Debates of Feb. 1st, 2011

Michael Ignatieff Leader of the Opposition

Mr. Speaker, the Prime Minister has announced that he will be going to Washington on Friday to talk to the Americans about something he does not seem to want to talk to Canadians about, and that is a secret perimeter security deal with the United States.

Will he confirm that these negotiations are under way? Will he confirm that is what he will be talking to President Obama about? Will he commit to the House to bring this deal back to the House for an open debate before he surrenders Canadian sovereignty?

Ralph Goodale Wascana, SK

Mr. Speaker, on corporate tax cuts the government is both bullheaded and wrong, but there is Conservative precedent for flexibility.

Let us look at when the finance minister was in the government of Ontario. In 2001, he announced provincial corporate tax cuts to come into effect two years later. However, in the face of intervening economic difficulty, his government put those tax cuts on hold. The minister applauded that delay, defended that delay and voted for that delay.

Why will he not do the same thing today and invest instead in families?

Jim Flaherty Minister of Finance

Mr. Speaker, actually, if the member opposite checks the record he will see that I was not there for that vote. However, he will want to check that.

We have a low tax plan. On the other side, the self-described leader of the Liberal Party, a tax and spend Liberal, says that he will raise taxes. Why will he raise taxes? So he can spend money on big new programs.

We have a low tax agenda for Canadian families. The average saving for Canadian families so far has been $3,000 over the course of the five years of this government.

Ralph Goodale Wascana, SK

Mr. Speaker, specifically on the corporate tax cuts, the job creation is not there, so says the Bank of Canada. Corporate tax cuts are the least effective way to get immediate growth, so says the Department of Finance. The benefits of these corporate tax cuts are trivial, so says the chief analyst of Statistics Canada.

Why do Conservatives waste $6 billion on imprudent, ineffective extra corporate tax cuts, mostly for big business, while imposing higher EI payroll taxes, mostly hurting small business and killing jobs?

Jim Flaherty Minister of Finance

Mr. Speaker, here is what John Manley, a former Liberal deputy prime minister said: “Canada needs a significant tax advantage....I do not think we should underestimate” the benefits of lowering taxes on businesses. “We are transforming how Canada is seen by investors....Reforming the tax system...is a hugely positive move”.

Those are the words of John Manley, the former Liberal deputy prime minister. The member for Wascana ought to listen to him.

Gilles Duceppe Laurier—Sainte-Marie, QC

Mr. Speaker, yesterday I questioned the Prime Minister as to why Quebec has still not received compensation for the harmonization of its sales tax. The response received was not very enlightening. Nevertheless, it seems that almost everything has been resolved with regard to this issue: Quebec is collecting a single tax and tax on tax has been eliminated.

Are products that are taxed by Ottawa but not by Quebec, for example, books, the problem here? Can the Prime Minister provide us with a clear answer?

Stephen Harper Prime Minister

Mr. Speaker, this government is in favour of harmonizing sales taxes with the provinces. We have reached agreements with a number of provinces. To date, Quebec has decided to do things differently, namely, by signing an administration agreement rather than a harmonization agreement. However, Quebec has expressed interest in actually harmonizing its taxes and we are negotiating in good faith to resolve the problem.

Gilles Duceppe Laurier—Sainte-Marie, QC

Diapers and nursing products are other examples of products that are taxed by Ottawa but not by Quebec. Is the problem with the harmonization agreement a result of the fact that Ottawa wants to make Quebec apply sales tax to diapers and nursing products? Does the Conservative government not want to help Quebec families?

Stephen Harper Prime Minister

Mr. Speaker, to harmonize taxes, we must have only one tax. We cannot have two. That is what we are negotiating with the Province of Quebec. Frankly, I appreciate the discussions and I am certain that Mr. Charest does as well. He does not expect us to conduct negotiations with the Bloc Québécois in the House of Commons.

Daniel Paillé Hochelaga, QC

Mr. Speaker, the leader of the Bloc Québécois does not need anyone's permission to defend the interests of Quebec, and certainly not that of Jean Charest.

There is a difference between managing a tax and having the power to impose a tax. Quebec does not tax books because we want to support a cultural policy. Quebec does not tax diapers in order to support our family policy. That is what it means to exercise fiscal independence. It seems that some of our social choices are being questioned in the negotiations. Can the Minister of Finance confirm that the negotiations with Quebec broke down over that? Otherwise, what is the holdup?

Jim Flaherty Minister of Finance

On the contrary, Mr. Speaker, negotiations between Quebec and the Government of Canada are going very well. We have had some good discussions with the Government of Quebec on the matter, but a lot of work remains. We hope to continue our discussions and make some progress.

Daniel Paillé Hochelaga, QC

Mr. Speaker, Quebec's policy of not taxing diapers and books stems from its political choices. The federal government has nothing to do with that. Minister Bachand has asked the Prime Minister to intervene to get negotiations moving.

Since we cannot trust the federal finance minister, who gives Ontario preferential treatment, will the Prime Minister step in and get negotiations moving right away?

Jim Flaherty Minister of Finance

Mr. Speaker, as I said, we have a list of items we are discussing with the Government of Quebec. Discussions are continuing.