Inky Mark

[Income Tax Act, March 9th, 1999]

Madam Speaker, first let me thank all hon. members on both sides of the House for debating this private member's bill. They brought forward many important points, one being that it is about societal values and the volunteer base of this country. We all come from communities where if it were not for the volunteer sector, not much would probably happen.

My colleague from Cypress Hills—Grasslands brought forward the important point that perhaps there needs to be a new set of standards. If the rules are to be changed, it is a good idea. We all need scrutiny. Audit requirements are probably a sensible approach.

In my brief closing comments, I would like to make some key points to tell the House why this bill should have been made votable.

It is the optics of our society, of equality in this country. Politicians really should not get the edge on the average Canadian, at least that is the optics out there.

The charitable donation of $1,150 or less should be put on an equal footing with political donations. The first $200 donated to charities results in a tax credit of 17% of that amount. Anything over $200 donated to a charity results in a tax credit of 29% of the amount. The maximum tax creditable amount is 50% of the filer's income.

The first $100 of a political donation results in a 75% tax credit. The next $450 results in an additional 50% tax credit. The next $600 results in an additional tax credit of one-third of the amount donated. The maximum tax creditable amount is $1,150 which results in a tax credit of $500.

In 1993 the average charitable donation claim was $626. Subject to standard rules, the tax credit was $158. As a political donation, $626 resulted in a tax credit of $325. That is a difference of $168. Again, as was indicated by previous speakers and myself, there is a discrepancy in our tax credit system.

What are the revenue implications? According to the reference branch of the Library of Parliament, these are difficult to nail down at this time. Estimates are that under present levels of donations this would probably result in the government taking in about $800 million or less. Perhaps we could just deem this as a tax break. As we all know, money in the pockets of the citizens of this country is certainly better than in the hands of politicians.

In summary, the key reason for the uncertainty on revenue is that increasing the tax credit for charitable donations could encourage people to give more to charities. At a time when governments are able to do less, and we all agree on that, I think we should encourage increased giving to charities. It is unfortunate that with the tax breaks political organizations currently get, it appears that people in this country still do not take an interest in politics.

I thank the members of this House for speaking to this bill.

[Income Tax Act, March 9th, 1999]

moved that Bill C-312, an act to amend the Income Tax Act (percentage of gifts that may be deducted from tax), be read the second time and referred to a committee.

Madam Speaker, it is a pleasure to have the opportunity to debate my private member's Bill C-312. Let me thank my colleague from Delta—South Richmond for seconding the bill.

Bill C-312 would amend the Income Tax Act with respect to the percentage of gifts that may be deducted from tax. I will read a brief overview of exactly what this private member's bill is all about:

The purpose of this enactment is to increase the deductibility of charitable gifts up to $1,150 a year to be no less than for political contributions. It applies to gifts, up to that amount, the same formula for calculating the deduction that is used for political contributions to registered parties and candidates. The deduction for gifts above that amount remains unchanged.

The enactment actually covers Crown gifts and cultural gifts as well because they are added to charitable gifts to calculate the deduction under the act and the expression “total gifts” means total charitable gifts up to 50% of income plus total Crown gifts plus total cultural gifts.

The rationale for this private member's bill is really about levelling the playing field. As members know we are all proud to be Canadians and we believe that Canadians should be treated equally. That is one of the pillars of our democracy. Politicians should not have any advantage over regular citizens who work hard and pay a lot of taxes. In fact 46 cents out of every dollar is paid out in tax in one form or another. For that purpose it is even more important for citizens to get the same breaks as politicians.

This bill is really about equality for Canadians. It is about being treated in this country on an equal footing. Regardless of what politicians believe, which is that they should have an added advantage certainly during election times when raising funds, I believe that politicians should not have an advantage over other citizens who would like to contribute to the charity of their choice. Therefore, this bill would level the playing field.

In essence, Bill C-312 is about taking away political advantage for political donations. Politicians I believe and most people in this country believe should be treated no differently from the average Canadian. Not all donations should have the same weight.

This bill unfortunately is not votable. Obviously it was politicians who decided that it should not be made votable. In fact when I presented myself before the committee there was an instance when members of the committee thought I was mixing apples and oranges. I really do not think we are mixing apples and oranges. I believe that Canadians need to be treated in an equal fashion. Politicians are Canadians and so are the citizens of this country, so it is really not about apples and oranges.

What I would like to do at this time is run through the bill so that the people who are watching will know what it is about. As I first indicated, Bill C-312 would amend the Income Tax Act with respect to the percentage of gifts that may be deducted from tax.

Subsection 118.1(3) of the Income Tax Act would be replaced by the following:

(3) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted such amount as the individual claims, not exceeding

(a) 75% of the lesser of $100 and the individual's total gifts for the year if the total does not exceed $100, plus

(b) 50% of the amount by which the individual's total gifts for the year exceed $100 and do not exceed $550, plus

(c) 33 1/3% of the amount by which the individual's total gifts for the year exceed $550 and do not exceed $1,150, plus

(d) the highest percentage referred to in subsection 117(2) that applies in determining tax that might be payable under this Part for the year multiplied by the amount by which the individual's total gifts for the year exceed $1,150.

(2) Subsection (1) applies to the 1998 and subsequent taxation years.

The proposals necessary to change the calculation for the charitable donation credits for income tax would take place in such a manner.

The Income Tax Act would have to be amended, as I indicated earlier, in order to make the calculation of the tax credit for the first $1,150 of charitable donations in order to make the treatment equivalent to or better than the tax credit for political contributions of $1,150.

With respect to political contributions, the taxpayer may at present deduct from income tax otherwise payable under Part I of the Income Tax Act an amount in respect of contributions made in the year to a registered party or an officially nominated candidate in a federal election or byelection.

According to subsection 127(4) of the act, the above terms have a meaning assigned to them in the Canada Elections Act.

Pursuant to subsection 127(3), the political contribution deduction is calculated as a percentage of the actual contribution made by the taxpayer in the year.

The taxpayer may deduct (a) 75% of the first $100 contributed; (b) 50% of the next $450 contributed; and (c) 33 1/3% of the next $600 contributed. The maximum deduction is therefore $500 and is available where the taxpayer has contributed $1,150. Where the contribution in a year exceeds $1,150 no amount is deductible in respect of this excess and the taxpayer may not carry such an excess over and take a deduction in another year.

Since the deduction is from part I, tax otherwise payable, it is in the nature of a tax credit. Where the taxpayer is not otherwise required to pay income tax for the year in an amount at least equal to this credit the benefits of the credit are lost. The taxpayer cannot receive this credit as a tax refund.

Section 118.1 provides for a non-refundable tax credit to individuals in respect of certain gifts made by them which qualify as charitable gifts, crown gifts, cultural gifts or ecological gifts. This credit is applicable against income tax otherwise payable under part I of the Income Tax Act and is determined in accordance with the formula described in section 118.1(3).

The formula is based on the individual's total gifts for the taxation year, meaning the total of the lesser of the individual's total charitable gifts for the year and generally 50% of the individual's income for the year in 1996 and later years up from 20% in 1992 to 1995; the individual's total crown gifts for the year; the individual's total cultural gifts for the year; and the individual's total ecological gifts for the year.

The relevant definitions of the above terms are contained in section 118.1(1). According to section 118.1(3) the tax credit for an individual in respect of total gifts for a taxation year is calculated at two rates, 17% of the first $200 of donations plus 29% of the donations over $200.

In order to change the calculation of the tax credit for the first $1,150 of the total charitable gifts to make it equivalent to or better than the tax credit for $1,150 in political contributions an amendment would be required to section 118.1(3). The wording would depend on whether the intention was to change the calculation of the tax credit for only total charitable gifts or for total gifts since total charitable gifts comprise only a portion of the total gifts on which the present calculation of the tax credit is based.

Assuming that the calculation of the tax credit for the first $1,150 of donations was changed to be the same as the calculation for the tax credit for $1,150 in political contributions, a determination would also have to be made as to what the legislated formulae would be for calculating the tax credit on the portion of donations in excess of $1,150.

Turning to the revenue implications of the proposal in Bill C-312, the most important change is the increase to 75% credit of the first $100 as opposed to the 17% of the first $200 given the existing rules and 50% of the next $450. The average charitable donation claim in 1993 was $626 according to Revenue Canada's taxation statistics. Subject to standard rules the federal tax credits generated would be $158. If this representative donation had instead been subject to the political contribution credit rules, the earned credit would have been $325, a difference of $168 multiplied by a hypothetical 5.4 million taxpayers.

Another approach to estimating the revenue implication of the proposal is static microsimulation which was done using Statistics Canada's social policy simulation model and database. Responsibility for the results and the interpretation lies with the present author. This involves rewriting the algorithm of calculating the charitable donations tax credit to reflect the proposal at hand and using the model to estimate the net impact of federal revenues.

Assuming that for charitable contributions above $1,150 the credit rate would be thirty three and one-third per cent instead of the current twenty nine per cent. Matching the political contributions credit for amounts below that, the impact on federal revenues is estimated to be about $800 million. The simulation approach thus matches quite nicely with estimates above employing averages.

After $1,150 it will go back to 29%. This is a static exercise, which is to say that we assume in doing the calculation that individuals do not choose to donate more because of the more favourable treatment. If it is the case, that more favourable treatment does not generate any new or incremental revenue for charities, all that is changed is the cost of giving.

It would be more realistic to assume that individuals choose to donate more, in which case charitable events would increase and federal revenues would decrease more than they do in the static exercise. How charitable givings would increase is a matter of speculation. It depends on what estimates one chooses for the rate of tax induced giving, which means how much the after tax cost of donation influences the amount donated.

There has been a reasonable amount of empirical work on this question and the jury is still out. While taxes do positively affect charitable livings, on the margin the magnitude of that effect is uncertain.

The incremental federal cost of increased giving depends on who is doing the giving. This is because for amounts above $550 the credit rate is only changing from twenty nine per cent to thirty three and one-third per cent, a relatively small shift. For smaller donors the credit rate is changing from 17% to either 50% or 75%, which may have a significant impact on donation rates. In other words, we may well find a large number of new donations under the $100 level and a large amount of new or increased donations in the $100 to $550 range. This would obviously influence charitable receipts in a positive way and a federal revenue in a negative manner.

[Request For Emergency Debate, March 8th, 1999]

Mr. Speaker, from what we just heard from the hon. member from across the way, he and his government basically missed the point.

My application for an emergency debate deals with the issue of risk this government is putting Canadians at with Bill C-55. In fact, the faster it fast tracks this piece of legislation, the greater the risk.

I believe a billion dollars worth of retaliation will impact hugely right across this country, probably up to 45,000 jobs. This is from a paper on international trade. I can submit this later on.

[Publishing Industry, March 8th, 1999]

Mr. Speaker, Bill C-55 will have an immediate effect on foreign owned split runs other than American.

Many Chinese people came to this country seeking freedom, like freedom of speech. Over 100,000 Canadian Chinese will read the World Journal and Ming Pao magazines. Why is the minister willing to sacrifice their readers?

[Publishing Industry, March 8th, 1999]

Mr. Speaker, today the government called closure for the 49th time, this time on C-55.

At least two Chinese language magazines under foreign ownership are published in Canada: World Journal and Ming Pao magazine. The heritage minister's Bill C-55 will shut down these magazines which are published in Canada.

The heritage minister says that the magazine bill will protect culture. If that is the case, why are Chinese Canadians paying the price?

[International Trade, March 5th, 1999]

Mr. Speaker, on Wednesday the U.S. trade representative imposed 100% duties on imports from Europe to the United States.

If the international trade and heritage ministers doubted the United States would follow through on retaliation because of Bill C-55 they should now be true believers.

What will the finance minister say to wool suit makers in Montreal when the U.S. retaliates against textiles?

What will the international trade minister say to pharmaceutical workers in Toronto when they lose their jobs because he would not take action?

What will the heritage minister say to Hamilton steel workers in her own riding when their jobs disappear because of trade retaliation?

How will the Prime Minister explain to Canadians that he allowed Canada to bear the brunt of a $1 billion retaliation?

[First Nations Land Management Act, March 1st, 1999]

Mr. Speaker, I am pleased to speak today on Bill C-49, the first nations land management act.

Like my colleagues, I am not happy with the government's evoking time allocation for the 48th time. I certainly hope the government resists the temptation to invoke time allocation on certain other bills. As I understand, next week it may do the same on Bill C-55.

I come from a riding with 13 Indian reserves. Bill C-49 will have profound implications from what I have heard today. I hope the government slows down the process and consults the aboriginal community certainly at the grassroots level before passing this bill.

I want to focus today on the issue of simple fairness as it relates to Bill C-49. Bill C-49 proposes to give significant jurisdiction to certain Indian bands, including the authority to collect taxes from residents on reserve land.

Bill C-49 fails to take account of how these jurisdictions affect residents on reserve lands who are not status treaty Indians. So far in dealing with the residents of the Musqueam development of lower mainland B.C., the Musqueam band is proposing the collection of horrendous rents from resident leaseholders.

The Musqueam's proposed rent will have the effect of driving residents who own homes built on leased lands out of their homes. I have received briefs from the people who are affected by this proposed change to the act. They have had numerous town hall meetings and have many issues to be concerned about.

In some cases the band's rents are driving out senior citizens who have resided on the Musqueam development for the past 30 years. Annual rental payments for each lot are now in the range of $28,000 to $38,000 depending on lot size. Currently rents are based on a percentage of the property value if these properties were owned outright, including the land. The homeowners do not own the land on which their homes sit. Property taxes have recently been doubled into the $7,000 range by the band's taxation authority. The homeowners' only recourse is through the courts. Currently they are pursuing their case before the Supreme Court of Canada.

The homeowners have no voice on the Musqueam band council nor with the band's taxation authority. The are not entitled to vote in band elections. Even if homeowners choose to pay unreasonable land rent, they know their homes are now rendered worthless.

Under Bill C-49 the Musqueam band will obtain sweeping powers of expropriation. Bill C-49 restricts recourse to the courts of the provinces and of Canada. Under Bill C-49 charter protection is no longer guaranteed. Where is the fairness in this kind of legislation. Why is the Indian affairs minister pitting Canadians against Canadians? In the name of fairness to all stakeholders the Minister of Indian Affairs and Northern Development should withdraw this unfortunate bill forthwith or certainly approve its amendments.

Most Canadians believe the granting of self-government powers to first nations is a reasonable solution to historical problems. However, the manifest unfairness of Bill C-49 is its effect on non-natives who have property interests on first nation reserve lands.

I have been asked to bring forth to the House concerns about the Musqueam band issue. The first nations law that Bill C-49 enables will apply within the boundaries of reserve land. Therefore people can choose whether to subject themselves to such laws based on whether they choose to enter reserve lands. However, the reason Bill C-49 would be outrageously unfair to existing non-native leaseholders on reserve land is that such leaseholders would be automatically subject to any new first nation law. Whether they approve or not by virtue of their pre-existing leasehold interests, choice is effectively violated.

I will present to the House some thoughts on the Musqueam situation vis-à-vis Bill C-49. This is seen as a squeeze play by the federal government. The government can give away all the self-government power it wants provided that it is acting fairly to all parties involved. In other words, people caught in the middle like leaseholders on reserve land should not be destroyed in the process. It is only reasonable. After all, this is supposed to be a democratic country.

This is also seen as an abuse of power. The powers granted under Bill C-49 are much too broad and are apparently not restrained by checks and balances. Unchecked power tends to abuse, as we all know in the House. In this case the law is giving aboriginal bands the right to abuse with impugnity. Bill C-49 would be all right if there were some safeguards, for example guaranteed charter protection for the non-native people who live on the reserve.

Concerning the lessons of history, the American revolution was in part fought over this issue. The Americans objected to the authoritarian rules of the British monarchy and thus revolted in order to establish a system of government with fundamental checks and balances to counter the supreme power of the leader. Today in Canada our system of government follows this model, supposedly. It is known as democracy.

On Bill C-49 in the context of appeasement, appeasement does not always work since the party receiving the benefit will invariably ask for more power in the future. Just ask Prime Minister Chamberlain before the outbreak of World War II.

Another thought on this bill is future uncertainty. Once a break occurs, no one can control the direction in which it spreads. Bill C-49 grants wide, sweeping powers. Once established the future evolution and scope of the powers cannot be predicted with any degree of certainty.

This dynamic evolution of law is a fundamental element of our common law system. Therefore, once such broad powers are granted, they may be very difficult to restrain, since they will be able to use the full force of the legal system in the fight to keep such powers entrenched. Before granting such powers, the government should carefully consider all of the downside permutations lest there be future regrets.

The Musqueam situation is unique. It is a 10 sigma event, one that just happens to fall through all the cracks. The three pronged combination of property taxation, rental dispute, and Bill C-49 expropriation could be used to destroy the leaseholders completely. In other words, the leaseholders can be hit with any of the prongs in any order to maximum effect. The catch is that it is perfectly legal.

On the provisions of Bill C-49, clause 28 deals with expropriation. Expropriation can occur for any first nations purpose. In other words, it is effectively carte blanche. Expropriation takes effect from the moment of its registration or 30 days, whichever is shorter. In other words, it can have immediate effect.

Fair compensation is to be paid along the lines of fair market value. In the case of the Musqueam, current FMV is zero. Appeals of fair compensation are to be had through their own internal review structure, one that is sure to confirm any initial assessment. It is uncertain whether or not the usual courts of Canada can be engaged in reviews of fair compensation. It is arguable that they are not since this bill is essentially granting powers of self-government.

I would like to close by stating that self-government by the bands means that they are being granted the right to write their own criminal legislation along with penalties. Penalties follow the summary conviction stream, meaning the maximum penalty is either a $2,000 fine or six months imprisonment. They are also being given the power to hire their own justice of the peace and police.

The combination of all the powers under this section would effectively allow a band to create its own criminal justice system. And the application of the charter is uncertain. Therefore, there is no guarantee of fairness or due process. This is very alarming.

I urge all members of the House to support the amendments.

[Cbc Funding, March 1st, 1999]

Madam Speaker, I am pleased to speak today on private member's Motion No. 432 for more CBC funding from the member for Dartmouth.

The CBC is doing a fine job reflecting Canadian culture at this time despite continued cutbacks. The larger question should be what is the right balance, not just more money.

At present, the CBC receives approximately $800 million to $900 million in its annual appropriation from the federal government. The CBC also takes in approximately between $250 million to $300 million every year in advertising revenue.

The CBC has exclusive access to half the Canadian television fund, formerly the television and cable production fund for production.

The Minister of Canadian Heritage announced recently the CBC's exclusive access to half the Canadian television fund will end in July 1999. However, that funding has amounted to about $100 million per year.

Even when we estimate on the low side, when it is added all up, the CBC currently takes in approximately $1.2 billion or more each and every year.

Where does that $1.2 billion or more come from? The Canadian television fund of $200 million comes from both the federal government and from the television cable service providers. It comes from federal taxpayers and private cable companies.

Advertising revenues of $250 million or more come mainly from private companies, the federal government and federal crown corporations, from advertising, charities and from non-profits.

As an aside, I recently heard something very strange. A well respected Canadian charity, Athletes in Action, which provides chaplaincy support to professional athletes and which is active in youth work, launched a national advertising campaign. One broadcaster refused it, the CBC. Why would the CBC refuse a reputable charity that does laudable work with our athletes and our youth? That is an aside.

More than $250 million comes from advertisers. Finally, the CBC receives more than $800 million each and every year from the federal government. Really the CBC receives more than $800 million each and every year from federal taxpayers.

Canadians across Canada are footing an annual appropriation given to the CBC to the tune of more than $800 million. The member for Dartmouth is asking this House to restore multiyear funding to the CBC, sufficient to meet its stated public service goals.

I think the more appropriate question to ask, first of all, is why can the CBC not meet its stated public service goals on a $1.2 billion budget, and why is $1.2 billion a year not sufficient.

The second question we could raise is are the CBC stated public service goals still valid. What will the CBC's role be in the new millennium? What will be its role on the international stage?

What is the place of public broadcasters in an era of not just broadcasting but with cable, direct to home satellite service, an era of booming new media like the Internet, including web casting and a convergence of all these?

I have one more question I want to preface with some observations. Even before the recent problems between the CBC management and its technical staff, viewership for CBC TV and listenership for CBC radio has gone down and stagnated. Private broadcasters sink or swim on their ability to attract viewers and listeners. If they do not attract viewers and listeners they cannot attract the advertising dollars that keep them afloat. In fact, a key basis on which a private broadcaster gets and keeps its licence granted by the CRTC is its profitability. No advertisers, no money; no profits, no licence to broadcast. If fewer and fewer Canadians watch and listen to the CBC, is the CBC serving Canadians?

Is the CBC worth the more than $800 million it gets in its annual appropriation? Is it worth the $100 million it gets from the Canadian television fund? Is the CBC worth its combined revenues of $1.2 billion or more? More important than money for the CBC, this government needs to be at arm's length from the CBC so that the CBC can operate independently without government interference.

Should the CBC get one more cent from Canadian taxpayers? At this time without further review of the CBC I certainly would say no.

[Dauphin—Swan River, February 17th, 1999]

Mr. Speaker, my constituents in Dauphin—Swan River, Manitoba work hard, abide by the laws, and do their best to create communities safe both for the young and the old.

But wheat, cattle, and pork producers, the backbone of Dauphin—Swan River, have fewer and fewer markets to go to. When they sell their produce, they get less and less.

In fact, the one thing they can count on getting more of is more taxes. They pay higher and higher taxes to the federal government and get less and less. They get longer and longer speeches from the finance minister. They get more and more empty rhetoric from the Prime Minister.

It is time for less rhetoric, shorter speeches and tax relief for Dauphin—Swan River.

[Chinese New Year, February 16th, 1999]

Mr. Speaker, today people of Chinese descent all over the world are celebrating the year of the rabbit, Chinese New Year.

Canadians of Chinese descent work in their communities across the country in finance, in the professions of law, medicine, dentistry and teaching, in engineering and high technology, various small, medium and large business ventures, in government and even politics. Wherever they are in Canada, Canadians of Chinese descent are making significant contributions, creating jobs, participating in their communities and improving overall standards of living.

To all Canadians I wish happiness and prosperity for this, the year of the rabbit.