Gerry Ritz

[The Economy, March 24th, 1999]

Mr. Speaker, those same industry economists said “Basically, we were told not to distribute the paper”. The Canadian Chamber of Commerce said that productivity remains a problem, that Canada is falling behind its major trading partner.

Why is the minister blocking the reports he does not like?

[The Economy, March 24th, 1999]

Mr. Speaker, the industry minister found himself in hot water recently by admitting that Canada's standard of living is lower than Mississippi's. Since then his own department's economists wrote a paper verifying those facts.

Why did the minister block the distribution of that report?

[Petitions, March 22nd, 1999]

Mr. Speaker, it is a pleasure to rise today to present a petition that has been six months or more in the making.

I have 100,000 signatures from people across this great country protesting the Young Offenders Act as it stands. They talk about substantive changes they want to see come forth. They hope the amendments we put forward in the next few days will really make that happen.

[The Economy, March 18th, 1999]

Mr. Speaker, all through that speech he did talk about a productivity growth challenge here in Canada. I guess he has to realize that high taxes and high debt kill any kind of productivity that Canadians care to put forward.

Has the industry minister changed his stance now that the PMO writes his speeches?

[The Economy, March 18th, 1999]

Mr. Speaker, in a speech the industry minister has quickly forgotten, and it was only one month ago in Toronto, he talked about productivity in Canada and if it had grown 1.2% faster we would not have the $7,000 gap we now have with the Americans leading to a $7,000 per year per person shortfall in this country. Is he denying that he actually said that?

[Income Tax Amendments Act, 1998, March 18th, 1999]

Madam Speaker, I am just getting warmed up here. All of this is relevant because now we can send it to a Liberal controlled committee where debate is also curtailed by the heavy-handed democracy there.

Our day is so filled with crucial legislation that everyone awaits with eager anticipation to see what new pearl of wisdom will come out of this administration. My constituents tell me day after day that they would meet the suggestion with a few rude comments which I really cannot explain here.

It seems our days are going to be filled with sloppy bills that are badly designed and which go mere inches toward what the Canadian people are most in need of: real tax relief. Canada has miles to go to make up for decades of neglect and mismanagement. We can still vaguely remember the days when the dollar was at par or even above the U.S. dollar and when it was a real tragedy when unemployment rose above 5% or 6%.

The Liberals become masters at taking the proposals made by other parties, watering them down and offering the struggles of average Canadians as proof that their administrations were good for this country. That is not so. We have never had more proof than now in that Canadians are struggling to overcome the suffocating, self-righteous intrusions of this government. What success we enjoy as individuals or as small businesses is in spite of this government, not because of its misguided programs.

That is not to say the government cannot have a good idea once in a while. Bill C-72 has a clause that restores the previous $5,000 credit for investment in labour sponsored venture capital funds. Some of these funds are quite active and really serve a need.

Quite a few people lobbied hard for that inclusion last year and now we see it takes the finance minister only 12 months to get on board with the idea. This gives us hope that perhaps he will wise up to other proposals that interest Canadians.

The child care expense deduction has been raised to $7,000. That is a good start. We are always in favour of allowing Canadians to keep their own money. But this deduction is not available to all parents and that is a tragedy.

We have heard ministers opposite plant their Florsheims in their dental work time after time and spend precious days in this House arguing over what they really meant and who they meant to offend or not offend. We have wasted time arguing over who cares and does not care in this House. I suspect we have succeeded in showing the majority of Canadians that this place is more about playing politics than shaping public policy. That is a travesty.

The truth of the matter is that there are clauses in this bill that can be commended in principle. The life learning plan allows Canadian residents to take money out of their RRSPs, if they can afford to have any, to pay for full time training for themselves or their spouses. That is a great idea. I do not know if everyone in that situation can afford full time training as opposed to something a little more flexible, but the intent is a noble effort.

We are aware that RRSP contributions have fallen off in the last two years as well. There is something like $126 billion in unused contribution room outstanding. As I said, it is a noble effort and let us hope there are a few Canadians out there who can actually afford to get retrained and plan on using that retraining here in Canada rather than being forced to go to other countries by our high taxes.

I suggest the same analysis applies to another program concerning part time education. Eligible part time students can use education tax credits and child care expense deductions to go back to school. I presume that helps young single mothers in particular. There is a lot of merit in doing that.

I wish I could be more specific with these measures but the fact is that this government has pulled a fast one on all of us. The Library of Parliament was caught flat footed with this bill and it expressed extreme frustration that there was no time to properly analyze the clauses in this bill.

Even though Bill C-72 was supposedly printed on March 9, the date on the folder, the library had no access to a copy of it until March 17. The researcher complained that this omnibus bill was just too thick to get through and really understand it in less than a week. Yet we are expected to speak to it with two days' notice. What on earth is this government up to? Are we on a fast track again? The calendar is not crowded enough with significant legislation to justify this kind of bullying and arm twisting.

On top of that we are dealing with the tax code, probably the most thick-headed and misguided document in the English language. It is convoluted, complex, and all of those great terminologies. Lawyers have written in their own secret codes, 1,600 pages of every possible definition of every possible object, and they still have to take people to court to apply the statutes. It seems that Quebec can have plain language legislation to make legal documents truly available to the people they apply to, but this government shows no interest in that.

In thousands of cases every year, thousands of Canadians citizens and businesses are put through a wringer to get them to conform to an incomprehensible juggernaut of legalise and secret passwords that even Revenue Canada has to admit it gets wrong on occasion. However, it does not do that often because in the way of this government it has taken on the corporate culture of self-righteousness and the attitude that big government knows best.

What we do not see in Bill C-72 is any admission by the finance minister, his bureaucrats or any of the Liberal members on the finance committee that this system is out of control. We cannot afford it. We see a clause that reduces the individual surtax by a few more dollars. That is a good idea, but who on the government side would dare to stand to defend putting taxes on taxes in the first place? Yet this goes on year after year. Canadians are still waiting for this government and the previous government to wake up and straighten out the mess they have made.

The 5% surcharge which remains untouched for now falls on incomes as low as $60,000. There are thousands of workers in high tech industries or specialized manufacturing who can make that much. What do they do? They take their skills and their incomes and they maximize them south of the border. Brain drain is a common phenomenon. The Liberals maintain their punitive tax structures and wonder why Canadian artists, entrepreneurs, doctors and scientists head for a friendly climate. We could add hockey players to that list too.

It is not like they cannot see it coming. My home province of Saskatchewan started driving out opportunity and entrepreneurship years ago. It has been rewarded as being a have not province by the government in Ottawa. No wonder Roy Romanow and the Prime Minister get along so well. They have the same tax philosophy. We have a government that sees nothing wrong with discriminating against single income families and that perpetuates applying taxes on taxes, punishing the very people it relies on to pay the bills through taxes.

This government really has nothing important to contribute so it keeps its head down, trying really hard not to upset anybody, while it rushes half-baked legislation through the House. It hides behind self-fulfilling opinion polls and paid for studies that tell it what it wants to think. It only adds to the pile that makes up the tax code, never thinking that there might be something worthwhile underneath or another way to approach the subject.

It has been proven that lower taxation leads to higher revenues. Alberta and Ontario are certain proof of that. Ireland has just reduced its tax regime and it is booming. Why can we not catch on to that ideology?

Worst of all, it tables bills like this which announce all over again what Canadians have already heard and paid for in the previous budget.

The government is hungry for any positive PR spin. We heard the finance minister claim that the country can only afford his style of nickel and dime tax adjustments and that it costs the government to give people their money back. What a ludicrous idea. We have a new program to help farmers in the prairies; $85 million to top up their NISA accounts. The unfortunate part is that it is an insult. One very seldom qualifies for NISA. It is a net income thing. So the $85 million is really a teaser.

We know what it costs because year after year the finance minister announces that his programs will cost the treasury so many billions of dollars. He goes ahead and subtracts that amount from the nation's books. He takes it right out of the taxpayers' pockets.

I do not know if Canadians are picking up on this yet, but the day is rapidly approaching when they will finally put their finger on what bugs them about this government. The auditor general has done a great job of painting a picture of what the minister and his finance cronies are up to. Maybe Canadians view public accounting in much the same way as they do the tax code. It is very convoluted and complex. Nobody really understands it. But this practice is pretty easy to follow.

The minister makes an announcement of, say, $2.5 billion. Then, without parliamentary approval, he charges that to the expenditure side. The government says “Look we would like to give you that tax break, but you can see that there is no money left on the bottom line”. The money has taken wings and flown off to pay for a scholarship fund that nobody asked for. Few will enjoy it and it will not even come into existence for another full year. The way our Canadian dollar is shrinking the students may get 50 cents on the dollar by then. According to our tax code anyone who tried to run a business booking expenses that way would find themselves in deep trouble with Revenue Canada.

We are hiding it very well in this country, with our low productivity and so on, because of the strength of the American economy south of us, but we cannot count on that forever. We need to stand alone. The bills will come due and then everyone will see where these years of Liberal mismanagement have led us.

We are really lagging behind in our productivity against our American counterpart and others in the G-7. We have a low dollar, very high taxes and low productivity. The polls show us that no one really identifies with this concept of productivity. Maybe that is because it has been so long since we have had any that nobody recognizes it any more.

The Minister of Industry made several comments to that extent, which I would like to quote. He was addressing the issue of the standard of living in this country. He pointed out that since 1987, just a mere decade ago, Canada's standard of living has increased by only 7%. The standard of living of our counterpart to the south has increased by 17%. That is a 10% difference.

According to the slide that he was showing, the income gap between the U.S. and Canada is 30%, and growing at a rate of about a $9,000 difference in income between Canada and the United States. That correlates into about $28,000 for a family of four. Those are Statistics Canada's numbers.

With respect to the impact on Canada's productivity, the industry minister went on to say “Canada has the lowest growth rate in productivity in the G-7”. We are 17th in the world, which is certainly not good enough. Why? It is because of high taxes and the low dollar. We are paying more and getting less. It is very unfortunate.

The industry minister also pointed out that we have much higher taxes in Canada than they do in the United States. Our tax rate is 130% of that of the United States. If we couple that tax rate with the low dollar, we are on a downhill slide. We see omnibus bills like this which continue to shove Canadians farther down in that sinkhole of despair.

I would like to present an amendment at this time. I move:

That the motion be amended by deleting all the words after the word “That” and substituting the following therefor:

this House declines to give second reading to Bill C-72, an act to amend the Income Tax Act, to implement measures that are consequential on changes to the Canada-U.S. Tax Convention (1980) and to amend the Income Tax Conventions Interpretation Act, the Old Age Security Act, the War Veterans Allowance Act and certain acts related to the Income Tax Act since the principle of the bill fails to address the federal tax system to end discrimination against single income families with children.

[Income Tax Amendments Act, 1998, March 18th, 1999]

Madam Speaker, I thank the members of the House for that consideration.

Today we are studying Bill C-72, an act to amend the Income Tax Act, to implement measures that are consequential on changes to the Canada-U.S. tax convention, and its full title is quite a mouthful. Quite frankly this bill has a loaded title to go along with all the clauses and subclauses which make it up, a lot of rhetoric and a lot of grey areas. This government should be ashamed of itself.

This is the same government that is in such a rush to get through its legislative agenda that it has invoked closure 49 times to date. It is so worried about shutting down the opposition that it has cut off debate on bill after bill, but for what?

[Income Tax Amendments Act, 1998, March 18th, 1999]

Madam Speaker, it is an honour to rise today and speak to Bill C-72. I would like at this time to seek unanimous consent to split my time with the member for Lakeland.

[Taxation, March 16th, 1999]

Mr. Speaker, much to the government's embarrassment in the last few days, the issue of unfair taxation has risen in the public consciousness to push over the Liberal's weak agenda and give a voice to 17 million frustrated Canadian taxpayers.

While the parties in the House put forward their competing visions and arm themselves with reams of stats, a curious phenomenon appeared. It seems that no one can be completely wrong on this issue. The fact is that the tax system has become so convoluted, archaic, out of touch and incomprehensible that it has become the Liberal government's model for its new firearms registry.

Let us be clear. The best tax system for the country is one that seeks to lighten the burden of all citizens and businesses. That system must be understandable, accountable and neutral, allowing Canadians to make their own choices by keeping the greater part of their earnings.

It is time to reject the Liberal obsession with growing revenues to pay for bigger governments and refocus the government to fit its revenues.

[Federal-Provincial Fiscal Arrangements Act, March 10th, 1999]

Mr. Speaker, it is indeed a pleasure to have another opportunity to address Bill C-65, an act to amend the Federal-Provincial Fiscal Arrangements Act.

What we are really talking about is spending $43.5 billion over the next five years and this is really the only time this parliament will get a chance to talk about spending that atrocious amount of money. We might be sympathetic to a government that was in a big hurry to implement important legislation like this but all we see from this side of the House is a government frightened of making mistakes and, like a deer caught in headlights, it freezes and does nothing instead.

We on this side of the House certainly have no problem with the concept of equalization. Equalization grants have been held up as representing Canadian values and as the essence of Canada, supposedly the very stuff that makes us a country. Like many government myths, this one is so thick with rhetoric and misconceptions that average Canadians, the ones paying for and supposedly benefiting the most from this redistribution, are probably unclear what we are arguing about. Canadians are not sure how this affects them one way or another.

To them we can add just about every expert in this country and of course the bureaucrats in the finance department responsible for this complex, convoluted scheme. I believe they have forgotten what the object of equalization really is and are so busy inventing new calculations to hand out taxpayer money that they do not look at what they have done.

We know that section 36 of the Constitution calls for promotion of equal opportunities and a reasonable level of public services to all Canadians across the country. These are noble ideals. The Constitution does not define these terms or set out how these imaginary levels are to be reached.

Over the years the Liberals have applied this peculiar formula to the question. If it is simple, make it complex. If it is not working, it has to be a lack of program funding so add taxpayer money here. It will all get better.

The announcements made by the Prime Minister and the finance minister concerning the social union and equalization fit into this category of fiscal policy. If there are strains in Confederation it is because they have not layered enough bureaucracy on it. Is somebody still complaining? Throw some more money at them and they will shut up for a little while.

There does not seem to be any recognition that the money comes from the same taxpayer who is already paying into these provincial coffers or increasingly now paying user fees for all sorts of public services. There is no federal money versus provincial money, only taxpayer money. Everyone across the country can agree that governments are getting too darn much of it these days.

It is an established principle that whenever a government involves itself in an economic activity there will be distortions. We have to accept some of this no matter what we do. Even if we cut taxes, and I mean really cut taxes, not the shell game we see bandied about here, we know this will affect the behaviour of our citizens in different ways.

There is no such thing as no effect, only good or bad effect. It is sometimes difficult to predict what the outcome might be. Lower taxes tend to increase investment, savings and debt repayment, which are all good effects. It is also possible that people may go on a buying spree with that extra cash and fuel inflation or increase imports over exports, which is not necessarily good.

The most important consideration is that lower taxes put the freedom of choice back into the hands of Canadian taxpayers and that is a great effect in itself. The key to minimizing the distortions we see and the political manipulations in this program, making sure that what we are really trying to accomplish is actually happening in the real world, is to keep programs transparent and accountable.

Everyone should be able to understand how and why the program is set up and be able to make adjustments to changing conditions or to new information as they gather it. What does this government do instead? It adds layers of complexity and rushes a flawed package through parliament before anybody can really get a good look at it. Government members typically protest that they have consulted and studied but they conveniently ignore that there is a big difference between public debate and publicly available information. The public is not informed about the shortcomings of the equalization program and is instead flooded with empty rhetoric like the price of being Canadian, who we are as a nation, and helping the have nots.

When critics rise up to say the program is not doing what it is supposed to do, they are accused of not wanting to help the poor or of trying to split up Confederation or some other such nonsense as we have heard here lately.

If the government were really interested in helping Canadians make the best possible lives for themselves it would many things. The first thing it has to do is make sure it is not engineering an outcome it claims it does not want. All Canadians want their fellow citizens to have good and sustainable jobs, access to education and health care, to enjoy the benefits of living in one of the world's greatest countries. Make no mistake, they know it is only fair that their fellow citizens work just as hard as they do to get these things.

We are famous for our obsession with helping the less fortunate and I hope we never lose that impulse. I fear that if Canadians are constantly confronted with the fact that government programs are often counterproductive or so badly designed that money intended for the poor ends up in the hands of lawyers, bureaucrats, lobbyists and so on, anywhere but where it will do the most good, they will become cynical and lose faith in what government tries to sell them.

When we consider the size of the underground economy and the rate of brain drain out of this country, we can see this effect is already settling in. We all know what happens to some people who are given something for nothing. Most self-respecting people want to get off welfare but some take it as a subsidy for a lifestyle choice and remain in that rut for years. If you are being given money to continue to do what you are already doing, naturally you will continue doing it. Why not?

Why should we think provincial politicians will be any different? We know many of them have worked hard to investigate options for employment and new wealth. We also know they have clung to old industries or methods because it has been politically dangerous for them to make the tough decisions and because taxpayers from somewhere else are backstopping the expenditure.

I do not mean to point fingers anywhere in particular or at anybody. All provinces and all politicians have good and bad examples. I do not mean to simplify the historical reasons why one province or region developed the way it did. There can be many factors contributing positively or negatively at various times. We are discussing only equalization here, and there is no question that getting billions of dollars from somebody else's budget affects the decision making process, political manipulation if you will.

Bill C-65 adds complexity by roping in more revenue sources than were originally included. It tries to calculate gross values of resources without taking into account what it cost to generate those revenues in each province or region. It includes side deals to let Nova Scotia and Newfoundland play catch-up with resource wealth but squeezes mineral wealth into one category. It does nothing to address the fact that property taxes, one of the single largest sources of provincial revenue, are calculated differently not only from province to province but often within those provinces as well.

The last item is of extreme importance. Property taxes have the ability to kill investment as fast as any other factor. We have heard recently how our NHL teams are paying relatively high amounts and are suffering from this. Ontario has recently gone through a revision process and many businesses have found their property tax bills going up by hundreds of percentages. We saw that a short time ago in Saskatchewan. It really cut deep. This can kill a small business or a farm. High property taxes damage the construction industry and discourage development of manufacturing infrastructure. We see industry moving to the States.

What does Bill C-65 do? It actually rewards the provinces for high property taxes. When a government raises this tax it lowers its value but raises the entitlement of the government to more equalization money. It is counterproductive. Nobody raises taxes on the expectation of suffering a loss but we see governments doing this anyway and being rewarded for their counterproductive behaviour by the federal level of government.

We have already highlighted how the net effect of equalization is to hold tax rates higher than desired in the contributing provinces and allows receiving provinces to shift their tax bills in artificial ways to maximize those entitlements. In effect this means that lower income people in the so-called have provinces are paying extra so higher income people in the have not provinces can escape the real cost of subsidized programs. This is not really helping anyone. It is just a transfer of funds.

Some provinces can offer social programs whose costs are carried by other Canadians who have no access to those very programs. This is not equalizing anything for any Canadians.

The Liberals seem to twist this into some kind of cruel conspiracy, but they are wrong. I am sure they are more frightened that they will lose the ability to micro manage the economy and therefore lose their purpose as a governing party.

We can see why they come up with complex bills such as Bill C-65. The thing they fail to realize is that Canadians already vote with their feet on this. Brain drain is an excellent example. Industry moving to the States is another excellent example. My province of Saskatchewan is another great example. Our single greatest export is our bright-eyed youth marching off to Alberta and the States. After all, if we are one big happy country, why is it considered failed policy if Canadians decide to go where the jobs are? It is their right. They have to make a living. They have to go there.

How should equalization work? It must be transparent. All Canadians should be able to look at the mechanism and understand it. There is no way they will support it anyway. My party suggests the macro formula. It is very simplified. We would look at the province's GDP per capita, not at hundreds of little variables, and focus the transfers to the provinces where they are truly needed.

I find it difficult that my home province of Saskatchewan is a have not province. We are rich with agriculture, high tech manufacturing, resources and biotechnology. It has a very educated population. We export them and they head up companies all over the world. We have a long history of superdevelopment. When will that province take responsibility for its misdirected economic policies? Clearly not as long as someone else is paying the bills from somewhere else.

There are other federal systems around the world. Germany has a system where the wealthier regions contribute to a pool of funds that can be drawn on by the less wealthy regions. We have to see more flexibility in the way we work in this country. We do not see anything in Bill C-65 through the fog of rhetoric and complexity that is piled up here.