House of Commons Hansard #156 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was americans.

Topics

The Economy
Oral Question Period

2:20 p.m.

West Vancouver—Sunshine Coast
B.C.

Canadian Alliance

John Reynolds Leader of the Opposition

Mr. Speaker, I am sure his leadership rival, the Minister of Finance, hopes he does not make too many speeches that move the dollar around a little bit too much.

We agree with the Deputy Prime Minister and with the Minister of Industry that productivity is weak in Canada, which is a statement he made yesterday, but we think that instead of blaming Canadian businesses he and his cabinet colleagues should look in the mirror.

Instead of blaming the business sector, why will the government not end Canada's shameful record of having the highest income taxes and the second highest debt levels in the G-7?

The Economy
Oral Question Period

2:20 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, if the Leader of the Opposition had been paying attention to government policy in the House what he would see is that as a result of the actions of the government, our corporate taxes, in a couple of years, will be lower than the United States'. Our capital gains taxes are now lower than the United States'. Those are the kinds of policies that will lead to increased productivity. On our debt, we have the highest reduction in the debt ratio of any industrial country over the last number of years. The fact is, we have produced and Canadians are producing.

The Economy
Oral Question Period

2:20 p.m.

Canadian Alliance

Jason Kenney Calgary Southeast, AB

Mr. Speaker, even if the Minister of Finance tries to avoid saying anything negative about the dollar, one of his main rivals for the leadership, the Deputy Prime Minister, seems to prefer a more negative approach.

In fact, he has succeeded in bringing the loonie down half a cent in a single afternoon. Good work.

Can the Minister of Finance tell us whether he agrees with the financial community, which accuses his rival of irresponsibility in this affair?

The Economy
Oral Question Period

2:20 p.m.

Ottawa South
Ontario

Liberal

John Manley Deputy Prime Minister and Minister of Infrastructure and Crown Corporations

Mr. Speaker, it is rather silly to say that the value of the dollar went down merely because of a comment, when it has already gone up today.

It must be clearly understood that we have a highly competitive economy, because we have reduced our debt, eliminated the deficit, and reduced taxes, particularly for corporations, compared to the U.S. These are factors that will create a competitive economy here in Canada.

The Economy
Oral Question Period

2:20 p.m.

Canadian Alliance

Jason Kenney Calgary Southeast, AB

Mr. Speaker, this is the same minister who two years ago said that high taxes help make Canadian companies more competitive. Now he is blaming those companies, saying “it's not up to us...the private sector has got to make the investments”.

How does the minister expect Canadian companies to cure the falling loonie when they are having to deal with the pressure of the highest income tax burden in the G-7, the second highest debt burden, a debt that is $35 billion higher than when the government took power, and labour markets that do not work? How does he expect the private sector to solve the problems that the government has created?

The Economy
Oral Question Period

2:20 p.m.

Ottawa South
Ontario

Liberal

John Manley Deputy Prime Minister and Minister of Infrastructure and Crown Corporations

Mr. Speaker, I expect that the private sector will recognize not only the elimination of the deficit, not only the reduction of corporate taxes below those levels in the United States, not only the reduction of capital gains taxes below those in the United States, but will also recognize that right now today we can buy more goods and services for a dollar in Canada than we can buy for 62 cents in the United States.

That means they need to prepare by making the investment in equipment, in research and development and in technology that is going to ensure that they win those markets and retain those markets.

Taxation
Oral Question Period

March 14th, 2002 / 2:20 p.m.

Bloc

Gilles Duceppe Laurier—Sainte-Marie, QC

Mr. Speaker, the Minister of Finance is spreading untruths to deny the existence of fiscal imbalance in Canada. To support his erroneous argument, he has gone so far as to distort the conclusions of the conference board. I quote the conference board, and it is very clear, “the dynamics in place for each level of government will unquestionably create a problem of fiscal imbalance”.

That is what the conference board says.

Is the Minister of Finance prepared to be more forthcoming and recognize, as the conference board has done, that a significant fiscal imbalance exists, to the detriment of Quebec and the provinces?

Taxation
Oral Question Period

2:20 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, allow me to quote the conference board, which says that “This scenario assumes that the government will not allocate any of its surplus to tax reductions, new spending or additional transfers”.

And here is its conclusion, I am quoting the conference board once again, “The exercise is purely hypothetical—”.

Taxation
Oral Question Period

2:20 p.m.

Bloc

Gilles Duceppe Laurier—Sainte-Marie, QC

Mr. Speaker, one must always start with the hypothetical. If he does not yet understand this, I wonder how he prepares his budgets.

Let us have a look at these five years to which he constantly refers. The conference board concludes there is fiscal imbalance. For the next five years, the conference board is forecasting a deficit of $10 billion for Quebec and a surplus of $14 billion for Canada, for the five years he refers.

Rather than twisting the conclusions of the conference board, which are good for the short, medium and long term, will the minister have the honesty to admit that there is a fiscal imbalance, call a meeting of provincial ministers and discuss the issue with them?

Taxation
Oral Question Period

2:25 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, again, looking at the figures quoted by the leader of the Bloc Quebecois, the conference board, according to its projections, is predicting, as he just mentioned, a deficit next year for Quebec, and the PQ government.

However, we see this morning that what Quebec is predicting for next year is a surplus.

Taxation
Oral Question Period

2:25 p.m.

Bloc

Yvan Loubier Saint-Hyacinthe—Bagot, QC

Mr. Speaker, I would remind the minister that the figures for the first five years he is criticizing in the conference board study are the figures in his own budget. It is completely ridiculous.

The Minister of Finance is well known for underestimating budget surpluses. And since 1994, he has been out an average of over 171% per year. This year, he will be out by close to 500%.

Will the Minister of Finance admit that even his own figures are clearly and deliberately low?

In its study, the conference board concludes that there is fiscal imbalance in Canada now—not in the future—and that it will become worse over time.

Taxation
Oral Question Period

2:25 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, the member says that the conference board used our figures.

It did projections over a 20 year period. We have always said that projections over 20 years are not realistic.

Take the last 15 years in the United States. Last year, the United States predicted an incredible surplus and this year they are looking at a deficit. We say that projections over 20 years are not realistic.

Taxation
Oral Question Period

2:25 p.m.

Bloc

Yvan Loubier Saint-Hyacinthe—Bagot, QC

Mr. Speaker, if the conference board has no credibility with the minister, how is it that he himself gave it a $185,000 contract this year to do a study?

Will the Minister of Finance have the decency and the honesty to admit that the conference board study which he is using to deny the existence of fiscal imbalance concludes, on the contrary, that there is indeed fiscal imbalance for each of the years, starting with this one, to the benefit of the federal government and its popularity and to the detriment of the provinces?

Taxation
Oral Question Period

2:25 p.m.

LaSalle—Émard
Québec

Liberal

Paul Martin Minister of Finance

Mr. Speaker, the problem is not the conference board but the mandate it was given by the Séguin commission.

For example, it said, “In 20 years, no recession”. But, in the past 20 years, we have seen the 1980-81 recession, and the 1989-90 recession, with years of after-effects. It said that there would be no tax cuts. Last year marked the largest tax cuts in the history of Canada.

This shows that the problem is the mandate given by the Séguin commission.

The Economy
Oral Question Period

2:25 p.m.

NDP

Alexa McDonough Halifax, NS

Mr. Speaker, let us be clear about what the Deputy Prime Minister actually said. He said “Many Canadian firms would enter the land of the living dead if the Canadian dollar were strengthened”. These grotesquely irresponsible remarks broadcast worldwide caused the dollar to fall another one-half cent.

Rather than fearmongering about what could happen if the Canadian dollar actually rose to 80¢, what steps is the minister prepared to take to ensure that it actually does?