Gurbax Malhi

[Supply, March 19th, 1996]

Mr. Speaker, it is an honour for me to address today's debate on the opposition motion on business taxation.

Canada is consistently rated as one of the best nations in the world in which to live. Yet the only way to maintain our position on the world stage is to create a business tax system that not only raises money but also creates jobs. I fully support the attempt by the Minister of Finance to re-examine the tax act.

By establishing a technical committee of outside experts, only through a close examination of the grant system will we be able to encourage economic growth and job creation. Who better than the team of experts that is in the field of taxation to tackle the challenge?

It is my hope that such a professional review might lead to enhanced fairness in the tax system by ensuring that all businesses share the cost of providing government services. Otherwise we are faced with declining trust among Canadians and will have a greater reliance on what is known as the underground economy.

In fact, one of the biggest threats posed to Canada's financial well-being is the infamous underground economy. The Ministry of Finance should be commended for getting tough with tax cheaters in this budget. By reinforcing the existing strategy to combat the underground economy, we are sending a strong message to tax cheaters everywhere. The underground economy is not made up of honest people who are merely bending the rules.

The message we are sending to tax cheaters is clear; in your quest for personal gain, you are endangering Canada's economic future. Tough, fair enforcement programs, aimed at protecting our tax system, will help ensure this country's economic future.

The warning in the section of the budget is likely to deter people who might have been thinking of cheating their government out of tax dollars. Pushing an economy underground simply causes the

main source to dry up. You cannot expect water tomorrow unless you are prepared to prime the pump today.

With this budget announcement, Revenue Canada has put in place a multi-faceted approach that enhances its existing underground economy strategy. This strategy aims at enhancing current levels of respect for the tax system in a handful of especially high risk areas of the economy.

As I said back in 1994, anyone who chooses to live in Canada must be prepared to pay for that privilege. Where there is no honour in the honour system, perhaps the fear of getting caught will now prove to be a sufficient deterrent.

It is essential that we maintain the integrity of our taxation system. If the public's trust in the government's revenue generating methods becomes completely eroded, there is no turning back.

Had we failed to get our economic house in order, we would surely have been heading in the direction of a banana republic by now. The life blood of any economy lies in the level of trust it holds among its citizens. Results from this section of the budget should be quick and significant.

Benefits will come in two forms, both in terms of traditional revenue generated for public programs and of greater fairness to other taxpayers who have always met their obligations. Public trust, being as it is a two-way street, this government has repaid honest taxpayers in the best possible way. For the first time in recent memory a federal budget has not unveiled new taxes.

How and how much a country taxes its residents is critical in determining its future economic success or failure.

Without a doubt, taxes in Canada are still higher than most of us would like. This is why a fiscal turnaround is so vital. Only by controlling the debt can we free up resources to eventually ease the tax burden.

In its latest budget, however, the government has taken what is clearly a step in the right direction. There are no tax rate increases, not personal, not corporate, not excise. There have been no personal income tax increases in any of the last three budgets.

Fairness to taxpayers who comply with their obligations demands effective enforcement of the tax law to ensure everyone shoulders his or her fair share of the burden.

To build on Revenue Canada's highly successful underground economy strategy the budget has proposed to devote more energy to Revenue Canada's audit program for unincorporated businesses and self-employed individuals. A higher audit rate for these two high risk groups is expected to recover about three times the cost of bolstering the program.

Because a technical commitment in the Department of Finance will be examining ways of simplifying the business tax system,

including corporate income, capital and payroll taxes and personal taxes, taxpayers will be able to more easily comply with the system.

An effective tax system should not simply raise taxes. It should raise awareness of the importance honesty and fairness play in securing the nation's future.

[Employment, March 19th, 1996]

Mr. Speaker, the number of Canadians working for temporary help agencies grew by 15 per cent in 1995, 17 per cent in 1994 and 29 per cent in 1993.

Workers at these agencies earned on average $383 a week last year; more hours for less money. Some private employment agencies pocket hefty premiums from both the workers and their place of work.

We must therefore encourage government departments and the private sector to post a far greater number of job openings in Canada employment centres, which offer free services to all.

[International Women's Week, March 6th, 1996]

Mr. Speaker, I rise today in the honour of millions of women and men who are working toward gender equality around the globe. During International Women's Week we are invited to reflect on women's progress in all fields of achievement.

In keeping with our lead role in talks at the Beijing conference on women last year, Canada must continue to fight for women's equality in the face of dramatic social change. It is up to all of us to ensure that the commitments made at the Beijing conference are honoured.

[Black History Month, February 29th, 1996]

Mr. Speaker, it is my pleasure to rise today in honour of the important role black Canadians have played in our nation's history.

During black history month we can all feel proud of the contributions made by black Canadians in every sphere of Canadian life.

In 1793 Upper Canada's first lieutenant governor, John Graves Simcoe, helped to free black slaves living in Upper Canada. In time this brave act would clear the way for people like Lincoln Alexander, Ontario's first black lieutenant governor in 1985.

By honouring the achievements of black Canadians, the House has given all Canadians a greater understanding of the richness of black history.

[Seymour Schulich, December 7th, 1995]

Mr. Speaker, earlier this week a North York investor, Mr. Seymour Schulich, donated $15 million to York University's school of business. His gift will pay for a series of undergraduate and graduate scholarships and up to five endowed chairs to study specific areas of business.

He said he believes every affluent Canadian has an obligation to give something back to the country.

He also suggested the federal government encourage more private donations by providing the same kind of tax breaks offered to American philanthropists, who get tax breaks four times larger than Canadians.

I take this opportunity to commend Mr. Schulich for his generosity and to suggest the government consider his advice very carefully.

Hospitals, schools, libraries and other public institutions can use all the donations they can get.

[Income Tax Act, December 5th, 1995]

moved:

That, in the opinion of this House, the government should amend the Income Tax Act to eliminate the payment of personal income tax on interest from personal savings accounts when the amount of interest is $1,000 or less.

Madam Speaker, I am very pleased to have the opportunity to introduce this motion today. I believe taking this action could benefit a great number of people, particularly our senior citizens.

Amending the Income Tax Act to eliminate the payment of personal income tax on interest from personal savings accounts when the amount of interest is $1,000 or less is not a completely new idea.

In 1974 an exemption on the first $1,000 of interest income was introduced as a way of counteracting the impact of inflation on the taxation of interest.

It was also believed the exemption would reduce tax evasion, as those with small amounts of bank interest would no longer have an incentive to ignore the interest they received when filing their income tax returns.

Another argument was that the exemption would increase savings by increasing the post-tax return of investment that produced interest. All of these were valid arguments in 1974 and remain valid today.

In 1988 as a result of a decision by the Tory government the exemption was removed. According to statements given by the witnesses to the Standing Committee on Finance in 1987 the people who had the most to lose if the exemption was removed were senior citizens.

It therefore stands to reason that senior citizens are the people with the most to gain if the exemption is reinstated. According to testimony before the committee more than 80 per cent of taxpayers over 65 claimed the $1,000 deduction in 1983.

Despite the fact that the deduction was removed in 1988, 2,026,620 or about 70 per cent of all seniors who filed income tax returns in 1992 still included bank interest as a source of income. Bank interest was even more significant among the seniors 75 years of age and older, with 878,370 people or about 75 per cent naming bank interest as a source of income. It is obvious that for senior citizens keeping their money in a bank savings account is a way of life, the result of a lifetime of habit.

Think for a moment of the life of a person who is 75 years old. Think of the time they were born, the significant events of their lives and the lives of their parents. Think of the Great Depression. Think of the second world war. These people have known the hardship of trying to make ends meet when the ends just seem to get farther and farther apart.

The Great Depression hit Canada and Canadians hard. It was a terrible, grim time when all manner of personal indignities and deprivations became the norm. People lost their jobs, their homes, their dreams. Soup kitchens were a booming business. Men tramped the city streets trying to pick up 50 cents doing odd jobs or in desperation travelled the country in boxcars looking for work or a handout and the advice of those who still had handouts to give. It was always the same as that of John D. Rockefeller, always to save their money, not squander it. It was a lesson they took to heart.

Then the war came and blew the depression away. Suddenly there was a desperate need for everyone to work, but there was an equally desperate need for everything to go to the war effort. Rationing was introduced and people learned to barter and to save their butter and eggs for the important events in their lives.

People saved string from parcels. They saved paper. They saved buttons and zippers from discarded clothing, anything they thought could be used again.

Our senior citizens and many of their children still save everything useful. They are the original recyclers and they know how to clip a coupon. When they were finally able to work again they saved every cent they could squeeze from their carefully worked budgets as a down payment on their future.

Credit was a dirty word to our senior citizens. It meant you could not afford to pay your bills. It meant a loss of dignity.

Instead they saved to buy their homes. They saved to pay cash for their furniture, their appliances and their cars. They saved to pay for the education of their children. They saved for their old age so they would not have to do without in their sunset years, so they would not be beholden.

Now with interest rates so low their carefully hoarded nest eggs are yielding less and less. Seniors have been hard hit in recent years by falling interest rates. Unlike younger people who may have been able to accumulate savings, our senior citizens are usually unable to work. Their interest from their savings is their income. A $1,000 exemption on interest will really make a difference to them.

Younger taxpayers still working may enjoy a tax advantage or an investment in an RRSP, but such investments and tax breaks are often unavailable to seniors. Many older people are not at ease putting their money into more adventurous avenues.

Often they do not feel comfortable turning their life savings over to a stranger to invest. They are afraid of losing what they worked so hard to save. They feel it is safe and secure in a bank savings account and they want to be able to withdraw their money at will.

Surely the people who built this country deserve a break. It was their money, carefully saved and invested, the banks had at their disposal when others came to borrow. Their habit of putting money aside for the future enabled the banks to invest in the dreams of other younger people when they wanted to start a business or build a new home.

I believe this would be a good habit to instil in the young people of today as well. I believe giving them an income tax exemption on the first $1,000 of interest would prove to be an incentive.

As parents we always want things to be better for our children than they were for us. We try to teach them the importance of a strong work ethic. We show them ours is a society that celebrates

success. We tell them they must always strive for personal excellence. We encourage them by stressing there is nothing they cannot achieve if they just try.

We know young people must be given the opportunity to learn to take responsibility for their own lives. Only then can they acquire the self-confidence and pride in their own accomplishments that everyone needs for self-esteem. Without self-esteem it is pretty hard to gain entry into the mainstream of society and virtually impossible to become the leaders we will need in the future.

Our youth are the future of our nation and our world. They will decide our destiny. The choices made by the young people of today will eventually define the world in which we all live.

There is little in this life more fulfilling than saving for a goal and reaching that goal through conscious effort and sacrifice. I can think of no better or more satisfying way to take control of one's own life and destiny.

Our government should do whatever it can to encourage our young people to be responsible citizens and consumers. Among young people age 25 to 29, 406,660 or 55 per cent included bank interest as a source of income in 1992. So it is already a significant means of saving, ready to increase with some encouragement. Young people who may be saving for a down payment on a house or for a new couch or refrigerator are not making much interest on their savings. They should not be penalized on what little they do earn.

An exemption would act as an incentive and would make more money available for banks to loan out as well. Many of the big ticket items like appliances have been purchased on credit cards in the past few years. Instead of the dirty word it was to our seniors, credit and the amount of credit available somehow became a status symbol.

Credit is incredibly easy to get. Everyone has heard of reports of children and even the family dog being offered credit cards. But credit card purchases cost consumers much more than waiting until one can pay cash. It is very easy to be sucked into the maelstrom of spending more than one actually earns.

In the first seven months of this year 36,118 consumer bankruptcies were filed across Canada. That is 16 per cent more than in the same span last year and one per cent more than in the first seven months of 1991, when the 12-month toll reached an unprecedented 62,277. According to some analysts, much of the cause of these consumer bankruptcies is credit card borrowing.

Saving is clearly a better way to go. For those with relatively modest incomes, an investment in a savings account is one of the few investment opportunities readily available.

In closing, I would like to say that there are plenty of tax breaks for those with large amounts of money to invest. An exemption on the payment of income tax on the first $1,000 of interest from savings accounts would give a break to the little guy and help our senior citizens as well.

[World Aids Day, December 1st, 1995]

Mr. Speaker, today, December 1, is the eighth annual World AIDS Day.

Since the global epidemic of this dreadful disease was first documented and up to the end of 1994, an estimated 19.5 million men, women and children have contacted HIV. The World Health Organization estimates that the total number could more than double by the year 2000.

AIDS is the most deadly scourge ever faced by humankind. Those who suffer with the ravages of this disease, their families and friends, indeed all of us can count ourselves among the victims of AIDS.

I urge all Canadians to continue to support the battle against this devastating illness. The efforts of every one of us are needed if we are ever to celebrate the last World AIDS Day, the day when we can finally claim victory over this deadly killer.

[Crime Prevention, November 27th, 1995]

Mr. Speaker, the holiday season is a busy time for shoppers and criminals alike.

The Peel regional police and police all across Canada have compiled lists of suggestions to help people reduce the risk of becoming a victim of crime. Among other things they suggest that shoppers avoid carrying large amounts of cash and lock their purchases in the trunks of their cars.

They remind people that empty cartons from high value products such as televisions, computers and stereo equipment may cause a thief to add their home to his post-Christmas shopping list. They suggest that gifts and valuables be kept away from windows to keep criminals from window shopping.

These crime prevention tips may keep thieves from stealing the joy from our holidays. I am sure all members will join me in commending the police on their fine work.

[Canadian National Institute For The Blind, November 21st, 1995]

Mr. Speaker, this year the Canadian National Institute for the Blind dedicated its annual review to the more than 20,000 people from across Canada who work as CNIB volunteers.

Volunteers work at all levels of the organization, from national policy development to fundraising to the support of core services. They enable the CNIB to do much more than would otherwise be possible, transforming each $5 donation into an estimated $100 of impact for clients.

The CNIB values its volunteers because the imagination, experience, purpose and insight they willingly provide would be difficult to buy at any price. Without volunteers its work would be unthinkable.

I am sure all members join me in recognizing and thanking those Canadians who give so generously of their time and energy in support of the CNIB.

[Intervener Funding Act, November 7th, 1995]

Mr. Speaker, I am pleased to rise today in support of Bill C-339, an act to provide for funding for interveners in hearings before certain boards and agencies.

I think we all know that politicians at all levels of government are suffering from a serious lack of credibility right now. People feel politicians are not listening to what they have to say and are refusing to tackle the very real concerns that touch their daily lives. They have the perception that government is selling out to the interests of big business. It may well be they are right, but for the wrong reasons. It may well be that the voices of the people are not being heard in many instances because they just do not have the funds to travel across the country to make their views known. They just do not have the money to hire lawyers, experts, researchers, and writers to present their point of view. The interests of the little guy are in fact getting lost in the shuffle.

Over and over people have been saying that they want to have an input into government decision-making. We, as a government, have told them that we agree. However, as the Minister of the Environment said during the debate on the Canadian Environmental Assessment Act, "It is one thing to say that people have a say; it is another thing to give them the tools to exercise their right."

Bill C-339 addresses this problem in a concrete way. By ensuring funding, it provides the tools necessary for the average citizen, regardless of his or her financial assets, to be heard in the decision-making process. Intervener funding will assure the public that those with a valid interest will be heard at future hearings and that the public will have input into government decisions.

It is important to note that in drafting this excellent piece of legislation the member for Oxford was able to draw upon legislation that already exists in the province of Ontario. He was not reinventing the wheel. The Ontario government proclaimed the Intervenor Funding Project Act in 1989 as a three-year pilot project. In 1992 the province of Ontario conducted a review of the Intervenor Funding Project Act. This review, entitled "Access and Impact: An Evaluation of the Intervenor Funding Project Act, 1988", showed broad support for the objectives of the legislation. The project was extended to the spring of 1996. I would like to quote from this report, as I think the experience in the province of Ontario is very close to that in the entire country:

The manner in which many administrative decisions were made in the 1960s and 1970s excluded members of the public, even though many decisions were required to be made in the public interest.

Too often, agencies and tribunals were only presented with the view of the regulated industry or the applicant for an approval. As agencies are now faced with a bewildering array of social, economic, and moral questions, a critical view is that excluding diverse interests is no longer appropriate.

Increasing public access to administrative decision-making is important for several reasons, first of which is fairness. Decisions regulating the conduct of businesses affect small or large segments of the public. Sometimes individuals are financially affected, each to a small degree, as with telephone or utility rates. Sometimes an individual's health and well-being are affected, as with environmental and food and drug regulation. In principle, if people are affected by decisions they should have the right to be heard.

Second is quality of decisions. Where regulatory decisions affect the public and are required to be made in the public interest the quality of those decisions is improved when members of the affected public participate. They apprise the tribunal of facts that might not otherwise come to its attention. They assert different perspectives and opinions about the consequences of the decision to counter the assertions of the regulated industry. In this way the tribunal gains a better understanding of the range of dimensions of the public interest it is charged with serving. Better decisions result.

Third is accountability. When members of the public participate in administrative decisions they gain an understanding of the balance that is struck between competing interests in reaching a decision. This process improves the accountability of the decision-maker and legitimizes the decisions for those who participate.

I believe these statements fairly sum up the reasons in favour of the bill.

During earlier debate there was some question of the fairness of requiring a private company to finance the group that may kill its application as well as some question of what would happen if the company were financially unable to fund the interveners. Again I would like to quote from the access and impact study:

We believe that more effective monitoring of the costs and benefits of the process will be achieved if those who are the focus of these decisions, the proponents, are made to bear the costs. It is they who are the centrepiece of the regulated activity. A critical aspect of that role requires effective participation by other interests while ensuring that participation is responsible.

I think it is obvious that a proponent who has to pay for this intervention will suddenly realize that consultation and co-operation and compromise are in their best interest, thus reducing or even eliminating the need for the intervention and confrontation.

I urge all members to support this legislation.