House of Commons Hansard #147 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was tax.

Topics

Taxation
Oral Question Period

2:35 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, it only stands to reason that if 750,000 more people are working, it is quite possible that more people are paying taxes.

It only stands to reason that when loopholes are closed, and the $100,000 capital gains tax exemption is eliminated, more people are paying taxes.

One really is entitled to a higher level of debate from an opposition party. Its members fail to understand that an economy that is growing will give the government more revenues. That is a good thing, not a bad thing.

Goods And Services Tax
Oral Question Period

March 19th, 1997 / 2:35 p.m.

Bloc

Yvan Loubier Saint-Hyacinthe—Bagot, QC

Mr. Speaker, for several months now, the Minister of Finance has stubbornly refused to compensate Quebec for harmonizing the GST, although according to the calculations done by Quebec's Minister of Finance Quebec is entitled to $2 billion in compensation for having harmonized its sales tax. This estimate, it goes without saying, is very different from the one arrived at by the Minister of Finance, and that is why it is becoming increasingly clear that the solution to this problem will be political rather than bureaucratic in nature.

Does the Minister of Finance realize that his compensation formula, the McKenna formula, that compensates a province if, and only if, it is losing more than 5 per cent of its revenues, is an arbitrary formula and that Quebec is actually entitled to demand compensation similar to that received by the three maritime provinces?

Goods And Services Tax
Oral Question Period

2:35 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, the member must know that the formula by which only those provinces having lost more than 5 per cent of their revenues are compensated is perfectly normal. Five per cent includes normal fluctuations in a province's revenue from a tax source, in this case the sales tax.

The reality is that Quebec has not lost more than 5 per cent. Furthermore, if we look at the figures for the years since 1990, Quebec has made money by harmonizing and there is no compensation for a province that has not lost money. Nor is there any compensation for Ontario, Alberta and British Columbia.

Goods And Services Tax
Oral Question Period

2:35 p.m.

Bloc

Yvan Loubier Saint-Hyacinthe—Bagot, QC

Mr. Speaker, since the minister wants to talk about reality, here it is: there was a 20 per cent drop in QST revenues following harmonization in Quebec. Because of harmonization, we have had to compensate by hiking the income tax rate of SMBs by 66 per cent and payroll taxes by 23 per cent. That is reality.

It is so real that the premiers of British Columbia, Alberta and Ontario are demanding that the federal government give in to Quebec's arguments and pay $2 billion in compensation for the Government of Quebec's losses. If that is not a consensus, we would like to know what the Minister of Finance is waiting for. These three provinces represent 85 per cent of the population.

I put my question to him. What is he waiting for to give Quebec what it is owed in all fairness for harmonizing the GST, because equity and only equity is what this is all about?

Goods And Services Tax
Oral Question Period

2:40 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, first of all, it is very clear that Quebec is not entitled to compensation because Quebec has not lost any money.

I must point out that Quebec's former Minister of Finance himself, Mr. Bourbeau, indicated very clearly that Quebec did not deserve to be paid in this case because it had not lost any money.

That having been said, Mr. Bourbeau also pointed out that in other areas, such as technology and partnership for example, Quebec has received more than 60 to 70 per cent of all money, that Quebec, with 25 per cent of the population, receives 31 per cent of transfer payments, and more than 45 per cent of equalization payments.

It must be said that, when it comes to federal transfer payments to the provinces, Quebec is receiving its fair share.

Tobacco Products
Oral Question Period

2:40 p.m.

Reform

Grant Hill Macleod, AB

Mr. Speaker, there is no doubt the government's role in manipulating nicotine levels in cigarettes is plain. Agriculture and Agri-Food Canada funds the scientists and the tobacco companies tell them what to do.

Did the health minister know this was going on and why did he not stop it?

Tobacco Products
Oral Question Period

2:40 p.m.

Essex—Kent
Ontario

Liberal

Jerry Pickard Parliamentary Secretary to Minister of Agriculture and Agri-Food

Mr. Speaker, the premise the hon. member has brought forward is totally false.

Agriculture and Agri-Food Canada is in harmony with Health Canada in our reduction of nicotine in tobacco products. There is no question we have funded a tremendous amount of money to help farmers leave the industry. The majority of our spending goes to give farmers an exit from the tobacco industry.

When we look at it, we have done what we can to make sure the industry is treated reasonably well, but we do not spend money enhancing nicotine. That is false.

Tobacco Products
Oral Question Period

2:40 p.m.

Reform

Grant Hill Macleod, AB

Mr. Speaker, they are treating the industry reasonably well, indeed. On March 13, 1996 the chair of a meeting between government officials, researchers and the industry said the following:

Lines crossed with U.S. and Canadian varieties will continue with emphasis on improving nicotine and grade quality.

Did the health minister know this was going on and why did he not stop it?

Tobacco Products
Oral Question Period

2:40 p.m.

Essex—Kent
Ontario

Liberal

Jerry Pickard Parliamentary Secretary to Minister of Agriculture and Agri-Food

Mr. Speaker, I believe it is very important to realize that nicotine quantities in tobacco products are controlled internationally and that the industry itself has standards. The standard for nicotine in a tobacco plant is 2.5 per cent to 3 per cent. All products sold commercially in this country have to abide by between 2.5 per cent and 3 per cent.

Agriculture and Agri-Food Canada only monitors the tobacco plants to make certain that the industry standard is maintained and tobacco plants are within the standard accepted worldwide.

Goods And Services Tax
Oral Question Period

2:40 p.m.

Bloc

Roger Pomerleau Anjou—Rivière-Des-Prairies, QC

Mr. Speaker, my question is for the Minister of Finance.

In Quebec, to defray the cost of harmonizing the QST, as my colleague from Saint-Hyacinthe-Bagot pointed out, the tax rate on the profits of small and medium size businesses increased by66 per cent, and the contribution to the health services funds and the capital tax have both increased by 23 per cent. In the maritimes, however, there is no need for an increase, because of the $1 billion that Ottawa paid out. Quebec therefore is being deprived unfairly of its sole tax advantage compared with these three provinces and is being penalized for its earlier tax choices, which are not those of the maritimes.

Will the Minister of Finance put a stop to the unfair competition from maritime businesses by giving Quebec the $2 billion that would have cost a maritime-style harmonization?

Goods And Services Tax
Oral Question Period

2:40 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, the members of the Bloc can keep asking the same question; the answer will not change. I have heard all I can stand.

Quebec has lost no money. It has lost no more than the five per cent. With the other programs, the transfers of technology and partnerships, the equalization payments, the transfers to help the aeronautical and pharmaceutical industries in Montreal, Quebec has received a lot from the federal government.

If Quebec deserved money for harmonizing the GST, it would have been given some. Unfortunately, for Quebec, it did not lose any money.

Goods And Services Tax
Oral Question Period

2:45 p.m.

Bloc

Roger Pomerleau Anjou—Rivière-Des-Prairies, QC

Mr. Speaker, the premiers of the three maritime provinces are advertising in Les Affaires and the Globe and Mail the advantages of harmonizing the GST, which are greater for these provinces than for Quebec, simply because they have not had to pay the costs of harmonization. No wonder.

How long will the Minister of Finance continue to finance this unfair competition with Quebec and this shameless raiding of

Quebec businesses with part of the taxes of Quebecers? When will he redress this injustice and pay the $2 billion he owes Quebecers?

Goods And Services Tax
Oral Question Period

2:45 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, Mr. Speaker, I speak now as a Quebecer. I think it is very dangerous for a member of the Bloc to complain when another region of the country is given help, because Canada's strength lies in the fact that regions help each other and that the federal government is always there when it is needed.

When the time came to help the Montreal aeronautics industry, the federal government was there. When the time came to help Quebec after the flooding in the Saguenay, the federal government was there. When the time came to make equalization payments, the federal government was there.

What I think the Bloc member should know is that Canada's strength lies in its regions' helping one another. We are a country, and he should stop trying to divide us.

Goods And Services Tax
Oral Question Period

2:45 p.m.

Liberal

Dan McTeague Ontario, ON

Mr. Speaker, I would like to obtain the co-operation of the Bloc Quebecois.

Goods And Services Tax
Oral Question Period

2:45 p.m.

The Speaker

The hon. member for Ontario.