Bill C-43 (Historical)

An Act to amend certain Acts and instruments and to repeal the Fisheries Prices Support Act

An act to amend certain acts and instruments and to repeal the Fisheries Prices Support Act

[The Acting Speaker (Ms. Bakopanos)]

I know the hon. member is very passionate about his private member's bill but we are not in private members' business. We are on Bill C-43 and I would ask the hon. member to please get on with his speech on Bill C-43.

[Peter Stoffer, NDP, Sackville—Musquodoboit Valley—Eastern Shore, NS]

Madam Speaker, I will put on the record that I will limit my time so that my colleagues to the left of me will have more time to speak to the hon. House leader about what their concerns are regarding Bill C-43.

First, I could not help but notice that yesterday we had two hours in the middle of the day with not much to do. In about 20 minutes we are going to be debating a very important bill that would make parliamentarians much more accountable to their constituents. It is called the floor-crossing bill. If a member crossed the floor to another political party, that seat would become vacant. We would then have to go back to the constituents to see if they wish to--

[Bernard Bigras, Bloc, Rosemont—Petite-Patrie, QC]

The government House leader says “exactly”. Since 1982, this board, the Fisheries Prices Support Board, has not been in existence. Now, in 2001, we are discussing and debating a bill that, essentially, changes certain provisions regarding a board that has not been operational for more than 18 years. I also have to point out that the mandate of the Fisheries Prices Support Board was to stabilize prices by providing financial support to buyers.

And finally, the bill substitutes the corporate designation of the Canadian Film Development Corporation to the name that it has been using since 1994, Telefilm Canada.

This is where it becomes evident that the government has nothing to propose to us in terms of a legislative agenda, so it has come up with a bill, Bill C-43, which basically is making adjustments to an office that has not been operational since 1982, and amends a statute which officializes the use of the name Telefilm Canada, which it has been using since 1994. This government is proposing to us nothing but these bills, which are basically nothing more than making cosmetic changes, when what we expect of it is proactive efforts, acting like, and being, a government of which the people of Quebec and of Canada can be proud.

While there are important issues to be dealt with in Canada, fundamental debates that must be carried out, it has come up with a bill that makes some cosmetic changes.

The changes to the National Capital Act offer the Bloc Quebecois the opportunity to remind hon. members that the national capital is not bilingual. The Bloc Quebecois again draws attention to the failure of the federal language policy.

The failure is all the more flagrant because it is played out in the Canadian capital, which should reflect linguistic duality better than anywhere else in Canada. I believe that—

[Bernard Bigras, Bloc, Rosemont—Petite-Patrie, QC]

Madam Speaker, I thank you for this opportunity to speak today to Bill C-43. As my Canadian Alliance colleague mentioned earlier, this bill amends various acts.

While reading this bill, which is approximately 15 pages long, one realizes that the government is using a parliamentary instrument, which it is entitled to do, to amend a number of acts.

Several amendments are included in this bill which, to a certain extent let us admit, is of minor importance, but at the same time is rather important in view of the number of acts it amends.

The amendments concern a number of acts and instruments. The government House leader is shaking his head. If you will allow me, I will list the acts Bill C-43 seeks to amend. I am thinking of the Access to Information Act, to which I will come back later, but also of other acts parliamentarians, citizens and journalists commonly use.

Amendments could have been made to this act, which were not merely cosmetic but would have made it easier to use by citizens, parliamentarians and journalists. For us parliamentarians, this act is a very useful and necessary tool to help us do our work.

The Atlantic Canada Opportunities Agency Act, with which some of our colleagues in the House are very familiar, is another act amended by the bill. Few from Quebec know this act because, of course, the Bloc Quebecois represents Quebec citizens.

The Canadian Film Development Corporation Act, to which I will get back later on in my speech, is also amended. It is a fairly important act. We need only look at all the events surrounding the CINAR case.

The government had the opportunity not just to change the name of the Canadian Film Development Corporation for the name used since 1994, namely Telefilm Canada, but also to go even further than that and to provide resources.

The Financial Administration Act, the Lieutenant Governors Superannuation Act and the National Capital Act are also amended. What perspective does this debate on Bill C-43 give us today? It is an opportunity to remind everyone that, in reality, the national capital is not bilingual.

The National Film Act and the Nuclear Safety and Control Act are amended as well. This bill amends the Nuclear Safety and Control Act, and it so happens that we had an in-depth debate about nuclear waste yesterday. Today, we have an opportunity to debate this amendment. I recognize, of course, that it is not the same bill. However, we must remember that each debate that we have in the House must be put in perspective, and that perspective does not go back very far since it was just yesterday that we had that other debate on this subject.

This bill also amends the Payments in Lieu of Taxes Act, the Privacy Act, which the government House leader should know pretty well, the Public Service Staff Relations Act, the Special Retirement Arrangements Act, the Telecommunications Act and the Yukon First Nations Self-Government Act.

Even though the government says—and it is right to a certain extent—that all this bill does is change a few names, members can see that it does amend several acts.

This is why we are against fast tracking this bill. We want to be able to study it.

I also rise today to speak to the second reading of Bill C-43, introduced by the hon. government House leader.

Needless to say that our statutes must be consistent and updated, if we want their enforcement to also be consistent. In order to meet this obvious need, the Miscellaneous Statute Amendment Program was implemented in 1975. This program allows for minor amendments of a non-controversial nature to a number of federal statutes without having to wait for a more in-depth review.

The main purpose of the bill is to correct discrepancies between the French and English versions of statutes. In addition, it repeals certain provisions, which is an excellent idea. But how do we explain the fact that we are required today to study a bill, Bill C-43, to correct, I repeat, discrepancies between the French and English versions of statutes? Does this not denote, indeed, the lack this government's of commitment, and fundamentally, of Canadian governments past, and an unacceptable lack of insight when it comes to the French reality in Canada?

The first purpose therefore is to correct discrepancies between the French and English versions of statutes. In addition, it repeals the provisions regarding the Fisheries Prices Support Board. I remind the House that this board has not been operational since 1982. This is really quite unbelievable.

[John Reynolds, Canadian Alliance, West Vancouver—Sunshine Coast, BC]

Madam Speaker, I will go back to October 25, 1989, when the present government whip was in opposition. She said she felt the Tory government's use of closure showed it had no respect for the public process, no respect for parliament and no respect for the opinions of the public.

On November 16, 1992, according to Hansard , the present government House leader said in the House that he was shocked by the conservative government's use of closure.

The government he was talking about used closure or time allocation about 23 times. The present government has used them 73 times. Rushing legislation through 73 times is one of the reasons we have a bill like the one before the House today. Mistakes are made and corrections must be made. We should spend the proper time looking at these bills.

The three members I have referred to, the Prime Minister, the government House leader and the chief government whip, are key players in the House of Commons today.

We in my party support Bill C-43 because it would make the necessary changes. However we would like the proper time to be taken in the House and the proper assistance to be given to members to make sure mistakes do not happen.

Parliament does not need to rush 73 bills through on closure. We should let parliament do its job. If it takes a little longer than the government hopes, that is one thing. We would prefer to avoid making mistakes in the first place. This would be achieved by careful drafting.

As I mentioned, when I was on the justice committee a number of opposition amendments to the extradition bill were approved. This proves my point. The member for Red Deer, our environment critic, has had numerous amendments approved in committee. This shows that if we let the opposition and the government work in committee and give them time to do what they must do, we will have better legislation.

Using the heavy hand of government to invoke closure does not bring about good legislation. Bill C-43 is a good example of that. It is a waste of taxpayer dollars. The money should have been spent making sure the legislation was done properly in the first place.

[John Reynolds, Canadian Alliance, West Vancouver—Sunshine Coast, BC]

Madam Speaker, it was interesting to listen to the government House leader today. He said that the acts were precise and as up to date as possible, which was the reason for the bill. I cannot help but wonder, if the bills were done properly in the first place, that we would not have to be doing some of this stuff and taking up the time of the House.

Bill C-43, an act to amend certain acts and instruments and to repeal the Fisheries Prices Support Act, amends the following: Access to Information Act, Atlantic Canada Opportunities Agency Act, Canadian Film Development Corporation Act, the constitution of Telefilm Canada, Financial Administration Act, Lieutenant Governors Superannuation Act, National Capital Act, Nuclear Safety and Control Act, Payments in Lieu of Taxes Act, Privacy Act, Public Service Staff Relations Act, Special Retirement Arrangements Act which I am sure would excite people watching live this afternoon, and Special Retirement Arrangements Act.

The committee will have to get together to make sure there are no special arrangements for MPs pensions or senior bureaucrats. The bill also amends the Telecommunications Act, Yukon First Nations Self-Government Act and repeals the Fisheries Prices Support Act.

We are told the bill proposes minor technical corrections that do not involve any policy changes. I agree with that. The reason the government's legislation is so riddled with mistakes is that it rushes it through the legislative process claiming lack of time. Yet the House adjourns early every other day.

Here is a question we could ask. How many high priced lawyers do we have in all these government departments drafting legislation? It is rather unfortunate that we still have all these mistakes.

I recall being on the justice committee and we had scads of lawyers, 10, 20 or 30 of them. They were all looking at the Extradition Act. I had to hire two professionals to look at the act. About nine or ten amendments were approved that time because we as the opposition hired some top notch lawyers to look at the bill.

I asked these lawyers why, If we could hire two lawyers to do this work for us and come up with amendments the government lawyers accept, they would not pick up on this. They said that government lawyers tended to like things to go to the supreme court for decisions rather than make laws that would never go there under the charter. I sometimes wonder how legislation is drafted that necessitates what we are doing this afternoon: taking up a couple of hours of parliament's time. It is a disturbing trend and this bill is a by product of that trend.

Yesterday the Liberal government attempted to adjourn government orders early due to the lack of government business. Ironically the day before it limited debate to less than two hours on the most important bill to hit the House in years.

I found this to be so offensive, as did most of my colleagues on this side of the House, that we refused consent to adjourn early, giving the Speaker no choice but to suspend the sitting until 5.30 p.m. when private members' business begins. The House was in a state of limbo with no business before it for a couple of hours.

So far this fall the House adjourned early for the same reason on November 22, November 20, November 2, October 26, October 25, October 24, October 22 and October 19. This is why we have a bill like Bill C-43 before us. It is not necessary because we do not have time to deal with legislation in a thoughtful and thorough manner.

Time allocation is not necessary in most cases. In fact there was a time when the Liberal leadership in the House shared that view. As recently as December 29, 1992, on CBC Prime Time the Prime Minister who was then the member for Saint-Maurice declared:

We have closure in Parliament now every day. I think it's completely wrong...And we will have to restore parliament...the parliamentary democracy that existed before.

On January 19, 1993, the same member made the following comment at a press conference in Ottawa. I see that the Prime Minister's parliamentary secretary is wondering if I am in order with some of these comments. There is a reason that we talk about bills which are being updated. It is because of mistakes and that is why we have to press these issues. Before becoming Prime Minister he said on January 19, 1993:

I think we should let members of parliament speak their mind as long as it is possible.

If we had the opportunity to get the proper witnesses before committee and took the proper time on some of these bills, we would not make mistakes. It would mean we would not have to be back here bringing in a bill with all these mistakes and trying to correct them.

On October 25, 1989, the Toronto Star reported that the present government whip who in those days was in opposition said she felt the Tory government's use of closure showed it had no respect for the public process--

[Don Boudria, Liberal, Minister of State and Leader of the Government in the House of Commons]

moved that Bill C-43, an act to amend certain acts and instruments and to repeal the Fisheries Prices Support Act, be read the second time and referred to a committee.

Mr. Speaker, I am pleased to speak today to Bill C-43, the technical amendments bill. In the unlikely event that some members are not totally familiar with what the technical amendments bill does, it makes some minor corrections to a number of statutes.

Most of the provisions of the bill before us today were in the draft Miscellaneous Statute Law Amendment Act. During the draft bill's review by the House and Senate committees, requests were made for additional information on a number of provisions. I understand this information was given to the committees but in view of the concerns expressed during the committee meetings, several provisions which were not objected to were nevertheless not incorporated in the Miscellaneous Statue Law Amendment Act which the House passed a few weeks ago.

Additional information also has been provided to parliamentarians and the public in the communications material for the bill. As a result, I believe the House could proceed quickly with these provisions. I initially wanted to do all readings of the bill today but I understand the House is not quite ready to do that. I guess it will have to go to standing committee now but hopefully it can be dealt with quite quickly and then brought back to the House.

In the period since the draft Miscellaneous Statute Law Amendment bill was tabled last spring, a few other technical amendments have been brought to the government's attention. The bill proposes to amend the Special Retirement Arrangements Act to address incorrect references and cross-references which were omitted in the 1999 public sector pensions legislation that was passed by parliament. These changes do not affect the policies or substance of existing statute but simply ensure that internal references are corrected.

Business of the House

[Don Boudria, Liberal, Minister of State and Leader of the Government in the House of Commons]

Mr. Speaker, as hon. members know, the House will not sit tomorrow as is the usual courtesy to a political party holding a national convention, in this case the New Democratic Party.

Our business for next week is fairly straightforward. First, we will deal with report stage and third reading of Bill C-36, the anti-terrorism legislation. When this is completed we will turn to second reading of the public safety bill that was introduced earlier this day by the Minister of Transport.

On any days next week, particularly in the early part of the week, should the debate on any of these items end earlier in the day, it would be my intention, then, on Monday to call for report stage and third reading of Bill C-27, the nuclear safety bill and, if time permits, second reading of Bill C-43, the technical legislative amendments bill which I introduced earlier this day.

If debate collapses on or after Tuesday, it would also be my intention to add to the list that I have just made Bill C-35, the foreign missions bill, at third reading.

An act to amend certain acts and instruments and to repeal the Fisheries Prices Support Act

[Don Boudria, Liberal, Minister of State and Leader of the Government in the House of Commons]

moved for leave to introduce Bill C-43, an act to amend certain acts and instruments and to repeal the Fisheries Prices Support Act.

(Motions deemed adopted, bill read the first time and printed)

Income Tax Amendments Act, 2000

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I appreciate the opportunity to address the House at third reading of Bill C-22, the income tax amendments act, 2000.

The bill would implement key elements of the government's five year tax reduction plan, the largest tax relief package in Canada's history, and would legislate the technical amendments in Bill C-43 which died on the order paper last fall. Each measure in the bill is based on the principles of fairness and equity in the federal tax system to which we have been committed since 1993.

The most important component of the bill delivers measures announced in the 2000 budget and last October's economic statement to set out a multiyear plan for further tax reductions.

This plan, which provides $100 billion in tax relief by 2004-05, will reduce by an average of 21% the federal personal income tax paid by Canadians.

Families with children will receive an even larger tax cut of about 27% on average.

As of January 2001, tax rates on all income levels were reduced and the 5% deficit reduction surtax was eliminated. The low and middle income tax rates fell to 16% and 22% respectively. The top 29% rate was reduced to 26% on incomes between $61,000 and $100,000, which means the 29% rate applies only to income over $100,000. As all the economists and analysts have noted, the timing could not have been more perfect to bring in these tax cuts.

Increased support for families with children would be provided through the Canada child tax benefit. The maximum Canada child tax benefit for the first child would rise to $2,372 in July, well on the way to the five year goal of $2,500 by the year 2004.

For the second child the maximum Canada child tax benefit would increase to $2,308 in July 2004.

These amendments must be in effect by July 1, so that families can get this benefit within the set timeframe.

Other amendments to personal income tax are specifically designed to help those who need them most.

The bill would increase the amount on which the disability tax credit is based. It would expand the list of relatives to whom the disability tax credit can be transferred to make it consistent with medical expense tax credit rules and it would allow speech language pathologists to determine eligibility for the disability tax credit with respect to speech impairments.

In addition, the bill would increase the maximum child care expense deduction for children for whom the disability tax credit can be claimed and the amounts on which the caregiver and infirm dependant credits are based.

It would also include certain incremental costs under the medical expenses tax credit when a principal residence is built for people with mobility impairments.

Moreover, an amount of up to $3,000 in scholarships, fellowships and bursaries will be tax exempt, provided the student is eligible for the education tax credit. Self-employed workers can deduct from their income the share of the contributions to the Canada pension plan or to the Quebec pension plan paid by the employer for their own benefit.

Other personal income tax changes clarify the rules under which clergy can claim a deduction for their residence, allow Revenue Canada to release information about former registered charities under certain conditions and exempt municipalities from filing T4s for volunteers to whom they paid not more than $1,000.

Another element of the tax reduction plan would help make Canada's business income tax more internationally competitive. Corporate tax rates would drop to 21% from 28% for businesses in the highest tax sectors to make them more internationally competitive, beginning with a one point tax cut effective January 1, 2001.

By the year 2005 the combined federal-provincial tax rate would drop from the current average of 47% to 35%, five percentage points lower than the U.S. This would put our businesses on a more competitive level with other G-7 countries and serve to attract investment and create jobs.

The plan also provides a tax deferred capital gains rollover for investments in shares of certain small and medium size businesses, and a 50% reduction of the capital gains inclusion rate. Thus, the highest federal-provincial tax rate on capital gains will be lower than the same combined rate in the United States.

Increasing the employee stock option deduction from one-third to one-half means employees in Canada would be taxed more favourably on stock option benefits than employees in the United States. In addition, the bill would allow the deferral of tax on certain stock option benefits and an additional deduction for certain stock option shares donated to charity.

Bill C-22 would ensure a comparable tax system for Canadian banks and foreign bank branches operating here. It would strengthen the thin capitalization rules, phase out the special tax regime for non-resident owned investment corporations and introduce a temporary 15% investment tax credit for grassroots mineral exploration.

Technical amendments include extending the additional capital tax on life insurance corporations until the end of 2000 and clarifying the tax treatment of resource expenditures and the rules governing gifts of ecologically sensitive land.

There are three remaining measures I will touch on briefly before closing.

The first would introduce changes to the taxation of trusts and their beneficiaries, in particular property distributed from a Canadian trust to a non-resident beneficiary, mutual fund trusts, health and welfare trusts and those governed by RRSPs and RRIFs.

New antiavoidance measures will ensure that transfers to trusts cannot be used to unfairly reduce taxes.

The next measure would ensure that Canada retains the right to tax immigrants on gains that accrue during their stay in Canada. It would also clarify the effects of new taxpayer migration rules on rights to future income and allow returning former residents to unwind the tax effects of their departure regardless of how long they were non-resident.

To avoid international double taxation, former residents would be able to reduce Canadian tax payable on their pre-departure gains by certain foreign taxes paid on the same gains.

Another measure would make advertising expenses in periodicals with at least 80% original editorial content fully deductible and those in other periodicals 50% deductible regardless of ownership.

After July 1996 Canadian pension funds and other entities that own Canadian newspapers qualify as Canadian citizens under the ownership requirements of the Income Tax Act.

Before closing, I wish to mention that a number of amendments were made to this bill in committee. On behalf of the government, I wish to thank members of the Standing Committee on Finance for their detailed examination of this bill.

Improvements have been made to several provisions, including those affecting back to back loans, weak currency debts, foreign accrual property income, partnerships, mortgage investment corporations and segregated fund trusts, just to name a few.

Each of these amendments contributes to fairness in the tax system.

I remind the House that fiscal responsibility for government is fundamental and tax cuts are essential. At the same time we are committed to maintaining an effective, fair and technically valid tax system. Without a doubt this is the thrust of Bill C-22.

This bill will implement the key features of the five year tax reduction plan, which will lighten the tax burden on all taxpayers, strengthen support for families with children, and increase the competitiveness of the Canadian corporate tax system internationally.

I urge all my hon. colleagues to keep in mind that Canadian children need the Canada child tax benefit increases on July 1, a fact that makes speedy passage of the bill essential.

[Gurmant Grewal, Canadian Alliance, Surrey Central, BC]

Madam Speaker, I rise on behalf of the constituents of Surrey Central to state our case in opposition to Bill C-22, the Liberal government's proposed changes to the Income Tax Act, the income tax application rules, the Canada pension plan, the Customs Act, the Excise Tax Act and many other acts.

Earlier this morning I spoke in opposition to the Liberal's proposed changes to Bill C-9, the Canada Elections Act. That act creates a two tier electoral system. Among other things, it discriminates against smaller political parties. The Liberals are eroding our democracy with that bill and we cannot support it.

Bill C-22 seeks to amend the Income Tax Act and statutes originally included in Bill C-43 and to put into place key aspects of the last two budgets. The bill has 31 amendments touching on a number of tax deductions and their definitions.

There are three main reasons the official opposition and my constituents oppose the bill. First, the bill fails to address the enormous complexity of the tax code. It adds further complexity to an already complex tax code.

Second, it undermines the family, particularly one income families.

Third, the tax cuts provided for in the bill fall far short of what the Canadian Alliance proposed and what the government must do to increase our nation's productivity, competitiveness and standard of living. I would like to elaborate on those three points beginning with the complexity of the bill.

The government should be moving toward simplifying and broadening the base of the tax code. Lowering the taxes of all Canadians would be easier and it would have a far more positive impact for everyone. If the tax code were simplified and if it had less exemptions, further clarification would not be necessary.

The bill adds to the enormous complexity of the Income Tax Act with its numerous amendments. Rather than simplifying the act as the Canadian Alliance would do, the Liberals continue to maintain a costly and complicated tax code.

Another reason for my opposition to the bill deals with measures in the bill that assist the tax position of families with some minimal tax reductions. Nothing is done to address the longstanding inequality between single income and dual income families. The bill increases the inequity by increasing the child care tax deduction which is only available to high income or dual income families.

The bill also erodes the legal position of marriage. By changing references of spouse to common law partner it is including same sex partners.

Even after the changes proposed in the bill, Canadians would continue to pay far too much in taxes. The mini budget claimed to cut taxes by $100.5 billion over five years. However here is the reality. It is a bit technical so I would like to go into a little detail.

From the $100.5 billion claim of gross tax relief we must subtract $3.2 billion over five years for social spending, chiefly the child care tax benefit. The child care tax benefit is a spending program delivered through the tax system. The increase in the tax benefit should not be confused with being a tax decrease as it is a spending increase. The figure above excludes indexation because indexation is accounted for separately.

We then have to subtract $29.5 billion over five years for increased CPP premium hikes. We then have to subtract $20.7 billion over five years for cancelled tax hikes, namely indexation. Indexing the personal income tax system is meant to hold the tax burden constant over time so it should not be counted as a tax reduction.

Therefore when we take into consideration all those deductions, the net tax relief is only $47.5 billion provided over five years, not immediately.

The reality of the Liberal Party's 2000 tax relief package is that it is less than half of what it claims it is and half of what the Canadian Alliance proposed during the election.

These are the realities when we do a little math and we go into detail. This is how the tax relief would work in contrast to the image of tax relief the Liberals are projecting through their propaganda. We are watching a smoke and mirrors show by the government with respect to the bill.

Bill C-22 is a 500 plus page bill. I will read it later on because it will take too long. The Liberals say the bill is concerned with administrative, technical and implementation measures. They say it implements about $100 billion in tax cuts over five years. As I demonstrated it does not. It is less than half of that amount.

The more people study the bill, the more problems they will find. The more people study the bill the more complexities it creates in the minds of Canadians. I will take the time to go over some of the points.

There are 31 amendments in the bill. One amendment is about non-resident film and video actors. It would apply a new 23% withholding tax on payment to non-resident film and video actors and their corporations, with an option to have the actors and corporations pay regular part 1 tax on the net earnings instead. This provision alone hurts my beautiful province of British Columbia where film making has become popular and is contributing to the economic well-being of my province.

Canada Citizenship and Immigration has also imposed restrictions on issuing visas to those who are trying to come to Canada to make films and make the best use of the beautiful British Columbia scenery and its facilities. This hurts B.C. Those people then go to other countries to make films. Why should they come to B.C. to make films? Many people are hoping the film industry will contribute to the prosperity of my province.

The bill deals with limited liability partnerships, replacement property rules, types of property to be considered, stop-loss loans and a capital tax. An additional capital tax would also be imposed on life insurance corporations. Foreign affiliate losses would determine the affiliate or accrual property income for a particular taxation year. It deals with a foreign affiliate held by a partnership with simultaneous control in a chain of corporations and the control of their stake. It deals with advertising expenses concerning periodicals and magazines between Canada and the United States. It also deals with trusts and the tax treatment or property distribution from a Canadian trust to a non-resident beneficiary. Further, it deals with mutual fund trusts, RRSPs and adjusted retirement income funds.

When we go into the detail of the bill, we will notice that there are more complexities, more anti-family type situations and many other things.

There is taxpayer migration which is the ability to tax the gains accrued by immigrants. It will affect the projection of the country's image with respect to future immigrants.

With reference to foreign branch banking, there would be a 15% investment tax credit for certain grassroots mineral exploration. There is the foreign exploration and development expenses and the value of foreign resource property owned. It would impose a 30% restriction for the annual deduction of new foreign exploration and development expense benefits.

There are many other points. Here is another one. There would be a foreign tax credit on oil and gas production sharing agreements. Another one is weak currency debt that limits the deductibility of interest expenses and adjusts foreign exchange gains and losses in respect of weak currency debt and associated hedging transactions.

There are many points in the bill which will further make the tax codes very complicated.

Since capitalization, it reduces the acceptable debt to equity ratio from 3:1 to 2:1 and it repeals the exemption for manufacturers for aircraft and aircraft components.

As far as CPP contributions on self-employed earnings, these amendments introduce a deduction from business income for one-half of CPP contributions on self-employed earnings with the other half of the contributions remaining eligible for the CPP tax credit.

Here is something regarding students and scholarships, fellowships and bursaries. The exemption would be increased by $3,500 for scholarships, fellowships and bursaries received by the taxpayer in connection with the taxpayer's enrolment in a program and in respect of the taxpayer claiming the education tax credit.

Here is another one for the education tax credit. It would double the monthly amounts the tax credit allows to full time and part time students based on $400 and $120 respectively.

It also affects the medical expense tax credit.

There is not one area that does not affect families, caregivers, infirm dependant tax credits, disability tax credits, child care expense deductions and so on. Therefore, I assume this bill will not only be affecting families but also those individuals and low income people.

The Canadian Mining Association supports some aspects of this bill. It supports the definition of mining property, yet it was not aware of the changes until the official opposition contacted it. The association was not consulted. It had to learn from us that the definition of mining property was being tinkered with by the government.

This is a government from behind closed doors. Surely if the government was sincere in its intention, it would have contacted stakeholders and various groups in Canada. It would have listened to Canadians. It should have understood that Canadians want the tax credits to be implemented sooner rather than up to 2005.

The bill guarantees that the basic personal exemptions will hit a minimum of $8,000 by the year 2004. The credits and relief provided in the bill are a step in the right direction, but they are baby steps nonetheless.

Efforts have been made to reduce the capital gains tax, deficit surtax, marginal rates, raise marginal income thresholds and tighten up various other rules surrounding deductions. The bill would increase and clarify the disability tax credit.

There are some good points and some bad points.

In conclusion, Canadian Alliance members would restore public confidence in the fairness of the Canadian tax system by reducing its complexity. We would restore indexation and move toward a simpler tax system built around a single rate of taxation to ensure lower taxes for all Canadians. We believe all Canadians above a minimum income level should share in the cost of the services provided by the government, which benefit all of us irrespective of income.

We hope the government will consider the amendments and what witnesses have said at the committee hearings on this bill. At this point the Canadian Alliance will not be supporting this bill.

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I welcome the opportunity to present Bill C-22, the Income Tax Amendments Act, 2000 for second reading today.

While the bill amends several sections of the Income Tax Act, more important, it implements key elements of the government's five year tax reduction plan which was introduced last year.

Briefly, this plan will provide $100 billion in tax relief by 2004-05, thereby reducing the federal personal income tax paid by Canadians by 21% on average.

Families with children will receive an even larger tax cut—about 27% on average.

The bill also includes many additional measures, including technical amendments that were introduced in Bill C-43 last fall but which died on the order paper when the election was called.

Many of these amendments are relieving in nature. Some correct technical deficiencies in the act while others lighten the administration of the tax system. Whatever the changes, one thing is certain, each is based on the principles of fairness and equity in the federal tax system to which our government has been committed since coming to office in 1993.

Once we eliminated the deficit in 1997-98, we began to cut taxes for all Canadians. The bill before us today is the biggest step forward in our tax cutting efforts to date and is based on four key principles.

First, our approach to tax reduction must be fair starting with those who need relief most, middle and low income earners, and especially families with children.

Second, we will focus initially on personal income taxes since that is where we are most out of line.

Third, we will ensure that Canada has an internationally competitive business tax system.

Fourth, we will not finance tax relief with borrowed money because that means an inevitable return to higher taxes in the future.

For the government, fiscal responsibility is fundamental and tax cuts are essential. At the same time, it is essential that an effective, fair and technically valid tax system be maintained, which is the thrust of the legislation before us today.

I will now discuss the main measures in the bill beginning with some of the personal income tax changes.

In 1999 the government promised Canadians that it would set out a multi-year plan for further tax reductions. The 2000 budget delivered on that commitment by making the most important structural changes to the Canadian tax system in more than a decade with a special emphasis on the needs of families with children. The bill provides for tax rate reductions at all income levels as of January 1, 2001.

The low and middle income tax rates fall to 16% and 22% respectively. The top 29% rate is reduced to 26% on incomes between about $61,000 and $100,000, which means that the 29% rate applies only to income over $100,000.

While tax burdens will fall for all Canadians, the decline will be felt substantially by middle income earners. In addition, the bill would eliminate the 5% deficit reduction surtax as of January 1, 2001.

One component of the five year tax reduction plan must be in place by July 1 of this year because it benefits Canadian children. I am referring to the increased support for families with children through the Canada child tax benefit.

As hon. members know, the Canada child tax benefit is a key element of federal assistance to families. It is an income based benefit with two components: the Canada child tax benefit base benefit for low and middle income families and the national child benefit supplement for low income families.

The maximum Canada child tax benefit for the first child will rise to $2,372 in July 2001, well on the way to the five year goal of $2,500 by the year 2004.

For the second child, the maximum Canada child tax benefit will increase to $2,308 in July 2004. Together with increases announced in previous budgets, annual Canada child tax benefits will exceed $9 billion a year in the year 2004, of which low income families will receive about $6 billion and middle income families about $3 billion.

The bill contains other personal income tax changes that are specifically designed to help those who need it most.

For example, the amount on which the disability tax credit, the DTC, is based is increasing from $4,293 to $6,000 effective 2001. This tax relief will increase over time, as the DTC is fully indexed to inflation.

The list of relatives to whom the disability tax credit can be transferred has expanded to make it consistent with the medical expense tax credit rules. In addition, speech language pathologists will now be able to certify eligibility for the disability tax credit with respect to speech impairments.

Another measure increases the maximum annual amount that can be deducted for child care expenses to $10,000 from $7,000 for each eligible child for whom the disability tax credit can be claimed.

The amounts on which the caregiver tax credit and the infirm dependant credit are calculated are both going up to $3,500. With full indexation, this tax relief will continue to increase over time.

At present, individuals with certain mobility impairments may qualify under the medical expense tax credit for renovation costs that enable them to gain access to, or be mobile or functional within, their home. Bill C-22 includes reasonable incremental costs relating to the construction of a principal residence to help these individuals.

To provide additional assistance to students, the annual exemption for scholarships, fellowships and bursaries received in conjunction with programs for which the education tax credit may be claimed increases to $3,000, up from $500.

I also want to mention that self-employed individuals will now be able to deduct one-half of their Canada pension plan or Quebec pension plan contributions on self-employment income. The remaining one-half will continue to be eligible for a personal tax credit at the lowest tax rate. Without the bill they would be entitled only to the credit on both the employer and employee contributions, which would put them at a disadvantage vis-à-vis owner-operators who can deduct the employer share.

The technical amendments in this bill are too numerous to mention in the short time allotted to me in this debate. However, I would like to highlight a few of them before moving on to the business tax changes implemented in this bill.

On the personal tax side, some of the changes ensure that the rules under which clergy can claim a deduction for their residence are clarified. They also ensure that Revenue Canada can release information about a former registered charity as long as it relates to when the organization was a registered charity.

They ensure that municipalities do not have to file T4s for volunteers to whom they paid not more than $1,000. They also ensure that the exemption applicable to reasonable travel allowances to part time teachers be extended to teachers who do not have other jobs.

The five year tax reduction plan also goes a long way toward making Canada's business income tax system more internationally competitive. This is important because business tax rates have a significant impact on the level of business investment, employment, productivity, wages and incomes.

With this in mind, Bill C-22 includes significant corporate tax rate reductions. Corporate tax rates will drop to 21% from 28% for businesses in the highest taxed sectors, such as high technology services, to make them more internationally competitive. These reductions begin with a one-point cut effective January 1, 2001.

By 2005 the combined federal provincial tax rate, including both income and capital taxes, will drop from the current average of 47% to 35%. This would put our businesses on a more competitive level with other G-7 countries.

Two measures in the tax reduction plan involve capital gains. The first provides a tax deferred capital gains rollover for investments in shares of certain small and medium sized active business corporations. It includes increasing the $500,000 investment limit, originally announced in the 2000 budget, to $2 million as announced in the economic statement and increasing the size of small businesses eligible for the rollover from $10 million to include corporations with no more than $50 million in assets immediately after the investment.

The second measure reduces the capital gains inclusion rate to one-half. This would reduce the tough federal provincial tax rate on capital gains in Canada from an average of about 31% to about 23%, lower than the typical U.S. combined federal state top rate of about 25%. Both measures would improve access to capital for small businesses with high growth potential. High technology industries would particularly benefit.

Consistent with this change to the capital gains inclusion rate, the deduction for employee stock options would increase from one-third to one-half. As a result, employees in Canada would be taxed more favourably on their stock option benefits than employees in the U.S. The bill defers the taxation for certain stock option benefits and allows an additional deduction for certain stock option shares donated to charity.

Another measure that I want to discuss relates to branches of foreign banks operating in Canada.

These new rules stem from the 1999 amendments to the Bank Act, which allow foreign banks to establish specialized, commercially focused branches here. Previously, foreign banks could operate in Canada only through Canadian incorporated subsidiaries.

The tax system for the new foreign bank branches would now be comparable to that for Canadian banks. These new rules would give foreign banks a time limit window to move their operations from a Canadian subsidiary into a Canadian branch without undue tax consequences.

As with the personal tax measures, the business tax changes are too numerous to discuss individually during today's debate. I would like to summarize a few of them.

The bill, for example, provides a tax deferred rollover for shares received on certain foreign spinoffs. It strengthens thin capitalization rules. It phases out over a three year period the special income tax regime for non-resident owned investment corporations. It treats provincial deductions for scientific research that exceed the amount of the SR & ED expenditures as government assistance. It ensures appropriate treatment of foreign exploration and development expenses in computing foreign tax credits. It introduces a temporary 15% investment tax credit for grassroots mineral exploration and it amends the corporate divisive reorganization rules.

Other technical amendments ensure that Canadian corporations that hold shares of non-resident corporations through partnerships are not subject to double taxation. The additional capital tax on life insurance corporations is extended until the end of 2000. Shares of one foreign corporation can be exchanged on a tax deferred rollover basis for shares of another foreign corporation. The tax treatment of resource expenditures and the rules governing gifts of ecologically sensitive land are clarified. In a chain of corporations, a corporation is controlled by its immediate parent, even where the parent is itself controlled by a third corporation. Replacement property rules do not apply to shares of the capital stock of corporations, and a member of a limited liability partnership under provincial law is not automatically a limited partner under the Income Tax Act.

Those are some of the more technical changes incorporated into the bill. There are three remaining measures that I wish to discuss briefly before closing. The first involves changes to the rules governing the taxation of trusts and their beneficiaries.

Bill C-22 addresses the tax treatment of property distributed from a Canadian trust to a non-resident beneficiary. It also introduces measures dealing with the tax treatment of bare, protective and similar trusts, as well as mutual fund trusts, health and welfare trusts and trusts governed by RRSPs and RRIFs.

For example, the existing rules whereby an individual can roll over property to a trust for the exclusive benefit of a spouse or common law partner would be extended to alter ego trusts and joint spousal or common law partner trusts.

Several new anti-avoidance measures designed to ensure that transfers to trusts cannot be used to inappropriately reduce tax are also included in the bill. For example, there would be limits on the use of rollovers where trusts were used to avoid tax when a beneficiary emigrates. Also, income allocations to beneficiaries could not be used by trusts to circumvent the rules ensuring that spousal or common law partner trusts, alter ego trusts and joint spousal or common law partner trusts would not allocate income to others before the beneficiary, spouse or common law partner dies.

In addition, rollovers to a trust would be denied if the transfer was part of a series of transactions designed to defer capital gains through the use of a trust as an intermediary between a vendor and purchaser of property.

A final anti-avoidance measure would prevent certain pre-1972 trusts from using graduated income tax rates if they received property from a trust not subject to these rates, and the beneficial ownership of the property had not changed.

The second measure I wish to highlight involves the new taxpayer migration rules, which are also part of the government's ongoing commitment to greater fairness in the tax system.

Since 1972 Canada has had special tax rules that apply when people give up Canadian residence. The basic entitlement of those rules is a deemed disposition that treats the immigrant as having disposed of property immediately before leaving.

For many years, questions have persisted as to the exact scope of this deemed disposition on departure from Canada and its interaction with Canada's international tax treaties. Under Bill C-22, Canada retains the right to tax emigrants on gains that accrue during their stay in Canada.

The bill would also clarify the effect of the new rules on various kinds of rights to future income and would allow returning former residents to reverse the tax effects of their departure, regardless of how long they were a non-resident.

In addition, former residents would be able to reduce the Canadian tax payable on their pre-departure and distribution gains by certain foreign taxes paid on the same gains. This is part of Canada's commitment to avoiding international double taxation, a commitment that is reflected in our network of tax treaties as well.

Since 1999, in anticipation of these rules coming into effect, Canada has been negotiating its tax treaties to reinforce protection against double taxation when immigrants' pre-departure gains are taxed.

A final measure, deals with amendments to the Income Tax Act that relate to the June 3rd, 1999 agreement between Canada and the United States concerning foreign periodicals.

Since the 1960s the Income Tax Act has precluded the deduction of advertising expenses unless a newspaper or a periodical is at least 75% Canadian owned and has at least 60% original Canadian content.

As a result of the Canada-U.S. agreement, this rule no longer applies to advertisements and periodicals. Instead, advertising expenses and periodicals with at least 80% original editorial content would be fully deductible and advertising expenses and other periodicals would be 50% deductible regardless of ownership.

In addition, after July 1996, the meaning of Canadian citizen will include Canadian pension funds and other entities that own Canadian newspapers to ensure that they qualify as citizens under the ownership requirements of the Income Tax Act. For periodicals, this amendment applies from July 1996 to May 2000, after which time nationality of ownership is irrelevant.

In conclusion, while the bill is lengthy, very detailed and technical in nature, its components are all very important and deserve to be passed without delay. Most are relieving or clarifying measures and a few are housekeeping measures.

As I indicated earlier, each measure is designed with the principle of tax fairness in mind and there are many taxpayers out there who will benefit from these changes. The measure with the highest profile of course implements the key components of our government's five year tax reduction plan. In summary, that plan reduces the tax burden at the middle income level, increases support for families with children and makes Canada's business income tax system more internationally competitive. As I stated earlier, the five year tax reduction plan will provide $100 billion in cumulative tax relief by 2004-05.

I urge all hon. members of the House to give the bill quick and speedy passage and, most importantly, to keep in mind all the Canadian children who will benefit from the increases to the Canada Child Tax Benefit on July 1.

Rights Of The Unborn

[Garry Breitkreuz, Canadian Alliance, Yorkton—Melville, SK]

moved:

That, in the opinion of this House, the government should bring in legislation defining a “human being” as a human fetus or embryo from the moment of conception, whether in the womb of the mother or not and whether conceived naturally or otherwise, and making any and all consequential amendments required.

Madam Speaker, this is the most important issue facing Canada today. In fact, this issue is more important than anything that has been debated in the House since May 1991. Let me explain.

May of 1991 was when Bill C-43, an act respecting abortions, was debated in parliament. That was the last time there was any serious debate about the rights of the unborn in the House. That is a disgrace. For 10 years now successive governments have buried their heads in the sand on this life and death issue. I will correct myself. It is not a life and death issue, it is only a death issue.

Between 1988 and 1998, 1,021,965 unborn babies died because the government did not have the courage to deal with the issue. Now is that time. Those one million unborn do not think this is the best country in the world to live. They never had a chance.

Bill C-43 was actually passed by the House of Commons but was defeated in the Senate by a single vote. One vote was a death sentence to how many babies? After one million have died is the senator who defeated the bill proud? After one million babies have been killed is the government proud of how effectively it killed the debate of this issue?

The unwillingness of the government to even debate the issue, to even study the issue, to even ask Canadians what they think about the issue is criminal negligence if, in fact as I contend, these one million unborn were human beings. Does the government really think it can ignore the fact that 100,000 babies are being killed every year? Does it actually think there are no consequences for its actions?

Before I get into my main remarks, I want to tell the House about a response I got to one of my access to information requests. I asked Health Canada for the documents, reports and correspondence in the department that provided evidence that abortions are medically necessary.

On March 8 Health Canada responded by saying:

I regret to inform you that after a thorough search of all likely record holdings, departmental officials have confirmed that they have no records relevant to your request.

That is amazing. More than 100,000 unborn babies lose their right to live every year and the Department of Health does not have one document that says abortions are even medically necessary.

If they are not medically necessary, why are we doing them? Why are taxpayers paying for them? Why is this happening?

The problem is the way we define a human being in Canadian law. Our legal definition of a human being is wrong and needs to be amended. This is the sole purpose of my motion.

Currently a human being is defined in section 223(1) of the Criminal Code of Canada as follows:

A child becomes a human being within the meaning of this Act when it has completely proceeded, in a living state, from the body of its mother, whether or not

(a) it has breathed,

(b) it has independent circulation, or

(c) the navel string is severed.

Motion No. 228 which I put foward today states:

That, in the opinion of this House, the government should bring in legislation defining a “human being” as a human fetus or embryo from the moment of conception, whether in the womb of the mother or not and whether conceived naturally or otherwise, and making any and all consequential amendments required.

The United Nations Convention on the Rights of the Child, which Canada signed, states:

—the child, by reason of his physical and mental immaturity, needs special safeguards and care, including appropriate legal protection, before as well as after birth.

In Canadian law there simply is no protection for a child before birth. The Government of Canada cannot discharge its legal obligations under this international agreement, an agreement the federal government and 10 provinces have ratified, unless and until it changes the definition of a human being.

Prior to 1969, all abortions were illegal. From 1969 to 1988, Canada had a law in our criminal code that provided for an abortion only when a therapeutic abortion committee of three doctors agreed that the continuation of a pregnancy would cause harm to the life or health of the mother. The word health was not defined or limited.

In 1988 the supreme court struck down the 1969 abortion law as unconstitutional. The supreme court ruling, commonly referred to as the Morgentaler decision, provided constitutional parameters for a new abortion law.

Based on the instructions from the supreme court justices, in 1990 the government of the day introduced, debated and passed Bill C-43 in the House of Commons. As I mentioned, Bill C-43 was defeated by one vote in the Senate. Since that time the government has not restricted abortions in any way and the unborn have been without any rights. Since then more than one million babies have been aborted while politicians were hoping the issue would just go away.

In 1988 the supreme court said that this is an issue best left to parliament. I say it is time for parliament to assume its responsibility. Many key moral and legal issues such as reproductive technologies, rights of the unborn and a mother's duty of care for her unborn, all hinge on when the law says a child becomes a human being.

Today's definition is unacceptable in my mind. It is debatable in the minds of most people. It is time the debate began. How we define a human being is the place to begin this entire debate. That is why I have introduced this motion.

Since introducing the motion, I have been asked some important questions like why I am trying to ban abortions. While that would be my personal preference, my motion would only ban abortions if the legislation I am asking the government to draft bans them. The more likely consequence of my motion would be that parliament would determine at what point during a pregnancy an unborn human being has rights.

I have also been asked why I am bringing in this motion. Because the current definition of a human being in the criminal code is scientifically incorrect. A baby has to emerge completely from the birth canal before it becomes a human being.

It is obvious to everyone that a baby is a human being before it is born. It is a proven law of science that like things beget like things. Dogs have dogs, cats have cats and people produce people.

I have also been asked about a woman's right to her own body and if my motion is passed whose rights would come first, the child's or the woman's.

I agree that everyone has a right to their own body, until it interferes with the rights of someone else's own body. The problem is that under the Canadian law, the human being growing inside the woman has no rights until he or she has fully emerged from the birth canal. I maintain that at some point during the pregnancy the unborn baby's rights are equal to the woman's rights. Even the United Nations agrees that every unborn child has rights. These rights need the protection of the Government of Canada.

My motion would start a debate in parliament, and in the public, to determine at what point during the pregnancy does the helpless, unborn child deserve protection under Canadian law.

A month ago I had the pleasure to meet and listen to Scott Klusendorf. Scott is a director of bio-ethics for Stand to Reason from San Pedro, California. I was impressed by the simplicity of his approach and his direct hard hitting message. I appreciated his taking the time to meet with the pro-life caucus and with our staff. I thank him for the printed materials he shared with us, some of which I have used in preparing for this debate.

The question we must answer is “Can we kill the unborn?” The answer is “Yes, we can kill the unborn if it is not a human being”. How many have watched a video of what actually happens to a baby during an abortion? After watching any video that depicts the truth, no one can doubt what is being killed is a human being.

When MPs opposite support abortion, they are going against what Canadians would think Liberals normally stand for. Liberals normally pride themselves as defenders of the weakest members of society. Who could be weaker and more defenceless than an unborn baby?

Liberals normally pride themselves in not discriminating against anyone, and I use small l there, but every year they are discriminating against more than 100,000 unborn babies and defending every adult mother's right to kill the baby in her womb, for any reason or for no reason, up to the very moment the baby fully emerges from the birth canal.

During the election, the Liberals attacked pro-life policies and any politician who holds these views. However, who should really be attacked? The Liberals because they approve of killing more than 100,000 unborn babies or me because I want to save the lives of many of these poor, defenceless, unborn babies as possible.

What is so wrong with trying to save as many little unborn babies as we can? What is so wrong with trying to get a real debate in the House about saving these babies' lives? What are we so afraid of? What is the government afraid of?

We are not the scary ones. We are the ones who think the unborn have some rights. The government thinks the unborn has no rights. We are the ones who want to save these babies.

Why do we have a law that allows the killing of a little unborn baby, even when they are eight or nine weeks old? It is like unborn babies are not people. From conception to birth, the unborn are not technically people so it is okay to murder them. However, the moment they emerge from the birth canal, it is a crime to murder them. Where is the sense in that?

Remember when the law did not consider slaves to be people? They were property. Their cries were heard. Liberals agreed this was wrong and the law was changed.

Remember when the law did not consider women to be persons and denied them the vote? Their cries were heard. Liberals agreed this was wrong and the law was changed.

Remember when aboriginal people and Chinese immigrants were not considered people? Their cries were heard. Liberals agreed this was wrong and the law was changed.

It is time we recognize the fact that the unborn are people. It is time someone heard their cries. Their cry is not a silent cry. It is a silent scream. It is time the law was changed. It will take a lot more than one hour of parliament to provide some small measure of justice in the defence of the rights of the unborn. In a moment I will be asking for consent to go beyond that.

Abortion has been defined as the strong and independent exploiting the weak and defenceless. Here we stand, the strong and the independent. We are the only hope for the weak and the defenceless in Canadian society. There is no one weaker and no one more defenceless than an unborn baby. Anti-life activists challenge us by asking why we are forcing our morality on them. I say to them that their morality is being forced on me. When I cannot stand up for what I believe, is that right?

Anti-life activists approve of killing the most weak and defenceless human beings. I am trying to save them. Who is standing on the high moral ground? Abortion is not a complex issue. It involves the honesty of answering one simple question. What is the unborn? That is what I would like parliament to debate. That is what we are here for today.

Madam Speaker, could I request unanimous consent to make the motion that I have before the House votable?