Bill C-47 (Historical)

Excise Act, 2001

An Act respecting the taxation of spirits, wine and tobacco and the treatment of ships' stores

Microbreweries

[Bryon Wilfert, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, we are listening. It is the opposition that is not listening. In fact, the beer industry asked us to move forward on Bill C-47. We are taking very clear steps in reviewing the information we received and we will respond accordingly.

The member across the way would have us respond in an inappropriate manner and not do the right thing. We will do the right thing. We will do the right thing for the microbreweries and we will do it soon.

[Bryon Wilfert, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, as the hon. member knows, Bill C-47 does not deal with beer. It deals with wine, spirits, tobacco and ships' stores.

The member should know that right now the government is reviewing proposals from the microbreweries and the beer industry generally. We will act prudently and appropriately in dealing with this very important issue for all Canadians.

Business of the House

[Ralph Goodale, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, today and tomorrow we will continue with Bill C-55, dealing with public safety. If that is completed, we would turn to Bill C-47, dealing with excise.

Next week we will have the unusual pleasure of three days, Monday, Tuesday and Thursday, as allotted days for opposition debate. On Wednesday we will return to business unfinished this week, including Bill C-5, species at risk.

I would like to designate Tuesday evening of next week as the first evening for consideration, in committee of the whole, of estimates, pursuant to Standing Order 81.4(a). I would also advise that consultations are ongoing with regard to holding certain take note debates on Wednesday evening of next week.

Excise Tax, 2001

[The Speaker]

It being 3 p.m., the House will now proceed to the taking of the deferred recorded division on the amendment to the motion for third reading of Bill C-47.

Call in the members.

(The House divided on the amendment, which was negatived on the following division:)

Excise Act, 2001

[Pierre Brien, Bloc, Témiscamingue, QC]

In addition, I am told that for a year and a half, the finance minister has refused to even meet with them. Clearly the big breweries seem to be worried by the arrival of new players in the market. However, we should not be fooled, essentially Molson and Labatt are the ones holding huge shares of the market.

Our role is not to represent only these major businesses who have their own interests. I can understand why they would be lobbying. However, the government has to stand up to them. Small businesses are trying to develop and could become extremely interesting players. They could create jobs.

In the past few years, big breweries have experienced some problems. Time and again in Montreal, there were closures and job cuts. This was to be expected with more foreign competition. However while local players are struggling to develop, the government does not help them, claiming it has to support the major players that are left. This makes no sense.

It should send a clear message. At the very least, the government could have acknowledged that we are right, and promised a new bill before the summer recess. We could co-operate, and the bill could go through very quickly. There is no problem if the government wants to rapidly pass a bill to help microbreweries. But that was not to be. They will pass Bill C-47, and that will be the end of it.

In committee, when the Bloc raised the issue, its amendments were ruled out of order. This raises major questions about the ability of the committee to work properly. Moreover, we have an extremely important ethical problem here because the chair of the committee is the spouse of a man who is involved in lobbying for Labatt. It is beyond me.

The chair of the committee is hiding behind the fact that she had an opinion telling her that everything was fine, but she kept it to herself during all the committee proceedings. She never told the committee from the outset that if the microbreweries were discussed, she might be in a conflict of interest. Had she done so, the committee could have decided what was to be done.

What kind of message does this send to people watching this? They say to themselves “Things were rigged from the start. The large breweries had lobbied. They had done whatever was necessary to ensure the debate would not go any further, that the tax for microbreweries would not be included in the bill and that nobody could add it afterwards”.

Now the end of the session is near. We will soon be leaving for the summer and next fall we will work on something else. However, these people from the microbrewery industry need support right now.

At one point, when they came here a few years ago, I was under the impression that the government would automatically listen. What was being asked was only common sense compared to what was being done elsewhere. Now, a few years later, we have not moved forward a single bit.

Hopefully the members on the other side will show some sense in the last hours of this debate and bring forward amendments to this bill. It is not difficult. We only need to pass an amendment or table a new bill that says, “Here, we will amend the regime”. We would be pleased to co-operate on such an initiative. In any event, the legislative agenda is not exactly overloaded. We have the capacity to do it. So let us do it and the committee will have all the time to perform its work correctly if it has to hold a few hearings on the subject. Ultimately, I think we could even dispense with that stage.

We now have to decide if we are going to help the microbreweries or not and, judging by their silence, I think the Liberals have already made up their minds. They will favour the large breweries over the microbreweries. We will not, however, be able to support the government in this instance.

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, it is my turn to speak to Bill C-47, which is a missed opportunity for the government to introduce measures to help microbreweries in this bill.

Like several of my colleagues, there is in my region a microbrewery that sells a commercial beer under the appellation 8. The administrative region of Abitibi--Témiscamingue being region 08, that is the name the investors gave their beer.

These investors came from Belgium are now well established in our community and in our region and they chose—which is not always easy—to invest in a product that appeared to be very promising, with an image of the region that could perhaps be sold everywhere in Quebec, of course, but also outside Quebec, and which would at the same time be an instrument of commercial development for them and of regional development for us, to promote our region.

However, there are a lot of barriers to lower to enter on this market. Obviously, everybody knows the power of the big brewers; I am speak only of their competitiveness for the time being. I am not speaking of their lobbying power; I will come back to that later.

It is therefore not easy because of course when only small quantities are produced, it is a real challenge to keep prices competitive when distributing a product. Businesses have to find niches in various ways. It is obvious that the distribution costs are much higher when small quantities are produced and the product is not sold in large stores.

This also raised the whole issue of the capacity to produce small quantities, at the beginning, while maintaining the quality of the product, because consumers demand quality, and rightly so. This is a real challenge. These people have successfully dealt with it for a long time, but they have had problems. There were some temporary work stoppages, during which they had to close down.

This is why every little bit counts. In this sense, I remember that a few years ago already, other microbreweries that had united had come here to Ottawa. I met them with my colleague from Saint-Hyacinthe--Bagot. There is nothing new here. These concerns have been known for a long time. We all know that the taxation system penalizes them in many ways and that it impedes their development.

In a very simple way, it would not have been complicated to include in a bill like this one some changes to the tax system that could have given a bit of a boost to these microbreweries. I have mentioned the been known as 8 in my area, but there are others, in some other very well known areas, that have succeeded in breaking into the market and filling a need among customers interested in this type of beer. We have the choice between helping our own businesses or letting imported beers take over the whole market in that niche. For some other countries have chosen to support their microbreweries.

Earlier, I was reading in one of my colleagues' speech that in the United States, for example, the size of a microbrewery's production is defined as one million hectolitres. In the U.S., under the tax system microbreweries are subjected to, the sale of 24 bottles yields $1.12 in taxes whereas here the tax amounts to $4.09 and even more when the beer is sold in a licensed beverage establishment such as a bar; in this case, the tax can amount to $6.12.

As we can see, the tax ratio imposed on our products is four to one and even six to one, compared with what is done in the U.S. which has chosen to support this industry.

There are plenty of interesting statistics in the previous speech. It was clearly demonstrated, however, that our taxation system does not suit the present situation.

Yet, it appears that, on the other side of the House there is considerable silence. I am pretty surprised today to see the hon. member for Abitibi--Baie-James--Nunavuk silent. Surprised because the brewery I referred to, which produces La 8 beer, is in that riding, not in the riding of Témiscamingue. It is, nevertheless, a pleasure for me to stand up for the entire region. The brewery is, to be specific, located in Amos.

I would have liked to hear from the hon. member, or at least for him to show some interest at other stages, but I never heard a peep from him, either in the region or here in the House of Commons, or in committee, to bring forth the point of view of the people who work there and would appreciate some support.

Where are the other members from Quebec? I remember a few years back—at political conventions, one can sit in as an observer—I went with one of my Bloc Quebecois colleagues to a convention of the Liberal Party of Canada. In an effort to promote the products, the delegation had organized a tasting of Quebec beers from microbreweries. That is all very fine and well, but when they are here in parliament, where they have been sent by their constituents and where they have the power to do something, where are they all of a sudden? There is more involved than just organizing tasting sessions. They must also support these people if they want to be able to organize more such sessions in the future, because the product still exists and will have been able to develop. It is all very fine and well to make nice gestures, but they now have an opportunity to do something tangible.

It is too easy to say “No, that was not the initial purpose of Bill C-47”. If it was not that, what else is there on the table? Why is there no other government initiative on the table? The Minister of Finance tells us that they are taking this seriously. He is taking it so seriously that no other legislative measure has been indicated. He did not even indicate anywhere that he was prepared to hold a debate.

[Serge Cardin, Bloc, Sherbrooke, QC]

He is the former mayor and also a former Conservative member. He is known for changing his mind quite often.

When he was mayor, he protected the interests of that microbrewery located in his community. He worked hard to protect it, to get the licences it needed, to ensure it could expand, because the microbrewery was located right next to his pub. So distribution was not a problem. The beer was sent directly to the pub next door.

The Liberal member for Compton—Stanstead is not rising to protect the interests of a microbrewery located in his riding. What is he doing? I think he is a fellow citizen of mine. If he had problems, I would probably come to his aid. Yet, if the microbrewery located in his riding has problems, he does not care. He relies on the Bloc Quebecois member for the riding of Sherbrooke to protect the interests of the microbrewery that is located in his town, even though he is the member representing that riding.

So, this is a person who can change his mind. We saw it, he changes his mind about parties and about values. He will probably also change his mind about the beer that he drinks and switch from the beer produced by that microbrewery to beer produced by Labatt or Molson probably.

I believe it is essential that Liberal members take a stand. A number of them have microbreweries in their riding. They must take a stand, because this is the thing to do. Of course, the Excise Act brings in large amounts of money for the government, but the primary objective should be to help the industry. We must help industry develop. It should be the government's duty to do so, instead of working against it to ensure that only two large breweries reap all the benefits.

The beer produced by microbreweries is a quality product in my opinion. The people who work in the sector are competitive and they work hard. I will repeat what I mentioned earlier, when I said that distribution is very difficult. The microbreweries have to compete with the big breweries, which import beer with very low excise taxes. So it is not an even playing field.

One of the objectives of the Excise Tax Act is to manage industry, whether it be microbreweries or another sector, such as wineries. However, I think it is important that the government review its position and ensure that Bill C-47 includes beer and microbreweries.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, first I want to congratulate my colleague from Saint-Hyacinthe—Bagot, as well as my colleague from Drummond, a riding that is very close to mine.

Today's debate is intoxicating in many respects. The microbrewery industry is quite important for Quebec and there is fair number of jobs at stake. Regarding Bill C-47 and the Excise Tax Act, the purpose of that act is to enable a government to levy taxes and to collect rather large sums of money. It is also used to manage and give direction to our economy.

In this case, we can see that it is the first element that guided Liberal members on the finance committee, including the chair. First, when we talk about modernizing the Excise Tax Act, which covers a multitude of products, we want to see to it that the economy and the industries related to these various products are as thriving as can be.

In this case, when 28¢ a litre of beer are charged to microbreweries, and we know what their situation is, while American microbrewery beers are taxed only 9¢ a litre, there are questions to be asked since we know that Labatt and Molson, the big Canadian breweries, basically control the distribution of imported beers.

When we examine the situation a bit more closely, we find that there is some collusion where, it must be said, the two main breweries control more than 90% of the beer market, and that includes of course imported beers that are taxed only 9¢ a litre. We realize at this point that there is a big problem in that regard. However, the government does not seem interested in helping microbreweries save their 2,000 jobs.

People must fight at every level. As for distribution, products must be of good quality. More and more, we find that microbreweries operating in Quebec and Canada have developed a quality product comparable to the best products in the world. Indeed, our microbreweries win more and more international prizes.

We find that the government is not there to support the microbrewery industry's development but rather to support mainly two big companies, Labatt and Molson. We cannot help thinking that there appears to be a conflict of interest here. It is crystal clear. It is not surprising that the ratings given by Quebecers and Canadians in public opinion polls to people in power for credibility and honesty are so low. When we see situations such as this, we cannot help but think like that.

Therefore big companies like Labatt and Molson are given preference. Globally, the objective of modernizing the excise tax act has not been reached. In fact, we are going in the opposite direction.

A number of issues could be mentioned, but one is of particular interest. What do Liberal members do when they have microbreweries in their ridings?

I have a microbrewery in my riding, in Lennoxville to be more precise. It is a small brewery called the Lion d'Or. It does not produce 300,000 hectolitres a year; it is really quite small, but it is extremely important and it is located in Lennoxville. Besides that microbrewery, I also have the Liberal member for Compton--Stanstead in my riding. So, he is one of my fellow citizens.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Mr. Speaker, first I would like to thank my colleague from Saint-Hyacinthe—Bagot for giving me the opportunity to discuss Bill C-47, particularly because we have a microbrewery in my riding, Boréale, which serves people from part of North Montreal.

Its employees and its president are doing an excellent job but, because of difficulties with the excise tax, they cannot make a breakthrough with the quality product that they offer.

When we, in the Bloc Quebecois, were told about Bill C-47, I agreed with my colleagues that we could probably support it. However, in the last months, the situation with the bill has worsened.

I remember that I had the opportunity, about a year ago, to replace my colleague from Saint-Hyacinthe—Bagot on the Standing Committee on Finance and to hear about the problems experienced by Canadian and Quebec microbrewers.

I thought that, this time, the government would have had the decency to meet their demands, so they could operate under the same conditions as microbrewers in the United States or in Europe. However, I am very disappointed that the these microbreweries have to pay a lot, 28 ¢ in Canadian currency. This is a lot for a microbrewery that has to compete with other microbreweries. For example, American microbreweries only pay 9 ¢ a litre. How can they be expected to find a place on a market they are entitled to have access to, just like aany other Canadian brewery?

I find it somewhat deplorable that Canadian microbreweries are being forced to be minor players on this market which, as a matter of principle, should be open. I think that everybody should have an opportunity. Unfortunately, these microbreweries and their employees are victims of a tax policy that, by the way, seems more and more to have been dictated by the big brewers, which are good buddies of the current government.

What I also find disappointing is all this collusion between the wealthy and the federal government. Clearly, considering the composition of the committee and the fact that its chair is the hon. member for London West, who happens to be the wife of one the executives of those big breweries, there is something fishy. People are not crazy. I think Canadians realize what is going on.

Two thousand employees depend on the microbreweries, two thousand people who, in order to survive and progress, absolutely need the help of the government. The Canadian brewers who are quite rich do not care about the survival of these microbreweries and their employees.

If these microbreweries disappears at an annual rate of 1%, large brewers earn $17 million more a year. If that money went to microbrewers, regional and local economies could continue to function. I think this situation is shameful and horrible.

There is a conflict of interests on this issue. There obviously is collusion to eliminate Canadian microbreweries. Large Canadian breweries are predators. Molson and John Labatt are predators who are actually preventing our people from making a living.

When we look at the history of Canada and even of Quebec, these are the very people who founded these huge breweries, going against historical trends in Quebec in the process. There is a very large number of microbreweries in Quebec, and I believe that there is a clear intent to take away part of the power that Quebecers have through microbreweries.

In Bill C-47, wine, spirits, tobacco and distillery products are all mentioned. We are asking that beer be included. Why should it not be included? It would be normal and logical.

It is clear that the federal government and the members of the committee are in collusion to do nothing. I understand why only 11% of Canadians trust their politicians. In a situation such as this, I think it is absolutely normal that someone who makes a decent living in microbreweries believes that they want to get rid of it. People do not trust this government nor those who are making the decisions and passing the laws. I think it is absolutely understandable.

We have to modernize our parliamentary system and our laws. ITo do that, we have to dare to condemn what is going on. This is what the Bloc Quebecois is doing, and I believe that it is standing firm in its opposition to this bill.

We say to the population of Quebec that it is inadmissible and unacceptable that the federal government is acting in collusion with large companies, which are making money at the expense of Canadians and Quebecers. I invite the people in my riding, where we have Boréale beer, to remember this at the next election.

[Stéphane Bergeron, Bloc, Verchères—Les Patriotes, QC]

As my colleague from Laval Centre just said, it is because it is totally disingenuous. It is also because if members of the committee had given their unanimous consent for this amendment to be ruled in order, it could have been accepted as such by the committee.

One can bend over backwards to try to justify such a decision. One can invoke all kinds of legal arguments and cite all kinds of precedents when looking for an excuse to avoid doing something.

Obviously, in the case at hand, the government was not interested, far from it, in doing anything whatsoever on this issue.

The Brewers Association of Canada wrote a letter to the chair of the committee, giving its opinion on the inclusion of microbreweries in Bill C-47 with regard to a possible exemption.

In the last paragraph, the Brewers Association of Canada pointed out that it totally supported such an exemption for microbreweries, but it clearly stated that, in light of its prior agreement with the government, it could not support including it in Bill C-47.

We certainly have good reason to be concerned about this type of agreement between the Brewers Association of Canada and the government.

[Stéphane Bergeron, Bloc, Verchères—Les Patriotes, QC]

Mr. Speaker, first, I would like to join with my colleagues in congratulating the member for Châteauguay for the excellent speech he just made here, in the House.

I am also pleased to speak to Bill C-47. As I have said a few times, when I say that I am pleased to take part in a debate, it does not mean that I am pleased with the provisions set out in a bill, Bill C-47 in this case, on the contrary.

I considered very carefully whether I should address this bill. Why? Because I wanted to avoid taking part in a partisan debate that could have a demagogic undertone. However, I happen to have in my riding a small microbrewery called La Seigneuriale, which is in a rather unusual situation, since it was bought by Sleeman, a major brewery, a few years ago.

It is a situation that most microbreweries will have to face pretty soon. They will either have to close down or let their fierce competitors, the large breweries, take over. This competition amongst the large breweries does not exist only at the counter, in the corner stores, the groceries and the liquor stores. It even exists here on the floor of this House. It does because the large breweries go as far as trying to influence the decisions of the lawmakers that we are to put the microbreweries in a more than precarious position.

The amendment moved by my colleague from Drummond is simply an attempt to make the government take a step back from a bill that has obviously been prepared very quickly—I am trying to be polite here. However there are those who would say that it was prepared taking certain interests into account.

If the government believes in our role to preserve the general interest and not the special interests of lobbyists who generously contribute to certain campaign funds, it has to acknowledge the amendment proposed by my colleague from Drummond, put things into perspective, review the whole issue and come back with a formulation that will be much more acceptable, taking into account the general interest.

This bill is fundamentally flawed in that the excise tax provisions excluding for example small wine producers do not apply to small beer producers. We have to wonder why some small scale producers of certain spirits would be excluded but others would not. Why? I believe we have given in the last few days a number of explanations as to why the government has chosen to exclude microbreweries from Bill C-47.

Now, there surely is an explanation. As I was saying, Bill C-47, in its present form, has a major flaw that we tried to correct in the finance committee. My colleagues, the members for Saint-Hyacinthe--Bagot and for Drummond, tried to correct this flaw in good faith, always in the public interest.

With public interest in mind, we came to the committee and said: “We will try to correct this flaw”. The chair of the committee then questioned the admissibility of the amendment. We must first ask why the chair of the Standing Committee on Finance refused the amendment. I will come back to this after question period, but this question about the motivations of the finance committee chair is fundamental.

[Robert Lanctôt, Bloc, Châteauguay, QC]

Mr. Speaker, I thank you for recognizing me once more in this debate. I will make the link between Bill C-47, microbreweries and the hon. member for Beauharnois--Salaberry.

Why? Because this is another opportunity to point out that there is a microbrewery in his riding, Brasserie Saint-Antoine-Abbé. I hope the hon. member for Beauharnois--Salaberry will stand up, just as we do to defend the people and the small businesses of Quebec, for a microbrewery that needs his help. I explained this morning why it needs help.

In the last two days, the Bloc Quebecois has been demanding that the amendment moved by the hon. member for Saint-Hyacinthe--Bagot be discussed in committee. If I am singling out the hon. member for Beauharnois--Salaberry, it is because there is a microbrewery in his riding. He too is aware of the problems it is struggling with, or he should be. But I hope things are working out nonetheless.

In the last five years, 38 out of 86 microbreweries have gone under. Why did the government refuse to talk about this problem in the context of the excise legislation? It was a golden opportunity to do so. In the last five years, people have been working hard to find a solution. The government said it needed some data to determine whether the taxation should be reduced.

The Brewers Association of Canada mentioned, in a letter to the chair of the Standing Committee on Finance, that it supported a tax reduction, but that this reduction should not be included in the bill.

How can the member for Beauharnois--Salaberry that his government should behave in this way? This is a fine mess. Last week, in my riding of Châteauguay, this same member declared that the Bloc Quebecois was against Bill C-47, while he was talking about highway 30. Imagine how well he knows this issue. Today is the day we are debating Bill C-47.

The member actually wanted to explain why we voted against Bill C-49. He made the headlines, saying that the Bloc Quebecois is opposed to highway 30 and to the Canadian strategic infrastructure fund. How demagogic can one get? The member did not even refer to the right bill, and then he wondered why the Bloc Quebecois voted against Bill C-49, not Bill C-47.

Many reasons justified our position. It was not only the establishment of the fund. There was also the whole issue of the employment insurance fund, all the money not available or not transferred for health. There were also airfares in the regions. So, there were many reasons for the Bloc Quebecois' opposition to Bill C-49.

However, the member would rather keep saying that the Bloc Quebecois is against legislation. I would like him to count the number of times when I, as member for Châteauguay, and the Bloc Quebecois have talked about highway 30, have asked that the project be made a reality and that the necessary amounts be invested in the Canadian strategic infrastructure fund. Then I would like him to count the number of times when he, the member for Beauharnois--Salaberry, dared to ask the House to invest those funds. The result of those calculations will indicate who wants highway 30 the most, the member for Châteauguay or the member for Beauharnois--Salaberry. The answer is obvious.

Once again, I am calling on the member to stand up, but this time I am talking about Bill C-47. The newspapers are talking today about Bill C-47, not Bill C-49. I hope the member will meet the management of the microbrewery in his riding and ask those people “Is it true there are taxation problems?”

I hope he will get some information and find out that, currently, in Quebec and in Canada, microbreweries have to pay a 28 ¢ tax on each litre of beer whereas their foreign competitors, the microbreweries of Europe and the United States, pay a 9 ¢ tax.

Worse still, large Canadian breweries have dared to sign distribution contracts with foreign microbreweries, which therefore compete with our overtaxed microbreweries. Moreover, large breweries are making money by doing this. We can imagine why the government wants to protect these large breweries.

We must not forget where a large brewery such as Labatt is located. It is in the finance minister's riding. In 1997, microbreweries had a 5.5% share of the market. Now, five years later, their share has dropped to 4%.

We see very well what large breweries are up to in delaying a tax reduction for microbreweries. When microbreweries lose 1% of the market , do members know how much more money goes into the pockets of the large breweries' shareholders? An amount of $17 million, for a 1% drop in the share of the market. It means a net increased revenues of $17 million in the pockets of the large breweries' shareholders, those who will donate money to the Liberal Party's coffers. This is the truth of the matter.

We saw what happened in committee. We saw why the Liberals voted against Motion No. 2 that changed the powers of this government and gave greater powers to committee chairs. The chair used these powers. I will not go back to the issue, I talked about it for 20 minutes. The chair's husband, Mr. Barnes, was sitting on the taxation committee of the Brewers Association of Canada. Incidentally the chair did not have the honesty to tell members sitting on the committee: “In these circumstances may I withdraw to allow a discussion on the amendment put forward by my colleague from Saint-Hyacinthe—Bagot?” She did not do so. I do not want to revisit the issue. I have talked enough about it earlier.

I go back instead to the case of the hon. member for Beauharnois—Salaberry. He is an hon. member from Quebec. Quebec microbreweries are not the only ones experiencing losses because of the current situation. In Ontario, 13 microbreweries have closed. In Quebec, we have lost 11. There were also seven in British Columbia, one in Manitoba and another one in Nova Scotia that had to close.

When will the Liberals represent their constituents, people who work in small businesses, instead of once again defending their own interests in order to crush the little people, the small businesses and fill their party's coffers? This is incredible.

I hope the hon. member for Beauharnois—Salaberry will meet the people who work in the microbrewery in his region and ask them if the numbers given today are correct. Is it true that microbreweries are part of the new association, the Canadian Council of Regional Breweries? I would like to know if the people in his riding belong to this association. Why? Because the regional council has asked my colleague from Saint-Hyacinthe—Bagot to put these amendments forward. The government refused to consider this possibility. The Bloc Quebecois was not the only one asking for this. The request came from businesses, people who need to have the tax on their microbrewery reduced to be able to survive. This is incredible.

When I was saying that I was making the link between the member and these microbreweries, it is because he mixed things up in the media. It is today that we are talking about Bill C-47 and it would be time for him to really deal with Bill C-47.

He would realize then why he should be working with us to defend our people, our businesses. I am being told that I do not have much time left, so I will conclude by stressing the fact that the Bloc Quebecois truly disagrees with how Bill C-47 was handled by the Standing Committee on Finance.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

I am sorry, Mr. Speaker, for not using the name of the riding of London West. I should have done that. Again, I apologize.

Still, as chair of the finance committee, she received a letter signed by a Mr. Morrison, who is not a member of this House, so I can say his name. He is the president and CEO of the Brewers Association of Canada.

He made some very important statements in his latter. First, he said:

We will support any measure aimed at attaining this objective--

A reduction in the excise tax for small brewers.

--but in light of our prior agreement with the government--

What prior agreement with the government? Where was that decision made? Was it at a fundraiser for the Liberal Party of Canada? We do not know. He added:

--we cannot support amendments which would include beer in Bill C-47.

No substantive argument was ever made to exclude the tax on microbrewery beer from the bill. We were always told that Bill C-47 is not expected to deal with beer. However, beer is defined in the bill. So, it was supposed to be addressed somewhere.

Then we were told that we had to wait for further studies. In this regard, we have all the necessary elements to correct the situation, particularly since there is a sense of urgency. The member for Berthier—Montcalm demonstrated this earlier. Several microbreweries have disappeared in the last few years, and others will be forced to shut down if changes are not made immediately to allow these beers to have a share of the Quebec, Canadian, American and European markets.

Everywhere else, including in the United States—and we know that the U.S. is the mecca of capitalism—it was determined that there could be a different tax for microbreweries: 9 ¢ a litre for them compared to 28 ¢ a litre for large breweries. We know full well that microbreweries cannot, in terms of production costs, compete with those who are engaged in mass production, but there is room on the market for microbrewery products. It would even be very beneficial for us if we allowed them to be successful.

In my own riding, the Brugel microbrewery, which brews a most original beer, is an asset to the tourism industry in our region. People have also started to produce very original cheeses to attract tourists and encourage them to stay. This microbrewery wants to sell its product on different markets. It is a known fact that competition for space on grocery stores shelves is fierce. Profit margins are important. Some grocers are willing to sell that particular product. However, those who buy beer may be willing to pay a bit more to get an original local product, but not as much as what would result from the position taken by the government on Bill C-47.

I know that the Secretary of State for Rural Development is currently touring the country telling people that the government is concerned about rural development. I would like the government to take real action, one single measure that would allow microbreweries to capture their market, by following up on the amendment that was proposed. There is no rush, nothing to prevent us from taking some time to examine the proposal. Nothing prevents the Standing Committee on Finance from studying this question as a priority. We could come up with a solution very quickly. We could simply lower the excise tax. A change in the excise tax would not turn the whole Excise Tax Act upside down, it would simply allow a product to be more competitive.

Of course, the status quo allows the big breweries to increase their market share. For the average person, having 96% of the market share, rather than 95% may not seem to be so important, but for shareholders and companies that want to make profits, each percentage point of the market share represents $17 million. Yet, this same $17 million does not create many more additional jobs. For microbreweries, however, every time a microbrewery sets up shop in a rural or small community, these one, two , three or four jobs add up to one or two more families in town. This is the type of choice we as a society have to make.

We do not want to prevent competition or to stop anyone from gaining access to the market. Quite the opposite. I think the government's position is similar to that of Mr. Morrison, which I find unacceptable. For a reasonably intelligent man, he is showing a total lack of respect.

On one hand, they agree that the excise tax imposed on small breweries should be lowered, but on the other hand they maintain that Bill C-47 is not the place to do it. They argue that more studies are needed and things have to done. They believe we should wait some more. We always hear the same old song when people are against legislation. They say, “We will set up a committee”. Or “We will develop a position and try to define something, and then we will decide. We will make a decision in six months, a year, two years or five years”. But six months or a year down the road, another five, ten or fifteen microbreweries will have closed their doors. The big brewers will have gained another 1% or 2% of the market. And in the end, we will be very unhappy with the results.

When the Bloc Quebecois stands up for these people, it does so because it feels that it is important to care about our small businesses, about these people who are earning a living in our regions and who try to compete. We try to alleviate the negative impacts of globalization.

The beer industry went from a highly regulated market, where each province was subjected to certain restrictions and could not easily export beer in the other provinces, to a slightly broader market. We made room for large businesses. Why not take the time now to allow microbreweries, as they did everywhere else in the world, to have their share of the market and be able to compete with other businesses?

Yesterday, I heard two Liberal members address this issue when I was here in the House. Afterwards, they came and said “You are right. We do not know why our government is not doing something, but we will still vote with it”. We must make a plea to Liberal members and tell them “Check in your ridings to see whether there are microbreweries. Go and ask them if it would be worth waiting one, two, three and even up to six months to settle the issue of microbreweries, so that by the summer they would know that they will be guaranteed a share of the market and be able to compete with American and European microbreweries”.

This would ensure that the bill and our review of the Excise Act are exhaustive. We will then be in a position to all vote together, after completing the work that was not done.

This is why I am urging all members to support the amendment of the hon. member for Drummond.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, I am pleased to speak to this amendment. Yesterday, I spoke about this bill before the amendment was put forward. The amendment reads as follows:

That the motion be amended by deleting all the words after the word “That” and substituting the following:

“Bill C-47, An Act respecting the taxation of spirits, wine and tobacco and the treatment of ships' stores, be not now read a third time but that it be read a third time this day six months hence.”

This amendment, which was put forward by the member for Drummond, is an excellent one, because it corresponds exactly to the actual stage we are at in consideration of this bill.

We realized that the government deliberately decided to exclude from the review of the Excise Act anything to do with beer, except the definition, which was left in the bill. If the definition has been left in the bill, then somehow we should be allowed to address this issue.

When the Bloc Quebecois' proposed amendments were considered in committee, the committee chair used her authority in an unorthodox way, in response to very obvious influences, and decided not to accept the amendment. It was not defeated in committee, but simply rejected.

Since then, all the microbrewers have come forward and said that there were agreements. For example, they had the support of the federal Minister of Justice, who had said that it was a good idea to have this amendment in the bill, so that taxes would be reduced for our microbreweries. Suddenly, they are realizing that the government has decided to abandon them.

The answer probably lies in the letter Mr. Morrison sent Sue Barnes on April 12, 2002—

[Michel Guimond, Bloc, Beauport—Montmorency—Côte-De- Beaupré—Île-D'Orléans, QC]

Mr. Speaker, I am pleased to speak to this bill, particularly because we must say at the outset that, when we talk about a problem of fairness that might affect microbreweries mainly, small breweries that are almost cottage-type, we are talking about regional economy.

As everyone knows, I come from the Saguenay—Lac-Saint-Jean region, even though I represent and live in a Quebec City area riding. Being from Saguenay—Lac-Saint-Jean, I know very well the impact of microbreweries in very small Quebec communities.

I could talk, among others, of the community of L'Anse-Saint-Jean, in the riding of Chicoutimi—Le Fjord. I am disappointed and surprised to see that the member for Chicoutimi—Le Fjord prefers to go after my colleague from Jonquière who is doing her best to defend the issue of highway 175, that he prefers to play petty politics, to use demagogy, instead of defending the microbrewery in the small village of L'Anse-Saint-Jean.

L'Anse-Saint-Jean is located on the Saguenay, in the fjord of the Saguenay, where the view is magnificent. It attracts many tourists, mainly in the summer, although its infrastructures are quite limited. The microbrewery in L'Anse-Saint-Jean provides jobs. This is what we mean when we say that we must develop fairness between the big breweries, Molson and Labatt for instance, and microbreweries.

In this regard, certain people took exception to the fact when the Bloc Quebecois pointed out the connection between the chair of the Standing Committee on Finance and her husband, Mr. Barnes, who, incidentally, is chair of the taxation committee of the Brewers Association of Canada and also a Labatt executive. This is not to say that a wife must defer to her husband or that she must parrot her husband's opinions. If the case had been exactly the opposite, the situation would not have been any more acceptable.

I could mention, as an example, the Minister of Transport and his wife, Penny Collenette, who holds an important position at Loblaws, a company that owns Weston and who also has a significant interest in the Quebec-based company Provigo. If the Minister of Transport used his position the same way the chair of the finance committee used hers to judge the amendments put forward by my colleagues from Saint-Hyacinthe—Bagot and from Drummond, which were aimed at ensuring a fair deal for microbreweries, it would be unacceptable. She used her position and that is why we are criticizing her.

I will go on with my example. The Minister of Transport, whose wife, Mrs. Penny Collenette, holds an important position at Loblaws, cannot make decisions favouring that particular company knowing that he has privileged information regarding that company. It is also a matter of apparent conflict of interest.

We have here a letter dated April 12 addressed to the chair of the House of Commons Standing Committee on Finance and signed by Mr. Sandy Morrison, Chairman and Chief Executive Officer of the Brewers Association of Canada. Incidentally, Mr. Morrison is a former Air Canada executive, which I know for having met him when he was with that company.

I think it would be relevant to read one particular paragraph from the letter sent by Mr. Morrison to the chair of the finance committee:

Our position remains unchanged: we fully support a reduction in the excise tax for small brewers.

This is what is called wishful thinking. Nobody is against virtue. It is just great. If the letter ended there, we could say that small brewers would have nothing to worry about.

So the Brewers Association of Canada, a large association, says this:

Our position remains unchanged: we fully support a reduction in the excise tax for small brewers. It is a priority of the BAC and we want to point out that small brewers in Canada urgently need such a reduction.

Even though the Brewers Association of Canada recognizes that fact, the government refuses to recognize it. What is happening with regard to the relationship between the chair of the finance committee and the senior officer of the Brewers Association of Canada?

The paragraph does not end there. Here is what the Brewers Association of Canada goes on to say:

We will support any measure aimed at attaining this objective, but in light of our prior agreement with the government, we cannot support amendments which would include beer in Bill C-47.

What does that mean, “in light of our prior agreement with the government”? We can imagine the collusion, secrecy, dealings, secret agreements and sweet deals behind closed doors. We are left to wonder what the real motives of the government are.

We could dig out some information on the contributions of Labatt and Molson to the Liberal election fund, and we would have a nice illustration of what returning a favour means. You scratch my back, and I will scratch yours.

The goal of the Brewers Association of Canada is to eliminate the microbreweries. Microbreweries have taken a fair share of the market. Given the beer consumption in Canada, which is measured in hectolitres, I believe, a tiny 1% increase in the market share represents profits of $17 million.

Even if the word beer is defined in Bill C-47, the government suggests that our amendment to include beer in the bill is out of order. They refuse to accept the amendment moved by the Bloc Quebecois. Our learned colleagues opposite remark that there is nothing in the bill about beer. If that is true, why is the word beer included in the definitions in Bill C-47?

We could go on and on, but I want the Liberal Party to know that the Bloc Quebecois will keep fighting. I hope that those in Quebec who believe in the development and the future of microbreweries will remember where the Liberal government stood on this issue.