Bill C-22 (Historical)

Income Tax Amendments Act, 2000

An Act to amend the Income Tax Act, the Income Tax Application Rules, certain Acts related to the Income Tax Act, the Canada Pension Plan, the Customs Act, the Excise Tax Act, the Modernization of Benefits and Obligations Act and another Act related to the Excise Tax Act

Patent Act

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, it is with pleasure today that I rise to speak to this important legislation.

When applied to drug development and production, the whole notion of intellectual property protection becomes a very divisive issue that in many ways pits the right to patent protection and commercial opportunities for Canadians and Canadian pharmaceutical companies against the need for cost effective access to these technologies.

It is important to recognize that without investment in research and development there would never be a debate on how best to enable important pharmaceutical developments to reach people.

Whatever public policy we put forward regarding intellectual property, patent protection and commercialization, we must be careful not to reduce incentives to the point where we stifle the development of leading edge drugs and treatments that ultimately benefit all Canadians. At some point these technologies and pharmaceuticals become commodities and the generic industry plays a role in that as it occurs.

This piece of legislation, like so many others passed by the Liberals, identifies and in some ways exemplifies the hypocrisy that pervades the government. The government says the WTO ruling has no significant or sustained impact on drug costs. It says the impact of the ruling over the eight year horizon is equivalent to less than 1% of pharmaceutical sales in a single year. It says Canadians will continue to have access to affordable drugs at prices below those of the U.S.

These arguments sound eerily similar to those presented by the Conservative government in the early 1990s, arguments which were rejected by the opposition Liberals. The current Minister of Industry and self-promotion was the Liberal opposition's key spokesperson against using patent and intellectual property protection as a vehicle for promoting a more successful Canadian pharmaceutical industry and greater economic growth.

This is a 180° shift in the position of the Liberals. It is completely consistent with their inconsistency on free trade, the GST and others issues. I will quote the colourful language used at that time by the current Minister of Industry and self-promotion. In the early 1990s he said:

The citizens will need more than generic drugs to recover from the festering wounds which are about to be inflicted on the exposed ankles of Canada's poorest citizens when the Minister sinks his teeth in, past the bone, into the marrow and sucks the lifeblood out of Canada's poorest citizens with Bill C-22.

That was the statement of the then Liberal opposition member who is now the Minister of Industry and self-promotion. Was he referring to the minister at the time or to himself? Could he look into the future and see that he would become a minister and eagerly embrace the policies he vociferously opposed in opposition?

The Minister of Industry has stated on several occasions, and most recently at an economic conference in Davos, that he was wrong about the policies he espoused and opposed while in opposition and that the Conservative Party had been right. Perhaps through action he is now making the same admission.

It is in some ways annoying and upsetting for Conservatives to see Liberals embrace policies they had opposed in opposition and then take credit for the results. However we would prefer that they steal Conservative policies and take credit for the results than implement their own policies, which could in the long term have a far more negative impact on the country.

While it is important to point out their hypocrisy on these issues it is also important to credit them with extraordinary intellectual flexibility. They are at least intelligent enough to swallow themselves whole and recognize that some policies introduced by the previous government have made their lives a heck of a lot easier.

Woody Allen once said that 80% of life is just showing up. For seven years the government has done just that but for probably closer to 90%. For the Prime Minister it is probably 95%. I am not talking about golf; I am talking about governing.

We must walk a fine line. We must provide enough patent protection to allow the pharmaceutical industry and the emerging biotech industry to grow and prosper and develop new technologies which have such potential for the future of humankind. However we must also ensure that new medicines and pharmaceuticals reach the public in the most cost effective and timely way. It is a difficult balance to maintain.

Our current patent protection in Canada by and large strikes a reasonable balance. Our policy is not working badly and has created economic growth in the leading edge, knowledge based industries of pharmaceuticals and biotechnology. That being the case, we should be looking at ways to create a more effective balance between the two policy priorities.

The Economist magazine about three years ago published a study conducted in the U.K. about a policy which could balance the need for patent protection with the importance of getting pharmaceuticals into the hands of those who need them in the most cost effective way.

It involved an auctioning process whereby when pharmaceutical companies announced new drugs or medical treatments governments would have an opportunity to bid on them. Governments would of course pay a significant price for the privilege by recognizing the public good of making pharmaceuticals more widely available. They would then make them available to the generics in order to provide lower cost access to the consumer.

We should at least consider doing it that way or investigate the matter as part of the debate in order to balance patent protection and economic opportunities for pharmaceutical companies and biotech companies while making these new pharmaceuticals available more expeditiously to the public. We should be engaging in a debate that would find ways to bring these two divergent interests together in a more realistic way.

The other aspect we have to consider is the emergence of Canada's biotechnology sector. Around the world biotechnology is one of the key components of information technology within the knowledge based industries, which are becoming so important to our global competitiveness.

Canada has demonstrated some significant strengths on the biotech side which capitalizes on our post-secondary university infrastructure. In Nova Scotia we have 11 degree granting institutions. Those universities, which were at one point seen as a cost, are now in a knowledge based economy and seen as an asset.

If members looked at the symbiotic relationship between the small biotech companies and the big pharmaceutical companies, they would recognize that this is not simply an argument about big business and big pharmaceutical companies versus consumers. The notion that only the big pharmaceutical companies benefit from patent protection is a specious argument.

If we were to reduce patent protection and take an aggressive approach that would reduce the incentives for pharmaceutical companies to develop new drugs and treatments, we would be significantly hurting the biotech companies. They are, by and large, small companies and involve our post-secondary institutions across the country. We must be very careful not to do something from a political perspective that would have a negative impact on Canada's competitiveness in biotechnology.

We must also consider a second argument. How do we get new drugs or pharmaceuticals into the hands of Canadians faster? If we cannot ensure an environment within which those new technologies can be developed in the first place, the second discussion is a moot one. It would be a terrible step backward for the government to reduce, in any way, shape or form, the incentives we have in place to encourage the leading edge development of new pharmaceuticals and new advancements in biotechnology.

Some provinces have been more successful than others in terms of creating a critical mass of activities in these areas. This is one of the areas where significant growth can be achieved in the future both on the biotech side and in pharmaceuticals. We must focus on our medical schools and our undergraduate programs in terms of science and research.

I am pleased to see that the government has in fact recognized the error of its ways in the past. It has embraced and continues to support and foster Progressive Conservative policies with the introduction of this legislation.

I hope we will have an opportunity in the future to discuss some of the other alternatives that could balance more effectively the needs of consumers and patients. It is important to create a greater level of commercialization, intellectual property protection and opportunities in Canada.

The government has not been as creative as it might have been in studying more carefully some of the alternatives that are available in terms of moving forward in a more innovative way in that regard.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, this bill is very important to our party. We have indicated to the government that we do not intend to hold up this debate for much longer, and we appreciate the government's co-operation in this matter.

For us the bill and the issues that it raises with respect to trade agreements and drug pricing go to the heart of our objection to what has been going on in this country for the last 10 to 15 years. I guess it has been 14 years if we go back to 1987 when the first bill on changing the drug patent legislation in Canada first came before the House of Commons.

At that time it was a Progressive Conservative government under the leadership of Prime Minister Brian Mulroney. A bill was introduced to reduce and transform the way in which we had constituted our drug patent and drug pricing policies in this country. Until that point, we had a policy which had been established some decades before whereby generic drug manufacturers could bring onto the market generic imitations of new brand name drugs after only two years.

This was one of the reasons why we had one of the most envied health care systems in the world, not just in terms of quality but also in terms of being able to keep costs down. We did not have to pay these exorbitant brand name costs or at least we did not have to pay them for very long. We only had to pay them for two years, then after that our health care system could begin to use and doctors could begin to prescribe these new generic replacements. Of course the brand name drugs were still available and could still be used.

In 1987 we understood, and we still understand, as a prelude to the free trade agreement negotiations between Canada and the United States, the Conservative government at that time, in a very strange form of negotiation, made a big concession before it even got to the table by giving into the Americans on this particular issue. It was not just to the Americans. There were a great many French multinational drug companies and others that were involved. We were very much against this at the time. We were against it again in 1992, when Bill C-91 was brought in. I believe the bill in 1987 was Bill C-22.

We were against it then and today we are against Bill S-17 which is part of a sequence of bills that have progressively eliminated the ability of Canada to have its own independent drug patent and drug pricing policy. The fact that we could not and cannot maintain a system that worked so well for Canada, which was the result of a political decision taken in this country many years ago, is for us transparently what is wrong with the free trade agreement. The fact is the rights, privileges and profits of multinational drug companies come first. The rights, the privileges and the health of Canadians insofar as their need for access to cheaper drugs and collectively in terms of their need for a health care system that is less costly rather than more costly comes second.

Property is put before the public interest in such a blatant way that even the Liberals when they were in opposition could see this. Or did they? We have spent a fair bit of time and appropriately so pointing out that the Liberals have changed their position.

However I maintain that at another level it is not so much that they changed their position, it was the fact that they were insincere in their opposition to Bill C-22 and Bill C-91 in the first place, in the same way they were insincere in their opposition to the free trade agreement, with the possible exception of their leader at the time in 1988, Mr. Turner, who I have come to the opinion was sincere in his opposition to the free trade agreement. At the same time, he led a party that was full of people, some of whom later became Prime Minister and Minister of Finance, who were not opposed to the free trade agreement.

I believe now that they were not genuinely opposed to Bill C-22 and Bill C-91 at the time because they knew, as we know, that the Liberal Party ultimately would do the bidding of the big business community. There are few businesses in this country and internationally that are bigger than the multinational drug companies.

It is not just that they do the bidding of these companies, the problem is now the bidding and the interests of these multinational drug companies is enshrined in international trade agreements, like the World Trade Organization. Now these interests can be advanced without there being a political decision or without anybody having to take responsibility for it. Nowadays, all the drug companies have to do is invoke the WTO and no governing political party takes any responsibility for it.

The Liberals get up and say they have to respect our international obligations and that they have to respect the trade agreements that they have signed, never mind that, at least with respect to NAFTA and the WTO, it was the Liberals who signed Canada on to the NAFTA and the WTO. Why did they sign these agreements if they were sincere in their opposition back in 1987 and 1992? Only they can answer that, and we look forward some day to an honest reckoning of just what happened along the road to corporate Damascus on the part of the Liberals.

For us, although the bill implements a certain ruling of the WTO and is a smaller ruling than the larger ruling in the first place, it is all part and parcel of a trend in international and regional trade agreements that gives priority to the interests and the profits of big business, in this case large drug companies, over the interests of the Canadian people and of people all around the world.

Look at the struggle that was fortunately just won in South Africa where the drug companies invoked their patent rights to prevent the distribution of medicines that treated the disease of AIDS.

While I am at it, I asked a question in the House not so long ago. It had to do with emerging therapies and treatments related to gene therapies. I asked the Minister of Health what the government would do.

There are many people in the medical community who are worried that the same thing that has been done with drugs by the kinds of things we are debating today will be done with these gene therapies, and that some time in the future any time we use a particular gene therapy we will have to pay a royalty to some big drug company that invented that gene therapy in the first place. This will become another burden on our health care system. It will become another argument for privatization, more private sector money and more user fees.

However I asked the question of the Minister of Health, and for me this was very symbolic, because I thought it was a health issue. I thought that distributing cures, therapies and medicines is something over which the Minister of Health ought to have some kind of ultimate authority. Who rose in his place to answer my question or should I say who rose in his place to not answer my question? It was the Minister of Industry.

I am not surprised that I did not get an answer. I suppose I should not have been surprised that it was the Minister of Industry who got up and said that it was a very interesting question, blah, blah, blah. The fact that the government sees this as an industrial question really had already answered my question.

This is a new territory. It is fine if the Liberals wanted to say that perhaps drugs are history and maybe it should be dealt with by the WTO, but there is a whole new area that they must stand fast on, and that is to not allow these new gene therapies to be taken over by the philosophy that they are private or corporate property and should be distributed on the basis of what is in the best interests of the profit margins of the companies involved. They could take a stand there if they did not want to go back and rewrite their own history. They are not even willing to do that. They see it as an industrial matter rather than a health matter.

For all these reasons, we feel it is unfortunate that there seems to be this consensus in the House, a consensus of which we are not a part, and that this is something that is beyond criticism. It reflects the political monoculture that has developed in the House of Commons among the Bloc, the Alliance, the Conservatives and the Liberals, all part of a seamless apology for corporate interests, with only the NDP standing here in our place saying that there has to be another way to look at drugs, at health.

Is there no other way of looking at drugs and health that will not put corporate interest first and people second? We believe there is. We think we had that before the Conservatives and then the Liberals moved to destroy the generic drug regime that we had in place. We feel that we can have that again if we had governments around the world that were willing to stand up to corporate interest, instead of engaging in these acts of self-inflicted powerlessness by which they give up the power that they once had as governments to act in the public interest.

The governments give up their power to trade agreements. Then when these trade agreements kick in years later and impose certain conditions on them, they do not know what to do as they are just living up to their international obligations. They may be international obligations now, but they were political choices at one time that governments made and that the people had at one point but they no longer have.

We want a government that works for the day when those kinds of political choices return to parliament and the Canadian people so they can decide what kind of generic drug regime they want rather than leaving it in the hands of trade bureaucrats at the WTO who are lunching constantly with the drug manufacturers and not lunching with the people whose health care system will be drastically affected by their decisions.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I wholeheartedly agree with the member for Churchill and the member for Burnaby—Douglas.

Barely two weeks ago we were in Quebec City with 60,000, 70,000 or maybe even 80,000 people marching for democracy. They were trying to take down the wall and trying to be heard. I think it is important to note that the central issue underlying that process was about defending our democratic system. It was about defending the right of democratically elected parliaments, legislatures or even municipal governments, to uphold the public interest and to make decisions that benefit the public interest.

I take note of what happened in Quebec City because the opposition to the FTAA is directly related to the debate we are having in the House today on Bill S-17 and the drug patent law. We have probably the clearest example of the tail wagging the dog.

We have the Government of Canada rushing around to change its legislation to meet what? Is it something based on public debate and discourse in the country? No. It is something based on a World Trade Organization tribunal ruling.

There is the evidence of what we are up against in the country as a result of the capitulation by the government to international trade agreements that are literally, as my colleague from Churchill said, bleeding away not just people's ability to access prescription drugs in a reasonable and affordable way, but bleeding away our ability to make decisions about our country, decisions that affect how Canadians live, our quality of life and in whose interests we speak in the House.

I feel very strongly that I need to say loud and clear to Canadians that every single member of the New Democratic Party was in Quebec City marching for democracy and upholding the public interest, and we are in the House today to fight the bill. The NDP is the only party in parliament to do this, because we in our party understand that the bill is very wrong.

We have heard some of the history of the bill. It is not just something that has popped up out of the blue in the last few months. It goes back to 1987 and the glorious days of the Mulroney government, which started changing the laws to favour these massive pharmaceutical companies by changing the patent rules.

Let us be very clear about this. It is about creating legislation that favours the profit making interests of very large pharmaceutical companies at the expense of providing accessible, generic prescriptions and drugs to Canadians. This is now taking place on a global scale.

That happened in 1987. As has been so eloquently pointed out by my colleagues, it is very sad to see the hypocrisy that takes place. The mighty Liberals who took on the Mulroney government in 1987 and again in 1992 seemed to understand that those laws, Bill C-22 and Bill C-91 in those days, were a great threat to our public health care system and to Canadians' accessibility to affordable drugs.

Where are the Liberals on this issue now? They are not even neutral on the question. They have completely come around 360° and are now peddling the interests of those same pharmaceutical companies that 10 years ago they were speaking against. Then years ago they clearly outlined their concerns about this.

A few weeks ago before the summit of the Americas in Quebec City, I attended the foreign affairs committee meeting. The witnesses who came forward spoke directly to the issue of intellectual property rights, as they are called, and the so-called rights of these companies to restrict access to the generic versions of their drugs.

At that committee I heard a man speak. I forget his name. He was very smooth. He was the chief spokesperson for the pharmaceutical association. He had the gall to say that trade agreements like the FTAA and the orders that come from the WTO, which prompted this legislation, improve the quality of life for all people around the globe, that intellectual property rights and trade agreements actually improve quality of life.

I sat there thinking how far removed from the truth that was. If anyone needs evidence of that, we have only to look at what took place in South Africa, where 39 pharmaceutical companies were actually forced, through public pressure, to withdraw their claims against the South African government.

Millions of people who live in sub-Saharan Africa are dying of HIV and AIDS. Millions of people in Latin America or Central America and around the globe are desperately in need of essential medicines, not just in terms of HIV and AIDS but for things like TB or hepatitis C. These people understand that these trade agreements are not about improving the quality of life for ordinary people. They are not about improving the quality of life for poor people or people who are sick. This is about conferring greater concentrated power to those multinational corporations and the government is allowing to happen through the bill.

That is why we stand today in absolute opposition to what is taking place. I would like to point out to Canadians that the consequences of what would happen because of the bill are very dire indeed. What would the consequences be? Extending the patent from the current 17 years, which is bad enough, to 20 years, as well as prohibiting generic companies from stockpiling drugs, means that the most likely thing that would happen would undoubtedly be a dramatic increase in prescription and drug prices for Canadians. There is no question about that.

As this debate continues and the issue continues to unfold, we in the New Democratic Party have a very great resolve to work with other organizations, the labour movement, the Council of Canadians, environmental groups and seniors' groups, who understand what is really at stake here. We have a role to play in parliament in trying to defeat this kind of legislation, but we also have a role in working with a broader community and bringing pressure to bear.

Maybe one day we will get to the point where we have the kind of mobilization that took place in South Africa in defeating the multinational corporations who were seeking litigation to prevent people from accessing essential medicines. Maybe one day we will see that type of challenge in Canada. At the very least today, we have to stand in opposition to this legislation. We think it is bad legislation and is nothing more than conferring greater concentrations of power and profit to fewer multinational corporations.

Surely that cannot be in the public interest. I defy any member of the House to stand up and tell us how this can be characterized as being in the public interest. The evidence, going back to 1987 and 1992 and now to what has happened with the FTAA, tells us that the opposite is true, that this is a bad piece of legislation. It must be defeated, as must these international trade agreements that undermine the ability of our governments to make the very kinds of decisions that would ensure this legislation would not go ahead.

[Bev Desjarlais, NDP, Churchill, MB]

Mr. Speaker, I have seen the actions of the new Minister of Industry in the House and know his historical background with regard to the issue. Yes, it is extremely pathetic. There is absolutely nothing worse than a politician who says one thing prior to an election, who says one thing while in opposition, and then does something else.

That kind of attitude and that lack of principles result in people having no faith in a democracy and a parliamentary system. For the sake of getting elected they mislead and try to pretend they are there to do what is best for Canadians. Then they get into government and tell Brian Mulroney that they are sorry, that he was right. I guess it must have been the two Brians. That must have been what did it. It is disappointing.

I want to reflect upon my colleague's comments when he mentioned Bill C-22 and Bill C-91. The difference between when those bills came up and this one came up is that the government is sneaking this one through the Senate, allowing next to no discussion nationwide on the issue. That is what is happening. Now it is in a panic state, will impose closure and do whatever because that is the way the government operates.

The issue is important to all Canadians, to seniors most definitely. Some of the most vulnerable people have been faced with huge increases in energy costs and a lack of government funding in numerous areas. It is extremely disheartening to see the government imposing an even greater expense on them. It is absolutely unacceptable.

I expect a good number of seniors to be around at the next election. They are a stalwart bunch and they will weather the storm under the government. I want them to remember, especially those seniors in Ontario, how the Liberal members voted on this bill.

[Svend Robinson, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I have listened with interest to the eloquent comments of my colleague from Churchill, who is also our spokesperson on industry and primarily responsible for this legislation.

The hon. member has reviewed the quite appalling history of the Liberal Party on this issue. I am one of those members who was actually in the House in 1987 when Bill C-22 was brought before it by the Conservative government of the day. I recall vividly Liberal MPs viciously and vigorously opposing the legislation. They said it was a sellout to multinational drug companies.

Committees Of The House

[Maurizio Bevilacqua, Liberal, Vaughan—King—Aurora, ON]

Mr. Speaker, I have the honour to present, in both official languages, the sixth report of the Standing Committee on Finance regarding its order of reference of Monday, April 23, 2001 in relation to Bill C-22, an act to amend the Income Tax Act, the Income Tax Application Rules, certain acts related to the Income Tax Act, the Canada Pension Plan, the Customs Act, the Excise Tax Act, the Modernization of Benefits and Obligations Act and another act related to the Excise Tax Act.

The committee has considered Bill C-22 and reports the bill with amendments.

Patent Act

[Loyola Hearn, Progressive Conservative, St. John's West, NL]

Mr. Speaker, it is my pleasure to say a few words on Bill S-17. It is an interesting day in the House as we see the debate unfold.

A lot of people across the country think that when one is in government one agrees with certain things but when the shoe is on the other foot one always objects to whatever government does. In a couple of cases here, that is not factual.

After listening to the debate from our friends in the NDP, I would say that it is quite clear that they stand where they always did on the issue. I will be making it quite clear that in my party we stand where we have always stood on the issue. In this case, we support the bill, as we did when the original bills were introduced by the Tory government and, as has been pointed out a number of times today, objected to strenuously by the then opposition party, which is now the governing party. It is amazing how the tide turns.

I did not think I would be supporting my friend and colleague, the minister of trade and industry. It is very difficult to do in light of several issues about which we thoroughly disagree. However, my party does support him on this issue because the bill itself was a Tory initiative.

I will explain to my friends from the NDP why we support it and I think by the time I am finished they will also perhaps agree with us and support the bill.

However, it is interesting to note that the government of today was against the original bills, Bill C-91 and Bill C-22, when they were introduced in 1987 and 1992. The more interesting parts of all of this are some of the comments made by those who are now government members. Some of the people who voted against those bills, by the way, were the present Deputy Prime Minister and present government House leader.

In 1992 during the debate on Bill C-22, the minister of industry and trade, who is sponsoring this bill, said “It is inconceivable to me that parliament finds it necessary yet again to deal with yet another measure proposed by the government because it is bound and chained to some ideological dictate which says this kind of patent act is necessary”.

I am sure he was reading from a prepared speech when he said that. However, at the time he was against the very bill which he is now proposing.

Here is another interesting quote from him, which leads into what I have to say. He said:

The citizens will need more than generic drugs to recover from the festering wounds which are about to be inflicted on the exposed ankles of Canada's poorest citizens when the Minister sinks his teeth in past the bone, into the marrow and sucks the life's blood out of Canada's poorest citizens with Bill C-22.

Those are strange and interesting words, which came from the present Minister of Industry.

People are allowed to change their minds. People see the light and become converted. The minister said today that he had been concerned about the increase in drug prices at the time, but they did not happen. He said indirectly that Prime Minister Mulroney had been right to bring in such a bill. Just a short while ago, as has been pointed out today, the minister said that Prime Minister Mulroney was right about free trade.

It will be interesting to see over the next while how many things the minister agrees with that he fought so hard against as a rat packer before his party became the government.

The NDP has expressed a concern, of which all of us are conscious, that the bill might lead to increased drug prices for people with major illnesses, many of whom cannot afford the drugs they need.

One of the most memorable occasions for me during the last campaign, and I am sure members on all sides of the House remember talking to people affected by the cost of drugs, was meeting a gentleman who had just been diagnosed with Alzheimers and whose wife was trying to cope with it. A drug had been prescribed to retard the advancement of the disease, a drug called Aricept I believe. The drug was not covered by medicare and the family had to pay the extremely high cost themselves. That meant other pleasures of life had to be sacrificed, including a little car that enabled them to get back and forth to the cabin. They had to sell the car to pay for the drugs. That is not the way it should be in Canada.

Can we blame pharmaceutical companies for that? The answer is no. We blame governments for that, because if an effective drug is brought on the market, tested and approved, the government should immediately sponsor it under medicare.

The NDP has expressed major concerns about drug companies getting rich and the impact of drug costs on poor people. However one important element has not been raised: Those who need drugs would not have them if somebody did not put the time, effort and money into their development.

Let us look at cancer. Very few of us in the House are not affected, directly or indirectly, by that dreaded disease. Will we ever find the cure for it? The answer is that we are hopeful. Will we find the cure for AIDS and other dreaded diseases worldwide? Luckily our country is not affected to the same degree as other countries but certainly we are affected by it. Will cures be found for dreaded diseases? They will be found in only one way: If somebody puts the dedicated research into coming up with a drug that will kill or retard the growth of the agents causing those diseases. That can only be done, as I said, by time, concentration and funding.

My colleagues to my right, ideologically to my left, are very supportive of the arts.

I would ask them about the art industry. What if a recording artist made a big hit which took a lot of time, involvement, practice and rehearsals? What would the hon. members think if other performers, who were not as dedicated or bright or could not put together that one great hit, knew it was coming on the market, copied it and pirated the copies around the country? How would it affect the person who put the time and dedication into developing the product?

Drugs are not unlike that. Our hope of combating the major illnesses that affect people across the country may lie in the hope that a pharmaceutical company will develop a cure.

We could say governments should be the ones doing that and pumping money into research. I certainly would not disagree. However, if governments were the ones responsible for doing research, I would question whether the work could be done. Government cannot be as efficient as the private sector. That has been proved over and over.

My concern lies with the people across the country who are faced every day with having to buy drugs. I point to the government opposite and say that should be its main concern. It has the mechanism to alleviate the costs shoved upon people for drugs to treat illnesses. In a lot of cases there are drug assistance programs to do just that. There are always those who fall between the cracks but a smart, sharp government could deal with such cases if it had any vision.

If the people who put their time, effort and money into developing the needed drugs are not given the freedom and protection to do so, they will not do it. They are not in the business of trying to make a breakthrough only to have it taken away from them. When another company immediately starts making generic drugs or starts to stockpile so it can wipe out the company that developed the original drug, that is not fair competition.

The fallout can be handled by government. We could have the best of both worlds if we had a government with brains and vision. Protection and help can be given to those who develop the drugs we need, but assistance can also be given to those who rely on them and cannot afford to pay for them.

It is interesting to see the government trying to solicit support for a bill it was once so much against. I know the NDP, even if it does not agree with us, is saying what it has always said. It has not changed its opinion because the stripe of government has changed.

We are saying the same thing we have said and the same thing the Bloc is saying. I agree totally with its last speaker. The Alliance is also saying that if we are to produce the drugs needed to combat the concerns the NDP talks about, freedom and protection must be given to companies that put the time and effort into developing the cures that are so badly needed.

The government, however, has switched back and forth, which shows that its concern is not for people or companies in Canada. Its concern is for itself. That has become more and more evident.

As we debate the bill further we will all have more to say on it. However we stand on the principles we announced when the original bills were brought in. We think this protection must be provided. Hopefully government will address the other side of the concern.

[Svend Robinson, NDP, Burnaby—Douglas, BC]

Mr. Speaker, certainly I appreciate the comments and the question of the hon. member for Winnipeg Centre, who has been in the forefront of the struggle in the House, and indeed in his previous life, for affordable, accessible drugs for Canadians.

I would not for a minute suggest that the flip-flop of the Liberals from their position in 1987 on Bill C-22 and from their position in 1992 on Bill C-91 had anything to do with the massive amount of money that they get every year from pharmaceutical drug companies as donations to the Liberal Party of Canada. Of course not. That has absolutely nothing to do with it. I know that the Bloc position has absolutely nothing to do with that either. J'en suis certain.

I do want to take advantage of the opportunity that has been afforded to me by the member for Winnipeg Centre to share with the House some of the statements that were made by the Minister of Industry, then a member from Newfoundland and Labrador. On November 16, 1992, the Minister of Industry spoke in the House, then in opposition of course, on Bill C-91.

He said we have lower health care costs in Canada on a per capita basis than they do in the United States largely because of our prescription drug program, which this government wants to do away with. What are we to conclude from that other than that the government wants to increase the cost of health care in Canada? It will do that at the expense of the taxpaying public and at the expense of the provincial governments because provincial governments in many cases will buy, through their drug plans, significant quantities of these same pharmaceutical drugs.

The Minister of Industry went on to read from a text that talked about the burden of changing patent legislation. He said “Extending the patent life of drugs is likely to cost consumers immediately and also add to the burden on the government health plans, which are already under economic pressure. Compared with hospital and doctors' bills, prescription drugs are a relatively small though rapidly growing expense”.

The member pointed out that even in the United States people were lauding Canada's generic drug system, saying “However, here in Canada the government wants to do away with it”.

I would note, and my colleague from Regina pointed this out a few minutes ago, that the cost of just this one amendment to Bill S-17 will be over $200 million to Canadian taxpayers, both through pharmaceutical drug plans and of course directly for those who are not covered.

Why is it that we are giving a $200 million gift to pharmaceutical drug companies in this country? There is absolutely no excuse whatsoever for that. For that reason as well, we as New Democrats strongly oppose this legislation.

[Svend Robinson, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I rise on behalf of members of the New Democratic Party to say that we are strongly opposed to this unfair and inequitable bill.

I was frankly very disappointed to hear members of the Bloc Quebecois, who claim to belong to a social democratic party, giving such amazing support to the demands of pharmaceutical companies.

Obviously, there is only one party in this parliament which is fighting for the poor, for ordinary people, who are saying that the big pharmaceutical companies do not need more handouts from their friends in government.

I see the Minister of Industry in the House today. We have had the privilege of serving together in the House since 1979. I am one of the few members of the House who was in the House with the minister in 1987 when he spoke with passion, eloquence and vigour in total opposition to Bill C-22. He called it a giveaway to the multinational pharmaceutical companies. He was absolutely right.

In one memorable quote he said that Bill C-22 would suck the life's blood out of Canada's poorer citizens. I recall it well. The minister was up on his hind legs speaking out and screaming out strongly for justice for Canada's poorer citizens. That was he and the Liberal Party.

Bill C-22 passed. Then in 1992 what did we have? We had another bill, Bill C-91, another Conservative bill and another giveaway to the pharmaceutical drug companies. What did the Minister of Industry have to say at that time? On behalf of his Liberal colleagues, along with the member for Dartmouth and many others, he denounced that legislation and bitterly complained it would lead to a massive increase in the price of pharmaceutical drugs in Canada. The minister was absolutely right.

When we look at the increases in the price of drugs in Canada, it is the fastest growing component of our health care system, far faster than the increase in the price of physician services. Indeed it is the biggest single component of our health care system, as my colleague for Winnipeg North Centre pointed out so strongly on a number of occasions.

Over the past 15 years I would point out that Canada's prescription drug bill has jumped by 344%. That is 15 years since the Minister of Industry warned Canadians about what would happen.

It is not as if these pharmaceutical drug companies are suffering.

The Bloc Quebecois is suggesting that the poor pharmaceutical companies must be defended. It is sad, such a pity, the poor pharmaceutical companies need defending by the Bloc Quebecois.

Let us look, for example, at the largest pharmaceutical company, GlaxoSmithKline, which made profits of some $11.9 billion in one year. It does not need the Bloc Quebecois to defend it. That is clear. Those who need defending are consumers.

It is the consumer, patients, the poor and provincial drug plans that need defence from the government and from their allies in all of the other opposition parties. What an unholy alliance the Liberal government, the Alliance, the Bloc Quebecois and the Conservatives. At least the Conservatives have been consistent. They have been consistently wrong but at least they have been consistent, not like the Minister of Industry who has done the most extraordinary flip-flops.

It was a sight to behold in Davos, Switzerland. I wish I could have been there to see the Minister of Industry speaking in Davos, Switzerland and saying “I fess up, I was wrong Brian”. Brian Mulroney was standing there as proud as punch as the Minister of Industry stood and said he was wrong, the Liberals were wrong and that he was right, NAFTA was a good thing.

A few weeks later he stood in front of the senate, that great bastion of democracy. That was another occasion when he said he had it all wrong back in 1987 on Bill C-22, that the Conservatives were right and the pharmaceutical industry was right. He was there to defend the interests of those poor, suffering pharmaceutical companies. Why? Because the WTO told him that they no choice.

What a shameful spectacle this is. Why should we ever believe anything the minister and the government have to say. I know the Speaker, a man of integrity and respect, will recall those debates because he was in the House. Indeed I dare say he participated in one or two of them. I am not going to pull out the speeches of the Speaker because I know that would be entirely unparliamentary. However it is certainly appropriate to remind the Minister of Industry of exactly what he said. We used to have the lowest priced pharmaceutical drugs in the world. Now, as we have seen, drug prices have risen dramatically.

As the minister indicated, the purpose of the legislation is to implement a WTO tribunal order. We were challenged by the European Union and the United States that our existing generous provisions for patent protection were not good enough.

Until this bill becomes law, the generic drug industry is at least allowed to stockpile and to get their drugs ready six months before the expiry of a patent so that when that patent expires consumers, Canadians who are sick, will be in a position to buy those generic drugs quickly. That is something the Minister of Industry supported long ago, but not anymore. Now they are saying no. Even that six month stockpiling opportunity is gone.

The minister is retroactively extending from 17 years to 20 years the patent protection. This is a retroactive gift to the pharmaceutical industry approved by the Bloc, the Alliance and the Conservatives. Why on earth would the government give this retroactive gift to the struggling pharmaceutical industry that just reported massive record profits? In another day the minister would have been the first on his feet condemning this largesse to an industry that has already been treated far too generously.

As New Democrats, we say that this is unacceptable. When we look at the history of this legislation, it is quite shocking to know that not that long ago under GATT there was no reference at all to intellectual property. In fact it was only after the Uruguay round of the General Agreement on Tariffs and Trade that intellectual property was protected in these so-called trade deals.

That is another reason why as New Democrats we are deeply concerned about the impact of the proposed FTAA, the free trade of the Americas agreement. We know what the Americans are pushing for even more protection. Let us be very clear, it is only the Americans in this hemisphere that are exporting that. It is only those big, multinational American pharmaceutical companies that benefit from this.

Is the Government of Canada and the Minister for International Trade standing up on behalf of Canadians and people throughout the hemisphere and saying to the Americans that there is something wrong with this picture and that they do not support extending the patent protection to 25 years from 20 years? No, there is not a word, not a peep. There is silence.

The trade department keeps telling us to go to its website to find out what Canada's position is. If we go to the website, under intellectual property rights is a summary of Canada's position. Where is the leadership? Is the government speaking out for consumers? Is it speaking out for the poor? This is what the department had to say on intellectual property rights.

To date, Canada has made no submissions to the Negotiating Group on (intellectual property rights). Any submission made by Canada will be made available on the website.

There is the leadership. The government has nothing to say. The Minister for International Trade has nothing to say about one of the most shameful abuses of power by pharmaceutical drug companies. That is their attempt to muscle the government of Brazil in this hemisphere into increasing dramatically the prices of drugs that are made available for people living with HIV and AIDS.

Recently there was a major victory in South Africa when under tremendous international pressure 39 pharmaceutical companies, which were suing the South African government under the WTO, were forced to withdraw that suit because it was obvious they were suffering from international shame. They were trying to tell the South African government and health ministry that they had no choice that, even in the face of a catastrophic epidemic of HIV-AIDS throughout sub-Saharan and South Africa, the interests of multinational drug companies had to come ahead of the interests of patients. Profits before patients.

In the case of South Africa, they were shamed into backtracking and with no thanks to the Government of Canada or the Liberal government. We called on them to show some leadership in a situation of absolute crisis.

There are 25 million people infected with the AIDS virus in sub-Saharan and Africa out of 34 million globally. The multinational pharmaceutical companies want to prevent them from having access to affordable drugs. That is absolutely shameful.

However we see the same thing in this hemisphere in Brazil. We know that in Brazil the government has shown some extraordinary leadership in making generic drugs available. It has had a very powerful and significant impact in reducing the incidence of HIV-AIDS. In 1994 the World Bank predicted that by the year 2000, Brazil would have 1.2 million AIDS carriers. Today there are less than half of that. There are about 540,000. There are still far too many. Thanks to the courage of the Brazilian government in taking on these multinational pharmaceutical companies, it was able to make a difference.

As New Democrats we do not want to see the intellectual property rights of pharmaceutical drug companies enshrined and enhanced in the FTAA. We want to see a new regime where people are put before profits and pharmaceutical drug companies are accountable to the people in the hemisphere and globally.

I am not speaking in any way on behalf of my party, but I often wonder why we believe that in an industry as fundamental to public health and security as the pharmaceutical industry should be driven on the basis of profit. We have a situation now in which only a tiny amount of money, something like $300 million globally, is being spent by the pharmaceutical drug industry in the struggle to find a vaccine. Why is that? Because if it finds a vaccine, it finds a cure and then shares in the pharmaceutical drug companies will not be worth as much money. There is something obscene about that.

We have a situation as well where researchers are working for this pharmaceutical drug company or that pharmaceutical drug company. They are all working in splendid isolation, not co-operating with one another and desperately trying to find what will make them more money.

I suggest that instead of accepting that the market is God when it comes to pharmaceutical drugs, it would make a lot more sense for us to say that this should be in the public domain, those who serve in the health care industry, those who research, those who try to find cures and the government. The public domain should be involved. Health care, and in particular the pharmaceutical industry, should be owned by the people not by those who seek to maximize global profits.

Once again, as New Democrats we do not accept this loss of democracy through the WTO, through the TRIPS agreement, the expansion of GATT and now the FTAA. More and more we are losing democracy in this country. More and more as elected representatives we are losing our ability to make decisions about what is in the best interests of the people who we represent. Bill S-17 is an other example of that.

As elected representatives, as members of parliament, why should we not be in a position to have a public policy debate in Canada about whether 17 years is good enough, or 20 years is good enough or whether compulsory licensing is acceptable as a means of ensuring that, as long as this is in the private sector, there is still an incentive to bring new drugs on the market? However not in a way that jeopardizes access to affordable drugs for Canadians.

That should be a decision we make. However, the Minister of Industry comes before the House and says, “Tough luck. Forget it. You no longer have an option”. As an elected government we no longer have an option. We have no choice because the WTO is forcing us to do this.

One reason why every member of the New Democratic caucus marched in the streets of Quebec City against that FTAA agenda was because we believe in democracy. The agenda of the FTAA, the WTO and GATT is an assault on that democracy. This bill is an example of that.

Instead of moving forward with this legislation, which we vigorously oppose as New Democrats, I call on the government to take a strong stand at the WTO and in the negotiations on the FTAA for affordable accessible drugs for people who are suffering from HIV-AIDS and other life-threatening diseases.

Recently, Médecins Sans Frontières called on the minister of trade not to bow to pressure from pharmaceutical drug companies to further strengthen drug patents. John Foster from the North-South Institute said “It's is absolutely tragic that the minister of trade has absolutely no position on this issue”, the issue of access to affordable pharmaceutical drugs in Brazil. He went on to say “although from prior positions we believe he goes along with United States, drug companies and those in favour of even firmer patent laws”.

We call on the government to stand up for democracy and affordable drugs. Not extend even further the patent protections that are afforded to pharmaceutical drug companies, but recognize that they have already done very well under this legislation. They say they need resources for development of new drugs, yet the reality is that these same drug manufacturers spend twice as much money on marketing their drugs, on pushing their drugs, as they do on research and development.

All hon. members have to do to see this is open the Medical Post or any other major medical journal. Our spokesperson on health has pointed out the absolutely obscene amounts of money that are spent by these companies in marketing drugs.

We also know that we are seeing more and more corporate influence in post-secondary education and universities. Recently a university professor who challenged some elements of the safety of Prozac had his offer of employment at a university in Ontario summarily withdrawn because one of the pharmaceutical companies that funds the university objected vigorously.

Corporate influence is very dangerous in post-secondary education. Corporate influence on this Liberal government is growing and is stronger than ever before.

Once again, we as New Democrats say no to Bill S-17 and yes to affordable drugs for all Canadians.

Business Of The House

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, let me begin by congratulating the opposition House leader on his appointment and to extend as well similar words of congratulation both to his seatmate, the new chief whip, and the other officials of his caucus.

This afternoon we will continue debate on the second reading of Bill C-6, the water export bill. I intend to seek adjournment of the debate after the speech from our colleague from the Bloc Quebecois on this matter.

If there is any time, we will commence the second reading of Bill C-25, the farm credit amendments bill. It would be my intention as well to adjourn the debate after the lead off speech from either the government minister or parliamentary secretary, as the case may be. We would then propose to move immediately to private members' business this afternoon.

Friday we will debate second reading of Bill C-26, the tobacco tax legislation.

On Monday we will return to Bill C-6, which will not be completed this afternoon. We will then continue with Bill C-25 for the same reason, and then, if necessary, to Bill C-26, the tobacco tax legislation, if we do not complete it tomorrow. If we have any time left, it will be spent on Bill C-10, the marine parks bill, as I previously indicated to my colleagues at the House leaders meeting earlier this week. In the afternoon we will debate Bill C-16, the charities bill. I wish to give notice pursuant to Standing Order 73(1) that the government will propose that this bill will be referred to committee before second reading. This should, in essence, take roughly the time between 3.00 p.m. and the adjournment later in the afternoon.

Tuesday shall be an allotted day. In the evening it is my intention to seek the usual co-operation to hold the second of the take note debates on the modernization of House rules. It would be pursuant to consultation with others. My intention is to see if we want to have this debate using the forum we used very successfully earlier this week, but, as I said, I intend to consult with other House leaders on that.

On Wednesday I would propose that we continue with any unfinished business from the previous days, adding thereto Bill S-16 which was introduced in the House earlier this day. Should we be ready to do so, and should time permit, I would then commence the report stage and third reading of Bill C-22, the income tax amendments bill.

Income Tax Act

[The Deputy Speaker]

The House will now proceed to the taking of the deferred recorded division on the motion at the second reading stage of Bill C-22.

Income Tax Amendments Act, 2000

[Gurmant Grewal, Canadian Alliance, Surrey Central, BC]

Madam Speaker, I rise on behalf of the constituents of Surrey Central to state our case in opposition to Bill C-22, the Liberal government's proposed changes to the Income Tax Act, the income tax application rules, the Canada pension plan, the Customs Act, the Excise Tax Act and many other acts.

Earlier this morning I spoke in opposition to the Liberal's proposed changes to Bill C-9, the Canada Elections Act. That act creates a two tier electoral system. Among other things, it discriminates against smaller political parties. The Liberals are eroding our democracy with that bill and we cannot support it.

Bill C-22 seeks to amend the Income Tax Act and statutes originally included in Bill C-43 and to put into place key aspects of the last two budgets. The bill has 31 amendments touching on a number of tax deductions and their definitions.

There are three main reasons the official opposition and my constituents oppose the bill. First, the bill fails to address the enormous complexity of the tax code. It adds further complexity to an already complex tax code.

Second, it undermines the family, particularly one income families.

Third, the tax cuts provided for in the bill fall far short of what the Canadian Alliance proposed and what the government must do to increase our nation's productivity, competitiveness and standard of living. I would like to elaborate on those three points beginning with the complexity of the bill.

The government should be moving toward simplifying and broadening the base of the tax code. Lowering the taxes of all Canadians would be easier and it would have a far more positive impact for everyone. If the tax code were simplified and if it had less exemptions, further clarification would not be necessary.

The bill adds to the enormous complexity of the Income Tax Act with its numerous amendments. Rather than simplifying the act as the Canadian Alliance would do, the Liberals continue to maintain a costly and complicated tax code.

Another reason for my opposition to the bill deals with measures in the bill that assist the tax position of families with some minimal tax reductions. Nothing is done to address the longstanding inequality between single income and dual income families. The bill increases the inequity by increasing the child care tax deduction which is only available to high income or dual income families.

The bill also erodes the legal position of marriage. By changing references of spouse to common law partner it is including same sex partners.

Even after the changes proposed in the bill, Canadians would continue to pay far too much in taxes. The mini budget claimed to cut taxes by $100.5 billion over five years. However here is the reality. It is a bit technical so I would like to go into a little detail.

From the $100.5 billion claim of gross tax relief we must subtract $3.2 billion over five years for social spending, chiefly the child care tax benefit. The child care tax benefit is a spending program delivered through the tax system. The increase in the tax benefit should not be confused with being a tax decrease as it is a spending increase. The figure above excludes indexation because indexation is accounted for separately.

We then have to subtract $29.5 billion over five years for increased CPP premium hikes. We then have to subtract $20.7 billion over five years for cancelled tax hikes, namely indexation. Indexing the personal income tax system is meant to hold the tax burden constant over time so it should not be counted as a tax reduction.

Therefore when we take into consideration all those deductions, the net tax relief is only $47.5 billion provided over five years, not immediately.

The reality of the Liberal Party's 2000 tax relief package is that it is less than half of what it claims it is and half of what the Canadian Alliance proposed during the election.

These are the realities when we do a little math and we go into detail. This is how the tax relief would work in contrast to the image of tax relief the Liberals are projecting through their propaganda. We are watching a smoke and mirrors show by the government with respect to the bill.

Bill C-22 is a 500 plus page bill. I will read it later on because it will take too long. The Liberals say the bill is concerned with administrative, technical and implementation measures. They say it implements about $100 billion in tax cuts over five years. As I demonstrated it does not. It is less than half of that amount.

The more people study the bill, the more problems they will find. The more people study the bill the more complexities it creates in the minds of Canadians. I will take the time to go over some of the points.

There are 31 amendments in the bill. One amendment is about non-resident film and video actors. It would apply a new 23% withholding tax on payment to non-resident film and video actors and their corporations, with an option to have the actors and corporations pay regular part 1 tax on the net earnings instead. This provision alone hurts my beautiful province of British Columbia where film making has become popular and is contributing to the economic well-being of my province.

Canada Citizenship and Immigration has also imposed restrictions on issuing visas to those who are trying to come to Canada to make films and make the best use of the beautiful British Columbia scenery and its facilities. This hurts B.C. Those people then go to other countries to make films. Why should they come to B.C. to make films? Many people are hoping the film industry will contribute to the prosperity of my province.

The bill deals with limited liability partnerships, replacement property rules, types of property to be considered, stop-loss loans and a capital tax. An additional capital tax would also be imposed on life insurance corporations. Foreign affiliate losses would determine the affiliate or accrual property income for a particular taxation year. It deals with a foreign affiliate held by a partnership with simultaneous control in a chain of corporations and the control of their stake. It deals with advertising expenses concerning periodicals and magazines between Canada and the United States. It also deals with trusts and the tax treatment or property distribution from a Canadian trust to a non-resident beneficiary. Further, it deals with mutual fund trusts, RRSPs and adjusted retirement income funds.

When we go into the detail of the bill, we will notice that there are more complexities, more anti-family type situations and many other things.

There is taxpayer migration which is the ability to tax the gains accrued by immigrants. It will affect the projection of the country's image with respect to future immigrants.

With reference to foreign branch banking, there would be a 15% investment tax credit for certain grassroots mineral exploration. There is the foreign exploration and development expenses and the value of foreign resource property owned. It would impose a 30% restriction for the annual deduction of new foreign exploration and development expense benefits.

There are many other points. Here is another one. There would be a foreign tax credit on oil and gas production sharing agreements. Another one is weak currency debt that limits the deductibility of interest expenses and adjusts foreign exchange gains and losses in respect of weak currency debt and associated hedging transactions.

There are many points in the bill which will further make the tax codes very complicated.

Since capitalization, it reduces the acceptable debt to equity ratio from 3:1 to 2:1 and it repeals the exemption for manufacturers for aircraft and aircraft components.

As far as CPP contributions on self-employed earnings, these amendments introduce a deduction from business income for one-half of CPP contributions on self-employed earnings with the other half of the contributions remaining eligible for the CPP tax credit.

Here is something regarding students and scholarships, fellowships and bursaries. The exemption would be increased by $3,500 for scholarships, fellowships and bursaries received by the taxpayer in connection with the taxpayer's enrolment in a program and in respect of the taxpayer claiming the education tax credit.

Here is another one for the education tax credit. It would double the monthly amounts the tax credit allows to full time and part time students based on $400 and $120 respectively.

It also affects the medical expense tax credit.

There is not one area that does not affect families, caregivers, infirm dependant tax credits, disability tax credits, child care expense deductions and so on. Therefore, I assume this bill will not only be affecting families but also those individuals and low income people.

The Canadian Mining Association supports some aspects of this bill. It supports the definition of mining property, yet it was not aware of the changes until the official opposition contacted it. The association was not consulted. It had to learn from us that the definition of mining property was being tinkered with by the government.

This is a government from behind closed doors. Surely if the government was sincere in its intention, it would have contacted stakeholders and various groups in Canada. It would have listened to Canadians. It should have understood that Canadians want the tax credits to be implemented sooner rather than up to 2005.

The bill guarantees that the basic personal exemptions will hit a minimum of $8,000 by the year 2004. The credits and relief provided in the bill are a step in the right direction, but they are baby steps nonetheless.

Efforts have been made to reduce the capital gains tax, deficit surtax, marginal rates, raise marginal income thresholds and tighten up various other rules surrounding deductions. The bill would increase and clarify the disability tax credit.

There are some good points and some bad points.

In conclusion, Canadian Alliance members would restore public confidence in the fairness of the Canadian tax system by reducing its complexity. We would restore indexation and move toward a simpler tax system built around a single rate of taxation to ensure lower taxes for all Canadians. We believe all Canadians above a minimum income level should share in the cost of the services provided by the government, which benefit all of us irrespective of income.

We hope the government will consider the amendments and what witnesses have said at the committee hearings on this bill. At this point the Canadian Alliance will not be supporting this bill.

[Keith Martin, Canadian Alliance, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, it is a pleasure today to speak on Bill C-22. I find it intriguing, listening to the debate, the completely different psychologies of our side and that of the government.

I listened to some of the comments made about the tax structure. Our party is for a progressive tax structure, not a punitive tax structure which is what we have today.

Why do we have a system where the more one earns, the greater chunk is taken away? Our party has always fought for the ability of individuals to take care of themselves and for a fair tax structure that takes the same percentage from the amount people make as they grow older. Therefore the more one makes, the more one pays, but the more one pays is not a greater percentage of what one makes.

Also what is not as well known perhaps is that our party stands for radically and dramatically improving the health and welfare of the poorest and most impoverished people. How would we do that? Simply by raising the amount of money that people would have to make before they pay taxes. That is progressive, innovative and demonstrates ingenuity.

If the government truly wants to help those who are most in need, then it would look at our single tax rate, look at the way we have articulated it and understand very clearly that it strikes a balance between helping those who are most impoverished while enabling those who are innovators to have the tools to innovate.

There is one major complaint that I think all members in the House hear when they talk to small and medium sized businesses in their ridings. That is the government takes too much money from their pockets. They generate jobs, innovate and are the major engine of economic growth in our country.

They ask us why the government is not listening. There have been reports and committees at federal and provincial levels for years. Report after report says the same thing. Canadians want the ability to provide for themselves, to pay a fair share of tax but not a punitive share of tax. Businesses want to generate the funds to hire people, to do research and development and engage in the actions that build a strong economy which enables us to have strong social programs.

One of the mythologies that has always been connected to the right of the political spectrum is that the right does not care, the left does and that the right only cares for the rich, the left cares for the poor. This is completely nonsensical.

We have shown and demonstrated over the years that the budgets put out by the members of New Democratic Party have been abysmal and the arithmetic has not added up. Instead of helping the poorest people in our society, they would actually hurt them. What they would do is raise taxes up to such a level that the ability of the private sector to function would be constricted and restricted. This leads to brain drain, the exodus of businesses from Canada and the lack of ability for businesses to get on the cutting edge in their chosen field.

Some would say we need to raise taxes even more. If we look at the European models of Sweden, Norway, Switzerland and countries that have historically been the bastions of socialism, countries that have been looked upon from the socialist left, as being the nirvana of economic thought, they not only damaged and destroyed their social programs, they gutted the soul of their countries and severely compromised their economies. This has been proven in history.

I would encourage members of the NDP to listen very carefully and look at their history books. What they ought to do is come over to the Canadian Alliance, as should members from across the House, and listen to what we have fought for over a long period of time. Indeed, the former leader of the Reform Party was an individual who was at the forefront of this and deserves a great deal of credit for doing this.

One of the major reasons I joined the party in 1993 was out of a deep concern over the state of our social programs. I did not look at the NDP for that. I chose the Reform Party. Why? Because the Reform Party articulated constructive economic solutions to enable us to have a fairer and a lower tax rate which would give our private sector the ability to generate the funds to expand. It would also provide the moneys for our social programs.

A healthy economy and a healthy private sector means strong social programs. After all, the best social program any individual could ever have is a job. Whatever we can do to strike that balance between enabling our private sector to be strong, aggressive and competitive, as well as ensuring that we have tight, strong social programs that are targeted and fair, will create the right balance.

I believe the public who is watching and members from across party lines will understand very clearly that this is something we have striven for throughout our entire professional careers here.

We only need to look at the tax differential between ourselves and the United States to see what it has done. We heard about the brain drain. We heard about the exodus of companies. Perhaps what we have not heard about is a more subtle and perhaps more insidious problem in our society. That is what this has done to the soul of our country.

Punitive tax rates erode the deep, inherent desire that all of us have to strive to better ourselves. It destroys that edge of innovation that every country needs to be competitive in a global environment. Let us not forget that we are not only competing among ourselves, within provinces and between provinces, more important we are competing with other countries. As the barriers to trade come down, which is a good thing, we will have to find our niches and be more aggressive in how we capitalize on those.

I would also re-articulate the issue of a single tax rate, not a flat tax rate, but a single tax rate that lowers and simplifies the tax system while still allowing many of the deductions that we have enjoyed in the past.

I would also suggest, and this is a personal issue, that we lower the GST. The government has never looked at lowering it, although it promised to, or simplifying it. One of the major complaints we all hear about back home is that the GST is far too complex. The amount of money that goes into managing it chews up about one-third of all the moneys received from GST. That is not an efficient system.

Personally, I would implore the government to look at ways to simplify the GST, make it a single one time per year reporting, make it more comprehensive and lower the amount by 2%.

On the issue of payroll taxes, the EI moneys that companies pay are in many ways just another tax. The government has generated billions of surplus dollars from the EI fund that we have said time and time again must go back into the hands of the Canadian people and the companies that hire them.

EI, under the guise of being a social program, is actually a tax. Payroll taxes by and large are another form of tax. What we can do is ensure fair EI payments and restructure EI into a true insurance policy.

I will also speak about charitable donations. There is a theory that the higher the taxes, the greater the desire of individuals to donate in order to receive a tax benefit. The facts prove the opposite to be true. The United States has done some interesting studies to show that the more money people have after tax, the more they donate.

Between 1982 and 1989 the marginal top tax bracket in the United States dropped substantially. The amount of money people had in their pockets increased dramatically and there was a 29% increase in the amount of money people donated. That is a huge amount.

These days, when people have less and less money and non-governmental organizations have more and more responsibility to raise money, is it not fair and equitable that the government give them a chance to take care of themselves? Is it not fair that organizations like the Canadian Cancer Society, Juvenile Diabetes Foundation Canada and others have an opportunity to raise money from the public and that the public derive the benefit from that?

We cannot take money away from non-governmental organizations while denying them the ability to raise money. The government should look at what the U.S. did in terms of enabling people to increase their donations. Again, it is about more money at the end of the day in people's pockets.

Another thing the government can do is enable NGOs and the people who donate to them to derive the same tax benefit as a person who donates to a political party. Why do people who donate to the Liberal Party or the Alliance Party receive a higher tax benefit than if they donate to the Canadian Cancer Society?

We should ensure there is equitability, that a person who donates to an NGO receives the same tax benefit as someone who donates to a political party. I encourage the government to look at that. It is quite innovative work. People in Canada who rely on non-governmental and charitable organizations would benefit enormously from such a progressive move on the part of the government.

Another thing the government can do in an age of so much new wealth is enable people in the top tax bracket to create foundations. Foundations can be an enormous generator of funds for charitable and other non-governmental organizations. Why does the government not put provisions into the tax structure that enable people to create foundations which give them control and ownership and, I would argue, efficiency in ensuring those moneys get to people in need?

Another innovative program is energy tax incentives. The United States in its budget last year put through some innovative energy tax incentives aimed particularly at reducing greenhouse gas emissions. Many of those tax benefits rest on the ability of individuals to invest in other forms of non-fossil fuels and non-greenhouse gas producing energy sources that benefit both the environment and the individuals themselves.

I encourage the government to look at what the U.S. has done. Solar power, new ways of heating homes and hybrid cars that use non-fossil fuels would all provide our environment, individuals and the organizations producing them the tax incentives that would wean us away from fossil fuels.

Our demand for energy will increase substantially. We will need alternative fuel sources. Nuclear power is a clean source, but it has an obvious downside. Fossil fuels are limited. Since greenhouse gas emissions will only increase, we must look at alternative measures. We could learn from the U.S. energy tax incentives to greatly improve our environment at home.

On the education system I encourage the government to look at another proposal from our side, the income contingent loan repayment plan. Students today face increasing difficulty in finding the money to pay for their education.

I am a physician, but I could not have gone to medical school if costs had been what they are today. Tuition fees at my alma mater are now more than $12,000 per year. There is no way, given the socioeconomic conditions I grew up in, that my family could have afforded the fees. That is the situation students across the country are facing.

We are now seeing a very dangerous situation in which professional faculties are becoming the purview of the rich. A recent study looked at family incomes at various schools, and I will take the University of Western Ontario as an example. The study found that over the last four or five years the average family income went from $60,000 to more than $120,000 for students entering medical school at the University of Western Ontario. That pattern is borne out across the country and in other professional faculties like law and dentistry.

People in lower socioeconomic groups who want to enter professional faculties face an economic obstacle. Gaining access to professional faculties is no longer an issue of merit or competence. It is becoming an issue of how much money one's parents make. This is a critical issue that must be dealt with now. It is an matter of fundamental fairness for a country that prides itself on equality for all people regardless of socioeconomic condition.

The situation will only get worse. I encourage the Prime Minister to call together the ministers of education across the country to urgently look at the matter.

The shortage of professors and faculty members is also an issue now and will be one in the future. Across the country the dearth will become critical. It is so bad now that universities and post-secondary institutions have sent out a clarion call for help. We must find innovative ways to train and retain individuals who can teach and work in our post-secondary institutions. A professor cannot be trained overnight. It takes at least seven years.

I encourage the government to raise the issue at a first ministers conference as soon as possible. It will take years to deal with it, but it must be done for the sake of our youth and our economy. The economy is predicated on hiring and training good, competent individuals. If we cannot train people of excellence our economy will face a fate we do not want to contemplate.

Lastly I will address the issue of accountability. My colleagues have raised the issue time and time again. A backbench member of the Liberal government articulated a solution with which it is difficult to disagree. The individual quite intelligently raised, as have my colleagues, the fact that we do not know where our money has been spent.

We need to know the amount of money going in, where it is spent and what the output is. Whether we are talking about health care, agriculture or the environment, we need to measure this. There are ways it can be done.

Every ministry ought to be on a spreadsheet so that a deputy minister would know, if asked, where the money has gone, how it was spent and have a way of measuring the output. That is what we want and what the public wants. If we are to build an effective public service we must do that.

The government has been very clearly asked to do this by the Clerk of the Privy Council. He has asked for an urgent indepth look at our public service and how we can make it more efficient. The good people who work in our public service urgently need that as well. We must find ways of innovating and allowing members in the public service to put their incredible talents and intelligence to the best use.

I will again draw attention to something Mr. Gore did when he was vice-president. President Clinton asked Mr. Gore to rejuvenate the public sector. Mr. Gore did something I thought was quite innovative. He told public sector members they had carte blanche to do the right thing but with certain restrictions. He then gave them a card listing the restrictions.

We need to be able to unleash the power of our public service. We need to increase its efficiency and accountability. We need to streamline it so we have an efficient public service that works for the public good.

I know my time is up. I will close by saying that the bill, while it moves in the right direction, should have come out three years ago.

[James Moore, Canadian Alliance, Port Moody—Coquitlam—Port Coquitlam, BC]

Mr. Speaker, we were in the questions and comments phase of the discussion. I have largely concluded my comments so I would entertain any questions.

However, I did want to remind the government of the issue of brain drain and the further complications in the tax code that Bill C-22 presents. I will give the example to the House of my own family.

My brother-in-law lives in Louisiana. My sister lives in Atlanta. They are part of the brain drain. In the 19th century, the great exodus of Loyalists to Canada on the underground railway had a song they used to sing. It was called Follow the Drinking Ground . The chorus of the song is:

So long old master Don't come after me I'm heading north to Canada Where everybody's free

That was the chorus of the song they sang when they came to Canada because Canada was the place where everybody was free.

Since then it is astonishing how things have changed. The underground railway has turned into a highway heading south, by which the best and brightest leave the country. They leave this country for better opportunities.

My own sister is an example of that. She has a degree in communications in French from Simon Fraser University and she is in Louisiana helping Canadian firms that are trying to sell Canadian products in the French Bayou country. She is a Canadian earning her keep in the United States because this country does not treat her the way she thinks government really should treat its best and brightest.

The United States has a better environment for cultivating, sustaining and taking care of the best and brightest in their country. The Americans treat young people as a resource.

In this country we do not get that. The finance minister brags in the House of Commons day after day about the fact that we have a balanced budget, but he does not give credit to the people who balanced the budget: young people, entrepreneurs, the best and brightest, small business owners, families, the people who sacrifice, and people in the university departments like the small university I went to, the University of Northern British Columbia, which has a crisis in its entire financing structure because of the government.

We have a balanced budget for a whole host of reasons, like the hospitals that get shut down because of this government and like the overtaxation of small businesses. The government stands atop a dustbin of bad decisions. It stands atop the rubble of bad financial decisions and atop the shoulders of small businesses and says that because of the government and its decisions Canada has a balanced budget. Canada has a balanced budget because of nothing government has done. We have a balanced budget because of a whole host of reasons, which frankly the government does not control. The finance minister and the Prime Minister do not appoint Alan Greenspan. They do not decide the economic growth rates of the United States. They opposed free trade. They increased taxes. They increased the payroll taxes that kill jobs and the Canada pension plan. They are driving the best and brightest out of this country.

They talk and brag about balancing the budget and about bills like Bill C-22 that we are debating today, but Bill C-22 goes in the wrong direction. It further complicates the tax code. It makes it less likely that people, entrepreneurs and builders, will want to stay here because they see that this country will be something they want to be part of in 20 or 30 years. That is not good enough.

I would love to see the day when we go back to that chorus of the underground railway, where Canada is an enterprise state, where we can sing that chorus again and be proud of it. For the government members who just walked in, I will remind the House of what that chorus is:

So long old master Don't come after me I'm heading north to Canada Where everybody's free

We need economic freedom and political freedom. We do not have them, we deserve them, and if we do not, we are only sacrificing our future.

Business Of The House

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I am pleased to answer what is undoubtedly the most thoughtful question asked thus far today.

This afternoon we will continue with Bill C-22, the Income Tax Act amendments proposed by the very excellent Minister of Finance. Then we will deal with Bill C-4, the sustainable development foundation legislation. Tomorrow we will do report stage and third reading, hopefully, of Bill C-12, the Judges Act.

On Monday, April 23, we shall call Bill C-13, the GST technical amendments. We will then follow this with the organized crime bill, introduced earlier today.

Tuesday, April 24, will be an allotted day at which time members could raise such issues as softwood lumber, as they perhaps should have last Tuesday when it was an opposition day and other less significant issues were raised.

On Wednesday, April 25, we will begin with third reading of Bill C-9, the Canada Elections Act legislation.