Bill C-26 (Historical)

Tobacco Tax Amendment Act, 2001

An Act to amend the Customs Act, the Customs Tariff, the Excise Act, the Excise Tax Act and the Income Tax Act in respect of tobacco

Tobacco Tax Amendments Act, 2001

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I appreciate the opportunity to address the House at third reading of Bill C-26, the tobacco tax amendments act, 2001. The bill would implement the tax elements of the comprehensive new tobacco strategy that was announced on April 5 by the Minister of Finance, the Minister of Health and the solicitor general.

The new strategy is designed to improve the health of Canadians by reducing tobacco consumption, especially among youth, which is one of the government's national health strategies. The new strategy represents the most comprehensive anti-tobacco program in Canadian history.

The strategy includes increased spending on tobacco control programs as well as tobacco tax increases to discourage smoking. Under this strategy, tax increases are linked to a new tobacco tax structure designed to reduce the incentive to smuggle.

The new tobacco tax structure builds on the 1994 national action plan to combat smuggling, which has proven to be very effective in reducing the level of contraband activity and restoring the legitimate market for tobacco sales. The main element of the new tax structure is a replacement of the current tax on exports of tobacco products, which was implemented under the 1994 action plan, with the new two tiered excise tax on exports of Canadian manufactured tobacco products effective April 6, 2001.

Under the new export tax, all exports of Canadians brands of tobacco products would be taxed, thereby reducing the incentive to smuggle exported products back into Canada.

The new tax would be two tiered. A tax of $10 per carton of cigarettes would be imposed on exports up to a threshold of 1.5% of a manufacturer's annual production. A refund of tax would be provided upon proof of payment of foreign taxes. This measure would help avoid double taxation of these products when they enter legitimate foreign markets.

Exports of Canadian tobacco products over the threshold would be subject to the current excise duty on tobacco products and a new excise tax which in total would amount to $22 per carton of cigarettes. There would be no refund on the second tier of export tax.

The new export tax structure would remove any incentive to bring Canadian tobacco products back into Canada illegally and would help set the stage for future tobacco tax increases.

Another element of the new tax structure affects people who travel. The government believes that all Canadian brands of tobacco products should be taxed regardless of where they are sold. Allowing Canadians who travel to continue to have access to low cost, tax free tobacco, either through duty free shops or the traveller's exemption, would be inconsistent with the government's strategy of raising tobacco taxes domestically to achieve the government's health objective of reducing smoking.

With the bill, Canadian tobacco products delivered to duty free shops and ships' stores, both at home and abroad, would be taxed at a rate for cigarettes of $10 per carton effective April 6, 2001. Furthermore, the traveller's allowance is being amended to ensure that returning residents can no longer bring back tax and duty free tobacco products. Effective October 1, 2001, a new duty of $10 per carton of cigarettes would be imposed on these products when they are imported by returning residents.

To ensure that Canadian residents are not subject to double taxation when they return with Canadian tobacco products on which tax has already paid, neither this duty nor regular excise duties and taxes would apply to tobacco products with a Canadian stamp, signifying that excise duties and taxes have already been paid. Non-residents would not be affected by the change to the traveller's exemption.

These measures would help meet the government's goal of reducing tobacco use.

Increasing tobacco taxes is another key component of the new strategy to combat the use of tobacco.

The federal government is increasing taxes, along with the five provinces that followed the federal government's lead when it reduced tobacco taxes in 1994. Effective April 6, 2001, combined federal and provincial taxes will increase by $4 a carton for cigarettes sold in Ontario, Quebec, New Brunswick, Nova Scotia and Prince Edward Island.

The increases would restore federal excise tax rates to a uniform level of $5.35 per carton on cigarettes sold in Nova Scotia, New Brunswick and P.E.I. The amount would be equal to the current federal excise tax rate in the provinces that did not reduce tobacco taxes jointly with the federal government in 1994.

This would be the fifth increase in tobacco taxes since 1994 and would raise federal revenues from tobacco products by $200 million annually.

Bill C-26 would also increase the surtax on the profits of tobacco manufacturers to 50% from 40% effective April 6, 2001. This surtax currently raises about $70 million annually. It would now raise an additional $15 million each year.

Before closing, I want to mention briefly that the government is providing additional resources in the amount of $15 million the first year and $10 million each year thereafter to help federal departments and agencies monitor and assess the effectiveness of these new tax measures in reducing smuggling.

The bill would implement fundamental changes in our tobacco tax system which would enable the government to use higher tobacco taxes to reduce smoking.

The new tobacco tax structure will reduce the incentive to smuggle Canadian-produced tobacco products back into Canada, and the resulting tax increases will help the government to meet its health objectives.

The new structure also sets the stage for future measures.

This new strategy demonstrates the depth of the government's commitment to reducing tobacco use. I encourage my hon. colleagues to give their full support to the bill.

Business Of The House

[Marlene Catterall, Liberal, Ottawa West—Nepean, ON]

Mr. Speaker, I rise on a point of order. I think you would find that the House is eager to give unanimous consent to the following motion. I move:

That, notwithstanding the decision taken by this House earlier today with respect to the third reading of Bill C-26, when debate on Bill C-10 is completed this day, the House shall revert to consideration of the third reading stage of Bill C-26, provided that, at 6.30 p.m. today, Bill C-26 shall be deemed to have been read a third time and passed.

Committees Of The House

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

Mr. Speaker, I have the honour to present the seventh report of the Standing Committee on Finance regarding its order of reference of Friday, April 27 in relation to Bill C-26, an act to amend the Customs Act, the Customs Tariff, the Excise Act, the Excise Tax Act and the Income Tax Act in respect of tobacco. The committee has considered Bill C-26 and reports the bill with amendment.

Business Of The House

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

Mr. Speaker, I believe it is the first opportunity I have had to respond to the hon. member in that capacity. Let me begin by congratulating her on the position she holds.

This afternoon we will continue consideration of Bill S-11, followed by Bill S-16 respecting money laundering. As a matter of fact the debate on Bill S-11 may have collapsed just before question period. That means we will start with Bill S-16 respecting money laundering, followed by Bill C-14, the shipping legislation. Afterward, if there is any time left, we will resume debate on Bill C-10 regarding marine parks.

On Friday we will begin consideration of Bill C-22 respecting income tax amendments at report stage and third reading. We will then return to the list I have just described should we not have completed Bill C-14, Bill C-10 or Bill S-16, for that matter.

On Monday next, if necessary, we will resume consideration of Bill C-22, followed by Bill C-17, the innovation foundation bill, at third reading. We will then return to the list that I described a while ago.

On Tuesday it is my hope that we will be able to commence and hopefully complete the third reading of Bill C-26, the tobacco taxation bill, as well as the second reading of Bill C-15, the criminal code.

Next Wednesday it is my intention to call Bill C-7, the youth justice bill at report stage. We also hope to deal next week with Bill S-3 respecting motor vehicles, Bill C-11, the immigration legislation, if reported, and Bill C-24, organized crime. As well there has been some discussion among political parties and hopefully we can deal with Bill S-24 respecting the aboriginal community of Kanesatake at all stages in the House of Commons, provided that it has been reported to the House from the other place.

Tobacco Tax Amendments Act, 2001

[Rob Merrifield, Canadian Alliance, Yellowhead, AB]

Madam Speaker, it is a great privilege to speak to Bill C-26 concerning the raising of taxes on cigarettes.

My position is not an easy one to take. When I consider raising taxes I swallow rather hard. Canadians are hurting desperately because of the taxes they pay, and imposing even more taxes cannot be healthy for the country. However the bill is less about raising taxes than about stopping the use of cigarettes. It is a health matter.

The use of cigarettes in our country has become a serious health issue and it must stop. I have been involved in the health care system for many years. When I talk with my counterparts I understand that one in six patients has a tobacco related problem. Canada has a critical problem with its health care system and cigarette smoking.

However to suggest that increasing cigarette taxes will solve the country's health care woes is misguided and dangerous. It is only one piece of the puzzle. We need to look at the whole puzzle and determine what must be done to change the paradigm and the way people think about tobacco use.

It would be better to ask where cigarette taxes are being spent. If they are not being spent to determine the health dangers of cigarettes then we have a serious problem. We need a game plan that does more than raise taxes because that is not the whole issue. The issue is about stopping cigarettes and the damage they do to the health of Canadians.

We should ask whether that can be accomplished. My father smoked all his life. I look at kids today and think of when I went to school and how difficult it was to discern whether or not to smoke. I was saved because of a basketball team and a coach who decided that if we smoked we would not be able to play. Those were the issues.

Teenagers are very vulnerable. The battle is about who will win the minds of our children with regard to cigarettes: the tobacco companies which are putting more and more nicotine into their cigarettes so they are more addictive, or the government which should address the issue in an educational sense so that teenagers know they are becoming victims rather than exercising free choice.

I believe a society should have free choice and that we should stop victimizing the weak. Someone who starts smoking at age 13 will have spent $15,000 on tobacco by age 30. That is a down payment on a good home or half the price of a good car. That does not even take into account the health effects of smoking.

Tobacco companies in Canada reap $260 million in profits every year from the sale of cigarettes to teenagers. Ninety per cent of those who start smoking do so between the ages of 13 and 20. That is where the battle must be fought. Approximately 28% of teenage girls in Canada smoke cigarettes.

The real question is whether we can win the war. Can we win the battle at that level? Let us look at the example of alcohol. Massive education campaigns have seen drinking and driving in Canada decline dramatically from what it was a couple of decades ago.

We have to be careful when we look at other countries and examine what they are doing. What California has done is worthy of note. It has put the pieces of the puzzle together a little more than we have here in Canada. As a result it has moved its percentage of teenage smokers from 30% down to 9% today. That is a success story that we need to perhaps model ourselves on and improve on, because it is an area that we have to look at.

The whole area of health care is something I would like to address because it is a bigger picture issue. We need to understand that if we are to address efficiencies in health care and sustain a health care system, we have to look at the bigger picture of preventative health. Since the seventies we have been talking about preventative health and yet I see very little effort directed to doing something about it.

The bill moves very slightly in that direction, but we have to recognize that as the baby boomer bubble hits our health care system we have to do more than just add funds to the system and stop the crisis management of health as Canadians end up in our emergency wards or clinics. To start with, we have to look at preventing them from becoming ill. That is something we have to look at in a bigger scheme. To do that we must recognize how smoking impacts our health care system. We have to realize that $3 billion is spent in direct costs for hospitalization and physician time in regard to smoking, and another $8 billion is spent in lost productivity in the workplace. Those are amazing figures.

Labour Canada estimates that it costs between $2,300 and $2,600 more to employ an individual who is a smoker. The rate of absenteeism in the workplace has increased because of it. Life insurance premiums have also gone up. Not only is there a productivity cost due to smoking, but there are other direct costs. These are the things we do not really recognize.

We have to get to the teenaged mind. Teenagers need to understand that not only is it costly to smoke and not only does it stink, and in more ways than one, but there is very little upside to smoking and to becoming addicted to something that will harness them to an addiction they cannot escape. I have talked to a lot of people who smoke. Very few of them want to smoke. Most of them want to quit, for many reasons.

Yesterday I had five individuals in my office. One of them was the president of the Canadian Dental Association. I have never thought about cigarettes and their effect on dentistry. These people came to my office to talk about cigarettes and what they see as they look into the mouths of Canadians. What they see is that baby boomers keep more of their teeth as a result of accomplishments in the dentistry field. However, they are suffering from far more cancers because of their cigarette smoking. Dentists are very concerned with the amount of gum disease and cancers of the mouth that they see brought on because of cigarettes.

I want to impress upon the House how important it is that we look at funding a plan to address teenage smoking. Just raising the cost of cigarettes is not the issue. If we took the money raised and put it into such a plan, Canadians would support it much more.

Here is what amazes me and why I ask the House to implement such a plan. The bill was introduced once before. Now it takes 40 pages to introduce the legislation and 50 pages to explain why. I am a little suspicious. It was introduced in 1998 by the Senate and supported at that time by the health minister. Unfortunately the Speaker of the House did not support it because he felt it was a taxation issue, not a health issue. Obviously this is a health issue and not a taxation issue.

It is a little suspicious to see the turnabout in the minds of the members next to me in the House, because they have to address this as a health issue. I am a little suspicious about how fast this is happening and about what kind of energy is behind it. If we do not address it as just one piece of a very large puzzle, then we will have missed our opportunity.

The House needs to examine it as not just a taxation issue but a health issue, one that has to be addressed in our country. We cannot fail in this one. We owe it to our teenagers and to the next generation. We owe it to them to sustain our health care system.

[Bev Desjarlais, NDP, Churchill, MB]

Madam Speaker, I am pleased to have the opportunity to speak on the bill today. There has been much work done on behalf of the Standing Committee on Health. I recognize that the government is making efforts to improve the situation to reduce smoking among Canadians. Also, our health critic, the member from Winnipeg North Centre, has been very active and keeps us abreast of everything that has been going on.

I am not going to dwell so much on Bill C-26 as to the specifics of it. We are going to support the bill. Any incentive or anything we can do to decrease the opportunity for young people to begin smoking and to discourage people from smoking, is definitely the route to go.

I have no shame in admitting now that I started smoking when I was 12 years old. By the time I quite I was smoking a pack and a half to two packs a day. I could barely breathe when I got up in the morning. I did not have the guts to go to my doctor and say that I had a problem with my lungs. My biggest incentive to quit was not being able to face my doctor and listen to him give me a good tongue lashing over the fact that I was smoking and complaining about not being able to breathe. It took a number of attempts but I have not smoked for close to 20 years. I have had my moments when it seemed like a not so bad idea. Maybe price is a deterrent but I am not sure.

I certainly think we must do everything to discourage people from smoking. I have to admit I am truly concerned that this increasing will just not cut it. I have seen young people buying one cigarette at a time from someone down the street. For 25 cents a cigarette, children as young as seven or eight years old can pick up a cigarette from certain people they know.

We all know that video games, trips to the arcades and little hand held Game Boys are a lot more expensive than a 25 cent cigarette. Those same young people, who have money for those things, are the ones who are out there buying the cigarettes. They may not have to pay the $6 or $7 a pack but they can buy them individually a little at a time. It is not hard to find a quarter lying around in the shopping carts or wherever. There will be money available for that.

What is of the utmost importance is that we have proper education in place and that we have proper pharmaceutical supplies available, whether it be Nicorette or the patch. It is important to have these available to assist people when they do want to quit.

I tried to quit a number of times and I know there are people out there, even teenagers, who by the time they are 16 or 17 are thinking about quitting but they cannot afford buy a box of Nicorette. I am sorry to use just Nicorette but it is the only name that comes to mind. I am not giving them advertising and I am not getting paid for using that product. A lot of people want to quit but they cannot afford to buy Nicorette or the patch. They do not have a prescription plan available where they can go out and get it. As a result it makes their job to quit that much harder.

What I personally would like to see is a more sincere effort to dedicate dollars to education and to help people quit smoking. Maybe what we need is dollars or legislation to say to those tobacco companies that they will have to pay for all of the products that people who smoke need to use to help them quit. They should be required to pay for the oxygen required when someone's lungs get so bad they cannot breathe because they are responsible for it.

Tobacco companies, after all these years, now admit, for the most part, that they deliberately encouraged people to take up smoking and made it habit forming by increasing the concentration of certain chemicals within the cigarette. I would much rather see an increase in education than an increase in the cost of cigarettes.

To those of us who do not smoke, no one complains more about a smoker than someone who has quit smoking. I know a number of smokers who want to quit but who have a hard time quitting. They do need help and we need to provide that help. Increasing the price of cigarettes will not make their lives any easier. Granted, we should not hand cigarettes to them at will. They do need to pay a reasonable price because of the additional health care costs, not just for smokers but for others around them, associated with secondhand smoke and numerous other factors.

Children in homes of people who smoke are jeopardized. I wonder if at some point we may need to seriously consider whether we are injuring our children by continuing to smoke or having them in smoke filled places. We need to decrease the opportunities where people are able to smoke or where they inhale smoke, but slamming an increase in the cost of cigarettes on smokers will not do it. We need to have the dedicated dollars.

One of the issues that I get the most mail on, to the credit of Senator Kenny, is his bill. I have received literally hundreds and hundreds of letters supporting Senator Kenny's bill to ensure that dedicated dollars go to education. Recognizing that there is that support, we need to push along in those areas and dedicate dollars. People do not have faith that the government will use tax dollars for the benefit of health care, to assist smokers and those around them, and perhaps look after the environment.

Instead of creating a bullheadedness between smokers and non-smokers, between tobacco industry workers and those opposed to smoking, we need an alternative plan for those workers and alternative uses for tobacco other than smoking, so that we are not creating these head on forces. We do not need these divisions with smokers literally cursing every non-smoker around. This might make smokers put more of an effort into trying to quit.

I wish it could be quicker but I think we are a long way from a generation of non-smokers unless we seriously commit to educating people and deceasing the number of places where people can smoke. One of the best routes that we have taken which has had the most impact is having fewer places where it is okay to smoke. It is wonderful, even for smokers, to enter a place that is not filled with a haze of smoke. Our eyes do not get as sore. Smokers have to go outside for a smoke but overall even smokers appreciate the curtains and the ceilings not being covered with smoke. Smokers appreciate areas where there is non-smoking as well.

Those are the things that we need to be doing, along with possibly increasing the cost of cigarettes.

[Wendy Lill, NDP, Dartmouth, NS]

Madam Speaker, we have room to further increase the cost of cigarettes without bringing about a massive smuggling effort. As I said, the cost of a carton of cigarettes in Maine is $60.31 Canadian. With the addition in Bill C-26, we would still not see our cigarettes go up that high. We would see a range anywhere from $54.38 to $37.00 in Ontario. Quite frankly, we need to put the prices a lot higher, then I think we would see a decrease in availability and a decrease of young people starting the habit.

[Wendy Lill, NDP, Dartmouth, NS]

Madam Speaker, it is my great pleasure to rise today and support the steps being taken in Bill C-26, an act to amend the various acts including the Customs Act and the Income Tax Act in respect to tobacco.

Everyone in this Chamber knows that smoking kills. Everyone knows that more needs to be done to help those Canadians addicted to nicotine to quit smoking. More needs to be done especially to stop our kids from starting to smoke. Our goal in this place should be a smoke free generation.

Ways in which this can be done are to make this dangerous substance cost more, take away the incentives of tobacco companies and often less savoury organizations from making huge profits through smuggling, increase the taxes on what profits tobacco companies make and hopefully to divert the funds allocated to fight tobacco use in our population.

Bill C-26 is a step in this direction and I commend the government for that but, and yes there is a but, there is much more to do.

The tax increase on tobacco could and should have been higher. I believe higher prices are a major deterrent to smoking, especially for young people. The tax increase has been far too timid. We need just look across the border at the United States.

The price for a carton of cigarettes in Maine is $60.31 in Canadian dollars. In New York state a carton in Canadian dollars costs $65.21. In Michigan a carton costs $59.00 in Canadian dollars and so on. What would the price of a carton of cigarettes be in Canada once this bill is in effect? Our prices would range from a high of $54.38 in Newfoundland and Labrador to a low of $37.00 in Ontario. There is more room to tax smokers without the terrible fear of smuggling, which dominated the headlines in the early 1990s.

The government's use of an export tax, once again a bit timidly, is a welcome step in allaying the fears of the development of new booming cigarette smuggling operations. The financial measures contained in Bill C-26, including the clauses on taxing duty free cigarettes and eliminating the traveller's exemptions, are only the first steps to protecting ourselves, our neighbours and especially our children.

I commend the excellent work which has been done by organizations, such as the Canadian Cancer Society, the Canadian Council for Tobacco Control, the Canadian Lung Association, the Heart and Stroke Foundation of Canada, the National Cancer Institute of Canada, the Non-Smokers' Rights Association and the Physicians for a Smoke-Free Canada, in developing an implementable plan of action which the government can use to further reduce tobacco consumption in our population.

I also feel compelled to congratulate Senator Kenny and my colleague from Winnipeg North Centre for their outstanding individual contributions in the fight against tobacco.

One of the most constant and recurring themes that these organizations and individuals have recognized as a priority is the need for adequate and sustained funding for tobacco control. The government currently takes in billions of dollars in taxes on cigarettes but does not spend anywhere near as much to directly discourage smoking. These organizations say that at least $360 million is needed to fight against smoking but the government has refused to commit those funds.

While I reluctantly support Bill C-26, I wholeheartedly support Bill S-15, a bill that has the seeds of a comprehensive anti-smoking plan and a funding mechanism through an arm's length agency. Bill S-15 would create a $360 million funding stream through a dedicated levy taken from tobacco manufacturers to an arm's length agency which would be committed to implementing real tobacco control programs aimed specifically at young people.

Frankly, I would love to stand in this place and say we do not need any arm's length agency to deliver unnecessary health policy, but the government has shown itself to be playing both sides of the tobacco fence in the past. Too many lives are at stake to trust this initiative to politicians. We need these things.

I do not wish to leave the impression however that nothing has been done up until now. I commend the government for the new bigger warning labels on cigarettes, and I look forward to them bringing in labels on alcohol bottles.

I commend the government for ending tobacco advertising even though I know the real pain that this initiative caused for many arts organizations across the country. I also know that most arts organizations never liked accepting tobacco money but they were given no alternatives after years of Liberal cuts to the arts.

The steps in Bill C-26 are not enough to move us toward a smoke-free generation. We need to support community initiatives aimed at making smoking uncool to young people. We need to work with all jurisdictions to make public places and all work places smoke-free. We need fund multitudes of community initiatives to help those addicted to tobacco quit. We need to eliminate the opportunities for our children to start smoking.

In short, we have to get a lot more radical on this front. I am not going to quote the horrific financial costs, both personal in health terms and as a country, that Canadians suffer due to tobacco. I am sure we all know them here, even the smokers. I will continue to urge the government to see Bill C-26 as only a small step towards this effort. Furthermore, New Democrats will continue to push for Bill S-15 hopefully with improvements.

It is going to take real sustained funding programs, creativity and tenacity through many anti-smoking initiatives to lead us to our first smoke-free generation. Let us get to work on it.

I will be splitting my time, Madam Speaker, with the hon. member for Churchill.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, if I understood correctly, the Liberals do not want to know the truth about the Auberge Grand-Mère. That is really what we heard. Nor do they want the lease to be tabled in the House. They do not want to see for themselves that the Prime Minister is talking through his hat when he says there was no financial connection between the auberge and the golf club after 1993. It is rather strange, but I will now get back to my remarks about Bill C-26.

I must say at the outset that Bill C-26 contains good measures to fight tobacco consumption. It provides various instruments, including a tax increase on tobacco products in general and on cigarettes in particular.

We support this bill. Why? Because tobacco kills. But before it kills, it creates considerable costs for our health system. These costs run into the billions of dollars every year. Tobacco kills through various smoking related diseases.

There is emphysema, heart disease and myocardial infarction in particular. There is lung cancer. There are strokes, many of which are linked to smoking.

In the end there are over 40,000 deaths a year in Canada caused by smoking.

There are still too many people smoking today. There are still too many people uninformed. There are still too many people today, especially young people, who are beginning to develop this bad habit of smoking.

And yet, tobacco kills. It is a real poison. According to the Canadian Cancer Society, there are a variety of components to cigarettes, chemicals, which should be made known to those who have the bad habit of smoking.

They are real poisons. To name but one, tar in cigarettes by itself contains 4,000 chemical compounds, 4,000 noxious compounds. Nicotine is the worst element in a cigarette causing dependency, because of its high level—between 5 and 7 milligrams per cigarette—of such magnitude that it is likened to cocaine and heroin dependency.

I know what it is like to break a habit like smoking because I myself smoked for many years. Given the withdrawal symptoms that one can experience over a long period of time, I know whereof I speak.

Cigarettes, and tobacco in general, contain acetone. This substance is normally used as a paint stripper. This is what one is inhaling along with cigarette smoke.

Cigarettes also contain methanol, something else one is inhaling. Methanol is wood alcohol, one of the most potent alcohols on the market. Tobacco also contains acetylene, another chemical, which is used to fuel flares. This is what one is inhaling in tobacco products.

One is inhaling hydrocyanic acid, which is used in gas chambers, benzene, a very strong solvent on the market, and ammonia as well. When one smokes a cigarette, one is breathing in ammonia. This is a colourless gas used for cleaning. I think that everyone is somewhat familiar with this chemical, which is extremely harmful if inhaled. It is very bad for the health.

Cigarettes also contain mercury, lead and cadmium. These are the substances one is inhaling when one smokes a cigarette: three highly toxic heavy metals. There is also carbon monoxide. Everyone has heard of carbon monoxide, a colourless, odourless and deadly gas. Nitrogen oxide, a toxic gas, is also present.

In short, if we could conduct an aggressive information campaign to provide this kind of fundamental data and make an analogy with a poison cocktail, we could not find anything more appropriate.

Imagine a large glass in which there is a certain amount of tar. This is the viscous, yellowish liquid which becomes black once it has been mixed with other products and which is used on roofs. Imagine a large glass with some tar in it.

Imagine another glass in which there is acetone and two or three spoonfuls of paint remover to enhance the flavour. To this, we would then add wood alcohol, a product used for torches, and hydrocyanic acid. We would also pour some acid into our explosive cocktail. And benzene, which is a solvent. We would also put a certain amount of heavy metals into the same glass. We would mix the whole thing with some ice and give it to someone to drink. This is the image that we should bear in mind whenever we light up a cigarette. This is what we are inhaling.

The fundamental question that I ask myself is: Would we give that cocktail to our children to drink? Would we be able give that explosive mixture, that poison which I just described, to our children to drink? This is what is happening.

Since the end of the eighties, the only age group that has significantly increased its tobacco consumption is the 15 to 19 year olds. Where are the parents? We must provide that information, but we must also have it. I could not give that to my child. I could not accept that my child would take such a quantity of poison. Yet, according to statistics, this is what is happening.

As a society, we have an obligation to act. In the case of young people aged 15 to 19, statistics on tobacco since the end of the 1980s are staggering. At the end of the 1980s, the percentage of habitual smokers among female teenagers 15, 16, 17 and 18 of age 24%. Today, it is 31%, an increase of almost a third since the end of the 1980s and early 1990s.

This is cause for concern, when one considers the devastating effects of tobacco. At the end of the 1980s, 21.6% of teenagers aged 15 and over smoked. Today, it is 27.2%.

This too is a cause for concern because we know that diseases that can be developed, like emphysema, myocardial infarction, lung cancer and even strokes are linked to a lifelong investment, from youth to maturity. It is a cause for concern when teenagers, who will become young adults and mature adults, are increasingly becoming smokers.

I believe we should take urgent action to put an end to the deplorable increase of smoking.

I was recently reading a report that showed that the situation with young people between the ages of 20 and 24 is stable but a stable catastrophe is still a catastrophe. When one looks at the data for young people between 20 and 24, and these are young adults we are talking about here, it is surprising to see that 39% of men and 32% of women in that age category are still smoking.

Again, when people hit 40 or 50 years of age, which is the time when tobacco illnesses surface, they end up with the health they built in their youth. If they neglected their health when they were young, it will not improve as the years go by.

What I am trying to say is that starting to smoke at a young age is a negative investment in one's health. It is a bad investment in one's health that can cause two major problems: first, it ensures a slow and painful death, and second, society has to pay for one's bad habit and one's choice not to quit.

Smoking kills and it costs billions of dollars in health care and other services. That is something those with government responsibilities have to bear in mind.

When the packaging of cigarettes and the horrible and repulsive pictures to be displayed on the cigarette packs were debated in the House, the Bloc Quebecois tabled a report containing a number of recommendations to better discourage smoking.

We, of course, recommended an increase in taxes, which has proven to be an effective tool. It has been proven in the past that tax increases have a deterrent effect on young people. Young people do not have a lot of money, particularly 15, 16 and 17 year olds.

We also said that putting photos on cigarette packs and increasing taxes was not enough. We need other solutions, such as requiring cigarette manufacturers to reduce the nicotine content of cigarettes.

As I was saying earlier, there are hundreds if not thousands of toxic products in a cigarette but nicotine is the one chemical that creates addiction. It is as addictive as cocaine or heroine. This should be our first priority so that young people who try that first or second cigarette do not become addicted.

There are means of reducing the nicotine level which, according to various scientific studies, should not exceed five milligrams a day for a person not to get addicted to cigarette smoking.

Members will certainly remember the scandal. If the tobacco industry was able to increase the nicotine level to get more people addicted to their product, an act which is totally reprehensible, irresponsible, appalling and despicable, it means that science is sufficiently advanced to enable the industry to lower the nicotine level. It could be a first step toward helping people to quit smoking or preventing them from becoming addicted to smoking.

Funding for anti-smoking campaign has to be increased as well. At the moment, some $40 million is spent on developing awareness. With new tax money available under C-26, $100 million could be set aside. There is an urgent national need to do so.

With slightly less than 30% of the population still smoking, still having the habit, and with the mortality rate of the various smokers' illnesses, and increased smoking by young people, it seems to me it would be worthwhile investing a little more money there. Instead of swelling surpluses or the government's consolidated fund, it seems to me that it would be a good idea to invest this tax surplus in information, training and public awareness, not only among children and adolescents, but among parents as well.

As parents, we have huge responsibilities and we cannot know everything. Despite all the information campaigns, I think there are still parents around, as there are adolescents, who are not completely in the picture about the problems of smoking and all its ins and outs. They are also unaware of the consequences of this bad habit smoking. We have to lay it all out in order to change these habits.

In the past 20 years, progress has been made. Fewer people smoke but there are target groups. Budgetary resources must be deployed such as information resources and educational resources, to ensure that there is reinvestment in health so that we do not end up 20 years from now with the same problems we have had for the last 20. I am thinking of such things as the increasing incidence rates of lung cancer, emphysema and stroke. Something must be done.

Our second recommendation at that time, and one I believe is still current today, was additional funding. There will be new funds connected with the new taxes imposed by the Minister of Finance on smokers and on the tobacco industry. Please, let us use this money to invest in the health of our young teens. It seems to me this would be a good thing to do.

Our third point was that smoking is not the only thing that creates victims, so do changes to the industry. If government continues its approach—and I choose this terminology because we are talking about smoking here—to burn an industry right off the map, even one as harmful as the tobacco industry, it must not penalize workers in the process.

There will be tens of millions of dollars at stake. Why could some of that not be earmarked for worker retraining and relocation? Why could some not be set aside for policies on conversion from tobacco?

Farmers in various regions of Quebec and of Canada are hurt by these measures. They will hurt even more because the government, like ourselves, seems determined to continue to battle against smoking. Why not earmark an amount to help them retrain?

Some farm families have invested a lot of money in machinery and land improvement to produce the best possible tobacco. Now that we are indirectly fighting this production, we must provide adjustment policies because there are none.

A few years ago the level of taxes on tobacco was so high that contraband was thriving. There is a direct link between the level of taxes and smuggling. If smugglers can sell cigarettes at a cheaper price than on the market, contraband will become more prevalent as the gap grows between these two markets.

This is my fourth point. We support an increase on tobacco taxes. We support any other measure that might be effective in the fight against smoking.

At the same time, we must realize that as taxes increase so will the urge to engage into contraband activities. This means that we must also step up law enforcement.

With these four measures—although there is no quick fix for such an issue—we would be on the way to helping those who are addicted to tobacco, an addiction that is often the result of the industry's greed. In the United States—I do not know if the same thing was done in Canada—it even increased the nicotine content of its products to get more people addicted. It seems to me that the victims of that industry could benefit from these four measures.

These four initiatives would also help the some 30% of Canadians who currently smoke kick this harmful habit so that some day there will not be any smokers left.

We will support the bill.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, it is always sad to be cut off after a few minutes, because the case to be made on tobacco taxes and smoking in general is a very serious one. The time at our disposal here is so important that cutting my speech in two might have a negative effect on the message. Nevertheless, in the five minutes remaining to me before oral question period. I will try to introduce my message.

As hon. members are aware, Bill C-26 consists essentially in raising the taxes on tobacco as an anti-smoking measure.

Right off, I will say that my party, the Bloc Quebecois, will support the bill because we care about people's health and about the fight that has gone on for many years against what I would call a plague, a major social problem, a problem creating considerable cost for the health care sector. It is a problem that also results every year in Canada in deaths that would not occur had people not taken up this bad habit.

Some 29% of people smoke. This is fewer people than in the past but it is still too many. It is still too many because tobacco kills and before it kills it makes people sick. These people impose considerable costs on the health care system.

People get emphysema, caused primarily by smoking. Smoking is also the cause of heart disease, and in particular, myocardial infarction, of lung cancer, and of strokes, some of which are linked to smoking.

Every year, there are over 40,000 deaths related to the use of tobacco. Why are there so many deaths? Why does tobacco kill? It kills because it is a really poisonous mix of highly toxic chemicals.

As for tar, do people know that the tar found in a cigarette includes over 4,000 chemicals? Tar alone, which is but one of hundreds of components found in tobacco and a product of the combustion of tobacco, contains 4,000 toxic products.

Nicotine is the worst of the poisons found in cigarettes. Why? Because, depending on a cigarette's nicotine content, it is the nicotine that creates a dependency, an addiction similar to cocaine and even heroin addiction. Some studies even suggest that nicotine makes it just as hard to stop smoking as to stop using hard drugs such as heroin and cocaine.

All sorts of junk is found in cigarettes. I could talk about it at length, because I smoked for many years. I stopped eight years ago. At the time, I did not have this information. It is thanks to awareness, information and advertising campaigns on the ills of tobacco that I became aware of the makeup of this poison.

Mr. Speaker, I can see that you are getting anxious. I will resume my speech after oral question period.

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

Mr. Speaker, we support Bill C-26. It is high time it came about. However I think a little history is warranted here.

Prior to 1994 tobacco consumption in Canada was plummeting as a direct result of high taxes. We also know that the average age young people begin to smoke is between 12 and 13. High tobacco prices do discourage smoking. The price elasticity of demand says that if the price is increased the demand will decrease dramatically, which is particularly important with regard to our youth.

In 1994, in response to cigarette smuggling, particularly in eastern Ontario, the government committed what was probably the most horrendous blunder in health care policy in the history of the country. Almost nothing this government could ever have done would have committed such a number of youth to smoke and have such a devastating impact upon the health of Canadians, not only in the short term but also in the long term.

What the government did in response to smuggling was drop the taxes on tobacco significantly. What did that do? It increased the consumption among youth and adults, as well as the number of people smoking and the amount that they smoked. Why do we say that? It is because something interesting happened. Tobacco taxes were reduced in five provinces in central and eastern Canada. The west and Newfoundland kept their prices relatively the same.

We had an interesting laboratory, looking at central Canada where the price was much lower, and the west and Newfoundland where the price was much higher.

If we looked at any graph we would see that tobacco consumption and tobacco profits after 1994 went up dramatically. Almost a quarter of a million young people started to smoke. Tobacco companies were popping champagne corks in their offices.

What the government should have done in order to deal with the tobacco issue, which was a legitimate problem, was what it did prior to 1993.

In 1992 the same problem arose. At that time the government put an excise tax on tobacco. That cut the legs out from under tobacco smugglers. It eliminated the differential between Canada and the United States. Within six weeks tobacco smuggling dropped 75% without changing the price of cigarettes. After six weeks the government of the day buckled under pressure from the tobacco companies that threatened to leave, and it removed the excise tax.

If the government had the backbone, it could have cut the legs out from underneath tobacco smugglers while not compromising the health of Canadians, particularly the youth. It could have done that by keeping the taxes where they were and by adding the excise tax.

It was the excise tax that would have prevented smuggling while enabling to keep the taxes where they were. It would not have committed a quarter of a million young people to smoking, 50% of whom will die of tobacco related deaths, with 21% of them dying of some form of cancer. It is a public tragedy and a public health problem that we will see in the long term.

The government also deprived the public coffers of nearly $5 billion worth of revenue. I can imagine what we could have done with that money. We could have put it into health care, into research and into prevention.

Our party supports the bill, but we want make sure that the money coming from taxes would not be put into some big vat to be used for special projects by the government. The money could be used for prevention models. It could be used for a head start program that focuses on strengthening the parent-child bond which has proven to be of dramatic importance and very effective at improving the health care of children and their families while preventing a lot of social problems that occur later on. That is what the government could and should be doing.

The government could also put money into increasing physical activities among kids. Physical activity is at an all time low. This would have a dramatic impact on the future health of Canadians because when children become adults, if they were not active as youth, there is less of a chance they will be active as adults.

The minister responsible for sport is very interested in physical activity and is working hard with our Olympic athletes. Why does he not take the Olympic athletes to the schools as part of a speaking program to teach children the importance of physical activity? The athletes could be paid to do this and the kids would be directly impacted by Canadian heroes, which would push and encourage them to be physically active. It is a win-win situation.

I hope the minister in charge of sport would consider this proposal. It is an informal proposal but doable. The Olympic athletes would get money. They would be getting paid to do a good job and the children of our country would benefit. It would have a long term and positive impact on the health of Canadians.

It is also important to look at what we could be doing in terms of improving the health of our children, our youth, as well as adults in the country. Looking at it from an international perspective, smoking consumption is not a domestic problem but an international problem. The World Health Organization has said clearly that in many countries such as China and other nations it will be a health care disaster with millions of people dying from tobacco related diseases.

The public would be very interested to know that tobacco companies actually sponsor dances in foreign countries and give out free cigarettes to children. They give out free cigarettes to children, not because they are good corporate citizens but because they are attempting to cause children to become addicted to cigarette smoking. Some of these tobacco companies are pretending to be the paragons of virtue and good corporate citizenry while going to other countries or nations, sponsoring dances, providing free admission to children and giving them free cigarettes. That is what is happening in the world today.

I encourage the government to pursue and fast track Bill C-26, to make sure that the bill goes through, and to increase the taxes to ensure that our children do not smoke. It should make the price so high that it becomes even more difficult for youth to smoke.

Libertarians would suggest that what happens to people is their business and that they should have freedom of choice. I agree. However let us take into consideration that we are talking not about people who are 25 or 30 years of age but about children who are 12 and 13 years of age. That is when children start to smoke. That is when they start to take up the weed.

On a slightly related issue, the issue of medicinal marijuana, I applaud the government in this regard. It is high time. However the government must make sure it is well regulated and not simply a tool to legalize marijuana consumption.

What the minister can do, and I am speaking personally and not on behalf of the party, is decriminalize the simple possession of marijuana. If we decriminalize marijuana consumption there would be a penalty or fine which could be used to fund youth prevention programs. It would also save expensive court costs. It would take people out of the courts and save legal fees and court time. The courts would then have more time to go after people who commit murder, rape and other heinous crimes. If we decriminalize marijuana use, and the Canadian Police Association supports this, we would have higher penalties, lower costs and a revenue source we could funnel into prevention programs for kids.

My last pitch, once again, is for the head start program. If the government is truly interested in preventing the social problems that result from youth crime, if it wants to ensure kids are more employable and less dependent on welfare or drugs, then a head start program is the fastest, best and most effective way of doing so. We could draw from the best of head start programs around the world which focus on strengthening the parent-child bond. This should start at the prenatal stage. If fewer parents took drugs and alcohol during pregnancy we could reduce the incidence of fetal alcohol syndrome, a tremendous problem in our country. The programs would also ensure parents had the skills to be good parents.

This can be done simply, effectively and for the most part with existing resources. It can be done if the federal government calls together its provincial counterparts for a conference on the issue. The government needs a specific plan of action that can enable the program to be a reality. The cost savings would be in the hundreds of millions of dollars. The lives saved would be in the thousands.

We support Bill C-26 and hope it goes through quickly. We only regret that the government in 1994 dropped the taxes to begin with.

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I am very pleased to speak in the House today to present Bill C-26. In fact my heart soars with enthusiasm.

Bill C-26, the tobacco tax amendments act, 2001, implements the tax elements of the government's comprehensive new tobacco strategy which was announced on April 5 by the Ministers of Finance and Health and the Solicitor General.

The new strategy is designed to improve the health of Canadians by reducing tobacco consumption, particularly among young Canadians. Briefly, it consists of increasing spending on tobacco control programs, tobacco tax increases to discourage smoking, and a new tobacco tax structure to reduce the incentive to smuggle.

The package has received positive support from health groups, such as the Canadian Cancer Society, the Heart and Stroke Foundation of Canada and the Alberta Tobacco Reduction Alliance.

My remarks today will focus on the new tax structure and tax measures which are contained in amendments to the Customs Act, the Customs Tariff, the Excise Act, the Excise Tax Act and the Income Tax Act. Before I discuss the individual measures in the bill, I would like to take a moment to put the legislation in perspective.

All tobacco products manufactured and sold in Canada have federal and provincial taxes and duties levied on them. Prior to 1994, tobacco products for export were sold on a tax free and duty free basis.

In the early 1990s exports of Canadian cigarettes grew substantially. There was strong evidence to suggest that most Canadian tobacco products that were illegally exported on a tax free and duty free basis to the United States were being smuggled back into the country and sold illegally without the payment of federal and provincial taxes. Two serious problems developed. Organized criminal activities were increasing and the market in Canada for fully tax paid tobacco products was being undermined by the availability of illegal lower cost products. This undermined the government's health objective of using higher prices to reduce smoking.

This is why the government implemented the national action plan to combat smuggling in 1994. That plan included increased enforcement measures, a surtax on the profits of Canadian tobacco manufacturers, a tax on certain exports of tobacco products and reduced tobacco taxes.

It has proven to be very effective in reducing the level of contraband activity and restoring the legitimate market for tobacco sales. As a result, the government has been able to increase excise taxes on tobacco products five times since 1994.

The measures in the bill before us today include a new tobacco tax structure to further reduce the incentive to smuggle tobacco products back into Canada and tobacco tax increases to advance the government's health objectives.

As hon. members know, one of the government's national health objectives is to reduce smoking. Our new tobacco strategy is specifically designed to help reach this objective, particularly reducing smoking by youth.

Allow me to quote from the Minister of Finance when the new strategy was announced. He stated:

The Government's anti-tobacco strategy will help improve the health of Canadians by discouraging smoking. By increasing taxes sharply and introducing a new tax structure for tobacco, we are taking important steps now and positioning ourselves to take further steps as need be.

Canada needs this comprehensive strategy to deal with the broad range of factors that contribute to smoking. The measures in the bill are part of that strategy.

I will now discuss these measures in detail and begin with the new tax structure.

As I mentioned, the new tobacco tax structure is designed to reduce the incentive to smuggle Canadian-produced tobacco products back into Canada from export markets, the main source of contraband in the past.

The key element of this new structure is the replacement of the current tax on exports of tobacco products, effective April 6, 2001, with a new two tiered excise tax on exports of Canadian manufactured tobacco products. Before discussing the measure further, let me provide some background.

As we know, the Canadian smuggling problem of the early 1990s was primarily caused by Canadian exports to the U.S. that were illegally re-entered into Canada. In the 1994 national action plan to combat smuggling, which I discussed earlier, the government imposed an excise tax on Canadian tobacco products. To ensure that Canadian tobacco manufacturers were not denied access to legitimate export markets, several exemptions from the export tax were allowed, including one for exports up to 3% of a manufacturer's annual production. That was reduced to 2.5% of production in April 1999.

Bill C-26 implements the budget 2000 proposal to further reduce the exemption threshold under the tax on exports of tobacco products before April 6, 2001, to 1.5% of a manufacturer's production in the previous calendar year. This 1.5% threshold represents the approximate level of exports required to meet the legitimate demand for Canadian tobacco products abroad, principally in the United States.

Under the new export tax structure, all exports of Canadian tobacco products will be taxed, thereby reducing the incentive to smuggle exported products back into Canada. This new tax will be two tiered. For exports up to the 1.5% threshold, a tax will be imposed at the rate of $10 per carton of cigarettes. To avoid double taxation when these products enter legitimate foreign markets, the tax will be refunded upon proof of payment of foreign taxes.

Imposing a refundable tax on exports of tobacco products allows for a seamless transfer of tax-paid products from Canada to other countries. This reduces the threat of these products being diverted and used for contraband, while allowing Canadian exporters to meet legitimate demand for their products abroad.

Exports over the 1.5% threshold will be subject to both the current excise duty on tobacco products and a new excise tax that together amount to $22 per carton of cigarettes. Imposing a tax at this rate will remove any incentive to illegally bring these products back into Canada. Further, there will be no rebate on this tax. This measure will reduce the potential for smuggling and help set the stage for future tobacco tax increases.

Before moving on, I should mention that discussions are ongoing between Canada and the United States to help achieve the objectives of our tobacco products not being available tax free, while avoiding double taxation of exported products and helping reduce compliance burdens for U.S. importers.

The next element of the new tax structure concerns tobacco products sold at duty free shops and as ships' stores.

As hon. members know, duty-free shops are located at border crossings and international airports across the country. These shops are authorized to sell certain goods, including tobacco products, tax-free and duty-free, to people leaving Canada.

Tobacco products supplied as ships' stores have traditionally been provided for use by crew and passengers and are sold to passengers through on board duty free shops on ships and aircraft with international destinations. Under the new structure, Canadian tobacco products delivered to duty free shops and as ships' stores both at home and abroad will now be taxed at a rate of $10 per carton of cigarettes. In addition, imported tobacco products delivered to Canadian duty free shops will also be taxed. However, this tax will be refunded on the first carton sold to an individual who is not a resident of Canada. Both measures take effect as of April 6, 2001.

Imposing a tax on tobacco products for sale in duty free shops or as ships' stores is an integral part of the government's strategy to reduce tobacco consumption. It demonstrates just how serious the government is about this issue.

Allowing Canadians who travel to continue to have access to low cost, tax free tobacco through duty free shops would be inconsistent with our strategy of raising tobacco taxes domestically to achieve the government's health objective to reduce smoking.

This measure would also reduce the risk that smugglers might seek to access Canadian tobacco products in duty free markets as other sources of untaxed, low cost tobacco products are eliminated. We want all Canadian tobacco products to be taxed, no matter where they are sold, to ensure that they are not smuggled back into Canada.

Another measure in the bill would ensure that tax is paid on tobacco products imported by returning residents. Currently Canadian residents returning to Canada after an absence of more than 48 hours may bring back one carton of cigarettes tax free and duty free as part of a traveller's allowance. Effective October 1, 2001, a new duty of $10 per carton of cigarettes would be imposed on these products when they are imported by returning residents.

To ensure that Canadian residents are not subject to double taxation upon returning to Canada with Canadian tobacco products on which tax has already been paid, neither this duty nor regular excise duties and taxes would apply to tobacco products that bear a Canadian stamp signifying that excise duties and taxes have already been paid. Non-residents would not be affected by the change to the traveller's exemption.

Tobacco tax increases are another key element of the government's strategy to reduce tobacco consumption, particularly among youth. Since the implementation of the national action plan to combat smuggling in 1994, the federal government has worked with the five provinces that implemented matching tobacco tax reductions at that time, namely Ontario, Quebec, New Brunswick, Nova Scotia and Prince Edward Island, to assess the feasibility of regular joint increases in tobacco taxes.

As of April 6, 2001, the federal government has raised tobacco tax rates jointly with these five low tax provinces.

The combined federal-provincial tax increases are $4 per carton of cigarettes sold in New Brunswick, Prince Edward Island, Nova Scotia, Ontario and Quebec.

Bill C-26 would implement the increases in federal excise tax rates on tobacco products. These increases would restore federal excise tax rates to a uniform level of $5.35 per carton on cigarettes for sale in Nova Scotia, New Brunswick and P.E.I. This is equal to the federal tax rate that now applies in the provinces and territories that did not reduce taxes jointly with the federal government in 1994. After this tax increase only Ontario and Quebec would have cigarette excise tax rates below the national excise tax rate.

Taxes on fine cut tobacco and tobacco sticks would also be increased in all provinces and territories. In addition, Bill C-26 would eliminate the reduced rate of federal excise tax on fine cut tobacco for sale in Ontario.

As I indicated earlier, this is the fifth increase in tobacco taxes since 1994. In total, federal and provincial taxes on cigarettes will have increased from $7.40 to $9.80 per carton in these five provinces since 1994.

I am confident that a successful new tobacco tax structure would enable the government to hike tobacco taxes even further in the future. The bill would also increase the surtax on the profits of tobacco manufacturers to 50% from the current rate of 40% effective April 6, 2001.

To help ensure that these measures are effective, we are giving more resources to federal departments and agencies so that they could better monitor and assess the effectiveness of these measures in reducing smuggling.

These resources would be targeted specifically to the RCMP, the Canada Customs and Revenue Agency, the Department of Justice and the Solicitor General of Canada at a cost of $15 million in the first year and $10 million each year after that.

In conclusion, all the proposals in the bill reaffirm the government's commitment to reduce tobacco consumption in Canada while maintaining vigilance in combating the level of contraband.

A new tobacco tax structure will help reduce the incentive to smuggle Canadian produced tobacco products back into Canada and the tobacco tax increases will help advance the government's health objectives.

In addition, the tax measures would increase federal revenues from tobacco products by $215 million per year. I believe that this new strategy demonstrates the depth of the government's commitment to reducing tobacco use.

We know the stakes are high in the campaign against tobacco use. Through the tax measures contained in the bill, we now have the means to conduct the campaign effectively. Tobacco taxation is about health. Health is our priority, especially protecting the health of our young people. These new measures reflect our commitment to reduce smoking.

We have an endorsement from the Canadian Cancer Society. With an endorsement like that, I believe the government is definitely on the right track toward reducing smoking by Canadians, particularly young Canadians. I encourage all members in the House to give their full support to the bill.

[Pierre Pettigrew, Liberal, for the Minister of Finance]

moved that Bill C-26, an act to amend the Customs Act, the Customs Tariff, the Excise Act, the Excise Tax Act and the Income Tax Act in respect of tobacco, be read the second time and referred to a committee.

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.

Tobacco Tax Amendments Act, 2001

[David Kilgour, Liberal, for the Minister of Finance]

moved for leave to introduce Bill C-26, an act to amend the Customs Act, the Customs Tariff, the Excise Act, the Excise Tax Act and the Income Tax Act in respect of tobacco.

(Motions deemed adopted, bill read the first time and printed)