House of Commons Hansard #8 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was taxes.

Topics

Presence in Gallery
Oral Questions

3:05 p.m.

Some hon. members

Hear, hear!

Canadian Islamic History Month
Oral Questions

3:05 p.m.

Liberal

Mauril Bélanger Ottawa—Vanier, ON

Mr. Speaker, there have been consultations among the parties and if you were to seek it, I hope you would find unanimous consent for the following motion. I move:

That, in the opinion of the House, due to the important contributions of Canadian Muslims to Canadian Society; the cultural diversity of the Canadian Muslim community; the importance of Canadians learning about each other to foster greater social cohesion; and the important effort now underway in many Canadian communities in organizing public activities to achieve better understanding of Islamic history, the month of October should be designated Canadian Islamic History Month.

Canadian Islamic History Month
Oral Questions

3:05 p.m.

Liberal

The Speaker Peter Milliken

Does the hon. member for Ottawa—Vanier have the unanimous consent of the House to propose this motion?

Canadian Islamic History Month
Oral Questions

3:05 p.m.

Some hon. members

Agreed.

Canadian Islamic History Month
Oral Questions

3:05 p.m.

Liberal

The Speaker Peter Milliken

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

Canadian Islamic History Month
Oral Questions

3:05 p.m.

Some hon. members

Agreed.

Canadian Islamic History Month
Oral Questions

3:05 p.m.

Liberal

The Speaker Peter Milliken

(Motion agreed to)

The House resumed consideration of the motion.

Opposition Motion—The Economy
Business of Supply
Government Orders

3:05 p.m.

Bloc

Thierry St-Cyr Jeanne-Le Ber, QC

Mr. Speaker, I am pleased to speak to the Liberal Party's opposition motion, to which the Bloc Québécois objects for several reasons, as I will explain in this brief presentation.

I will begin with the reference to income trusts. This was a field day of irresponsibility. For years the Liberals refused to act on this issue and allowed income trusts to go tax free. They created an unfair advantage for this type of organization or enterprise. In addition, there was an increasing impetus for large corporations to adopt this economic model. It is a particularly pernicious model because it practically forces the company to spend all its money every year and to return surpluses to shareholders rather than investing them in research and development and spurring the growth of the company.

Thus, it is a very short-term vision that is destabilizing our economy. The Bloc Québécois had been asking for some time that these trusts be taxed as corporations, but the Liberal government did nothing. It acted irresponsibly.

The Conservatives were even more irresponsible during the 2005-2006 election campaign when they promised not to tax income trusts. That was an irresponsible promise, especially since many investors believed it and invested their money in this savings vehicle. When the Conservative government announced last year that income trusts would henceforth be taxed, trust stock prices plummeted, causing losses in the billions of dollars in market capitalization all because of this field day of irresponsibility: the irresponsibility of the Liberals, who never did anything about income trusts and are still today calling for this tax shelter to be maintained; and the irresponsibility of the Conservatives, who did in fact do something about it, but promised they would not, thereby giving investors false confidence.

Beyond this issue, this Liberal motion poses a major problem. I am talking about the same old centralist attitude of a domineering federalism that defines the Liberals, as well as the New Democrats and the Conservatives. We saw this today during question period on the issue of the securities commission.

There is quite the unanimity within the federalist parties in this House. They are unanimous on the fact that there should always be interference in Quebec's jurisdictions. They also share the attitude of Ottawa knows best. This is where it is decided what is best for the nation of Quebec, which was unanimously recognized in this House. However, that recognition was nothing more than lip service.

There is a lot of meddling in this motion. It talks about infrastructure, research and development, post-secondary education, assistance to immigrants, recognition of credentials, and labour force training, all in just two or three paragraphs; that is quite the feat.

This same old attitude harms Quebec because programs centralized in Ottawa are not adapted to Quebec realities. We see this quite often. Just look at the percentage of spending by the various departments in Quebec: we are almost systematically below our weight in terms of tax contributions and we are especially below our demographic weight. These programs are not adapted. Just look at Fisheries and Oceans. Quebeckers contribute 25%, but 25% of the budget certainly does not get spent in Quebec.

Taxation is another area where we see this. Ottawa puts in place centralized programs that do not reflect the reality in Quebec, and Quebeckers are punished and disadvantaged because they are part of the Canadian federation. I will give two examples. Taxation is not always exciting, but it represents hundreds of millions of dollars for Quebeckers.

The first example concerns tuition credits. We can claim tuition on our federal tax return and deduct up to $10,000 in tuition from our taxes.

In the rest of Canada, tuition averages $14,665 for a typical three-year university course worth 45 credits, but in Quebec it costs only $5,700. Students in Quebec therefore can claim only $5,700 of the $10,000 tax credit or 57%, while students in the rest of the country can claim the full amount.

If we take a typical tax rate of 22%, which applies to people earning $50,000 or more—this is often true in the case of university students—that comes to $946 per student. If we multiply that by 111,000 students, we get roughly $105 million in savings for Canada, because Quebeckers decided to adopt a different system.

Some might say—and I have heard this said in this House—that it does not matter, all the better for Quebeckers. Since the students pay less tuition, it is only right that they should have fewer tax credits than other Canadians. This is wrong. What Quebeckers do not pay in tuition, they pay in tax. Quebeckers decided to collectively pay students' tuition rather than expect students to pay a larger share themselves. Consequently, we are penalized because of the choices we have made. What is more, every year, Canada reaps huge savings. This is a gift from Quebeckers to Canada, and the federal government is still refusing to wake up to that reality and give us back our money.

Another similar example is the credit for child care. In Quebec, we decided to establish community tools such as very low-cost child care, at $7 a day, instead of the much higher average of $35 and up in the other provinces. This means that again the government saves hundreds of millions of dollars every year because Quebeckers decided to do things differently. When we ask the federal government to give the money back to provincial governments, it systematically refuses. We are not asking for a handout; we are asking that the savings be returned to Quebeckers, who chose to use a different model.

Unfortunately, I am running out of time, but I could go on about all these examples. Obviously, Quebeckers are realizing more and more that the federal framework does not allow them to build a nation, a society in their own image, and that in the medium term, the solution is for Quebec to become a sovereign country that fully controls all its taxes and can make its own budgetary decisions based on the type of society it wants to build.

Until then, the Bloc Québécois will at the every least continue to demand that the Constitution be respected, and to call for the decentralization of the federation and a solution to the fiscal imbalance.

The latest budget contained a monetary correction for the fiscal imbalance. The government gave several billion dollars that will help the Government of Quebec. However, in order to correct the fiscal imbalance, we are asking for a fiscal solution. Otherwise, the fiscal imbalance issue will not be resolved. The minister himself appeared before the committee and told us that there was no fiscal solution in the latest budget. Once tax or GST points have been transferred, Quebeckers will be able to decide how that money is to be managed, without having always to ask Ottawa for permission, and without having to beg for their own money.

It is important to establish another measure to avoid the centralization of the federation, which we are seeing at this time and which the three parties have been constantly supporting for several decades in Canada, specifically, to really limit use of the federal spending power in areas of Quebec jurisdiction. A rather inane sentence about this appears in the Speech from the Throne.

I would like to issue a challenge to the Conservative members, who could perhaps use the questions and comments period at the end of my speech to give me a list of the projects that, over the past 10 or 15 years, have met the criteria set out in the throne speech.

According to these criteria, they have to be new cost-shared programs that fall under Quebec's jurisdiction. Given all of these criteria, there are simply no programs left. There have been almost no new cost-shared programs that fall exclusively under Quebec's jurisdiction in decades. The last ones were about health insurance.

This is a real con. The federal government is giving us a totally meaningless gift.

Earlier, I asked the Conservative members of the House what programs they were talking about. I asked them to name one single program that the federal government has implemented in the past five to 10 years that meets the criteria mentioned in the Speech from the Throne, that is, a new shared-cost program that falls exclusively under provincial jurisdiction. I myself have not yet found a single one. I challenge the Conservative members to provide us with a list to prove that what they are giving us is worth something. If they cannot, then they are promising something we already have.

It looks as if the Conservative government is simply encroaching on provincial jurisdiction without even sharing the costs with the provinces. Even if the Conservatives came up with a bill to deliver on their throne speech promise, we would get nothing new. There is no substance to what the Conservative government is offering. I hope that the Conservative members will be able to give me a list.

Opposition Motion—The Economy
Business of Supply
Government Orders

3:15 p.m.

Liberal

Francis Scarpaleggia Lac-Saint-Louis, QC

Mr. Speaker, I listened carefully to the speech by my colleague from the island of Montreal. He spoke at length on the fiscal imbalance and so forth. It is difficult to grasp the true nature of the fiscal imbalance. My question is as follows.

At what point will we know with certainty that the fiscal imbalance has been resolved once and for all? Will it be when the Government of Quebec deems it to be resolved? If not, what will happen if there is a change in government and the new government claims that it has not been resolved? Or will it be when a majority of Quebeckers, according to some poll or other, claims that the imbalance has been resolved?

Opposition Motion—The Economy
Business of Supply
Government Orders

3:20 p.m.

Bloc

Thierry St-Cyr Jeanne-Le Ber, QC

Mr. Speaker, judging by his question, the hon. member clearly does not understand the concept of the fiscal imbalance.

The fiscal imbalance occurs when the federal government has too much revenue in relation to its constitutional responsibilities, while the provinces do not have enough revenue.

Nonetheless, I will answer his question. It is quite simple. When will the fiscal imbalance be corrected? It will be corrected when the federal government stops spending in the jurisdictions of Quebec and the provinces. That is clear.

If the federal government has the means to spend money in the jurisdictions of Quebec and the provinces, then it has too much revenue in relation to is constitutional jurisdictions. This is no laughing matter.

When enough money has been transferred from the federal government to the governments of Quebec and the provinces, and the government is no longer spending money in Quebec's jurisdictions, the fiscal imbalance will have been corrected. Clearly this is not the case.

In its motion, the Liberal Party is proposing again today that money, taxes, be spent in provincial jurisdictions. Conclusion: the federal government has too much money in relation to its responsibilities and has to spend it in provincial jurisdictions. That is the imbalance that needs to be corrected.

It is quite simple. There is no need to conduct polls, hold consultations or ask anyone whether the fiscal imbalance has been corrected. Once this House is dealing only with issues of a federal nature and it stops interfering in provincial jurisdictions, then we will know.

Opposition Motion—The Economy
Business of Supply
Government Orders

3:20 p.m.

NDP

Olivia Chow Trinity—Spadina, ON

Mr. Speaker, in fact, there is a very serious fiscal imbalance, and that is one of investing in our communities and cities.

In my city, the city of Toronto, there is a desperate need for federal investment, whether it is infrastructure in highways like the QEW, or in public transit, or in the city itself so it can deal with some of its emerging needs.

In Montreal in the summertime, for example, a whole section was closed because of the crumbling infrastructure. It was really serious, and it is not only in Montreal. I have seen it in Ottawa as well. A stadium has had to be sectioned off, again because of aging infrastructure.

We have a very low corporate tax rate already in all the G-7 countries. We are lower than Japan, Italy, Germany and the United States. Instead of reducing the corporate tax rate any further, would it not make sense for the federal government to transfer more funding to different provinces as well as dramatically increase investment in infrastructure, especially municipal infrastructure?

Opposition Motion—The Economy
Business of Supply
Government Orders

3:20 p.m.

Liberal

The Speaker Peter Milliken

I would ask the hon. member for Jeanne-Le Ber to please answer briefly.

Opposition Motion—The Economy
Business of Supply
Government Orders

3:20 p.m.

Bloc

Thierry St-Cyr Jeanne-Le Ber, QC

Mr. Speaker, the provinces have needs in terms of infrastructure and, clearly, they do not have enough money, while the federal government has too much. The solution is to correct the fiscal imbalance and to transfer predictable revenues to the provincial governments.

I would also like to point out to the House that I issued a challenge to Conservative members to give me a list of programs, of the historical gains they claim to have given Quebec in their throne speech.

No one bothered to rise to try to show from which programs, over the past five or 10 years, the Government of Quebec could have opted out, if the promise to limit use of the federal spending power—which is in the throne speech—had been implemented. No one bothered to rise. I think their silence speaks volumes.

That promise is a sham. It is an empty promise. We are being promised something that we do not need, something that is already inapplicable. The three federalist parties continue to want to centralize the federation and tell Quebeckers what is good for them, while what Quebeckers really want is greater independence to build a society according to their own vision.

Opposition Motion—The Economy
Business of Supply
Government Orders

3:25 p.m.

Liberal

Bryon Wilfert Richmond Hill, ON

Mr. Speaker, I will be splitting my time with the member for Charlottetown.

I am delighted to speak to this motion. First of all, we have a good fiscal situation in Canada because of the record of the Liberal government for 13 years. I would point out that in 1993 when the Liberals came into power, we inherited a $42.5 billion deficit. During that time, we had to deal with fundamental issues to put our fiscal house in order.

There is no question that the current government inherited a significant amount of money because the Liberals were prudent. We dealt with the deficit and at the same time, we invested and we started to pay down the national debt as well. I think during our time in government over $60 billion was paid on the national debt.

I want to talk about municipal infrastructure. It should come as no surprise that the current government has failed miserably the cities of Canada. I point that out because in 1983 the Federation of Canadian Municipalities proposed a national infrastructure program to the government. At that time there was about a $17.5 billion municipal deficit. The government of the day said that if it were re-elected it would put that into operation, but that government was not re-elected. The Conservatives came in and for 10 years the national infrastructure program lay dormant.

In 1993 when the Liberals returned to power, they created the national infrastructure program, with participation from all three orders of government: a third, a third and a third. This was renewed in 1997. As a former president of the Federation of Canadian Municipalities I know all too well how important this was for cities in this country.

During the time of the Liberal government from 1993 to 2006, a number of major infrastructure programs were developed. In fact that money went toward improving highways, transit, sewers, basic infrastructure, recreation. It was extremely important. Our cities are the economic engines of Canada. We need to invest in them. We need to realize that although constitutionally the cities are under the jurisdiction of the provinces, the fact is that people who live in the cities, and now 80% of the population lives in our major cities in Canada, we need to invest in them. We need long term sustainability.

Regrettably the current government has failed. Now we have a $100 billion deficit. We are dealing with everything from rusting bridges, and we have seen what has happened in the city of Montreal as an example, to poor water treatment systems, to problems with transit. There has not been the investment. The government will probably talk about the building Canada fund of $30 billion of which $4 billion only is earmarked for cities. With a $100 billion deficit, $4 billion is not going to cut it.

We need real partnerships. We really need to invest. When the Liberals were in power we eliminated the GST on goods and services. I remember fighting that battle. We only got 57% of the rebate and eventually it was the Liberal government that came in and eliminated 100%. What did that mean for Richmond Hill alone? It meant a million dollars in savings in one year.

Understanding cities is important. We need to understand that they are the economic engines. People who live in these cities have to get to work. They have to be able to get from point a to point b and they cannot do that if the infrastructure is falling apart. We all have a responsibility.

When the leader of the Liberal Party went to Calgary in June, he reaffirmed the commitment of this party to long term infrastructure sustainability. This is a party that returned part of the gas tax to cities and communities across the country. This is the party that understood from the beginning the need to invest in infrastructure. When we invest in that, we have better productivity and that is extremely important for the country.

When we talk about lowering taxes I am clearly on record as supporting the lowering of taxes, both corporate and personal taxes, but we also have to have the investment in communities, whether they are large or small.

We have situations in Canada where we are not competitive because we do not have that investment in infrastructure. We need to have that. If the government is bringing in a fiscal update, it needs to look at that kind of investment in cities.

We hear the big city mayors across Canada continually say that the government is not listening. It is not paying attention to an issue which clearly is of the utmost importance for Canadians. Any fiscal update or budget that may come forward needs to address that fundamental issue.

We cannot have sewers that are falling apart. We cannot have a situation where roads are falling apart. People want to see three orders of government working collaboratively. That does not preclude the private sector. We certainly have seen private sector investment in past infrastructure programs. That is very useful, but again, the municipal governments have to be at the table. They have to be part of the solution. They have to be able to, as they did under the Liberal infrastructure programs, propose what their capital issues are. They have capital programs, five and ten year programs, where they can say they need to advance these things that are very important.

I know my friend from the Northwest Territories who is in the House, a former mayor of Fort Smith and a former president of the Northwest Territories Association of Communities, whom I had the pleasure to work with for a number of years, understands this problem from a northern perspective. There is no question whether one is in the north or whether one is in the southern part of this country, infrastructure needs to be addressed.

We of course had the new deal. These are the kind of innovative programs that I will want the government to consider, to start to really listen.

I realize that the big cities have not necessarily been electorally successful for that party, but that should not be the consideration. The consideration should be that these are the areas of Canada that produce such wealth. If we want to be truly competitive, if we want to match what is being done in Germany, in the United States, in Japan and elsewhere, we need to invest in cities.

I would urge the government to take a leaf out of the Liberals' book of what the Liberals have done in the past successfully. We have received accolades galore from city mayors across the country because they understand. We developed a 20 year strategy to address infrastructure and other needs in this country. For me that is a vision.

We need a national vision when dealing with infrastructure. We cannot do it piecemeal. We cannot simply say that it is somebody else's responsibility. We need to have it earmarked. We have to be able to say to the provinces and the cities that we are all part of this issue. It is not simply about writing cheques; it is about making sure that the money is delivered for the programs.

The same would be true for recreational facilities and things like bicycle paths, if we really believe in making sure that people are healthier. The federal government has a role to play as well in reducing carbon monoxide and improving the health of people in our cities and communities across the country and investing in transit. Again, it should be a dedicated transfer. Funding is important in those areas of the country where that is warranted.

This is part of the Liberal vision, what we have enunciated and have implemented for many years. We believe very strongly that this is something the Government of Canada needs to do because without doing so, from a competitive standpoint we will fall behind.

That is also true in investing in research facilities in our cities. We must make sure that we are investing in post-secondary education. With respect to post-secondary education, we need to convene a federal-provincial conference to talk about the plight of students who are faced with horrendous debt as they come out of colleges and universities. The Canadian Federation of Students and other stakeholders who understand the problem need to be at the table so that we can design a dedicated transfer to the provinces in that regard, as we did on health care funding when we were the government. It is extremely important that we do that.

My plea is very simple. If we do not invest today, we will suffer tomorrow in terms of being competitive in the international community.

I would trust that the Minister of Finance, when he brings down his mini-budget or his statement, will address that. We are all for debt reduction and all for tax cuts, no problem, except we need a balance, and if we are not going to bring that in, we will suffer in the long term.