House of Commons Hansard #186 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was legislation.

Topics

Points of Order
Oral Question Period

3:30 p.m.

Progressive Conservative

Peter MacKay Pictou—Antigonish—Guysborough, NS

Mr. Speaker, my point of order arises out of question period.

Begging the indulgence of the House, in keeping with the respectful nature of the moment of silence and the tributes that were paid in the House commemorating the 10th anniversary of the Westray explosion, I referred in my remarks to a composition by a 15 year old young lady by the name of Jennifer MacDonald from Stellarton, Nova Scotia, which is in close proximity to the mine. I wonder if, in keeping with the solemnity of the occasion, I might seek unanimous consent from members present to table this handwritten copy of her poem about the Plymouth explosion so that it might form part of the public record and help mark the importance and the significance of this 10 year anniversary.

Points of Order
Oral Question Period

3:30 p.m.

The Speaker

Does the hon. member for Pictou--Antigonish--Guysborough have the unanimous consent of the House to table the document?

Points of Order
Oral Question Period

3:30 p.m.

Some hon. members

Agreed.

The House resumed consideration of the motion that Bill C-47, an act respecting the taxation of spirits, wine and tobacco and the treatment of ships' stores, be read the third time and passed.

Excise Act, 2001
Government Orders

May 9th, 2002 / 3:35 p.m.

Bloc

Marcel Gagnon Champlain, QC

Mr. Speaker, it is now my turn to speak to Bill C-47, the Excise Act, 2001 respecting the taxation of spirits, wine and tobacco.

What is rather surprising about that bill is that for the first time, brewery products were completely excluded from it. My colleague, the member for Saint-Hyacinthe--Bagot moved amendments which were rejected. These amendments concerned microbreweries. More and more, in Quebec as elsewhere in Canada, brewery products are becoming regional products, products with a regional colour and flavour. As I said, these are products reflecting regional culture.

In the last number of years, microbreweries have enjoyed rapid growth, and several regions have developed beers of better quality, with a regional colour and flavour. Besides, those initiatives have generated jobs in the regions.

These small breweries should be encouraged and have a great future. They help develop our regions in terms of culture of flavours. However, they have started to compete with large breweries like Molson and Labatt in particular. Why are breweries excluded from the bill? Because it became obvious that small breweries held a market share that large breweries want to take over. There was intense lobbying, and representations were made to the chair of the committee looking into the issue. The result was the exclusion of breweries from the bill. In the long run, they will disappear.

Microbreweries give regional colour and they create jobs in the regions. Some want to eliminate them. With 4% of the market share, microbreweries automatically deprive the larger breweries of profits. I find it appalling that the government caved in to the lobby, arguing that we will come back to the issue later. We will, once all the microbreweries have disappeared.

For example, in 1997, there were more than 90 microbreweries in Canada. Today, because of these policies, there are only 30 left. In the riding of Portneuf, which is next to mine, there was a fine microbrewery that was a delight for the region and was putting the region on the map, so to speak. It is among those that have disappeared. Having known the owners personally, I found it hard to see it go, as it was creating jobs, especially as this worked out to the advantage of the biggest breweries.

Why did the government not want to deal with the taxes collected from microbreweries? It is simple. It is because it wants to replace them with American microbreweries.

For example, in the United States, the tax on microbrewery products is 9 cents a hectolitre, while it is 28 cents a hectolitre in Canada. Thus, the big breweries, Molson and Labatt, acquire the American finished product and compete on the Quebec and Canadian market, using American microbrewery products and kill our microbreweries.

It is an aberration when the government caves in to the big business lobby, which leads to the elimination of our small businesses. It is a known fact that every time microbreweries lose 1% of the market to the big breweries, the big breweries gain a further $17 million in profits.

Members will understand that, when microbreweries have 4% or 5% of the market, big breweries are worried. So they have found a way to swallow the small ones by ensuring they are no longer competitive.

This means that the 4% of the beer market that belongs to microbreweries is worth about $68 million in profits. This represents many jobs on the regional market, which is, once again, being taken over by Molson or Labatt.

We are here to make laws that will ensure greater justice. We are also here to make laws that will give regions a chance to develop. The Liberal Party, which is in power, is using its majority to crush the opposition and to pursue its agenda by having legislation passed. This is the same party that claims it represents the regions. If it were really representing the regions, it would have understood that the big breweries' lobbying was a threat to some very promising businesses at the regional level.

Not only did the government not see what was happening, but if it did, it did not care. If it realized what was happening, it helped to destroy the market for microbreweries. It excluded beer from the Excise Act and the Excise Tax Act under pressure from Labatt, which had free access to the government, in spite of our irepresentations and of the importance of this issue at the regional level.

Responding to the pressure, the government saw to it that more and more microbreweries would disappear. We have already gone from 90 breweries to 30. It is expected that with the competition by the big breweries, which are selling American products taxed at one quarter of the rate here, the beers produced in the regions by the microbreweries in Quebec and in Canada, will disappear.

It is rather depressing to see how little the government cares about small businesses. It is depressing to see the big businesses, major contributors to the Liberal Party's campaign fund, getting their greedy hands on the market share of the microbreweries in Quebec and in Canada.

We will of course be voting against this bill, but we want to condemn it with the utmost vigour.

Excise Act, 2001
Government Orders

3:45 p.m.

Bloc

Bernard Bigras Rosemont—Petite-Patrie, QC

Mr. Speaker, I am pleased to take part today in this debate on Bill C-47. As it has been often mentioned, the purpose of the bill is to modernize the Excise Act. We are in a situation where all the provisions contained in the Excise Act, which Bill C-47 is supposed to replace, are included in this bill, except anything that has to do with beer.

This is important for what I will call the microbrewery industry. Microbreweries are the pride of several regions in Quebec. As my colleagues pointed out, these beers often have a different taste that has a regional character. These industries employ men and women from every region in Canada, but also from every region in Quebec.

Microbreweries are often symbols of the regions of Quebec. They are employers, they are a driving force for economic development and they are the symbol of a region. They offer consumers a product that is different from those offered by the big Canadian brewers.

The situation in which we find ourselves leads us to the conclusion that a market is developing, resulting in these microbreweries being subjected to unfair competition by other brewers. I will explain.

The beer produced by microbreweries often has to compete against so-called imported beers. Under the current taxation system, the big breweries, like Labatt, enjoy preferential treatment, a preferential tax rate, compared to the microbreweries.

The preferential rate is based on the tax rate. In Canada, there is a charge of 28¢ on Canadian beer. The rate in the U.S. is about the same, except that they have a preferential rate for microbreweries. They consider that a small business does not have the same organizational or financial structure as the big breweries. So, the preferential rate in the U.S. is only 9¢ a bottle, compared to 28¢ in Canada.

Since the tax rate for microbreweries in the U.S. is 19¢ lower than it is in Canada, it is clear that our microbreweries are the victims of unfair competition. Not only is the difference between the tax rate unfair, but microbreweries are far from being defined the same way in Canada and in the U.S.

For instance, to be considered as microbreweries, Canadian breweries have to produce 300,000 hectolitres, compared to almost 1 million hectolitres for U.S. breweries. So, the definition in itself paves the way for the unfair competition Quebec and Canadian microbreweries are victims of.

I have just mentioned the tax rate on one bottle of beer, but if we do the math, we see that for 24 bottles sold in a grocery store, the Canadian government gets $4.09, and the U.S. get $1.12, for a huge difference of $2.90 on a case of 24, which would explain why several of our microbreweries had to close their doors in the last few months and years.

Several regions in Quebec have been hurt by the loss of these small companies that can be competitive if they are given a bit of a tax break, something this bill is not doing.

In the riding of the hon. member for Saint-Hyacinthe—Bagot alone, two microbreweries have had to shut down since 1997. We have also lost microbreweries in Saint-Eustache, Baie-Saint-Paul, Montreal and Cap-Chat. Microbreweries, which have, in recent years, become ambassadors abroad for various regions of Quebec and Canada, promote regional development, in terms of growth and symbol. Therefore, these closures were major losses.

We are speaking on behalf of microbrewers, but I want to stress that the Bloc Quebecois did not fight this battle in recent weeks and months only for Quebec microbrewers. We were pleased to see that, just last week, the Canadian Alliance joined forces with the Bloc Quebecois to condemn the current federal preferential system.

We saw Canadian Alliance members ask questions in the House of Commons. It is not because the situation necessarily affects Quebec microbrewers; it is because they realized that microbreweries were in trouble in other Canadian provinces.

Here are some figures. Seven microbreweries have shut down in British Columbia, five in Alberta, one in Manitoba and one in Nova Scotia, for a grand total of more than 38 microbreweries that had to stop operating in Quebec and in the rest of Canada, in part because of the current system.

This means there are only some 40 microbreweries left in Canada. Close to half of the microbrewers had to shut down in recent years, thus leaving the market to the big breweries, such as Labatt. The result is that Quebec and Canadian consumers have only two choices: they can either drink Canadian beer brewed by a big brewery, or imported beer.

Knowing consumers, they will often choose beer from a microbrewery over imported beer, because they like local products.

We hope that the government will listen and will propose provisions to boost these driving forces of the Quebec and Canadian economy.

Excise Act, 2001
Government Orders

3:55 p.m.

Bloc

Réal Ménard Hochelaga—Maisonneuve, QC

Mr. Speaker, before getting into the heart of the matter, let me congratulate those who won during random draw this morning.

I also want to thank the member for Saint-Hyacinthe--Bagot for the excellent work he did on Bill C-47, a bill about taxation and particularly the excise tax. The member for Saint-Hyacinthe--Bagot and I are friends. Over the years, we have worked together, mutually respecting each other's jurisdiction.

The member for Saint-Hyacinthe--Bagot is an enlightened person. He knows that if he had not been quite alert at committee, they would have pulled a fast one on us. For our visitors in the gallery and for the people watching us, I would like to explain precisely the purpose of this debate.

I learned about the excise tax in my economics classes in cegep. I think you and I belong to the same generation, Mr. Speaker, except that you may be a couple of years older than I am. In cegep, the member for Joliette was one of my teachers. He taught me that the excise tax is paid by the consumer on a number of products.

In the early 1980s, the member for Joliette used a metaphor for his students. He used to say that the excise tax was a tax on sin because it dealt with alcoholic beverages and cigarettes, which are all associated in one way or another with luxury.

The member for Saint-Hyacinthe--Bagot, who has been on the Standing Committee on Finance for about 10 years, is an experienced member of parliament in spite of his youth. On several occasions he explained in committee that we are not against a general review of taxation. We understand that processing has changed in industry. We realize that the reality of import-export has evolved.

I would like to digress for a moment to say that Quebecers are genuine free traders who believe in international and interprovincial trade. As a matter of fact, the premier of Quebec, the member for Verchères, who, as everyone knows, will remain premier of Quebec because he is giving Quebecers a very good government, was the creator of the department of international trade in Quebec. He also gave Quebec its first international trade policy.

He pointed out that Premier Lévesque had invited him to his office and told him, “You will be responsible for international trade”. He had a very small budget then. Unless I am mistaken, it was about $9 million. This was not much to put Quebec on the map in terms of international trade.

When we had the free trade debate in Canada and Quebec in the early 1980s, Quebecers were genuine free traders. They believed that increasing trade was a sure way to promote economic growth. Even if one believes in the virtues of trade, even if one is convinced that taxation has to be reviewed and that trade is an inescapable fact of life for all nations--the member for Kamouraska--Rivière-du-Loup--Témiscouata--Les Basques, who is a fervent advocate of regional development, knows this--mechanisms to protect culture are needed.

As far as protection of culture is concerned, we understand each other, Mr. Speaker. You were on the heritage committee for a long time. You are well aware that nations must protect their culture.

Globalization is unavoidable, but sovereignty is essential. Sovereignty allows trade on an equal footing, and allows specific mechanisms to protect culture.

Do not think that there is no link between the excise tax and culture, because you would be wrong. I will explain this link.

It is a known fact that the excise tax is a tax on consumer products, which the consumer pays on a certain number of goods, such as, of course, tobacco, spirits, wine and beer.

I repeat that the hon. member for Saint-Hyacinthe—Bagot was absolutely in favour of a general review of the act. We were surprised—and when I say surprised, I mean appalled, and when I say appalled, I mean outraged, and when I say outraged, it is because, deep down, we were hurt—to see what the government did. Why did the government want to exclude the microbrewery sector from this general review?

Mr. Speaker, you will allow me to stay within the limits of parliamentary language, but I think I am beginning to smell patronage here.

We understand that members who sit on a parliamentary committee have the right to be married, to have a marital relations, to have privacy. Privacy is a right protected in major charters, both the Canadian Charter of Rights and Freedoms and the Quebec charter.

However when someone is the chair of the finance committee, it is quite different. Indeed, it seems that the chair of the finance committee was elected after a hard fought battle and has foiled Liberal strategists. This chair, who is quite a very nice person—no one questions this—is married to an influential director of one of the biggest breweries in Canada, who himself sits on the Brewers Association of Canada.

One might wonder about this. I thank the member for Saint-Hyacinthe—Bagot for his vigilance. I would like to make a link with regional development. Of course we understand that my colleague and friend, the hon. member for Jonquière, has defended regional development here on several occasions, every time she has had the opportunity to do so.

This is the situation. Of course we recognize that the big breweries, like Molson and the others, represent a relatively concentrated market. Some of them dominate the market and are trying to sink the microbreweries. If I am not mistaken, there have been more than 40 such cases already. Some of the microbreweries had to close down because of the unfair tax system and because of the rate that is applicable in the United States.

However, we have to understand that a number of microbreweries are located in regions and that they create employment. The location of an industry is an important factor. When a brewery or a microbrewery decides to set up in a region, it contributes to the development of the economic fabric of the region.

I regret to have to inform the House and all our viewers that in the area of regional development, the government's record is abysmal. I do not know how a Liberal can actually say the words regional development.

Let me give members an example. During the last election campaign—I could give members the example of the member for Beauharnois--Salaberry—the Liberal Party promised to spend $1.9 billion on the highway system. This is not peanuts. It is, however, rather unbelievable that the strategic highway improvement program only amounts to $108 million over a four year period.

It is therefore obvious that the issues of microbreweries, of culture, of regional development and of privileges in the House are all related.

In conclusion, on all these issues, Quebecers can count on the Bloc Quebecois to be looking out for the interests of Quebec to the best of its knowledge and energy.

Excise Act, 2001
Government Orders

4:05 p.m.

The Deputy Speaker

Is the House ready for the question?

Excise Act, 2001
Government Orders

4:05 p.m.

Some hon. members

Question.

Excise Act, 2001
Government Orders

4:05 p.m.

The Deputy Speaker

The question is on the motion. Is it the pleasure of the House to adopt the motion?

Excise Act, 2001
Government Orders

4:05 p.m.

Some hon. members

Agreed.

Excise Act, 2001
Government Orders

4:05 p.m.

Some hon. members

No.

Excise Act, 2001
Government Orders

4:05 p.m.

The Deputy Speaker

All those in favour of the motion will please say yea.

Excise Act, 2001
Government Orders

4:05 p.m.

Some hon. members

Yea.

Excise Act, 2001
Government Orders

4:05 p.m.

The Deputy Speaker

All those opposed will please say nay.