House of Commons Hansard #62 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was tax.

Topics

Business Of The House
Government Orders

12:15 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

The House has heard the terms of the motion. Is it the pleasure of the House to adopt this motion?

Business Of The House
Government Orders

12:15 p.m.

Some hon. members

Agreed.

(Motion agreed to.)

The House resumed consideration of the motion.

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May 3rd, 1994 / 12:15 p.m.

Broadview—Greenwood
Ontario

Liberal

Dennis Mills Parliamentary Secretary to Minister of Industry

Madam Speaker, I am appreciative of having the opportunity to participate in this debate because it is an issue very near and dear to my heart. It is an issue that is near and dear to the heart of every member of Parliament. You cannot be in public service today without hearing from your constituents that they are frustrated with the current tax act of Canada.

When you test a tax system it should stand up to three basic criteria. First, is it simple enough that the person on the street who basically has to be responsible for participating in the tax system can understand it? On simplicity the tax act of Canada fails.

Second, on fairness we have heard time and time again of examples within the tax act where people who are making millions of dollars a year are not paying anything and people in the lower income spectrum, sometimes under $50,000, paying more than multimillionaires. When it comes to the test of fairness, it does not pass the test of fairness either.

When you talk about the third criteria, efficiency, my goodness when it comes to efficiency there is no one in this country who would stand up and say that the current tax act is an efficient system.

I must start off by reminding everyone in this House that the Prime Minister during the last election led the debate on tax reform. He led the debate. He said it in the red book. He came to Toronto on more than one occasion. I can vividly remember in the control room of CFRB when they confronted him on the issue of tax reform. The Prime Minister, then the Leader of the Opposition, said our government will be committed to comprehensive tax reform and it will have to meet the tests of simplicity, fairness, and of course efficiency.

We have been in office for just six months and we have started the process of addressing comprehensive tax reform. I believe the finance committee has done a terrific job going across the country and listening to all the different ideas that were presented.

The previous government moved arbitrarily on the GST, without proper consultation, and it ended up getting us all in a mess. It ended up fracturing the confidence of Canadians. It

destroyed a good part of our retail industry, not to mention that it exacerbated an underground economy beyond our ability to calculate right now. The underground economy it is said could be as high as $30 billion to $40 billion.

I say to the members of the Reform Party that they are not alone in their quest for comprehensive tax reform. All of us on this side of the House are on the same pathway as they. I have to caution them, and I say this humbly to the members of the Reform Party, that it is not easy to reform the tax act of Canada.

I believe that I can say that from a bit of experience. I began this journey on tax reform four and a half years ago when the Prime Minister of Canada at that time, Prime Minister Mulroney, and Michael Wilson would stand up on this side of the House and when we would criticize the GST they would say: "Come up with an alternative. Don't just criticize it. Come up with an alternative". A group of us got together and said: "This is going to be an interesting exercise". We came up with this idea called the single tax system.

I want to spend a couple of minutes explaining why we called it the single tax rather than the flat tax. I think it is very important to understand this point. I believe it is essential in advancing comprehensive tax reform further down the path.

For years there has been an attempt to reform the tax system. The number one alternative for debate was called the flat tax. The problem with the flat tax system was that the proponents never took into account the constituencies that needed to be addressed when it came to progressivity. In other words, and I am not suggesting the Reform Party is doing this because I have listened carefully to their speeches, the flat taxers tended to say: "No credits for seniors, no credits for families with children, no credits for charitable donations, to heck with the RRSPs". The flat tax system developed a very bad name. It was: "Here is the gross revenue. You have one single credit and then after that you are 20 per cent, over and out".

The seniors in our community, families with children and charitable organizations, the most disadvantaged in our community who we should care about the most, started to look at the flat tax and said: "The social side of the equation is being ignored in the flat tax system". Regrettably the flat tax got a very bad name. The biggest slam against the flat tax was it was not progressive.

A group of us who were dealing with this problem and doing the research said: "We can't go with that name because if we are going to get acceptance we have to design in the tax form credits that will make sure that those people who are most disadvantaged in our society are looked after right up front". We came around to this name called the single tax, a single rate of tax, corporate and personal.

We designed the personal side of the form. I am sure many members have seen this form. It is a relic now because it is draft two which was done in about April 1989. We are now at draft 19. In five years seven or eight of us have been listening to thousands and thousands of Canadians, probably about 100,000 Canadians over five years who gave us advice and input on how we could refine it. I only bring this point out that it took five years because most of those points that people made were good points. It taught me a big lesson.

Even though I wanted to come in in one year or two years and reform the tax system, I realized that a package this complex could not be done overnight. Believe me, I am not being defensive. I still support the idea of a single tax. One cannot just do it. It is not like putting something in the microwave and 20 seconds later, it is there, ready to go.

Going back to the personal side of the single tax, we started off with the following premise. We must for starters make sure families with children are recognized in the single tax. Therefore they must have a credit. We then said that the seniors need to feel comfortable with this tax act, therefore they need to have a line in the tax act and a credit.

Another line that we put in the credit was for charitable donations. I want to tell members that that 1 per cent line for charitable donations is essential. When we did our early research on this issue we called Drs. Hall and Rabushka from the Hoover Institute at Stanford. They said to us: "Do not make the mistake, Dennis, that we made when we started. We scrubbed the charitable donations line. We said no more charitable deductions".

They told us that the charitable organizations went to their local politicians and went to the press and they were such a force that they condemned the system even before it got out of the gate.

One has to have a line in one's tax act for charitable donations. One can cap it, but one must be generous because ultimately one is going to need those constituencies supporting the system if you are going to pull it off.

Then we said that we cannot do away with the RRSP structure. The RRSP structure is almost a part of our fiscal framework. We put that in the act but we capped it. Of course there was the basic deduction.

After all, there are those deductions or those progressive credits. I want to put the emphasis on progressive because the biggest criticism of this project is that it is not progressive enough. One can design progressivity into the act or into the

card. At any rate after those progressive features were designed, we told them that after their basic income and those deductions they could take a single rate of 20 per cent.

On the corporate side, because one needed to have a fully integrated system, we said that there should be a very progressive credit for small business on the first $50,000, no tax. After that, it is their basic corporate expenditures and after those corporate expenditures and their basic depreciation is put in place, there is a single rate there as well.

That is the direction that we have been working on. We believed that would accomplish a number of goals. The most important thing is simplicity. I think very few people would argue that this system is not simple. There it is. One can see it. One can fill it out. It is very straightforward.

The next most important thing is to make it doable and that is the challenge that we have in this Parliament.

There are difficulties in moving a tax system that primarily ran and to this day runs the economy of Canada and now we are saying, those of us who support this type of idea, that we want to stop running the economy of Canada through the tax act. We basically want to make it a tax collection unit; no more preferences, no more loopholes, flush them all out with those exceptions that I mentioned for seniors, families with children and charities.

I have to say to the Reform Party that the transition from the current system that we are in to a single tax system is really the debate that we have to engage in because that transition period is the real challenge.

I do not believe the challenge is one of whether or not we are going to generate enough revenue because right now the current tax system is so flawed that some experts say the underground economy is over $40 billion or $50 billion and growing. The notion of a simple, fair tax system is reinforced by the underground economy right now.

There is another factor and it is called having a globally competitive tax system and I do not believe we have been talking about that issue enough. Our tax system right now is driving people not only underground but offshore. In other words, our achievers, our entrepreneurs who are creating real wealth are starting to leave. Over a million Canadians are in California right now and we did a survey and found that many of them are there because of our tax act.

I believe that one of the reasons we should investigate comprehensive tax reform which the Prime Minister and our party have supported is that we need to reverse the capital flows. We have to design a tax system that causes the capital to flow back into our country rather than flow out. The current tax act is not doing that very well.

People from time to time come to me and ask how I could support somebody making $60,000 a year paying 20 per cent and someone making $1 million a year paying 20 per cent. Is that not unfair, inequitable?

For me it is not. There are many others in Canada who believe two things. Number one, the harder you work and the more you achieve and the more you earn, you should at least be able to keep some of it in your pocket. There is another thing. Right now there is no guarantee that we are getting anything on the person who is making $1 million or $2 million whereas in the single tax it is airtight. We are going to get that 20 per cent no matter what, including family trusts. In other words, under a single tax system all income is in the loop, it is airtight.

I suggest that if we had a system like that then those people, whether they be scientists or doctors or people who have achieved entrepreneurial wealth, rather than being tempted to leave would stay. Not only that but we would see other capital from around the world coming to our country because we would have a competitive tax system, a tax system that respected wealth creators, job creators, a tax system that respected people who have achieved through their intellect all kinds of scientific discoveries.

I want to say that we on this side of the House support the pathway that leads to comprehensive tax reform. However, at the same time I want to say as someone who has been engaged in this debate for a long time that it is not an easy task. This transition period is going to be a very tough period.

Let me give an example and let us deal with the energy sector right now because many of the Reform members are from western Canada and I know that the energy sector is very important to their constituents.

Right now in the tax act there are billions of dollars of tax grants to the energy sector. Under the single tax all of those grants or those preferences are gone, eliminated. When a company from the province of Alberta that has been used to getting these tax deductions, some of which are actually in the billions, finds that all of a sudden they are gone, it is a tremendous kick to the cash flow of that particular company. It is going to come running up to Ottawa or to members in their constituency offices saying it is out of business if that tax credit is cancelled.

Therefore, we are going to have to have a transition period because we are going to have to analyse whether that entire tax grant should be eliminated.

My own view has always been the following. Any grant, whether it be a direct grant in a line department or an indirect grant through the tax act, should always be linked to the policy objective of creating jobs. The problem is that because these tax grants are buried in the tax act there is no accountability as to whether they are meeting the policy objective.

I am going to close in 30 seconds. I want to say to the members of the Reform Party that we have to make sure when we move those grants into the line department we link them to job creation. If they do that, where they are transparent and accountability, we could have a successful tax act.

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12:35 p.m.

Reform

Ted White North Vancouver, BC

Madam Speaker, I very much enjoyed the speech of the hon. member. In fact, I hope he has the ear of the revenue minister and is managing to get some of these changes put into effect without too much delay.

I hope the hon. member will listen to my speech later on today about tax saturation because I think that is a point perhaps we have reached here in Canada today. Taxes are too high and part of the reason is that the spending is far too high.

I hope the hon. member will admit that is part of the problem. I certainly hope that it does not take a debt crisis as it did in New Zealand before we can come to grips with this tax situation and actually turn it into something fair.

I agree with the member regarding the complexity of the system. He implied a few times that millionaires do not pay their fair share of taxes. I would like to explore that a little. I would like to know if the member can give me a list of the reasons or ways millionaires do not pay tax other than because of a family trust, which he mentioned. I would really be interested to know. If millionaires can avoid paying taxes in some way legally then those same ways should be available to any average taxpayer in this country. If those ways are there I would like to know about them because I think I am paying too much tax as well.

I wonder if the hon. member could explain the ways millionaires escape paying tax.

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12:40 p.m.

Liberal

Dennis Mills Broadview—Greenwood, ON

Madam Speaker, I want to begin by saying to the member that in no way, shape or form did I mean to cast aspersions on the people who are generating great personal wealth in this country. Neither did I want to say that they were not paying tax through illegal means.

The bottom line is that there are opportunities that exist for tax deductions or tax options within the tax act that would allow a person with great wealth to reduce that income tax payable.

I am not going to get into any specifics today, but I did give an example in a recent householder. I will give the one example that was actually advertised in a magazine a couple of months ago: "Now your income tax dollars can help you invest in a beautiful home in the sun". I am sure members remember that ad: "This investment opportunity is designed to be of maximum tax benefit to individuals like you with a total family income of over $50,000 per year, Intelevest Group. You can either redirect your income tax dollars to help you invest in luxurious townhouses in beautiful Sarasota or you can continue to send all that hard earned money to the government in income taxes".

In other words, this is an example of how the tax preferences discriminate against those with lower income tax. In other words, you would have to be over that amount. It allows a higher income earner to use his higher income to participate in this luxury townhouse rental income at an after tax cost of zero. That is one specific example but there are many others.

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12:40 p.m.

Reform

Philip Mayfield Cariboo—Chilcotin, BC

Madam Speaker, I would like to compliment the hon. member for Broadview-Greenwood for his statement, his intervention. I appreciate very much the way he has laid it out, citing simplicity, fairness and efficiency.

As I was listening I realized that he talks about the doability of it as well. I am pleased to hear the practical thoughts he has. This Parliament is not the first Parliament to take a run at tax reform. Names like Carter and Macdonald are well known in this exercise. As I have read about these other attempts there has always been the story of the obstacles that have been placed in the way of simplifying the tax system and of reforming it.

I was wanting to ask if the hon. member would perhaps outline some of the obstacles to tax reform. Who are the vested interests that resist reforming the tax system so that it may pass the test of simplicity, fairness and efficiency so that it is a doable tax system?

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12:40 p.m.

Liberal

Dennis Mills Broadview—Greenwood, ON

Madam Speaker, I would like to deal with the question in two parts.

First, naturally there are people who have thought for years, on behalf of industry, to put their tax preference or their tax loophole or their tax break, whatever you want to call it, into the tax act. Those people who have fought for years and worked over the Department of Finance for their special privilege are defenders of the status quo. They believe in that with the same passion as the member would believe in his particular approach.

However, I am going to say that the biggest obstacle to tax reform in my mind are the people of Canada. The people of Canada are not interested in tax reform. They talk about it a lot and I know we talk about it. I am somebody who has worked on the issue for five years, but when push comes to shove it is not the kind of issue that makes people roll up their sleeves and get turned on about. I know there are tax groups out there that band together and rally from time to time. In relation to the whole, Canadians at large, they are a very small number.

In fairness to the member, my biggest frustration with the issue of tax reform in the last five years-and my party has been supportive of the issue-is that we cannot seem to get the people of Canada charged up and asking for tax reform. They have little

moments or little flutters when they call about it, but there is no real thrust from the people.

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12:45 p.m.

Reform

Jim Silye Calgary Centre, AB

Madam Speaker, I will be very brief. I compliment the hon. member for Broadview-Greenwood on all the work he has done for the last four or five years. We would like that to snowball and not have to wait another three or four years before something happens.

In defence of his simple, fair and efficient tax system, whether we call it a flat tax, a single tax or proportional tax, how many more years is he willing to wait before his government supports or rejects the proposal?

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12:45 p.m.

Liberal

Dennis Mills Broadview—Greenwood, ON

They are playing hardball with me today, Madam Speaker.

First let me be very specific. I have always said that the single tax is an effort to advance the tax reform debate in a constructive, open way. If there are better ideas out there than the single tax, I welcome them. In other words if it is proportional tax or if the men and women of the finance committee come up with some new tax design that is better than the single tax, as good as or whatever, I am for it. I do not want to be in a position-and the Prime Minister has said he does not want to be in that position either-of defending the status quo. He said it again yesterday.

We must understand that it is most important not to make the same mistake the Conservatives made. They came in so quickly with this GST that they fractured and tax shocked the people of Canada. That set us back 10 years.

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12:45 p.m.

Reform

Jim Abbott Kootenay East, BC

Madam Speaker, my topic as it relates to the subject today is that Canada is an exporting nation. Our livelihood, our personal incomes depend on exports. Our present tax system must be altered to maintain our international competitiveness because our national economy depends on it.

On January 27 I rose and spoke in the House. If I may I would like to repeat a small part of what I said then. It was interesting that in a recent news article in the Kimberley Bulletin a headline read: Cominco irked at city tax rate''. The complaint of the mining company was that the major industrial tax rate in Kimberley was 69 per cent higher than the tax rate in Cranbrook. In justifying the position of the city, the mayor of Kimberley argued that Cominco taxes were high but said that the tax rate was justified. He said that the mining company has had it easy on taxes because it did not start paying taxes until 1968 when Cominco was incorporated into the city limits. The mayor said:That is when Cominco started shutting down plants and laying off people''.

I am not criticizing the mayor of Kimberley for his comments. I simply cite that quotation as an accurate representation of what happens when an industry is taxed. The fact is that when taxes go up jobs in an industry decrease.

Capital for mining is fleeing Canada. The country of Chile is one of the greatest beneficiaries of this flight. It has an effective tax rate of 15 per cent. Countries like Mexico and Papua, New Guinea have a mining tax rate of 35 per cent. The Philippines and even the United States have a tax rate on mining companies of 38 per cent, whereas the mining companies in the province of British Columbia suffer a mining income tax rate of 50 per cent for hard rock mining. In coal mining, although it is hard to believe, in four years between 1987 and 1991 the B.C. coal industry paid $454 million or almost half a billion in direct taxes while net returns to the industry were only $8 million. I say taxes kill jobs.

I am a member of the standing committee on the environment of the House of Commons. We are concerned, as we should be, about carbon dioxide emissions. The objective is to return CO2 emissions to 1990 levels by the year 2000. I support that objective. However we must recognize doing that, particularly if we do it by taxation, will have a very detrimental effect on the electric power industry in Alberta.

I represent British Columbia and I have Canada's largest coal mine in my constituency. Therefore I am very concerned about the informal discussion there has been about green tax and about carbon tax. If we use taxation to alter behaviour then we kill our ability to be internationally competitive.

If we want to change behaviour I suggest we may choose to institute penalties. We may choose to institute levies. We may choose to institute fines but they should be considered to be as revenue neutral as possible. In other words taxation is for the purpose of raising revenue. If we manage through green taxes and carbon taxes to alter behaviour, having altered the behaviour we lose the revenue. It is totally contrary and totally counterproductive.

Most of my constituents and perhaps a lot of constituents of members of the House suffer from the same problem and the same concern about the overlapping of all the levies, the penalties, the fines and the permits.

I have a letter from a business in my constituency which was written to the Prime Minister, a company in the business of blacktop. In part it reads:

Over the past three years, we have kept a record of government permits, inspection and controls from different levels of bureaucracy. To everyone's astonishment, we were exposed to, hassled or intimidated by 35 different government officials all looking for their pound of flesh. Furthermore, if we don't take the time from our busy schedule to treat these people as "all important" we could face costly delays and problems.

Being in a smaller constituency businesses have to deal with many municipalities. When they do so they come up against city engineering which has material specifications, traffic control rules and regulations. They also have independent assessments with respect to fire department regulations and registration. They need a business licence and a municipal licence for registration of trucks. That is at the municipal level.

At the provincial level these firms have to deal with-and this is amazing-the pesticide branch for a permit, pollution control branch for a permit, gas inspection for inspection, electrical inspection, employment standard branch for an audit, gravel pit inspection, safety permit and bond. What is very interesting about the gravel pit inspection is that within the provincial jurisdiction they have to deal with the mines department and with workers' compensation. In certain situations with respect to the gravel pit they cannot comply with both sets of regulations. Within that single provincial jurisdiction they have to work with conflicting regulations: motor carrier inspection, dangerous goods inspection, safety inspection, weight restriction, over width permits, over height permits, provincial sales tax audit and licence, paving branch inspection and standards, material inspection branch, workers' compensation inspection, workers' compensation audit, pressure vessel inspection and permit, fire marshal inspection and regulation, and air use permit.

I should mention what struck me as terribly weird was that they actually pay for the amount of air they consume. It just goes on and on: air use permit, traffic control permit, ICBC licensing and regulation, and capital tax.

Then there is the overlap of many of these regulations into the federal jurisdiction: Canada pension plan rules, regulations and audit; UIC rules, regulations and audit; and Revenue Canada income tax and corporate tax. Included in that would be remission of taxes collected from employees; GST rules, regulation and audit; radio licensing and regulations; Public Works Canada material supply inspection, electrical inspection, mechanical inspection; and finally more inspection and regulation under work hazard training.

This is indicative of what we are doing to the people of Canada. Whether we are talking about individuals or about businesses, fundamentally we are regulating these people out of existence. We are fining. We are getting permits. We are finding all sorts of ways at various government levels to get more and more money from people.

I suggest as I started that Canada is an exporting nation. Our livelihood, our personal incomes depend on exports. Our present tax system must be altered to maintain our international competitiveness because our national economy depends on it.

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12:55 p.m.

Reform

Randy White Fraser Valley West, BC

Madam Speaker, I am pleased to rise to speak today about reforming the tax system. I want to talk today about the tax revolt which has started across the country. It has been going on for some years but it is becoming more predominant. I am going to cover why and how that is.

I want to talk a bit about why people are angry today about taxes, how we got here in the first place, what the government is doing about it, and the result which is the tax revolt itself.

We often hear people asking: "How do we own a small business in Canada today?" A lot of people respond by saying: "If you want to own a small business in Canada today, buy a large one and wait two tax years". While some find those words humorous they are quite discouraging. In fact they are very true in most cases.

Why are we angry? There are three fundamental reasons. First, there is little value in the tax dollar people are getting today. They see smaller disposable incomes and increasing costs. That is one of the reasons we are angry.

Second, people across the country see governments as fat cats spending inappropriately, spending well beyond their means. Quite frankly that is at all levels of government.

The third reason we are angry is that there is only one taxpayer. The trouble is that all three levels of government see only their perspective in raising taxes. It is like the infrastructure program of the federal government. It says it is spending only $2 billion, but it is spending $6 billion of taxpayers' money. It is $2 billion provincial, $2 billion municipal, and $2 billion federal.

Taxpayers do not really give two hoots about who is sharing in the small packages of dollars. They care about the big package and how much it is costing us.

How did we get to where we are? This all started with a temporary tax measure to support the war spending in 1917. Since then all levels of government have the feeling that even though there is no war they can get into the pockets of the average citizen on virtually everything they can name.

Also, we got here because of incompetence and mismanagement. We do not have to go very far to see the mismanagement and incompetent spending. I refer to a couple of items from "The Tales of the Tax Trough" by the National Citizens Coalition. It found that we spent $37,363 to study the effects of colour in advertising. We also spent $58,000 for an examination of what it is like to work for the Dominion grocery stores. We

spent $21,566 to examine experimental studies of interactive gestures.

Those kinds of costs go on year after year after year and in the same year after year after year governments say they are going to make a change. However the taxpayers do not see that; they only see more government rhetoric.

Another way we got here is because Canadians are passive people. We tend to think that governments are going to pull us out of this crazy spending, but it never seems to happen.

The tax revolt is going to go on. It is going to get larger and larger. There are several formal tax revolt structures in place in this country. I am going to speak about those in just a second.

What has this government done? We have already seen that this government has tacked on about $3 billion more in expenditures, but it has said that revenues should increase to offset that. Governments have played that trick on Canadian taxpayers for two generations now.

The government promised to spend about $1.5 billion on child care, if the economy should rise about 3 per cent. But it says: "No, it is not $1.5 billion. It is only $750 million because the provinces have to contribute $750 million". Well, their $750 million and the federal government's $750 million is $1.5 billion to the taxpayer. That is what we have to get into our minds.

The government has closed some bases which was a little premature because they are into a one year study. I have said before it is like bailing out a sinking ship with a thimble. We owe $40 billion. Getting $750 million here and there or $2 million and saving a few on perks and so on is not enough. We have to go deeper.

What is the result? We are into an underground economy the size of which nobody can estimate but we know it is big. The last election was part of the result. We saw a party virtually disappear off the face of the political map.

Then we have the revolt. A number of organizations are springing up across this country and I have talked to two of them. One is the Tax Revolt Network News run by Gerry Rogers in Halifax. He prints a monthly document and I will be quoting from it. There is also a gentleman by the name of Gebert from my home riding of Fraser Valley West who is well aware of Mr. Rogers' activities. By no means is this a limited list. There are all kinds of people out there.

I did get a call from a fellow by the name of George MacDonald in Calgary who is on a fixed income. He basically said: "Why not add the museum in the Prime Minister's riding to the cost of the inordinate expenditures, or the $100,000 grant to study riddles", and so on and so forth. That just came from Mr. MacDonald a few minutes ago. People out there are sick and tired of this.

Let me quote the Tax Revolt Network News: "Today nobody trusts governments will do what they say they will do, or say what they are planning to do without deceit". Gerry Rogers is a small businessman. He is not a politician. He is just ticked right off.

Other things in the Tax Revolt Network News: "The system is too complicated. A small business should be able to run and be accounted for by a person of average intelligence with a basic high school education. Please, governments, do not lend us money and do not give us grants. We are capable of governing ourselves. We need a more participatory form of government for the 21st century".

Another quote: "Taxes can be lowered without law breaking. The secret in the control of politicians and their pathological need to tax and spend: Control the money. Take away their privilege of taxation and borrowing and they will become more reasonable to deal with". This is all over the place in this country.

Another fellow has formed a citizens tax coalition. One hon. member talked about banding together from time to time. These people are not just banding together; this is big stuff in this country. I quote: "The thing Mr. Rogers and I have in common is the contempt for the political system that ignores common sense in taxation. It is bound to result in chaos in our economy. The first casualty will be our system of government followed by the politicians who failed to represent the wishes of the people who elected them".

I have one more quote which is interesting. It goes back a little bit. The quote is this: "The national budget must be balanced. The public debt must be reduced. The arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced if the nation does not want to go bankrupt. People must again learn to work instead of living on public assistance". This is not my quote; it came from a senator of ancient Rome, Marcus Tullius Cicero speaking in 55 B.C. What has changed since 55 B.C. you ask. Not much in this country.

The Romans misread the mood of the people and the civilization went up in flames. We are in danger of that happening too and I think this Liberal government should take heed.

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1:05 p.m.

Liberal

Dianne Brushett Cumberland—Colchester, NS

Madam Speaker, I truly enjoyed the hon. member's remarks, particularly the humour. When there is humour and wit in a taxation debate it does make it a lot more enjoyable.

One comment is in terms of the Rogers report on taxation revolt out of Halifax. My riding of Cumberland-Colchester is in Nova Scotia, that beautiful province. Just yesterday I attended a ribbon cutting and sod turning ceremony at a factory. It

is a manufacturing plant of Intertape Polymer Group. This factory has been in existence in Truro for close to 20 years. About every five years it has been able to expand with a little bit of Atlantic Canada opportunities or ACOA funding.

Yesterday we presented it with a grant of $1.5 million. Seventy per cent of that was federal funds and 30 per cent was a provincial co-operative sharing financial grant. The amount we presented as government of $1.5 million was matched with $9.8 million from the plant. This was to expand into new products that would go on the international marketplace. It already employs close to 400 people and will take on an additional 45 people. These are long term sustainable jobs.

The point I wish to make is that the manager of this plant had to compete with his other plants. One in Florida, one in North Carolina, one in Ontario, one in England, and the one in Nova Scotia: five manufacturing plants that manufacture a plastic tape that goes on the back of carpets, that makes polysacs for carrying all kinds of large bulk products. This fibre is made, competed with and sold internationally.

This plant in Truro was able to get the $9.8 million from the conglomerate because we were able to assist a little bit with an ACOA grant in the Atlantic region.

That is the benefit of cost sharing, stimulating, promoting those jobs. As the hon. member will know, in our red book we did advocate jobs for this country. If he has read the recent reports the economy today is at the highest it has been in the past five years. It is growing. It is growing slowly but it is growing and he must agree that we have taken some appropriate measures by reducing those taxes, the 3 per cent in the UI premiums. That was a constructive, positive measure to increase jobs and to increase job potential for this country.

I wanted to point out to the hon. member the fact that when we do cost share as a government, if the owner or manufacturer puts in a substantial amount and there are long term jobs, long term sustainability in manufacturing for the export market, I must remind him of the tremendous products, then it is a good investment and we are on the right track.

Supply
Government Orders

1:10 p.m.

Reform

Randy White Fraser Valley West, BC

Madam Speaker, good comments from the hon. member. I assure her it is not easy getting a laugh out of a tax revolt or a tax system in this country but one has to try once in awhile.

There is such a thing as government trying to assist business. I guess it is the perspective one has on how it is done. I can name time after time where government has put money into business and it has just gone out the back door. It has been a waste.

I spent some time down in Halifax not too long ago. Many people I talked to down there said: "Get rid of ACOA. It is just another tax bonus for those who can get into the trough".

I was in Anglemont up in the Shuswap in British Columbia this weekend. A fellow there said: "A friend of mine is going to start a business. He just got a $17,000 grant to start a business". I know the name of the business but I will not say it here.

The fact is that perhaps his friend should have borrowed the money from a bank or a business somewhere. You cannot just go around this country handing out tax dollars from the people of British Columbia or Alberta to somebody in the territories who wants to start a business. That is what is ticking people off today. Their money is being given away to some businesses that are totally unproductive.

Westray mines in Nova Scotia is a good example. That mine kept a lot of people working but it was tax dollars being transferred right across this country. What was the end result? There never was money earned in that place and many people died in a very unfortunate accident.

I received a letter not too long ago from the Canadian Kennel Club after my criticism of its receiving a $5,000 bilingualism grant. The club told me it had an income of $4 million to $5 million, yet it was getting a $5,000 grant. What for? Let it spend its own money.

Supply
Government Orders

1:10 p.m.

The Acting Speaker (Mrs. Maheu)

I am sorry, the hon. member's time has expired.