Rick Dykstra

[Budget Implementation Act, 2007, June 4th, 2007]

Mr. Speaker, I appreciate the perspectives of the member for Dartmouth—Cole Harbour and respect his work, but I have difficulty trying to understand his view on the budget.

He picked on one program within the budget, upon which changes were said to come from the very beginning. It was a new program that needed to be implemented based on getting rid of the situation where MPs were signing off. We would turn it into a system that was fair and equitable, a system that would be reviewed after it started, and it was.

He asked a question in the House as to why that association had not received funding. He stood in the House today and acknowledged that it did receive funding. Congratulations, the organization deserved and received the funding it should have.

The one thing he did not talk about, and the member for Saint John did not speak about beforehand, was the $1.4 billion under new equalization for New Brunswick, the $1.3 billion for equalization for Nova Scotia, the $512 million under the Canada health transfer for New Brunswick and the $639 million to Nova Scotia for health care transfers. Talk about the big impact this budget will have on provinces that for years cried to the former government for help and what did it say? Nothing. Newfoundland and Labrador had to lower the flag in order to get attention.

Why will the member not acknowledge the good, the intent and the funding that will help his province? Why he will not support the budget?

[Petitions, June 1st, 2007]

Mr. Speaker, I am pleased to table a petition signed by over 100 of my constituents, drawing attention to the alarming level of violence against indigenous women and girls. The petitioners urge the Canadian government and Parliament to condemn this violence and work toward a solution.

[Organ Donation, May 31st, 2007]

Mr. Speaker, I recently learned of a young girl in my riding named Mackenzie Walchuck, who was diagnosed with a life-threatening liver disease at the age of three. Mackenzie is now 11 and the disease has progressed to the point that her liver can no longer function.

She is the youngest person in Canada in need of a liver and she needs it now, but Canada has one of the lowest organ donation rates among industrialized countries. This is something we need to change.

On behalf of Mackenzie and the thousands of other Canadians waiting for new organs, I have a simple request. I ask people to sign their organ donor cards and consider becoming a living donor. Certain types of organs, including kidneys and liver, like Mackenzie needs, can be given safely by living donors. At the cost of a minor inconvenience, we could all save a life.

Health Canada and provincial ministries of health can provide more information for people who want to help. All we need to do is act.

[Goods and Services Tax, May 28th, 2007]

Mr. Speaker, the Liberal tax and spend philosophy has Canadians worried. Apparently, the Liberals think Canadians do not pay enough taxes and they want them to pay more.

The Liberals, who once promised to scrap the GST, have shockingly revealed their plan to increase the GST should they ever, I repeat ever, get back into power. Constituents in my riding and across Canada are worried.

Will the Parliamentary Secretary to the Minister of Finance please inform the House how much this Liberal tax increase would cost every hard-working Canadian in this country?

[Income Trusts, May 16th, 2007]

Mr. Speaker, I appreciate the opportunity to speak to the bill.

I am a little surprised to see the member here. He and I had a good debate on Thursday of last week and he indicated that if I showed him where in the Liberal red book it said that the GST was going to be cancelled, scrapped and changed, he would resign, but he is here today to speak to his private member's motion. I took him up on his challenge, mano-a-mano, and, like the Liberal Party, he did not keep his commitment.

I take this opportunity to contribute to the debate on Motion No. 321, a proposal that represents another sorry chapter in the tale of Liberal mismanagement on the issue of income trusts. It is a book that is never going to become a best seller, and I would like to think, as probably all Canadians would, that the conclusion of the Liberal Party is actually being written as we speak.

The Liberal Party now has had at least three policies on income trusts: one with the tax, one without a tax, and now we are back with a tax in another Liberal plan.

The proposal in this motion fails in every respect. First, there is no tax neutrality between trusts and corporations. Second, it does not address significant federal and provincial revenue losses if existing trusts continue to grow. Third, there is no level playing field. It maintains a tax advantage for income trusts over corporations, which we have seen is bad for this country.

It would open the door for corporate taxpayers like Hibernia and EnCana to convert to trusts. No wonder, as the member for Peterborough so aptly put it, that Finn Poschmann of the C.D. Howe Institute called it “a politically funky stew”. I have seen Finn at our finance committee meetings and I am not saying that he always agrees with us, but I will say that he and the government are 100% on side in terms of what we needed to do with income trusts.

Our government is committed to tax fairness, as we announced on October 31, 2006. Prior to that, Canadian companies were announcing intentions to convert to the income trusts and it was happening at a frenetic pace. Such decisions offered short term tax benefits but created significant economic distortions. It threatened Canada's long term economic growth and it shifted future tax burdens onto taxpaying Canadians, both families and individuals.

It would have meant unchecked growth that would have resulted in billions in lost revenue, which would not have been invested in the priorities of Canadians. This has been confirmed by a number of experts. Economist Andrew Teasdale noted that “exploitation was set to expand to a level which could have significantly impacted the ability of the government's right to make tax policy”.

Bank of Canada Governor David Dodge said:

By giving incentives that led to the inappropriate use of the income trust form of organization, the tax system was actually creating inefficiencies in capital markets, inefficiencies that, over time, would lead to lower levels of investment, output and productivity.

The introduction of the tax fairness plan restores balance and fairness to the federal tax system.

The decision was not an easy one. It was a tough one, but it was the right one. The provision of doing the right thing and addressing tax relief means that we could reduce the general corporate income tax rate; we could increase the age credit amount for seniors; and in regard to a recommendation, after 40 years we actually could introduce pension income splitting for seniors.

This is the right plan. It will not indefinitely maintain a tax imbalance between income trusts and corporations, and it will not maintain the economic distortions which that imbalance entailed, an imbalance that over the next number of years would have forced personal income tax rate increases that would have shocked Canadians.

Dominic D'Alessandro of Manulife Financial said it was “the right thing” and that “continuing on this path [of income trusts] would not be in the long-term interest of this country”.

In April 2007 the Financial Post had a poll that showed that a majority of Canada's business leaders supported our action and saw income trusts “as an increasing threat to economic growth because income trusts, unlike normal companies, were obliged to distribute their earnings and couldn't readily reinvest”.

They couldn't talk about the reinvestment of capital equipment, of machinery. That is something we put right in the budget with the accelerated capital cost allowance that allows companies and corporations across this country to accelerate the investment they make into their companies. Instead of doing it over 10 or 15 years, they can now do it in two years. We are starting to see companies and corporations move in that direction.

Even the Liberal member for Halton said that “reforming the [income] trust business and stemming the tide of conversions is necessary for the long-term health of the economy”.

Motion No. 321 offers dangerous false hope to Canadians who suffered losses, regrettably, and it suggests that going back to an imbalance is actually the right thing to do. It would reintroduce unnecessary uncertainty into financial markets. We have seen, as I outlined, that the movement of the Liberal Party on income trusts has shown that the financial markets were imbalanced when they tried to and did not move on this.

I am not the only one saying that. Jack Mintz of the Rotman School of Management said that the Liberals are “creating market uncertainty by extending false hope to investors”. The National Post said, “The issue is settled”. It said, “In other words, it's time to move on“.

Everyone in the House got the message except the Liberals. Why not? Why are the Liberals proposing a plan that will exacerbate revenue loss? Let us imagine the revenue loss if Hibernia or EnCana and other large energy companies were to convert to income trusts. The Liberal plan would create a burden on Canadian taxpayers and would cost the federal and provincial treasuries billions.

Every single province supported our tax fairness plan. From across this country finance ministers from every province and territory wrote letters to every member of the finance committee to tell them that this was the right thing to do.

P.E.I. finance minister Mitch Murphy said that without our plan the province could find itself “facing a severe tax base decline...[that] would be very damaging to [Prince Edward Island's] efforts to build a strong, self reliant corporate tax base...as well as in the Atlantic region in general”.

Canada's Conservative government has said it repeatedly: Canadians pay far too much tax.

Budgets 2006 and 2007 introduced a total of over $40 billion of tax relief benefiting Canadian individuals and businesses.

Ignoring the issue of income trusts would have resulted in ordinary Canadians paying more tax today and for years to come.

Corporate tax avoidance left us with us with a choice. We either balance our budget on the backs of ordinary Canadians or we take firm action to implement tax fairness. It was not an easy decision. When leadership is required and when tough decisions are made, leadership is never easy and those decisions are never easy, but those decisions have to be made.

The tax fairness plan provides certainty and security. Proceeding with the plan means acting in the national interest and enhancing incentives to save and invest for family retirement and security.

Unlike previous governments, we did not base our decisions on political calculation but on principles of tax fairness, balancing the needs of the individual investors versus the interests of taxpayers.

Decisions are all about fairness: fairness for Canadian taxpayers and their families who would otherwise be asked to pay more and more; fairness for the corporate sector, by removing the tax distortion in favour of income trusts relative to corporations; and fairness for all Canadian governments, federal, provincial and territorial, by preventing a significant loss of tax revenue, by setting right a significant wrong.

Where once there was speculation, today there is certainty. Where once there was posturing, today there are principled decisions. Where once there was dithering, today we have decisiveness. Where once we had confusion, today we have confidence.

Businesses are making their own choices and they are moving on. It is time we all moved on. The result of our decision is clear: a tax system that is fairer for Canadians and that will help our economy to become more productive, efficient and dynamic today and for years to come.

[Sales Tax Amendments Act, 2006, May 14th, 2007]

Mr. Speaker, the member can rest assured that the next part of my speech dives right into that topic.

I would like to remind the member that the next time he stands to speak to any issue that he heed the words and advice that he just gave me because I think they would be outstanding for him to follow as well.

Bill C-40 would also improve our tax advantage. It would improve fairness and efficiency in the sales tax system and would ease compliance in administration for businesses and for government.

The bill consists of three parts. The first pertains to the GST and the harmonized sales tax. The second relates to the taxation of wine, spirits and tobacco. The third concerns the air travellers security charge.

I will begin with the GST. This bill is principally aimed at improving the operations and the fairness of the GST-HST in specific sectors of the economy. The principle behind the measure encompasses important areas for Canadians.

First and foremost is health care. Canadians know that our health system is one of the best and it needs to stay that way. Bill C-40 contains a number of measures to help improve it. It would cement the GST and the HST exemption for speech language pathology services and it would add the services of social workers to the list of services exempt from the GST or the HST. This is consistent with the policy criteria for the inclusion of a particular service on the list of the GST-HST exemption in all provinces.

The criteria is as follows. If a service is covered by the health care plan in a given province, it is exempt in that province. If a service, however, is covered by the health care plan of two or more provinces, it is exempt in every province. If a profession is regulated as a health profession by at least five other provinces, the services of that profession are exempt in all provinces.

The government is also very aware of the challenges faced by individuals with disabilities. Budget 2006 went above and beyond the recommendations of the Technical Advisory Committee on Tax Measures for Persons with Disabilities. In that spirit, Bill C-40 broadens the specially equipped vehicle GST-HST rebate for individuals with disabilities. It also exempts the sale and importation of a blood substitute known as plasma expander. It also restores the tax-free status of a group of drugs commonly used to treat a variety of conditions, such as seizure control, anxiety and alcohol withdrawal.

Those measures illustrate the government's commitment to ensuring that Canadians continue to have access to timely and quality health care.

Canada's new government is committed to reducing taxes for individual Canadians as well as for Canadian businesses.

Budget 2007 reduces the paper burden on small business by 20% by no later than November 2008. It also decreases the frequency of business tax remittance and filing requirements.

These measures are technical in nature so I will not get into the details but I will say that, broadly, they will ease compliance by removing technical impediments and simplifying compliance with the GST-HST legislation.

The second part of Bill C-40 dealing with excise measures relates to tobacco and alcohol products. The bill would amend the Excise Tax Act, 2001 to implement minor refinements that would improve the operation of the act and more accurately reflect current industry and administrative practices.

The bill would also implement related and consequential amendments to the Access to Information Act, the Customs Act, the Customs Tariff and the Excise Tax Act.

The principal measures related to the Excise Tax Act, 2001 are as follows. The first is tobacco. Bill C-40 would extend the requirement to identify the origin of tobacco products to all products, including those for sale at duty-free shops or for export. This is consistent with the framework convention on tobacco control, an international treaty on tobacco control. It also clarifies which tobacco products may be supplied to the export market or the domestic duty-free market. For example, cigarettes, tobacco sticks, fine cut tobacco or cigars may be supplied but it does not include packaged raw leaf tobacco.

I will move on to the spirits licence, which is required to produce alcohol products using a still. There are still some cases where private laboratories, provincial liquor boards and vintners use stills to produce spirits, to analyze substances containing ethyl alcohol.

Bill C-40 would authorize these entities to possess a still without holding a spirits licence. However, to limit possession of non-duty paid spirits, the bill would also require these parties to immediately dispose of those spirits once the analysis is complete. This would also defer payment of duty by certain small vintners selling wine on consignment in retail stores until the wine was actually sold.

As I said, a number of administrative measures are in the bill. One has to do with the exchange of information between Canada and its foreign governments. The bill would permit the Minister of National Revenue to exchange excise duty information with foreign governments that are signatories to the Convention on Mutual Administrative Assistance in Tax Matters. The bill would also add a discretionary power for the chief statistician of Canada to provide statistical information concerning business activities to all the provinces. It is similar to an existing provision that is already in the Income Tax Act.

Third and finally are air travel security charge measures. The bill would relieve the charge in respect of air travel donated by an air carrier to a registered charity that arranges free flights for individuals as part of its charitable purposes. It means that certain charities that arrange free air transportation services for people who cannot otherwise afford the cost of flights for medical care will not have to pay the air travel security charge.

This is a good time to introduce a couple of examples. It includes the flights of a lifetime, such as those provided by the Children's Wish Foundation of Canada and other similar charitable organizations that organize dream trips for physically, mentally and socially challenged children. It is not something new. It is one of which all of us across the country are certainly aware. Now we have eliminated any additional costs that may be incurred by these individuals.

Tax legislation must be applied consistently. Proposed ATSC relief for charitable flights reflects that objective by being consistent with relief from other federal levies provided to registered charities. It is also consistent with other ATSC relief measures such as that provided in respect of air ambulance services.

Summing up, Canada's new government understands that good government and good tax policy go hand in hand. Well focused tax policies are a sign of a government with some vision, and this government is all about that. We are looking ahead and planning for the steps we need to take to build a stronger economy and a more confident Canada. In doing so, together we can make Canada a world leader with a long term focused economic plan not just for today, not just for tomorrow, but for years to come.

[Sales Tax Amendments Act, 2006, May 14th, 2007]

Mr. Speaker, I appreciate the opportunity to speak to Bill C-40 at third reading. The bill contains a number of amendments to Canada's sales tax system. It also reflects the goal of our government to improve fairness in our tax system and ensure that it functions smoothly for individuals and businesses alike

However, before getting into the specifics of Bill C-40, I would like to remind hon. members of the key elements of advantage Canada, a plan put into action in budget 2007. The plan has five key advantages.

The first advantage is a tax advantage. We wanted to create new opportunities and choices for people and when we lower taxes we help do that. It helps keep our best and brightest here at home and it attracts the best and brightest from across the world. We always say that Canadians pay too much tax relative to competition so we did something about it.

Since budget 2006, we have reduced taxes. We have decreased the GST. We have increased the basic personal amount of exemption. We have reduced the lowest personal rate of tax. We implemented Canada's employment credit of $1,000 for every employee in the country who pays taxes. We also have other targeted tax relief measures.

Our tax fairness plan went even further for Canada's seniors. We implemented a $1,000 increase in the age credit amount and, most important, we finally, after successive governments, introduced pension splitting for seniors.

Those were significant steps but we needed to go further, and we did in budget 2007.

In budget 2007, Canadians again come out ahead through real tax relief that benefits working families.

[Business of Supply, May 10th, 2007]

Mr. Speaker, the member and I serve on the justice committee together. I have to say I respect the work that he does there. He is hard working. He knows his place. He knows what he needs to do there. He deals with the facts on a reasonable basis. Let me compliment him on that.

The fact is we are not talking about justice here. We are talking about finance and we are talking about commitment. The plain fact of the matter is: square box, put it in, and what came out was a broken promise. There is nothing more that can be said about it. They cannot correct the record. All they can do is say that yes, they broke their promise. That is all they can do.

[Business of Supply, May 10th, 2007]

Mr. Speaker, if I had the opportunity I would stay here the rest of the week and over the weekend to debate with the member for Scarborough Centre about his broken promise, his party's broken promise. He admitted it right here in the House. He said, “We didn't keep it. We didn't do it. We didn't get it done”.

This is my favourite day in the House since I have been here. He called me a large-mouthed bass and I took the bait. Sir, through you, Mr. Speaker, this was fishing at its best. Those who host fishing shows on TSN would be proud to watch what the member for Scarborough Centre did today when he admitted to Canadians and the House of Commons that the Liberals did not do what they said they were going to do with the GST. I am proud the member finally had the nerve, on behalf of his party, to stand and say it.

[Business of Supply, May 10th, 2007]

Mr. Speaker, my speech follows up on the excellent speech by the member for Regina—Lumsden—Lake Centre, but I do want to respond to something. I was challenged earlier by the member for Scarborough Centre to come up with where specifically in the red book it said that the GST would be scrapped. He will be happy to hear that on page 22 of the red book of 1993, the quote that the Liberals will scrap, kill and abolish the GST is:

A Liberal government will replace the GST with a system that generates equivalent revenues, is fairer to consumers and to small business, minimizes disruption to small business, and promotes federal-provincial fiscal cooperation and harmonization.

It is on the record. The member for Scarborough Centre challenged me. I think I am up to the challenge, so we will see if the member for Scarborough Centre is prepared, based on the fact that it is in the red book, to step down from his seat and run again like he said he would. I am looking forward to it.

I would like also to focus my remarks on the portion of today's motion dealing with the deeply flawed Liberal alternative to the government's tax fairness plan, an alternative aptly described by Finn Poschmann of the C.D. Howe Institute as politically funky stew, and elaborate on the extensive tax relief our government has provided to Canadians.

The chief deficiency with the Liberals' alternative plan is that it completely fails to level the playing field between income trusts and corporations. The Liberals would completely ignore the tax revenue losses experienced by the federal and provincial governments, nor would they remove the tax incentive for business and investors to choose the income trust structure over corporate structure.

On October 31, 2006 Canada's new government announced its tax fairness plan. Unlike this motion, it will restore balance and fairness to the federal tax system by creating a level playing field between income trusts and corporations and also deliver over $1 billion of new tax relief annually for Canadians, especially our seniors.

Included in the measures in the tax fairness plan is a distribution tax on distributions from publicly traded income trusts and limited partnerships. Distributions of existing income trusts will not be affected, I repeat, not be affected, by this tax for four years. Also included is a reduction of one-half percentage point in the general corporate income tax rate as of January 2011. At that point in time, the federal general corporate income tax rate will be 18.5%, which makes us the third lowest in the G-7. There is an increase in the age credit amount by $1,000, from $4,066 to $5,066, effective January 1, 2006. The $1,000 increase in the age credit amount will provide tax relief to low and middle income seniors.

For many, pension splitting beginning in 2007 is also in the plan. The pension income splitting measures will allow residents who receive income that qualifies for the pension income tax credit to allocate up to one-half of that income to their spouse or common law partner, thereby significantly reducing the tax on that income. The pension income splitting measure is a move that will directly benefit many of the 20,000 seniors in my riding of St. Catharines, and will benefit thousands more across the country.

The government is committed to tax fairness in this country. It is only right that businesses and individuals in Canada each pay their fair share of tax.

Had the government not acted on the income trust issue, the tax burden would have been unfairly shifted on to the backs of hard-working individuals and families in our country. Our government could not stand by and watch this happen. Ordinary taxpayers needed to be protected. That is why we acted.

Informed opinion from coast to coast has been overwhelmingly in our favour. The federal Daily Gleaner said, “It was the decision we think that will benefit Canadians in the long run”. The Montreal Gazette called it sound public policy, noting that unlike the former Liberal government, we had the discipline to avoid public dithering. The Toronto Star said that the finance minister deserves much credit for doing the right thing by plugging a tax avoidance loophole that he rightly described as a very bad thing for Canada. The Winnipeg Sun said that the Conservative government acted in the best interest of the economy going forward.

Even the Liberal finance critic, the member for Markham—Unionville, said at the time that it was absolutely the right thing to do, to ensure tax fairness and to work for Canada's productivity.

Unlike the Liberal leader, most Canadians clearly get it. In order for Canada to compete and be a leader in the 21st century, we must have a fair and neutral tax system in which all individuals and businesses pay their fair share.

Canada's new government demonstrated its commitment to tax fairness in this country in its most recent budget. The 2007 budget invests in things that make Canada great and reflect the values and beliefs that define us as a nation.

The government is taking important steps to clean up our environment, invest in Canadians, improve our health care system and celebrate our culture.

Canada's new government came into power believing strongly that Canadians pay too much tax. That is why in budget 2007 our government took steps to reduce the tax burden on Canadians and provide over $7 billion in tax relief over the next two fiscal years.

The tax relief provided in budget 2007 builds on the already significant tax relief that the government provided in budget 2006 in which 29 tax reductions amounting to almost $20 billion over two years were made. Budget 2006 provided more tax relief than four previous federal budgets combined.

Canada's new government has also introduced advantage Canada. A key element of the plan is to provide a tax back guarantee to Canadians by dedicating all interest savings from reducing the federal debt to personal income tax reductions. It means that every dollar saved from lower interest payments will be returned to Canadians through personal income tax reductions.

Over the next two fiscal years this will mean $2.4 billion in tax relief. It is made possible by lowering our national mortgage by over $22 billion since being elected, debt reduction that works out to more than $700 per Canadian. After all, why should Canadians not benefit directly from living in the only G-7 nation with a balanced budget?

Here are a few examples of how the government is acting to help hard-working Canadians and businesses:

We are introducing a $2,000 per child tax credit that will help families get ahead. For a typical family with two children, it will mean up to $620 in tax savings. This tax credit will help alleviate some of the necessary expenses incurred by Canadian families in raising children.

We are increasing the spousal and other amounts to provide up to $209 of tax relief for a spouse or a single taxpayer supporting a dependent child or relative. We are giving all families the opportunity to enjoy the dignity that comes with having a job and the pride of independence through the working income tax benefit. It will reward and strengthen incentives to work for more than 1.2 million low income Canadians. The maximum benefit is $500 for individuals and $1,000 for families.

We are reducing the federal paper burden for business by 20% by November 2008, by reducing the number of annual tax filings and remittances by over 350,000 small businesses. We are recognizing that businesses need modern technology to be more efficient and buildings that allow them to grow. That is why we proposed changes to the capital cost allowance system that will shorten the writeoff period for computers and non-residential buildings.

Budget 2007 also contains a detailed plan creating a Canadian advantage in global capital markets that will create a stronger and more efficient capital market in our country. The plan will give enterprises of all sizes better access to capital at more competitive costs, provide investors with increased investment choices and create more highly skilled, well paying jobs.

Canada certainly recognizes that attracting investment is as basic to building a strong economy as reducing government debt, lowering taxes and maintaining low, stable and predictable inflation.

Make no mistake that the decision that was taken on October 31 is all about fairness. It is about fairness to Canadian taxpayers and their families who would have been asked to pay more and more. It is about fairness within the corporate sector by removing the tax distortion in favour of income trusts relative to corporations. It is about fairness for all Canadian governments, federal and provincial, by preventing a significant loss of tax revenue.

In summary, it was clear that income trusts had special tax advantages that regular business corporations did not. Although the decision to act on this income trust issue was not an easy one, it was absolutely necessary for the country and for the future generations of Canadians, our children and our grandchildren.