Bill C-10 (Historical)

Income Tax Amendments Act, 2006

An Act to amend the Income Tax Act, including amendments in relation to foreign investment entities and non-resident trusts, and to provide for the bijural expression of the provisions of that Act

Part 1 of the enactment enacts, in accordance with proposals announced in the 1999 budget, amendments to the provisions of the Income Tax Act governing the taxation of non-resident trusts and their beneficiaries and of Canadian taxpayers who hold interests in foreign investment entities.
Part 2 enacts various technical amendments that were included in Part 1 of a discussion draft entitled Legislative Proposals and Draft Regulations Relating to Income Tax released for consultation by the Minister of Finance on February 27, 2004. Most of these amendments are relieving in nature, and others correct technical deficiencies in the Act. For example, Part 2 enacts amendments
–       to implement various technical amendments to qualified investments for deferred income plans,
–       to clarify that certain government payments received in lieu of employment insurance are treated the same as employment insurance for income tax purposes,
–       to extend the existing non-resident withholding tax exemption for aircraft to certain air navigation equipment and related computer software,
–       to allow public corporations to return paid-up-capital arising from transactions outside the ordinary course of business, without generating a deemed dividend,
–       to confirm an income tax exemption for corporations owned by a municipal or public body performing a function of government in Canada, and
–       to provide that input tax credits received under the Quebec Sales Tax system are treated for income tax purposes in the same way as input tax credits received under the GST.
Further, Part 2 enacts provisions to implement announcements made by the Minister of Finance
–       on September 18, 2001, limiting the tax shelter benefits to a taxpayer who acquires the future business income of another person,
–       on October 7, 2003, to ensure that payments received for agreeing not to compete are taxable,
–       on November 14, 2003, to simplify and better target the tax incentives for certified Canadian films,
–       on December 5, 2003, to limit the tax benefits of charitable donations made under certain tax shelter and other gifting arrangements, and
–       on November 17, 2005, relating to the cost of property acquired in certain option and similar transactions.
Part 3 deals with provisions of the Act that are not opened up in Parts 1 and 2 in which the following private law concepts are used: right and interest, real and personal property, life estate and remainder interest, tangible and intangible property and joint and several liability. It enacts amendments to ensure that those provisions are bijural, that is that they reflect both the common law and the civil law in both linguistic versions. Similar amendments are made in Parts 1 and 2 to ensure that any provision of the Act enacted by those Parts are also bijural.

Opposition Motion—Income Tax Act

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I am very pleased to have the opportunity to participate in the debate this afternoon on the motion from the member for Ahuntsic, which reads in part:

That, in the opinion of the House, the government should introduce, as soon as possible, an amendment to Bill C-10, An Act to amend the Income Tax Act...in order to remove the reference to public policy that is added by this bill to subsection 125.4(1) of the Income Tax Act, because this new provision opens the door to unacceptable government censorship of film and video production.

I thank the member for Ahuntsic and her party for giving us the opportunity to debate this issue, for putting it on the agenda and using one of their opposition days to have this important debate.

New Democrats support the motion to remove this wide open reference to public policy considerations from the guidelines related to the application of the Canadian film and video production tax credit.

We support the motion because we believe the provision is far too broad and far too easily misused. In fact, it is so large that we could drive a truck through it. We have seen that already this afternoon with the inability of government members in particular to define exactly what that clause means.

Over the last week we have seen concerns emerge across Canada about the implications of changes to the Income Tax Act with regard to the Canadian film and video tax credit. The changes to section 125.4 of the act would allow the government, through the Minister of Canadian Heritage, to deny a film or video an important tax credit.

In the provisions of this legislation it says that the minister would have to be “satisfied” that “the public financial support of the production would not be contrary to public policy”. Earlier when the minister was asked to define what it meant to be contrary to public policy, there was no answer forthcoming.

Another important provision in Bill C-10, with regard to the film and video tax credit, is it also removes development of these guidelines from the usual statutory requirements, leaving the process solely with the Minister of Canadian Heritage. It removes it from the Statutory Instruments Act to allow the minister to short-circuit the usual process, to short-circuit the usual legal import of guidelines and regulations and to develop those regulations on her own. Even though the minister said that there would be some kind of public process around this, the final decision still rests with the minister. That is another serious concern about the legislation.

This was one provision in a large bill of almost 600 pages of income tax changes. The overall intent of the bill was to close tax loopholes and deal with the question of tax havens. I admit I missed this provision when we looked at the legislation. It never occurred to me to look for a censorship measure, or a measure that could be used for censorship in legislation to deal with tax loopholes and tax havens. I think this is why all of us found that this kind of provision was buried deep inside other legislation on quite a different topic.

I now know about this provision. I have now been made aware of it by people in the arts community in particular. Now that this concern has been raised, I will do all that I can to ensure that this problem is fixed fully and appropriately. There will not be any resting until we completely deal with the matter. As of yet, I have not seen that assurance from the government.

It is important that we take responsibility for this. The motion, which calls on the government to take a measure to delete that section from the bill, is an important suggestion, and the government has that ability. As I mentioned earlier, the government has told the committee of the Senate looking at this legislation, that it will be bringing its own amendment to Bill C-10. The Conservatives have identified other problems with the legislation.

It is not only the opposition parties that have problems with the legislation. It is also the government. Therefore, the delay in the legislation now is that the committee in the Senate is waiting for the government to bring forward those amendments.

I think this is the perfect opportunity for this House to tell the government that deleting this reference to a public policy guideline should be part of the amendments that it brings forward to the Senate. I disagree strongly with the decision of the Liberals to back away from supporting this legislation, to refuse to support this motion this afternoon, saying that the government would not do it anyway. The government has the perfect opportunity to do it now. I think the House has the perfect opportunity to encourage the government to bring that forward.

This concern broke after an article appeared in the Globe and Mail last Thursday. At that time, Charles Drouin, a spokesperson for Canadian Heritage, is quoted as saying in a statement:

“Bill C-10, currently at third reading in the Senate, contains an amendment to the Income Tax Act which would allow the Minister of Canadian Heritage to deny eligibility to tax credits of productions determined to be contrary to public policy.”

Mr. Drouin also noted:

“... Upon royal assent of C-10, the Department of Canadian Heritage plans to update the eligibility requirements for the...program.”

That is the Canadian film or video production tax credit program.

Also, Robert Soucy, the director of the Canadian Audio-Visual Certification Office, the office that administers the tax credit program, has been reported as saying that the federal government wants to be more selective about the cultural products it funds.

Mr. Soucy has also suggested that a panel would be set up by his office and it would review content and have the final say on who got the tax credit after this review of content of film and video production. He is also reported in the media to have “hinted that the government was considering a 'public policy' criterion” related to film and video production and also sound recording and publishing.

That is the background of the concerns that have emerged over this past week.

I believe that the government should immediately table any draft guidelines that have already been prepared, so that we can see exactly what is planned in relation to this public policy guideline. The government should also announce a public review of the existing guidelines and a public process around the revisions of the current guidelines or the development of new ones.

I am glad to hear the minister this afternoon say that she would do that kind of process. I am not clear about how extensive that will be or what exactly the commitment was made, but she did mention something to that effect.

Why is this causing such concern? Why is a provision that may have existed for some time, that may already exist in the guidelines, that is now being talked about as being introduced as part of the income tax law itself, raising such concerns at this point?

I think that is because of comments made by members of the Conservative Party in relation to film and video production in Canada and what they think is appropriate or not appropriate. I have to say that, as a member of the Standing Committee on Canadian Heritage, this has been done at the standing committee.

Back on January 31 the standing committee was meeting the new president of Telefilm Canada, Michel Roy. At that time a number of Conservative members took the opportunity to criticize some of the decisions of Telefilm Canada and some of the specific decisions of funding that were made.

One Conservative member of Parliament, and these quotes can be found in the evidence from that committee meeting on January 31, said he believed that “films should be for mainstream Canadian society”. I think this is clearly a limitation on the kinds of decisions that Telefilm Canada was making.

Another member at the time talked about a film that he had seen and he said, “it focused more on recreational sexual activity than loving relationships”. He concluded that that made it “not redeeming”.

Again, another Conservative member had a definitive opinion about what might be appropriate or inappropriate for Telefilm Canada to be funding and raised it directly with the president.

No matter what we think of recreational sexual activity, I do not think it is up to a Conservative member to tell the head of an agency what in fact is objectionable or redeeming in that situation. In fact, the same member, the member for Abbotsford, this afternoon talked about the government needing to take action to ensure that objectionable and offensive content does not go forward in film and video. Again, he never defined what he meant by the words “objectionable” and “offensive”. I think these are the kinds of comments that raise that concern.

Also, at the meeting on February 28, another Conservative member argued that the minister should have the ability, and I am quoting, “to restrict the flow of Canadian taxpayers' dollars to odious and unacceptable and repugnant movies”. Who is defining “odious and unacceptable and repugnant”? Why should anyone in the government have the ability to tell a filmmaker that the story the filmmaker wants to tell is odious and unacceptable and repugnant? I have some strong difficulties with this. Concern emerges in the arts community when it hears Conservative members trying to impose their own particular sensibilities, their own values in this regard.

At the committee meeting on January 31, another Conservative member went on at length about films that he found objectionable, seemingly related to the controversial nature of words in their titles. I do not know that that is a basis for wanting to deny funding to a filmmaker or a creative person in Canada, that somehow we find the wording in a title to be provocative.

Railing against a provocative title, or talking about mainstream films, or something being not redeeming or odious and unacceptable and repugnant are all concerns for a provision in law that is as broad as this public policy provision. That is where the concern stems from, and it is Conservative members who are fuelling that concern. That is why so many people in the arts community believe that the public policy clause in Bill C-10 opens the door to government censorship.

I do not believe that any politician, not me as the member for Burnaby--Douglas, not the former minister, Sheila Copps, who proposed this guideline originally and even acted on it, and not the current Minister of Canadian Heritage, should have the ability to impose our personal tastes, our personal sensibilities, our likes and dislikes, on the creative process, on cultural activities, on films, videos, books, magazines or recordings.

If we should not have that ability, I also do not believe that any bureaucrat or public servant should be delegated that kind of authority. I would have just as much difficulty if the tax certification office and people associated with it were delegated the authority to screen film and video production and its content in Canada and make decisions based on their perception of the acceptability or unacceptability of that content.

We need guidelines to enable the operation of a government program. I do not deny that, and I do not think anybody here would deny that. Those guidelines should be transparent and objective and they should encourage the telling of Canadian stories, but they should not and must not impose subjective limits on the freedom of expression in Canada.

It is not that there are not already some key limitations in place. The Criminal Code outlaws certain activities, child pornography, for example. Those kinds of provisions are already covered by the provisions of the Criminal Code of Canada.

A loophole as large as the guideline about so-called public policy goals must be closed. It should not be enshrined in legislation, which is what is happening in the case of Bill C-10. My subjective perspective should not be the determining factor on whether or not a film or video gets made in Canada, just as the Minister of Canadian Heritage's personal sense of what is offensive or odious, or Sheila Copps' personal feelings about a particularly tragic story in Canadian history, or even Reverend Charles McVety's perspective should not be the determining factor on which Canadian film gets made.

A country as diverse as Canada must ensure that as many of our stories as possible are told and controversy must not divert us from this goal. Just because a story is controversial does not mean that it should not be told, or that it does not deserve help from the government to assist in its telling. Just because a film or video in its title is provocative does not mean that it does not deserve our support. We have to take measures to ensure that the freedom of expression is protected in Canada. We have to make sure that the creative process in Canada is supported.

Some Conservatives will say that this does not amount to censorship even if the government did deny a film and video tax credit, because the filmmaker can get private funding anyway and make the film privately. That kind of attitude severely devalues the importance of the Canadian film and video tax credit system. Anyone who has worked in film and video production in Canada will explain how important this provision is and how it allows Canada to have a film and video production industry. They will also tell us how important it is to ensure that those stories are told.

I believe that this kind of provision and this kind of discussion and the kind of suggestions that come from Conservative members also have a chilling effect on that kind of production in Canada.

There is another aspect that worries me as well. When we have this kind of debate and these kinds of suggestions are made by the government or by individual Conservative members, I think it also sets up the possibility of self-censorship on the part of the creative community in Canada.

Creators need support and should not be encouraged to self-censor to get an idea past a minister, a bureaucrat or a panel that is reviewing content, who might not share their perspective, their life experiences, their ideology or their religious beliefs. This is completely inappropriate.

To set up this kind of system could lead to the self-censorship of people working in artistic endeavours in Canada.

I have to reiterate that guidelines for the administration of the tax credit program must be objective, transparent, clear and straightforward. They have to support the telling of Canadian stories.

One of the Conservative members who spoke this afternoon spent most of his speech in fact saying, “This was not our measure. This was the Liberals' measure”. Therefore, the conclusion was that it must be okay, that we could not have concerns about something like this because it originated with the Liberals.

I find that a really difficult premise to accept because there is a lot that the Liberals do that I have questions about. It seems again that we have this Liberal-Conservative coalition kind of activity happening where what one does seems acceptable to the other. This is another example, this time coming from the Conservatives who are saying, “The Liberals did it, it must be okay”. I really do have trouble with that kind of perspective.

Sheila Copps did make mistakes in her day as a political leader in Canada. She did much that was good as well, but not everything she did was right and needs to be continued by subsequent governments or members of Parliament today. I think the Liberals were wrong to go down this road and I think the Conservatives are wrong to continue taking us down that road.

The Senate is still considering this. The Senate should propose an amendment to get rid of the clause. I think we should put pressure on the government to make sure that kind of amendment comes up at the Senate committee.

As I said, the Senate committee is waiting on the government to bring in its own amendments to its own legislation because the government has identified problems. Here is one more that the government should add to its list.

We must be rigorous in our defence of the freedom of expression. We cannot minimize the importance of government support or tax credits to the industry. The reality is that the film industry in Canada depends on this support and without it, the possibilities of telling a Canadian story sharply decline.

It is ironic that a reporter in the press today pointed out that a U.S. production filmed in Canada might be eligible for tax credits that are denied to a fully Canadian production due to the public policy clause. That is because the same considerations do not seem to apply or to be considered for the film and video services tax credit used by many foreign productions that are filmed in Canada.

It is ironic that we may have this different provision that does not affect foreign film producers the same way that the Canadian film and video tax credit is administered with regard to this public policy criteria.

In this corner of the House, New Democrats are prepared to take a stand on this legislation. We are prepared to say that we are here to protect the freedom of expression in Canada, that we support the creative process, that we want to encourage the telling of Canadian stories. We want to make sure that guidelines are established that are clear, transparent, objective and straightforward for this important cultural program.

We also believe that we have to spend taxpayers' dollars responsibly, but that for us does not mean that we should not say no to censorship. We also have to say no to censorship or setting up the possibility where censorship can be exercised.

I firmly believe that this is possible. These kinds of guidelines without a provision that is so broad and so open, that raises the possibility of abuse and censorship is not necessary. Another kind of proposal can be drawn up and in this corner of the House we are prepared to take on that responsibility if the government and the official opposition are not prepared to do it.

When it comes down to it, the government, ministers and MPs, must be ready to take the heat when controversy erupts about a cultural production in Canada, when controversy erupts about the freedom of expression in Canada, which it is bound to do because protecting the freedom of expression in Canada and protecting the creative process is worth that effort.

We have to be prepared, as elected officials, to take the heat, to protect freedom of expression in Canada, and in this corner of the House, we are ready to do just that.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I am pleased to be able to participate in the debate.

We have evidence again this afternoon of the Liberal-Conservative government coalition in action. Earlier the member for Abbotsford spoke at length about how this was Liberal legislation, a Liberal proposal, so therefore it must be okay. In fact, he dedicated seven minutes of his speech to that.

Now we have heard from the member for Ottawa—Vanier, and I am disappointed, that the Liberals will not oppose this because they do not think the government will not do it anyway.

I am glad he talked about the Senate. The reality is the bill could be fixed in the Senate. In fact, the Senate committee that is looking at Bill C-10 is not meeting. It is waiting to hear from the government. The government has told the Senate that it is proposing amendments to fix other problems with Bill C-10. Not only did we miss this provision in this corner but, apparently, the government missed a whole bunch of other problems with the legislation that it is seeking to fix in the Senate.

Therefore, there is an opportunity to support this motion this afternoon to compel the government to bring forward a solution to this problem in the Senate. I would ask that the Liberal Party and the member for Ottawa—Vanier reconsider their position. This opportunity explicitly exists at the Senate and it is because the government will bring forward its own amendment.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Mr. Speaker, on behalf of the official opposition, I would first like to say that we share the concerns of thousands of Canadians who have clearly indicated, these past few days, their opposition, or at the very least, their concern over the actions of the Conservative government with respect to funding for Canada's television and film productions.

We agree that this requires closer examination to determine the true intentions of the government, what consultations it has already conducted and what it has failed to do. We need to know where things stand. If the situation needs to be rectified, we believe it should be.

But we do not think that the Bloc's motion, or at least their proposed method for tackling this issue, is the right way to go about it. That is why we will not support the motion.

We will not support this motion for several reasons. The first is obvious: the government will not respect it. The Bloc is asking the government to withdraw a section of Bill C-10, which is now before the Senate. Earlier, I asked the minister. Even if the Bloc motion were adopted, the government has no intention of withdrawing this section from the bill or proposing an amendment. So it is not worth it.

There are many examples of times when, although the House voted in favour of various legislative, financial or other types of measures, the government ignored them. I am thinking, for example, of the court challenges program. Many times, a majority expressed that it wanted the government to restore this program, but nothing happened.

The same thing happened with environmental issues. The House even took the legislative route, but we are still waiting for the government to follow up on the majority will of the House. The same goes for the Kelowna accord.

I could go on and on. This is why we have no doubt that even if the Bloc motion were adopted, the government has no intention of following through on it.

The second reason we do not support this motion is that Parliament must do its work. Parliament's role is to legislate and to supervise the government. It must do that work. Government representatives are rubbing our noses in the fact that the House endorsed this bill. On behalf of my party, I would like to say mea culpa, as others have done.

We have to acknowledge the reality of this situation. This is an extremely technical, 560 page-long bill. It was introduced during the first session of this Parliament, and it was referred to the Standing Committee on Finance, if I am not mistaken.

However, the government must act responsibly and honourably. The Crown demands a certain sense of honour of its representatives. When the committee studied Bill C-33, which is now Bill C-10, the government's representatives did not say a word about this measure. They tried to sneak it through quietly. That approach seems to have worked here in Parliament.

With all due respect to my NDP and Bloc colleagues, this is a bicameral parliament. Canada's Parliament is made up of two houses: this one and the Senate. Today, my Senate colleagues announced that the Standing Senate Committee on Banking, Trade and Commerce intends to study the matter.

Throughout the history of this institution, we have rarely seen a better example of the usefulness and necessity of a bicameral legislature, a parliament made up of two houses. Even though the government neglected to talk about some parts of the bill, given its very technical nature, the bill was sent to the Senate. Subsequently, the issue was raised publicly, and the Senate now intends to shed some light on it.

I believe that by April, the Senate will hold hearings and listen to those who want to be heard in order to find out what is going on. That is another reason we will not support the motion. We have to give Parliament a chance to do its work. As legislators, both houses of Parliament have a duty that they must carry out.

There is another reason: the proposed motion just puts the ball in the government's court. The minister said earlier that the federal and provincial governments are having some sort of discussion. We can presume that these discussions between officials and her staff have been precipitated in the past few days, for reasons I will get into in a few minutes. With all due respect to the minister, there has not been a lot of transparency here. No one knows when these meetings were held, who attended or what was discussed. We are left to assume certain things, when Parliament has a duty to carry out.

We have to look for the opportunity—and we have it right now, or will have it in the Senate—to clarify and truly understand the relationship that can exist between legislation, or Bill C-10, regulations and guidelines.

I have a question for the House and anyone watching us today. Earlier, reference was made to the Canadian Audio-Visual Certification Office guidelines. The hon. member for Kootenay—Columbia said that clause 5 states:

production for which public financial support would, in the opinion of the Minister of Canadian Heritage, be contrary to public policy

Note that was in February 2004.

Now, if I refer to the regulations, which have more authority under the political and legal conventions of our country and our Parliament, we do not find that in the regulations of 2005. They huff and puff that this is a Liberal initiative, but it must also be recognized that in 2005, under a Liberal government, the regulations excluded this item from the conditions making a film or television production ineligible.

What is this really about? This needs to be cleared up. The Senate, or the committee in question, will give a voice to all those who want to speak up. It could call witnesses. That brings us to the heart of the matter. I hope the Senate will call and listen to Mr. McVety.

This gentleman has made some affirmations that we believe must be questioned. He has affirmed having met with two ministers of the Crown, the Minister of Public Safety and the Minister of Justice, and that he is entirely satisfied that they have listened to his concerns about guidelines, future guidelines perhaps, who knows, and that he is happy.

Another comment was made on CBC Radio this week by the Parliamentary Secretary to the President of the Treasury Board who said that the government has already decided what it wants to do and that it wants to take guidelines from somewhere else and impose them on cinematography and television productions.

When we hear the minister saying that nothing has been done, that he is waiting for the bill and then he will consult, we must be allowed to have some doubts as to what has happened and, thus, the necessity to have these hearings so it will be clear and everyone can deal with this very delicate matter, which is akin to censorship as I have said, in full knowledge of the status of the current legislation, regulations and guidelines and whether they mesh or not. I think that is an absolutely legitimate role of Parliament. I wish that it was being done in the House instead of the Senate but that is not the case. It will be done in the Senate and we support that. I think that is the way to go.

We need to have clarity in this. I have received hundreds of messages and calls, and I know it is the same for many of my colleagues, from people wanting to know what gives. Whenever we deal with censorship, the matter of freedom of speech or the matter of artistic liberty, people have deep feelings about that, as they should. We live in a society where we do encourage respect. We have a Charter of Rights and Freedoms that establishes freedom of speech, freedom of assembly and freedom of expression. Artistic expression is certainly among those.

We need to understand what the government has in mind, what it did have in mind and what its intentions are. The best way of doing that is to use the ability and tools at the disposal of parliamentarians, whether they be in this House or the next house, to do that. The Liberal members of the Senate have publicly committed to doing that as early as possible, one would suspect as early as the month of April because the scheduling will be taken up in the next few days.

There is another reason why we cannot support the Bloc Québécois motion. This is because the amendment put forward by the Bloc might not be the right one. It might be, but it might not be. Other sections of Bill C-10 would have to be checked. Perhaps the best way to address this problem, once all the information and all the details are on the table, would be to ask that the Minister of Canadian Heritage be given the authority to establish regulations rather than guidelines.

This is important, because regulations are subject to review by Parliament, while guidelines are not. The Bloc Québécois is focusing on one section in particular. But I would like to highlight another section of Bill C-10. As I was saying, it is a 560-page bill that is extremely technical and I will try to quote part of it, in the hope that it will mean something to someone.

Another section says:

The Minister of Canadian Heritage shall issue guidelines respecting the circumstances under which the conditions in paragraphs (a) and (b) of the definition of “Canadian film or video production certificate” in subsection (1) are satisfied. For greater certainty, these guidelines are not statutory instruments as defined in the Statutory Instruments Act.

In English, it says that for greater certainty these guidelines are not statutory instruments as defined in the Statutory Instruments Act. The reason I raise this is that guidelines escape the scrutiny of Parliament. Once the Senate has heard the witnesses, convened officials and had a full airing of this matter, perhaps other sections may or may not need to be amended. Certainly, if there are to be guidelines at some point and anywhere, perhaps these guidelines should be a statutory instrument and therefore subject to parliamentary scrutiny. That would not be the case. There are a number of possible amendments that the Senate could make.

In the same spirit, if we were to rely on the Bloc's motion, we would be asking the government to present amendments. We have clear indications from the minister that the government has no intention whatsoever of providing such an amendment.

Therefore, if we rely on our own, as parliamentarians, be it this House or the next, ability and authority to review legislation and propose amendments, should that be the case, the amendments would come back to this House and we would have a chance to look at them, as I hope we do. That is another reason that I believe the Bloc's proposal is not the best way to go and we will not be supporting it.

I will quickly summarize the situation. We have a bill that has gone to the Senate. Tens of thousands of Canadians and nearly the entire artistic community are extremely concerned about certain statements made by some people to the effect that the government intends to change the guidelines concerning the payment of tax credits. This has created huge uncertainty within the industry.

Apart from the matter of possible censorship and the limiting of artistic freedom, another concern is the financial structure of productions for television or films. If we spend all the money and at the end we are told we cannot, then we cause incredible grief.

That is another consideration that must be addressed. I think the Senate, as my colleagues in the Senate have promised this afternoon, will provide an opportunity for those who wish to be heard, those who wish to express their concerns and those who wish to understand all of the complexities between text of law or a law, regulations and guidelines and how they interrelate. We have a duty as parliamentarians to ensure that is all on the table in a very transparent way.

The way the Bloc is proposing to do this would not provide that at all. It would not provide an opportunity for parliamentarians to do what should have been done in the first place. However, because we are a bicameral Parliament, we have an opportunity in the other House, in the red chamber, to do that.

Therefore, we will not support the Bloc motion, although we share the concerns expressed by tens of thousands of Canadians as to what the intentions of the government are. It is incumbent upon us to use whatever methods we have as legislators to shed the light on that. I am very happy and very proud that my colleagues in the Senate have undertaken to do just that and we will see where that leads us.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Mr. Speaker, if people in the film industry are pointing to potential censorship by the Conservative government, it is undoubtedly because there are examples to prove that the members of the Conservative Party are tempted to act in that manner.

I am referring to the recent appearance of the Chairman of the Board of Telefilm Canada before the Standing Committee on Canadian Heritage. The member for Palliser listed movies which, in his opinion, Telefilm Canada should not have funded. This concrete example speaks for itself.

I am also thinking of the guidelines. The government told us that they once existed but that they no longer exist and that they will be issued after the bill is passed by the Senate and receives royal assent.

Does the member not think that, in order to eliminate these concerns, it would be better to remove this contentious passage from Bill C-10?

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Speaker, I would be glad to answer that question.

Had the hon. member been listening, I reminded my colleagues in the House that four provinces actually have exactly the same wording that we are proposing in Bill C-10. Three others have similar wording and all hope to achieve the same goal.

If in fact the legislation would violate some human rights legislation in Canada, surely there would have been challenges in some of the other jurisdictions.

I also remind the member that this matter has been before the House. He had an opportunity to address this matter at committee, if he had chosen to do so. He did not raise the issue of human rights.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

In view of our conversation, Mr. Speaker, on Bill C-10, I wonder if the hon. member would ask his party to look at whether or not the human rights committee would take a look at human rights commissions in Canada and specifically section 13.(1) of the act.

[The Acting Speaker, Conservative, Andrew Scheer]

I think the hon. parliamentary secretary makes a good point. The motion before the House is very specific with regard to Bill C-10 and proposed amendments.

I did not hear anything in the question that had to do with this subject, so I think we will move on to another question, unless the hon. member can tie it in somehow.

The hon. member for Esquimalt—Juan de Fuca very briefly, if he can tie it into the motion.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Speaker, I am pleased to have the opportunity to engage in this debate on Bill C-10. My sole purpose today is to correct the public record regarding this bill.

As we know, Bill C-10 is a very specific amendment to the Income Tax Act and it clarifies our government's support for the Canadian film production industry. The bill simply permits the federal government to refuse to issue film tax credits where there are sound public policy reasons for doing so.

Regrettably, the debate has been muddied by unfair and inaccurate information emanating primarily from the opposition parties in this House.

From the outset, let me correct the public record by saying that, unlike what has been suggested this past week, the indisputable fact is that this proposal did not even originate with our current Conservative government. For anyone willing to actually examine the issue, it is abundantly clear that this proposed legislation originated with previous Liberal governments, going back to 1995.

As this fact seems to have escaped some of my conspiracy theory colleagues on the opposition benches, it might be helpful to review the historical record of this legislation.

As I have just stated, the very first time a previous Liberal government suggested a public policy limitation on the certification of films or video productions was back in 1995, some 13 years ago. The original release of the draft film tax credit regulations by the previous Liberal government provided discretion to the Minister of Canadian Heritage to refuse eligibility for film or video tax credits if the provision of public financial assistance--in other words, taxpayers' hard-earned dollars--would, in the opinion of the minister, be “contrary to public policy”.

Then again in 2002, the federal Department of Justice recommended to the then Liberal government of Jean Chrétien that such ministerial discretion be authorized in the Income Tax Act. In response, some amendments to the Income Tax Act were released for consultation by John Manley, who at that time was the Liberal minister of finance.

These amendments created a ministerial discretion to deny assistance to a film or video production on the grounds that granting such assistance would be “contrary to public policy”, exactly the wording that is in today's Bill C-10.

At the conclusion of that consultation period, final amendments were published on November 14, 2003. They were published jointly by then Minister Manley and the then Liberal minister of Canadian heritage, Sheila Copps, including the following provision:

“Canadian film or video production certificate” means a certificate issued in respect of a production by the Minister of Canadian Heritage certifying that the production is a Canadian film or video production in respect of which that Minister is satisfied that

public financial support of the production would not be contrary to public policy.

That provision released by the previous Liberal government is exactly the same provision, verbatim and word for word, that is included in the current Bill C-10, which we are debating today.

I would also like to quote a Liberal government news release that was issued jointly in 2003 by both John Manley and Sheila Copps. It stated:

Today's proposal results from ongoing consultations with all sectors of the film industry, which were undertaken by the Departments of Finance and Canadian Heritage....

To those in the film and television community who now plead ignorance to the introduction of these amendments, let me read a portion of the Canadian Film and Television Production Association press release from November 2003, a release that was still posted on its website the last time I looked, for all the world to see. It stated:

After almost three years of complex negotiations, the Department of Finance and Department of Canadian Heritage unveiled draft amendments to the Canadian Film or Video Production Tax Credit, which affects Canadian content production....

“This is going to help a lot of producers, and it's exactly what the industry needs right now. Making Canadian shows and films is tough in the current international markets. While financing is never easy, this is what the doctor ordered”, says Guy Mayson, acting president and CEO, Canadian Film and Television Production Association.

Everybody bought in when a Liberal government was in place.

I encourage people to go to that website and check out that news release. Anyone who reads the press release will note the absence of any serious concern with the discretionary power afforded under Bill C-10. There is nothing about censorship, nothing about it potentially devastating the industry.

As I have stated, these very amendments are now included in Bill C-10. In fact, the bill before us was first introduced in the last session of Parliament as Bill C-33.

In that previous session the bill had completed third reading in the House of Commons with all party support: NDP, Bloc, Liberal and Conservative. Of course, that session came to an end and the bill died on the order paper.

When the second session started, the bill was introduced as Bill C-10 and again received unanimous support from all parties in the House. It passed at second reading, went to committee, came back for third reading, and now it is in the Senate.

During that long process, the bill has been thoroughly reviewed time and time again by the NDP, the Liberals and the Bloc, both in this House and at the House and Senate committees. No objections were raised by parliamentarians from any opposition party, Liberal, NDP or Bloc, or even by film or television industry representatives.

Let me be perfectly clear. From November 2006 until very recently no expressions of concern regarding the amendment were raised. There were no fears regarding censorship or devastation of the industry. This is an industry all parliamentarians are proud of and want to thrive, an industry that not only serves a vital cultural role in Canada but an important economic role as well.

That is the history of Bill C-10. I trust that I have been able to dispel once and for all the absurd notion that the bill is a secret plan to introduce censorship. It is just not true.

Quite frankly, I am offended by that suggestion coming from the opposition parties. This is their bill. They introduced it. They thoroughly reviewed it a number of times. They approved it not once, not twice, but at least three times. In fact, this Liberal proposal goes back 13 years.

Now that I have firmly established the Liberal origins of the bill, I would like to turn to the central question. Why is it that both previous and current federal governments support this legislation?

Let me first note that restrictions on funding eligibility for films are not uncommon in cultural policy. Throughout the years most federal funding programs that support cultural works have included guidelines stating that certain materials, such as hate propaganda, excessively violent material, or pornography, is not eligible for government assistance. Most taxpayers find that eminently sensible. Somehow today, the Liberals, the NDP and the Bloc, who used to support this legislation, do not find it eminently sensible.

In the same way, Bill C-10 addresses only the most extreme and objectionable of film and video productions. What Bill C-10 does not do is in any way ban or restrict cultural productions which are privately funded.

We simply want to ensure that public funds, in other words taxpayers' hard earned dollars, are not invested in productions which are highly objectionable and offensive in their content. In fact, Bill C-10 simply implements long established practices in this regard.

For example, I note that four Canadian provinces have exactly the same wording in their film tax regimes as does our bill and three additional provinces employ very similar concepts, yet the Liberals and the Bloc and the NDP have not been jumping up and down about those jurisdictions having implemented this kind of legislation.

Despite the histrionics from the opposition parties, the Canadian film and television industry can be assured that it has the strong support of our Conservative government, especially the support of our fine Minister of Canadian Heritage. Canadian producers will continue to have great flexibility in the kind of productions they want to produce.

In short, the bill has absolutely nothing to do with censorship and everything to do with ensuring that taxpayers receive good value for the productions that they and their tax dollars subsidize.

[Josée Verner, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, surely the hon. member must know that we are talking about rules that are already being applied in the book and magazine industry. One thing is certain, the famous guidelines will be set. As I said in my speech, we will hold consultations with industry people. We will take their comments into consideration and set the guidelines, as we should, after Bill C-10 is passed.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Mr. Speaker, I listened carefully to the minister's remarks, and now I would like to ask her a question.

The motion we are considering today, if passed, would require the government to propose an amendment to Bill C-10—which is now before the Senate—to remove a certain clause.

If I understand and interpret the minister's remarks correctly, the government has no intention of following up on the House's wish in this regard. Do I understand correctly what the minister said about the motion before us today?

[Josée Verner, Conservative, Minister of Canadian Heritage]

Mr. Speaker, I will share my time with the member for Abbotsford.

I am pleased to speak today to Bill C-10. I will start by saying that over the last few days, we have heard a lot of false information about the purpose and scope of Bill C-10, An Act to Amend the Income Tax Act, in connection with tax credits for the production of films and videos.

I would like to take this opportunity to set the record straight and to discuss several things.

First, Bill C-10 is in no way a form of censorship. It is not our goal to interfere with freedom of expression, as the opposition would have us believe. Absolutely not. This bill would ensure the integrity of the tax system. The objective of this bill is to reassure taxpayers about the way public funds are spent. Since the Conservative government is responsible, this issue is important to us.

As some hon. members are aware, the Minister of Canadian Heritage has discretionary power to refuse to issue a film or video production certificate if, in the minister's opinion, the use of public funds is contrary to the public interest. This discretionary power has been in effect since 1995 under the Income Tax Regulations.

The proposed amendments in Bill C-10 come as no surprise to Canada's audiovisual industry. They were announced first in 2002 by the former finance minister in the Liberal government, then in 2003 by that same minister and the former Canadian heritage minister in the Liberal government. We therefore have a hard time understanding why the Liberals and now the Bloc seem to be opposed to the amendments. This is not the first time they have changed their minds, though.

Our government submitted exactly the same amendments to the House of Commons and they were approved by all parties on October 29, 2007, four months ago. All the parties approved the bill last fall. Moreover, four of the 10 provinces use the same wording in their system of tax credits for film production. Three other provinces refer to very similar concepts. In addition, Telefilm Canada, the federal cultural agency that provides financial support for Canadian audiovisual production, also refuses to finance some productions for similar reasons.

Many people have said that Bill C-10 will threaten freedom of expression. Nothing could be further from the truth. Our government continues to passionately defend freedom of expression.

The establishment of reasonable measures, such as the ones contained in Bill C-10, is designed to provide as much opportunity to freedom of expression, as it is consistent with the limits of the law and public policy.

Bill C-10 is about government accountability. It is about responsibility. Our government is a responsible government. A fundamental responsibility we have, as members of Parliament, is to ensure that Canadians are represented in these matters. I believe Bill C-10 does just that.

Bill C-10 also includes many other amendments to the Income Tax Act for which the film industry has asked. For example, amendments to section 241 would permit some disclosure of information to strengthen transparency in the administration of the programs in support of Canada's audiovisual industry.

The proposed amendments will allow the publication of recipients of tax credits, along with the names of the key creative personnel associated with the production. Other amendments simplify the tax credit and hence its benefits.

These measures are in keeping with our government's commitment to transparency, to streamline administrative processes and to reduce unnecessary red tape to make these programs work better for Canadians and, at the same time, make sure that the funds are managed effectively and efficiently.

Beyond the scope of this bill, our government has always demonstrated that it believed in the importance of culture.

We believe that it is important that our programs to support the arts, music, theatre, literature and audiovisual production reflect our country's history and Canadians' experiences. We believe that it is important for Canadians' voice to be heard, just as we believe that everyone should be able to hear it.

Our government has confirmed that commitment in many ways. We recently announced additional funding for festivals, the Canada Council and national museums. Moreover, budget 2006 granted a capital gains tax exemption for donations to public charities, many of which are active in the arts and culture.

Our commitment to culture is also evident on the international scene, as we sponsor and support the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions.

In addition, our government promotes the creativity of Canada's audiovisual industry every day through many established programs, including the Canadian Feature Film Fund, the Canadian New Media Fund and the Canadian Television Fund.

We are also supporting this industry through co-production agreements and tax credit programs that have proven their worth.

We are also supporting various key organizations that stimulate the creativity of the audiovisual industry. Telefilm Canada, the National Film Board, the Canadian Broadcasting Corporation and the Canadian Radio-television and Telecommunications Commission come to mind.

In 2006-07, our government invested more than $765 million in Canadian audiovisual content: $74 million went to the National Film Board, $96 million to the Canadian Feature Film Fund, $252 million to the Canadian Television Fund, $14 million to the Canadian New Media Fund and $330 million to two tax credit programs.

Although public funds play an important role, we believe that they are not the only means available to develop the audiovisual industry. To stimulate the industry, we need policies, legislation and institutions. Important legislation, such as the Broadcasting Act, the Investment Canada Act and the Income Tax Act, along with other policies and regulations, contribute without a doubt to the success of our audiovisual industry.

Bill C-10 is about fairness and transparency. Many critics have said that the process is unfair and not transparent. With the passage of Bill C-10, the next step is for the Department of Canadian Heritage to conduct consultations with industry groups, as it did informally on March 3, and take full consideration of their comments and concerns. We will ensure that this will not have a negative effect on financing practices within the film industry.

In conclusion, let me address more specifically the audiovisual content. At the CFTPA convention, I stated the importance of content. In an open, global and multi-platform world, reaching Canadian audiences with Canadian content is the single most important objective.

This is why the creation of and the access to high calibre Canadian content that appeals to Canadians are the main drivers of our government's support. This is further evidence of our government's commitment to diverse cultural expression. Canada needs risk-takers to deliver this content and to capture the Canadian audience.

Our government firmly believes in its duty to support artists, creators and everyone who plays a key role in our cultural industries.

I would like to remind all Canadians that our government will continue to pursue this course with passion, respect and transparency.

[Maria Mourani, Bloc, Ahuntsic, QC]

moved:

That, in the opinion of the House, the government should introduce, as soon as possible, an amendment to Bill C-10, An Act to amend the Income Tax Act, including amendments in relation to foreign investment entities and non-resident trusts, and to provide for the bijural expression of the provisions of that Act, in order to remove the reference to public policy that is added by this bill to subsection 125.4(1) of the Income Tax Act, because this new provision opens the door to unacceptable government censorship of film and video production.

Mr. Speaker, I am very pleased to rise here today to introduce this motion to counter the Conservative government's desire to censor film productions.

The motion calls on this government to introduce, as soon as possible, an amendment to Bill C-10, An Act to amend the Income Tax Act, including amendments in relation to foreign investment entities and non-resident trusts, and to provide for the bijural expression of the provisions of that Act, with a view to remove the reference to public policy that is added by this bill to subsection 125.4(1) of the act.

We must ask the question: why should the expression “public policy” be removed? Well, this expression is so vague that it is open to interpretation. I will give a few over-the-top examples to demonstrate how it could be interpreted in various ways.

For instance, would a film that shows someone burning the Canadian flag or insulting the Queen conform to public policy? That is one question. What about a film that criticizes the Conservative government or questions our presence in Afghanistan or promotes sovereignty in the middle of or prior to a referendum, for instance? Would such a film conform to public policy? We must ask the question. Thus, the words “public policy” could be taken even further still.

With respect to Bill C-10, what is the Prime Minister telling us through the Minister of Canadian Heritage, Status of Women and Official Languages, of course?

Here is the first argument they keep repeating endlessly: given that this bill has already been passed by the House, and is presently being studied by the Senate, we should have acted earlier. That is true.

Nobody pointed out this section on criteria for film production credits. This section is buried in a 560-page bill to amend the Income Tax Act.

When I say nobody, I really mean nobody. The three opposition parties did not see it and the Senate did not see it at first or second reading. It is now at third reading stage. We can even assume—and I did say assume—that the Minister of Canadian Heritage did not see it because it was her colleague, the Minister of Finance, who was responsible for this legislation.

We must humbly acknowledge, and simply say, that a mistake was made and that we are prepared to rectify the situation. That is the important point: let us rectify the situation.

Yet we see that the government continues to make these kinds of arguments.

The second, and not the least important, of its arguments is that this government does not view it as a censorship mechanism. It would serve to prevent the state from funding pornographic movies, child pornography, hate propaganda and so forth. It is true that the state should not fund these types of productions.

We heard the Minister of Canadian Heritage blithely repeating in all the media and even in this House that we must not fund such productions and that the purpose of the section was to prevent such horrors.

I realize that the Minister of Canadian Heritage may not be aware that such movies are not funded in Canada or in Quebec. It is true that we do not have to know everything. In fact, either the Minister of Heritage is acting in bad faith or she is not aware that we have a Criminal Code that prohibits such things. Personally, I prefer to think that she just is not aware of it.

For the benefit of the Minister of Heritage, allow me to briefly summarize the offences found in the Criminal Code in this regard.

Section 319 of the Criminal Code includes provisions on hate propaganda and incitement of hatred. The maximum prison sentence is two years. Section 163 of the Criminal Code on offences tending to corrupt morals prohibits the production and distribution of child pornography and obscene publications.

I could cite other provisions. The famous subsection 163(1)(a) states: “—makes, prints, publishes, distributes, circulates, or has in his possession for the purpose of publication, distribution—”. This all has to do with child pornography.

Subsection 163.1(2) addresses the production of child pornography. Production itself is therefore covered. It also provides for maximum sentences of 10 years for the distribution of child pornography. The Criminal Code also covers other offences, such as defamation and slander.

I also want to remind the minister that the criteria for granting film certificates were changed in May 2005. Section VII, newly created by the Regulations Amending the Income Tax Regulations (Film and Video Productions), stipulates that all pornography is excluded. Child pornography is clearly defined in the Criminal Code. Under this new Section VII created by the Regulations Amending the Income Tax Regulations (Film and Video Productions), productions exclude all pornography. In other words, no tax credit is given to that type of film.

What current events have prompted us to amend the legislation in question? Why were these clarifications added? In my opinion, the question must be asked. Does this legislation not include hidden objectives that reflect the government's desire for censorship? I believe that people are inherently good and I can believe that the government is well-meaning. I am simply proposing that this bill be amended. It is not too late.

We all agree on one thing: the state must not provide funding for pornographic films. The state must not provide funding for child pornography or hate propaganda films either. We all agree on that.

I have good news for everyone: my colleague, the hon. member for Rosemont—La Petite-Patrie, has tabled a bill to have the CRTC regulate violence on television. He would like violent programs to be broadcast after 9 p.m. when children are already sleeping. The purpose of his bill is to get the CRTC to do its job as a regulator. Broadcasters are currently required to regulate themselves voluntarily. This bill offers a way to control violence on television without having to censor anything.

I would like to bring up an interesting argument from a press release issued by the minister's office. The press release contains something I found rather unusual and it really left me wondering. So I wanted to take a closer look at it. According to this document, the creator of a film that includes content that may be subject to prosecution under the Criminal Code “could technically still be eligible for a film tax credit under the Income Tax Act.” The release goes on to say:

This is a legal absurdity; a loophole that successive governments—first Liberal, then Conservative—have worked to close.

I must admit I am rather surprised that a creator who produces a work that includes content that may be subject to prosecution under the Criminal Code could receive a tax credit. That is unthinkable. Let us assume that this creator produces pornographic movies. Child pornography is subject to prosecution under the Criminal Code. We do not pay for these kinds of things.

The creator would not receive a tax credit.

I must admit that I am rather shocked by this argument, which makes no sense, and just goes to show that the government is flailing around and saying any old thing.

I think that the Conservative government—and I am sure many members will agree—is still using the back door to impose its far-right values. The Minister of Canadian Heritage is accusing us of blowing this out of proportion, and is saying that the film industry is panicking for nothing. If that is the case, the Conservatives should reassure us and simply amend the bill. We will have been wrong, we will have blown things out of proportion, and they will have fixed this little problem.

Unfortunately, our Minister of Canadian Heritage is powerless. She does not make the decisions in her department; they are made by her colleague, the Minister of Finance. I think she is so powerless that she is strongly supporting aberrations that are taking us back to the time of censorship. Now that is really something. It is very sad, but I think this is the only concrete action the minister has taken for the film industry, which is an action against the film industry. It is truly sad.

Indeed, this minister's record when it comes to the film industry is absolutely terrible, pathetic even. Let me explain. She is a minister from Quebec and she still refuses to recognize the existence of the Quebec film industry. She is the first minister to have abandoned the International Centre of Films for Children and Young People, whose head office had been in Montreal since 1990, and which had to move to Johannesburg, South Africa.

I would also remind the House that there was absolutely nothing for the film industry in the recent budget. Out of a $240 billion budget, she could not convince her colleague in the finance department to reinvest $50 million in the Feature Film Fund or the Television Fund. Furthermore, she still does not want to establish a $10 million documentary feature film fund, as called for by the film industry. It is so unfortunate and I am very sad to have to tell the cultural community that we have a heritage minister who is merely an extra.

Yes, the cultural community should be worried. As Pierre Even, producer of C.R.A.Z.Y, said, and I quote: “Despite the numerous representations we have made over the past two years to make the government aware of our needs, there was absolutely nothing in this budget for the film industry ... The government understands nothing about culture or how cultural institutions operate”.

This is very sad, indeed.

Here is how CTVM's newsletter summarized the general impression of this community, and I quote: “Our federal minister does not appear to like our movies”. We love movies. Does the minister not like movies? We would have to ask her. What I would say to the film community is that the Minister of Canadian Heritage is not showing any leadership in this file and is merely a powerless representation of a minister in power, even though she has none. She is a powerless minister.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

I have a quick matter to deal with, which I've asked the chair under a point of order. I had told the committee I was going to be getting back with the response from the department with respect to the guidelines in Bill C-10. This is the response I got. The guidelines do not exist, cannot exist, before Bill C-10 is passed. There are simply no guidelines to provide the committee. When Bill C-10 is passed, we'll be holding consultations on the guidelines.

With respect to the department official who was quoted on Thursday, he simply misspoke when he implied that there were guidelines in existence that the department was working on. There are no guidelines; he misspoke. After Bill C-10 is passed, once the legislation is passed, the minister will direct the department to begin consultations with industry officials and stakeholders, after consultation guidelines have been discussed.

Thank you.

Arts and Culture

[Maria Mourani, Bloc, Ahuntsic, QC]

Mr. Speaker, once again, the Minister of Canadian Heritage, Status of Women and Official Languages, who is powerless, is not answering questions. The solution is for the government to introduce an amendment to Bill C-10 as soon as possible to remove the reference to “public policy”, which opens the door to censorship.

Will the government promise to do so immediately?

[Maria Mourani, Bloc, Ahuntsic, QC]

Mr. Speaker, to justify its desire for censorship, the Conservative government is trotting out its old line that people who disagree with the government are promoting child pornography, defamatory libel and hate propaganda. These are already prohibited by the Criminal Code. The Minister of Canadian Heritage, Status of Women and Official Languages is even accusing the industry of creating a tempest in a teapot.

Will the Minister of Finance agree to amend Bill C-10 to ensure that these new provisions do not lead to any censorship?