House of Commons Hansard #15 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was revenue.

Topics

Questions On The Order Paper
Routine Proceedings

12:10 p.m.

Kingston and the Islands
Ontario

Liberal

Peter Milliken Parliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, I would ask that all questions be allowed to stand.

Questions On The Order Paper
Routine Proceedings

12:10 p.m.

The Speaker

Is it agreed that all questions be allowed to stand?

Questions On The Order Paper
Routine Proceedings

12:10 p.m.

Some hon. members

Agreed.

Supply
Routine Proceedings

February 4th, 1994 / 12:10 p.m.

The Speaker

Dealing with the supply period, pursuant to Standing Order 81(8), it is my duty to inform the House that a total of nine days will be allotted for the supply period ending March 26, 1994.

The House resumed consideration of the motion that Bill C-2, an act to amend the Department of National Revenue Act and to amend certain other acts in consequence thereof, be read the second time and referred to a committee.

Department Of National Revenue Act
Government Orders

12:10 p.m.

Essex—Windsor
Ontario

Liberal

Susan Whelan Parliamentary Secretary to Minister of National Revenue

Mr. Speaker, I would like to recap my earlier comments in support of Bill C-2, an act to amend the Department of National Revenue Act and to amend certain other acts in consequence thereof.

This bill would enable the Minister of National Revenue to consolidate two distinct departments under his responsibility since 1926 into one and thus eliminate unnecessary duplication and overlap within government.

It is an act that will bring distinct benefits to taxpayers and will enhance the ability of the Department of National Revenue to provide more efficient and effective services and programs.

I want to assure the House that this act will not compromise the integrity of programs in the area of responsible enforcement, of Canadian sovereignty and laws at the border, revenue generation, or trade administration, the lines of business that make the department an essential national institution.

I would also like to inform the House that Revenue Canada customs is highly regarded and well respected as one of the finest services of its kind in the world. This respect has been well earned and Canadians can rest assured that this will continue to be the case within a unified Revenue Canada. Not only due to its enforcement role but also because of programs such as International Project Return, a program to find missing children, Revenue Canada customs has become internationally recognized.

I would like to assure the member who raised this concern earlier and I would like to assure all of those who work for the safe return of missing children to families that the minister has assured me that Revenue Canada customs remains committed to International Project Return.

As well, Revenue Canada is firmly committed to maintaining and strengthening all its customs functions.

As national revenue minister, the hon. minister has said that the role of customs is essential to the social and economic well being of the country.

As I mentioned earlier, Revenue Canada customs will continue to have a clear mandate to enforce Canadian law and sovereignty at the border by preventing the entry of criminals, illegal immigrants, pornographic material, prohibited goods and weapons. As well, a mandate to protect Canadian business and industry by administering international trade agreements. Further, a mandate to protect local economies by collecting taxes at the border and also a mandate to provide service to other government departments at border facilities.

I would like to assure the House that this mandate will be carried out by competent experienced managers and employees.

As well, the customs and excise union, some organizations and border communities have expressed concerns about the integration of customs within the Department of National Revenue. I again want to inform this House that their concerns are unwarranted and unsupported.

Enforcement activities at Canada's border crossings are important to this government and to Revenue Canada and will remain so. Administrative consolidation will enhance and strengthen customs programs by allowing greater accessibility

to a broader range of information, increased use of technology and redeployment of additional resources to better attack the underground economy and combat smuggling.

So far, from savings realized through the administrative consolidation of headquarters, almost $13 million has been reinvested in key customs initiatives such as enhanced technology at airports and border points to speed up the processing of travellers and goods and to facilitate the detention of contraband and high risk travellers.

In 1993 Revenue Canada customs seized a record amount of drugs worth more than $1.4 billion. I am sure that customs officers will continue their outstanding work with law enforcement agencies to keep drugs off our streets.

Enforcement does not begin only at Canada's border. That is why Revenue Canada is negotiating agreements with carriers in other countries to work together in the international fight against drugs.

The government is very concerned about the level of smuggling we are currently experiencing. Such illegal activity cannot continue to the overall detriment of society and this government is considering its strategies in this regard. We believe that a strengthened enforcement role, both at the border and in the boardroom, will help the government to tackle the issues of smuggling and non-compliance.

I want to inform the House that by combining its resources, Revenue Canada will be able to get tough with the small minority who cheat the system. Administrative consolidation will give Revenue Canada the resources, expertise and information to conduct joint GST and income tax audits of individuals and businesses to identify non-registrants and those not reporting income, to conduct special investigations and to improve its ability to identify non-compliance with all of its acts and regulations.

It is up to this government to ensure that the law-abiding majority does not suffer because of those who deliberately cheat the system either by smuggling or not paying their taxes. All Canadians should pay their fair share.

As the Minister of National Revenue has said, such illegal activities constitute a significant threat to Canadian society and to our economy. This government is determined to maintain and enhance its ability to respond to these challenges. As well, this legislation will permit the minister to organize the delivery of programs and services. With improved accessibility, Canadians will no longer have to run from one Revenue Canada office to the next to get general information, make payments or pick up publications and forms. All of this can be done at one time at Revenue Canada's expanded network of offices across Canada.

As well, there will be a consolidated collections program. Clients will eventually be able to deal with one revenue official for all their accounts. The result will be efficient service that is more responsive to individual business circumstances and combined audits.

Revenue Canada recognizes that businesses usually have to deal with customs, excise, GST and income tax auditors separately. This is cumbersome and inconvenient, particularly for small businesses. Therefore, Revenue Canada is developing a consolidated approach to audit. This will mean better service, reduced costs and less duplication. It will be less intrusive to businesses because whenever possible combined audits will be done at one time.

Finally, we will have a single business registration number. Revenue Canada is taking the lead for the federal government by developing a single business registration number; one client, one account number. This is obviously a much simpler system for businesses that sometimes have to use several different account numbers when dealing with different parts of the department.

The department plans to pilot this initiative in eight cities in May of this year. There will be a single remittance for customs, GST and income tax. The department is now examining a plan which will allow it to accept single payments. This initiative will simplify and streamline accounting for hundreds and thousands of Canadian businesses and an offset system.

Eventually businesses will be able to offset a liability in one area such as taxation with overpayments or refunds from another area such as GST. This will make it possible for the department and businesses to reconcile their accounts with one single cheque. This will also simplify account processing for businesses, improve their cash flow and reduce the cost of doing business with the government.

We will also introduce a simplified combined annual business return. Beginning in the 1993 taxation year, small businesses with gross sales under $500,000 will be able to file a combined annual return for both income tax and GST. They will be able to pay both taxes with one cheque and even use a credit from one tax account to pay an outstanding balance from another. This will bring existing GST legislation in line with the fairness policy which was recently developed for income tax filers. This policy gives Revenue Canada officials flexibility when dealing with persons who have not met their obligations due to circumstances beyond their control.

Revenue Canada is also piloting a new way of doing business with its commercial clients starting with pilots in the automotive and aerospace sectors.

The new business relationship changes the way customs interacts with its commercial clients by re-engineering processes and requirements and reducing red tape and paperwork.

This new approach will generate significant savings for clients. The big three North American automakers and the aerospace industry together estimate a $180 million saving over the next decade, something quite substantial.

This program has been well received by a cross-section of Canadian businesses. Revenue Canada is committed to building a first class revenue administration capable of adapting to new economic and fiscal policies and one in which service is a priority.

I tell the House today that Revenue Canada is an essential instrument and must be capable of meeting these challenges head on as an organization having service, voluntary compliance, and enforcement as priorities. It would make no sense to weaken our response capacity.

The proposed bill will not undermine the effectiveness of Revenue Canada customs or make it play second fiddle to revenue generation. Administrative consolidation will instead strengthen the government's capacity in this important field. It is for these reasons that I recommend the support of Bill C-2.

Department Of National Revenue Act
Government Orders

12:20 p.m.

Parkdale—High Park
Ontario

Liberal

Jesse Flis Parliamentary Secretary to Minister of Foreign Affairs

Mr. Speaker, I congratulate the parliamentary secretary and her minister for bringing this bill in so quickly and congratulate the parliamentary secretary for her emphasis that this bill will look into and put a stop to the illegal entry of criminals, the entry of illegal immigrants and will provide more resources to combat the smuggling of the drugs and the liquor that are coming into this country.

I have said many times before that there is a criminal element taking over the economy of this country. I am glad that this minister and this parliamentary secretary are acting so quickly.

I would like to pose a question based on representations I have received from constituents and other people. When Canadians return to Canada if they have been out of the country a very short time they can bring tax exempt goods back with a maximum value of $20. If they have been out of the country for 48 hours they can bring goods back worth $100. If they are away for seven days they can bring back goods worth $300.

I wonder if this bill does address this. If not, would the parliamentary secretary take representations about looking into increasing the exemptions? Many families come back and they cannot even buy goods for their children for $100.

My recommendation and their recommendation would be to increase those exemptions perhaps to $50, $200 and $500, or something like that.

Department Of National Revenue Act
Government Orders

12:20 p.m.

Liberal

Susan Whelan Essex—Windsor, ON

Mr. Speaker, I would like to inform the hon. member that this bill does not address that issue but we will certainly take that under advisement and look into it.

(Motion agreed to, bill read the second time and referred to a committee.)

Crown Liability And Proceedings Act
Government Orders

12:25 p.m.

Hull—Aylmer
Québec

Liberal

Marcel Massé for the Minister of Justice

moved that Bill C-4, an act to amend the Crown Liability and Proceedings Act, be read the second time and referred to a committee.

Crown Liability And Proceedings Act
Government Orders

12:25 p.m.

Kingston and the Islands
Ontario

Liberal

Peter Milliken Parliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, I am pleased to rise to introduce debate on the second reading of Bill C-4, an act to amend the Crown Liability and Proceedings Act.

Last summer Canada, the United States and Mexico concluded two agreements which were additional and complementary to the North American Free Trade Agreement. One of these agreements is the North American agreement on environmental co-operation. This agreement commits the three countries to environmentally sustainable economic growth, to effective enforcement by each country of its environmental laws and regulations and to increased co-operation in the development of such laws and regulations.

The other is the North American agreement on labour co-operation which promotes improvement of working conditions in the North American workplace for all workers.

Under these complementary agreements, the three countries must not only enforce their labour and environmental legislation but also correct any pattern of failure to effectively enforce the existing legislation. These complementary agreements have created international obligations for Canada.

In order to enforce these obligations each agreement provides for the establishment of panels to make findings of fact and determinations. In carrying out these functions a panel may in its determination require a country to adopt an action plan to correct any failures to enforce its own laws or standards. In certain cases the panel determination may require the offending party to pay a fine.

The proposed amendments to the Crown Liability and Proceedings Act, for which the Minister of Justice is responsible, are before us today to permit domestic enforcement by the Federal Court of Canada of determinations relating to Canada's international obligations which may be made by these trinational panels. Without these amendments no mechanism exists in Canadian law whereby our domestic courts can be employed to

require the government to live up to its international obligations.

Canada respects the rule of law. It does not have a problem with using its national legal framework to enforce international rights and obligations.

I would like to outline briefly the process of how penalties will be enforced against Canada under the agreements.

In the highly unlikely event that Canada were to fail effectively to enforce its environmental and labour laws and standards and had demonstrated a persistent pattern of failure to do so, a trinational environmental or labour panel could require Canada to adopt action plans to correct the problems identified by the panels. Canada could also be subject to fines which are called monetary enforcement assessments in the bill. Very politely, I may add.

Under the agreements any failure to comply with an action plan approved or established by a panel or to pay a fine levied against Canada can only be enforced through the filing of the panel's determination with the Federal Court of Canada. It would then become a judgment of that court and is enforceable as such against the federal crown.

A panel determination that is made an order of the federal court would be enforceable in the same manner as any other order of the court subject to certain limitations.

This mechanism could not impose such an order on a provincial court unless the province has signed the agreement in question and the order relates to an area of provincial jurisdiction. In such a case, the province would have to amend its enabling legislation so that the order can be tabled in the province's superior court of competent jurisdiction. Such amendments would have the same effect as Bill C-4 for the federal government.

Canada negotiated the right to set up this process thereby avoiding other remedies such as trade retaliation which will be applied in the case of the United States and Mexico. Many of us heard about this negotiating process and the results of the process frequently during the election campaign.

I would also draw the attention of the House to provisions in the bill which promote the finality of the enforcement procedures. Under the proposed legislation there would be no right of appeal against a panel determination or an order or decision made by the Federal Court in any enforcement proceedings.

Because this is a strictly international determination which calls for particular expertise and complex international issues, Canadian courts would not be allowed to override the panel's determination.

The bill also contains a privative clause to exclude domestic judicial review of the panel proceedings, panel determinations, enforcement proceedings taken in the Federal Court and orders and decisions made by the Federal Court in any enforcement proceedings.

This provision is similar in some respects to one already in place concerning the North American Free Trade Agreement.

The government is presenting these amendments early in the parliamentary session to fulfil its commitment towards the United States and Mexico.

In an exchange of diplomatic notes with the United States and Mexico on the coming into force of NAFTA, the minister promised on behalf of the government to ask Parliament for permission to implement these extra-judicial settlement mechanisms at the national level. He made a commitment to submit this request as soon as possible.

I commend this bill to the House for consideration and I urge all hon. members to lend their support.

Crown Liability And Proceedings Act
Government Orders

12:30 p.m.

Bloc

Jean-Guy Chrétien Frontenac, QC

Mr. Speaker, this is the 102nd day that the Liberal Party of Canada has been in power and we are presented with two bills. This is a big first, and I want to congratulate the Minister of Justice who is showing the most courage by presenting Bill C-2 and Bill C-4 this afternoon.

First, I should say that the Official Opposition will support Bill C-4 introduced by the Minister of Justice. Over the last few years, a consensus has developed in Quebec regarding the opening of our society to international competition. Quebec must participate actively to any initiative intended to reduce trade barriers and to promote international trade. To that effect, our support for that Bill also applies to the principle of NAFTA and to the objectives set out in the side deals.

However, I would like to convey to the House some of our concerns regarding the Canadian process for passing accords. Quebec has, for a long time, made it known that it wanted to be involved when international issues relating to its jurisdiction were being discussed. This is part of what we might call the traditional demands of Quebec. This involvement was upheld by a 1937 decision of the Privy Council, which confirmed that the federal government had to have the agreement of the provinces

to implement international accords affecting their jurisdictions. It is on the basis of that decision that Ontario lodged an appeal to the courts disputing the legitimacy of federal action in this matter.

I repeat that the Official Opposition approves the principles of NAFTA. Let me remind this House that Quebec was the strongest advocate of NAFTA and of the free trade agreement between Canada and the United States. During the 1988 election campaign, the Conservative Party used the free trade agreement to get votes in Quebec. With the support of the Parti québécois, the Conservatives were able to win a lot of seats in Quebec and thereby get a second straight mandate.

If Quebecers were so strongly in favour of free trade, it is because they understood that the future of a small and dynamic modern society such as ours is contingent upon being open to the world and having access to major markets. Far from advocating a rigid and inward-looking form of nationalism, Quebecers are confident in their ability, and they are ready to face international competition and conquer new markets.

The federal structure never allowed Quebec to fully affirm its autonomy and extend its jurisdiction to an international level. Quebec can no longer endure this situation which limits its possibilities; the failure of the Meech Lake Accord confirmed the dead end in which Canada put itself.

Let us not forget that Quebec was always willing to participate in federal-provincial consultations on NAFTA, and always strongly defended Quebecers' interests at those meetings. The terms and conditions relating to Quebec and Canada in the side agreements must take into account Quebec's legitimate wishes and reflect the jurisdictional realities that exist in Quebec and Canada. Under the 1867 Constitution, the Official Opposition will not approve any agreement before receiving assurances that Quebec's areas of jurisdiction will be respected.

Negotiations are under way between Quebec and Ottawa in order to implement the side agreements. The Official Opposition is keeping a close watch on these negotiations. It would be totally unacceptable for the federal government to take advantage of Quebec's agreement in principle to unilaterally impose its own environmental and labour standards, two areas in which Quebec is determined to maintain its prerogatives and its autonomy.

Quebec cannot be satisfied with a hasty consultation when issues affecting it so deeply will be discussed in committee. We will soon find out whether the federal government's appetite for centralization will gain the upper hand once again.

So that is the position of the Bloc Quebecois and Official Opposition.

Crown Liability And Proceedings Act
Government Orders

12:35 p.m.

Reform

Charlie Penson Peace River, AB

Mr. Speaker, today I am speaking as chairman of the Reform Party committee on international trade.

The topic is Bill C-4 which will permit the full Canadian enforcement of two NAFTA side agreements: the North American agreement on environment co-operation and the North American agreement on labour co-operation.

I will begin my statement by saying that the Reform Party supports this bill, although we do have a few areas of concern that I will be expanding upon later in my presentation. Our support of NAFTA is on the condition that Canadian businesses can take full advantage of this important agreement by reducing government spending and lowering taxes in this country; by eliminating interprovincial trade barriers, and by shifting emphasis from welfare to retraining and technological development.

Because we support NAFTA we support the necessary enacting legislation introduced in Bill C-4. I would like to commend the government for signing NAFTA. I was encouraged in the throne speech by the promise of an activist trade policy and by improving access to export sales. I was especially encouraged by the promise to work with provincial governments to eliminate internal trade barriers.

Canada is a trading nation and benefits enormously from trade liberalization. Canada produces a surplus of many goods and services which are in demand around the world. Yet Canada cannot possibly produce the full range of goods and services that Canadians need so it is to our advantage that we maximize and optimize trade. Greater and freer world trade will open up new markets and new opportunities. It will provide more jobs, raise our real income levels and add to the strength of the Canadian economy. The overall prosperity of Canadians will be enhanced.

In Canada, trade accounts for one out of every four jobs generated. In my riding of Peace River we are very dependent on trade to provide jobs; in the agriculture sector, oil and gas, and also in forestry. Twenty-five per cent of everything we produce is exported and the total value of exports is increasing all the time.

This underlines the importance of participating in both NAFTA and the GATT trade agreements. The NAFTA agreement allows Canada to reach its long-term objectives and will

strengthen environmental co-operation in North America; promote sustainable development on a continental basis; create an effective institution to oversee this agreement; effectively enforce and enhance compliance with domestic environmental laws.

In the area of labour co-operation, NAFTA will improve working conditions and living standards in all three participating countries and it will protect, enhance and enforce basic workers' rights.

In order to benefit fully from any trade deal, the government must ensure that Canadian businesses are in a position to participate fully in the new opportunities that exist.

The hon. member for Calgary Southwest and many of my colleagues have spoken about the importance of bringing down the cost of doing business. We must eliminate deficit spending so that we can finally lower taxes. We must eliminate interprovincial trade barriers.

There are many categories of barriers. In the agriculture and food processing industries over 100 barriers exist. They include production quotas, differential labelling, quality and packaging standards, and transportation and stabilization subsidies.

In the liquor, wine and beer industries we have provincial production requirements, local bottling requirements, differential mark-ups, quotas, packing requirements and marketing favouritism.

In the transportation industry, we have different licensing requirements, size and weight requirements, safety regulations, provincial transportation board discretionary powers, and varying fuel and sales taxes.

In the area of government procurement, we find explicit and implicit preferences for local suppliers and requirements for locally produced materials. With government procurement expenditures exceeding $100 billion per year, approximately 20 per cent of GNP, this is by no means insignificant.

In the area of labour mobility, there are different licensing requirements for professionals and trades persons from province to province. These barriers create significant impediments to people wishing to move to another province since skilled workers have to meet additional licensing requirements.

In the area of capital mobility there are industrial incentives, local investment funds and local tax incentives. Such carriers are often used for regional development and create an inefficient allocation of our financial resources.

The cost to our nation of these and other internal barriers is in the neighbourhood of $6.5 billion per year. Interprovincial trade barriers have fragmented the marketplace and hindered Canada's ability to compete internationally. Furthermore, these barriers give competitive advantages to large firms that can afford to comply with the stringent rules imposed by government. At the same time they hinder small businesses from reaching their market potential. Unless we can improve competition within our own borders and can lower the cost of doing business by providing some tax relief, we will never be able to reap the full rewards of the expanded trade opportunities that exist.

I have outlined our party's concerns on the need to let businesses take full advantage of this trade agreement. We expect the government to take the necessary steps to allow this to happen.

Let me get back to Bill C-4. Under NAFTA a compliance mechanism has been established in the event an arbitral panel finds persistent patterns of failure by a country to effectively enforce its labour and environmental laws. If a country fails to correct the problem, the panel may impose sizeable fines. In the event that a fine is imposed on Canada, and it is very unlikely this will happen as one speaker said earlier, the fine would ultimately be enforced by domestic courts.

At this stage we support this bill and its enabling legislation in order to move quickly to bring this trade deal into full effect. But we do have a few specific concerns that need to be addressed.

First, the bill states clearly that any panel determination that would enforce Canadian labour laws or standards cannot be appealed. We would favour the addition of an appeal process.

Second, we would insist that Canadian members on this panel be chosen on the basis of fair regional representation.

I trust that the standing committee reviewing this legislation will address our specific concerns.

Crown Liability And Proceedings Act
Government Orders

12:45 p.m.

Broadview—Greenwood
Ontario

Liberal

Dennis Mills Parliamentary Secretary to Minister of Industry

Mr. Speaker, I appreciate the opportunity to speak today on Bill C-4. Many members will realize this was a central issue for us not only during the last campaign but during the last Parliament.

Many of us participated in the around the clock debate when the then government brought in the NAFTA. Our critic for labour, the member for Kenora-Rainy River, led the debate. We did our best to get the government to include side deals on NAFTA related to labour and environmental standards that we believed to be so necessary and so important for the integrity of this agreement.

We did not have such luck. But it was amazing during the election how our NDP opponents forgot about that debate. They forgot that we debated around the clock and we did our best to fight for amendments to the deal. In fact I remember at one time during the campaign they said that the Liberals were really going along with the Conservative Party package on NAFTA when that was not the case.

I am happy to speak in the House today, approximately 100 days since the government was sworn in. It was the Prime Minister who within the first week of taking office declared that we would only get behind NAFTA if we could have enforceable side deals. Therefore, I think it is important for all Canadians to know that NAFTA has been strengthened and improved. I believe the side agreements on environmental and labour co-operation will go a long way in allaying the justifiable fears of Canadians in these areas.

I specifically like that this tripartite commission which will be set up will be so specific in its area of responsibility and priority that it will include limits on specific pollutants, assessing projects with transboundary implications and reciprocal court access. This is the specific type of thing those in Canada who were opposed to the NAFTA, myself included, wanted attached to the agreement.

Also with respect to the environment the minister of trade went to extra lengths in the area of water. In the last Parliament we listened to lawyers and experts from across Canada who had the view, as did many members, that the issue of water was not clear. In fact they could have access to our water either through the free trade agreement or the NAFTA. Many of us were very concerned about that. I give credit to the minister of trade who went the extra distance to cite water specifically. In fact under these side agreements there is absolutely no way the Americans or Mexicans have unfettered access to our water.

The last point I want to make is in relation to labour. In my riding labour was a major concern and I supported this concern. We are going to have to be very diligent about this issue because many people are concerned about the labour standards in Mexico, especially with this notion of hiring young children and the working conditions. No one in this country could tolerate those working conditions with any kind of conscience at all.

Under the very specific mandate to the labour commission in this side deal we can assure Canadians if there is any action taken in any corporation or any activity in Mexico they can appeal to this commission. We will have representation there that will bring the matter to the attention of this Parliament and that is ultimately what Canadians want.

I am happy to see that all three parties are united on these side agreements to the NAFTA. However, we are going to have to be very diligent and watch this agreement very closely because I know that a large number of Canadians are still very dubious about it.

Crown Liability And Proceedings Act
Government Orders

12:50 p.m.

Reform

Paul Forseth New Westminster—Burnaby, BC

Mr. Speaker, I make a comment for clarification on this additional measure.

Can it be explained in plain language on the record, how a local citizen or a company could intervene when they observe in the marketplace that these new orders of the Federal Court, generated from this tripartite commission, can bring others to account, that these new orders will be obeyed and observed both here in Canada and in comparable jurisdictions.

Crown Liability And Proceedings Act
Government Orders

12:50 p.m.

Liberal

Dennis Mills Broadview—Greenwood, ON

Mr. Speaker, the parliamentary secretary to the minister of trade will be speaking momentarily.

My understanding of this agreement is that when there is a situation having to do either with the environment or labour where we believe the agreement is not being followed, then we would report this to the commission which has the jurisdiction and will allow the claim to be analysed. If the claim is justified and someone is defaulting then action can be taken right away.