Scott Brison

[Income Tax Act, September 25th, 2003]

Madam Speaker, I am impressed by the parliamentary secretary's ability to stand up and extemporaneously say something on an economic matter without a written text.

If he had been listening to my remarks, he would have heard my support for the tax measures that could improve from a tax competitiveness standpoint the way we tax resource based industries in Canada, and within Atlantic Canada as well. He also would have heard my concern about increasing the effective tax rate in some areas of mining. I have some concerns about any tax increase on any sector at all.

With regard to his reference to the previous government's record, I would gladly debate with him any time, anywhere, that government's record. It reduced the deficit as a percentage of GDP from 9% to 5%. At the same time it introduced a free trade agreement that created jobs, growth, opportunity and prosperity. His party campaigned against the free trade agreement. His government has benefited from the results of replacing the manufacturers' sales tax that hurt Canadian competitiveness and our manufacturing sector with a consumption tax which his party had committed to removing but failed to do.

I would love the opportunity to compare that government's record with his government's record in terms of his government actually expending valuable political capital to do what is right as opposed to always following the poll mongers. The previous government actually did the right thing from a principled perspective. It took risks and achieved a great deal on behalf of all Canadians.

[Income Tax Act, September 25th, 2003]

Madam Speaker, it is with pleasure that I rise today to speak on Bill C-48. Tax reform is an issue that I am always interested in speaking on. We see continued evidences of tax tinkering from the government, a one-off ad-hockery sort of approach to dealing with taxation, but no overall strategy to improve Canada's competitiveness, to make Canada a northern tiger as opposed to a northern kitten, and to make Canada a magnet for capital and the best minds and the brightest minds in the world.

We support the direction of this legislation. We have some concerns about the increase in the effective tax rates on the mining industry. Any increase in taxes on industry in Canada is a concern for us because all sectors in Canada are overtaxed. In the old days the government could get away with that, but today in a hyper-competitive global environment high taxes no longer just redistribute income: high taxes redistribute people and capital. So we do support reducing the taxation on resource based industries and standardizing the tax treatment of industries in the resource sector. This goes back to the Mintz report on business taxation in Canada.

In fact, I remember that when the Mintz report actually came out it was my recommendation and the recommendation of my party that the government move to implement the recommendations of the Mintz report without a lot of delay. The Mintz report is probably one of the most erudite and intelligent studies of the Canadian business tax system that has ever been conducted. It provided a very important road map on how to build a more competitive tax system in Canada.

The government often speaks of Canada having lower corporate taxes than the United States. That is just patently false. If we were dealing only in statutory rates we are closer, but the United States is far more competitive than Canada in terms of effective tax rates, corporate tax rates and taxes on investment.

If we go beyond that and look at some of the national economic success stories in the last 10 to 15 years, most of them have been based on governments that were willing to embrace significant and broad based tax reform, not just tax relief, which is often done based on politics, not on public policy parameters, but tax reform based on creating greater levels of investment.

Of course, greater levels of investment lead to greater levels of productivity. Greater levels of productivity lead to higher standards of living and to an increase in the government's ability, of course, to afford the social investment that people demand and need.

Ireland is probably one of the best examples of a country that has turned its situation around. I come from Atlantic Canada and I very much understand its situation, based on generations of Atlantic Canadians leaving Atlantic Canada and going to other parts of Canada seeking opportunities. Ireland was a lot like that for a long time, in fact for generations. Now, for the first time in a long time, children of expatriate Irish in other parts of the world, in Canada or the United States as an example, are returning to Ireland. In fact, people are going to Ireland seeking opportunities, largely based on the Irish government's dramatic, significant and innovative tax reform package, which led to one of the most competitive corporate tax regimes anywhere in the world.

There is no better tax reform in terms of its ability to attract investment and improve productivity, prosperity and the standard of living than corporate tax reform, reform of taxes on investment and capital. Ireland had a 92% growth in its GDP per capita over a 10 year period. During the same period of time, Canada had a 5% growth in GDP per capita. The Irish standard of living has grown beyond that of Canada. It is shocking. Twenty years ago Ireland was an economic basket case and today it is truly a Celtic tiger. It has set an example of what can be done if governments take some risk and present some bold public policy, particularly on the tax reform side.

Some of the ideas that I would like to see the government embrace in a tax reform package include eliminating personal capital gains tax in Canada. There was no capital gains tax in Canada prior to 1971 with the Carter commission and the implementation of the capital gains tax. The original capital gains tax was designed to replace the inheritance tax, but eliminating the inheritance tax and replacing it with the capital gains tax made Canada a great place to die but not a great place to live.

We really should take a serious look at eliminating Canada's capital gains tax, not reducing it or tinkering with it but eliminating it. That would unlock an immense amount of capital. Capital gains tax serves to lock up capital, to prevent the flow of capital to the most effective opportunities. It hurts productivity because investors are compelled to make decisions based on tax reasons and to hoard money into static investments that may not make sense from an investment or a business perspective but simply make sense from a tax avoidance perspective.

We would unleash incredible entrepreneurial potential in Canada if we actually went beyond the U.S. instead of always just trying to catch up with the U.S. in key areas. In the capital gains area, if we actually went beyond the U.S. and eliminated the personal capital gains tax in Canada it would have a tremendous impact on Canada's economic growth and prosperity and the environment for entrepreneurs and investors here.

I would also suggest that it is a good time for us to consider what Roger Martin, the dean of the Rotman school of business at University of Toronto, has proposed, and that is allowing a 100% capital cost allowance write-off at the time of the investment. That would create huge incentives for companies to invest in productivity enhancement and provide a huge advantage for Canadian companies over American companies. Currently because of our treatment of capital cost allowance we are compared to the U.S. That is one of the reasons why the United States still has a significantly lower effective corporate tax rate environment: because of our uncompetitive capital cost allowance system in Canada.

I would go further. I would suggest that we eliminate corporate welfare from Industry Canada, HRDC and regional development programs and use that money to reduce corporate taxes nationally, but also in a targeted level in the regions. I will give some examples.

I come from a region where there is a program called ACOA, the Atlantic Canada Opportunities Agency. ACOA has a $447 million per year budget. Total federal corporate taxes in Atlantic Canada are $380 million. We could actually eliminate ACOA and eliminate federal corporate taxes in the region, which would leave us with provincial corporate tax rates in the 12% range, which coincidentally is about the same as Ireland's. When we really ask ourselves the question of which strategy would have the greatest capacity to create economic growth, prosperity and opportunity in Atlantic Canada, 500 ACOA bureaucrats driving around Atlantic Canada trying to tell people how to start small businesses or the most competitive corporate tax environment in North America and one of the most competitive in the world, the answer is self-evident.

We ought to take the same approach with all regional development programs in Canada. Instead of bureaucrats and politicians trying to select between winners and losers, we should allow the market to identify the winners. That kind of approach would unleash the entrepreneurial potential of our regions. It would in this case allow Atlantic Canada to pay into equalization in the not so distant future which would be good for all of Canada. It would create a tremendous level of growth, prosperity and opportunity.

This is an important discussion right now because one of the topics we are talking about in this sessions is the reform of Canada's EI system. We should move toward individual EI accounts. We should allow Canadians to build up capital within their own individual EI account if they do not draw from it frequently or perhaps do not draw from it at all. For instance, if a Canadian were to pay into his or her own individual EI account, after 10 years of paying into it and not drawing out from it, he or she would receive a statement every year of that EI account balance. It would go up incrementally each year. It would grow over time.

People could withdraw from their accounts to upgrade their skills educationally. That would address the very real issue of underemployment. Underemployment is growing in Canada and is as significant an issue as unemployment. The ability to withdraw from an EI account to upgrade skills, to take a course which is needed to go from underemployed to fully employed would be good for Canadian productivity.

Currently, government funding is available for people to upgrade their skills if they are already drawing EI, but not if they are actually working and want to upgrade their skills and need that little bit of help. For example, some people in their 30s, 40s or perhaps 50s are at a stage in their lives where they are stuck in a career rut and they want to improve their lot and that of their families. There is nothing that the government will do for them from a funding perspective to facilitate that unless they are actually unemployed and drawing EI. This would help in that regard.

Alternatively if people did not draw from EI to upgrade their skills or only rarely drew from EI during their careers, they would have a little bit of capital in their EI accounts which upon retirement they could roll into their RRSPs. That would be a reward system in many ways for Canadians who work hard and do not draw from the EI system. It would be an EI system that works for Canadians who work. That kind of incentive and that kind of reward based system would help significantly.

Going further, we should eliminate the capital tax completely. Currently the government is phasing it out over a period of time. We have the budgetary capacity to eliminate the capital tax immediately. All of this can be done without creating a deficit. We are committed, as are Canadians, to running government deficit free, to living within our means. It is going to involve not just tax reform but part of it will also involve considering the size and the effectiveness and the role of government, what the federal government should focus on, what it could do effectively and what it should not be trying to do.

It seems ridiculous to me that we have a federal government that cannot provide a coherent foreign policy. It cannot manage a military effectively or fund a military. It cannot from a trade policy perspective protect Canadians' interests by protecting our trading relationship with the richest market in the world. The same government that cannot handle things such as the military, foreign policy and trade policy which are clearly in the federal domain is trying to run the education policies of the provinces and trying to micromanage the health care systems of the provinces.

The federal government should focus on those areas. This could mean taking a more aggressive approach in dealing with the Americans on the BSE issue, or working toward a Canada-U.S. security and economic partnership which not only addresses perimeter security issues but goes further to harmonize our regulatory burdens between the two countries and also as part of it addressing the ambiguity around resource pricing and subsidies and replacing it with clarity to avoid a lot of those types of trade disputes. If the government really focused on those federal domain areas, it would not have time to focus on trying to micromanage the affairs of the provinces.

The government, through HRDC, must stop the incredible intrusion into the private sector across Canada. An incredible amount of waste exists through small and large scale corporate welfare. The government could target some of that money toward tax reduction and tax reform in lockstep. The government must address some of the waste in government.

The fact that a ministerial assistant spent $28,000 on food over a period of a year is shocking. That individual ought to have been named by the Canadian Restaurant Association as the political staffer of the year which is probably the only award he ought to receive. Canadians have to live within their means and pay taxes. They work hard and are having trouble just maintaining their standard of living and that of their families. It is shocking for them when they see that kind of egregious waste in government.

We need to find ways to not just in an ad hoc manner tinker with our tax system but reform Canada's tax system, reform Canada's regulatory system, address the waste in government and reconsider the role and effectiveness of government in key areas.

Every one of us in the House regardless of our political party ought to be considering ways that we can improve productivity, prosperity and the standard of living of Canadians.

We cannot afford to dilly-dally and dither while other countries are embracing bold innovative approaches to economic growth and economic reform. Canada is a relatively small country on the edge of the largest market in the world. We have the opportunity for Canada to become a true northern tiger. We must make Canada a magnet for capital, make Canada a magnet for some of the best and brightest minds in the world and to allow Canadians to have an unprecedented level of economic growth.

Free trade is a policy to which my party is unequivocally committed. It has created incredible wealth and prosperity for Canadians. We need to go further in a post-NAFTA environment and strengthen our trading relationship with the United States. As a principle we must look toward a true Canada-U.S. security and economic partnership. At the same time we must revolutionize our tax system and regulatory burden so that Canadians not only have access to the richest market in the world but they have a tax system and an economic environment that makes it an advantage to be Canadian as opposed to a disadvantage.

All Canadians want to live here, but we ought to be building a tax system that makes Canada not just a good place to live but the best place to invest and grow companies and businesses. Regardless of where they are in the world, we should allow them to make Canada the location of choice within North America.

[Criminal Code, September 19th, 2003]

Madam Speaker, first, my party is the Progressive Conservative Party and I intend to keep it that way. I am sure that will please the hon. member for Halifax immeasurably.

During my comments I referred specifically to the flaw of this legislation. I read an article written by David Roberts, a Halifax lawyer. I quoted specifically the following passage:

It's worth remembering, however, that in the case of Westray, prosecution of the corporation would have been pointless. The parent, Curragh Resources, was bankrupt by the time a prosecution could have started. There was nothing left for a court to fine. No company survived to implement new safety policies. The power to charge a corporation would have been an empty power in the Westray disaster.

I did refer specifically to that during my comments. I referred to it as an unfortunate irony that in legislation which some refer to as the Westray bill this legislation would have failed to have any impact at that time. That is a very unfortunate irony. I do support strengthening the legislation in that regard. I concur with the hon. member on this.

[Criminal Code, September 19th, 2003]

Madam Speaker, it is a pleasure today to speak to Bill C-45. As a Nova Scotian it is particularly poignant. The legislation emanates from a disaster in my province, in fact the Westray disaster in the riding of the hon. member for Pictou—Antigonish—Guysborough, the leader of my party.

Almost 12 years ago, on May 9, 1992, the Westray mine disaster in Plymouth, Nova Scotia occurred, killing 26 men. At the time I was actually living in New York. I was listening to national public radio on that morning. It was the first time I had ever heard Nova Scotia mentioned on national public radio in New York during the period of time that I lived there. I remember how it impacted me, the thought of 26 Nova Scotians dying, and we were to learn unnecessarily, in a disaster that could have been prevented. It is unfortunate that 12 years later we are still debating the merits of a piece of legislation that could have been in place a lot earlier to protect Canadians against that sort of corporate malfeasance.

It is interesting to consider the legislation today in an environment where increasingly issues of corporate governance and accountability are being debated and discussed. Most of the time when we are talking about corporate governance and accountability, we are talking about financial issues, dollars and cents issues and accounting issues. We are talking in this case not about dollars and cents but about human lives.

If we consider the principles of corporate governance and the principles of financial accountability and financial corporate governance, the similarities are striking of what we want to achieve. We simply want to see that management and ownership is held accountable and responsible to protect the safety, of workers in this case, from avoidable disasters.

Our party has spoken supportively. My leader, in his capacity as justice critic for our party, has been supportive. Clearly there are some legitimate criticisms of the legislation that it does not necessarily go far enough. I suppose an unfortunate irony of this is that the legislation quite possibly would not have helped address the accountability of the management and ownership of the Westray mine.

In the case of Westray, prosecution of the corporation would have been pointless. The parent company, Curragh Resources, was bankrupt by the time a prosecution could have been started and there was nothing left for a court to fine. No company survived to implement new safety policies.

The power to charge a corporation would have been an empty power in that sense in the Westray disaster. There is a fine line clearly between ensuring reasonable accountability and governance on health and safety issues but also recognizing that there is always the risk of somebody down the management chain acting irresponsibly. There is a fear in Canada today at the board of directors level of various companies that there is going to be an almost unlimited accountability. These issues have to be considered.

There is a fine line effectively in creating an environment within which no Canadian would take the risk of being on the board of a company for fear of being implicated in a proceeding like this, even though they would not have a direct responsibility. Despite those fears, there is no doubt we need greater levels of accountability of management and ownership in health and safety issues.

I would hope that this legislation will help prevent the kind of disaster, such as the Westray disaster which destroyed lives. It took away lives and tore apart families in Nova Scotia in 1992. We would like to see Canadians protected immediately by the passage of this legislation. Hopefully this legislation can play a role in preventing another Westray type disaster in the future.

We should not have had to wait 12 years after the original Westray disaster for this legislation. It is imperative that we as legislators move quickly now, when we have the opportunity, to pass this legislation and do the right thing.

Sometimes in this place when we are talking about legislation it seems a little esoteric, it seems less connected to the lives of ordinary Canadians, but this is not one of those times. This is a time when I am proud to speak to an important piece of legislation. As a Nova Scotian, I feel particularly honoured to have the opportunity to stand in the House and support this legislation.

I want to commend my leader for having played such an important role at justice committee as justice critic for our party over the last number of years in terms of working toward the passage of this legislation. I want to commend him and offer my full support and that of our party for the direction that this legislation is trying to achieve.

[Government Assistance, September 19th, 2003]

Mr. Speaker, floods last spring devastated parts of several Nova Scotian communities, including parts of the town of Kentville.

I asked the Minister of National Defence to act and to provide reasonable federal assistance immediately so flood victims could move on with their lives. Instead of helping out, the minster has shirked his responsibilities.

When will the minister stop pointing fingers at the province and start providing meaningful and immediate relief to flood victims in Nova Scotia?

[Pumpkin Festival, September 19th, 2003]

Mr. Speaker, Windsor, Nova Scotia, is known as “The Little Town of Big Firsts” and this weekend the Hants County Exhibition, the oldest agricultural festival in North America, continues for the second of two weekends in the town.

On October 4 the 19th annual pumpkin festival and weigh-off will be held. Windsor's Howard Dill, developer of the Atlantic giant pumpkin seeds is credited with launching the international craze of growing giant pumpkins. Known as the Pumpkin King, Mr. Dill is a four-time world champion pumpkin grower.

The festival now includes the hugely popular pumpkin regatta to be held on October 12. The Windsor-West Hants Pumpkin Festival and Regatta won the 2002 Attractions Canada award in the sporting event category.

Mr. Speaker, I actually won the pumpkin regatta in 2001, by the way.

But as the birthplace of hockey, the home of North America's oldest agricultural fair, and now the new home of giant pumpkin racing, Windsor-West Hants continues to be the “Little Town of Big Firsts”.

[Supply, September 18th, 2003]

Madam Speaker, I agree that we are robbing the Canadian tax base in our ability to pay for the social investment and also to create a more competitive tax system in other areas of Canada with a tax haven. However we have to address it, working with other industrialized countries that have a tax treaty relationship with Barbados and other tax havens.

This is an area where Canada could play a leadership role. We have a Canadian who is head of the OECD. There is a real opportunity. In fact, I believe Don Johnston was a former minister of finance in Canada or was at least a minister on the fiscal side in the Trudeau government. We have a Canadian, a former cabinet minister of Canada, heading up the OECD. What better entree for Canada to play a leadership role in helping to shape this process?

I would like to see Canada playing that role, and I agree absolutely with the intention of the hon. member to create more tax fairness for all Canadians and to make sure that all Canadian companies are paying their fair share. However if we do that and ignore the realities of what other countries do in similar circumstances, we could have the law of unintended consequences which could lead us to losing an awful lot of our Canadian companies to other jurisdictions. That would not be in the interests of any of us.

[Supply, September 18th, 2003]

I totally agree with my colleague. That is dishonest on the part of the Department of Foreign Affairs and International Trade.

If Canadian businesses want advice in that regard they can call their tax accountants. It should not be given by the federal government.

We have to do more than simply cancel one tax treaty. We should not only be renegotiating that tax treaty, but we should also working with other countries that have tax treaties with Barbados to ensure that we are not putting our own Canadian companies at a disadvantage.

The discussion today has been about one specific group of companies, those companies connected with the member for LaSalle--Émard. However the fact is that if we look at corporate Canada and the number of Canadian companies that have relations offshore with countries like Barbados, I would argue that we would find a lot of Canadian companies. This is a very broad based issue. If we simply arbitrarily close that loophole, we could be sending some of those Canadian companies to the U.S. which has a tax treaty. Anything we do has to be multilateral. We have to work with countries like the U.S. to ensure we do not put Canadian companies at a further disadvantage.

[Supply, September 18th, 2003]

Madam Speaker, with regard to the first point, the Progressive Conservative Party won because we actually had a leadership race. Canadians won because they were glued to their television sets watching a contest as opposed to a party where the leadership candidates are limping to a finish.

Canadians are concerned because there is a stark realization that Canada is one heart beat away from having the current Minister of Canadian Heritage as prime minister. If the member for LaSalle--Émard were to step in front of one of his Voyageur buses as an example, I would be very afraid as would Canadians.

I was proud to participate in the leadership selection process that resulted in the Progressive Conservative Party selecting a new generation of leadership in my leader, the member for Pictou--Antigonish--Guysborough, under whom I am proud to serve in the House and on the hustings and doorsteps of Canadians.

On the second question, in terms of capital gains, the government has reduced capital gains inclusion rates somewhat but has only gone so far. The problem with tinkering is that in the hyper-competitive global economy and in the investment community, tinkering does not get noticed. What would get noticed and what would create a great deal of interest in Canada is if the government were to take the bold step that our party presented in the last federal election and eliminate federal capital gains tax completely thereby creating a huge unlocking of capital in Canada.

Capital gains tax results in people making decisions based on tax decisions, not on economic decisions, and it locks up capital. Whenever capital is locked up a static situation is created which prevents capital from going where it ought to, to create jobs and opportunities in the most productive place. We presented that in our last platform. In fact I was co-chair of that platform process. I urge the hon. member to read that platform because it was a great platform and well regarded by all four Canadians who read it. Perhaps he could be the fifth. If more Canadians had read it, they would have voted for us in the last election as well. Maybe he will join us in our fight for a more competitive tax system on this side of the House.

[Supply, September 18th, 2003]

Madam Speaker, it is with pleasure today that I rise to speak to this motion. I think it is a very important issue that the member from the Bloc has raised. I want to point out some aspects of this issue that I do not think have been adequately addressed so far in the discussions today.

Everyone recognizes that tax treaties exist to avoid double taxation. As such, the notion of tax treaties is not the issue here. The importance of us having tax treaties is unarguable.

The tax treaty with Barbados is a special case because of the fact that there is a disproportionate percentage of Canada's foreign direct investment in Barbados that does not make sense given the size of its economy and the nature of the investment.

I would argue that we should be talking about a multilateral effort, working particularly with the OECD, which has done a lot of work in this regard, and with our other trade and economic partners to eliminate this kind of negative use of tax levers to create tax havens which ultimately take from the Canadian economy and other industrialized economies significant wealth and ability to invest in some of the programs that are important to ourselves domestically.

I would argue that it would make more sense to renegotiate the tax treaty with Barbados rather than to unilaterally scrap it. I think we ought to do that with other countries, including the United States. One of the difficulties with simply scrapping the treaty is that companies that have made significant borrowing and investment commitments based on the current tax laws would only have six months' notice. I do not think that termination notice of six months would be adequate.

We also cannot ignore that as a country we do not live in a vacuum. Barbados has tax treaties with other jurisdictions, including the United States, so we need to work with those countries, the other countries with whom Barbados has tax treaties. I think unilateral action in this matter rather than a more multilateral effort could result in Canada losing a lot of its ability to work effectively.

The other thing that could happen as well with unilateral action is that we could see a lot of corporations in Canada that currently have relationships based on the tax treaty with Barbados conceivably moving operations from Canada to the United States, as an example. To pursue this unilaterally without discussion with other countries with whom Barbados has tax treaties I think would be folly. There is a lot of work that needs to be done beyond simply cancelling our tax treaty with Barbados. I think Canada has a very important role we can play, working with our trading partners. Pursuing this under the auspices of OECD and other international organizations, I think we could actually achieve a lot more in really addressing this issue.

I think it is also important when we are talking about tax treaties to consider tax policy in a more macro sense and thus consider the impact that tax policy has today on investment decisions. Twenty years ago, tax policy was not as important as it has become today as a lever to create investment, growth and prosperity. In the old days before more economic integration globally and in a time when there was less competition, high taxes tended to redistribute income. Today, high taxes can redistribute people, talent and capital.

People, particularly talented people, and capital have never been as mobile as they are today. If we look at the economic success stories of the last 10 to 15 years, it is hard to ignore the degree to which tax policy has played a critical role in shaping those successes. Ireland had a 92% growth in GDP per capita largely based on an innovative and aggressive tax strategy. Ireland is a relatively small country on the edge of the second largest market in the world. Canada is a small country, by population and economic perspective, that is on the edge of the largest market in the world.

I believe that as a country we should stop simply talking about northern tiger when our tax policy means that we are likely to remain a northern kitten for a long time. It is time for us to actually become that northern tiger, to earn our stripes by presenting a bold, new, innovative tax strategy focused on making Canada a magnet for capital and talent, as opposed to a repellent, by having a tax system that rewards hard work and investment instead of attacking ambition and initiative.

The kinds of ideas I would like to see incorporated in that tax reform would be to eliminate the capital tax immediately, not phase it out over a period of time, and to eliminate capital gains taxes in Canada, which we did not have before 1971 when they were brought in to replace the inheritance tax. Bringing in the capital gains tax to replace the inheritance tax made Canada a good place to die but not a good place to live. The fact is there is no tax that does more to hurt investment and, as such, hurt productivity. Whenever anything is done to reduce levels of investment, it is an attack on productivity. Whenever we attack productivity, we attack the standard of living and the capacity to develop a better standard of living for Canadians and our capacity to afford the kinds of social programs that Canadians value.

I would also propose a significant overhauling of our corporate tax system. The government boasts that we have a lower corporate tax regime in Canada than many other countries. I have even heard the Minister of Finance claim we have lower corporate taxes than the U.S. That is patently false. The fact is that if we are only comparing statutory rates and ignoring effective rates, we are not actually talking in the real world. Our effective corporate tax rates are still among the highest in the OECD and need to be addressed if we are going to be serious about attracting levels of investment that can improve productivity and the standard of living of Canadians.

The dean of the Rotman School of Business at the University of Toronto, Roger Martin, has proposed, among other things, the idea of radically changing our capital cost allowance structure to in fact allow corporations to write off on a cash basis investments in new equipment and productivity enhancement immediately as opposed to more gradually over a period of time or amortizing the benefit over a period of time. It would be a radical step that would provide a huge advantage for Canadian companies and a tremendous incentive for Canadian companies to invest in productivity enhancement. That is one idea.

I propose that we eliminate corporate welfare in Canada, that we take the money currently going to Canadian companies through HRDC or Industry Canada or regional development programs, and use that money to reduce in a significant and broad based way corporate taxes in Canada. One example would be in Atlantic Canada, where the budget of ACOA, the regional development program, is $447 million per year. The total federal corporate taxes for Atlantic Canada are $380 million per year. The capacity exists without costing the federal treasury any money to actually eliminate federal corporate taxes in the region and at the same time have $70 million left over to invest in important infrastructure.

We can ask ourselves the question, or more important, we can ask Atlantic Canadian business people in small, medium sized and, in some cases, large businesses. Which would be more beneficial in terms of increasing their capacity to create jobs, wealth and prosperity for Atlantic Canada: 500 ACOA bureaucrats telling people how to start small businesses or one of the lowest corporate tax regimes in North America and in fact in the world? If we were to leave just provincial corporate tax rates in Atlantic Canada, we would in fact have corporate tax rates in the 12% range, which would be very close to those of Ireland, just as an example.

It is self-evident that tax levers create greater opportunities for wealth, prosperity, growth and opportunity than direct subsidies, because businesses, business people and entrepreneurs will make the decisions where to put the money. It will not be politicians and bureaucrats. Politicians and bureaucrats do not do a very good job of selecting winners from losers. Actually, that is not completely fair. Usually they do a good job of picking losers. It is just on the winners' side of the ledger that they do not seem to do as well.

As someone who started his first small business in Atlantic Canada at the age of 19 renting compact mini-bar fridges to students and building a business with over 1,000 refrigerators, by the time I graduated from university I could have been called a fridge magnet. Nobody on the other side of the House got that; maybe I should explain it.

The fact is that we can create more growth and opportunity across Canada if we have the courage to reform our tax system. That cannot be done unless we, in lock step with that, address our regional development strategies and our strategy in terms of investments in business through Industry Canada and HRDC.

I would also propose on the personal side that we eliminate RRSP limits in Canada. That would create huge opportunities for tax deferred savings, not tax write-offs but tax deferred savings. It would create a situation whereby a lot of the tax revenue would be deferred to the future when there is a demographic issue, when Canada will need significant tax revenue at a time when there will be less people working, more people retiring and more burden on the health care system. Eliminating RRSP limits would shift a lot of the tax revenue to the future at a time when it is going to be extremely important.

It would also eliminate a lot of the incentive for young Canadians, talented Canadians and educated Canadians to move to other tax jurisdictions, including the United States, again without giving up tax revenue over their life cycle but simply deferring it to the future. I think we would do a lot to address the brain drain issue with that kind of approach. It makes a great deal of sense when we consider the types of people we are losing to the United States. It is not just the numbers; it is the quality of the talent we are losing. Also, we are not just losing them for three or four years. We are losing people at middle and in a lot of cases higher income levels, who are going to the United States, starting off their careers and in many cases planting roots, becoming established and staying there.

I lived in New York between 1991 and 1996, when I returned to Canada. Many of my friends in New York were expatriate Canadians and most of them are still there. Sadly, I will inform the House that I do not believe they are coming back. They are now rooted there. In many cases they have established families and are enjoying a standard of living in the United States superior to that which they could afford here in Canada. Even when we talk in terms of the advantage of our health care system, these people, through their companies, have private health care insurance, so in many cases they have not just lower taxes but also a better health care system in terms of the degree to which the health care system exists for their own families and their own situations.

I think that we as a country have to become very strategic, not just in terms of our tax policy but in terms of our social investment policy. We have to be smarter about how we spend money.

We hear of the levels of waste that exist in the federal government. This week, just as a tip of the iceberg, one ministerial aid has spent something like $30,000 on meals over a period. I am sure if the Canadian Restaurant and Foodservices Association had a political staffer of the year award, it would probably go to this individual. That is just tip of the iceberg stuff.

Anyone in the House who would deny that there is no waste in government is delusional. There is an opportunity for us to reduce waste, to target government activities in areas where there is a real reason for the government to be participating and there is an ability for government to play a constructive role in improving the lives of Canadians and to get out of the rest of those areas, to stop interfering with provincial jurisdictions, as a federal government, to help provide provinces with the fiscal tools they need and the fiscal capacity in taxing power that is required to provide the constitutionally mandated services of health care and education and to stop micromanaging as a federal government.

There are a number of areas where not only on the expense side can we spend more wisely but on the tax side we can tax more wisely. Renegotiating tax treaties is one part of the equation. Again, we should be renegotiating tax treaties and working with our trading partners in a multilateral approach to Barbados and other tax havens. Beyond that I cannot over-emphasize the need, in lockstep with that approach, for Canada to introduce the kinds of tax reform that can truly revolutionize the Canadian economy and create the kind of growth, prosperity and opportunity Canadians deserve. To fail to do that and to simply go in a hyper-competitive billable economy where talent and capital have never been as mobile as they are right now would be folly.

I hope I have been able to bring a different approach to this debate and I hope that in consideration of this motion all members consider the need to reform Canada's antiquated tax system that is currently hurting opportunities for Canadians here. It is holding us back. Let us consider just for a moment the opportunity we have as legislators to make decisions today to reform Canada's tax system in a way that we can look back in 5, or 10 or 20 years at our having played an important role in making Canada truly a northern tiger instead of simply talking about Canada's desire to be a northern tiger.