Debates of Oct. 2nd, 2003
House of Commons Hansard #132 of the 37th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was tax.
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The House resumed consideration of the motion.
October 2nd, 2003 / 12:10 p.m.
Bev Desjarlais Churchill, MB
Mr. Speaker, I am pleased to have the opportunity today to speak to the motion of the official opposition regarding dedication of gas taxes to the provinces and municipalities.
First I want to say that after we just heard the statements, it is hard to get back at each other over the spending of government funds, so hon. members should just bear with me if they can please.
There is no question that we have heard a number of speakers this morning talk about the serious consequences of not putting the needed resources into infrastructure throughout the country. I listened to my colleagues from the west talk about the serious conditions of roads and the number of deaths that have occurred as a result of the conditions of those roads. I, too, agree that something has to be done.
The New Democratic Party and our leader, Jack Layton, who was actively involved in the Federation of Canadian Municipalities as its chair or president for a period of time, know full well the seriousness of the government not putting enough dollars into highways and other types of infrastructure. We have focused on that for a great amount of time in the last while because of what we have heard from Canadians. They have said very strongly that if something is not done now, we are in serious trouble. It is recognized that there is already a crisis.
The motion this morning from the opposition party reflects the view that a number of us have had over the last few years, and that is there has to be a dedication of a percentage of the gas tax revenue. The reason a lot of members of Parliament and parties have started to say that we need to have it dedicated is because we have had a series of governments in place which have not put the dollars back into the provinces and municipalities. The dollars have not gone back to the provinces and municipalities for the infrastructure needed.
While this country was being built over the course of the last century and on, Canadians paid their taxes, provincial and federal, and they saw the benefit nationwide. They saw roads being built, rail being put in place, universities being built and water and sewer projects happening throughout the country. We were building a country with strong foundations. We all know that over the course of time there will be deterioration and we have to keep putting dollars into those roads, universities and water and sewer projects to maintain them or maybe there has to be some expansion as well.
I hate to take everybody back to the 1950s, but around that time 100% of gas tax revenue went back into highways. A long time has passed but that does not mean that the work still does not have to be done. Canada did not end in 1950. The maintaining of the infrastructure did not end in 1950. It continued on. Over the course of time we have seen less and less money go into it from the tax revenue. That would not be bad if the money went into infrastructure from the overall budget.
As a member of a party and as an individual, I understand the need to have one bit of money and not dedicate necessarily specifics in each area. I understand that from the perspective of the federal government. However I understand people do not trust the government to put the money there any more. That is the problem.
There is no faith that the federal government is going to assist or give back to the people of Canada in the form of dollars to support their infrastructure needs. They are rightfully not trusting the government to do that because such a limited portion, and I think it is only 26¢ on the dollar of gas tax revenue, only 26¢ goes back per dollar nationwide for those needs. We have to ask what we are going to do and how we are going to maintain this infrastructure. I fully understand why things have had to change and people now want a commitment, a promise from the government that this amount of money has to go in.
As I said, only 26¢ on the dollar goes back nationwide and quite frankly, it is not fairly divvied up across the country either. There are the western provinces, and I am not moaning about the western provinces, but it is the reality as the facts and figures are there. The western provinces get far less of the revenue for highways than provinces further east. The facts are there. One has to wonder how the government decides this. Is it based on the amount of roads that are there or the work that has to be done or is it based on some other reason? I hate to even get into it, but the facts are there. The province of Saskatchewan has the greatest amount of roads in the country and gets very little of the revenue dollars or funding from the federal government for roads.
We have heard the arguments come out about whether the revenue we are taking in should be given directly to the cities, whether we should give it directly to the municipalities or whether it should go through the provinces. We have to look at the whole picture to sort it out if we reach that situation.
Quite frankly I will certainly support this motion and I believe my colleagues in my caucus intend to support this motion because we are hearing back from the municipalities that this is what they want to see. They want to see the dollars dedicated so they know they have some stable funding.
The question now is, do we give this money directly to each municipality, the tax revenues that they take in from the sale of gas? Do we give it back individually to each area? Do we give it back to the provinces or do we put some other form of payment in place?
Being from a northern rural area, I do not think that it is entirely fair or even feasible to suggest that we expect those areas to fund their infrastructure needs out of those dollars that they get back. The reality is that there are much greater costs incurred by northern rural areas for their roads. If it is intended that they have to pay for them, they would not have the tax revenues to do that.
I had wanted the opportunity to question my colleague from the Conservative Party. He suggested that everything has to go back through the provinces because we can trust the provinces to do what they want. I think he was talking about education. I had to chuckle. As much as I recognize that we have the provincial jurisdictions and believe there has to be agreement between the municipalities, provinces and the federal government, I could not help but chuckle when he was talking about the provinces knowing what we need in the area of education. One of the biggest issues happening here in Ontario as will be indicated today from the vote is the serious deficit in funding and education by a Conservative government in Ontario.
The bottom line is we have to have some safeguards in place to ensure that the dollars that should be dedicated to a certain area, whether it be education or infrastructure, are there. There have to be some safeguards in place.
I am happy and extremely proud to say that within the province of Manitoba the dollars are going to where they should be going. The province of Manitoba, from its tax revenues, puts almost 100%, I think the percentage is in the high 90s, of its gas tax revenues into highway infrastructure. That has only started since 1999 when a New Democratic Party government came into place in Manitoba. Prior to that, that was not happening. The Conservative government that was in place was not putting that money into highways and infrastructure.
We all need to be clear that there have to be some safeguards in place so that the dollars will be there. Dedicating a portion of the tax certainly would do that. We could come up with numerous facts and figures and maybe we do need to reinforce and emphasize some of those today.
The Federation of Canadian Municipalities indicated, after the last budget, that there was a $57 billion shortfall in infrastructure funding.
The Deputy Speaker
Order, I wonder if the hon. member for Churchill could assist the Chair. Is she splitting her time or is she taking the entire 20 minute slot for herself? That is quite appropriate, but I would just like verification.
Bev Desjarlais Churchill, MB
Mr. Speaker, my colleague, knowing that I had so much to say on this issue, has indicated that I could have the whole time. So I will do my best to fill it.
There were some comments that were made after the last budget came out. The budget's biggest failure was on community infrastructure, which Winnepeg mayor Glen Murray called a joke and the Federation of Canadian municipalities called doomsday. It simply fails to deliver on the expectations of communities, big and small, and fails to recognize the reality of a $57 billion infrastructure deficit in Canada. The funds are absolutely inadequate.
For example, a recent water plant in Winnipeg would cost $204 million. Cleaning up the soil on LeBreton Flats in Ottawa will cost $100 million. Ottawa's light rail needs $66 million. The Halifax harbour project would cost $300 million.
This indicates that there is a serious deficit in the federal government giving back to taxpayers the dollars that it is taking in tax revenues.
Again I emphasize that no one has suggested we should not have any taxes whatsoever, but there is no longer trust in the government to put the dollars back into areas that need to be funded.
We talk about the dollars going back into highways. A few years back I asked a question in the House. At that point in time, 38% of the national highway system did not meet minimum standards. The roads were causing serious accidents and a number of deaths, I think 200 deaths on the roads each year in Canada. Twenty-six cents of every loonie is all that the government is committing to roads from the tax revenues when there was such a serious need.
The government's answer in a lot of these cases has been to suggest public-private partnerships, toll roads, that somehow that is the answer to putting the dollars back in and suggests it is only the users of those roads that should have to pay for them. That really would defeat the whole purpose of building a nation and all of us realizing that we benefit from what happens throughout our nation.
If we suggest that toll roads are the answer to funding roads and highways, it just would not work in rural and remote areas of Canada. Quite frankly, and this may shock people here, that is still most of Canada. We have our larger centres, but the majority of our country is still rural and remote and the roads that get us there need to be maintained. Tolls on those roads just would not work. We need other options, such as a portion of the tax revenues going back to the provinces and the municipalities, to make sure that those roads can be maintained.
There is another area that I will mention because there has been such a failure of dollars going back to infrastructure in the country. I know this motion was intended to look strictly at highway funding, but housing is another area that has been sadly lacking.
We are the only G-7 country, I believe, that does not have a national housing strategy. Every province has indicated a need. I am sure most municipalities have indicated a need for affordable housing within Canada and little funding for it. This is an area to which the government may have to look at dedicating some dollars on a regular basis.
If we listen to what Canadians are telling us, we cannot help but accept that there have to be changes to the way business is done.
I have to admit it has been really interesting to listen to the new leader of the Liberals and the way he has been talking in the last while. Quite frankly, almost all of the socially minded comments that he has made have come almost directly from Jack Layton's speeches that have been taking place since January of this year. It has been fun for our caucus. We have to wonder what party he really is running for.
The new leader of the Liberals has indicated that he is going to dedicate some of the dollars for municipalities. He was finance minister for many years and made massive cuts across the board, to infrastructure, to education and to the health care sector. He also made cuts in certain levels of taxes for certain groups, mostly corporations, but did nothing in the way of returning tax revenues back to provide services for Canadians.
It is going to be fun when the new leader is in this place in February. We will literally have him on the hot seat. It is going to be a tender spot for him once he gets back here on a regular basis because of all the promises he is making. We have often said that during elections, Liberals talk like New Democrats, but once they get into government they act a lot differently.
That is what we are going to see in the future. We will hear a lot of talk about what the Liberals are going to do, but they will not follow through. We need only look at the record of the Liberal government. We need only look at the record of the new leader of the Liberals, who once was the finance minister and made massive cuts. From that record, we know that the government is not committed to returning tax revenues back to the provinces and municipalities. It is not committed to doing what is right for Canada and for Canadians. I do not know where the Liberals' agenda is, but I do know it has not been to support services in Canada.
When talking about the budget and infrastructure funding, there is always a little note about water and sewer services throughout the country. Something like 1.5 million Canadians in communities across Canada still dump waste water into oceans and rivers. Canada is quite rich in resources and we consider ourselves somewhat advanced and civilized, yet the waste water of 1.5 million people is being dumped into oceans and rivers.
Why is that happening? Because municipalities cannot afford to put in place some of the needed infrastructure so that it does not happen. They are unable to afford it because the federal government is taking dollars out of the pockets of Canadians, out of municipalities, out of the provinces, and it is not returning those dollars so that programs and services can be put in place for Canadians.
I want to emphasize again the $57 billion shortfall in infrastructure. What the government has done comes nowhere near meeting that. There is a need to invest $2.4 billion over the course of 10 years. If the government invested that amount, it would meet a lot of those infrastructure needs. The government needs to be reminded of that.
We will certainly be supporting this motion moved by the official opposition party. It is good when we have a motion before us on an opposition day that we can all support. In this case it will definitely benefit all Canadians.
Chuck Strahl Fraser Valley, BC
Mr. Speaker, before I join the debate, I wish to express my personal condolences to the families of those soldiers who gave their lives in the pursuit of the war on terrorism. I think many of us feel caught in a quandary here today. We must debate the issue of the day, but all of it seems so unimportant compared to the tragedy we have heard about. I extend my sympathies to the families and I know they will understand that we must continue with this business today even while we mourn collectively as a nation for their loss.
We are talking about transportation taxes generally today and about the desirability of making sure that the federal tax collected on gasoline is returned for infrastructure development, especially to the municipalities, which desperately need it.
I would say that really what we need to start off with is an acceptance that this is philosophically the right thing to do. Either one believes it or not. Those in the Canadian Alliance believe it is the right thing to do and that it is a proper role for the federal government to make sure that infrastructure in the country is developed properly and that the money goes in a non-partisan and non-politically directed way to benefit all Canadians, not just those with good political connections or those who elect members of the governing party.
It is important that we believe this at the very beginning of this debate. If one does not believe that, argues with it and thinks it is a bad idea, then of course the rest of the discussion is moot. I hope that Canadians will see here today an acceptance of the idea that the money raised in gasoline taxes should be used primarily to benefit infrastructure on behalf of all Canadians.
Mr. Speaker, I want to be clear that I am splitting my time with a colleague today.
Again, this has been a long-standing policy of the Canadian Alliance and its predecessor, the Reform Party of Canada, back to 1989. We have been asking the government throughout our unelected and elected history to get with the program, to listen to the Canadian Automobile Association, to the official opposition, to Canadians and to municipalities, which have been asking year in and year out for it to do the right thing and allow federally collected gasoline taxes to go back to the people who need to develop the infrastructure.
Frankly, we have not had a lot of success. We have asked for it repeatedly, but in the last 10 years we have not received any acceptance from the governing Liberals to go with this at any time.
I will work back through a little of the history. I think it is important that people understand what has gone on here. First, we had a motion here last June very specifically asking all people in the House to support the idea that Canada's infrastructure needs should be met at least in part by a regime of stable funding, and we said that this stable funding should happen by reducing the federal excise taxes on gasoline and allowing the provinces, in conjunction with the municipalities, to take up that tax room and make sure the municipalities have that tax for infrastructure and municipal development.
The government opposed that. It would not support this as recently as last June, but it deserves a second chance. We brought forward the motion again today. The words for the motion today are basically taken from a speech by the member for LaSalle—Émard, who keeps saying how supportive he is of this and yet never seems to be able to actually vote for it. Thus, the wording of today's motion is:
That, in the opinion of the House, the government should initiate immediate discussions with the provinces and territories to provide municipalities with a portion of the federal gas tax.
Let us not wait for the next election. Let us not wait until the member for LaSalle—Émard actually gets the reins in his hands; he has the bit in his teeth already but not the reins in his hands. We could start this immediately. We do not have to wait until the Grey Cup game. We do not have to wait for anything to happen. We could start immediate discussions. We could phone up all the provinces and let them know that the only item on the agenda is that the government wants to make sure they get the gas tax, and quickly.
It can be done before the next federal budget. We do not have to wait for the election. We do not have to campaign on this. We can all agree to it here. We can get the provinces on side; the municipalities are already there. Let us make it happen. Let us not wait for the member for LaSalle—Émard or anyone else. Let us just do what is right because it is the right thing to do.
Unfortunately, in June of this year it was not right. The member for LaSalle—Émard did not support our motion and neither did the Liberal Party of Canada. Just prior to that, last spring, the current finance minister said he opposed sharing fuel tax revenue. That is the Liberal position. He said the money goes into consolidated revenue and goes to good things like health care and it goes into social programs and that is where it is going to stay.
We do have to fund health care and we want to have stable funding there as well, but again there is a philosophical disagreement here. On this side of the House we say we should get out of the business of taxing gasoline and allow provinces and municipalities to work together to make sure it goes to infrastructure development. We already have a surplus in other areas. We argue that we should use that surplus to fund health care and other high priority items, but we should not use the gasoline tax, because that long term infrastructure development is important for all Canadians as well and that is where the money should come from.
It is interesting to note that back in May 2001 the Canada Transportation Act Review Panel said that the federal fuel tax is undeniably part of the price paid for road use. Yet the member for LaSalle—Émard, who was finance minister at the time, did not push to recognize that those taxes should go for road improvements and for infrastructure development. The government did nothing with it. In fact, the government continues to oppose the idea.
The Parliamentary Secretary to the Minister of Finance in May of this year said that the money goes into consolidated revenue and that is where it should stay. The current Minister of Finance said about the member for LaSalle—Émard, and this is interesting, “I think [the member for LaSalle--Émard] is being politically opportunistic” in talking about transferring gasoline tax. The current finance minister says the provinces are not going to agree to this and if they do it would be very difficult to implement. He says the member for LaSalle—Émard knows it is “bad public policy” and he does not think the member has “any expectation that he will ever be called on to do it”.
The current finance minister is not in favour of transferring gasoline taxes, but we are going to give him another chance. We will let him review the debates today. We will let him listen to the Canadian Automobile Association, the Union of B.C. Municipalities, the Federation of Canadian Municipalities and Canadians from coast to coast who are saying that we need to have infrastructure development and it needs to be done in a way that is predictable, long term and stable.
As for the words from the current finance minister to the member for LaSalle—Émard, that is the current Liberal government policy. We are hoping, of course, that on Tuesday when this vote comes up it will be the Liberals' chance to see the error of their ways and to finally do what the member for LaSalle—Émard is campaigning on right now, which is a promise to deliver to the municipalities a portion of the gas tax. Let us not wait until the election. Let us do it Tuesday, and let us, if necessary, run roughshod over the current finance minister. That fight is over. We should just get on with it.
We had supply day motions brought forward back in 2000. The member for Prince George—Peace River brought forward a motion to reduce gasoline and diesel fuel taxes; that was in a period of high prices for gasoline. We should get on with it. We should give that money to the consumers, to the provinces and to the municipalities for infrastructure development and use it to develop roads.
It is interesting that the federal taxes were not always as high as they are today. The person who jacked them up to make them as high as they are is the member for LaSalle—Émard. He put on an extra 1.5¢ per litre tax when he was finance minister. The reason? To retire the debt. The debt, according to the former minister, went away in 1998. Since then, what has he been doing? He has been putting that money into general revenue. For what reason? To retire the debt.
But the Liberals have never met a tax they were not in love with. Who originally brought in the federal gasoline tax? It was Mr. Turner, another Liberal finance minister and prime minister. It is a pattern here. They see a tax, they see an opportunity and they put it on. They promise they will take it off, but is like income tax. They said that income tax would be eliminated after the war, but the Liberals have never met a tax they did not like.
What we are facing here today is basically a situation where the rubber meets the road, to use a transportation analogy. The member for LaSalle—Émard says while campaigning right now that he wants to do this. For nine successive budgets he refused to do it, but there is always a second chance on this road to Damascus. He can have a change of heart. On Tuesday he can support this motion, give that gasoline tax to where it belongs, to the provinces and through them to the municipalities, for infrastructure development. It is the right thing to do. Let us do it on Tuesday. I hope the member for LaSalle—Émard will be here to support it with full colours.
Lynne Yelich Blackstrap, SK
Mr. Speaker, it is my pleasure to rise today and join my colleagues in contributing to the debate on the motion before us, which reads as follows:
That, in the opinion of the House, the government should initiate immediate discussions with the provinces and territories to provide municipalities with a portion of the federal gas tax.
The issue raised by this motion is the extent to which gas taxes collected by the federal government do not find their way back to the provinces and municipalities, at least directly.
For example, in my home province of Saskatchewan, and I am here in its best interests, the federal government collects on average about $248 million per year in fuel taxes. Only about 10% of this or about $25 million is returned to the province each year. In contrast, the Saskatchewan provincial government commits to expenditures on transportation equivalent to between 90% and 100% of the fuel tax it collects. In the United States, 84% of federal fuel tax is earmarked for specific highway improvements.
Based on these figures it is fair to say that there is greater room for further contributions by the federal government. My contribution to today's debate will focus on Saskatchewan's infrastructure issues relating to roads. Such infrastructure is crucial in my province.
Saskatchewan has a small population. Our communities are widely dispersed throughout the province. We are served by 198,000 kilometres of road. Of these, 162,000 kilometres are in rural areas. Excluding those roads that are entirely within municipalities, there are about 100,000 kilometres of road to maintain on an annual basis.
One of the contributing factors to high road maintenance needs is that trucks, cattle-liners and other heavy vehicles are routed to rural municipal roads and provincial highways considered to have particularly thin membranes. As a consequence, numbers of rural municipal roads are in significant states of wear and disrepair. With the closure of smaller rail lines and general compressions in rail transportation, more is being transported from within and from Saskatchewan by truck, making maintenance of the road infrastructure all that more important.
Due to their perilous financial circumstances, Saskatchewan governments cannot easily fund the cost of maintaining provincial road infrastructure. In some years the government has simply said that it has no money to maintain road infrastructure.
For example, in April 1998, the provincial government advised rural municipalities that no further funding for municipal road construction and maintenance was available. In that year, the provincial government was only able to contribute roughly half of the $56 million considered essential to maintain Saskatchewan rural roads. It is circumstances like these that cause municipalities in Saskatchewan to seek some form of financial relief.
From the federal government perspective, the argument is that funds are returned to the provinces indirectly, through either federal-provincial equalization payments or other transfers. The problem with this approach is that infrastructure needs of provinces and municipalities differ depending on their geography and their ability to raise further revenue. In Saskatchewan, there are great infrastructure needs, yet the province is limited by its significant debt position from raising further taxes.
Transportation is vital to the economic health and prosperity of Saskatchewan, yet we see example after example of how the road system in particular is deteriorating. Last month, the Canadian Taxpayers Federation nominated a Saskatchewan highway as the worst highway in Canada. In fact, of the 100 or so highways nominated, 12 were in Saskatchewan.
The Saskatchewan director of the CTF said that some of the highways have deteriorated to a point where they are dangerous, and that the state of our highway system sends the wrong message to families and businesses interested in coming to the province. In fact, the roads are so noticeably bad that a long time American tourist was moved to write a letter to the editor of a major Saskatchewan newspaper saying that he probably would not be coming back to spend his vacations in the province.
Saskatchewan simply cannot afford to lose that kind of business. That is the message I hear from my constituents. They do not understand why Saskatchewan has such bad roads when they pay so much for fuel. I might add that I think Saskatchewan has one of the highest fuel prices in Canada. I will save that argument for another time.
Motorists know that they are being heavily taxed by the federal government each and every time they fill up at the pumps. Why is more of that money not coming back into the highway and road system? Why is the federal government not ensuring federal reinvestment in the transportation system at the provincial and municipal levels?
Those are excellent questions and are ones that could be largely resolved if the government followed the direction of the motion before us today. The federal gas tax plus the GST cost the average Canadian more than $220 last year. In 2001-02 Canadian motorists paid $4.7 billion in federal gas excise tax. They paid an additional $2.2 billion in GST on gasoline during the same period.
I would like to remind the House that there was a time when the Conservative federal government promised that the GST would be revenue neutral and in the unlikely event that there was an increase in tax dollars collected, the surplus would go toward debt reduction.
We all know what happened to that subsequently. The GST became such a major source of government revenue that our Liberal government, having promised to get rid of it, found it could not without significantly increasing taxes in other areas.
My point here is that governments often make empty promises as to how increased tax dollars will be used. We saw this again in the mid-1990s when federal gas taxes were increased as a deficit reduction measure.
The government is so proud of the fact that it has delivered balanced budgets, surpluses in fact for the past several years, yet the deficit fighting tax increases remain in place.
The motion serves to redirect gas tax revenue to where it is needed, at the municipal level, rather than to a purpose it no longer serves. As my colleague from Port Moody—Coquitlam—Port Coquitlam noted earlier this morning, Canada's road system is comprised of 900,000 kilometres of roads, highways and bridges and of those no less than 2% are federally owned.
Despite its nominal responsibility for roads, the federal government keeps nearly half of the revenue generated by gasoline taxation. Very little of that amount is reinvested into highways and infrastructure.
Canadian motorists and taxpayers deserve better than this. They do not want their tax dollars disappearing into federal government coffers never to be seen again. They want and they deserve a fair and accountable taxation system that supports a sustainable infrastructure on which we all depend.
I hope the federal government, in the vote on Tuesday, will consider that the motion is very important for municipalities and for Canadians. Municipalities are looking forward to perhaps the motion being passed. Then they can take care of their own infrastructures.
I would remind the House that motorists paid $4.7 billion in federal gas excise taxes in 2001-02. They paid $2.25 billion in GST on gasoline in that same period. Motorists paid $6.95 billion in gas taxes and GST on gas in 2001-03. The federal gas tax cost the average Canadian $149.21 last year. The federal gas tax plus GST cost the average Canadian $220 last year. Gas taxes vary between 35% and 45% of our total cost at the pump. In other words, the money from every second or third fill-up of gas is going to taxes. U.S. gas taxes in total are roughly 25% of the pump price.
That brings us to the federal spending on roads and transfers to provinces, $118 million. That is 2.51% of the amount the feds collect in gasoline taxes was invested into roads. That is 1.71% of the amount the feds collect in gasoline taxes plus GST on gas. Canada's infrastructure transfers to provinces, roads, conference centres and waterworks equals $800 million.
I am pleased to have joined this debate this afternoon. I sincerely hope we will see a successful, overwhelming support for this motion on Tuesday when we vote on it.
Chuck Strahl Fraser Valley, BC
Mr. Speaker, I would like to thank my colleague for putting into the record some of the astronomical dollar figures which are collected by the federal government. It reminds me again of the Liberal tendency to take any revenue it can get.
Another example would be the employment insurance premiums. Once the Liberals have a fund that is sufficient enough to cover EI, do they stop collecting or reduce the premiums? Of course not. They keep the premiums jacked up and put them into consolidated revenue. They spend the money on programs we never asked for and frankly were designed by someone far from the land we love.
Just to put a human face on those kinds of dollars, I would like to ask the member to comment on this. Last weekend I was part of a group of concerned citizens who took part in a cavalcade from Harrison Lake to Pemberton: up the back way, up the west side of Harrison Lake, alongside Lillouette Lake and up into the interior of British Columbia to the town of Pemberton.
Many of us think it would be a good idea to develop that into a secondary highway. It would be secondary access into that whole region. It would be an outlet if there were a problem on the Sea to Sky Highway. More important, it would be an opportunity to provide highway access to some aboriginal communities and other communities along the way. Right now they not only have no year round road access, but they have no telephones, no electricity and no way of communicating with the outside world. In each of these aboriginal communities, there is about one satellite telephone because cellphones do not work. That is it for communication. When the snows come, they are finished. They sit there and hope that nobody gets sick.
One thing they have been complaining about for many years is the need for federal government help to build a secondary highway so they can have some of the things that we take for granted in some of the larger centres. That is why I am a little nervous of the Liberals, especially the member for LaSalle--Émard. He talks about this program for cities, which might be interesting and have some good ideas in it, it is hard to say. However there is a lot more to this country than just cities. In fact highway construction is generally between cities and no one wants to grab that bull by the horns.
The cavalcade went by several aboriginal communities in a region that if it were developed would provide jobs and access to education. Right now when the roads open it is a two hour bus ride each way for their kids to go to school. Then they wonder why they cannot stay in school. They cannot take the punishment of driving up and down those roads, and that is when the roads are open.
There is a price tag of about $2 million on this highway. A lot of it will fall on the shoulders of the provincial government, which is proper. It is a provincial jurisdiction. However in British Columbia alone last year, Ottawa collected $495 million in gasoline taxes and it returned to British Columbia $13 million, or roughly 2.6% of the total budget.
My point and my question for my colleague is this. When we talk about putting money into infrastructure, we are not just talking about the glory of paved roads. We are talking about changing the lives of people and giving communities life that otherwise would fall by the wayside. I know the problem Saskatchewan has with retaining people, farmers and young people is in part because of transportation. Could the member give us some details as to whether this is as big an issue and problem in her province as it is in mine.
The Deputy Speaker
The hon. member for Blackstrap has one minute to respond.
Lynne Yelich Blackstrap, SK
Mr. Speaker, I want to talk about Saskatchewan roads. As I said earlier, we were voted as having one of the worst roads in Canada, so I really cannot answer that in one minute.
However what I can do is read into the record just to show what it is doing to our tourism. We had an American tourist who was so upset with our roads. He came every year to a tourist point in Saskatchewan. We do have nice places in Saskatchewan to visit and one of them is Elbow. Mr. Robert Ronning from North Dakota said in a letter:
For seven of the past 10 years, I and eight or nine friends have visited Elbow. We have rented condos, swam in the pool, golfed and fished on Lake Diefenbaker. This is truly a remarkable area. A real diamond in the rough.
The one thing I cannot understand is the condition of the area roads. We always take three or four boats with us, but the road conditions chip up both our boats and cars.
Several years ago, Highway 42 by Brownlee had about five miles of bad asphalt returned to gravel.
Now, there is 15-plus miles of gravel. I thought going from gravel to asphalt was progress, not going from asphalt to gravel.
I could read on and on. This letter is a very sad reflection of how our infrastructure is crumbling.
The parliamentary secretary mentioned that the taxes went into consolidated revenues which went into such things as health care. We could not get an ambulance over these roads to get to a health care facility. Therefore, our roads--
The Deputy Speaker
I regret to intervene but members will recognize that the difficulty when time slots of 20 minutes are shared, the question and comment period is shared for at least five minutes. Whether one member owes another member some time, I will leave that for the parties to resolve.
Alan Tonks Parliamentary Secretary to the Minister of the Environment
Mr. Speaker, I welcome the chance to speak to today's opposition motion for two reasons.
First, the issue of healthy and prosperous municipalities is a subject that is very close to my heart, having spent 25 years in the municipal field. Indeed it is of real national importance that cities can be looked upon as needing very special consideration by the federal government. We all could benefit in this House from the insights that can be shared in terms of ideas that could help serve the needs of cities better.
There is no question that Canada's cities and communities face significant challenges in providing the level of service and support that their citizens, and I might say 80% of all Canadians who live in cities, deserve. Perhaps working in partnership with the provinces and territories a share of the federal gas tax might offer an avenue to provide some of the additional resources that cities are looking for. It is something that we on this side consider certainly worth looking at.
This leads me to the second reason that I welcome the opportunity on behalf of the government to participate in today's debate. I believe it would be both timely and useful to provide the House with an important element of context about our government's fiscal intact performance, a context that in view of the discussion that has been raised with respect to the expenditure of money in the programs that general revenues support, should frame any discussion touching on federal taxation.
As hon. members know, since the beginning of our mandate in 1993, two of the government's core priority areas have been sound fiscal management and fairness in the taxation system. Both of these are extremely closely linked. The government understood from the start that we could never ease the overall tax burden on Canadians while running massive consistent deficits which were eating up 36¢ of every tax dollar in interest costs. A deficit dollar borrowed is nothing less than taxes deferred until tomorrow which future generations would have to pay and with the added cost of interest charges. That deficit would handcuff all levels of government, including cities, and Canadians from achieving today and in the future objectives for a high quality of social and environmental life.
That is why in the early years of our mandate while we did bring in targeted tax relief especially for families with children, our chief focus was on the tough action needed to get federal spending under control. The government succeeded, achieving Canada's first federal surplus in 1997-98 after 28 years of consecutive deficits.
One might ask what this has to do with federal taxation. The answer should be obvious. It was only after the government had put the country's books in order that we could afford to begin to bring down the tax burden for all Canadians. The government was successful in bringing that tax burden down.
In the 2000 budget the government launched a five year $100 billion tax reduction plan, the largest in Canadian history. That plan strengthened the foundation for economic growth and job creation in this country, allowing Canada to frequently lead the industrial world in growth during a difficult period in the world economy while at the same time helping low and middle income Canadians.
The benefits of this plan are already clear and concrete. It provided tax relief of $17 billion in 2001 and $20 billion in 2002. This will continue to grow, providing further tax relief of $24 billion this year and rising to more than $30 billion in 2004.
Let me humbly remind the House of some of the key elements contributing to this historic and ongoing tax reduction plan.
The government restored full inflation indexation of the personal tax system as of January 1, 2000. This meant that inflation no longer represented an automatic and hidden tax increase.
Effective January 1, 2001 personal income tax rates for all taxpayers were lowered. The 17% rate was lowered to 16%. The middle rate, which had been 26% in 1999, was lowered to 22%. The top rate was reduced from 29% to 26% on income between $60,000 and $100,000.
What does this mean for individual Canadians and families? It means that by 2004-05 we will have reduced federal personal income taxes by 21%. That is one-fifth on average. Families with children will benefit even more with average tax savings of 27%.
The government's five year tax reduction plan has also been promoting economic growth and jobs by creating an advantage for investment and entrepreneurial initiative in Canada. We reduced the 28% general corporate income tax to 23% and it is legislated to fall further to 21% next year.
In the 2003 budget the government provided further support to small business and entrepreneurs, including an increase in the small business deduction limit from $200,000 to $300,000 over four years. This will result in an annual savings of up to $9,000 for many local Canadian companies.
Another measure eliminates the $2 million limit on the amount of small business investment eligible for the capital gains rollover. This will help small firms to access the risk capital that is so important to expansion, growth and the pursuit of new markets. The government announced that we are phasing out the federal capital tax over a period of five years and eliminating it next year for medium size corporations.
As a result of the government's corporate tax initiatives, effective this year Canada's average federal-provincial corporate tax rate is below that of the United States. I have heard some comparisons to the American tax system. By 2008 the positive difference between Canadian federal-provincial and American federal-state corporate tax rates is expected to reach 6.2% in Canada's favour. This is not affected by current tax changes proposed by the United States administration. Our tax reduction action has not stopped there, though.
We have increased the limits of tax assisted savings in registered pension plans and registered retirement savings plans, RRSPs.
We will be cutting employment insurance contribution rates by a further 12¢ to $1.98 per $100 of insurable earnings for 2004. This is the 10th premium rate cut since 1994. It will bring yearly savings for workers and employers to over $9 billion. While this rate reduction applies to everyone, it will be particularly beneficial to small business, a key economic engine for so many smaller municipalities and communities.
Moving on, I think we would all agree that children, young people, play a special role in any community. We have consistently enhanced the Canada child tax benefit to help low and middle income families with children. Under action contained in last February's budget, the maximum Canada child tax benefit is now projected to reach $3,243 for the first child in 2007, $3,016 for the second child and $3,020 for each additional child. This will bring the estimated annual support delivered through the child tax benefit to over $10 billion. That is an increase of over 100%, in other words, double since 1996.
I have covered a lot of ground because our record of positive action in the tax arena is extensive and dramatic. Let me conclude by assuring all hon. members and all Canadians that our government remains committed to maintaining, and improving on, a tax system that is fair, efficient and competitive in order to best serve the needs of citizens in every community, rural and urban.
There is a companion commitment that is also part and parcel of a fair, efficient and competitive system, one that we must not lose sight of during debates such as today's debate. That is the absolute importance of ensuring that further changes to the tax system and any action to strengthen our cities in no way jeopardizes our ability to maintain balanced budgets or better.
All of us in the House and every Canadian can remember the painful price that years of deficits exacted. It was paid through high taxes and high interest rates. We shall not and must not let that destructive deficit cycle return to haunt us. That means that any tax change or action we pursue today or in the future must be consistent with fostering a vibrant economy, in particular by ensuring affordability and prudent fiscal planning.
I am sure the hon. member proposing today's motion will agree with those principles completely. We do welcome this debate in order to understand completely how we can develop the partnerships that will build a high level, a legacy, of quality of life for all Canadians.
Ted White North Vancouver, BC
Mr. Speaker, I listened to the entire speech given by the member opposite. I heard him go all over the map talking about taxation issues without really addressing the motion before us today. I will read our earlier motion for his benefit:
That, in the opinion of the House, Canada's infrastructure needs should be met by a regime of stable funding and that accordingly, this House call on the government to reduce federal gasoline taxes conditional on an agreement with the provinces, and with the creation of this tax room the provinces would introduce a special tax to fund infrastructure in provincial and municipal jurisdictions.
I have just one question for the member. Why did he vote against this almost identical motion in June that was put forward by the Canadian Alliance and today he is going to vote for it? Can he give us any rational explanation as to why he has flip-flopped on that issue if it is not simply to put up a smoke screen for his soon to be prime minister, the former finance minister, who has suddenly glommed on to this Canadian Alliance policy?
Alan Tonks York South—Weston, ON
Mr. Speaker, I do not think the issue before us is about my personal voting behaviour or the member's.
The member is quite right. What is before us is the relationship in this country of a progressive and dynamic taxing strategy that would serve all Canadians. Part of the strategy is it would trickle down to the cities and would be directly related through the gas tax for matters related to urban and rural growth and sustainable development as it relates to transportation infrastructure. That is the issue.
Also, the reason perhaps the motion is more supportable is it was not clear in the first motion that the Alliance made but it is now more fundamentally clear. I believe that a very strong case has been made. We must be absolutely clear and sincere about this and look at it within the context of the motion and today's events, but we must also look at it within the capacity for us to have a sustainable taxing strategy.
I hope that answers both aspects of the member's question.
Gurmant Grewal Surrey Central, BC
Mr. Speaker, I listened to the Liberal member's speech. He should know that his party got elected by being very opportunistic. Since he was talking about taxes, I would remind him that the GST is still here.
In fact, the member for LaSalle—Émard, who was a co-author of the red book 10 years ago, said at one time that this stupid tax must go. Yet he raised $190 billion from Canadians during his tenure as the finance minister.
Gasoline taxes in British Columbia raise about $750 million. On top of that, the GST is about $378 million. In total, taxes on gasoline raise about $1.1 billion. Of that amount, the federal government spends only 2.5% on road and infrastructure development; whereas the provinces, which share 50% of the taxes, spend about 91%. In the United States, the government spends or invests about 84% of all the gasoline taxes on road and infrastructure development.
I would like to ask the member, since he talked about taxes in his speech, about GST being charged on taxes. The way the government calculates the price on gasoline, all the taxes are added up and then it charges GST. Those taxes are neither goods nor services.
Can he justify the government ripping Canadians off by charging GST on taxes?
Alan Tonks York South—Weston, ON
Mr. Speaker, the previous questioner chastized him for straying into tax areas and straying away from the intent and context of the Alliance motion.
I will try not to be strayed in a second way by the member's question, but I will attempt to answer it.
I do not think it behooves us to try to understand the differences between American tax systems and how that government flows money through the states in sheer percentage terms because, just as there is a difference in the total array of tax supported services in the Untied States and a difference between that and Canada, so too is there a difference between the provinces in Canada.
I do not want to attempt to evade the question, but the issue here is to get closer to the principle of where taxes are raised from and apply them to services that will stimulate development and growth in a sustainable way in those areas. That is the issue and intent of the Alliance motion.
My reading of what is happening in British Columbia, since the member is most fluent with that, is that the province, while it has dedicated a portion of the gas tax, has not increased the total envelope with respect to the support of the transportation system, be it transit or roads. We still have an inequitable taxing situation, even in the hon. member's province.
The bottom line is that we can do better, in terms of sustainable development, in terms of meeting our Kyoto commitments, and in terms of using transportation technology to stimulate growth and employment. We can do it through a better knowledge and application of the taxation system.
I thought that is what the Alliance motion was attempting to do. If it is attempting to do that, and I believe it is, then the government is prepared to look at that very seriously.