Dennis Mills

[Income Tax Act, February 14th, 1994]

Mr. Speaker, I would like to congratulate the member on his sensitivity to the cost benefit analysis of the GST. I also share his view that the GST has been a disaster, especially for the 1.9 million registrants, most of them small businesses. It costs them about $3,000 to $5,000 a year just to administer it, not counting the paper burden.

I want to deal with research and development. I know it is a sensitive issue with members from Her Majesty's Loyal Opposition. I want to recognize first that there is a little bit of a disadvantage on the pure dollars of research and development that do not go into the province of Quebec. The member quoted 50 per cent, but when analysing the research and development component the Ottawa region cannot be ignored. We had this discussion before.

The Ottawa region includes many research and development facilities in which many constituents from the province of Quebec participate. When one sees the amount of research and development that goes into the Ottawa region one will find that on a per capita basis we are a lot closer to a more reasonable share of the research and development dollars.

[Income Tax Act, February 14th, 1994]

Mr. Speaker, first I want to say that I listened to the question from my colleague from Mississauga South. He was not suggesting we should not be sensitive to middle income earners who have that exemption. He was saying we should make sure that tax measure is not designed in a way to encourage investment outside of Canada, such as Florida properties and I support the hon. member on that.

The hon. member has made a compelling presentation today for first time home owners through the RRSP and I salute him for that. It is one of the best I have heard. We can only hope in the next couple of weeks that the member's recommendation is listened to.

I want to talk about the point he made in the first part of his speech relating to the duplication of provincial programs for small business and Government of Canada programs for small business and the fact that we should streamline the process.

The member talked about decentralizing. Would he consider a decentralizing or streamlining of the programs if they were operated by the Government of Canada in the regions or in the provinces? Or, is the member advocating that the Government of Canada should just get out of the business of helping small business, period? What is the member's position?

[Income Tax Act, February 14th, 1994]

Mr. Speaker, I thank the member for Vegreville for his question.

First on the issue related to environmental requirements I am totally in support of it. Any business person I have ever talked to who converted to green business movement has ended up making more money because of his commitment to the environment. I would not want a lesser commitment to the environmental sustainable development. I would want as much or more than we currently have.

The second point in terms of the non-profitability of small business to banks I do not accept. Aside from clipping bonds for the Government of Canada, I think the small business community is the most profitable sector of all the banks with the spreads on interest and the service charges. It is unacceptable that a bank person would say there is no profit in the small business sector.

Besides that the banks of the country have a unique banking charter organized by the Chamber under the Bank Act of Canada. It is not only to protect depositors' funds. We recognize that, but aside from protecting depositors' funds they are also mandated in that unique charter to lend to business. It is unacceptable if any bank person would say there is no profit in the small business sector. I hope the member for Vegreville would challenge the bank person who said that to him.

[Income Tax Act, February 14th, 1994]

Mr. Speaker, I appreciate the comments of the hon. member for North Vancouver. They are always constructive.

What I hear from the small business community in my city is, first of all, that the regulatory burden that exists for them, the paper burden, is number one. This is after bank financing. The overall complaint, of course, is access to capital. Then it is paper burden and tax reform.

In terms of government spending, I hear from small business that what we have to eliminate duplication and eliminate government waste.

If a program is meeting a good public policy objective and we are getting value for the money, most people I talk to can understand that. What they cannot stand and what they resent is government waste. I am totally in support of the member's concern for government waste. When we eliminate government waste we are cutting government spending. That type of government cutting I am totally in support of, as is our entire party.

[Income Tax Act, February 14th, 1994]

Mr. Speaker, I would like to first of all acknowledge the sensitivity of the member for Halton-Peel to the small businessmen and women in his riding. I have been through the member's riding many times. It is a vibrant riding. This is an example. If his community has incredible growth potential and if the small business sector gets ignited again, I know it can pick up a lot of the unemployed community that exists within the greater Toronto region.

I am not an expert on flow-through shares, so I do not want to get into this in a technical way without having all of the documents in front of me. I will give the member an undertaking that I will get the specific meaning on how this will help the mining industry. I will get it to him forthwith today.

[Income Tax Act, February 14th, 1994]

Exactly.

When I review, reflect and take a look at this piece of legislation that we are going to be talking about here today-I presume there will not be too much difficulty in passing it-I at the same time have to ask myself this. What can we as members of Parliament do to not just give amended tax laws to small business? What can we as members of Parliament do to address their number one problem, access to capital?

I am hoping that once again as we head toward a budget date and toward committees that all members can be seized with this notion of accessing capital to small business.

Our party believes-it was part of our red book-that the greatest hope we have in this country for putting people back to work rests with the small businessmen and women who are the ones who take the chances. They are the ones who put their homes, savings and RRSPs on the line.

I just wish there was a way that the financial institutions could realize that they are part of the responsibility of joining with us in facing the crisis of unemployment that is before us.

I do not really have a lot more to add on this bill but I want to go back to the amendment which deals with senior citizens, the instalment payments of income tax.

This is a very important amendment for our senior citizens. I am repeating this because, as many members have heard, the

parliamentary channel is watched by a lot of seniors in our country. I think this is a welcomed amendment.

Many of our senior citizens were asked to make quarterly instalments on very low incomes because of a glitch in the way the legislation was written. With this amendment we will be able to correct that instalment payment process for about 300,000 senior citizens.

I want to state again that this is a constructive piece of legislation. It is geared primarily toward assistance for small business using the tax act. Philosophically of course I would prefer a different approach to helping small business if we could do it in a comprehensive way.

I do not like using the tax act to run the economy. I prefer that we go back and have a total comprehensive review of our tax act. That of course is one of the reasons why I have been advocating for many years the idea of a single tax, a system where one basically takes the Income Tax Act, all of the 14,000 pages of exceptions to exceptions which by now most of us have had a chance to review because we have been here for almost a month. Special preferences are buried in that act. Most multinationals have the ability to benefit from the approach that exists in our current tax act. I am optimistic that many of those special preferences will be eliminated next Tuesday when the budget is presented. I am hopeful.

Is it not interesting that we are all being lobbied right now by different people for their particular measure to be attended to in the budget. I am sure many members have received the briefing from the Business Council on National Issues. In that briefing they talk about the fact that they want no new grants to business, no grants to business.

I thought this was incredible. They think that grants are moneys received directly from line departments, whether it be industry, agriculture or whatever. The real grants that big business receives in this country are buried in this tax act. I just wish when the Business Council on National Issues says no new grants or cut back on grants that it would include all the ones that are buried in the tax act.

I am happy today to at least acknowledge the fact that 90 per cent of the measures are for small business and I hope this bill goes through the House quickly.

[Income Tax Act, February 14th, 1994]

The answer was what he just said, that we are in an industry that has a lot of current appeal, the cablevision and electronic highway business. Right now that is the issue that is turning on the leaders of the financial institutions.

The bottom line was they did not really have a reason why all of a sudden the banks were throwing money at them. I do not begrudge them. If they can make that kind of situation happen, it is in the spirit of entrepreneurship and free enterprise. As long as it is not too much of a concentration in power then I really do not have too much of a problem with it.

What I do have a problem with-

[Income Tax Act, February 14th, 1994]

Mr. Speaker, I am happy to have the opportunity to speak on Bill C-9.

I would like to begin by informing the people who have tuned in to the debate today of the contents of this bill. A lot of the implementation measures in this bill came from the 1992 fiscal statement from the previous government and also the budget of April 26, 1993. As a government we recognized some of the constructive initiatives the previous government put forward and these are examples of legislation we supported.

I can remember discussing many of these measures when I was the opposition party critic for small business. I do not want to suggest that the implementation of these measures represents support for the previous government in its total economic thrust, but part of its tax amendments, especially those related to small business, we did our best to support when we were in opposition and made sure they went through the House as quickly as possible. I hope we can continue with that approach.

In the measures from the economic and fiscal statement touched in this legislation, our number one priority is the unemployment insurance premium relief for additional jobs. It provides a refundable tax credit in respect of an increase in unemployment insurance premiums payable by certain employers in respect of 1993.

The second measure is the temporary small business investment tax credit. It provides a temporary 10 per cent, non-refundable small business investment tax credit for eligible machinery and equipment. It is very important when manufacturing companies are attempting to modernize and upgrade so they can become globally competitive and is an inducement to make such purchases.

The extension of the small business financing program extends to the end of 1994. Under this program a small business in financial difficulty may refinance up to $500,000 of debt at low interest rates. It is very important right now, as I am sure many members would agree-and I am going to deal with this a little later in my remarks-especially when we are having such difficulty in shifting the attitudes of banks toward small business.

The bill repeals the penalty tax on excess small business properties held by RRSPs and registered retirement income funds from October 31, 1985. Another component of the bill is the labour sponsored venture capital corporations. This adds preferred shares to the list of eligible investments for these corporations and it facilitates the issuance of shares to RRSPs.

Flowthrough shares allow 100 per cent of the first $2 million of oil and gas development expenditures to be deducted by shareholders. That should certainly be supported by most of the Reform members.

The removal of mandatory deduction of Canadian exploration expenses allows corporations carrying on a resource business to choose to deduct lower amounts of Canadian exploration expenses in order to utilize non-capital losses before they expire.

Improvements to the tax credit for scientific research and experimental development introduces a simpler method of calculating the credit and allows for partial credits and clarifies definitions and improves administrations.

Three major measures came from the budget. The annual investment tax credit limit repeals the annual investment tax credit limit for taxation years that begin after 1993. It is basically housekeeping. The investment tax credit for scientific research and experimental development extends the 35 per cent tax credit to Canadian controlled private corporations with prior year taxable income under $400,000 and provides a phase-out of the $2 million expenditure limit. Last is the instalment payments of income tax. Individuals generally have to make quarterly instalment payments of taxes if the difference between the tax payable and the amounts withheld at source is greater than $2,000 in both the current and either of the two preceding years. The previous amount was $1,000. Close to 300,000 senior citizens with very low incomes had to make quarterly instalments which were a tremendous burden for them. When the bill is implemented it will be an added convenience or it will take the

burden of quarterly instalments away from over 300,000 low income senior citizens.

Essentially that represents the specific amendments in this implementing legislation. As I stated in my opening remarks, this is an example of legislation we got behind when it was introduced in the budget statement and the fiscal statement pre-Christmas last year. We are extremely sensitive. I believe actually all members of this House are extremely sensitive that we have to do things quickly to help motivate and mobilize the entrepreneurial spirit today.

All of the measures in this bill are important but I believe they are only going to be effective if the partnership of the financial institutions with small business starts working again.

It was interesting this morning when I came in from Toronto. On my desk was a speech that my colleague, our whip, gave at Memorial University in Newfoundland on the weekend. The whole theme of his speech was how the relationship between small business and financial institutions had broken down and how we, as members of Parliament, have to take a much more aggressive approach in trying to rebuild that relationship.

In his remarks he talked about how easy it was for the Reichmanns to have access to so much bank financing. Much of the money did not even have security and they got it so easily. This is a difficulty I have as a member of Parliament, with not just the Reichmanns, and I am not singling them out in a personal way, but I will give a more current example.

We have all read in the papers the last two or three days about the proposed takeover of Maclean Hunter by Rogers. About a month ago we were reading articles in the newspapers about how they were having such cash flow difficulties. They were looking for bridge financing to help them get through the next quarter and were looking for a couple of hundred million dollars. They were having great difficulty because of their debt load.

All of a sudden Rogers makes an offer to take over Maclean Hunter and the banks are throwing money at the company. An article which I am sure members read stated that close to $2 billion to $3 billion worth of commitments from all the chartered banks have lined up to try to help Rogers.

I met with one of the vice-presidents of the Rogers corporation Friday morning. The very first thing I said to him was: "How do you guys do this? How do you go from having a cash flow crunch of $200 million a month ago and now all of a sudden you have banks giving you over $2.5 billion? What is your trick? What is your secret? Tell me what it is so I can communicate what your trick is to the million small businesses that seem to be having such difficulty in getting access to capital".

[Federal-Provincial Fiscal Arrangements And Federal Post-Secondary Education And Health Contributions Act, February 9th, 1994]

Madam Speaker, my remarks will be very short.

I have said on more than one occasion in the House that there is not a region that does not have some legitimate frustration with the Government of Canada, and Quebec is no exception. The House must thoroughly examine the last 20 years of the presence of the Government of Canada in the province of Quebec and its attempts to try to make life meaningful and productive just as it does in every region of the country.

Members of Her Majesty's Loyal Opposition should realize that not only do we have members in our caucus from the province of Quebec who represent a voice for Canada in that province but for many years before that there were members from Quebec who would disagree with the approach these members are taking today.

[Federal-Provincial Fiscal Arrangements And Federal Post-Secondary Education And Health Contributions Act, February 9th, 1994]

I did not say that.