in Quebec, is not good, and the basic problem that gave
rise to all these difficulties originated in this House, right where the
finance minister sits.
We saw how the Harris government, in Ontario, and the Quebec
government headed by Mr. Bouchard were forced to take drastic
measures and to make deep cuts to the health and education sectors,
and even to their own human resources, the provincial public
service. Indeed, we witnessed very sad situations experienced by
people in Quebec, in Ontario and in other provinces. The public
must realize that these problems are not created by the provincial
governments, but that they have their roots in this House, right
where the finance minister sits.
The minister simply dumped his problem on the provinces, by
cutting the funds that were supposed to go to the provinces. He did
so in two ways. First, by reducing transfer payments. What is a
transfer payment? Under this process, the federal government
essentially gives back to a provincial government the money paid
by the taxpayers of that province. However, in this case, the federal
government simply decided not to do so, with the result that the
provinces are no longer getting the money to which they are
entitled. We are talking about $2 billion, which was earmarked for
health services and higher education.
(1120)
It comes as no surprise that the provinces, including Quebec,
were forced to cut services and budgets relating to health and
education, given that the $2 billion paid to the federal Minister of
Finance by Quebec taxpayers was never given back to the province.
But there is something else which, in a way, is even worse. The
minister has developed the bad habit of taking $5 billion a year out
of the employment insurance fund, which used to be called the
unemployment insurance fund. Five billion dollars is an awful lot
of money. In fact, what the Minister of Finance has done is to
artificially create a tax on the backs of workers and their
employers.
If we look at it in terms of proportions, we could say that each
time a worker or an employer pays a dollar in premiums to the EI
fund, 30 cents of this dollar will be skimmed off; not borrowed, not
put into a separate fund for the eventual benefit of workers and
employers but, when it boils right down to it, diverted from its
initial purpose, which was to provide for the future needs of the
unemployed, and used to reduce the finance minister's deficit.
Of course the Minister of Finance can then say he has reduced
the deficit. Let us be clear. He has not eliminated the deficit, he has
not prevented the ship from taking on water, he has not pumped out
the water that is already slowing us down. No. He has just reduced
the amount of water in the hold. How did he accomplish that? By
passing on the problem to employers and employees throughout the
country, using 30 cents of every dollar to mop up the consequences
of the deficit. It is a tax in disguise that the Minister of Finance will
not admit to publicly.
Fortunately the official opposition is here to denounce it, to
explain it and to see that people understand clearly that what is
happening provincially is not the cause, that the provinces are not
to blame, but rather the method of operating imposed by the
Minister of Finance, here in the House.
Something must be done about what is going on and, as my
colleague mentioned earlier, the Bloc Quebecois has proposed in
this House appropriate, detailed and carefully thought out measures
to rectify the discrepancies that now exist in tax measures. In fact,
with respect to individual taxpayers, the Bloc Quebecois has
produced a well researched document in which it proposes to the
finance minister ways of eliminating unfairness and introducing
new measures that would help families and others.
With respect to corporations, old tax loopholes that are to all
intents and purposes no longer used, except by corporations rich
enough to do so, should be eliminated and replaced by measures
more likely to encourage businesses to create jobs.
(1125)
One of the things I should perhaps point out in closing is that it is
unfortunate that the Minister of Finance has not at least
implemented one of these measures, which was intended to prevent
corporations from deferring taxes indefinitely. As things stand
now, corporations are in a position to avoid paying taxes today,
next year
9525
and for years to come, because of certain provisions in the Income
Tax Act.
The Bloc Quebecois has asked, and will continue to ask the
finance minister to take action to eliminate these measures and
replace them with new measures that are effective and productive
and that, above all, show respect for the citizens of Quebec and of
Canada.
[English]
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, I am
pleased to debate Bill C-92 at second reading. The parliamentary
secretary well laid out the principal features in Bill C-92. I do not
propose to repeat them. He has done an excellent job.
I take this opportunity to put on record my views on an issue that
has been raised in my constituency by a number of my constituents,
particularly seniors. It is modifications to the RRSP rules,
particularly with regard to the lowering of the age at which
contributions can be made down from 71 to 69.
There has been much written in seniors publications about this.
One need only look at who is offering these publications and these
articles. One has to assess what their motivation might be.
An article has been circulating by a former member of this place,
Garth Turner. He is suggesting this change is awful, that it will cost
anywhere from a $36,000 reduction in the value of an RRSP
account for a Canadian.
I want to attempt to explain how one might account for this
apparently significant number and why it is very misleading. The
maximum contribution under RRSPs is currently $13,500. To the
extent that a taxpayer would not be making contributions in either
their 70th or 71st year, it means that $27,000 will not be
contributed to the plan. Therefore naturally the planned value will
not be as high if those capital contributions have not been made.
Second, there would be an additional two years of interest
accumulation on all contributions that have been made throughout
the contribution lifetime of the taxpayer which would not be
accumulating and compounding during those two years.
Of the $30,000-odd that the accounts would be lower, this
represents some $27,000 of capital which Mr. Turner, if entirely
honest with Canadians and with seniors, would say that although
their RRSP account will be lower by $27,000, their bank account
would be higher by $27,000 because that contribution was not
made.
It is absolutely intellectually dishonest for anyone to suggest that
there is this loss of principle simply because it is not in one pocket
but in another. We have to look at value of the wealth of an
individual in all its forms.
I want Canadians to reflect on what is happening when RRSP
time comes around. There is a feeding frenzy of people trying to
sell RRSPs. One has to wonder why it is important for them that
we buy from this one or that one. There is one very simple reason
why they are trying to alarm the public about this. This is when
they earn their living. This is when they make these massive
commissions on selling.
These commissions are charged through to the funds that we are
investing in and passed on to us through management fees and
general expenses of the fund management. They have a vested
interest in selling more and more simply because it means money
in their pockets.
(1130)
I want the ordinary taxpayer and those seniors watching the
proceedings or will read Hansard to know there is another part of
the story they have to look at. It is not in the best interest of any
taxpayer to see how much money they can put into an RRSP. The
real issue is how much can they put in and what plan do they need
to get it out with the lowest possible tax consequences.
Many Canadians are fortunate to earn substantial amounts of
money which allow them to buy $13,500 of RRSPs and effectively
obtain a 50 per cent tax savings as a result of that contribution. If
they turn around and purchase an RRSP for a spouse who is not
working and come retirement time take their corporate pension and
the spouses who are working in the home take out the RRSP
moneys, they have effectively split the income and are both paying
at a lower rate.
The tax rate at which the contribution was put in was high. The
tax rate at which the contribution is paid out is low. There is an
automatic windfall in rate. Never mind the savings by the virtue of
the fact that they have government money on which they are able to
earn investment income. Everybody is entitled to that. High
income earners are entitled and have an opportunity to income split
or by set up their income averaging annuities in a way that allows
them to stream the income out at the lowest possible rates.
The best advice in my view for Canadian taxpayers is not how to
get the total amount of money into the RRSP. When it is one's time
to go and there is no surviving spouse, the full amount collapses
and is taxed in the year in which a taxpayer is deceased at the
highest possible rate.
Canadians have to look at their spousal situation. They have to
look at their personal health situation and they have to anticipate.
Although I am a chartered accountant I do not propose to give
advice to anybody on how to manage their affairs, but I raise these
issues for them to ask the questions of people who would suggest
that somehow not being able to put money in an RRSP is bad. My
own personal view it is best to wonder how to get it in and how to
get it out at the lowest possible rate.
9526
On top of that taxpayers should know that once the moneys
come out of an RRSP and are taxed in taxpayers' hands at a lower
rate they have an opportunity to do something with the cash. One
of the best recommendations I had for some family members I
have talked to was to help out their family members who do not
have the cash flow they need to invest in their own RRSPs so they
can start building up and preparing for their retirement income.
When gifts of cash given to family members who are 19 years of
age or over there is no income attribution back to the person who
gave the money to them. It is important for taxpayers to look at the
long term plan of not only building up an RRSP fund and getting a
good return but also finding out a strategy on how to stream that
money out for the best tax advantage for the family as a whole.
I hope Canadian taxpayers and certainly seniors in my riding
will be cognizant of the other questions to ask experts in RRSPs
whose only interest is that they want to sell more. They have to ask
them: ``What is my plan to get that money out? How can I make it
work the best for me, for my spouse, for my children and for other
family members?'' Families do care about the financial health and
the physical health of all family members. That is the way it should
be.
Mr. Garth Turner and others tend to bring forward rash
generalizations about what a terrible thing it is. They have been
intellectually dishonest with taxpayers if they suggested the change
in years from 71 to 69 took cash from RRSP accounts without
saying that it increased cash in their personal bank accounts. That
is telling half the story.
Canadians have to know where they are coming from. Canadians
have to know why they are trying to push RRSP investments on
them. It is because it is in their best interest with the high
commission rates they are getting.
(1135 )
I know some would think those are strong words, but every now
and then Canadians have to be alerted to the fact that they need the
whole story from the beginning to the end to ensure the decisions
they make are in the best interest of not only their own financial
planning but of the rest of their family members.
I hope this insight into one aspect of the bill will help Canadians
to ask questions that are important for them when looking at
retirement planning.
Mr. Ian McClelland (Edmonton Southwest, Ref.): Mr.
Speaker, as I stand to speak to the budget debate it would be fair to
say that I speak for millions of Canadians from coast to coast to
coast. If things are so good why do I feel so bad? If things in our
economy are so good why do I not have any money?
All Canadians appreciate that for all levels of government,
municipal, provincial and federal-and the federal government
especially has by far been the most devious-taxation no longer
has much to do with income or resources. It has more to do with
licensing. If the tax stream coming in from people is based on
profit or income it is variable. Governments do not like variable
income. They like income that they can depend on. Therefore far
less of our taxes have anything to do with how much money we
have, how much money we have made or our profit. It has more to
do with the privilege of being either in business or having the
privilege of earning income.
I use as an example the recent changes to the Canada pension
plan, perhaps the most nefarious of the worst investments any
individual could make, particularly a young Canadian, with rates
going up to 9.9 per cent. The finance minister and the Prime
Minister are now the only two Canadians who say they are not
taxes. They call them investments. It is a pretty rotten investment
that takes 9.9 per cent of the working income of Canadians for their
lives and gives them a return on investment of about $9,000 after
40 years.
Canadians have this ever increasing tax burden that is
represented to them not as taxes but as licence fees, mandatory
investments or whatever it is. It is almost impossible for a
politician not to spend other people's money if it means there is a
potential for the politician to be re-elected. That is the way it
works.
In my lifetime one did not get elected by telling people they had
to live within our means or that we did not have any more money.
One did not get elected by saying it is unfair to tax future
generations of Canadians so that we can live beyond our means
today.
What government has ever been elected by looking people in the
eye and telling them the truth? Certainly not this government and
certainly none of the governments that got our country into this
mess.
The reason our country is in the mess it is in today is that
politicians have had a free hand to spend other people's money,
taxpayers' money, to get re-elected.
How can we get ourselves out of this mess? We must say the
only way to possibly reduce taxation levels is to reduce the size, the
scope and the intervention of government in our daily lives. If we
are not prepared as individuals to assume responsibility for our
own lives, if we as individuals pass off responsibility for our lives
to other people through governance, then it will take more and
more and more resources of the nation to fund it.
The first step is for Canadians to say they have had enough
government; they want less government; they are sick and tired of
it; and they are not going to take it any more. The only way we will
9527
achieve that is to elect people who will look us in the eye and tell us
they must be responsible for lives. We cannot ask others to be
responsible for our lives.
Collectively we will be responsible for each other. If we cannot
first look after ourselves, how can we look after others? The
interdependence we cherish is based on personal independence. If
we cannot first be independent, how can we be interdependent?
(1140 )
This brings me to the second item I would like to speak about,
which also refers to the taxation by stealth the country has been
living under for the last couple of budgets. It has to do with the
changes to the support payments for parents who divorce or are
separated.
It used to be that when families unfortunately split up the
custodial parent, the parent with the children, received money from
the non-custodial parent. The paying parent earned a higher income
and the taxes were paid by the receiving spouse, usually the female.
She had the children. Her income was usually lower than that of the
male and therefore she paid less tax.
This situation has been changed in the budget. The taxes will
now be paid by the spouse who makes the payments. The money
will be received by the custodial parent. There are benefits to that,
one of which is that at the end of the year the custodial spouse will
not be nailed with an unexpected tax bill. In all cases they should
expect it, but the reality is that most of us as human beings do not
make provision for it and it comes as a surprise.
That tax windfall, the changes in that tax ruling, will mean the
federal government will take in an additional $200 million. The
question is whether that $200 million will be turned back directly
to the care and maintenance of children and whose children will be
maintained by that.
It should be the parents who make the decision on how the $200
million is spent. There is no reason in the world why in the absence
of an agreement on separation the taxes could not be split 50:50.
There is no reason in the world the default position could not be
50:50. With agreement by both parents in the court either parent
could pay the tax. The taxes should be paid in the interests of the
children so the majority of the money would stay with the children.
Instead we have gone from all in one direction to all in another
direction, which does not make sense.
In the debate on the bill that spoke to the issue the point was
made that there was no connection between access, custody and
support payments. The only people who would make that assertion
are people who do not know anything about it. If there is a problem
in maintenance payments, in the regularity of the payments being
made, obviously there will be a problem with custody. That is
usually where the problems arise when there are problems. I do not
know if it is possible for legislatures to legislate common sense. In
times when people's emotions are running on high it is difficult for
the government to say: ``Wait a minute. You have to put the
interests of your children first''.
We can ensure the laws, the rules and the regulations we enact
enure to the benefit of the children and make it less likely that there
would be an explosive situation to be dealt with. It seems that
maintenance payments are a tinderbox in relationships that have
gone bad and that there is a continuing acrimony between the two
parents. There might be a better way to handle the matter. I do not
know what we have arrived at will achieve what it is hoped to
achieve.
Earlier the member opposite spoke about RRSPs and the changes
in the budget which affect the collapsing of RRSPs. He did not say
that it is the compounding of the money in the RRSP in a tax
protected state that brings additional benefit to the people who own
the RRSPs. RRSPs are the vehicle of savings for the vast majority
of Canadians.
(1145)
The vast majority of Canadians really do not have any savings
outside of their RRSPs because there just is not that money. The
increase in taxation by all levels of government, particularly by the
federal government over the last few years, has sapped the total
growth in the economy. When governments through taxation suck
every bit of growth and money out of the economy then what is left
to reinvest to create the new jobs?
It is only through the decrease in taxation by all levels of
government, particularly the federal government, that there will be
money left in the hands of taxpayers that will be used as
investments and purchases in a consumer economy.
The changes through the seniors benefit were not mentioned at
all. We are talking now about taxation by stealth. For the
information of members opposite, there is a change to the old age
security and the guaranteed income supplement. The seniors
benefit which combines both ensures on a universal basis that all
Canadians will receive $11,420 a year without tax but then the tax
provisions that used to be on the guaranteed income supplement
will be on the whole kit and caboodle. Old age security will be
taxed by this government, which has said time and time again
``don't worry, seniors, we are your protectors, nothing is going to
happen''. It combined the two, changed the name and it is taxing it
all back.
That means that all pension income, including RRSPs, will be
taxed back at 50 per cent on the first $12,500 after the new seniors
benefit.
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, I rise on a
point of order with regard to the terms of reference for Bill C-92
and Bill C-93.
9528
Notice has been given to refer these bills to committee before
second reading. The minister has already moved to refer Bill C-92
to committee before second reading pursuant to Standing Order
73(1). Bill C-93 is the next item on the government's list today
and we have already received notice that this bill will also be
subject to Standing Order 73(1).
I bring this to your attention today because this is a new standing
order and it is under test. We as parliamentarians have a
responsibility to ensure that the intent of a new standing order is
not distorted and we must ensure that any rights and traditions are
not intentionally thwarted by any distortion of the use of a new
standing order.
On Monday, April 7, 1997 the House passed a ways an means
motion which adopted the budgetary policy of the government. On
Tuesday, April 8, 1997 the House adopted two ways and means
motions upon which Bill C-92 and Bill C-93 are based. The
procedure to send a bill to committee before seconding reading
allows a committee to bring forward amendments that can alter the
principle of the bill and go beyond the scope of the bill. That is its
purpose. There should be no other reason for the government to
send a bill to committee before second reading.
I would argue that if the House adopts the budgetary policy of
the government and then adopts a ways and means motion which
leads to a bill, that bill cannot and should not be subject to a process
that could alter the bill in such a way that it would be different from
the ways and means motion. I will argue that the only process for a
bill that is based on a ways and means motion is the traditional
process where the bill is adopted in principle before being subject
to committee study.
I Refer to Beauchesne's sixth edition, citation 983:
(1) A bill, related to a Ways and Means resolution, must be based on-the
resolution.
(2) The most desirable practice is for the bill to adhere strictly to the provisions of
the resolution, and departures, if any, ought to be subject to the strictest
interpretation.
(1150 )
Citation 984 deals specifically with the committee
consideration:
If any of the provisions of the bill should be found to go beyond the Ways and
Means resolutions as agreed to by the House:
(a) a further motion must be passed by the House before those provisions in the bill
are considered by committee; or,
(b) the bill must be amended so as to conform to the motions to which the House has
agreed.
Citations 988:
Amendments must not exceed the scope, increase the amount or extend the
incidence of any charge upon the public, defined by the terms of the Ways and
Means resolutions, by which the provisions proposed to be amended are authorized.
Citation 989:
The motion by which a tax is proposed in the House is now treated as an effective
expression of the financial initiative of the Crown, and therefore, as the standard in
relation to which the admissibility of amendments is determined. Accordingly, an
amendment is debarred, not only from increasing the rate of a tax but also from
extending its incidence to new classes.
We cannot have a process that recognizes the clear precedence
that the bill must stay within the narrow confines of the ways and
means motion, yet subject the bill to a process whereby the
government is inviting amendments that may vary the principle of
the bill and by inference go beyond the scope of the ways and
means motion.
If this is the case, then how can these bills be referred to
committee before second reading? It does not make procedural
sense to do so. It should not be allowed under our rules to do this
because it is a departure from our tradition of dealing with bills
based on ways and means motions and in particular a bill to
implement certain provisions of the budget which is based on two
ways and means motions adopted by the House.
If we consider that the general principles of these measures have
been adopted by the budgetary process and the details of the
principles of these measures have been adopted by a ways and
means motion, then how can we proceed to consider these bills in
committee before second reading when the principle of the bill has
already been fixed and determined?
It is clear that these restrictions on the way bills are based on
ways and means motions are dealt with disqualifies them from
being considered by a committee before second reading.
The committee cannot deviate from the ways and means motions
that were passed by the House, so the proper procedure is to
consider these bills in a traditional manner.
It is clear to me that what the government is trying to achieve is
to abuse the rules of the House in order to fast track its budget
implementation bills.
Not today, Mr. Speaker. I ask you to rule that these bills and any
future bills based on ways and means motions cannot be referred to
committee before second reading and that the motion we are
currently debating is out of order.
The Deputy Speaker: I thank the hon. member for St. Albert for
his representation which he has obviously thought out carefully and
has presented very precisely.
Ms. Marlene Catterall (Ottawa West, Lib.): Mr. Speaker, the
member for St. Albert is arguing that Standing Order 73 should not
9529
be applied to this bill. I think it might be helpful to recall why
Standing Order 73 was adopted unanimously by the House.
It was in response to a concern among the public and
parliamentarians that members of Parliament needed to have more
ability to play a real role in the development of legislation and not
to be constrained unduly by the government's intentions with
respect to legislation. For that reason, the government did
introduce into the House an amendment to the standing order
allowing any bill to be referred to a committee before second
reading so that the committee of ordinary members of Parliament
would not be constrained by the intentions of the government in
examining the issue of the bill and making the appropriate
recommendations back to the House.
(1155 )
As the member for St. Albert said, by referring a bill to
committee before second reading, the standing order allows a
parliamentary committee to look at the principle of the bill and to
not be constrained in proposing amendments which are consistent
with the principle. It allows those members of Parliament to
examine the entire issue that the bill addresses and to go beyond the
scope of the bill.
My colleague quoted Beauchesne. I would like to point out that
the citations he referred to predate the adoption of Standing Order
73 and therefore are superseded by Standing Order 73.
Both the government in introducing the change to the standing
orders and the House in adopting it unanimously did not in any way
limit which bills could or could not be referred to a committee
before second reading. That was left to the discretion of the
government in proposing that a bill be referred before second
reading and, more important, to the members of the House to vote
on the proposal to send a bill to committee before second reading.
I do not think that citations and interpretations which were made
before the House expressed its will to give members of Parliament
more latitude and scope to influence legislation without restriction
should supersede the views expressed by Parliament.
This whole issue of members of Parliament having more
influence, particularly on matters of expenditure and taxation, was
studied for over a year by the subcommittee of the Standing
Committee on Procedure and House Affairs, of which I and the
member for St. Albert are members. Throughout the study our
discussions on Standing Order 73 concerned how to give members
of Parliament more influence, in line with the wishes which we
heard from Canadians. Hopefully the report of that subcommittee
will be tabled before Parliament in the near future.
Frankly I am astonished that the member for St. Albert is
proposing that members of Parliament and the standing committees
should not have the expanded scope that Standing Order 73
intended to give them.
Finally, the committee is constrained by the will of the House, as
expressed in the ways and means motion. The member should be
aware of that. The committee has to act within the authority it has
been given by Parliament.
What the member seems to be suggesting is that a committee, in
exercising this new responsibility under Standing Order 73, should
not be constrained by the directions of the House. I find his
argument somewhat confusing. He says that because it is a decision
of the House, the House does not have the authority to act in
accordance with Standing Order 73, but if it does then the
committee should not be constrained by other decisions of the
House. There is a contradiction there.
However, the fundamental principle is that Standing Order 73
was adopted by the House to allow committees to have the scope to
examine the principles of a bill, the scope of a bill, and to bring
back its best recommendations to Parliament. Parliament will
ultimately decide.
The committee of course will exercise its new responsibilities in
accordance with the directions it has received from the House,
including the ways and means motion.
(1200 )
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, I rise on the
same point of order. When the hon. member who just spoke quoted
Standing Order 73, she was thoroughly accurate.
The purpose of sending bills to committee prior to second
reading is to give the committee an opportunity to look into a bill
thoroughly and to improve it before it comes back to the House for
second reading. In that way, a lot of valuable time of the House is
not tied up. There is no question that that is the intent, the scope
and the purpose of that standing order.
However, when you look at this bill and the other one we will be
debating later today, what has to be pointed out is that the general
principle of the measures contained in the budget have been
adopted by the budgetary process.
The details of the principles of these measures were adopted
when the ways and means motion was passed. Why is the bill being
sent to committee prior to second reading when, in principle, in
scope, in containment, in its content it is a fait accompli?
Puis parce que nous avons-I do not have very good French-to
send it. Not to make light of this, how can we proceed to consider
these bills in committee before second reading when the principle
of the bill has already been fixed and determined? What is the
Standing Committee on Finance going to do? What is it going to
amend? What principle is it going to change? What scope is it
9530
going to go back to? Will it spend less somewhere? Will it
recommend cuts elsewhere? Will it change the amount of money,
the $800 million, that is given to the foundation of innovation for
science?
This is a misuse of the standing order, plain and simple. The
argument that we are trying to put forward is that neither this bill
nor the other bill we will be debating today, Bill C-93, should be
sent to committee prior to second reading.
The very same point that the member from the Liberal Party, the
former whip like myself, made about the purpose of Standing
Order 73 is accurate and true. I support her when she makes that
claim.
When the rules of Standing Order 73 are applied, any good
lawyer-I see one sitting beside her now-will say that this is just
smoke and mirrors and that the purpose of the government is to get
it out of the House so that debate is limited. When it comes back
the rule states that debate is limited. We do not have the number of
hours to debate the bill after it comes back from committee if we
send it to committee prior to second reading.
They are using a double whammy on the opposition members. It
is another example of limiting the democratic rights and principles
of the opposition parties. Our job here is to go through legislation,
to go through ways and means motions, to decide whether it is in
the best interests of the Canadian public to either support them or,
if not to give them our full endorsement, then to make
recommendations through amendments either here in the House, in
committee or at report stage, then come back and work on them.
There was an agreement at the start of the 35th Parliament. A lot
of bills come here at second reading, prior to going to committee
and we make a lot of amendments. It ends up being a big waste of
time. For certain legislation, for complicated bills, there are
advantages in sending them to committee where the job of the
committee is then to thoroughly go through the bill. Sometimes the
committee has done it but sometimes it has not.
Agricultural bills have been sent to committee prior to second
reading and the members in the committee just ram through clause
by clause. They limit debate. We know all about the complaints we
have had. They have misused their majority in committee. That is
one thing.
However on this one, there will not be any debate on scope.
There will not be any debate on principle. It has already been
adopted. It is the law of the land. It is a done deal.
I submit very humbly that this point of order be considered, Mr.
Speaker, and that you rule that this bill not be sent to committee
prior to second reading for the very reasons that I have outlined. To
summarize, it is unnecessary. It is just a way that the government
has figured out to once again stifle and limit freedom of speech and
the time that is supposed to be allocated in the giving of opinions
on bills.
(1205)
This legislation will pass. We all know that. We all know how
important the budget is to the nation. We all know it is necessary
for the budget implementation act to pass, so money can be
borrowed and that kind of thing. But what we object to is limiting
the time that we can discuss the bills.
I believe this bill should not be sent to committee prior to second
reading because the principle and the scope are clearly established.
Nothing will be changed. It should just remain in the House for
second reading.
Mr. Williams: Mr. Speaker, I would like to rebut some of the
points brought forward by the government whip. She stated that
Parliament should not be constrained unduly. However, because the
House voted on the ways and means motion, in essence we put a
circle around that bill, a very definite circle.
I would like to refer you, Mr. Speaker, to Commons Debates,
page 962, dated February 7, 1994. It is about three paragraphs. It
states regarding the adoption of the standing order change:
There is, however, an important additional benefit to be gained. The broad role of
standing committees with regard to a bill dealt with in either of these two new
processes could substantially reduce the quasi-proprietary attitude of ministers and
their officials toward their legislation. By the time such a bill is ready for second or
third reading, it could be as much a committee's bill as it is that of the sponsoring
minister. It has been suggested that a vote on second or third reading of such a bill
could as a consequence of this be more difficult to describe as standing by itself, a
confidence issue. Members on all sides of the House could find themselves freed
more often of constitutional implications in voting and would be able to depart from
the party position without concern about defeating the government.
In other words, the suggestion has been made to me that these two new legislative
routes could be one way of increasing the number of so-called free votes.
The new procedures can also help avoid situations that all governments face from
time to time. They result from bills being developed within departments without
sufficiently broad and open public consultation. As a consequence, things could be
overlooked and governments as a result are embarrassed, to say the least, when the
bill must be dramatically changed or even withdrawn in the face of a strong
expression of negative public opinion after the bill has been introduced.
This all points to the fact that a bill going to committee before
second reading allows a process whereby major fundamental
changes can be made, the principle of the bill can be changed and
before the House has expressed its opinion in a vote.
In this case we have had two votes, one on the budget and one on
the ways and means motion. Those in essence are first reading of
this bill. The House voted and said that is it. We cannot allow this
9531
to go to committee before second reading. This motion is out of
order.
Ms. Catterall: Mr. Speaker, I do not want to belabour the point.
However, since there has been a response to my comments I would
like to reinforce some of them and perhaps just point out to the
member from Calgary Centre that unlike him I am not a former
anything.
Standing Order 73 is very clear. It is unlimited. It says ``any
government bill''. I trust that Parliament knew what it was doing
when it adopted Standing Order 73. It does not suggest any
limitations to the principle, the scope of the bill. It makes no such
references. Those are ways in which we have interpreted it in some
of our debate on how Standing Order 73 might apply. But the
standing order itself simply says ``any government bill may be
referred before second reading''.
(1210 )
The Deputy Speaker: I think I have heard enough. I thank all
three members who spoke on this matter. Rather than reserve on it,
I think it is important to give reasons now rather than later in the
day.
I note that Standing Order 73(1) states very clearly: ``-a
Minister of the Crown may, after notifying representatives of the
opposition parties-'' for any government bill, as was indicated.
This is pretty all inclusive. The hon. member for St. Albert has a
point in that this appears to be the first time that Standing Order 73
has been used for a ways and means bill.
Standing Order 73, however, does not alter directly the practice
of the limits imposed by the ways and means motion. The ways and
means motion was adopted by the House and the committee, as
members will appreciate, is bound by it. Anything in the bill not
directly related to the ways and means motion, however, would be
open to the larger scope of amendments envisioned by Standing
Order 73.
I might add that it is not unusual for ways and means bills to
contain matters which are outside the ways and means motion. This
apparently has happened dozens of times. Those matters can be
amended without reference to the terms of the ways and means
motion. In that case, Standing Order 73 seems to be an applicable
use and not necessarily an abuse, as was argued by the hon.
member for St. Albert.
Accordingly, the Chair finds, despite a most eloquent and
carefully thought out argument by the hon. member for St. Albert,
that Standing Order 73 would appear to govern in this situation.
[Translation]
Mr. Osvaldo Nunez (Bourassa, BQ): Mr. Speaker, after that
half-hour procedural debate on the scope of Standing Order 73, I
am going to enter the discussion on Bill C-92 to amend the Income
Tax Act. The purpose of this bill is to implement certain measures
announced in the 1996 budget. I wonder why the government
tabled this bill only yesterday, more than one year later.
To begin with, the purpose of the 1996 budget, like its
predecessors, was to battle the deficit. But the losers in the battle
were the provinces, the workers, the unemployed and the most
marginalized members of our society. This budget pretends to
reduce the deficit by taking the $5 billion surplus from the
unemployment insurance fund. We can see the consequences
today: the bulk of the budget problems of the Government of
Quebec today are, in fact, due to the 1996 budget, as well as the
1995 and 1997 budgets.
Many of the difficult choices the Government of Quebec has to
make are the consequences of the cuts in social transfers to the
provinces that have been decreed by Ottawa. I must state that it is
immoral for the government to use the unemployment insurance
fund surplus to solve its deficit problem. These funds do not belong
to the state, to the government, in any way; they belong exclusively
to the workers and to the employers.
When Bill C-12 reformed the unemployment insurance system
in Canada, it drastically reduced benefits, their duration, and the
number of unemployed people eligible for benefits. Workers and
especially the unemployed will not forget Bill C-12 when they vote
in the next election.
(1215)
Neither Bill C-92 nor the budgets brought down in 1996 and
1997 contain any provisions for the kind of tax reform in this
country that the Bloc Quebecois has been demanding repeatedly.
The 1996 budget only went so far as to create a technical
committee on business taxation, a committee whose appointees had
a conflict of interest and whose members advise large corporations
on how to save on their income tax. Moreover the committee's
mandate, which was for a set term, has already been extended until
the end of 1997.
In the next election, taxation will be a central issue. The Bloc
Quebecois will talk about Canada's unfair tax system. The tax
burden must be shared equitably between private citizens and
corporations. There should also be a greater measure of fairness in
the tax system's approach to large corporations and small
businesses, because small businesses are the sector that creates
jobs.
Our current tax system does not promote job creation, although
unemployment is our number one problem today in Canada,
Quebec, the maritimes and everywhere else. Again, we have to
mention all those promises that were not kept by a government that
was elected under the slogan: jobs, jobs, jobs. Today,
unemployment has reached 12 per cent in Quebec and 10 per cent
in Canada. The main victims are women, young people and
workers around 45
9532
or 50 years old who can no longer find work when they are laid off.
Immigrants are also hit by unemployment.
Last week in Montreal, I met several leaders of the Spanish
speaking community who told me that 40 per cent of the members
of this community are now unemployed in Montreal, more than
half of the black population in Quebec, especially Montreal, is
unemployed. These people want to work. They are even prepared to
take on difficult jobs, to work the night shift, to work for the
minimum wage, even without employment insurance. They want to
work, but the government is doing nothing to create jobs.
In my riding in Montréal-Nord, almost one third of the labour
force is unemployed. People come to see me at my office and ask
me to help them find a job. This is very sad, because there is almost
nothing I can do to help them. Zellers, which is doing very well,
announced it was closing its warehouse in Montréal-Nord, so 378
employees will lose their jobs as of July 1.
Last week, we attended a meeting called to create a committee to
salvage these facilities. The meeting was attended by federal
members, of course, and provincial members, representatives of
the municipality of Montréal-Nord and the unions. I want to take
this opportunity to ask Zellers not to close its warehouse in
Montréal-Nord, an area that has a very well trained and highly
skilled workforce with considerable experience in this field.
(1220)
I also take this opportunity to appeal to business to develop
social responsibility. Banks, for example, which made more than
$6 billion in profits last year, more than any other business sector in
Canada, also lay off the largest number of employees. That is
unacceptable.
Again, I think the government should introduce a bill imposing a
minimum tax on corporations, and banks in particular.
The situation in Montreal, and Montreal North in particular, is
extremely difficult. More and more women, children and
immigrants are living in poverty. A very large share of the
responsibility for this most acute problem lies with the federal
government. There are 1.5 million poor children in Canada. More
than 5 million Canadians and Quebecers are living under the
poverty line. In Montreal North alone, about 9,000 households, or
20 per cent of the total population, rely exclusively on social
assistance.
Efforts have been made these past five years to establish a
CDEC. I made this a priority when I ran for office. The CDEC has
been in operation since February and is doing a great job. However,
the federal government will not contribute $170,000 to the
Montreal North CDEC, but at the same time, older workers are no
longer covered by the POWA, the Program for Older Worker
Adjustment, since it was abolished on April 1.
For all these reasons, I can only find fault with this government,
and all this will come out during the next election campaign.
[English]
Mr. Jay Hill (Prince George-Peace River, Ref.): Mr.
Speaker, it is a pleasure for me to speak today to Bill C-92, the
budget implementation act.
I note that this is an act to implement parts of the 1996 budget. It
seems more than a little odd that at this late date we are debating a
bill which applies to different facets which were brought in under
the 1996 budget, albeit in limited fashion because of the
government's choice to use a procedure which was just argued
against.
What does this mean? Obviously it points to the ineptness of the
present Liberal government since it has taken it approximately 15
months to bring forward this legislation. As my hon. colleagues
from St. Albert and Calgary Centre pointed out during their very
eloquent presentations, it is a tragic misuse of Standing Order 73. It
is a way in which the government is able to circumvent the
democratic process and utilize a standing order which was agreed
to by all members in the House very early in this Parliament.
Perhaps we were naive enough to trust the Liberals. We do not do
that very often, obviously for good reasons. We trusted the
government not to abuse Standing Order 73 in this fashion. We
took the Liberals at their word that the intent of Standing Order 73
was to allow more input from rank and file members of Parliament.
Mr. Campbell: Mr. Speaker, on a point of order. I am sorry to
interrupt the hon. member. I know it is disconcerting to have that
happen. I believe the Speaker has ruled on this issue and the hon.
member in the context of his comments in debate on the motion has
returned to a matter on which the Speaker has just ruled, against the
position the member is advancing.
(1225)
The Acting Speaker (Mr. Milliken): I know the hon. member
was making comments about the tenor of the debate. I did not think
he was reflecting on the ruling of the Chair. I think the hon.
member knows it would be improper for him to do so. Bearing that
in mind, I am sure he will continue with his comments.
Mr. Hill (Prince George-Peace River): Mr. Speaker, since I
did not opt to rise, as a number of members of Parliament did, to
take the time of the House during that point of order, I thought it
was within the purview of my presentation to at least point out that
you are quite right, Mr. Speaker, I was not challenging the decision
made by the Chair, nor would it be appropriate for me to do so.
9533
What I was clearly pointing out is the misuse by the government of
this standing order, not the decision arrived at by the Chair.
The Acting Speaker (Mr. Milliken): The hon. member will
want to be careful because the Chair has ruled that the procedure
being adopted is correct in accordance with the rules. I invite him
to be temperate in his remarks in discussing this issue. There has
been a ruling from the Chair and I know he respects that. I invite
him to perhaps address another subject. It might be safer.
Mr. Hill (Prince George-Peace River): Mr. Speaker, I was
merely pointing out that I believed this standing order is broad
enough and loose enough that potentially some abuse can exist.
That was the point I was trying to make.
Earlier in debate the hon. member for Scarborough-Rouge
River attacked Reformers, saying that we were misrepresenting the
facts on how this government is moving toward a balanced budget.
I believe the Canadian public is coming to realize that how the
Liberal government is moving toward a balanced budget is on the
backs of taxpayers.
Tax revenue has increased in the neighbourhood of $24 billion a
year. There is a proliferation of user fees for various things that
used to be provided for Canadian citizens. There is the
downloading of approximately $7.5 billion to the provinces in
reduced transfers through the Canadian health and social transfer.
The government has been enjoying the lowest interest rates on the
national debt in four decades.
If taxpayers and voters really analyze who is responsible for
gradually bringing the budget into line they will recognize that they
are. They are the ones who are paying and making the advances
that have come.
It really galls me to no end when I hear government members
saying it is because of the growth in the economy. Who has ever
said that if we as a nation enjoy some growth in the economy big
government should benefit by just taking more out of the economy
to spend as it sees fit? It is the principle of the matter and I have
great difficulty believing that principle is supported by the majority
of Canadians.
This bill deals with a range of subjects, tax credits for
individuals, child care expense deduction, deferred income plans,
foreign reporting rules whereby people with assets overseas will
have to report not only the income derived from those assets but the
assets themselves to the government. It deals with a wide range of
issues.
Earlier the member for Scarborough-Rouge River said Reform
is not accurately representing the facts on the budget and the whole
issue of bracket creep. People have asked me ``who is this bracket
creep and what crime has he committed?'' They are really
interested. They hear about this bracket creep and they wonder
where they should direct their attention.
(1230)
To try to explain it as simply as possible, bracket creep is what
happens to a taxpayer in a certain income tax bracket who, because
the government has failed to index income tax to inflation, finds
himself moved up into another bracket.
Mr. Fewchuk: That is the guy from Calgary.
Mr. Hill (Prince George-Peace River): The hon. member
opposite is suggesting that it is only millionaires who experience
this. It is quite the contrary. This is falling on the already horribly
overtaxed middle class of Canada.
It is interesting to note what was said by some government
members about bracket creep when they were in opposition. I
remind those members of what they said by quoting from Hansard.
Who do we suppose said the following? This individual was
referring to the Tory finance minister, Michael Wilson:
He said lower taxes. He told us there were no tax increases in this budget. That
statement is false because taxes are going up in this country because of the
deindexation of deductions which this government has done in its past budgets. The
government knows it is going to get more money this year as a result of the removal
of the indexation provisions on all deductions in the Income Tax Act and the
removal of indexation on the rates of tax on various levels of income. Those have all
been taken out so taxes will go up this year.
That is a quote from
Hansard of April 28, 1993. I am sure the
House will recall that individual, the Liberal member of Parliament
for Kingston and the Islands. It was you, Mr. Speaker. Back in 1993
you recognized that bracket creep was a sneaky way in which
governments, at the time the Tory government, could increase
taxation on the already-
Ms. Catterall: Mr. Speaker, I rise on a point of order. I am
extremely concerned about the direction the debate has taken.
There were approximately 84 Liberal members of Parliament in the
last Parliament, any one of whom could be quoted.
I trust the member is not trying to drag the Speaker off his
neutral throne at the head of this Chamber and into this debate, but
I am afraid that is the effect his comments are having. I would ask
you to rule on whether he may in fact quote the Speaker who is now
occupying the chair as part of his debate.
The Acting Speaker (Mr. Milliken): I appreciate the kind
words of the deputy government whip but I am always pleased to
be quoted.
The hon. member has a few seconds left for his remarks. I would
appreciate it if he could conclude quickly as his time has expired.
9534
Mr. Hill (Prince George-Peace River): Mr. Speaker, I was
merely referring to the fact that back in 1993 you recognized this
as a form of increase in taxes. I was merely applauding your
insight.
What Canadians are telling us today is clear. It is Liberal-Tory,
same old story, when it comes to taxing, taxing, taxing.
The Acting Speaker (Mr. Milliken): I thank the hon. member. I
appreciate the new term bracket creep, which I do not recall using
and do not recall hearing before. It was a delight to hear it.
[Translation]
Resuming debate. The hon. member for Saint-Jean.
Mr. Bachand: Mr. Speaker, I would like to speak-
The Acting Speaker (Mr. Milliken): I am sorry. It is the other
party's turn to have the floor.
(1235)
Mr. Claude Bachand (Saint-Jean, BQ): Mr. Speaker, I thank
you for being absolutely neutral, as you have just shown us.
I am pleased to address Bill C-92 which, as we know, is a ways
and means procedure to implement certain measures announced in
the 1996 budget. That 1996 budget was yet another opportunity
missed by the government to put its fiscal house in order and to
make things somewhat more equitable.
That budget was yet another missed opportunity by the
government to review the corporate tax system. In order to put
things off for a while and to make sure that corporate taxation
would not be reviewed too soon, the 1996 budget provided for the
creation of a technical committee. However, we recently learned
that the mandate of this technical committee is now being extended
until the end of 1997. Once again, the government is playing it safe,
given the upcoming election campaign.
As the official opposition, we have a duty to point out these
things, and we will definitely do so during the election campaign.
What did the government do to postpone this tax review and to
make sure things remain unfair, as they currently are? It set up a
technical committee. That committee is made up of people from
the top consulting firms, people who are in the know and who try to
make sure large corporations do not pay their fair share of taxes.
I consider that a bit like putting the fox-or Colonel Sanders-in
charge of the henhouse. The chickens, that is the people footing the
bill, are told ``No problem, chickens, we have everything under
control. The good old Colonel will look after everything''.
But we have a major problem with that. The people advising the
minister, advising the government, are just about in a conflict of
interest situation. They will not be able to come up with solutions
which might put their own clients in an awkward position.
We understand that this is a stalling tactic, to ensure that the tax
contribution by the major corporations is not looked at too soon. In
this connection, my hon. colleague for Bourassa referred to the
situation with the banks, which I feel has become scandalous. At
the present time, bank profits are in the billions. Yet they are
rushing to lay off as many bank employees as they can. There are
virtually no measures proposed to reform the taxation system, to
get these banks to pay a bit more of their fair share.
And what is the situation in the meantime? The ones who are
getting richer in Canada are the bankers; the ones who are getting
poorer are the middle class. Everyone is contributing to support the
state except the major corporations, which are making a small
contribution, but far from enough.
Another thing that is in the 1996 budget which Ways and Means
will focus on is the venture capital corporations. This is another
example of Quebec's distinctiveness. Unions such as the CSN with
its action fund and the FTQ with its solidarity fund make it possible
for people to invest a little more venture capital. This was a first of
its kind when it started up.
The central labour bodies said: ``We are going to get together
with people, with workers who want to put money in a pension plan
for their retirement and arrange it so that we can provide venture
capital and maintain jobs''. Often, when companies are short of
cash, the solidarity fund or the CSN action fund will provide
assistance, helping not only to create jobs but often to maintain
them.
So what did the government do? In 1996, the government
decided to reduce the tax credit it had introduced which had been
an incentive for workers to put money into the solidarity fund
because they would get a more substantial tax refund. Probably
when the government saw this incentive was too successful-not as
successful as the banks, but they did not touch the banks, they hit
the labour-sponsored venture capital corporations-the
government decided to reduce the tax refund, which meant
reducing the tax credit. Furthermore, there would be a ceiling on
the amounts people are allowed to pay into these funds.
I think that was a pretty low blow, because we had workers and
employers who were encouraging the public to do something
socially responsible with their money, to use the money as a lever
to create and maintain jobs.
(1240)
Of course the government made cuts all over the place, and I
think this is deplorable. As usual, when decisions like that are
made, it seems that Quebec is hardest hit because 50 per cent of the
money in these venture capital corporations in Canada comes from
9535
Quebec. In other words, the government missed an opportunity to
let this type of fund expand. It would been far better, as I see it, to
set up a committee that would really do something about making
the system more equitable as well as doing something about those
who have all the capital, in other words, the banks.
Another ways and means motion about to be implemented is the
unemployment insurance fund heist. You will recall that in 1996,
the fund had a surplus of $5 billion. Employers and employees
make a contribution. Studies show that each time the contribution
is reduced by 10 cents, up to 30,000 jobs can be created. It was
maintained and artificially raised over the years.
Naturally the minister decided this year to lower it by 10 cents.
Will he create 30,000 jobs? I think so. But he had plenty of room to
lower it much more than that and yet he did not. Why? Because he
is taking the surplus from the unemployment insurance fund and
paying off the deficit with that. Who is bearing the cost? Workers
and employers, as I said.
Finally, it almost amounts to an indirect tax, and the government
is benefiting from it. Why is it benefiting? Not just because the
employers and employees are paying, but also because it is
tightening eligibility requirements and ensuring it is making people
poorer and hustling them along to the welfare rolls. That is what is
happening.
If we look at the statistics since the Liberals formed the
government, the number of unemployed in Canada declined from
1.6 million to 1.5 million. The 100,000 no longer receiving
unemployment insurance have probably thrown themselves into
the clutches of welfare, which is under Quebec's jurisdiction.
And so, on the subject of the unemployment insurance fund, it is
totally deplorable that the government is not settling the matter by
ensuring further improvements to the system and using the money
to try to create jobs. It is not necessarily a question of giving the
money to the unemployed, but some effort must be made to create
jobs. But the government is not trying to create jobs; instead, it is
using the surplus to pay off its deficit.
In terms of the unfair tax system, the same thing is true. I talked
about it to some extent earlier, but we can also talk about family
trusts. There are also large corporations that do not pay tax. When
asked when it intended to be pay its overdue taxes, which it used to
defer, Consolidated Bathurst replied: ``Never''.
I suggest that the taxpayers who are working on their income tax
returns write on those returns that they never intend to pay the
money they owe the government. I suspect Revenue Canada will
get back to them in a jiffy and say: ``Look, you must pay your taxes
and they are overdue. There is a penalty for not paying and you
will be charged interest on top of that''. But justice does not mean
the same thing, depending on whether you are a large corporation
or a middle or low income taxpayer.
Family trusts are another case in point. The government never
managed to settle this issue. There is some mention, in a ways and
means motion, of a possible deferral over time that would shorten
the length of time, but what does this mean for family trust owners?
It means transfers. Family trusts are still there to transfer. They are
transferred free of tax, benefiting once again rich financiers. The
poor and the middle class cannot afford to establish family trusts
for their young children.
This is unfair all the way. There is also the $7 billion in federal
expenditures that has been shovelled in the provinces' back yard
with the last two budgets. What this government should do is listen
to what the Bloc Quebecois is proposing to settle the personal
versus corporate income tax issue. This is $7 billion that can be
recovered.
Unfortunately, the government is not listening to what we are
saying, but we will make a point of bringing this up during the
election campaign. This will all be settled in the next federal
election. In Quebec, the voters will send a clear message to the
Liberal government, which has strayed off course, and this will all
be settled in the polling booth on June 2 or 9, probably.
(1245)
[English]
Ms. Marlene Catterall (Ottawa West, Lib.): Mr. Speaker, I
was very pleased to hear the Reform Party member who spoke last
acknowledge that Canadians are responsible for the very positive
gains that have been made in terms of putting the economy of the
country on a sound footing.
That is something that members of our caucus, our cabinet
ministers, recognize very strongly. The Prime Minister has spoken
about it. The finance minister has spoken about it.
They are the considerable sacrifices that Canadians have been
asked to make and the understanding we have had to seek from
them for some of the program cuts made over the last few years to
bring our deficit, finally, from over $42 billion down to under $20
billion, heading to under $10 billion for next year.
The member spoke about growth in the economy and somehow
seemed to think it a sin that with growth in the economy the
government would be collecting more taxes. It is quite obvious that
if there are a larger number of Canadians who are working, and
there are close to a million more Canadians working now than were
working three and a half years ago, more people earning, clearly
9536
there will be more people contributing to the cost of running the
country and delivering the programs that Canadians value.
The member should also ask himself why we have enjoyed the
growth in the economy that he has acknowledged. He talked as
though lower interest rates are something the government should
apologize for. We do not.
Those lower interest rates have contributed tremendously to the
growth in the economy that the nation is enjoying. It is because of
the good fiscal management that this country has had for the last
three years since the October 1993 election.
I want to acknowledge that the Reform Party did, in the last
speech, speak about the growth in the economy. We appreciate
those comments about low interest rates.
One of the items in the bill before the House today is the taxation
treatment of child support. This bill changes the taxation of child
support. The change is part of a larger package of reforms to deal
with child support. The reforms include measures to try to address
the problems of inconsistent child support payments, inadequate
child support payments, support payments that often are not paid at
all, intermittently or inadequately.
The three reforms include the introduction of the federal child
support guidelines to establish fair and consistent support awards
in divorce cases. In addition, there is the enhancement of federal
and provincial enforcement measures so that those awards decided
by the courts would be paid. Finally, the item this bill deals with
primarily, there is a change in the way that child support awards are
taxed.
Let me take a few minutes to explain how we have changed the
rules and why. Traditionally support awards have been tax
deductible to the paying parent and taxable as income for the parent
receiving the payment, i.e., the custodial parent who also has the
responsibility for the day to day care of the children.
The 1996 budget announced that this system would be replaced
with a system of no deduction, no inclusion. Perhaps some
members need to be reminded that this is in line with the court
decision delivered not that long ago that the practice of allowing
the parent paying child support payments to deduct the payments
before paying income tax and having the parent receiving it pay the
tax on that amount was unconstitutional and contrary to the charter
of rights and freedoms.
(1250)
To suggest that the government should not somehow be dealing
with that and correct a provision in tax law that is contrary to the
charter and to the Constitution of this country goes a bit beyond the
ridiculous.
That is what we are trying to do. The court simply said that if we
have two parents, both of whom are supporting their children, if
one is still married to the other parent, they pay tax on that money,
but if one is divorced from the other parent, they pay no tax on that
money. That is discriminatory between parents who are married
and parents who are not married. Quite simply that is the issue we
are trying to address here.
In theory the old system could deliver a tax benefit that would
make more money available to the children. That is because the
paying parent usually had a higher income than the recipient or
custodial parent and therefore was taxed at a higher marginal rate.
If the paying parent saved money, that saving could in theory be
passed along to the children.
In practice that is not what happened. The system failed to
deliver this benefit and actually made it harder to set fair and
realistic awards in the courts. The system was fraught with a host of
frustrations that were reflected in the well known case of Suzanne
Thibaudeau, which I have just referred to.
For one thing, the tax benefit was not targeted to reach children
who needed it most, and complex tax calculations made it more
difficult for parents to negotiate a realistic level of support that they
both saw as fair. Many parents also found that waiting until year's
end to receive a refund or to make lump sum payments created
serious cash flow problems for both parents.
This package of reforms we have made including the tax
measures in this bill is the result of a supreme court decision but
also the result of cross-country consultations held under the
auspices of my colleague, the member for Mount Royal, in which
we heard the real life experiences of families that had broken up,
what was happening to children, what was happening to their
parents and the real poverty created by the existing system.
The Vanier Institute's last report found that two-thirds of women
whose marriage breaks up walk out of the marriage and into
poverty. That means their children walk with them. That is part of
what we are trying to address by these reforms. It is part of the
reason for this change in tax policy with respect to taxation of child
support payments. It is a measure that is legally necessary but it is
also necessary in justice and in fairness and putting the concerns of
our children and their well-being first.
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, normally I
stand up to say that I am pleased to join in the debate on Bill C-92,
but you did hear the point of order I raised earlier and the fact that
Standing Order 73(1) has now become a time allocation standing
order rather than a standing order that has real meaning. If we
followed through with the real moral intent of the standing order
we would never be having this time allocation today.
I know the Speaker has ruled, not in our favour and we do not
feel he ruled in favour of the people of Canada, but certainly on a
narrow interpretation-
9537
(1255 )
The Acting Speaker (Mr. Milliken): I hesitate to interrupt the
hon. member, but he knows it would be improper to reflect on a
ruling of the Chair. I thought he was moving off that subject, quite
smartly, as I had sort of cautioned him to do. I invite him to move
off the subject immediately. I think it would be unwise to continue
this line.
Mr. Williams: Mr. Speaker, Bill C-92 deals with a budget
measure of 1996. It is now April 10, 1997, 14 months since that
budget was tabled. The legislation is just now being introduced.
I have a couple of children, one attending university. I saw that I
was getting an extra deduction for his education. It has gone from
$60 a month for full time attendance at university to $100 a month
for full time attendance. I thought it was not bad, but I wondered
when it went through. It is going through today. Here it is. Now we
know why the government is in such a rush. It is here in Bill C-92
after I did my income tax. After millions of Canadians have done
their income tax we now find that the legislation is coming along
like the tortoise after the hare. Unlike the tortoise, it does finish
first and causes the income tax returns to fall into line, if I may say.
Going through the summary of the act, it is complex and
detailed. There are tax credits for individuals, charitable donations,
child care expense deductions, child support payments, deferred
income plans, foreign reporting rules, non-resident pensioners, all
by and large things that are somewhat beneficial to individual
taxpayers.
Then I read on, scientific research and experimental
development. It introduces a salary cap for SR and ED treatment of
salaries of specified employees. This is a tax limitation on a tax
break that corporations can get.
No. 9, labour sponsored ventured capital corporations. It reduces
the tax credit rate from 20 per cent of the cost of the LSVCC share
to 15 per cent, another restriction on tax breaks for corporations.
No. 10, flow through shares. It extends the look back rule to
allow qualified expenses incurred at any time in taxation year to be
treated as if they were incurred in the preceding years, again a
reduction in benefit.
No. 11, resources losses requires an add back to income or 25 per
cent of prescribed resource losses, another one that increases the
tax liability of corporations.
No. 12, Canadian field processing excludes gas plant processing
from activities eligible for the manufacture and processing tax
credit, another situation where businesses will pay more tax.
No.13, joint exploration corporations, repeals rules allowing for
the renunciation of resource expenses by joint exploration
corporation, another situation where corporations will pay more
tax.
No. 14, part 6 capital tax, extends the application of additional
part 6 tax by one year for banks and other deposit taking
institutions and by three years for life insurance corporations,
another extension of a tax on corporations.
The minister stood up and said he has not raised taxes. Right
here is Bill C-92, coming from the budget of February 1996.
Fourteen months later we now have the legislation in front of us.
There it is, tax increase, tax increase, everywhere business turns
there is a tax increase, all the while the government throws a few
shekels to individuals. The government seems to think that there is
no limit to how big business can pay more tax.
That is despicable. Who creates the jobs in this country?
Business of course. How can business create jobs if they are being
taxed into oblivion? That is what the government is doing. It is
taxing business into oblivion.
(1300)
The employment insurance program is turning out to be nothing
but a blatant tax grab by the government. According to the latest
numbers I saw in the ``Fiscal Monitor'', the government will run a
surplus on employment insurance premiums that exceed benefits
paid out under employment insurance by approximately $7.5
billion. That is a $7.5 billion surplus in one year.
The government has dramatically cut back the eligibility of
individuals for employment insurance. It has cut back the amount
of employment insurance it pays to individuals who manage to
qualify. It has made a pitifully small decrease in the amount of
premiums paid by individuals and employers. In the course of
doing all that up comes the surplus. As more money is coming in
and less money is going out, away the surplus goes. The Minister of
Finance is taxing business to the point that it cannot create jobs.
Then he stands in the House and says that unemployment is still
over 9 per cent and he wishes it were coming down. He does not
know why it is not coming down. Let me tell him.
If he looks at Bill C-92 he will find out why the unemployment
rate is not coming down. There are extra taxes for business under
the scientific research and experimental development program,
extra taxes for business under labour sponsored venture capital
corporations, extra taxes on flow through shares, extra taxes on
resource losses, extra taxes on Canadian field processing, extra
taxes on joint exploration corporations and an extension of the
capital tax for banks and insurance companies. We cannot have our
cake and eat it too. That has basically been the rule with Standing
Order 73 excepted.
9538
The Minister of Finance thinks he can tax these businesses into
the ground and then turn around and say it is their responsibility to
create all these jobs. It is time the minister had a few economic
lessons from somebody. It just does not work that way.
Let us look at the benefits he has given to individuals. He has
made changes to the child care expense. People can now claim
child care expenses for people aged 16. We throw young people
into young offender institutions long before they are 16. I wonder if
that would qualify for a child care deduction. It is an interesting
thought: a 16-year-old going off to day care with a lunch bucket in
his hand and holding his mommy's hand too. I can see it now.
The government is going too far in thinking it can buy votes
from individuals and in taxing businesses into oblivion. I will leave
it at that.
[Translation]
Mr. Benoît Sauvageau (Terrebonne, BQ): Mr. Speaker, before
discussing the ways and means motion on the previous budget, I
would like to take a minute to thank some people from the new
riding of Repentigny.
You referred to me as the member for Terrebonne but, after June
2, that is after the next election, the Speaker who will be in the
Chair, and I hope it will be you, will have to refer to me, assuming I
am re-elected-but I am not overly concerned about this, since
things are going very well in our riding-as the member for
Repentigny, the first one to represent this new riding.
In a few years, if things go well, I will have become the first and
last member for Repentigny, because that riding will not have a
very long life. It will go through only three stages: first, the
election of the Bloc Quebecois; second, the election of the Parti
Quebecois; and third, the holding of a successful referendum. It
will be a tie-breaker after the dead heat we had the last time.
Therefore, the riding of Repentigny will exist for only a few years.
(1305)
My nomination meeting was held yesterday evening, in
Charlemagne, one of the municipalities in that beautiful riding. On
that occasion, people expressed their confidence in me by agreeing
to let me represent them at the next election, as a Bloc Quebecois
member. Therefore, I sincerely thank the people of Repentigny,
Charlemagne, Lachenaie, Mascouche and La Plaine, for their
support in the past three and a half years, and for their renewed
support last night in Charlemagne. Over 150 people were in
attendance and showed they are eager to get on with the next
election campaign.
Some hon. members: Hear, hear.
Mr. Sauvageau: Now we are going to get to the heart of the
matter, the ways and means motion for last year's budget.
I would like to quote from a book that I am sure you all read
regularly a few years back, and that you were only too keen to
forget about once we had read it too. I am talking about the red
book. We are still waiting for the second volume, the one on
promises kept, which will perhaps be as thick as this piece of paper.
I would therefore like to quote from the red book. I will read what
my friends across the way said on page 13:
Today, after nine years of Conservative government, Canadians are facing
hardship: 1.6 million unemployed, millions more on welfare, a million children
living below the poverty line, record numbers of bankruptcies and plant closings.
I repeat, this appears on page 13 of the red book.
What has become of the fine words of the Liberal Party, of the
compassion that we read about in the red book, but that never
actually materialized, because in concrete terms we have seen
nothing? What have they done after three years? We will give
figures, but not the Bloc Quebecois's figures, because as our
friends across the way tell us, the nasty separatists tend to play
around with figures. We will therefore give figures provided by
Statistics Canada, Industry Canada and Human Resources
Development Canada.
So, instead of the 1.6 million unemployed Canadians they
complained about in the red book in 1993, there are now, according
to Statistics Canada, 1.5 million Canadians without jobs. In 1993,
they wrote about ``millions more on welfare'', but Statistics
Canada tells us there are now 3 million Canadians in this situation.
Instead of ``a million children living below the poverty line'', as
they told us in 1993, Statistics Canada reports that there are now
1.5 million such children, 500,000 more than before.
In 1993 they wrote in the red book about ``record numbers of
[-]plant closings''-they did not give a figure because it was not
true-while today Statistics Canada tells us there were a record
86,253 bankruptcies declared between January and November
1996.
Before speaking about the budget, it is very important to
remember the compassion expressed by the Liberals in 1993, and
the failure of the Liberals to take action since that time. The figures
in the finance minister's budget can be interpreted any number of
ways, as the secretary of state just demonstrated, and as other
government members have shown, in trying to praise this
government and cover up mistakes in the budgets and this
government's failure to act or its blunders when it did.
We could also go on about a number of things, a number of
critical sectors of our economy, our society, our culture, our history
and our trade. I believe that the most important figures, the ones
that will really make the public sit up and take notice in the next
9539
election are these: the unemployment rate, the poverty rate, and
the bankruptcy rate.
Before having a firm political ideology, before having
intentions, projects, hopes, we need a bare minimum, that is to say
enough money to realize our ideology, or enough money to realize
our hopes and dreams for the future.
With a record as pitiful as 3 million people on welfare, 1.5
million children living below the poverty level, according to
Statistics Canada, I do not believe the Liberals can pat themselves
on the back and boast ``We are proud of our performance record.
We can present you with a budget and describe it as having
successfully bolstered the social and economic fabric of this
country''. This is false, and who says so? Not us, but-I
repeat-Statistics Canada, Industry Canada and Human Resources
Development Canada.
(1310)
The government could, perhaps-and I suggest it do so, as it has
in other sectors-tell us that the head of Statistics Canada must be
wrong, that he ought to be sacked, that someone new should be
hired who could change the figures. We know that is a Liberal
tactic. They would put a good Liberal in charge, a few figures
would get changed, and then something more attractive could be
reported.
Unfortunately for the Liberal Party, and fortunately for us and
the man or woman in charge of Statistics Canada-I do not know
which it is-this tendency, or way of doing things, from the past is
no longer in use. The chief statistician and the heads of the other
departments I mentioned will be able to stay put and keep giving
the real figures, the results of this government's failure to act.
As I said before, the government has nothing to be proud of in
this respect, and I think it has an obligation to explain these results
to the public. Meanwhile, what was the Bloc Quebecois doing?
Was the Bloc Quebecois, as an opposition party, shooting down
everything that moved? In a way yes, but in another way no.
Yes, the Bloc Quebecois objected to various bills that were
introduced and that, in our opinion, were skewed towards these
figures. But at the same time, the Bloc Quebecois made certain
proposals. We offered both negative and constructive criticism. So
what did we propose? We proposed a plan for corporate tax reform
and another one for personal tax reform.
In the new riding of Repentigny, if the Minister of Finance
bothered to listen to us and realized that the proposals made by
three excellent researchers of the Bloc Quebecois, not the slew of
researchers that can be found at the Department of Finance, if he
bothered to consider and implement the recommendations we
made, he would realize that what is needed is not new money or an
increase in the deficit. By reallocating amounts that are already in
the tax system, an average family-for instance, a Repentigny
family of two adults and two children with an average income of
$40,000, these are not wealthy people, this is an average, modest
income-if the Minister of Finance were to implement the
proposals of the Bloc Quebecois, this average family in Repentigny
would pay $821 less in income tax. This proposal would affect
more than 50 per cent of the families in my riding.
Unfortunately, this family will have to pay $820 more in income
tax because of poor decision making by the Minister of Finance. It
may not be a lot, but for the average family with a modest income
of $40,000, this is a lot money that could be funnelled back into the
economy and could create real jobs.
However, the Minister of Finance has trouble going along with
proposals made by an opposition party, a party that objects when
something does not make sense, but also makes suggestions on
how things should be changed in the interest of fairness.
[English]
Mr. Williams: Mr. Speaker, I rise on a point of order. Is the
order of debate from the Bloc to the Liberal Party and then back to
us under this order? Should a Reform member not be the next
speaker?
The Acting Speaker (Mr. Milliken): The last speaker before
the hon. member for Terrebonne spoke was the hon. member for St.
Albert.
The rotation today has been from the beginning I am advised-
and I was not here at the beginning of the debate-Liberal, Reform,
Bloc. That is the way it has been going. It is now a Liberal's turn.
Accordingly I recognize the hon. member for
Haldimand-Norfolk.
Mr. Bob Speller (Haldimand-Norfolk, Lib.): Mr. Speaker, it
gives me great pleasure to say a few words on Bill C-92. I know I
only have a couple of minutes to speak to the budget. It is a budget
that I think is notable.
(1315)
I want to say a little bit about rural Canada and the impact this
budget has in the rural areas. Rural Canada is an area that has really
been recognized for the first time in a budget by a government that
directly looked at solving some of its problems.
In the speech from the throne the government made a
commitment to look at rural Canada and to try to make sure that it
shares in the economic growth that is happening across the country.
I would like to thank all our members from the rural caucus in the
Liberal Party and the Minister of Finance for taking the
opportunity, after listening to our concerns, to address some of the
concerns that we have in rural areas so that we too can share in the
economic growth in the country.
I want to highlight a few areas that the minister has touched on.
One of those areas deals with the Farm Credit Corporation. He
9540
made sure that the Farm Credit Corporation had more money in
which to invest in rural areas.
The trade statistics show that agricultural exports have increased
some 30 per cent over the last three years. We seem to be booming
in exporting our products. One of the areas in which we need to do
more is to make sure that the further processing of goods,
especially in the agricultural area, can get to the export market. In
order to do that the farmers, who have a lot of really good ideas,
need some cash to invest in these products and to get them into the
market.
On the one hand the Minister for International Trade has done a
good job in getting the information out to these small businesses,
these farmers, and to make sure that they are represented in our
embassies around the world and that their product is there.
On the other hand, the Minister of Finance has made sure that
cash is there. He has made sure that the Farm Credit Corporation
has cash available to help invest in these small industries to make
sure that they can get up, get running and get these further
processed goods exported around the world. I want to thank him for
that.
I would like to highlight a point that the hon. member for Parry
Sound-Muskoka was pushing very strongly and I know the
Minister of Finance thanked him for that, and that is the whole of
tourism and the importance of tourism to job creation in Canada.
The rural areas have a lot to show. A lot of tourists come to the
rural areas but there is not as much co-ordination and there are not
the groups in place to help co-ordinate a tour group or a tourist who
comes in to certain parts of Canada.
The Minister of Finance in his wisdom and the cabinet agreed to
put some money into tourism. I know all hon. members will agree
it does a lot in helping to create jobs, especially in small tourist
operations in rural and remote Canada.
Obviously education and health care were in the budget. These
areas are important for rural Canada. I want to thank the minister
for investing in the Internet and making sure that we in the rural
areas are up to speed so to speak in having access to the Internet.
In fact our young people and our students can now in any
community with a population of over 400 have access to the
Internet. That is a very important initiative of this government that
really helps in making sure that people in rural and remote Canada
can get into the new technologies that I think are going to be
important in rural areas in terms of job creation.
(1320 )
It is also important to note this. I want to talk personally about
my riding of Haldimand-Norfolk and the importance of taxation.
In my nine years here, it seems that every year, the Minister of
Finance has come up and once again increased the taxes on
tobacco.
I want to thank him from my constituents' point of view for not
raising the taxes on tobacco in the budget. As members know, to
tobacco farmers in the community surrounding my area, the size of
tax on tobacco is important, although not on the sales. It does not
have a big influence in the production, but in giving them a good
feeling and understanding of how the system works.
[Translation]
The Acting Speaker (Mr. Milliken): It is my duty to interrupt
proceedings now to put the question now before the House.
[English]
Is it the pleasure of the House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Mr. Milliken): All those in favour of the
motion will please say yea.
Some hon. members: Yea.
The Acting Speaker (Mr. Milliken): All those opposed will
please say nay.
Some hon. members: Nay.
The Acting Speaker (Mr. Milliken): In my opinion the yeas
have it.
And more than five members having risen:
The Acting Speaker (Mr. Milliken): Call in the members.
(1340)
[Translation]
Before the taking of the vote:
The Acting Speaker (Mr. Milliken): The member for Joliette
on a point of order.
Mr. Laurin: Mr. Speaker, as the bells started sounding, the
official opposition asked that the vote on Motion No. 92 be
deferred, and the Chair did not recognize our request at that point.
I would submit, with all due respect, to your attention, Standing
Order 73(1)(d), which provides in French:
-after not more than 180 minutes of debate, the Speaker shall interrupt the debate
and the question shall be put and decided without further debate.
In our opinion, putting the question does not mean we cannot
defer the vote. Standing Order 45(5)(
a)(ii) provides:
(ii) During the sounding of the bells, either the Chief Government Whip or the
Chief Opposition Whip may ask the Speaker to defer the division.
This is what we did. Nothing in this Standing Order either
indicates that we cannot ask to have the vote deferred to another
9541
time. The French text is clear, and I would ask you to recognize the
request of the official opposition, please.
[English]
Mr. Chuck Strahl (Fraser Valley East, Ref.): Mr. Speaker, I
rise on the same point of order. It appears the whip of the Official
Opposition is correct in his summary.
I bring to the attention of the Chair that there are other times, for
example in Private Members' Business, where a set amount of time
is allocated for debate, at which time the question is put and is
often deferred. I think in this case the whip of the Official
Opposition is correct.
Mr. Bob Kilger (Stormont-Dundas, Lib.): Mr. Speaker, I
would submit respectfully that the standing orders are quite clear:
After not more than 180 minutes of debate the Speaker shall interrupt the debate
and the question shall be put and decided without further debate.
(1345)
[Translation]
In fact, debate was concluded after 180 minutes, the vote was
scheduled, the division bells were rung for 15 minutes ago. We are
now ready to vote.
[English]
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, I would
refer to the Chair's ruling earlier this morning on 73(1) where it
was pointed out by the government whip that there was no
restriction in Standing Order 73(1) and therefore it applies to bills
that had a ways and means motion preceding it because there was
nothing in 73(1) that contained that restriction.
I draw your attention to Standing Order 45, content contains no
restriction. Therefore I humbly suggest you see that his point of
order is in order.
[Translation]
The Acting Speaker (Mr. Milliken): I thank members of both
sides of this House for their arguments on this point. I have looked
at Standing Order 76, cited by the hon. member for Joliette, and
considered the wording. Furthermore, I looked at the wording of
Standing Order 45 to make a comparison, and I do not believe the
[English]
It is provided in Standing Order 45(3) that:
When, under the provisions of any Standing Order or other Order of the House,
the Speaker has interrupted any proceeding for the purpose of putting forthwith the
question on any business then before the House, the bells to call in the Members shall
be sounded for not more than fifteen minutes.
I interrupted the proceedings at the conclusion of 180 minutes.
[Translation]
-in order to put the question immediately on a matter under
discussion in the House, the division bells must have rung for
fifteen minutes at most.
[English]
Having done so, I refer the hon. member for Joliette and the
Reform Party whip to Standing Order 45(5)(a)(i):
Except as provided in sections (3) and (6) of this Standing Order-
In other words, where section (3) applies there is no right to
defer under Standing Order 45(5). Standing Order 45(5) applies to
30 minute bells, not 15 minute bells. On any 15 minute bell the
only hope for deferral lies under Standing Order 45(7).
I urge hon. members to have regard to that fact. I did not permit
the deferral of the division because I believed it was out of order
and I so ruled.
We will now proceed with the question.
(1350)
[Translation]
(The House divided on the motion, which was agreed to on the
following division:)
(Division No. 295)
YEAS
Members
Alcock
Anderson
Assadourian
Augustine
Bakopanos
Barnes
Beaumier
Bélanger
Bethel
Bodnar
Bonin
Boudria
Brown (Oakville-Milton)
Brushett
Bryden
Byrne
Calder
Campbell
Cannis
Catterall
Chan
Clancy
Cohen
Collenette
Collins
Comuzzi
Crawford
Culbert
Cullen
DeVillers
Dhaliwal
Dion
Discepola
Dromisky
Dupuy
Easter
English
Fewchuk
Finlay
Flis
Fontana
Fry
Gagliano
Gallaway
Gerrard
Goodale
Graham
Guarnieri
Harb
Harper (Churchill)
Harvard
Hubbard
Ianno
Iftody
Irwin
Jackson
Karygiannis
Keyes
Kilger (Stormont-Dundas)
Kirkby
Knutson
Kraft Sloan
Lastewka
LeBlanc (Cape/Cap-Breton Highlands-Canso)
Lee
Loney
Manley
Marleau
Martin (LaSalle-Émard)
McCormick
McKinnon
McTeague
McWhinney
Mifflin
9542
Mills (Broadview-Greenwood)
Minna
Mitchell
Murphy
Murray
Pagtakhan
Parrish
Patry
Peters
Peterson
Phinney
Pickard (Essex-Kent)
Pillitteri
Proud
Regan
Richardson
Rideout
Robichaud
Rock
Scott (Fredericton-York-Sunbury)
Serré
Sheridan
Simmons
Speller
St. Denis
Steckle
Stewart (Northumberland)
Szabo
Telegdi
Terrana
Thalheimer
Torsney
Ur
Valeri
Vanclief
Volpe
Wells
Whelan
Wood
Young
Zed-115
NAYS
Members
Ablonczy
Bachand
Bellehumeur
Bergeron
Blaikie
Breitkreuz (Yellowhead)
Bridgman
Brien
Canuel
Chatters
Chrétien (Frontenac)
Crête
Cummins
de Savoye
Debien
Duceppe
Dumas
Duncan
Epp
Gagnon (Québec)
Gauthier
Godin
Gouk
Grubel
Hanger
Harper (Simcoe Centre)
Hayes
Hermanson
Hill (Macleod)
Hill (Prince George-Peace River)
Kerpan
Langlois
Laurin
Leroux (Shefford)
Loubier
Marchand
Martin (Esquimalt-Juan de Fuca)
Mayfield
McClelland (Edmonton Southwest/Sud-Ouest)
Ménard
Mercier
Meredith
Nunez
Paré
Penson
Picard (Drummond)
Pomerleau
Ramsay
Ringma
Sauvageau
Schmidt
Scott (Skeena)
Silye
Speaker
Stinson
Strahl
Venne
Williams-58
PAIRED MEMBERS
Arseneault
Asselin
Dalphond-Guiral
Daviault
Duhamel
Fillion
Finestone
Gaffney
Guay
Guimond
Hopkins
Lalonde
Lefebvre
Loubier
MacAulay
Marchi
McLellan (Edmonton Northwest/Nord-Ouest)
O'Reilly
Payne
Reed
Tremblay (Lac-Saint-Jean)
Tremblay (Rimouski-Témiscouata)
The Acting Speaker (Mr. Milliken): I declare the motion
carried. Accordingly, the bill is referred to the Standing Committee
on Finance.
(Motion agreed to, and bill referred to a committee.)
(1355)
[English]
On the Order: Government Orders:
April 9, 1997-The Minister of Finance-Second reading and referrence to the
Standing Committee on Finance of Bill C-93, an act to implement certain provisions
of the budget tabled in Parliament on February 18, 1997.
Hon. Paul Martin (Minister of Finance, Lib.) moved that Bill
C-93, an act to implement certain provisions of the budget tabled in
Parliament on February 18, 1997, be referred forthwith to the
Standing Committee on Finance.
Mr. Kilger: Mr. Speaker, I wonder if there might be a
disposition either to suspend the House or to see the clock as being
two o'clock and we could go to Statements by Members in order
for the member to have his full ten minutes following question
period.
The Acting Speaker (Mr. Milliken): Is that agreed?
Some hon. members: Agreed.
_____________________________________________
9542
STATEMENTS BY MEMBERS
[
English]
Mr. Bernie Collins (Souris-Moose Mountain, Lib.): Mr.
Speaker, 1996 marked the third consecutive outstanding year for
the Saskatchewan potash industry, the largest producer and
exporter of potash in the world.
The industry's solid performance in 1996 was the result of strong
sales to the United States, Brazil, western Europe and Indonesia.
These sales, combined with strong potash prices, sustained gross
revenue to the Saskatchewan industry at the second highest level on
record.
Most important, this success translates into high quality, well
paying jobs. The potash industry employs 3,000 people in
Saskatchewan and has an annual capital spending of $60 million.
In order to build on this success and to spur growth in the mining
industry as a whole, I call on all members to support the natural
resources minister in her efforts to remove regulatory constraints
within federal jurisdiction which hinder mining investment in
Canada.
9543
[Translation]
Mr. Jean-Guy Chrétien (Frontenac, BQ): Mr. Speaker, I want
to acknowledge in this House the courage and determination of the
four miners from Asbestos who ran in the Paris marathon last
weekend.
In so doing, although they were ignored by the French press,
they wanted to create awareness about how safe asbestos really is
when used properly. These four miners have demonstrated that the
physical ability of workers is in no way affected by exposure to
chrysotile asbestos fibres, partly because of the very high health
standards in the industry.
I salute their action and encourage any such activity aimed at
convincing the French people that this matter was blown out of
proportion.
My colleague from Richmond-Wolfe joins me in
congratulating Guy Guérette, Eudore Lemay, Michel Champagne
and Pierre Laliberté, our four marathon runners and chrysotile
asbestos miners.
* * *
[
English]
Mr. Charlie Penson (Peace River, Ref.): Mr. Speaker, when the
Prime Minister arrived in Washington a few days ago he said he
had no serious issues to discuss. I beg to differ.
I recall that prior to the last election there was one item that
seemed extremely important to him. It is even included on page 24
of the red book: ``A Liberal government will renegotiate the
NAFTA to obtain a subsidies code, an anti-dumping code and a
more effective dispute resolution mechanism''. There was even
talk about abrogating the agreement if satisfactory changes could
not be negotiated.
What has happened to that promise? Is it no longer important? I
suppose we can add it to the heap of other Liberal broken promises
like dumping the GST, getting to the bottom of the Somalia affair
and eliminating interprovincial trade barriers.
It is indeed a cynical government that makes promises that it
knows it cannot keep.
* * *
(1400 )
Mr. Bill Blaikie (Winnipeg Transcona, NDP): Mr. Speaker,
many of my constituents are concerned about the fact that U.S.
based heavy construction equipment and workers have crossed the
border to perform routine train derailment wrecking services.
Any justification for such actions based on the claim that such
equipment and expertise are unavailable in Canada is just plain
false. Canadian crews do this kind of work all the time and they do
it well. They could have done the work recently performed in
Winnipeg and in Bala, Ontario. There was no emergency and no
need to import such services. Canadian crews and Canadian
equipment were available.
I join with CAW local 101 of Winnipeg in calling on the Minister
of Citizenship and Immigration to conduct a full investigation into
CP Rail's actions. The least this Liberal government could do is
make sure Canadian workers do not lose their jobs to Americans
because CP Rail is allowed to do whatever it likes.
* * *
Ms. Maria Minna (Beaches-Woodbine, Lib.): Mr. Speaker,
spring is in the air. One of the ways we know that spring has arrived
is that the 10th annual Beaches Spring Sprint was held this past
weekend in my Toronto riding. What better way to shake off the
winter blues and enjoy some fresh air and exercise than a run along
the shores of Lake Ontario?
A record 830 participants ran the five kilometre race along the
boardwalk to raise $6,000 for the Beaches Recreation Centre which
is celebrating its 25th anniversary. The runners were assisted by
130 volunteers who demonstrated good community spirit in
organizing the race. They made sure everything went along
smoothly.
I congratulate the runners and the volunteers on a job well done.
The money raised will go to maintain various programs at the
Beaches Recreation Centre and to purchase new equipment.
Congratulations to all who were involved.
* * *
Mr. Ted McWhinney (Vancouver Quadra, Lib.): Mr. Speaker,
current negotiations between Canada and the United States over
Canadian complaints that the United States is violating the
conservation norms of the Pacific salmon treaty of 1985 have seen
a breakthrough in traditional diplomatic methods. There is direct
involvement in the negotiations of the actual stakeholders, the
active fisher people in both countries who have the most to lose
from any violation of the treaty norms.
In a series of direct meetings whose consensus is reported back
to the two governments, the Canadian and U.S. fisher people bring
both practical experience and also human concerns to a
traditionally rather abstract technical bureaucratic process. Why
not? It is the new pluralism. It balances the new co-operative
federalism, which the federal government is now seeking to pursue
with the Government of British Columbia, in implementing the
Fryer commission's
9544
unanimous report on solutions to west coast fisheries problems and
in seeking to establish permanent federal-B.C. partnership at the
fisheries administration level.
* * *
[
Translation]
Mr. Roger Pomerleau (Anjou-Rivière-des-Prairies, BQ):
Mr. Speaker, this evening, Claude Picher, a journalist who has been
reporting on economic and financial matters since 1975, will
receive the Hyman Solomon award for the quality of his work in
journalism. He is the first francophone Quebecer to receive this
prestigious award.
The Hyman Solomon award is given out by the public policy
forum, which comprises representatives from government, labour
and management. This award recognizes the work of journalists
providing in-depth reporting on complex public interest matters to
clearly explain the issues and their implications in everyday life.
Claude Picher undoubtedly deserves this award. His lucid
analysis, clear explanations and limpid style significantly
contribute to Quebecers' growing interest in economic matters.
Our congratulations to you, Mr. Picher, on behalf of all
Quebecers.
* * *
[
English]
Mr. Ray Speaker (Lethbridge, Ref.): Mr. Speaker, 80 years
ago yesterday a Canadian identity was forged at the battle for Vimy
Ridge. That day 100,000 Canadians took a critical German
stronghold, something the French and British units twice failed to
do.
The price was high: 3,600 dead and more than 10,000 wounded.
But the hottest flame produces the strongest steel. The sacrifices
made that day won Canada a seat at Versailles and membership
among the family of nations.
The people of France have not forgotten this sacrifice. Nearly
2,000 gathered to watch France's veterans affairs minister award
six Canadian survivors the French Veterans Medal.
A number of our World War II veterans also attended yesterday's
ceremony, one of whom I know personally. Retired air force
Captain Ken Branch of Lethbridge served as a pilot overseas in that
war. He returned safely, unlike many of his comrades, and
Lethbridge has profited ever since. His contributions have
enriched the lives of many in our community.
To Ken Branch and the thousands of other Canadian men and
women who sacrificed in order that we might remain free, I say
thank you.
* * *
(1405 )
Ms. Paddy Torsney (Burlington, Lib.): Mr. Speaker, I am
proud to rise today to recognize Master Kerrick Flatt, a young
Burlington resident.
Kerry Flatt is a fine example of a young Canadian. He is
someone who demonstrated remarkable courage by his outstanding
actions on March 23, 1997. On that day, seven-year-old Kerry
rescued his father from the frozen waters of Manitouwabing Lake
near Parry Sound, Ontario after he and his father fell through the
ice.
Kerry risked his own life and has been recognized for his bravery
by the Governor General of Canada with a medal of bravery. This
medal is given to those Canadians who come to the aid of their
fellow citizens in spite of hazardous circumstances.
Please join me in congratulating this heroic young man for his
selfless act and in wishing Kerry continued courage and dedication
to his family, to our community and to our country.
* * *
[
Translation]
Mrs. Anna Terrana (Vancouver-Est, Lib.): Mr. Speaker,
cancer killed almost 60,000 Canadians in 1994. April is cancer
prevention month, and many individuals and organizations are
looking for funds to support cancer research and to find a cure to
this disease which cruelly destroys too many human lives.
[English]
Today in Ottawa, there is a young boy from British Columbia.
Mike Cuccione is 12 and very talented. In his young life, he has
defeated Hodgkin's disease twice.
During his tribulations, Mike wrote five songs which he
recorded on a CD. The disc was launched in November and Mike
has raised $100,000 since then. The money will go to cancer
research and to the B.C. Children's Hospital.
Mike recently won the Vancouver Leader of Tomorrow award
and was a finalist in the Terry Fox award. Mike is here to meet the
Prime Minister of Canada. His dream is to make a difference and,
inspired by his songs, he never gives up hope, he never gives up
faith, he never gives up love.
9545
I would like to congratulate Mike and his marvellous family
for his excellent work and successes.
* * *
Mr. John Richardson (Perth-Wellington-Waterloo, Lib.):
Mr. Speaker, it gives me great pleasure to rise today to pay tribute
to the proud Canadians who put their lives on the line in the name
of justice and liberty in Vimy some 80 years ago.
Vimy was the most remarkable of battles. Within three days, the
Canadians captured and controlled the entire ridge and had
captured more ground, prisoners and guns than any previous
British offensive. In fact, the assault turned out to be the swiftest
and most complete victory of the war.
Anyone who watched yesterday's news coverage of the
anniversary commemorations will not forget the emotions on the
faces of the Canadian veterans who had returned to Vimy. From the
sorrow in their eyes, you could appreciate the pain of loss of their
comrades who died serving their country.
Many veterans view events such as these as their last hurrah.
Who will be around to celebrate the next anniversary, they
question. But the celebrations will continue.
While those who made history will leave us, time will never
erase the memories of their courage, their valour and their
patriotism. May we remember them always.
* * *
[
Translation]
Mr. Jean H. Leroux (Shefford, BQ): Mr. Speaker, from April 9
to April 12, 1997, we are commemorating the 80th anniversary of
the Vimy Ridge victory by the Canadian expeditionary force,
which included the 22nd Regiment.
That impregnable fortress had resisted for over two years.
Canadian troops distinguished themselves by winning one the
greatest victories. However, this was achieved at the cost of 11,000
human lives.
Today, in this House, I want to pay tribute to the courage and
fighting spirit of the soldiers who took part in the Vimy battle. I
want to remind everyone that their sacrifice was not made in vain.
The road to the greatest victories is always paved with tombstones.
All of us remember the heroism of these soldiers and have
learned a lesson from their sacrifice. Our ultimate objective must
be, now and forever, to achieve a lasting world peace.
[English]
Mrs. Sharon Hayes (Port Moody-Coquitlam, Ref.): Mr.
Speaker, today it is a privilege for me to applaud the courage of a
young boy from my riding of Port Moody-Coquitlam.
Michael Cuccione, age 12, has experienced personal hardship
that few of us have known in his battle through two bouts of
Hodgkin's disease. Throughout his ordeal, music has been a source
of strength. Now Michael shares his inspiration with young people
across North America through his CD called ``Make a Difference''.
His story will be told to many more through the book There are
Survivors: The Michael Cuccione Story.
(1410 )
We salute you today, Michael, as you raise more than $100,000
for cancer research.
We salute you today, Michael, as you demonstrate the survival of
hope and community to individuals and families across Canada.
We salute you today, Michael, as you communicate that hope to
young people particularly, and challenge them to look beyond
difference and disability.
We salute you today, Michael, because through the lyrics of your
songs you remind us all that ``if we do our part we can make a
brand new start to make a difference to this world''.
* * *
Mr. Bill Graham (Rosedale, Lib.): Mr. Speaker, this week
Canadians watched with interest and pride as our Prime Minister
made his first official visit to the United States.
The spirit of this visit demonstrated that balance the Prime
Minister has achieved in our relations with the United States: an
independent Canada asserting its interests when faced with
excessive U.S. power; yet a good neighbour able and willing to
co-operate with our ally and most important trading partner when
in our interest.
Indeed, Canadian initiatives internationally, such as our free
trade agreement with Chile and our domestic fiscal success,
enables our Prime Minister to provide useful examples for our
American friends.
The value the American president places in the special
relationship that our Prime Minister has developed was in turn
reflected in his firm statement about the importance of Canadian
unity.
9546
[Translation]
The agreements signed will be useful to everyone. We can all be
pleased with the success of a visit whose outcome and timing show
the special nature of the relationship that the Prime Minister was
able to establish with our powerful neighbour.
* * *
Mr. Nick Discepola (Vaudreuil, Lib.): Mr. Speaker, young
people in my riding of Vaudreuil want to find their place on the
labour market. Youth unemployment is one of our government's
main concerns.
I am therefore pleased to mention a new partnership initiative
designed to promote the hiring of young people aged 18 to 25, in
the greater Montreal region.
The Défi-Emploi 18-25 program is a partnership between the
Department of Human Resources Development, the SQDM, the
Quebec department of income security, the chamber of commerce
of metropolitan Montreal, and other local stakeholders.
That program was set up to promote the hiring of young people
aged 18 to 25 by contacting various businesses. Young people
represent the future. Under the program, young people will be able
to take part in free seminars on employment, which will include
employers, employment experts and other young people.
Given last year's success with the Défi-Emploi program, we are
proud that this initiative is being repeated this year.
* * *
[
English]
Mrs. Daphne Jennings (Mission-Coquitlam, Ref.): Mr.
Speaker, when I was first elected to come to this House I promised
my constituents that if elected I would work with all members to
pass good legislation. I believe I have kept my word.
When each of my bills and motions was chosen I asked each and
every one of you for your help. The result is I have had the good
fortune to have been instrumental in keeping lacrosse as a national
sport and I received unanimous consent at second reading for our
grandchildren's right to visit their grandparents.
Last night I am happy to say my third motion on reporting
private members' business from committee to the House was
passed. This completes the cycle begun in 1994 when we passed
my freer votes motion and enacted free votes on private members'
business.
I was pleased too that before Christmas I was able to present
Reform's motion for recognition of the family which this House
supported.
I will not be with you next session so I must thank all of the
members of this House who have proved to me and to my
constituents and my students of 30 years that democracy can work
in this House. My colleagues, I thank you.
* * *
[
Translation]
Mr. Bernard Patry (Pierrefonds-Dollard, Lib.): Mr.
Speaker, yesterday, a journalist from the
Journal de Montréal
wrote the following, in a column entitled ``The Usual Suspects'':
``For the federal Liberals, this should be all the easier, given that
Quebec is still somewhat under-represented in the cabinet and that
there is still some room''.
How can one claim that Quebecers are under-represented in the
cabinet when the Prime Minister, the Minister of Finance, the
President of the Treasury Board, the Minister of Citizenship and
Immigration, the President of the Privy Council and Minister of
Intergovernmental Affairs, the Minister of Human Resources
Development, the Minister of Labour and the Secretary of State for
the Federal Office of Regional Development are all from Quebec?
Quebec is already very well represented in the cabinet, and
chances are that this representation will be supported by the
substantial number of new Liberal members, following our victory
in the next election.
_____________________________________________
9546
ORAL QUESTION PERIOD
(1415)
[Translation]
Mr. Gilles Duceppe (Leader of the Opposition, BQ): Mr.
Speaker, yesterday members of all political parties sitting in the
National Assembly, the PLQ, the ADQ and the Parti Quebecois,
agreed to ask Ottawa to amend section 93 of the Constitution so as
to permit the introduction of linguistic school boards.
Given the unanimity of the National Assembly, which was
elected by all Quebecers, will the Prime Minister agree to move on
the amendment requested by Quebec, which concerns an area of
provincial jurisdiction and complies fully with section 23 of the
Canadian Constitution?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, as our Minister of Intergovernmental Affairs said, we are
waiting for a resolution from the Government of Quebec. When it
comes, we will be very happy to examine it and to take appropriate
action.
9547
We were faced with a similar problem just a few months ago
in the House. A resolution to amend the Constitution as it applies
to Newfoundland and Labrador and their education system was
introduced, and everything turned out fine.
I am very confident that things will go just as well when we
receive the resolution from the Government of Quebec, but we
must wait for people to express their views before we can proceed.
Mr. Gilles Duceppe (Leader of the Opposition, BQ): Mr.
Speaker, the Prime Minister knows very well that Mr. Mulcair
introduced a resolution that received the unanimous approval of all
members of the National Assembly. He also knows that the
Minister of Intergovernmental Affairs said yesterday that the will
of the National Assembly was not enough.
Just today, the Prime Minister was speaking about hypothetical
opposition from church representatives, when the bishops have
never, throughout this longstanding debate in Quebec, opposed the
introduction of linguistic school boards.
Why refer to hypothetical opposition from church
representatives when, in the case of Newfoundland, in fact, we
know that church representatives were opposed, and the Prime
Minister agreed to the request from the Newfoundland legislature,
even though church representatives were opposed, but the elected
representatives of the people of Newfoundland wanted to go
ahead?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, as the minister responsible said, a broad consensus is
required. I am very happy to see that a consensus seems to be
taking definite shape in the National Assembly. But I also know
that people may wish to make representations to us, as they did in
the case of Newfoundland. We listened to them, and then took
action.
This is how the democratic system works. A resolution must be
passed here, in the House of Commons, and in the Senate. It took
several months before Newfoundland's problem was sorted out,
because of holdups that occurred in fact in the other Chamber. In
any case, we shall see. We shall have to wait to see the resolution.
And if it is unanimous, so much the better.
Mr. Gilles Duceppe (Leader of the Opposition, BQ): Mr.
Speaker, I ask the Prime Minister if, given the resolution passed
unanimously by all members of the National Assembly, he will
agree to move quickly. The official opposition in this House will
give him its full support. Will he agree, on behalf of his party, to
ask the Liberal and Conservative senators to do likewise, so that
this amendment may be passed before the upcoming election?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, we will receive the resolution, we will examine it as
required, and we will introduce it in the House of Commons. At
that time, we will ask members to proceed as quickly as possible.
Sometimes, people object to unanimous situations in the House,
and the Standing Orders of the House must be observed. As for the
Senate, we shall see. First of all, the House of Commons must vote
on it. When we have seen the resolution and it has been approved
by cabinet, we will then introduce it in the House as soon as
possible.
As for the date of the election, nobody knows what it is yet, so
until then it is not possible to say whether or not the other objective
can be met.
Mrs. Pierrette Venne (Saint-Hubert, BQ): Mr. Speaker, my
question is for the Prime Minister.
In acting as they are with the linguistic school board situation,
the Prime Minister and the Minister of Intergovernmental Affairs
are demonstrating exactly why all of the governments of Quebec,
whether sovereignist or federalist, have denounced or rejected the
Canadian Constitution which was imposed on Quebec 15 years
ago.
(1420)
Will the Prime Minister admit that he is once again making use
of the 1982 Constitution to intervene directly in a matter which
falls under the jurisdiction of the National Assembly, in order to
dictate to Quebecers how they are to handle their own affairs?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, there is but one Constitution in Canada and we respect it.
There is an obligation for the House of Commons to receive
resolutions from a provincial government, to study them and to
vote on them.
As I have just said, it is all the better if there is a broad consensus
in Quebec and a unanimous vote in the Quebec National Assembly.
That will, I hope, facilitate the debate here. Everyone's point of
view must be heard, however, for this is a democracy.
Mrs. Pierrette Venne (Saint-Hubert, BQ): Mr. Speaker, how
can the Prime Minister deny the consensus expressed by the
National Assembly's unanimous draft resolution, when he himself
patriated the Constitution in 1982, against the virtually unanimous
will of the National Assembly? Does he think a consensus in
Quebec means the exact opposite of what the National Assembly
wants?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, it is obviously the calling of the hon. members of the
opposition, who are getting the feeling this is where they always
will be, to do nothing but try to stir up controversy.
At the present time there is a debate going on in the Quebec
National Assembly. The MNAs concerned are holding discussions,
trying to reach compromises, and will be holding a vote, and there
is no controversy. Only one party, whose objective is to block
rather than to accomplish, is trying a blocking operation. We are
9548
going to fulfil our responsibilities as we always have, in a very
democratic way-
Some hon. members: Oh, oh!
Mr. Chrétien (Saint-Maurice): Yes, and by respecting
everyone's opinion. As I have already said, we will wait until the
National Assembly decides, before making our own decision.
They would be the first to complain if we were to take a positive
or a negative stance before their vote, without knowing what the
National Assembly wants to do.
* * *
[
English]
Mr. Randy White (Fraser Valley West, Ref.): Mr. Speaker,
yesterday child killer Clifford Olson failed in his latest attempt to
lift a media gag order, but he has vowed to appeal the decision to
the Supreme Court at taxpayers' expense, of course.
Killers like this get every benefit the justice system has to offer
while their victims have to fight to get even the smallest of issues
addressed.
I would like to ask a question of the justice minister. Why do
criminals like Clifford Olson have more rights in the justice system
than the rights of the victims?
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, two years ago this month a man
from Montreal came to see me explaining that his 15-year old
daughter had been sexually assaulted and strangled. He asked me to
help him. He asked the government to help him. He asked us to see
if we could change the law to provide the police with investigative
tools that might help in the prosecution of that offence.
As a result, the Solicitor General and I met with the caucus,
discussed the policies of the government, worked very hard and
brought forward legislation which added to the criminal law
powers for the police to search and to take bodily substances after
they get a warrant to test for DNA substances.
That legislation was put into effect in July 1995. The
investigation was concluded. A sample was taken. Charges were
laid and that case is now before the courts.
That is the way the government responds to the needs of victims.
Mr. Randy White (Fraser Valley West, Ref.): Mr. Speaker, I
was referring to criminals getting appeals left, right and centre,
while victims wait time and time and time again for them.
Yesterday I indicated that Darren Ursel tortured and violated a
young woman for an hour and a half. She was lucky to escape with
her life. The judge said this sex offender was tender at times and
somewhat sorry for what he did, so he gave Ursel a two-year
conditional sentence with no time in prison.
(1425 )
Yesterday I asked the justice minister the following question but
he evaded the issue. Again I will ask it so that all Canadians can
listen carefully to the answer.
Does the justice minister think there is any time in Canada where
a woman can be violated and degraded like this and the criminal
not receive time in prison?
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, all of us believe that anyone who
commits a serious violent crime should be imprisoned as a penalty
for that kind of crime.
The case to which the hon. member refers is before the appeal
court and he knows that. Let the courts deal with that decision.
Last Monday, because of our concern about the way courts are
interpreting some of the provisions of the bill, we asked the House
to agree to amendments to the conditional sentence provision in
Bill C-41. The hon. member and his party agreed, and those
amendments will be adopted and enacted by this Parliament.
I said in answer to the hon. member's questions earlier this
week, and I will say it again today, the government has acted to
make significant improvements in the criminal law for the interests
of victims. My hon. friend knows that. The legislation speaks for
itself. We have acted.
Mr. Randy White (Fraser Valley West, Ref.): Mr. Speaker, the
justice minister is talking about an appeal of a sentence resulting
from a law that he legislated. Conditional sentencing should not
have occurred in the first place.
Yesterday I was ashamed of the justice minister and the Liberal
government. The justice minister would not accept responsibility
for implementing laws that make the lives of victims worse.
I talked to this lady yesterday and she told me she was most
discouraged by his comments. She felt the justice minister had no
concern at all for her well-being.
How is it the Liberal government suggests it has concern for
women in Canada and then legislates conditional sentences that
allow women to be raped and degraded, with no prison time for the
rapist?
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, I say the government has acted. I
do not ask the hon. member or the House simply to take my word
for it. Why do we not ask someone who knows about being a victim
and about what rights victims need?
In answer to the hon. member's question, let me read from a
letter I received today:
9549
Three years ago a petition was presented to Allan Rock on behalf of 2.5 million
Canadians. It called for far-reaching measures to improve public safety and the
treatment of victims.
Since then significant steps have been taken to address some of these concerns.
Although much still needs to be done, this government has shown a willingness to
listen and to act.
We look forward to continuing to work with the justice committee during its
comprehensive review of victims issues in Canada.
It was signed by Priscilla de Villiers, president of CAVEAT,
Canadians Against Violence Everywhere Advocating its
Termination.
Some hon. members: Hear, hear.
Mr. White (Fraser Valley West): You should be ashamed of
yourself. A woman has been raped.
Mr. Rock: I told the hon. member that he does not have to take
our word for it. He can take the word of the president of the most
well respected and most credible organization of victims. That is
the truth.
The Speaker: I caution hon. members about using papers to
point.
* * *
[
Translation]
Mr. Michel Bellehumeur (Berthier-Montcalm, BQ): Mr.
Speaker, yesterday the Minister of Justice rejected out of hand the
text of a bill drafted by the Government of Quebec that would
outlaw biker gangs.
However, the very same day, two Hell's Angels were released
because of lack of evidence, a murder was committed in
Donnacona, there was an attempted murder in Thetford Mines, a
Molotov cocktail exploded in Quebec City, and sticks of dynamite
were found in a garbage can in Longueuil. This is all connected
with the biker gang war in Quebec. Otherwise, it was just an
average, care-free day for the federal Minister of Justice.
(1430)
By using the Charter as an excuse for his lack of political will, is
the minister not broadening the scope of the charter so that it
protects biker gangs like the Rock Machine and the Hell's Angels
more than it does law-abiding citizens?
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, I would ask the hon. member to
wait until next week when I intend to announce concrete, specific
and practical measures to deal with a situation we find not only in
Quebec but wherever such gangs and individuals are involved in
organized crime.
It is true that Monday night I received a proposal drafted by Mr.
Bégin, the attorney general for Quebec. I examined the proposal,
and my officials are now preparing our replies. Personally, I was a
little surprised and disappointed because, according to Mr. Bégin's
proposal, membership alone in an organization would constitute a
crime. I think this is against the Quebec and Canadian charters.
It is possible to find acceptable, permanent and effective ways to
deal with this. I am now preparing proposals for next week.
Mr. Michel Bellehumeur (Berthier-Montcalm, BQ): Mr.
Speaker, I suggest that instead of acting like an armchair
quarterback and waiting for a bill to appear out of thin air,
preferably drafted by divine inspiration, the minister take a look at
documents produced by the RCMP and Criminal Intelligence
Service Canada, which state that, and I quote:
The Hell's Angels and the Rock Machine have a vast arsenal of weapons and
munitions and are determined to go to the very limit. At stake in this war is control of
the drug trade in the Montreal area and elsewhere in the province.
These are federal documents.
Considering what he said yesterday about Quebec's bill, would
the minister agree that his rather innocent interpretation of the
Canadian Charter of Rights is undermining his own efforts to find
effective ways to deal with the bikers' war?
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, I fully share the hon. member's
concern. We disagree on how we should proceed to meet these
challenges.
Both I personally and the Government of Canada prefer to use
constitutional and valid measures. We believe it is possible to meet
these challenges with constitutional measures.
Mr. Bégin, the Quebec minister, suggested another,
unconstitutional approach. I would prefer to have laws with staying
power, not laws that would be challenged in the courts in the
months to come. So next week I intend to table proposals that are
valid, constitutional and effective as well.
* * *
[
English]
Mr. Jack Ramsay (Crowfoot, Ref.): Mr. Speaker, the justice
minister's Bill C-41 is allowing rapists and violent offenders to
walk free. I am sure Mrs. de Villiers will not support that. I am sure
she is opposed to that.
Rather than seeing rapists and violent offenders walk free, why
will the justice minister not bring in an amendment that would
restrict conditional sentencing to non-violent offenders?
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, as the hon. member knows, the
provision in Bill C-41 to which he refers requires the court to
assess the safety of the community before determining that a
conditional sentence is appropriate. One would have thought it was
9550
clear that someone who had committed a serious violent crime
would not be granted a conditional sentence.
The cases in some of the appellate courts of the provinces have
been unclear. It is for that reason that I proposed-and the hon.
member was good enough to agree-that there ought to be an
amendment to Bill C-41 to make clear that the courts must have
regard to the traditional principles of sentencing, including
deterrence, denunciation and protection of society when deciding
on whether a conditional sentence should be given.
The case to which the hon. member refers, which is so
shamelessly exploited by the hon. member for-
(1435 )
Mr. White (Fraser Valley West): Bullshit.
Some hon. members: Oh, oh.
The Speaker: Of course I do not always hear everything that is
said in the House. I can understand sometimes if we have outbursts,
but I would like the hon. member for Fraser Valley West to simply
withdraw the word so that we can get on with question period.
Mr. White (Fraser Valley West): Mr. Speaker, that was a very
serious accusation he made but I withdraw my comment.
Mr. Jack Ramsay (Crowfoot, Ref.): Mr. Speaker, the
conditions of the amendment to which the justice minister refers
will not stop courts from allowing rapists and violent offenders to
walk free. It will not do that.
Inasmuch as the justice minister's answer indicates very clearly
that he has no intention of limiting conditional sentencing to
non-violent offenders, what does he have to say to the victims of
violent crime, in particular women who have been assaulted and
raped by men who are now walking free because of his bill and
because of his refusal to restrict that law to non-violent offences?
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, the fact is that the case is before the
British Columbia Court of Appeal. The argument before that
appeal court is that such sentences should never be given in such
cases. If the appeal court should see fit to make such a disposition
of course it will be binding on lower courts.
The reality is that my friend speaks of victims. All week long the
Reform Party has made much of the plight of victims. As I have
already said this afternoon there is in Canada a no more credible,
hardworking organization in favour of victims and their rights than
CAVEAT. There are few more respected outspoken spokespersons
for victims than Priscilla de Villiers.
As I have read to the House today, Priscilla de Villiers on behalf
of CAVEAT has said that the government listens, has made
meaningful change and has acted to change the law to make the
plight of victims better. That is the record of the government.
* * *
[
Translation]
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ): Mr.
Speaker, federal legislation on financial institutions prevents
insurance companies with provincial charters from acquiring part
of the activities of a federally chartered insurance company.
It denies Quebec companies the opportunity to buy blocks of
insurance from a competitor withdrawing from the market. The
discrimination in the legislation goes so far as to permit a French,
American, Brazilian or other company to do what a Quebec
company cannot do in its own country.
My question is for the Minister of Finance. Will he agree before
this House to correct this discrimination against Quebec companies
immediately? He can do it right now in the course of the present
review of the legislation on financial institutions?
Hon. Paul Martin (Minister of Finance, Lib.): Mr. Speaker, as
the hon. member is aware, Bill C-82 is very important to the
insurance industry. It contains many provisions on a variety of
broad issues.
I am sure the hon. member will agree with me that any change to
an industry like the insurance industry must be made with care.
Third, the change proposed by the member was not a priority for
the insurance industry.
That having been said, my officials are already considering and
analyzing a possibility. I myself am very open to looking at it and
giving it full attention.
(1440)
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ): Mr.
Speaker, when the minister says it was not a priority for the
industry, I would remind him that a white paper was tabled last year
that was almost unanimously approved by the industry in Canada,
that contained support for this sort of change by the Canadian Life
and Health Insurance Association Inc., the Canadian Bankers
Association, the Insurance Bureau of Canada, Canada Trust, and so
on.
As we are always ready to co-operate in the interest of our fellow
citizens, contrary to what the Prime Minister said a few minutes
ago, we offer him our services to correct the unjustified
discrimination against Quebec's provincially chartered insurance
companies before the next election is called.
9551
My question then is: Is he prepared today to initiate a process
that will correct this situation with the full co-operation of the
official opposition?
Hon. Paul Martin (Minister of Finance, Lib.): Mr. Speaker, as
I have just indicated, I am very open to considering a change. My
officials are already looking into it, and I am prepared to meet the
companies concerned within a fairly short period of time.
I think the hon. member will agree with me that what counts
most is to have Bill C-82 passed as quickly as possible, because it
contains provisions that are vital to the industry as a whole.
* * *
[
English]
Mrs. Diane Ablonczy (Calgary North, Ref.): Mr. Speaker, I
have been listening carefully to the questions that have been put to
the justice minister over the last few days and to his responses, and
I cannot believe what I am hearing.
Judge Harry Boyle had evidence that Darren Ursel confined a
young woman, stripped her, raped her, sodomized her with a
racquet handle for an hour and a half until she escaped in terror.
The judge found this man guilty but said he was somewhat
remorseful, had been tender at times with his victim and then let
him walk free.
Rather than hiding behind a courtesy letter of thanks from
CAVEAT, a letter this group probably bitterly regrets sending him
now, what does the Minister of Justice have to say to this young
woman and her family about why nothing happened to her
tormentor?
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, as I have already said, that case is
before the Court of Appeal of British Columbia and I am not going
to comment on it. It is for the court of appeal to deal with the case
and the issues it presents.
I also caution the hon. member about taking some facts from a
case and not all the facts in presenting the issue to the House or
publicly.
Finally, in relation to conditional sentencing, I and the
government believe that anyone who commits serious violent
crime should be imprisoned. I also believe that the amendment we
made in common on Monday, to make clear that in the case of
conditional sentences the courts must look at the factors, including
societal protection, denunciation and deterrence, will improve the
provisions and give the courts clear direction on the intention of
Parliament.
Mrs. Diane Ablonczy (Calgary North, Ref.): Mr. Speaker, I do
not think the facts are in any doubt. A woman was stripped,
violated and brutalized. She is a single mother. Now the justice
minister brought in a hurried amendment which says that judges
should consider the needs of society for protection before letting
criminals walk free. Now he is saying he has done a great thing and
this is really going to protect women.
Is it not amazing that laws have to be passed to tell judges that it
is their job to think about our safety?
Why does this justice minister not pass one of his laws and tell
judges that raping women in this country deserves time in prison?
Hon. Allan Rock (Minister of Justice and Attorney General
of Canada, Lib.): Mr. Speaker, the Criminal Code contains over
800 sections. It is made very clear in the Criminal Code that the
penalty for serious violent crime is imprisonment. The penalty for
sexual assault is already crystal clear in the Criminal Code.
The case to which the hon. member refers is being argued in the
Court of Appeal of British Columbia. It is not to be decided here in
the House; it is to be decided in the courts.
The principles of sentencing are already set out in the Criminal
Code of Canada. They are there to be interpreted and applied by the
courts. That is the way the system of justice works in this country
and this government has taken steps to ensure that system is all the
stronger.
* * *
(1445)
[Translation]
Mr. Paul Mercier (Blainville-Deux-Montagnes, BQ): Mr.
Speaker, my question is for the Minister of Transport.
On March 25, the minister announced that financial support of
$185 million would be provided to the Pearson airport authority,
supposedly for necessary projects relating to safety and to the
environment at the Toronto facility. However, when we take a look
at the breakdown of the amount paid by the federal government, we
note that $145 million, or 80 per cent of the total, will in fact be
used to build a new runway.
Will the Minister of Transport admit that this gift of $185
million is compensation paid to the Toronto airport authority to
allow it to buy terminal 3 at a high price and thus save face for the
Liberal government, which is being sued to the tune of $662
million by Pearson Development Corporation?
[English]
Hon. David Anderson (Minister of Transport, Lib.): Mr.
Speaker, let me again explain to the hon. member and the House
that the $185 million he talked about was for three projects. The
rental deferral was conditional on three things, to complete the
runway, to build two fire halls on the Pearson airport area, and to
9552
put in a new de-icing facility which was a $40 million item. This
was the agreement made.
It follows adjustments to the rental formulas of Vancouver,
Calgary and Edmonton. It was in line with the general switch from
the local airport authority approach of the previous government to
the Canadian airport authority approach of this government.
Subsequently there has been a sale of T-3, the terminal at Pearson.
As I said yesterday, the chairman of the board of the local airport
authority has made it perfectly clear that it was his decision to buy
that facility and clearly in that case the price was determined by the
willing buyer and the willing seller.
[Translation]
Mr. Paul Mercier (Blainville-Deux-Montagnes, BQ): Mr.
Speaker, will the minister agree that, if we add these $185 million
to the $50 million to 75 $million that the federal is about to give to
promoters to compensate them for the privatization of terminals 1
and 2, we arrive at a total of some $250 million, which taxpayers in
Quebec and Canada will have to pay for Pearson airport as a result
decisions made by this government?
[English]
Hon. David Anderson (Minister of Transport, Lib.): Mr.
Speaker, I have no knowledge of the amount the hon. member
appears to know about with respect to a settlement. I made it clear I
believe the first day I became Minister of Transport that I think it is
always better to have lawsuits settled out of court, and this has been
the government's position. From time to time there have been
discussions and that is well known to everyone. If in the future
there are discussions which lead to a settlement which both sides
think is in their mutual interest, so much the better.
* * *
Mrs. Eleni Bakopanos (Saint-Denis, Lib.): Mr. Speaker, my
question is for the Minister of Foreign Affairs.
Today in Ottawa journalists and parliamentarians alike had a
chance to be informed on the crisis in Albania from visiting author
and human rights activist Nicholas Gage.
Can the minister tell the House what this government is doing to
help restore democracy and safeguard human rights in Albania?
Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.): Mr.
Speaker, we share very much the concern expressed by the
member. We very much welcome the presence of such a
distinguished author as Nicholas Gage in providing a briefing to
Parliament.
In the past several weeks we have participated actively in the
OSCE discussions leading to an international presence in Albania
to try to reconcile the parties.
My colleague, the minister responsible for international
development, has authorized $500,000 for relief efforts. I spoke
this week to the Italian foreign minister to endorse the leadership
that his country has taken in providing a multilateral force.
(1450)
We have also indicated that ultimately elections must be the
means by which groups in Albania reconcile their differences. We
would give very special consideration to helping in that process.
* * *
Mr. Paul Forseth (New Westminster-Burnaby, Ref.): Mr.
Speaker, the Prime Minister has just returned from a visit in
Washington for the Kodak dinner.
The people of Canada want to know in between all the smiles
and the hand shakes whether he happened to discuss why Canada is
stuck with about a $500 million clean-up of the American mess of
old military bases in Canada.
Regarding the Irving Whale barge raising or the Sydney tar
ponds clean-up, why is it always that someone else leaves their
garbage and yet it is the taxpayer who pays for the clean-up?
Hon. Douglas Young (Minister of National Defence and
Minister of Veterans Affairs, Lib.): Mr. Speaker, there are
negotiations ongoing with the United States as a result of several
installations, including the installations to the north for the radar
warning systems that were there for many years, Argentia and other
areas where American facilities were stationed for long periods of
time.
This is nothing new. We have been discussing the potential for
American participation in a clean-up activity. When those
negotiations are concluded, particularly when the American
Congress approves any final settlement, we will be happy to advise
the hon. member of the outcome.
Mr. Paul Forseth (New Westminster-Burnaby, Ref.): Mr.
Speaker, I hear that the Minister of the Environment has also been
to the U.S. to smile for the cameras.
The U.S. is refusing to pay the required $500 million in
compensation for the clean-up but the deal it offers is for Canada to
get a mere $100 million spread over 10 years if Canada agrees to
purchase U.S. military hardware. Such a deal.
Is the Minister of the Environment also going to embarrass
Canada just like the Prime Minister did? Will he defend his polluter
9553
pay principle? Will the government respond to the report of the
auditor general and clean up toxic dumps? Will he get the
American polluters of these sites to pay their appropriate share?
Hon. Douglas Young (Minister of National Defence and
Minister of Veterans Affairs, Lib.): Mr. Speaker, the hon.
member obviously is very familiar with embarrassment.
I want to assure him that when the president of the United States
came to Canada to discuss various kinds of arrangements we need
to enter into with that country, he was very well received.
Even the hon. member would accept that when the Prime
Minister of Canada visited Washington this week he was very well
received compared to the visit of the member's leader to see Newt
Gingrich. I guess it is all a question of who is operating the Kodak.
* * *
[
Translation]
Mr. Benoît Sauvageau (Terrebonne, BQ): Mr. Speaker, my
question is for the Minister of Foreign Affairs.
Child abduction is on the rise. All too often, children are
abducted by a parent who illegally takes them out of the country.
That is what happened to Suzie Robitaille's five children, who were
abducted by her former husband two years ago and are still in
Egypt. Mrs. Robitaille has been fighting ever since to get her
children back; one of them is very sick.
Could the Minister of Foreign Affairs tell us what his department
is doing right now in practical terms to bring Mrs. Robitaille's five
children back home in Canada?
Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.): Mr.
Speaker, I share the hon. member's great concern. All the necessary
steps have been taken to assist Mrs. Robitaille. For instance, I have
met with Mrs. Robitaille, and my office is in contact with her on a
regular basis.
More specifically, an agreement on consular matters is about to
be signed with the Egyptian government. This agreement could
facilitate the return of the children to Canada. I hope it will be
signed soon. We certainly hope we can be of assistance to Mrs.
Robitaille in these tragic circumstances.
Mr. Benoît Sauvageau (Terrebonne, BQ): Mr. Speaker, like
the minister, I too hope this agreement will be signed soon. As I
said, one of the children is very sick.
For the past two years, Mrs. Robitaille has been sending the
children, who are still Canadian citizens, money, clothing and
medicine. That is how she has been keeping in touch with them.
She was using the child tax benefit to do that.
(1455)
But last March, Mrs. Robitaille was not only informed that she
would no longer be entitled to the benefit, she was also asked to pay
back $7,000 in alleged overpayments.
My question to the minister is this: Could the minister state in
this House that he will be pressing his colleague at National
Revenue to maintain Mrs. Robitaille's entitlement to this tax
benefit for the sake of her children and as a means of keeping in
touch with them?
[English]
Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.): Mr.
Speaker, I thank the hon. member for the information. I will
certainly raise the matter with my colleague.
I would like to assure the hon. member that while the children
are still in Egypt, members of the embassy there are in regular
contact with the children to ensure their protection and to ensure
that as much as possible under Egyptian law their rights are being
protected.
We will take all measures possible to aid Mrs. Robitaille in this
very serious matter.
* * *
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, the
Minister of Labour is quoted in the Ottawa
Citizen today as
follows: ``If I fire or suspend Mr. Weatherill without having good
cause, Mr. Weatherill can turn around and sue the government''.
The minister therefore expects to keep Mr. Weatherill in his
position until the fall, and the chairman of the Canada Labour
Relations Board has violated every principle of his office by wining
and dining executives of CN and CP while adjudicating a case for
the railroads and he has violated the fundamental rules that apply to
his tribunal.
If that is not sufficient cause to fire Mr. Weatherill, what is?
Hon. Alfonso Gagliano (Minister of Labour and Deputy
Leader of the Government in the House of Commons, Lib.): Mr.
Speaker, before I fire Mr. Weatherill I have to have all the facts and
not rely on media reports.
The first day we learned of his expenses we asked the auditor
general to investigate. Today privy council officials have asked the
commissioner of ethics to investigate Mr. Weatherill's alleged bias.
As soon as we have all the facts we will act.
Mr. John Williams (St. Albert, Ref.): Mr. Speaker, I said
before that it seems this minister runs his department by reading
the newspapers.
9554
The Treasury Board has been paying these bills for years. This
tribunal reports to his department. He knows this and should be
aware of what is going on.
He is now sending a clear signal to people who violate the ethics
of their office, who have abused the principles of expenditures of
their office, that it is perfectly okay to sit where they are. He has
not even suspended him without pay until this investigation is
complete. This type of ethics from this government we have heard
time and time again.
Can the minister explain this double standard of keeping this guy
on the payroll when if it were in the private sector he would be
before the courts today?
Hon. Alfonso Gagliano (Minister of Labour and Deputy
Leader of the Government in the House of Commons, Lib.): Mr.
Speaker, again, we are acting as promptly as possible and we hope
in the next few days to have this matter solved. In the meantime, I
repeat, I cannot act until I have all the facts.
If the member was very concerned, on March 11, a month ago,
instead of filibustering, and the Reform Party moved a motion to
stop doing third reading and do it in six months, by now we would
have Bill C-66 and we would have a new board with a new
chairman.
* * *
Mrs. Carolyn Parrish (Mississauga West, Lib.): Mr. Speaker,
45,000 Canadian postal workers are very distressed at renewed
rumours that Canada Post is going to be privatized.
Could the minister responsible for Canada Post please tell us
something that might reassure these workers?
Hon. Diane Marleau (Minister of Public Works and
Government Services, Lib.): Mr. Speaker, last October I made a
statement to the effect that Canada Post should not be privatized as
long as it continues to serve a public policy role. I asked Canada
Post to look at how it could improve its services, especially in rural
areas.
That was last October. We have not changed our position on that.
I made that statement two days ago in New Brunswick.
* * *
(1500 )
The Speaker: I would like to draw to your attention the presence
in the gallery of His Excellency Rafik Al-Hariri, the Prime
Minister of the Lebanese Republic.
Some hon. members: Hear, hear.
The Speaker: I would also like to draw to your attention the
presence in the gallery of the Hon. Liu Zhongde, Minister of
Culture of the People's Republic of China.
Some hon. members: Hear, hear.
[Translation]
The Speaker: I would also like to draw your attention to the
presence in the gallery of Her Excellency Néziha Zarrouk, the
minister responsible to the Prime Minister of Tunisia for family
and women's affairs.
* * *
Mr. Michel Bellehumeur (Berthier-Montcalm, BQ): Mr.
Speaker, I want to ask the leader of the government in the House
what is on the legislative agenda for the coming week.
[English]
Hon. Herb Gray (Leader of the Government in the House of
Commons and Solicitor General of Canada, Lib.): Mr. Speaker,
we will continue today with the budget bills, which will be
followed by Bill C-82, the financial institutions legislation.
Tomorrow we will take up the business from where we finish today
and will proceed in the same way next week.
When we complete the finance bills we will resume debate on
the justice bills, Bill C-17, Bill C-27 and Bill C-55. They will be
followed by the ports legislation, Bill C-44.
I also understand that there are conversations under way
concerning Bill C-5, the bankruptcy legislation, as well as with
regard to the other bills outlined in the business statement I gave on
March 20.
We will make further plans on the basis of these discussions.
* * *
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, today in answer
to a question the Minister of Justice referred to a letter which he
received from CAVEAT, from Priscilla de Villiers. Pursuant to
citation 495 of Beauchesne, we request that the letter be tabled.
The Speaker: Like yourself, I heard the hon. minister referring
to a letter. However, I do not know if the letter was here. I wonder if
the hon. member would permit me to get more information.
Perhaps he could bring up the same point of order when the
minister is here.
Mr. Epp: Mr. Speaker, I stood and I was not noticed. However, I
did send you notice that I had a point of order. The minister was
here and he escaped us. I would like-
9555
The Speaker: I do not know if I would use the word ``escaped''.
I will make a commitment to try to get more information. The
point of order has been made and we will get an answer for the
hon. member. We will get back to the House.
_____________________________________________
9555
GOVERNMENT ORDERS
(1505)
[English]
The House resumed consideration of the motion.
Mr. Barry Campbell (Parliamentary Secretary to Minister of
Finance, Lib.): Mr. Speaker, I welcome the chance to launch this
debate and to encourage all hon. members to support the motion to
refer Bill C-93 to committee before second reading.
This legislation will implement a wide range of measures
proposed in February's 1997 budget. Some of these measures are
technical, but other proposals relating to support for children, to
small businesses' ability to create new jobs and to Canada's ability
to innovate and respond to Canadian needs and social interests,
fully deserve the speediest possible consideration.
[Translation]
We are not talking here about partisan politics, but about
national interests and progress. This is why I think this bill should
be referred to a committee at the earliest opportunity, so that the
House can, as quickly as possible, implement the constructive
measures put forward in the budget.
I do not believe it is necessary today to discuss at length the
measures proposed in the 1997 budget, let alone the important
achievements that it reflects. In the last two months, I have
mentioned on numerous occasions our government's achievements
and objectives.
However, I would like once again to stress a vital issue. The
1997 budget is not just a means to put our fiscal house in order, it
also a means to promote new investments that are essential for job
creation, both in the short term and in the long term.
It includes measures designed to alleviate the terrible burden of
poverty on the most vulnerable among us, namely our children.
These measures reflect a philosophy which had guided our
government in each of its four budgets.
Fiscal recovery is not an end in itself. Rather, it is an essential
tool that allows a government to fulfil an ongoing responsibility,
which is to build a stronger society, a society that can maintain and
enhance the well-being of its citizens.
[English]
This takes me directly to the legislation involved in this motion.
We all live in a world where scientific knowledge and industrial
innovation and the products of research become the driving engines
for national growth and economic opportunity. Our long term
future as an advanced industrial nation, able to compete abroad and
create jobs at home, will depend on our success in this area. That is
why C-93 will establish the Canada foundation for innovation. It
will provide financial support for modernizing research facilities
and equipment at Canadian post-secondary education institutions
and research hospitals in the areas of science, engineering, health
and environment.
Through an up front investment by the federal government of
$800 million, the foundation will be able to provide about $180
million annually for research infrastructure over five years.
However, this investment will go further through partnerships
with public research institutions, the business community, the
voluntary sector, individuals and, we hope, provinces. The
foundation has a potential to trigger about $2 billion for research
infrastructure across Canada.
I do not believe that any hon. member has substantive doubts
about this initiative. As the Globe and Mail stated in an editorial
just days ago: ``The Canadian Foundation for Innovation shows the
hallmarks of a forward looking and responsive policy''.
Therefore, it will be to the credit of us all if we move promptly to
get the foundation off the drawing boards and into reality so that it
can begin its task of enhancing Canada's research facilities.
[Translation]
In the 1997 budget, we did not just propose ways to promote
long term growth and improve job opportunities. Our government
knows very well that for too many Canadians the prospect of better
jobs in the future is not enough. What they want, and what they
need, is jobs right now.
Here again, Bill C-93 proposes concrete measures. Last
November, our government announced the program to hire new
workers, the creation of which was confirmed in the 1997 budget.
(1510)
This program provides for reduced EI premiums for small
businesses that create jobs this year and in 1998.
[English]
Under this bill eligible firms, those with less than $60,000 in EI
premiums in 1996, will pay virtually no employer premiums for
new employees hired this year. They will benefit from a 25 per cent
reduction in premiums for new employees in the year to come. This
action will help some 900,000 eligible small businesses make the
9556
transition to the new EI system and provide a bottom line incentive
for them to create jobs.
An economic analysis suggests that this new hires program, as it
is called, combined with the general 1997 EI premium rate
reductions, could generate as many as 20,000 new jobs. Again,
there is clearly firm and fair reason to implement this proposal as
speedily as possible. The price of unnecessary delay is one that
Canadians should not accept.
I have focused on measures in Bill C-93 that deal with creating
opportunities for meaningful work, a foundation for individual
well-being. But the ultimate foundation for nations and for
individuals lies in the conditions of childhood. For too many
Canadian children whose families lack the means that so many of
us take for granted, that foundation is at risk. That is why the
federal, provincial and territorial governments have been
examining ways to improve assistance to children in low income
families.
[Translation]
In the 1997 budget, we propose a national child benefit system
under which the federal government would introduce an improved
Canadian child tax benefit. For their part, the provinces and
territories could reassign part of their resources to improve the
services and benefits available to low income families.
The 1997 budget proposes a two stage improvement in the
present $5.1 million Canadian child tax benefit so as to create a
new child tax benefit of $6 billion by July 1998.
[English]
Bill C-93 represents a key component of this program. It will
mean that effective this July the working income supplement will
be enriched by $195 million, which is $70 million more than was
proposed last year. Benefits will be provided for each child instead
of per family. The maximum working income supplement will be
increased from $500 per family to $605 for the first child, $405 for
the second and $330 for each subsequent child. The benefits will be
phased in on family earned income over $3,750 and will be reduced
as family income exceeds $20,920.
The second step will occur in July 1998 when the working
income supplement will be combined with an enriched child tax
benefit to form the Canada child tax benefit. The maximum benefit
for low income families will be $1,625 to one child families,
$3,050 to two child families, increasing by $1,425 for each
additional child.
Overall more than 1.4 million Canadian families with2.5 million children will see an increase in federal child benefits by
July 1998. Again I find it hard to believe that any hon. member will
have substantive objections to such an initiative. Let us make sure
it is passed as quickly as possible.
I have highlighted the elements of this legislation that combine
wide reaching effects and the need for timely action. Bill C-93 also
includes a range of other measures and each has constituencies or
stakeholders who would also argue in favour of timely action. Let
me summarize these very quickly.
At the request of the Cowichan Tribes of Indians and the
Westbank First Nation the legislation includes provisions to enable
them to impose sales taxes on tobacco products. This initiative will
enable these First Nations to achieve a greater degree of
self-reliance and self-government. It will also provide a tangible
example of the government's commitment to reaching practical
taxation agreements with First Nations that indicate an interest in
exercising taxation powers. I should add that the costs of this
initiative are minimal, probably less than $200,000 a year in
foregone revenue.
There is another part of this legislation that also deals with
tobacco. Bill C-93 proposes amendments that implement changes
announced last November and December. These changes include
an increased excise tax rate for tobacco products, an extension of
the surtax on tobacco manufacturers, changes to the excise tax on
exported tobacco products and reductions in amounts of tobacco
products that may be brought into Canada on a duty and tax free
basis.
(1515)
I realize the tax increases involved are more modest than some
might favour, but we believe disciplined, gradual increases
undertaken in conjunction with the provinces is the most
appropriate method of restoring tobacco tax rates while minimizing
the risk of renewed contraband activity.
Bill C-93 would also implement the government's proposal to
rebate excise tax paid on aviation fuel, a measure available to
airlines that is conditional on the companies involved giving up the
right to use some accumulated tax losses.
Also the legislation proposes a further fuel related measure.
Currently the Excise Tax Act does not stipulate the method used to
measure the volume of fuel for the purpose of accounting for excise
tax. The legislation will clear that up.
Finally, Bill C-93 will formalize the procedures for the
government's participation in bridge loans, those co-ordinated by
the BIS or Bank for International Settlements to countries
receiving assistance from the IMF and the World Bank.
Let me emphasize that the amendment will in no way alter the
efforts made to ensure that such loans are quickly repaid from the
IMF or World Bank through its disbursements to the borrowing
country.
9557
The time for this debate is short and I had to cover considerable
ground in just a few moments. I have explained the reason for
moving quickly to implement these important changes. I feel the
summary indicates that the House should proceed immediately
with-
The Deputy Speaker: I am sorry but the parliamentary
secretary's time has expired.
[Translation]
Mr. Roger Pomerleau (Anjou-Rivière-des-Prairies, BQ):
Mr. Speaker, I will pick it up from there. The main thing the last
budget tells us is that the deficit has been reduced, and the
government is to be congratulated for that. But it is overdoing it a
bit for the government to claim that it has reduced the deficit by
cleaning up public finances. We know very well that the
government has not attained its objective, in terms of cutting its
expenditures.
In fact, where it has indeed reduced the deficit by reducing
certain expenditures is in two very specific areas. First of all, by
cutting $4.5 billion, or $4,500 million, in transfer payments to the
provinces, which will affect health, education and welfare in
particular, or in other words areas which affect the most
disadvantaged members of society. So, it took $4.5 billion from
transfer payments to the provinces. Yet we remember the Prime
Minister's commitments. We have them here in English. He stated
this before the 1993 election, and I am quoting the Prime Minister
here:
[English]
``What we said in our platform is we don't intend to reduce the
transfer payments. What I said in the program, and I intend to keep
my word, is we don't intend to cut further''.
[Translation]
A few months later, in April 1994, the Minister of Finance set
the record straight after the election, and I quote him, again in
English:
[English]
``The next federal budget will include massive cuts in aid to the
provinces for such things as health, welfare and education'',
according to the Toronto Star in April 1994.
[Translation]
So we can see that election promises are not worth much. They
promised to make no cuts to the provinces, yet half of the deficit
they are now claiming to have reduced comes from a $4.5 billion
cut in transfer payments to the provinces.
Then, as well, $5 billion or $5,000 million, were taken from the
unemployment insurance fund. Not the employment insurance
fund, for there is no such thing as employment insurance, it is
unemployment insurance. They laid their hands on $5 billion
belonging strictly to the workers of this country. The government
did a kind of collective garnishment of wages, and decided to
reduce its deficit with that money.
So then, the Canadian government's deficit was not cut by a
massive reduction in state spending, but by massive cuts in transfer
payments to the provinces which in turn, be it Ontario, BC or
Quebec, have been forced to make dramatic cuts to hospital
services and health care. As my colleague from the Reform Party
was saying this morning, this government is the one government in
the history of Canada that has closed the greatest number of
hospitals in the least amount of time, because all hospital closures
are the direct result of the cuts to transfer payments to provinces
made in the last budget.
I believe that some here do not understand how finances work.
(1520)
An in-house report of the Department of Human Resources
Development has revealed that today, 55 per cent of the
unemployed no longer receive unemployment insurance benefits.
Fifty-five per cent of the people who deserve to get these benefits
no longer do, compared with 33 per cent when the Liberals came to
power. I know some people will say we are making this up, but this
is from a press release of the Canadian Labour Congress, dated
January 23, 1997.
The CLC estimates that by the end of 1997-in other words,
right after the election-when we will be able to see the impact of
the Liberal reform, the proportion of unemployed who are not
eligible for unemployment insurance benefits will easily exceed60 per cent, in other words, 60 per cent of those who expect to get
unemployment insurance at the end of 1997, when all other
measures have been put in place, will realize after the election that
there is no unemployment insurance for them.
The Minister of Human Resources Development is nevertheless
trying to sell this reform by claiming that 500,000 more
people-they will say just about anything-will be covered by the
employment insurance plan. At least, that is what he says. Now,
about employment insurance. What the minister means is that
500,000 more people will pay unemployment insurance premiums.
However, an in-house study by the Department of Human
Resources Development was published in 1996, and my colleague
can check this, on employment insurance and the impact of reform.
This comes straight from the minister. What the minister means
and what this study claims is that more than 75 per cent of the new
people who are supposedly covered-the 500,000 people referred
to by the minister-will have their premiums refunded at the end of
9558
the year because they did not earn more than $2,000; they will
probably never get unemployment insurance.
Always according to the same study, only 18,000 more people in
Quebec will be eligible for benefits, while at the same time, 31,000
current beneficiaries will be completely excluded from the plan as
a result of the Liberal reform. This still according to the same
information provided by the department.
Unfortunately, that is not the end of it. All persons who earn
more than $2,000 annually but do not work the minimum number
of hours required to qualify, which varies between 420 and 910
hours, will pay premiums which will not be refunded because they
earned more than $2,000 during the year, and meanwhile they are
not eligible for unemployment insurance if they lose their job.
This is easy to understand. There are people, for instance in
universities, who teach about two or three hours per week.
However, they are relatively well paid on an hourly basis because it
is felt that they have a lot of course preparation to do. By the end of
the year, they have earned more than $2,000, they have paid
unemployment insurance premiums but did not work the total
number of hours required, so they are not eligible for
unemployment insurance. There are thousands of people in this
position.
With the massive cuts in transfers to the provinces and the
wholesale garnishment of wages, so to speak, to benefit the
unemployment insurance fund, the government has deliberately
created a network of poverty in this country. We have 500,000
more children living in poverty. Not three, four or one but 500,000
more than there were three and a half years ago. This government
even has the nerve to tell us it has done a good job. I think the
public will be in a position to judge in the next election.
I have a short quote taken from page 19 of the red book, before it
disappears and they do everything they can to make it sink into
oblivion, because they did not keep any of the major commitments
they made in the book. So here is the quote:
A number of government programs and tax expenditures-some of which have
been identified by the auditor general-are inefficient, poorly managed or driven for
purely political reasons. We will clean up.
(1525)
That is what it says on page 19 of the red book. What does
cleaning up mean? There were the family trusts, which transferred
$2 billion to the United States without paying a cent in taxes. They
are most likely talking about the $400 million or $500 million in
unpaid taxes. All that went on behind the scenes. There was no
paper trail. The so-called ministers knew nothing, nobody wanted
to investigate, the knuckles of the auditor general were rapped. He
said, and I quote: ``We fear that Revenue Canada, in making these
decisions, has harmed the tax base by giving up its right to collect
these amounts''.
I remind you, Mr. Speaker, that $500 million, and I will close on
this as I see my time is up, is what the Minister of Finance, his
voice quavering, is trying to tell us he is going to give over five or
six years to the poor children of Canada, who number 500,000
more than they did three and a half years ago.
All this time, however, the minister raises not a pinkie to stop
someone who probably contributes to Liberal party coffers from
leaving Canada with $500 million in unpaid taxes, which the
children will have to pay some day. I am acutely chagrined by the
fact that the minister continues to try to tell us that they reduced the
deficit through proper management and improvement of public
finances, because it is simply not true.
[English]
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, we are now
moving along with the budget bills, and this one is Bill C-93. Since
I did not quite finish the comments I wanted to make on Bill C-92 I
will continue along, finish my earlier speech and touch on a few
things I feel are important for the Canadian public to know about
the fourth budget of the Liberal government.
The government spent $1.3 billion in the budget on
infrastructure type programs. We all know the last infrastructure
program created about 10,000 permanent jobs with a $6 billion
expenditure. By that criteria this $1.3 billion will create about
1,300 permanent jobs.
Had the federal and provincial governments agreed to cut taxes
by $6 billion, they probably could have created 162,000 jobs by the
year 2000. Over the next couple of years it is obvious that spending
cuts and balanced budgets would mean a lot more to job creation
than infrastructure programs.
As I said earlier, infrastructure money is a battle of budgets: the
federal budget, provincial budget and municipal budget. There is
only one taxpayer that feeds that three levels of government. If we
take from one and give to the other and play games at this level, the
taxpayer will still have to pay more taxes at one level or the other.
It is just a fight about who will look better.
If the budget is so good, why do Canadians not feel better? Why
are they not jumping up and praising the government?
Unemployment is still at the same level with 1.4 million to 1.5
million unemployed. Bankruptcies are up. People get a raise and
end up paying more in taxes. Why would they not get to keep more
money?
No less an expert than the deputy minister, Mr. David Dodge,
agrees with me on the following point. It is called the bracket
creep. The finance minister will not acknowledge this point.
Mr. Dodge once wrote in The Canadian Tax Journal, Volume 22:
9559
There are two fundamental sources of higher taxes as a consequence of inflation.
Bracket creep and the erosion of the value of unindexed amounts in the system such as
the basic personal credit and married credits. It is essential that the adjustment process
offset both of these.
Apparently his political bosses do not agree.
People get a raise in pay that puts them in a higher tax bracket,
but because the personal exemption stays at the 1993 level they are
paying higher taxes than they were before. That is bracket creep.
Another thing that is wrong with the budget is that it has not kept
up with inflation or bracket creep. It has also entrenched the GST
forever.
(1530)
It is another example of why people are losing respect for
politicians. In opposition as we are now and in government as the
Liberals are now platforms are presented stating what will be done.
The Liberals did in their red book. We did it in our fresh start
platform. Everyone is beginning to do it. Are we not morally and
ethically bound to deliver on the promises we made?
Why is it that we can promise one thing when on this side of the
House and do the exact opposite when elected? Why is it that they
can promise to renegotiate a treaty and they do not? They should be
held accountable for promising to get rid of the GST and then not
doing it. I guess the people will have a chance either in June or in
the fall to hold the government accountable.
The Liberals were elected by going door to door saying they
would get rid of the GST, especially in Toronto. They went door to
door saying: ``Over my dead body will we get a third runway at this
airport''. This was the same type of thing the justice minister and
the environment minister said. Now they have changed their minds.
I read where the Minister of the Environment said that they have
found ways to reduce noise and to reduce the pollution. She
concludes that she was not very smart then but is smarter now and
the third runway is needed in Toronto.
I hope the Canadian public holds politicians accountable. They
should be elected to deliver the promises they make. If I believe in
something on this side of the House, I should implement that zero
in three program on the other side. I should make those cuts that I
promised. I should lower government spending. I should be held
accountable if I do not. I should not flip flop. Canadians for too
many years are letting politicians get away with it. It is time it
stopped. This might be a good election in which to do that.
Every one of the key cabinet ministers, the finance minister, the
current minister of defence and even the minister of national
revenue and the Prime Minister, has said various comments to the
effect that they have to get rid of the GST. The finance minister has
said that if the GST is harmonized with a provincial sales tax it is
entrenched forever. Those were his words. That is what he has done
with the budget.
Shame on him. Shame on him for flip flopping. Shame on him
for being a political opportunist and just trying to raise money in
any way, shape or form he can. Shame on him for trying to impose
this horrible HST on the Canadian public. It is poor politics and
poor business. That prepayment to the provinces is costing
taxpayers a ton of tax dollars.
What would the Reform Party do? If we were ever elected to
form the government we would make government smaller. We
would not expand to 301 members like the government is doing.
We would reduce it. We would have lower taxes thereby creating
more and better jobs. We would take 1.2 million of low income
people off the payrolls because we would increase personal
exemptions, give immediate tax relief to everybody at the low end
of the scale who is paying income tax. That is a good way to help
people to get more money in their pockets to pay for their daily
expenses. We have an overall comprehensive plan to stop
overspending, to attack the national debt and to overhaul
government with jobs as the bottom line.
We believe that lower taxes is the key to prosperity. We believe
that smaller government is the key to prosperity. The only way we
can get there is by making government smaller and getting it off
our back and out of our pocket.
The government believes it has now turned the corner on the
deficit. It believes it now has the opportunity to spend money. It
will not face and address the big problem. It brags in its budget
about the fact that it has lowered the deficit by $23 billion, $42
billion to $19 billion. Tax revenues are up by $30 billion. It says
that is just growth in the economy. None of it is due to the 35 tax
increases in terms of tinkering in exemptions and deductions, et
cetera. Let us accept those numbers because they are accurate. That
is a $55 billion improvement in the source and application of funds.
What does the budget not dwell on? At the same time the
government has lowered the deficit and increased tax revenues,
what has it not talked about? What does the government not tell the
Canadian public that the Reform Party will tell them at every town
hall meeting and in front of every Liberal? The Liberals have added
$111 billion to the national debt. That takes us over $600 billion.
(1535)
Who wants to come back here as a member of Parliament three,
four or five years from now when the debt is over $700 billion or
$750 billion? The separatists who want to break away will have a
$200 billion, $300 billion or $400 billion debt. Who will pay the
interest? How will we sustain the interest payment?
9560
There is only so much that can be cut. There is room to cut
another $10 billion or $12 billion over the next couple of years,
but after that there will be nothing left to cut. We need about $94
billion to $95 billion to run the country, along with all the
exemptions and deductions that currently exist in the tax system.
How are we to service the debt on $700 billion? I want the brains
on the other side to figure that out.
They will raise taxes. That is what the Liberal government will
do in the next mandate. It will promise to lower taxes. I have
already read some speeches made by the finance minister. What
will his choice be when the debt hits $700 billion? We are talking
about increased taxes. They have no other choice because they will
not be able to cut any more.
Your programs will be threatened. The only way you will sustain
them is by increased taxes.
The Deputy Speaker: I ask the hon. member to put his remarks
through the Chair.
Mr. Silye: Mr. Speaker, I apologize. I will do that. What bothers
me is that the finance minister and the government have missed the
problem. They are doing a half job. They could do a good job if
they addressed the debt.
We have to get to a balanced budget. There is no commitment to
do so. We have to create a surplus so we can service the debt and
start repaying the debt in terms of a mortgage over 30 or 40 years.
We need a long term plan. We do not have to pay it off all at once
but we have to stop adding to it. Even if we add $9 billion to it, that
is not breaking the back of the deficit. That is not solving the
problem. We are still adding to the problem.
If people on diets who are overweight keep eating, they add to
the problem. Even if they cut back on what they are eating but are
still eating more calories than they burn off, even if it is less than it
was the week before, they will still gain weight. They are adding to
the problem. They are getting fatter.
The debt is getting bigger. The government is adding to the
problem. It is not solving the problem. That scares me. Every
Canadian should be afraid.
In the next election Canadians should be looking at which party
is offering sound fiscal management. Which one is saying it will
make government smaller, lower the overhead, offer tax relief, and
put more money in the pockets of Canadians so that they will have
more money to spend? It would mean less for government but it
could get on with servicing the debt with a surplus. Those are the
kinds of people to vote for, the ones who will stick to what they say
they will do.
The Reform Party as a third party had the opportunity to keep
only one promise. It walked away from the fat cat MP pension plan,
which members opposite did not walk away from. Some 51
Reformers opted out of the pension plan. They will never qualify
for a pension plan here. The finance minister and the Prime
Minister made sure of that. Reformers did it gladly, to set an
example.
I hope Canadians will remember that. Leadership starts at the
top. This is the first group of politicians that ever put their money
where the mouth is. They want to do what is right for Canada. It
shows they are sincere. It shows where their hearts are. It shows
where their pocketbooks are. They care about Canadians. They
want to make the country better for Canadians. They do not want to
throw out money on flags and TV programs and be loved by
everybody. They are prepared to pay the price, sacrifice and do
what is right for Canadians.
The finance minister made an $800 million commitment to the
Canada Foundation for Innovation, which was very worth while. I
believe it is a good program. Over the next five years it will provide
many dividends for Canada and for Canadians. The finance
minister chose to charge off the $800 million to last year's budget.
I accuse the finance minister of going against generally accepted
accounting principles. It is a bad precedent. Cabinet ministers
should be paying attention. The issue is not whether he is doing a
good job. The issue is whether they are allowing a precedent to be
set by a finance minister who might not be here the next time
around. Another finance minister could abuse that power, based on
precedent, and we could be in real trouble.
The Liberals should pay attention. They are the government.
They have the responsibility-
(1540 )
The Deputy Speaker: The member's time has expired.
Mr. Alex Shepherd (Durham, Lib.): Mr. Speaker, it gives me
great pleasure to enter the debate on the budget implementation
legislation.
I cannot help but respond to some of the comments made by my
colleague from Calgary Centre. Members talk about originality. I
went door to door in the last federal election. We had a phrase in
my organization that we took some time to study as people do when
they enter into a campaign. Our phraseology was a fresh start. We
had that on our brochures. We promoted it because it was very
much a fresh start for Canada and for the people Durham.
Canada had its fresh start back in 1993. It always gives me great
delight when I hear the Reform Party saying me too another four
years later. That tells us a lot about its policies. Basically it is mired
in the past.
It has taken us a long time to get to where we are today in our
fiscal responsibilities. Past governments of all political stripes for a
variety of reasons created deficits and debts which we have had the
responsibility in this administration to deal with. I say
responsibility because we have not shirked our responsibilities.
Looking back
9561
to when I first wanted to enter this place, it was basically to
improve the finances of the country.
I am proud to be part of a government that took that commitment
seriously, that started off with a $45 billion a year deficit and
dropped it to $35 billion. In the last budget it is down to $17 billion.
We can see that we are going in the right direction.
The hon. member talks about a long term plan. Presumably he
means that somehow we are going to make it go away tomorrow.
We are not. We have a long term plan. The long term plan is toward
fiscal responsibility, getting the deficit and debt down.
The hon. member wanted to intervene about taxation. Reformers
talk about the lower income groups they will drop off the tax roll.
There may well be some merit in that but that kind of policy creates
a tax wall. It creates a wall so that people cannot get away from the
lower income. They are lower income people and as soon as they
jump over the wall they are hit with 20, 30 or 40 per cent taxes.
That is the kind of regime the Reform Party would have us enter
into.
They spend very little time talking about the other side of the
issue. They want to give their buddies and friends, the rich of the
country, a reduction in taxes. Who picks up the bill for that? It is
the middle income earners, the people in my riding, people with
$50,000 or $60,000 worth of income. They are the ones who will
pick up the bill for the so-called Reform agenda.
I agree with another aspect the member mentioned. I do not want
to dwell a long time on Reformers. On the infrastructure spending
program they went on and on about comparing infrastructure
dollars to jobs created. Nowhere did we ever say that the prime
motivation of the infrastructure spending program was to create
long term jobs. We always said it created short term jobs. It gave
people hope.
It gave people hope. I remember back in 1993 when people had
no hope at all. Once that infrastructure spending program came into
play, people saw things were happening. More important, the
infrastructure spending is not directly impacting jobs per se. It is
creating the infrastructure or the environment where governments
and small business people can create wealth. They have better
roads and better sewer systems. They can create business
opportunities.
The Reform Party seems to have entirely missed this point. It is
mired in the past. It keeps studying history.
One thing my colleague said, to lead me into the main part of my
dissertation, was that Canadians for some reason do not feel good.
They feel a queasy uncertainty. It is that uncertainty with which the
budget deals. What is that uncertainty and what drives it?
(1545)
Basically, what drives it is that we live today in a period of
change that is no different from the industrial revolution. Things
are changing because the country is moving to a different type of
economy. The Reform Party does not seem to understand what that
change is all about and how it impacts people.
The people are concerned about jobs. Clearly, if someone is
unemployed they are concerned about jobs. However, the people
who are concerned about jobs today are the people who have them.
People are worried that they are going to lose them for some very
specific reasons. They see how technology has impacted their lives
and it gives them fear and concern. I would like to discuss that
concern relative to this budget and relative to my riding. In some
ways, it is a microcosm of what the problem is.
In Durham, we have General Motors. The General Motors plants
are in the riding south of mine, in Oshawa, but a lot of the workers
live in my riding. More important, the person who started General
Motors in our area, Sam McLaughlin, had a carriage factory. That
is part of my riding.
In those days, Sam McLaughlin was building carriages so that
horses could trot people around for their transportation. When
General Motors came to Canada, it needed a framework to develop
an automobile industry. That is very important. Most of the growth
in this economy has been in the automotive sector. Basically an
engine was put on a carriage that horses would pull. Think of that.
We are talking about the 1800s. Think of what that meant to the
people who lived there at that time.
They were people who were working on carriages for horses or
people who raised horses. It must have been very disconcerting to
them to see suddenly these cars going around and their business
and agriculture threatened. They must have worried at night about
whether they were going to maintain some kind of livelihood with
this new engine of change that was enveloping them in Durham.
What happened, of course, is that this new engine created new
change. It created the need for gasoline. It created the need for
better roads. We were talking about infrastructure only a few
minutes ago. It created the need for those kinds of infrastructures.
It created the need for auto mechanics.
Generally speaking, most people will agree that if they actually
study the people who got new employment from using a car, in fact,
they got better jobs. They got higher paying jobs than they would
have had if they were in the agricultural sector.
That is change that is really upon us. A lot of people have
uncertainty. They feel uncertainty about that change. The opposi-
9562
tion parties, whether Reform or Conservative, breed on this
uncertainty. They try to say it is the government's fault that we are
living in a period of change. Nothing could be further from the
truth. What people need is the courage and conviction to go
forward into the 21st century.
When I look at Durham today, in some ways we are very much
married to that industrial economy. I have some interesting
statistics here. The industrial economy allowed for a relatively
modest degree of human capital to resolve into a fairly good return
on people's labour. People talk about the new society which is upon
us as the new knowledge based society, which requires
considerably more human capital to get that higher return.
In Durham, this is something I have been very concerned about.
Of course, Durham, General Motors and the automotive sector are
very close together. It has created a problem for us to break out of
that and to start realizing the potential benefits that science and
technology can deliver. What do I mean by that? It can mean
prosperity in the lives of people for better jobs, better lives, better
health care, et cetera.
(1550)
Over 25,000 people in my riding of Durham have post-secondary
education. The education of over 18,000 of those people is science
related. Durham has a population of approximately 250,000
people. That is not a lot when that aspect is considered. Another
aspect to be considered is why people are not educating themselves
in the area of science and technology.
Of the 18,000 people who have those degrees, only 8,000 have
jobs in the field of science. In reality, there is a deficit in Durham of
over 10,000 people who cannot work in Durham because no jobs
are available in their field. They have to go away. A lot of our youth
also go away to be educated.
The government's program, the Canada Foundation for
Innovation, is just one way to equalize that and for our educational
institutions to utilize the $850 million. We talk about the
importance of frugality in spending, but we have found a way to
spend money in these very important-
The Deputy Speaker: I am sorry. The hon. member's time has
expired.
[Translation]
Mr. Stéphane Bergeron (Verchères, BQ): Mr. Speaker, I am
pleased to participate in this debate on Bill C-93, an act to
implement certain provisions of the budget tabled in Parliament on
February 18, 1997.
I would like to focus on a new measure introduced in this budget
and dealing with the establishment of the Canada Foundation for
Innovation.
First of all, I would like to read-and this will come as a surprise
to you-a number of rather eloquent statements, which I would go
as far as to describe as most honourable, made by some of our
colleagues opposite. The first one states, and I quote:
We are working to ensure that Canada and Canadians are winners in this new
global economy, an economy which above all focuses on knowledge and our
knowledge capacity. That means helping our universities modernize and enhance
their science capacity. It means helping our teaching hospitals improve their research
capacity. It means increasing our investments in new technologies, research and
development.
This is what the Prime Minister said on February 13. Three days
later, the Minister of Finance announced in his budget speech the
establishment of the Canada Foundation for Innovation. This is the
explanation he gave for it at the time, and I quote:
We must broaden our notion of infrastructure. We must take it beyond its
traditional meaning to include the components of future economic success,
post-secondary education, knowledge, innovation. These are the building blocks of
the new wealth of nations. It is in this infrastructure as well that government must
invest, for if we fail to do so we will fail the country of tomorrow. We will short
change the next generation.
He went on to say:
Research facilities provide the tools needed to develop leading edge skills, skills
that our students have to acquire if they want to succeed and we want to remain
competitive in a world growing more competitive by the day.
He stated further: ``The fact is that much of our current research
infrastructure is literally unable to handle the kind of pressures
required to keep Canada in the front ranks of the new economy.
Innovation does not just happen. It requires investment''.
And he concluded with these words: ``The Canada Foundation
for Innovation is about looking forward. It is about our children. It
is about education. In short, it is about investing in the future
growth of our economy, making a down payment today for a much
greater reward tomorrow''.
(1555)
I was listening to all this and I was just stunned to see this new
awareness, on the part of the Liberal government, of the
importance of research and development. For close to a year, we
had been condemning the cuts to the research program on nuclear
fusion in Canada, which were to put an end to the tokamak project
in Varennes. We condemned these cuts for a year, and now we are
told that the future of Canada, the future of the Canadian economy,
is based on research in the advanced technology sector.
However, to justify its decision to cut its modest contribution of
$7.2 million to the tokamak project in Varennes, the government
9563
was saying that it had set other priorities. Its top priority was the
research, development, marketing and sale of CANDU reactors.
As you know, the traditional process of nuclear fission is a
dangerous, highly polluting and ultimately obsolete technique,
while nuclear fusion is a promising, clean and safe method of
producing energy in high volumes. Of course, we are told that
nuclear fusion will not yield results for another 20 to 50 years, at
least. Granted, but if we give up now, we will never benefit from
that technique, at least not in Canada.
The tokamak project in Varennes, in which the federal
government invested a modest $7.2 million, is currently the most
important research and development project on energy in Quebec.
It is particularly insulting and unacceptable to see that the federal
government wants to withdraw its annual $7.2 million subsidy,
considering that Quebec receives barely 17 per cent of federal
investment in research and development.
Regardless of the process, research on nuclear fusion allows us
to develop new skills and technologies that will be of use in much
more that just the nuclear fusion industry. Indeed, the research
program on nuclear fusion generates economic spinoffs amounting
to millions of dollars, mainly for the Montérégie.
This decision by the federal government is all the more
astonishing given that the European Union is now investing
US$550 million annually on nuclear fusion, and it plans on
increasing its budgets by 10 to 25 per cent over the next five years;
not a cut, but a 10 to 25 per cent increase on the base figure of
US$550 million.
For its part, Japan is investing US$600 million annually in
nuclear fusion research. The United States has levelled off its
investment in nuclear fusion research at close to $225 million
annually and, over the last five years, South Korea, the People's
Republic of China and India have also become involved in nuclear
fusion research.
Can it be that the federal government is completely cut off from
the reality of today's technology? Is it completely unaware of what
the future holds with respect to energy production? It seems so. The
decision is all the more incomprehensible because the modest $7.2
million invested by the federal government in nuclear fusion
research means that Canada is investing only 1 per cent of the
amounts spent in this sector internationally.
But by investing a mere 1 per cent of the amounts spent
internationally on nuclear fusion research, Canada receives all the
technological spinoffs from this research. If we now decide to cut
our nuclear fusion funding or research program, Canada will have
missed the boat when this form of energy starts to be used. It is
important that we continue our investments in nuclear fusion
research.
(1600)
It must also be understood that if the federal government
withdraws its modest contribution of C$7.2 million, it will be the
only G7 country no longer investing a cent in nuclear fusion
research.
In closing, I would like to put this announcement of $800 million
for a Canada Foundation for Innovation in perspective. First of all,
it must be understood that the government is initially investing
only $180 million. The $800 million is in the long term, and we
shall see how much it actually invests in the end. But what has to be
understood is that it is essentially making this investment with the
money it cut in transfers to the provinces.
The 1996 budget forecast that provincial transfer payments
would be $20.6 billion. In actual fact, when we look at this year's
budget, we see that this amount has dropped to $19.8 billion, or
$800 million less, exactly the amount announced for the Canada
Foundation for Innovation.
Mr. Speaker, you are indicating that my time is up. I shall now
conclude by saying that Quebecers will not be taken in by the tricks
and duplicity of this government. We will find a way to make this
clear in a few weeks.
[English]
Mr. Paul Steckle (Huron-Bruce, Lib.): Mr. Speaker, I am
very pleased to take part in the debate this afternoon on Bill C-93, a
measure regarding the government's fourth budget and one which
acknowledges the three main goals of our agenda since it was
elected: job creation, economic growth and deficit reduction.
First, I would like to take the opportunity to commend the
Minister of Finance for soliciting and considering the views that
were expressed by many Canadians during the process leading up
to the budget. I believe the budget addresses positively the issues
that were brought forward by the people of Canada. The budget
also proves that the government is keeping its promise to put
Canada's fiscal house in order. The government has remained
committed to reducing the deficit.
In 1993-94 the deficit had risen to $42 billion, approximately6 per cent of GDP. The 1996-97 deficit is the lowest in 15 years at
under $19 billion. Canada has every reason to be proud of its fiscal
recovery. Other countries in the G7 are reportedly impressed by our
fiscal turnaround and if the projections for the future are correct, by
1998-99 Canada will have the lowest deficit in the G7 with a record
low of $9 billion. That projected record low will also end the need
for Canada to borrow money from outside of the country.
The government has met its deficit targets in the past and I
firmly believe that the projected targets for the future will also be
met.
9564
Since the government took office in 1993 more than 700,000
jobs have been created. In the last four months alone 85,000
Canadians found employment, the vast majority of them in full
time jobs.
The government is also working hard to create the opportunities
that are so desperately required to keep improving the fiscal health
of Canada and to restore confidence. The announcements that I am
particularly pleased about are those measures introduced to assist
small and medium sized businesses. The survival of many small
communities across Canada rely on the building, strengthening and
continued success of small and medium sized business.
My riding of Huron-Bruce is a rural riding. The people of
Huron-Bruce depend on small business for employment. Without
the existence of small business in ridings like mine, people would
not be able to put food on their tables or clothes on the backs of
their children. Unemployment has a direct effect on the local
economy. Without businesses and employment stimulation in small
communities, small communities may cease to exist.
The 1997 budget announced very encouraging provisions to
provide Canadians with job opportunities. Improving employment
prospects is a team effort between different levels of government
and the private sector. For example, the new hires program is an
initiative to encourage small businesses to create jobs by offering
employment insurance premium relief to 900,000 eligible
businesses that hire new workers.
Another measure to assist small businesses is the step to reduce
the paperwork burden of payroll taxes which the government
imposes by allowing businesses with less than $1,000 monthly
payroll deductions to file on a quarterly basis. One model
partnership is the Canada infrastructure works program. An
additional $425 million in federal support for infrastructure will
have many positive influences on communities. Not only does the
investment in the Canada infrastructure works program produce
short term and long term jobs, but by upgrading local infrastructure
it allows communities to stay competitive and viable in attracting
business and commerce.
(1605 )
Technology is the way of the future. It is a science that changes
rapidly from day to day. The technology partnerships Canada
investment fund provides up to $250 million annually to work with
businesses and to keep the development, marketing and production
of new technology in Canada.
The industrial research assistance program offers financial
support and/or technical advice to numerous Canadian companies
to assist them in taking full advantage of the latest technology to
increase their competitiveness internationally, while at the same
time creating jobs locally.
On a more personal, riding related level, I am very happy to see
that the government continues to recognize and acknowledge the
important role that rural Canada plays in our society. Nearly
one-quarter of all Canadians live in the rural sector. I feel that the
rural development measures outlined in the budget reflect the
changing needs of rural Canadians.
The Farm Credit Corporation is an invaluable financial
instrument for rural Canada. This budget provides an additional
$50 million in capital to the Farm Credit Corporation to expand its
ability to support growth and diversification.
The budget also introduces the community access program for
rural Canada. It is important that the people of rural Canada
experience the same technological opportunities that urban Canada
does. The world wide web is an amazing communication and
information instrument which links people together around the
world. This budget provides an extra $30 million over three years
to connect 5,000 small communities, with populations between 400
and 50,000, to the information highway via Internet sites. Young
and old alike will greatly benefit from this access.
The challenges that face our youth are clear. Last spring the
government created a youth task force to solicit and consider the
concerns of young people. Knowledge and training are key factors
behind employment. However, rising tuition costs are making it
difficult for students and parents to afford post-secondary
education. The budget responds to struggling students and families
by doubling the already established education credit.
The budget also provides assistance to students who have had to
borrow money from the government. The government realizes that
it is difficult to find employment on graduation. Due to the
hardships that many graduates are facing, students will be allowed
to defer their loan payments for up to 30 months during the period
between post-secondary graduation and employment.
Also, for high school students seeking employment in order to
save for post-secondary education, the budget has consolidated $2
billion in a new youth employment strategy for work experience
and employment related programs and services for youth.
As well, the existing youth internship and summer student
employment programs will enable 140,000 more young Canadians
to gain the experience they require in order to enter the workplace.
Child poverty has been an ongoing concern across the nation.
Many families live at a low income level and are often unable to
provide their children with basic necessities, such as food and
clothing. If children do not receive the start they need at a young
age, how can we possibly expect them to become healthy, educated
and productive adults, the same adults that will run the country in
the future?
9565
The 1997 responds to the hungry cries of low income families by
introducing a new cross Canada child benefit system. The measures
introduced in this budget complement the child support reform
announced in the 1996 budget. The government announced that
federal spending on children will increase from $5.1 million to $6
million. The new Canada child tax benefit will go to all eligible
families, those who are employed and those who require social
assistance.
The changes that the government is imposing will also initiate
the process of dismantling the welfare trap, a trap that so many
have fallen into.
Canada will certainly be better off if the government can help to
prevent and reduce the overwhelming numbers of children living in
poverty.
Our national health care system is one of our proudest
achievements. It is a system that many other countries envy.
However, it has been under much duress and scrutiny. Last year the
budget introduced the Canada health and social transfer, a measure
that provided the provinces with predictable and assured funding.
To demonstrate the federal government's commitment to the health
system, a cash floor of $11 billion in cash transfers has been
guaranteed over the next five years and then will grow accordingly
to ensure that funding will not be jeopardized.
The National Forum on Health which was originally established
by the Prime Minister to allow Canadians to express their visions
of a more effective and efficient health care future recently brought
forward its recommendations. The forum concluded that the health
care system is fundamentally sound and adequately funded.
However, it did note that its usefulness in various areas could be
improved.
In response to the forum and its findings, the 1997 budget
allocates an additional $300 million over the next three years for
health initiatives. To break down the moneys that have been
rationed, $50 million will go toward the creation of a new Canada
health information system to provide Canadians with the best
medical information and the latest developments regarding
medical treatments; $150 million has also been specified for a
health transition fund to assist the provinces to launch pilot projects
to investigate new and better approaches to health care. These
funds will be awarded to the provinces and territories on an equal
per capita basis, with expenditure discussions to take place among
Canada's ministers of health.
(1610 )
There are already two active programs to help prevent health
problems from developing: the community action program for
children and the Canada prenatal nutrition program. The
community action program for children provides services to
address the developmental needs of young children who are at risk.
The Canada prenatal nutrition program addresses the problem of
low birth weight babies among high risk groups such as pregnant
adolescents and women who have used alcohol and drugs. This
budget increases the funding to these existing programs by $100
million over the next three years.
Canadians with disabilities face many obstacles in everyday life.
Last year the budget doubled the assistance provided to persons
with disabilities to a tax credit for those who provide in-home care
for family members.
The 1996 budget promised to review measures and opportunities
for people with disabilities. In response to that promise, the task
force on disabilities was created and chaired by the member for
Fredericton-York-Sunbury. It is the government's desire to
create a better society for all Canadians.
Not only is the list of expenses eligible for the medical expense
tax credit been broadened, but a new opportunities fund has been
set up to help a significant number of Canadians with disabilities to
help prepare, find or keep either part time or full time jobs. Every
Canadian has the right to contribute to the economy.
The opportunities fund will help to integrate disabled Canadians
into the economic life of their community as well as increase their
independence.
In closing, may I say that in a country as vast and diverse as ours,
it is a privilege to be able to be part of the team that outlines
priorities and goals and achieves them. We have made some
significant changes. I am confident that by maintaining our
practice we will continue to face and meet the challenges that lie
ahead of us.
It is with these sentiments that I fully intend to vote in favour of
Bill C-93, an act to implement certain provisions of the 1997
budget.
[Translation]
Mr. Crête: Mr. Speaker, I am pleased to speak to the budget
implementation bill.
We had a very clear picture this past week-
The Deputy Speaker: Pardon me, but I believe, since we are
taking turns, that it is now the turn of the Reform Party.
[English]
Mr. Silye: Mr. Speaker, I rise on a point of order. Our member
would like to speak.
Mr. Jay Hill (Prince George-Peace River, Ref.): Mr.
Speaker, it is a real pleasure to try and speak to this bill. I am
completely confused.
It is really quite incredible to sit here and listen to this debate
today on Bill C-93. It strikes me as more than a little odd that in
9566
just about the last two and a half hours we have managed to move
ahead about a year and a half. About two and a half hours ago we
were debating Bill C-92 which dealt with implementing certain
aspects of the 1996 budget. Here we are now moving at the speed of
light and dealing with Bill C-93 and the implementation of certain
facets of the 1997 budget. We are moving ahead very quickly.
In replying to this legislation, I noticed that once again the
Liberal government is doing exactly the same thing that it has
become renowned for doing over the past three and a half years. It
is using every procedural tactic possible to stifle debate in the
House of Commons, particularly today. Rather than face the public
honestly and try to shut down debate as it normally does with time
allocation, it has opted to use another procedure and shuffle these
two bills off to committee, regardless of the fact that the principle
of these bills has already been decided. I listened to a couple of
Liberal members make their presentations. The hon. member for
Durham said something to the effect that it has taken us a long time
to get to where we are today.
(1615)
Mr. Silye: Three years.
Mr. Hill (Prince George-Peace River): Exactly. That is what
I was going to say. It is not such a long time to a lot of Canadians.
Canadians can remember back to balanced budgets. Canadians can
remember back to a time when, even though wages were
substantially lower, they had a lot more of their income at their
disposal at the end of the day.
The hon. member for Durham went on to say that he came here
to improve the financial situation. He spoke in glowing terms of
how he was so proud of the Liberal record over the past 3.5 years.
The budget we are talking about in Bill C-93 is the fourth budget
since the Liberals came to power following the 1993 election. He
spoke as though he was quite proud.
I wonder if Canadians watching the debate today are equally
proud of another $111 billion worth of debt. The Liberals do not
talk about that. They do not talk about the fact that interest on the
debt is by far the single largest expenditure for the federal
government and for taxpayers.
When we talk about the federal government it is important to
understand there is only one taxpayer in the country. One person is
paying the bill. Some seem to operate under an illusion in this
place. They are insulated. They think the government is providing
these services and programs. They turn to government to look for
direction and for hope for the future when in reality it is the people
of the country who are providing all this for themselves.
Sometimes the old parties seem to forget this fundamental fact.
The Liberal member for Huron-Bruce talked about two of the
goals the Liberals had when they were elected in 1993. It was job
growth and controlling the deficit. Once again the hon. member, as
did his previous colleagues, spoke in glowing terms of how far we
have come.
Mr. Schmidt: With 1.5 million unemployed.
Mr. Hill (Prince George-Peace River): Exactly. Why are 1.5
million people still unemployed if the Liberals have done such a
great job of jobs, jobs, jobs? That was one of their big promises.
Let us look at their two big promises in the 1993 election. One
was jobs, jobs, jobs. We have 1.5 million people unemployed or
two million to three million unemployed people with the ones out
there who have given up looking for work. They have simply given
up and are no longer even included in the unemployment statistics.
There is no hope left in them to be out there seeking a job. Why are
they so proud of that?
Mr. Schmidt: Are they proud of their tax increases too?
Mr. Hill (Prince George-Peace River): That is right. They
talk about the fact that there have been no tax increases. When they
were on this side of the House they very clearly understood there
were two ways to increase taxation. There is the honest way, where
they increase the tax rate and take the heat from it publicly. Or,
there is the sneaky way where they do it by plugging some
so-called tax loopholes and with excise taxes and other such taxes.
That is the way the government has opted to go.
I do not believe for a minute Canadian people will to be fooled
by this, not for a minute. It is them at the end of the day, the end of
the week and the end of the month who have less and less money to
spend on essentials: food, homes, gasoline for their vehicle to get
to and from work, and raising their children.
We must look at the real facts if we are to discuss the 1997
budget and the deficit. Both Liberal members across the way
revealed quite correctly that the deficit had come down from $42
billion when they came to power in 1993 to somewhere in the
neighbourhood of $19 billion today.
(1620 )
They look at that and say: ``What a wonderful achievement. We
are on the road to victory''. Let us look at how that was
accomplished. It was accomplished by $24 billion in increased tax
revenue achieved in a number of ways. I spoke two hours ago to the
1996 budget and referred to the fact that a substantial amount of the
increase was because of something called bracket creep.
Mr. Silye: The finance minister?
9567
Mr. Hill (Prince George-Peace River): No, not the finance
minister. There is a system of bracket creep. When the Liberals
got into government they refused to index to the inflation rate,
even though they complained about it when they were in
opposition and the Tories were doing this type of thing. It is a
sneaky way to increase tax revenue. They complained about it very
volubly when they were on this side. When they got over to the
other side they recognized it was a way in which to continue to
gather in more and more tax dollars from Canadians, $24 billion
more annually than when they took office. They have cut $7
billion from the Canada health and social transfer.
In Bill C-93 they are talking about the Canadian Foundation for
Innovation, an $800 million program over five years. They talk
about it as though it will be the answer. They hold it up as the be all
and end all. The fact of the matter is that hospitals have closed and
highly trained and skilled doctors have moved to other countries
because there are not the opportunities here there should be, due to
their cuts.
They have cut $7 billion on one side but on the other side they
will initiate a few small new programs. I suspect they will be
highly bureaucratic programs. The Liberals are talking about a
board of 15 new patronage appointments that will necessary to
operate the organization. That is typical of the government. That
too highlights the problems and the differences.
As Canadians head toward the next election the choice will to be
increasingly clear. They can choose big government, big spending,
big taxes, big bureaucracy, more and more government intrusion
into their everyday lives, or they can choose smaller government,
balanced budgets and lower spending and tax cuts. That will be
their choices. It will be made very clear as we go into the next
election.
[Translation]
The Deputy Speaker: My apologies. Now it is really the turn of
the hon. member for Kamouraska-Rivière-du-Loup.
Mr. Paul Crête (Kamouraska-Rivière-du-Loup, BQ): Mr.
Speaker, I am very pleased to finally be able to speak to the bill on
budget implementation.
In this bill we find more of the smoke and mirrors the
government has been using on the whole issue of fighting the
deficit. For a long time now, the federal government has been
claiming that it has been fighting the deficit effectively. Yet it must
be seen-and this is something the people of my riding have
understood, and are telling me-that the federal government has
fought the deficit in the following way: it let the surplus in the
employment insurance fund build up, deciding to take out $2
billion in the next five years and reinject only $800 million. This
means a deficit of $1.2 billion at a time when we need all the
incentives we can get to create employment. There is no
adjustment included in the present bill.
What is more, transfer payments are being cut. Today, all of the
provinces, Quebec, Ontario, the others, are faced with problems
that require them to make major cuts in health and education. This
is always the result of actions by the federal government.
This past week we learned that the federal government has not
cleaned up its own act. Since 1994, the objective had been to
reduce expenditures in the order of 19 per cent. Today we see that
the reduction has been about 9 per cent. So there is another 10 per
cent that has not been saved.
(1625)
We are talking about $8 billion worth of expenditures. If this
amount had actually been saved, the government could have taken
the pressure off the employment insurance fund and arranged for
more money to be invested in business. When we talk about the
transition job creation fund, about money from the employment
insurance fund that is invested in projects, it could put a lot more
into those projects than is now the case. The current problem stems
from the government's decision to use the employment insurance
surplus to pay off the deficit.
So the government aimed at the wrong target. It decided to fight
the deficit. That is fine, but meanwhile, it could have taken more
decisive steps in this year's budget to ensure that employment is
again a priority, but there is no indication of this, and certainly not
among Reform Party members who are being most unruly today.
So the priority that should have been set on employment is
missing from this budget. People were waiting for some kind of
action, for instance if we consider the government's procurement
policies, this morning the government released the report of the
parliamentary committee on government operations. After three
and a half years in power, not one year but three and a half, we can
say that this government is not effective, lacks openness in its
procurement policies and does not use those policies to assist
regional development across Canada.
I think that is inconceivable. The report as such is interesting,
although it should have been tabled three years ago. The
government should have taken steps two and a half years ago. This
year, the budget should have contained measures to change the
government's procurement policies, so that the negative impact of
employment insurance reform on eastern Quebec and the
maritimes could be compensated by meaningful expenditures,
including government procurement, something that is sadly
lacking.
There is no significant action on research and development. How
will regional economies that need to diversify be able to meet the
9568
challenges of the 21st century? They must be given a chance to
transform their economy, to include research and development in
the agri-food sector, for instance. There is room in secondary and
tertiary processing for developing products that will be successful
on foreign markets, which means they would not be stuck with
primary processing where there are far fewer jobs today than was
the case 20 years ago.
In agriculture, the future is in processing. We must keep
producing primary products, but we must ensure that they are
subsequently processed in this country so we can sell them in that
form on American and European markets and throughout the
world.
So, there is nothing dynamic in the present budget or in the
practical applications.
The member for Matapédia-Matane pointed out to me that the
approach to the forestry industry could have been very different so
as to permit an improvement.
In connection with the new policy on U.S.-Canada relations,
quotas were imposed on lumber exports. There is however a major
new market to be developed and that is for wood which has been
processed and which is not subject to quotas. If the processing
industry is developed, it would mean increased exports to the
United States, which are not limited by quotas. This paves the way
for initiative, for original ideas. It provides a breath of fresh air to
those who have come up with ideas in our regions to develop
processing companies and development incentives. This will surely
be one of the issues in the upcoming federal election, with people
wanting to know what each party has to offer.
There was none of the originality we might have expected. Here
in Parliament, the official opposition is often the source of
originality, as we have seen in documents such as those tabled on
tax reform and the RRSP employment proposal, which could have
been included in the budget. But there is nothing like this.
The budget implementation policies are rather like the budget.
We could describe the budget as neutral, rather lazy, failing to aim
at the real target, unemployment. It should help us attain our
objectives by creating jobs and breathing new life into our regional
economies.
(1630)
In the last part of this presentation, I would like to talk more
specifically about a different problem, that of American pensions.
Yesterday, the minister made an interesting announcement. It was
the result of the efforts of members of pretty well every party, I
think. In particular, I would mention those of the member for
Bellechasse, with whom I set up a non-partisan committee to
propose solutions to the minister, of the member for Windsor-St.
Clair and of the Solicitor General, whose efforts I am aware of.
Once the new agreement between Canada and the United States
is ratified, the situation will finally be corrected. In the meantime,
however, one thing has not been corrected and could be in
legislation to implement the budget, such as this. The federal
government could have made an advance available to people who
were penalized by the Americans' deduction of 25 per cent income
tax from all American pensions. It often amounts to $1,000, $1,500
or $2,000, but it is money that enables people to buy food and pay
the rent.
If the agreement is not ratified until January 1998, low-income
people will have lived two full years with 25 per cent less than what
they should have received. I think the government should go the
extra step and provide advances so that people on limited incomes
have at least 50 or 60 per cent of the money they should normally
have. It could have done so through a bill like this one. Perhaps it is
not too late. Perhaps the government could bring in an amendment
to this effect, so as to put a lid on the inequity created by the change
made to the tax treaty.
Once the U.S. Senate has ratified the agreement and the
Canadian government has done so in keeping with the
announcement made yesterday, the problem will be resolved, but in
the meantime, there are people on very low incomes who will be
forced to cut back on necessities for two years or two and half
years, after which time they will receive a cheque covering the past
two years. Why does the federal government not show some
consideration and quickly give these people an advance?
These days, people are paying for mistakes made by
governments when it should be the other way around. I would
therefore ask the government to do that and to be more effective
than it has been in reducing the deficit, to show more foresight than
it has in curbing unemployment and, as far as American pensions
are concerned, to show some consideration and take action to settle
the problem once and for all.
In closing, it seems to me that the federal government still has a
long way to go in terms of addressing the unemployment problem.
The active measures one would have expected are nowhere to be
seen, and that is probably the issue on which this government will
be judged most harshly by the people in the next federal election.
[English]
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, I am
pleased to rise for a short while to address some of the issues.
Earlier this day the Parliamentary Secretary to the Minister of
Finance laid out some of the principal provisions of Bill C-93.
He referred to the issues of science research and development, in
particular the Canada Foundation for Innovation. He outlined a
program where the government would put as much as $800 million
over a five-year period into this important sector. The investment
9569
followed a pattern the government has used in other programs
where partnerships can be developed. It is expected-
An hon. member: Has he already spoken?
Mr. Szabo: The member is wondering whether I have spoken.
That was on Bill C-92. I know they enjoyed that one. The member
was wondering whether I had anything else to say on RRSPs and
was after some tax planning tips.
(1635)
With regard to the elimination of the seven-year limit on the
carry forward of unused RRSPs, the member knows that young
people who are cash poor in the early years will be able to
contribute. The statistics show that contributors to RRSPs make the
majority of their contributions after age 45. Certainly that
opportunity is an important aspect which I left out in my speech on
Bill C-92.
As the member knows, neither one of us care for Garth Turner's
rationalizations of why would should buy RRSPs from him.
Mr. Keyes: No, no.
Mr. Szabo: I hear the member. If he had heard the speech he
would well know the reason he is pushing RRSPs is to earn
enormous commissions without providing his clients the kind of
information they really need to know. It is not only how to get
money into an RRSP. It is how to tax plan to get it out at the lowest
effective tax cost to the taxpayer and to the family. That is an
important issue.
The rat fink phone line to turn in taxpayers is quite a draconian
and extreme measure.
Bill C-93 is related to some extent to Bill C-92. It deals
ostensibly with the provisions of the budget of February 18. The
parliamentary secretary raised some extremely important issues
with regard to EI and the relief to be given to businesses with
premiums of less than $60,000. There was to be a grace period for
EI premiums for new employees, an important aspect with regard
to the overall strategy of the government in promoting economic
growth and jobs for Canadians. The subsequent reduction of EI
premiums for businesses is estimated to create an additional 20,000
jobs.
These kinds of elements in the budget brought down by the hon.
Minister of Finance continue to show the commitment of the
government to the growth of jobs for Canadians. As he has said and
as the Prime Minister said on many occasions, as long as there is
one Canadian out there who wants to work and who has not had an
opportunity for a job they will continue to look for opportunities to
promote an environment which will provide those essential jobs.
I cannot help but comment on the plight of young people. They
are in a situation where they are competing for their first jobs with
people who have already been in the labour force for many years
because of the number of jobs that were lost, particularly the entry
level jobs. It is an extremely serious situation for young people
because it is not their fault. They have the education to a great
extent and are looking for a chance.
In terms of its work with the provinces, internship and
apprenticeship programs and other partnerships will tend to create
the foundation that is essential to providing important jobs.
I have a message for young people, particularly those in high
school. I have done a little of research since becoming a member of
Parliament. I have spoken to the Peel Board of Education about the
percentage of dropouts in high school. I was astounded to find out
there were no hard and fast statistics because of re-entry into high
school by people who formerly dropped out.
There are some rationalizations that somehow someone who has
dropped out and comes back in and completes high school is just as
successful as those who start and complete their high school
education.
(1640)
We can imagine the condition of young people's lives vis-à-vis
their families when they have taken the decision to drop out before
finishing high school. I imagine the parents feel sadness that their
children did not have the motivation, support or whatever it was at
a time when they really needed it and when it was so important for
them to continue school.
People who have not finished high school have a tremendous
problem finding that entry level position. We cannot expect small
businesses that are struggling to compete to hire high school
dropouts. Those jobs are gone in the new high tech global
economy. Canada's role is to provide knowledge based jobs. Our
young people have to understand that for them to earn a spot in the
labour force it is essential that they as a minimum complete their
high school education.
As an aside I pass on to young people that if there is anything
they could possibly do, they must continue their education through
high school. Hopefully they will find the motivation and a linkage
to a community college or some other opportunity to develop their
skills and talents. Every Canadian has something to contribute to a
knowledge based economy if they would only invest a little of their
time in its development.
In this last portion I would simply like to make a couple of
comments about the child tax benefit. Members will know that
some years ago there was an item called family allowance. Family
allowance was a universal benefit given to all Canadians regardless
of income. That changed over time. We now have a child tax
benefit. It is effectively income tested. It provides assistance
effectively to those with children who are in need.
9570
The budget provides for an enrichment of the child tax benefit.
As the parliamentary secretary laid out, the benefit for a couple
with one child would be $1,625; for two children, $3,050; and for
every additional child over two, $1,425.
The House has talked about an issue called a caregiver tax credit.
It is a concept where we are looking for opportunities to provide
financial or tax assistance to families who choose to provide care in
the home not only to preschool children but also the chronically ill,
the aged or the disabled.
The enrichment of the child tax benefit goes a long way to
improving the support we have given to families with children. I
continue to advocate on behalf of my constituents that the finance
minister and all colleagues of the House look for ways to continue
to enrich the support we should be giving to families who need
help.
We will have an opportunity to talk about this issue much more. I
simply wanted to reiterate the importance of the enrichment of the
child tax benefit to assist families. I appreciate the opportunity to
have participated in the debate on Bill C-93 and urge all members
to support it.
Mr. Paul Zed (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker, I
believe that you would find unanimous consent for the following
motion. I move:
That we adjourn debate on Bill C-93 in order to begin debate on Bill C-82 until
the end of Government Orders this day at which point all questions to dispose of the
report stage of the bill be deemed put, a recorded division deemed requested and
deferred until Tuesday, April 15, 1997, at 12.30 p.m., and immediately after the said
divisions, the House shall proceed to the third reading stage of the said bill and all
questions necessary to dispose of the third reading stage of the said bill shall be put
no later than 4 p.m. on that day provided that any division requested thereon may not
be deferred.
That on Friday, April 11, 1997, the business to be considered under government
orders will be Bill C-5 and Bill C-17 and that no later than the time provided for
government orders on that day all questions necessary to dispose of the remaining
stages of both bills shall be put forthwith and recorded divisions be deemed
requested and deferred until Tuesday, April 15, 1997 at 12.30 p.m.
That at completion of debate on Bill C-93 on Monday, April 14, 1997, a recorded
division be deemed requested and deferred until Tuesday, April 15, 1997 at 12.30
p.m.
(1645)
The Deputy Speaker: Shall we adjourn the debate on Bill C-93?
Mr. Strahl: Mr. Speaker, I think we are going to agree to the
motion. However, it was a very long motion. I would ask the
parliamentary secretary: Is that the motion that was typed up and
sent over or has it been amended? There has been quite a bit of
negotiation this afternoon and I want to make sure we are agreeing
to exactly what we agreed to previously.
Mr. Zed: Mr. Speaker, first I want to thank all parties for their
co-operation.
The only change to what we discussed earlier was the third
reading debate. This allows for third reading to occur right after the
vote at 12.30 p.m. on Tuesday. That is the only clarification.
The Deputy Speaker: I take it that the hon. member is satisfied
with that?
Mr. Strahl: Yes. Thank you, Mr. Speaker.
The Deputy Speaker: Does the hon. parliamentary secretary
have the unanimous consent of the House to move the motion?
Some hon. members: Agreed.
[Translation]
The Speaker: Is it the pleasure of the House to adopt the
motion?
Some hon. members: Agreed.
The Speaker: I declare the motion carried.
(Motion agreed to.)
The Speaker: It is my duty, pursuant to Standing Order 38, to
inform the House that the question to be raised at the time of
adjournment is as follows: the hon. member for
Shefford-CORCAN.
* * *
[
English]
The House proceeded to the consideration of Bill C-82, an act to
amend certain laws relating to financial institutions, as reported
(with amendments) from the committee.
The Deputy Speaker: I have a ruling to make. Copies are
available if members wish to have them.
Bill C-82 is an act to amend certain laws relating to financial
institutions. There are six motions in amendment standing on the
Notice Paper for the report stage of Bill C-82.
[Translation]
Motions Nos. 1, 3 and 5 will be grouped for debate, but voted on
separately.
[English]
Motions Nos. 2, 4 and 6 will be grouped for debate, but voted on
separately.
[Translation]
I will now put Motions Nos. 1, 3 and 5 to the House.
9571
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ) moved:
Motion No. 1
That Bill C-82, in Clause 42, be amended by adding after line 35 on page 22 the
following:
``(4) Where there is in force in a province a law that imposes terms and conditions
in respect of financial services described in subparagraph 3(b)(i) that are provided in
that province, that law, as amended from time to time, shall apply to every bank
located in that province.
(5) No regulation made under subparagraph 3(b)(i) shall apply to any bank
located in a province that has in force a law described in subsection (4).
(6) For greater certainty, in this section the term ``in force'' in reference to a
provincial law includes a provincial law that comes into force on or after the coming
into force of this section.''
Motion No. 3
That Bill C-82, in Clause 55, be amended by
(a) replacing line 29 on page 30 with the following:
``459. (1) The Governor in Council may make''
(b) by adding after line 18 on page 31 the following:
``(2) Where there is in force in a province any law that deals with any of the
matters referred to in paragraphs (1)(a) to (e), that law, as amended from time to
time, shall apply to every bank located in that province.
(3) No regulation made under subsection (1) regarding any matter referred to in
paragraphs (1)(a) to (e) shall apply to any bank located in a province that has in force
a law described in subsection (2) dealing with that matter.
(4) For greater certainty, in this section, the term ``in force'' in reference to a
provincial law includes a provincial law that comes into force on or after the coming
into force of this section.''
Motion No. 5
That Bill C-82, in Clause 226, be amended by replacing lines 33 to 38 on page
136 with the following:
``(a.1) transfer all or any portion of its policies to, or cause itself to be reinsured, on
an indemnity basis, against all or any portion of the risks undertaken by it by any
body corporate incorporated under the laws of a province that is authorized to
transact the classes of insurance to be so transferred or reinsured.''
He said: Mr. Speaker, I am pleased to address this important
measure, Bill C-82, at report stage. The official opposition is
basically proposing three amendments to the legislation before us
today.
The first amendment concerns clause 42, in which the federal
government seeks to regulate financial services. We propose that
the government take into account the fact that financial services
come under the exclusive jurisdiction of the provinces. This is the
purpose of our first amendment.
(1650)
The second amendment also relates to the federal government's
intention to take action regarding tied selling and consumer
protection. Again, in our second amendment, which deals with
clause 55, we suggest to the federal government that, when
provincial legislation applies to consumer protection, tied selling
or other issues, such legislation should be complied with by
financial institutions.
Our third amendment, which we feel is the most important one
for Quebec and all Canadian provinces, concern clause 226. Clause
226 provides that it is not possible for a provincially chartered
insurance company to purchase any portion of insurance policies or
transactions from insurance companies operating under a federal
charter.
For example, a Quebec insurance company such as l'Entraide,
which is mentioned in today's edition of the daily Le Soleil, cannot,
under federal legislation on financial institutions, make such
purchases, since it has a provincial charter, and it cannot purchase a
federally chartered company. By contrast, a federally chartered
company can purchase any portion of insurance policies or
transactions from another company that also operates under a
federal charter.
There is no longer any justification for this barrier in the context
of a free competitive market. This situation is unfair to Quebec
insurance companies for two main reasons.
First of all, they cannot freely enter into transactions with
another insurance company that is federally regulated, even to
purchase a block of policies that are all held by Quebec policy
holders. No one has control over his own affairs under this bill.
Second, it is contrary to the spirit of NAFTA and of any
agreement concerning international trade, as well as financial
services. Treatment under this bill and under section 226 that is still
in force today is more favourable to foreign insurance companies,
which are, for the most part, federally chartered, than to
provincially chartered Quebec and Canadian insurance companies.
A French federally chartered insurance company, for example,
could buy a block of insurance policies from a Canadian federally
chartered company that decided to go out of business.
It would be the same for an insurance company from Brazil or
the United States-name any country in the world-that was, and
usually is, federally chartered. It could buy a block of insurance
policies from a federally chartered insurance company operating in
Quebec that decided to wind up its operations. A provincially
chartered Quebec company cannot do the same, and this is
completely unacceptable.
The federal government is using consumer protection as an
excuse not to eliminate this discrimination. Why would consumers
be better protected in a situation that allowed federally chartered
9572
insurance companies to buy insurance policies from another
federally chartered company, but consumer protection is no longer
an issue when a provincial company decides to buy this same block
of insurance policies?
We are not in a developing country when it comes to financial
institutions or the insurance sector. We have institutions in place, in
Quebec and elsewhere, and the Inspector General of Financial
Institutions is responsible for the security and proper operation of
financial markets.
There is also CompCorp-the Canadian Life and Health
Insurance Compensation Corporation. This corporation requires a
high degree of solvency of all insurance companies, whether under
provincial or federal charter. They must be solvent and their
solvency is verified annually. The corporation also requires these
companies to keep reserves in the event of compensation, and is
also responsible for the final payment of compensation if a
company has the misfortune to go bankrupt.
(1655)
Consumers have ample protection, whether we are talking about
transactions involving an insurance company under a provincial or
a federal charter. So the argument that the consumer must be
protected does not hold water, especially since we have a situation
that is discriminatory. As I said earlier, a Quebec company has
fewer rights than a foreign company with respect to acquiring a
block of insurance policies in order to expand and be able to deal
with globalization and fierce competition in the insurance sector.
The Minister of Finance today, in response to one of my
questions, was quite forthcoming when he said he would like to
meet the official opposition critic and people from the industry,
including representatives of the Entraide insurance company, to
discuss ways to amend the legislation.
I commend the minister on his open minded approach, but I
would appreciate it even more if he would accept the amendment
we are proposing, which consists in allowing insurance companies
under a provincial charter to acquire blocks of insurance policies or
to acquire, in part or in whole, the business of an insurance
company active in Quebec under a federal charter.
In fact we discussed all this with the Quebec Minister of Finance
who is willing to make certain concessions so that the federal
government could move on this amendment from the Bloc
Quebecois. Mr. Landry, the Quebec Finance Minister, said that the
Quebec legislation on trust companies and credit unions is in some
ways discriminatory, but it is the reverse of the kind of
discrimination we mentioned today, in other words, companies
with a provincial charter may only acquire part of the business of
other provincially regulated companies but not of a company
operating under a federal charter. The Quebec Finance Minister is
prepared to go part of the way toward amending the Quebec
legislation, if the Minister of Finance accepts the amendment
proposed by the Bloc Quebecois that would allow this type of
transaction.
I think this is an interesting proposal, and I also think that this
government, and especially the Minister of Finance, who call
themselves apostles of free trade, should realize that on the eve of
the 21st century, this kind of discrimination makes no sense at all,
especially when we consider what we are losing as a result.
There are at least two provincially regulated insurance
companies in Quebec which would be forced at this time to expand,
to rationalize, to become more efficient, because of this type of
discrimination in the Financial Institutions Act, and the challenges
of globalization and rationalization that have been in place for the
past ten years.
It is perhaps time for the other side to make a move and we are
offering our full co-operation to the Minister of Finance so that we
may get Bill C-82 through rapidly, if he will accept the
amendments we are proposing to him, in particular the one
allowing provincially regulated insurance companies to rationalize
and have transactions with federally regulated companies.
It would be only logical to do so, and in my opinion the matter of
consumer protection has been resolved. The consumer is protected
by recognized institutions which are, let us keep in mind, within an
area of jurisdiction that is exclusive to the provinces. All that is left
to do is for the other side of this House to show some good will.
Next week the Minister of Finance can, when the bill is passed on
second reading, acknowledge the value of our arguments and claim
to be a true defender of the economic interests of Quebec.
[English]
Mr. Barry Campbell (Parliamentary Secretary to Minister of
Finance, Lib.): Mr. Speaker, I am pleased to speak to this first
group of motions which have been moved by the official
opposition. I would like to speak to each of them in order.
Motion No. 1 deals with financial planning and the suggestion
that the act be amended to provide that where there is any
provincial regulation on the provision of financial planning
services, that provincial regulations shall override the Bank Act.
(1700 )
I want to clarify first of all that the amendment is proposed in
respect of section 410(3) which deals only with the right to make
regulations in respect of new in house services, for instance
provision of information processing services and specialized
financing services.
9573
The right to make regulations about the provision of financial
planning services by banks was introduced in the 1992 Bank Act
and is not being changed by Bill C-82. That being said, I think
what underlies this motion is the suggestion that the federal
government, federal regulators in the Bank Act, have no place
whatsoever in the area of financial planning and regulations with
respect to financial planning.
It would simply be untenable if the Bank Act and other financial
institutions legislation which regulate financially chartered
institutions were not to be able to control the scope of powers of
those institutions. It is simply unacceptable to carve out certain
powers and say you cannot deal with those powers with respect to a
federal institution. Clearly concomitant with the right to regulate
certain institutions is to regulate the scope of the powers of those
institutions.
With respect to the second motion with respect to privacy and
the proposal from the official opposition that where there is any
provincial regulation on privacy it shall override the Bank Act, I
also understand that but I think consumers understand that they are
better off that this area of privacy and consumer protection is a
matter of shared jurisdiction between the provinces and the federal
government when it comes to financial institutions and consumers
are the better for it.
The last motion that was just brought forward by the official
opposition deals with the transfer of blocks of business between
insurance companies. The proposal has been made that the act be
amended to permit the Minister of Finance to allow transfers of
blocks of insurance business from federally regulated companies to
provincially regulated companies.
Again, I understand the motivation for the recommendation of
this change. Indeed it is something that officials are looking at.
Today in question period one of the hon. members from the official
opposition asked the Minister of Finance if he could proceed and
make this change at this time. The Minister of Finance indicated he
was open to considering such a change but that officials still had
work to do.
We have several concerns before we would agree to such a
change. Among them is the protection of policy holders and the
safety, soundness and prudence of the regulatory system. It is a
complex matter. Under current law transfers of blocks of insurance
policies that are purchased by one company from another are not
permitted when one of those companies, the seller, the vendor, is a
federally regulated company and the purchaser, for instance, is a
provincially regulated company. The reason for that relates, as I
said, to the protection of customers and solvency of federally
regulated companies. It is essential in a transfer situation that the
same supervisor continue monitoring not only the transferring
company but the acquiring company.
If financial difficulties were to arise the superintendent would
have the information to take effective action by ordering both
companies to take appropriate measures. This may not be able to be
done if the acquiring company is not under the supervision of the
superintendent.
I want to focus on some of the problems. That is not to say they
are insurmountable. Indeed, as I said a moment ago, federal
officials are looking at this suggestion and shortly, if the questions
that we have about safety, soundness and consumer protection can
be addressed, I could foresee a change along these lines being
made, but we are not there yet.
I just want to end by saying that Bill C-82, the financial services
legislation, contains many important changes for the financial
services sector and in particular the insurance sector. We have been
responsive to many of the proposals that were brought to this
government before the preparation of the white paper and the
consultations that took place after the white paper before the
finance committee reflected, and these responses are reflected in
this bill.
(1705 )
To be fair, this request for the federal Minister of Finance to
grant the discretion to allow these transfers between federally
regulated and provincially regulated companies was not something
that was brought forward by the industry during these consultations
as a priority for the changes it wanted to see in this round. It has
been brought to our attention at the 11th hour by certain insurers in
the industry and it is a valid suggestion that we should look at, but
we must take the time to look at it so we can assure ourselves that
prudence and consumer protection are addressed. We are going to
do that.
Mr. Schmidt: Mr. Speaker, I have a question of clarification. I
wish to introduce amendments to Bill C-82. Is that appropriate now
or do you have to do something to bring those motions forward?
The Acting Speaker (Mr. Milliken): I assume the hon. member
is referring to the other motions standing on the Order Paper in his
name and that he wants to proceed with debate on those motions.
If that is so, is the House ready for the question on the group now
before the House?
Some hon. members: Question.
The Acting Speaker (Mr. Milliken): The question is on Motion
No. 1. Is it the pleasure of the House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Mr. Milliken): All those in favour of the
motion will please say yea.
Some hon. members: Yea.
9574
The Acting Speaker (Mr. Milliken): All those opposed will
please say nay.
Some hon. members: Nay.
The Acting Speaker (Mr. Milliken): In my opinion the nays
have it.
And more than five members having risen:
The Acting Speaker (Mr. Milliken): The division on Motion
No. 1 is deferred. The next question is on Motion No. 3. Is it the
pleasure of the House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Mr. Milliken): All those in favour of the
motion will please say yea.
Some hon. members: Yea.
The Acting Speaker (Mr. Milliken): All those opposed will
please say nay.
Some hon. members: Nay.
The Acting Speaker (Mr. Milliken): In my opinion the nays
have it.
And more than five members having risen:
The Acting Speaker (Mr. Milliken): The division on Motion
No. 3 is deferred. The next question is on Motion No. 5. Is it the
pleasure of the House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Mr. Milliken): All those in favour of the
motion will please say yea.
Some hon. members: Yea.
The Acting Speaker (Mr. Milliken): All those opposed will
please say nay.
Some hon. members: Nay.
The Acting Speaker (Mr. Milliken): In my opinion the nays
have it.
And more than five members having risen:
The Acting Speaker (Mr. Milliken): The division on Motion
No. 5 is deferred.
The House will now proceed to debate on the motions in Group
No. 2.
Mr. Werner Schmidt (Okanagan Centre, Ref.) moved:
Motion No. 2
That Bill C-82 be amended by deleting Clause 45.
Motion No. 4
That Bill C-82, in Clause 55, be amended by deleting lines 19 to 42 on page 31
and lines 1 to 10 on page 32.
Motion No. 6
That Bill C-82, in Clause 412, be amended by replacing lines 18 to 22 on page
254 with the following:
``Governor in Council.''
He said: Mr. Speaker, I wish to speak to these amendments and
to refer briefly to the hon. parliamentary secretary with regard to
Bill C-82 covering a number of financial institutions. I think that is
correct, a number of the wishes were put into place, a marked
improvement forward.
However, the sections I am referring to, essentially clause 45,
part of clause 55 and the subsequent amendment to clause 412, are
there for a very specific reason which has to do with tied selling.
Tied selling means to sell one product on the condition that another
product be purchased. In other words, in the case of getting a
mortgage from an institution you would get that mortgage only on
the condition that you also brought your RRSPs or other kinds of
things to that institution, which could be a bank, credit union, trust
company or whatever the case.
The difficulty is that the individual once having made
application for loan and wanting that loan has no choice. That is
where the issue lies and this is where we want to come to grips with
this matter.
I draw this to the attention of the House. The government has
indicated that it would pass this legislation at this time but that it
would not proclaim these two sections of the act until September
1998. That proposes a very interesting dilemma. If the issue is that
this should be done now, then why would one delay this thing? The
rationale given was that it has to be given to the finance committee
so it can study in depth the implications of tied selling in the world
of financial business.
All the rest of this was done in consultation with industry and
was subjected to an in depth study. Now apparently this issue
requires further study but in the meantime the government will
pass legislation to permit institutions to do it. There seems to be a
certain lack of logic in this procedure.
I am so concerned about this issue because it is not in the
interests of the consumer. There are people who would argue this is
of particular interest to certain vested interests in the financial
sector.
(1710)
I submit that the interest is the consumer and the protection of
the consumer. I draw to members' attention the comments that
were made by the director of government relations of the Insurance
Bureau of Canada when he appeared before the committee: ``If
there is an area where the committee may choose to make Bill C-82
an even better piece of legislation, it is with respect to the tied
selling provisions proposed under section 459.1 of the Bank Act.
Our view is that subsections (2) and (3) have been worded too
9575
broadly and may permit the bundling of certain bank products and
other financial services in a way that may not be beneficial to
consumers''.
That is the crux of the issue. It is not only our view but it is the
view of the Insurance Bureau of Canada and the member
companies. It is also the view of the Insurance Brokers Association
of Canada, which has written a similar letter on this issue.
The matter goes even further when we get into the statement:
``The finance committee is also expected to assess ways to make a
distinction between cross-selling and practices anti-competitive or
coercive ones. The distinction between what is and what is not
acceptable could be, we are told, reflected in future regulations. If
our understanding is correct, it implies that the proposed
interpretive amendments to section 459.1(2) and (3) of the Bank
Act may be deleted or modified to reflect the finance committee's
findings and recommendations''.
What are the implications of tied selling that make me concerned
and that show why these provisions are not in the interests of the
consumer? Probably the primary issue here is the matter of forcing
consolidation of financial assets into a single institution.
Why is this significant? In this case we are dealing only with
banks. It should apply to other institutions as well but the act refers
here only to banks. They could precipitate a change in loan status,
credit lines and so on based on the customer information available
to them from information that may be existent in a subsidiary.
We were told before the committee by the Canadian Bankers'
Association that the bank would never use information from its
health insurance subsidiary or their life insurance subsidiary to in
any way influence what would happen in terms of this issue.
Let me read the policy statement that exists in one of the
subsidiaries of one of our six major banks. This is written to clients
of this subsidiary: ``In respect of the law the officers and
employees must scrupulously observe in letter and spirit all laws
governing business and securities activities. Confidentiality of
client information is a fundamental principle of our firm. No
employee may release confidential client information unless
required by law or with the client's consent''.
Then there is assurance that the subsidiary is wholly owned
subsidiary of the bank and the bank guarantees all the liabilities of
the subsidiary.
Now comes the key part, sharing client information. The
subsidiary: ``May give confidential client information to the bank.
This type of information includes a client's name, address, phone
number, income, assets, debts, investment objectives and financial
plans''.
The bank may use this information for the following purposes: to
sell its services to the client; to survey the relationship between the
subsidiaries and their clients; to determine the amount of debt
outstanding to the subsidiary and to the bank; for any other purpose
about which the subsidiary will inform the client in writing. That is
the clincher.
What is excluded? Nothing. The bank will not pass this
information to anyone else. Notice under the heading of consent:
``By opening an account with this subsidiary, you are consenting to
the bank's use of the information. If you want to end this consent,
you must give written notice to the subsidiary, addressed and
delivered to your subsidiary's branch. Your notice will be in effect
when you receive a written acknowledgement from that subsidiary.
The subsidiary may then decide to close your account if you said
you wanted to withdraw this consent, and give you at least 30 days
written notice before doing so. They will assume that you have
received this notice five days after it was mailed''.
(1715)
If that is not a clear indication of how the information in a
subsidiary may become the information available to another
subsidiary or the bank, I would like to know what could be clearer
than that.
That is one of the reasons confidentiality of information and
consolidation of all of one's financial assets under one bank could
be very serious if one of these businesses or certain parts of the
enterprises get into difficulty.
There is another reason this is not in the best interest of the
consumer. The point has been made, which is precisely what
subsection 459.1(2) states, that preferred rates may be given on the
condition that certain other products and services be purchased
from a particular person. Preferred rates are given.
What does this suggest? It seems to me that we all know about
lost leaders. It is certainly possible for a financial institution, in this
instance a bank, to provide the individual a preferred rate, perhaps
even a preferred rate in RSP purchases or in terms of negotiating
securities. Then, once the business is consolidated under one roof,
it could simply say: ``Guess what? Our costs have gone up and we
are going to have to increase the price of these services to you''.
It is certain price fixing and a certain monopoly position
vis-à-vis a particular customer that may not be in the interest of the
consumer.
Finally and probably the most significant part is to recognize
that we in this country need freedom. We need freedom of choice,
fairness and equality. If the government wants to declare its support
for consumers in the first instance, to support growth and
development of small business and to maintain strong, stable and
viable financial institutions like banks, it will support these
amendments.
9576
Mr. Barry Campbell (Parliamentary Secretary to Minister
of Finance, Lib.): Mr. Speaker, I thank the hon. member opposite
for his work on the bill. He has been tireless in his efforts at the
finance committee. Once again he is trying to bring forward
amendments in the House which I am sure he thinks will improve
the bill.
We have taken a very long time to look at the needs of the
financial services sector and to respond. Major amendments were
introduced in 1992. Up to that time it had been traditional to amend
the Bank Act and related statutes in the sector every 10 years.
Because of the nature of the changes introduced in 1992 it was
decided to review those changes in five years, in 1997.
Consultations were conducted. A white paper was issued.
Discussions were held on the white paper. Hearings were held by
the finance committee of the House of Commons and by the Senate
banking committee. The government took time to reflect on the
consultations and legislation issued. It has been debated in the
House. It was again debated at committee. We now find ourselves
at this stage very close to moving forward with what is essentially a
bill that does some minor tinkering with financial services statutes
because of the major overhaul that was done. The conclusion the
government came to was that many of the changes put in place in
1992 were still being absorbed by the sector. It would be unfair to
Canadians and unfair to the sector to once again make major
changes. The bill before us today deals with a host of issues
responsive to needs to make the sector more efficient, more
accountable and more responsive to the concerns consumers have
addressed.
(1720)
I digress for a moment to say the government announced the
creation of a task force on financial services to look ahead to the
21st century and to ask some fundamental questions about the
shape of the sector for the next century. How will it continue to
serve the interests of Canadians while continuing to grow and
prosper? How will it help enhance the opportunities for jobs and
growth? What powers are required? What realities will the industry
face?
We cannot sit back and simply say what we have will always be
good enough. The world changes whether we like it or not.
Competitive factors are there whether we like it or not. Our
financial services sector, a major engine of employment and
investment, requires that the government take the time-and
through the task force it is doing so-to ensure the sector is poised
to deal with the challenges of the next century.
The sector is often maligned in the House because it is
misunderstood. That is not to say there is not fair criticism. There
certainly is. We heard a great deal of it in the committee, which was
quite legitimate, as is true of any business sector. It is a major
employer, particularly the banks, of millions and millions of
Canadians through their RRSPs and their company pensions.
Sometimes we forget that.
Motions Nos. 2, 4 and 6 in the second group relate to the issue of
tied selling. We heard much about tied selling before the finance
committee during the consultation stage when we were considering
the white paper. Allegations have been made that certain financial
institutions engage in tied selling and that the legislative provisions
which currently exist in the financial services laws are insufficient
to deal with the problem.
The committee and the government concluded that as yet there is
insufficient evidence of the existence of tied selling as it has been
described to us by certain parties. Therefore the government took a
decision recently to invite the finance committee of the House of
Commons to engage in a detailed study of tied selling in the
financial services sector. That study will take place over the next
year. In the interim while the study is going on, the government has
indicated that it expects each participant or each industry group in
the financial services sector to develop internal guidelines to deal
with tied selling practices in this area. The government certainly
hopes that a self-regulatory regime will develop in that sector. We
certainly want to give it time to happen.
(1725)
The hon. member opposite, knowing the party he represents,
does not want government to rush in to regulate and not necessarily
help the situation. We are giving the industry time because the
industry has said: ``We can address the problem. Let us address it''.
We are saying: ``We will stand back and let you do that''. We will
also look at the whole area through the good work of the finance
committee in the year ahead.
To facilitate that we have proposed that a new tied selling
provision, which had been proposed in the legislation originally
tabled before the House, be suspended and not be proclaimed in
force until a certain date in the future.
In the interim the existing tied selling provision, whether
adequate or inadequate, will remain in place so that we are not left
with no provision whatsoever in the Bank Act dealing with tied
selling.
The government looks forward to hearing from the finance
committee of the House of Commons with respect to its
recommendations about the tied selling provision, what should be
reflected in regulations under that provision, what activity should
be described as acceptable and what activity should be prohibited.
We are mindful of the experience of our neighbours to the south
in the United States where there are extensive provisions dealing
with tied selling and carve outs of acceptable activity. We do not
want to inadvertently take away from consumers the opportunity to
9577
benefit from relationships that can happen in the market by just an
outright prohibition at this point.
While we appreciate the member's interest in the area, his
concern for consumers and for the efficient functioning of the
sector, we think we have the best situation of all. We have proposed
the new tied selling provision and suspended it. It will be
proclaimed in force. The government at that point will have the
benefit of seeing how the self-regulatory regime works and the
benefit of extensive study of the subject of tied selling throughout
the financial services sector by the finance committee. I am sure
the hon. member opposite will co-operate in the work of the
finance committee.
On behalf of the government I urge hon. members, as I did with
respect to the first group, to reject these motions.
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, I
vehemently disagree with the Parliamentary Secretary to the
Minister of Finance.
In his speech he indicated that the bill on financial institutions
had been debated and was pretty close to moving forward. Those
words mean they are not sure what they should be doing on tied
selling. That is the clause members of the Reform Party are most
concerned about. It is the clause that is potentially extremely
dangerous for consumers if the bill is allowed to go through
without clear definition and for competitors in the financial world.
The bill affects the four pillars of the financial industry: trust
companies, insurance companies, investment dealers and the
banks. By far the most powerful institution of those four are the
banks.
The Parliamentary Secretary to the Minister of Finance should
know it is the job of government to protect those who cannot
protect themselves, to protect against monopolies and to protect
against unfair intrusion into competitive areas where single
suppliers of a service are not held at a disadvantage.
I submit that clause 45 deletes the current section in the act that
prevents tied selling. Subsection 459.1(1) reads:
A bank shall not impose undue pressure on, or coerce, a person to obtain a
product or service from a particular person, including the bank and any of its
affiliates, as a condition for obtaining a loan from the bank.
That makes sense. I agree with that. It is the clause that basically
says that no tied selling, no coercion and no undue pressure on the
consumer. It protects other institutions that offer insurance and
investments and the bank does not have the advantage.
Then it goes to clauses 2 and 3 which my colleague from the
Okanagan wants deleted. I support that amendment. Section
459.1(2) confuses things more. It reads:
For greater certainty, a bank may offer to make a loan to a person on more
favourable terms or conditions than the bank would otherwise offer to a borrower,
where the more favourable terms and conditions are offered on the condition that the
person obtain another product or service from any particular person.
If that does not give the banks unfair advantage, these people do
not know what they are talking about. The bill is advocating
volume discount. I have five products. You are coming to me for a
mortgage. I approve your mortgage, but I say: ``Listen, I can give
you a better rate on the mortgage if you buy an RRSP. I will give
you an even better rate if you buy insurance on your house''. Those
are three products. But wait a second. A trust company cannot
provide all of those products. Insurance companies cannot provide
all of those services. Investment dealers cannot provide mortgages.
That is unfair.
Mr. Speaker, you are giving me a sign, but I believe the
agreement made by the House leaders was that we would be given
two ten-minute speeches on this today and that would be it. That is
what the parliamentary secretary to the House leader told us. I
believe that the Bloc agreed to that, as did the Reform Party. I
thought I had five more minutes.
The Acting Speaker (Mr. Milliken): The Speaker is bound by
the House order that was adopted earlier this day, which provides
that at the end of Government Orders, which is at 5.30 p.m., as the
hon. member knows, all questions are deemed to be put and a
recorded division deemed to be requested and deferred until
Tuesday, April 15 at 12.30 p.m.
If there is any other arrangement, I am unaware of it. If there is
consent, the hon. member may continue for another five minutes.
Otherwise, I believe the time has expired and it is my duty to
interrupt the proceedings in accordance with the order adopted
earlier this day.
Mr. Silye: Mr. Speaker, I was present when the negotiations
were going on. If there is some confusion, then of course you will
proceed to Private Members' Business, but I would like to make it
clear and put it on the record that I still have five minutes
remaining when this debate resumes.
I know that the parliamentary secretary to the House leader is
busy with other matters, but I wish he was here to clarify the
situation because I do insist, because that was the deal, that I be
allowed to finish this point. That is one of the things which is
wrong with sending this stupid bill off to committee after only
three hours of debate.
Mr. Campbell: Mr. Speaker, in the absence of the parliamentary
secretary to the government House leader, I was present in the
House and I believe you may have been in the chair, Mr. Speaker,
when the motion was discussed. If you refer to the text of the
motion, it is clear in its terms.
9578
I think you have proceeded quite properly and that at 5.30 p.m.
today all questions are deemed deferred until Tuesday and all
stages of the bill which is before us, Bill C-82, will be dealt with
at that time.
Mr. Silye: Mr. Speaker, I do not disagree with what the
parliamentary secretary to the finance minister said. I just want to
have it on the record and make it clear that when we continue
government orders I will have the floor to finish my speech.
The Acting Speaker (Mr. Milliken): The difficulty the hon.
member has is that when the matter comes up again it is for a vote.
There is no continuation of the debate except at third reading stage.
Mr. Kilger: Mr. Speaker, certainly everything that was
mentioned by the Parliamentary Secretary to the Minister of
Finance is correct. I fully support his view on the matter.
However, I was also involved in the negotiations with the other
parties and, given the co-operation of all the parties and the fact
that the matter will be coming to a vote on Tuesday without any
further debate, as you stated, in a spirit of co-operation I think we
should give the member for Calgary Centre another five minutes in
order that he may conclude his remarks. Then, of course, the vote
will be deferred until Tuesday at 12.30 p.m.
The Acting Speaker (Mr. Milliken): The House has heard the
suggestion of the chief government whip. Is it agreed that we
extend for five minutes at this time?
Some hon. members: Agreed.
Mr. Silye: Mr. Speaker, I would like to thank government
members for giving me the opportunity to finish my remarks.
I would caution those members of the Standing Committee on
Finance who will be considering this bill, especially with respect to
the issue of tied selling.
For greater certainty, we have to ensure that there is a level
playing field for financial institutions. We have to be concerned
that investment dealers, trust companies and insurance companies
do not have the same rights to provide all of the services which
banks do.
For instance, all those money machines out there are only banks,
Mr. Speaker. You have to have a bank account in order to use them.
These other institutions do not have that right. If a clause is put in
which says that the more services that one uses with the bank the
better deal one can get on one's rate for borrowing the money, that
is giving an unfair advantage to the banks. To me that is very clear.
It is unfair to the other institutions.
For the individual consumer in that particular case it might be
fair. As my colleague from the Okanagan pointed out, there are two
schools of thought concerning what happens when one bank or one
institution ends up getting all the business and knows everything
about that person. Either that is good or that is bad. If it wants to
pull the plug it can pull the plug.
Clause 3 states that for greater certainty a bank or one of its
affiliates may offer a product or service to a person on more
favourable terms or conditions than the bank or affiliate would
otherwise offer where the more favourable terms and conditions
are offered on the condition that the person obtain a loan from the
bank.
I am confused or call me stupid, but one clause says we get rid of
tied selling, then it is replace with this type of tied selling. That
allows tied selling. That is not cross selling. The banks can offer
more services, thereby if they are allowed to give discounts they
can give greater discounts than the other institutions. Therefore, it
becomes tied selling and people will end up dealing more with the
banks and it is a loss of revenue or business for the other
institutions.
Cross selling is fine. I have applied for a business loan, they have
approved it and then they ask me questions like ``Jim, do you need
a mortgage? Do you need something else?''. When I tell them no,
they say ``Okay. If you did you know we could look at it
favourably''. That is suggestive selling. Or I just bought a house
and they ask if I would like to get insurance on that house. Then I
ask what is the rate. At least I get my mortgage and I am approved.
It has nothing to do with my mortgage being conditional upon me
also getting insurance. If they just suggest it, that is okay.
We do not know what goes on behind closed doors, but we did
have witnesses come before the committee and say that this kind of
thing is done by certain bank managers who are more aggressive
than other bank managers. The law may say one thing but the
application of the law by individuals in the workplace might allow
them to do another thing. If they do another thing, then we end up
with coercive tied selling and that concerns me.
I do not want to be a part of a 35th Parliament that passes
something like this without proper debate, proper discussion, lots
of witnesses in the committee so that we know exactly whether we
are talking about cross selling or tied selling.
Maybe somebody should put forward an amendment that would
allow insurance companies, trust companies, investment dealers
that want to merge to go into the banking business as well. In that
way they can compete with the banks and we will not have these
kinds of debates. Then whatever the bank offers as a volume
discount for having more and more services, these other companies
would also be in a position to do the same thing.
Mr. Speaker, I want to thank you for your patience in listening to
the different points of order. I want to thank the chief government
whip for conceding the extra five minutes and the Parliamentary
Secretary to the Minister of Finance for also agreeing to allow me
9579
these few more minutes so that I can get the points across that I
wanted to make. I thank everybody in the House.
[Translation]
The Acting Speaker (Mr. Milliken): Pursuant to the agreement
reached earlier today, all motions in Group No. 2 are deemed to
have been put and recorded divisions are deemed to have been
requested and deferred.
Is the House ready for the question.
Some hon. members: Question.
The Acting Speaker (Mr. Milliken): The question is on Motion
No. 2. Is it the pleasure of the House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Mr. Milliken): All those in favour will
please say yea.
Some hon. members: Yea.
The Acting Speaker (Mr. Milliken): All those opposed will
please say nay.
Some hon. members: Nay.
The Acting Speaker (Mr. Milliken): In my opinion the nays
have it.
And more than five members having risen:
The Acting Speaker (Mr. Milliken): The recorded division on
the motion stands deferred.
The next question is on Motion No. 4. Is it the pleasure of the
House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Mr. Milliken): All those in favour will
please say yea.
Some hon. members: Yea.
The Acting Speaker (Mr. Milliken): All those opposed will
please say nay.
Some hon. members: Nay.
The Acting Speaker (Mr. Milliken): In my opinion the nays
have it.
And more than five members having risen:
The Acting Speaker (Mr. Milliken): The recorded division on
the motion stands deferred.
The next question is on Motion No. 6. Is it the pleasure of the
House to adopt the motion?
Some hon. members: Agreed.
Some hon. members: No.
The Acting Speaker (Mr. Milliken): All those in favour will
please say yea.
Some hon. members: Yea.
The Acting Speaker (Mr. Milliken): All those opposed will
please say nay.
Some hon. members: Nay.
The Acting Speaker (Mr. Milliken): In my opinion the nays
have it.
And more than five members having risen:
The Acting Speaker (Mr. Milliken): The recorded division on
the motion stands deferred.
[English]
It being 5.30 p.m., the House will now proceed to the
consideration of Private Members' Business as listed on today's
Order Paper.
On a point of order, the hon. member for Scarborough West.
Mr. Tom Wappel (Scarborough West, Lib.): Mr. Speaker, I
rise on a point of order. I want to apologize to my friend from
Scarborough-Agincourt for taking just a few minutes of private
members' time on this point of order.
After discussions with my friends on all sides of the House, I
believe that if you seek it you will find the unanimous consent of
the House for the following motion. I move:
That the House proceed immediately to Bill C-205, an act to amend the Criminal
Code and the Copyright Act (profit from authorship respecting a crime), at report
stage and third reading without further debate.
(1740 )
The Acting Speaker (Mr. Milliken): The House has heard the
proposal of the hon. member for Scarborough West. Does the hon.
member have the leave of the House to proceed as indicated with
the two stages of the bill without debate?
Some hon. members: Agreed.
_____________________________________________
9579
PRIVATE MEMBERS' BUSINESS
[
English]
The House proceeded to the consideration of Bill C-205, an act
to amend the Criminal Code and the Copyright Act (profit from
authorship respecting a crime), as reported (with amendments)
from the committee.
Mr. Tom Wappel (Scarborough West, Lib.) moved that the bill
be concurred in.
9580
The Acting Speaker (Mr. Milliken): Is it the pleasure of the
House to adopt the motion?
Some hon. members: Agreed.
(Motion agreed to.)
The Acting Speaker (Mr. Milliken): When shall the bill be read
the third time? By leave, now?
Some hon. members: Agreed.
Mr. Wappel moved that the bill be read the third time and
passed.
Mr. Strahl: Mr. Speaker, I would like to ask the hon. member
who, on this side, he had those discussions with since I was not a
party to them? I know he was planning on having those discussions
but I was not privy to them. I hate giving unanimous approval to
something of which I was not a part. Could he explain that?
Mr. Wappel: Mr. Speaker, I thank the hon. member for his
question. I had my discussions with the critic for justice for the
Reform Party, the member for Crowfoot, and also with the member
for Lethbridge whom I believe is the House leader. Both of them
concurred with this. I assure my hon. friend of those discussions
and that they did agree.
Mr. Strahl: Mr. Speaker, I know we had planned those
discussions. I know our party has been supportive of this bill and I
will take the member at his word. I am happy to support the motion
that has been put before us.
The Acting Speaker (Mr. Milliken): Is it the pleasure of the
House to adopt the motion at third reading?
Some hon. members: Agreed.
(Motion agreed to, bill read the third time and passed.)
* * *
Mr. Jim Karygiannis (Scarborough-Agincourt, Lib.) moved
that Bill C-324, an act to amend the Income Tax Act (entertainment
expenses), be read the second time and referred to a committee.
Mr. Barry Campbell (Parliamentary Secretary to Minister of
Finance, Lib.): Mr. Speaker, I rise on a point of order.
In light of the great co-operation that has been evident in the
House this afternoon I am sorry to rise now just before my hon.
colleague is about to speak, but I must rise on a point of order with
respect to private member's bill C-324.
I must sadly say, and I would ask you, Mr. Speaker, to rule on
this, that the bill is not in order on the grounds that the intent of Bill
C-324 is to increase taxes and would therefore require the tabling
of a ways and means motion.
I remind my hon. colleagues that such legislation requires the
tabling of a ways and means motion which can only be tabled by a
minister of the government. On these grounds, I would ask,Mr. Speaker, that you rule this bill out of order. I would like to add
that I am sorry to have to rise and do this but as a matter of the
order of the House I felt it essential to do so lest we have a
breakdown in the way in which those sorts of bills are brought
forward.
Mr. Speaker, I would ask you to take a position on that.
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, once again
I find myself disagreeing with the parliamentary secretary on this
issue. He well knows that we have a committee that reviews private
members' bills. It is the job of that committee to determine whether
or not private members' bills should go forward.
(1745)
The scrutiny and review of the principles and objectives of that
bill, whether or not they conflict with government policy, whether
or not they should be allowed to proceed, is determined in that
committee. Members well know that.
This bill is at second reading. It was presented to the House. The
government House leader had ample time and opportunity to ask
the member to withdraw. This gentleman has worked hard to put
forward some ideas in his suggestion. Whether we agree with it or
not is another issue.
This gentleman is a member of Parliament. He has followed the
proper course and if you rule in favour of the point of order of the
parliamentary secretary to the finance minister, you will be
stepping on the toes of another hon. colleague.
We should just proceed with this debate as planned and let this
thing play itself out. The proper procedures have been followed.
[Translation]
Mr. Paul Crête (Kamouraska-Rivière-du-Loup, BQ): Mr.
Speaker, I think this bill deserves our consideration, especially
since it is not votable. In addition, the bill not being votable, the
point made by the parliamentary secretary is irrelevant, as it will
have no funding implications. This is simply an opportunity for this
House to look into the matter and the desirability of taking action in
that area.
Not being votable, this bill will have no economic impact, but it
will have an impact nonetheless because of the relevancy of the
idea put forward by the hon. member.
[English]
Mr. Campbell: Mr. Speaker, I have a couple of points. It was
evident in the hesitation in my earlier remarks that I am troubled to
9581
be rising to object to this bill's being receivable and debatable here
because of the hard work of my hon. colleague which many of us
do in trying to get private members' bills before this House.
I do not want to interfere with that process. However, it is always
up to you to decide whether something is in order that we are
debating in this House.
Notwithstanding the procedure that has been followed, it is clear
that the sorts of bills that call for this kind of action by the
government must be preceded by a ways and means motion which
can be tabled only by a minister of the government.
Mr. Speaker, should you rule in favour of proceeding with this
debate, we will proceed and debate this motion. I want to make it
clear and have it on the record that the bill, in the government's
view, is not properly receivable by this House because of the nature
of the bill. I am sorry that is the outcome.
Mr. Jim Karygiannis (Scarborough-Agincourt, Lib.): Mr.
Speaker, I rise on the same point of order. With regard to the point
raised by my hon. colleague, I would like to make a few points
clear.
This bill was properly researched and drafted by the private
members' business office which, I assure members of the House, is
highly professional in its organization with many years of
experience in these matters. It saw no problem with regard to the
exclusive prerogative of the crown to levy taxes and believes this
bill to be in order.
Erskine May's twenty-first edition, pages 727 and 728, shows
examples of matters that require a ways and means resolution to be
initiated by a minister of the crown. The examples listed include,
under taxation, new taxation, continuation of an expiring tax,
reimposition of a repeal tax, increase in the rate of the existing tax,
and extinction of an instance of tax.
This bill does not change or repeal the rate of taxation or offend
any of the criteria which fall under the purview of the government.
It merely eliminates a deduction which will cause persons and
business affected by this bill to pay this rate of taxes, as do other
Canadians.
I therefore ask you, Mr. Speaker, to rule against this point of
order and let the debate proceed.
Mr. Silye: Mr. Speaker, to satisfy the parliamentary secretary to
the finance minister, as the member from the Bloc Quebecois
pointed out, this is a non-votable motion. There will be no ways
and means required to do anything because the House does not
have to vote on this.
The Acting Speaker (Mr. Milliken): The chair has heard the
arguments put forward by all hon. members on this issue. I want to
stress that in my view the parliamentary secretary is absolutely
correct to raise the issue at this stage. It may seem late to hon.
members, but bills are introduced and read for the first time
without being reviewed by other hon. members. They sit on the
Order Paper until they win a draw and are put on the order of
precedence. It seems to me entirely appropriate that the issue be
raised at this stage.
(1750)
It could have been raised earlier I suspect as a point of order at
any other time but it has been raised now and it clearly impacts on
whether the bill is votable.
I must say that I have grave doubts as to whether this bill is in
order. I refer to page 821 of Erskine May's twentieth edition:
Matters which are covered by the term `charges upon the people' may be briefly
summarized as-(2) the repeal or reduction of existing alleviations of taxation such
as exemptions or drawbacks-
It is clearly stated that where there are such changes it would
appear that ways and means proceedings are necessary and the full
scope, that is a resolution, would have to be introduced first,
followed by the bill.
In view of the fact that the House is ready to proceed with the
debate today and in light of the fact that members are prepared to
debate the subject today, and in view of the comments that have
been made concerning the possibility of such a debate, as your
Speaker I will take the matter under advisement and give a formal
ruling on the point of order at another time.
We can proceed with debate today. I have indicated the way the
Chair is leaning in light of the arguments advanced. If that is
satisfactory we will now proceed with debate.
Mr. Campbell: Mr. Speaker, thank you for resolving it in that
fashion. I want to indicate to my hon. colleague we will proceed as
a result of what you said but I want to be assured that did not stand
as any precedent whatsoever.
The Acting Speaker (Mr. Milliken): As I indicated to the
parliamentary secretary, I will come back to the House with a
formal ruling at a later time, possibly next week.
Mr. Jim Karygiannis (Scarborough-Agincourt, Lib.): Mr.
Speaker, it is with great pleasure to rise today to speak on my
private member's Bill C-324, an act to amend the Income Tax Act.
Bill C-324 provides for the elimination of entertainment expenses
as a deduction under section 67.1 of the Income Tax Act.
I received a number of calls and correspondence from lobby
groups and business associations under the mistaken belief that
meal deductions would be affected by this amendment. I would like
to make it clear from the outset that this amendment would not
affect business meal deductions.
What this amendment would do, however, is bring a certain
amount of fairness into the tax system for both small businesses
and individuals. I would like to commend the government which in
the 1994 budget reduced the deduction from 80 per cent to 50 per
cent. At that time there was much concern expressed by the
9582
business community that this would have a detrimental effect, but
this was proven not to be the case.
I believe that elimination of the entertainment deduction would
in the short term cause a small amount of disruption but in the long
term have no negative effect on businesses and a positive effect on
the revenues of the government and create a more equal playing
field for all those who pay taxes
If we look at sport stadiums in any major Canadian city the
majority of the best seats and practically all the box seats are held
by corporate entities. They do so with the help of 50 per cent
deduction on their income tax, while at the same time the average
Canadian sits in a cheaper seat up in the bleachers and pays full
price. The same holds true for attending the theatre, opera or the
events where the business community gets to deduct half the cost
while the average Canadian pays full price. This situation gives rise
to the circumstance that most sport stadiums count on the very
expensive box seats to provide necessary revenue to pay the
exorbitant salaries of sports figures who are indirectly being
supplemented by the Canadian taxpayer.
Although no figures are available there is much anecdotal
evidence to suggest that many of these corporate seats and boxes
are used by employees and their friends and families rather than to
further business contacts, as was the original intent of the
deduction. In my opinion this change would result in significant
savings to the people of Canada with relatively no impact on small
businesses and only a small period of adjustment for large
businesses.
(1755)
While this bill has not been deemed a votable item, I believe that
it is of some importance and when the opportunity arises I shall
resubmit it.
[Translation]
Mr. Paul Crête (Kamouraska-Rivière-du-Loup, BQ): Mr.
Speaker, I am pleased to speak today on this private member's bill.
The procedural debate we had earlier is but an indication of the
Liberal government's unwillingness to reform the tax system.
Beyond the principles raised, it is obvious that, these past three
years, the Government of Canada has sought to avoid at all costs
changing the tax system to any great extent.
While the Minister of Finance received with great interest the
papers on corporate and personal tax reform prepared by the Bloc
Quebecois, the government did not act on either. On every issue, be
it family trusts, the GST or tax havens, the Bloc played its role as a
watchdog, defending the interests of the taxpayers, but the
government failed to show the leadership one would have expected
from a government looking to change things and make tax policies
more effective, with respect to employment development in
particular.
According to the Bloc's analysis of corporate taxation, the
federal government could recover something like $3 billion a year
by revising or eliminating some outdated, ineffective or unfair tax
expenditures. The expenses specifically targeted by the hon.
member in his bill deserve consideration. It would be appropriate
to take an in-depth look at these expenses to see if, given the effort
asked from everyone to help improve public finances, we can still
afford to allow entertainment expenses as a tax deductible item. We
must also look at who benefits from such deductions.
The same questions could be asked about the fact that lobbyists
are allowed some tax deductions for their lobbying activities. It is
rather strange that a group, whose mission is to try to influence
parliamentarians so as to favour the interests of those it represents,
can enjoy a tax benefit that does not exist for ordinary citizens.
This is rather peculiar and a review of this whole issue seems in
order.
So, whether we are talking about corporate or individual
taxation, the federal government did not do its homework, as
evidenced by the fact that a Liberal member feels compelled to
table a private member's bill to deal with a very specific issue,
namely the tax deduction allowed for entertainment expenses.
There is also a significant shortfall when it comes to personal
taxation, because a lack of initiative or imagination on the part of
the federal government keeps it from bringing about the tax reform
that is so necessary. Here again, some $2.5 billion could be
recovered, while about $4 billion could be reallocated annually, if
the government reviewed or abolished some obsolete or inefficient
expenses. Such a reform would also improve fairness within the
federal tax system.
Therefore, the Bloc Quebecois fully supports this bill. Why
should the Income Tax Act allow a company to reduce its tax
liability by several thousand dollars simply because it happens to
have, for example, a private box in a sports centre? This is
something our society must no longer tolerate, in view of the
hardships experienced by the poor. A government that imposes an
employment insurance reform which has the effect of diminishing
benefits provided by the program while increasing the surplus
cannot maintain measures that favour those who have money, as
well as measures that do not necessarily yield the anticipated
economic benefits.
So yes, the hon. member is right to call for abolition of this type
of deduction; yes, it would be right also to demand that the
government carry out far more extensive taxation reform, that it
take into consideration the points submitted by the Bloc Quebecois
in two major documents on personal and corporate tax reform,
from which a number of elements ought to have been adopted by
the minister.
9583
(1800)
The fact that they were not is perhaps related to the fact that the
minister has created a taxation review committee, a technical
committee made up of experts, most of whom come from
communities already taking advantage of the systems and
conditions in place. Given such a context, it is understandable that
the government is trying to avoid having a bill like this go any
further.
I congratulate the hon. member, for at least this provides the
opportunity to bring the debate out in the open on the eve of a
federal election. I think that it will enable the voters to ask some
questions of the various parties, such as: ``What do you intend to do
about these tax deductions? Does the Liberal Party of Canada feel
these types of deductions ought to continue? What about the
Reform Party, the Bloc Quebecois?''
In our case, the answer is obvious. Where the entertainment
deduction is concerned, we feel this ought to no longer be allowed,
especially for corporations, who use this in the end as a corporate
perk, while at the same time often calling for the government to
interfere as little as possible. You cannot have it both ways. There
must be the greatest equity possible. I feel that the bill has the best
of intentions in this area; it will not have any financial impact
because it cannot be voted on, but it will have some impact on the
political debates.
I hope that the people of Quebec and the people of Canada will
take advantage of the next election to ensure that the next
government, the next Parliament, all of the representatives who are
here, will focus particular attention on this issue.
The Bloc Quebecois will certainly be there to remind the
government that action is necessary. There is also a connection
with political party financing. When a political party like the Bloc
Quebecois is 100 per cent financed by individuals, and companies,
organizations of any kind or labour unions cannot invest directly in
a party, then it is only indebted to the electorate.
When a political party receives substantial contributions from
banks, large corporations, even unions or other organizations, then
its hands are tied when it wants to introduce tax reforms that only
benefit the individual, and not people who were able to make
sizable contributions to the party's coffers.
In concluding, I may say we applaud the principle behind the bill
and the fact that the hon. member has asked the government to do
what it failed to do for three years in terms of tax reform. We hope
that the hon. member's initiative will be reflected as soon as
possible in concrete government actions.
It appears that this sort of decision and action will not be taken
until after the next election, but at least we hope that the Liberals
will make specific commitments and that, if they are returned to
power, they will keep their commitments and we will have a tax
reform that eliminates all unfair deductions such as those for
entertainment, although there may be some in other sectors too.
The impact of each of these measures on job creation has to be
assessed, and this will have to be a major criterion for tax reform,
so the people of Quebec and Canada can trust the tax system and
see clearly the advantages and disadvantages of each measure, and
the new tax system will have to be fair.
[English]
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, I am going
to argue against this non-votable bill. Based on words and the
ideology of the Bloc Quebecois member and the Liberal member
who moved the motion, they are out to lunch when it comes to
corporations. Do they not realize that corporations pay taxes and
lots of taxes?
They talk about how this being a tax deductible item and the
corporation getting it at half price while the person who takes his
lunch to work has to pay full price. The corporation or business has
generated the revenue to have the right to buy season tickets, to
have the right to spend $50,000 for a box.
Why do the government and the current income tax system allow
these businesses to write that off against their incomes? It is for a
very good reason.
(1805 )
They are sizeable corporations. They are movers in the business
world. They are growing and expanding and they wish to
communicate their message. The best way to get the attention of
others who might possibly buy their product is to mix and mingle
with them at times when they are not busy producing their product,
from the hours of 8.00 until 12.00 and the hours of 1.00 until 5.00.
The noon hour and evenings become prime time for people to
spread their message.
Having a box at a hockey game can be a legitimate deduction
because of expectation of profit. Companies in Canada cannot
afford to buy a box if they are broke. Companies in Canada cannot
afford to spend that money unless they are generating the money
against which they can deduct the cost of the box from income.
Even at 50 per cent it is a good compromise. At 50 per cent the
company has to think about how it is spending its money, whether
it is justified and whether it will get a return through this contact
and through this sales pitch.
It is a good compromise. It reduces the abuse. It legitimizes the
expense. When it was 100 per cent I agree there was a lot of abuse.
The 80 and 20 was not enough to ensure that companies thought
twice about it. The 50:50 rule should not require a motion like this.
It makes a mockery out of people going into business.
Profit leads to more tax revenue for the government than it loses
through the tax deduction. That is another point. If the company
9584
has a box which leads to more business, for example a high tech
corporation with a box at the Corel Centre, the company makes
more money. The bottom line increases. The tax revenue increases.
I bet it is more than the 50 per cent deduction on the $50,000 box.
What they are arguing against is less revenue for government, if it
is taken away.
It would not apply to food. That is good. I was pleased the
member made that clarification.
I do not understand how everybody seems to think we have to
tax, tax, tax the rich and the corporations. We have to make sure
that they pay their fair share. There is no question. People with
lower incomes should pay less taxes than people with higher
incomes. The simplified tax system I recommended would be
progressive. It would have the same level of generous personal
deduction. Everybody would pay the same rate with none of the tax
exemptions. They would be eliminated. People would pay the
single rate and maybe a dual rate on incomes up to a certain level
and then a higher rate on incomes above $30,000, say 17 per cent
and then 25 per cent.
The point is that what sets a country apart from less fortunate
and less expanding countries is how it handles its tax regime. Is it a
punitive tax regime or is it an inducement tax regime? Do people
get to keep more of their money when they make more money?
Our system is getting pretty iffy. We seem to punish incentive
and successful people by taxing them more and more. The levels
are higher than they should be. We are at the maximum in terms of
taxes. The finance minister knows that. That is why he has not
raised personal tax rates in the four years he has been here. He has
been very smart not to do that. Had he done that, the Liberals would
be a lot lower in the polls than they are right now.
With respect to corporations, the tax regime is important because
we are now in a global economy. If the separatists want to have
their own country, they had better learn quickly that if they punish
their corporations by taxing the heck out of them, there will not be
very many jobs. Who creates the jobs? It is the corporations. Do
corporations really pay taxes? No, they do not.
We could say that the banks contribute $8 billion in taxes. We
could look at any financial statement of a public company to see
how much it paid in taxes. Do they really pay those dollars in
taxes? No. It is the consumer who pays the taxes. The tax cost is
built into the corporation every year. It is built into a price increase
to protect the bottom line. It is the people who pay. It is the
consumers who pay the taxes.
(1810)
The whole argument that we should tax corporations more is
bogus. On the surface we must have a tax regime for corporations. I
am not one who says corporations should not pay tax. That is what
some people say. They think costs would be lower and product
costs would be lower and they would pass it along to consumers.
No, I do not think so. I do not agree with that. They should pay
some tax.
It is important to have the right incentives in place, a tax regime
that is properly thought out. If there is expectation of profit it is a
legitimate expense. If corporations are investing in hardware or
investing in people, how do they get their message out there? They
advertise. They advertise in a lot of ways. It is not just a media buy
in the electronic media or the print media. Word of mouth
sometimes is the best form of advertising.
If I just started a brand new restaurant, one of the better ways for
me to increase clientele and sales so I can hire more people and end
up paying more taxes is to start bringing people there. That is a
legitimate deduction if I bring people there to introduce them to my
product, my place of business, and show them what we have.
Both the Bloc member and the Liberal member who have just
spoken do not understand the corporate environment. They do not
understand what corporations really do. They do not understand
how much of a contribution corporations make.
It is government's role to create the right incentive and the right
environment for the private sector to create jobs. We are slowly
getting the Liberals to accept that. They are talking the talk now.
Maybe they will start walking the walk.
A bill like this one is draconian. It is dinosauric. It is from the
past. We must create incentives for businesses to stay in Canada.
We must give businesses the legitimate opportunity to deduct their
expenses. Those expenses that are clearly and legitimately intended
to increase their profitability should be deductible.
The 50 per cent rule legitimizes, reduces abuse and allows
corporations to have the respect they have when they spend this
kind of money. If these corporations did not spend this kind of
money, does the member know how many rinks there would be in
the country? Does the member know how many sporting venues or
other venues would exist if there was not an inducement for
companies to spend these moneys? There would be a lot less. How
many jobs would be lost? I do not think the whole psychology has
been thought out by the two members. They see high profits.
I would rather go after Bombardier. Lending money to
Bombardier as the government has done is shameful. It is a
profitable company with a profit of $400 million last year. Over the
last 10 or 12 years it has received over $1 billion. We do not know
when it will be paid back or how much will be paid pay back. How
much of the $400 million is the government getting back. We do
not know those things.
9585
Those are the ways in which I would increase revenues. That
is how I would go after corporations. I would not subsidize
businesses to that extent. If they cannot survive on their own they
should go broke.
If Bombardier with its huge profit this year wants to buy a box at
the Molson stadium, it should be allowed to deduct that against its
income because it generated that $400 million. A company does
not generate $400 million profit unless it hires a lot of people and
has a lot of clients. It is a worldwide company. It needs to show the
kind of operation it has. The member should rethink his position on
going after corporations and not allowing deductions of this nature.
While I have the floor is it proper for me to move third reading?
The Acting Speaker (Mr. Milliken): I should caution the hon.
member that if he seeks consent the Chair might be disposed to
make a ruling on the procedural regularity of the bill. I am not sure,
in light of the discussion we had earlier, the member would want to
do that.
(1815 )
Mr. Barry Campbell (Parliamentary Secretary to Minister of
Finance, Lib.): Mr. Speaker, I was only afraid that the hon.
member for Calgary Centre wanted yet another five minutes. The
spirit of co-operation only goes so far.
I would like to comment on Bill C-324, which we have been
debating for the last few moments. It concerns the income tax
system and specifically taxes on corporations.
I understand the intent of the bill is that certain company
expenses on entertainment should not be deductible. In addition to
the procedural irregularity of the receipt of the bill before the
House which you, Mr. Speaker, have taken under advisement and
on which I am not commenting further, there is a different problem.
I note, with all respect to my colleague the hon. member for
Scarborough-Agincourt, the bill suffers from a drafting error,
which I am sure was not the intent of the member. The bill would
raise the current deduction for business entertainment expenses
which is subject to several limits under the current Income Tax Act
to 100 per cent of eligible expenses on entertainment.
I know that the intent of the bill and the tenor of his comments
are quite different. The question before us is, to what degree should
entertainment expenses be deductible in the computation of income
for businesses.
As indicated earlier, the current deduction for business
entertainment expenses is limited in several ways. First, businesses
are not allowed to deduct certain types of business expenses.
Specifically, expenses paid for the use of a yacht, camp, lodge or
golf course facility are not deductible unless the taxpayer made or
incurred the outlay or expense in the ordinary course of his
business from providing the property for hire or reward.
Second, the Income Tax Act requires that any business or
entertainment expense must be reasonable in the circumstances and
incurred for the purpose of earning income from a business or
property.
Third, since 1994, qualifying business meals and entertainment
expenses have been deductible at a rate of 50 per cent. Prior to
1994, 80 per cent of qualifying meals and entertainment expenses
were deductible.
The current income tax rules are based on the presumption that
business meals and entertainment expenses contain a portion which
is incurred to earn income and, therefore, would normally be
regarded as legitimate business expense. They also contain an
element of personal consumption which should not be deductible.
However, it would be very difficult to identify the precise
proportion of business meals and entertainment expenses which
represent the business component.
For this reason, the Income Tax Act permits businesses to deduct
50 per cent of eligible expenses on business meals and
entertainment expenses in the calculation of taxable income.
I should also note that Canada's treatment of business meals and
entertainment expenses is in line with the level of tax deductions in
all provinces, including Quebec. I was startled to hear the hon.
member say that he thought it should be changed. I wonder if he
has told his provincial friends in Quebec City that. The federal
deduction level currently is in accord with the level in all provinces
and in the United States.
In conclusion, I would first say that the government cannot
support Bill C-324. Indeed, I doubt that the hon. member for
Scarborough-Agincourt would support it because of the drafting
error which, in effect, causes the opposite result from that which he
has asserted he intended.
However, even if the bill was redrafted in a way which would
carry out its stated intent, I would recommend to the House on
behalf of the government that it not be approved because it does not
recognize that a portion of these expenses do have a legitimate
business person. The complete denial of these expenses would not
constitute an improvement in the system we now have.
The Acting Speaker (Mr. Milliken): There being no further
members rising for debate and the motion not being designated as
votable item, the time provided for the consideration of Private
Members' Business has now expired and the order is dropped from
the Order Paper.
Is it agreed that we call it 6.30 p.m.?
Some hon. members: Agreed.
9586
9586
ADJOURNMENT PROCEEDINGS
[
Translation]
A motion to adjourn the House under Standing Order 38 is
deemed to have been moved.
Mr. Jean H. Leroux (Shefford, BQ): Mr. Speaker, a laundry in
the city of Granby, in my riding, recently bid on a contract to
service the Granby and Brome-Missisquoi-Perkins hospitals.
Buanderie Shefford has been providing laundry services to these
two hospitals for eight years now.
(1820)
On December 19, 1996, Buanderie Shefford received a call for
tenders. After the Granby company posted a $200,000 bond, it
realized, when the tenders were opened, that it was the lowest of
the four bidders.
Strangely enough, the Corporation d'achat régionale de biens et
services de la Montérégie decided to issue another call for tenders
without giving any explanation whatsoever. This time, my
constituent came out second, behind the Centre correctionnel de
Laval, CORCAN, which, strangely enough, had not submitted a bid
the first time around but did this time, knowing in advance what the
prices of its competitors would be.
The private company, Buanderie Shefford, might lose a contract
to a company funded in large part by taxpayers.
One has to wonder whether CORCAN includes all of its costs in
the bids it summits and respects the same ground rules as its private
sector competitors.
This is obviously a blatant example of unfair competition on the
part of the federal administration, taking major contracts away
from companies which are at least as competitive as Corrections
Canada.
CORCAN employs, on a regular basis, some 1,800 offenders
whom alone, I might add, cost Canadian taxpayers close to $90
million a year. The tax burden should not be made heavier, it is bad
enough as it is. The result would be a further 15 workers out of a
job. This is a fact, and it is unacceptable.
Fifteen jobs are in jeopardy, 15 families may have to suffer the
disastrous consequences of unemployment. While the Liberals
promised jobs, jobs, jobs, just the opposite is happening in this
case.
I sent letters to the solicitor general on two occasions. I have
questioned him in this House and, on March 21, he told me he
would be most pleased to look into the matter and to report to me as
promptly as possible. Here we are three weeks later and nothing
has been resolved in this matter. Time is of the essence. Will the
minister take action to redress this injustice?
Our local entrepreneurs have a right to operate in a free market
setting where the rules of the game are not altered by the
interference of government agencies whose financial resources are
totally unconnected to their economic performance.
The government must act responsibly and act as quickly as
possible to resolve this unfair situation. The government has one
responsibility: it must withdraw its bid. That is the only
conceivable solution.
Otherwise, law abiding citizens whose taxes pay for correctional
facilities will end up losing their jobs. That is unacceptable. It
makes no sense.
Mr. Bernard Patry (Parliamentary Secretary to Minister of
Indian Affairs and Northern Development, Lib.): Mr. Speaker, it
is my pleasure to provide an answer to a question raised in the
House by the hon. member for Shefford, on March 21.
At the time, the hon. member expressed concern about the bid
submitted by CORCAN, following a call for tenders by the
Corporation d'achat régionale de biens et services de la
Montérégie. He felt that CORCAN was an example of unfair
competition on the part of the federal administration.
I want to explain that CORCAN is a special operating agency
under Correctional Service Canada, which is accountable to
Parliament, through the Department of the Solicitor General. The
purpose of CORCAN is to promote rehabilitation of inmates into
Canadian society by providing them with job and training
opportunities during their stay in federal penitentiaries and for
brief periods once they are released.
There are always around 1,900 federal inmates working for
CORCAN. These working inmates get job-related training and
experience. According to a 1994 study, former inmates who had
worked for CORCAN were much less likely to be sent back to a
federal penitentiary. Since these individuals do not reoffend as
much, programs like CORCAN improve public safety.
CORCAN has five areas of activity: manufacture, agro-business,
construction, services and textile. Its 32 workplaces are distributed
among the 58 federal correctional facilities. CORCAN sells its
products to federal, provincial and municipal governments and to
institutions such as hospitals, schools, universities and charitable
organizations.
As a special operating agency, CORCAN receives no
appropriations but must borrow the money it needs to operate
through a revolving fund. This money must be paid back with
interest. CORCAN's operating costs must be recorded in its
financial
9587
statements in accordance with generally accepted accounting
practices.
CORCAN is always trying to minimize the adverse effects of its
activities on the private sector. An independent review of
CORCAN's operations demonstrates that it holds-
The Acting Speaker (Mr. Milliken): I am sorry to interrupt the
member but his time has expired.
The motion to adjourn the House is deemed to have been
adopted.
[English]
Accordingly, the House stands adjourned until tomorrow at10 a.m. pursuant to Standing Order 24(1).
(The House adjourned at 6.25 p.m.)