Bill C-49 (Historical)

Budget Implementation Act, 2001

An Act to implement certain provisions of the budget tabled in Parliament on December 10, 2001

Budget Implementation Act, 2001

[Bev Desjarlais, NDP, Churchill, MB]

Madam Speaker, I do not know whether I am pleased to speak to Bill C-49 or just pleased once again to have the opportunity to comment on the government's performance and its commitment to Canadians which is sorely lacking.

Bill C-49 was presented as a budget bill. As has been stated in the House, it really does not do a whole lot to provide the funding needed for Canadians in a number of areas.

It does not provide the dollars needed in health care funding throughout the nation. The premiers of all provinces called on the government to once again take its 50% share of health care funding. Was there even a point to getting to that level of funding by increasing it to 25%? Let us get on the road to improving the health care situation in Canada. That was not there.

There is nothing to assist post-secondary students with funding. However in the past we surely saw attacks on students by not allowing them to claim bankruptcy at the same level as other Canadians if they were in financial difficulty. It must be recognized that something like 92% of students pay back their loans. Compare that to corporations that receive government loans but do not pay them back at near that level. A great deal of dollars are owed.

The government has failed to put enough dollars into the employment insurance program to provide needed benefits to workers and the unemployed in Canada as well as to provide dollars for training needed throughout the country.

It is recognized that there are huge gaps in our workforce where training is needed. The government could use those EI dollars to do that. Instead it is using employment insurance premiums to provide the finance minister with a surplus that he keeps touting has come about by his great management of funds. The bottom line is that the surplus came about mainly by taking pension dollars and EI benefit dollars.

There was a very minimal approach to put dollars into infrastructure. The $2 billion infrastructure fund does not nearly address the infrastructure needs. The government consistently has not funded infrastructure over a number of years. We all know if a leak is not fixed, pretty soon the roof will need to be fixed, or pretty soon the walls will need repairs and then there will be nothing left. That is pretty much what the government has done to Canada's infrastructure over the last number of years.

Talking about leaking roofs, there is the housing situation in Canada. There is a need for affordable housing throughout the nation.

As far as Bill C-49 being a budget bill, it really was not much. Maybe people do not realize that the bill has over 70 pages on how the government will collect a $24 security tax. There are over 70 pages to get that additional $24 security tax, and it is a security tax. It is not an airline flying tax. It is not a user fee. It is an airline security tax.

The bottom line is we are not just dealing with airline security. What took place on September 11 was not just about airline security. It was about a nation's security. That is what we are talking about.

Have we resorted to charging individuals for their security? Is that what we are doing here? What will happen down the road when there is a robbery in a community? Will we charge the family for the police to respond? Is that what we are talking about in Canada, that individuals pay to get security?

Since when should the victims, and quite frankly I believe them to be the airline passengers, become the victims of the September 11 attacks? Those airline passengers lost their lives. What are we saying to airline passengers now? They are being told they will pay a security tax because by golly those other passengers got themselves killed. Is that what we have resorted to? It is despicable.

It is utterly despicable that any party or any member of the House would support a user fee on security, or even for one minute would suggest that it should be $2.50 or $5 or whatever. We are a nation that should be standing together recognizing that what happens in those airplanes could affect each and every one of us. That was proven on September 11 when those aircraft flew into the World Trade towers. That is what this is about.

I believe that as a result of what happened on September 11 the government is exploiting the airline industry and airline passengers. It is making them responsible for paying for security. It is not acceptable. It will cause devastation to a good number of smaller airlines and a good number of smaller communities and to individual travellers who are already paying high airline costs.

On that note, I have heard the transport minister's comments and answers, that if $24 is too much for people to handle, make the airlines reduce their fares. For crying out loud, he has been trying to make the airlines reduce their fares for years and he cannot do it. He has reduced the airlines. He has certainly been the transport minister while we have watched one airline after the other die in Canada. That is a given. What is his answer? Make them lower their fares.

After years a number of communities finally have low cost carriers which provide those lower fares. Now he is saying they should reduce the fares even more because he wants $24 from them as an airline security tax. If that is the answer the transport minister has, he should not be there. He could not get those airlines to reduce their fares. Actually he could by putting some regulations in place to get them to do it. That may not be the answer either, but the answer is certainly not to say that because he wants to charge a tax, the airlines should reduce their fares.

If I thought for one second that this was strictly an airline security issue and it was because of something the airlines were doing, then I would say we have to do this, but that is not the case. We are talking about national security and about taxing individuals because of that. It will not just apply in the airline industry. If it is allowed to proceed, this is what we will be looking at in each and every instance of some kind of terrorist attack.

What if something happens in one of the ports? Will we charge a security fee for any person hopping on a ship in case something happens? Will each and every passenger on buses crossing the border be charged a security tax? It is not the answer.

The answer is to take those dollars that are needed out of general revenues. The minister touts his surplus. I have indicated where I believe it came from. Until such time as it is realized whether there is a need for the security tax, or if there are additional dollars, it should be taken out of the surplus.

I have listened to the finance minister over the past number of weeks comment that he will review it in the fall. I then listened to the transport minister who believes that somehow the airlines should reduce their fares. That is his answer. I have listened to the finance minister say he will review it in the fall and I have listened to the transport minister say there will not even be a security agency up and operating by the fall. Boy, that is one heck of a picture.

There have been comments. I will read a couple of headlines: “Air security test results kept secret. September 11 attacks make documents too sensitive”. After September 11 we will no longer be able to find out whether there is good security at the airports because now it is a national secret. It is for national security. If it is national security then we cannot release those airport security test results. Why are individual passengers paying for security? “Airline security tax will raise $130 million surplus”. It sounds like a bit of a windfall to me. “Air security fee a rip off. Critics say a $24 ticket charge a revenue grab”. “Air safety tax hits new heights for waste”.

Let me just read from the Toronto Sun . It talks about the bomb detectors. My colleague from the Bloc mentioned the bomb detectors. It states that the leading manufacturer of these particular machines, one of only two U.S. approved suppliers, put out a press release a few weeks back indicating that Canada was ordering maybe five of the devices.

The government had indicated earlier that it was going to get 600 of them. It has ordered five so far and that leaves only 595 more units to order. It has $992,500 or whatever left. The U.S. for all of its airports is only ordering 100 scanners.

There was no impact study done by the government as to what would be the results of its security tax. There was no study done of the impact on the airline industry, the tourism industry and numerous other industries that will be hit by this. There is no understanding that municipalities will have those additional dollars taken out of their local economies any time someone needs to fly.

In the past I have listened to the Alliance members tell the Liberals that every time they cut a tax point more money goes into the local economies. How many tax points did the government just add to dollars coming out of the local economies? It is shameful.

It is hard for me to get my head around this whole picture when the transport minister says it should not be called a tax, that it is a user fee. If it is a user fee I present to the House that yes, the government is charging a security user fee and we can call it a user fee. If it is a user fee there is an understanding in Canada that the government has done some consultation and impact studies. The government members do not pop out of bed one morning and say “How much can we get out of these Canadians? They are afraid, so let us go big. We will not go just for two bucks or five bucks. Let us go big because we will have much more money”.

I and Canadians in general will have to be forgiven for not believing that it will only be used for airport security as such. Quite frankly, just too much money will be coming in. Not for one second do I believe that is strictly what will happen to the money. The way the bill is presented the money will go into general revenues, except for a certain amount which will be allocated to the Canadian air transportation security agency which still has not been set up.

On that note I have a question for the government. I ask Canadians to question the government as well. Why on earth are we setting up a separate agency for security at airports? What ever happened to the solicitor general's office, to the RCMP, the most trusted security people in Canada, those who know the business? Why are they not looking after airport security? Why are they not setting the rules and the guidelines? Why are they not putting the practices in place?

Why are we putting in place a number of government appointees who will get paid Liberal patronage dollars, probably $100,000 to $150,000 to be on this new airport security agency when there is a department that is supposed to be in charge of security for Canadians? Between the RCMP and CSIS certainly we are capable of doing that. Or is it that somehow we have more faith in the transport minister than the solicitor general as the head of that security agency? Maybe that is the case.

It is wrong. If we are talking about the security of the people in this country, a security agency should be in charge of it. It should not be the transport minister. What the heck does the man know about security? He is not even going to be dealing with those who fall under his department and are specialists in security. It was the Department of Transport that was in charge of security when those numerous incidents came before the House. There were numerous cases of failures within the system. The security at airports and the baggage checks went out to the lowest bidder. Is that the transport minister's idea of security? Whatever we could get for the cheapest price, we got it.

We do not have a system in place that is seamless. We do not have a system that people consider safe. I ask the House and Canadians to challenge the government on what it is doing. This is literally the security of the nation and the lives of the people travelling in Canada. We are leaving it up to the transport minister who, quite frankly, has done a very poor job.

Another issue that came up in discussion on the bill and was approved in committee dealt with representation on the board. I want to go on the record as saying that I firmly recommended, as the critic for the NDP on the transportation committee, that this issue should be under the solicitor general's office. It should be under a security agency. We do not need a separate agency of Liberal appointees, making $100,000 or $150,000 a year, using that money which could be used for other things. That is where I stand.

We talk about this security agency and about who would be appointed to the agency. We had a committee agreement that there would be representation from labour groups as well as government appointees. We would have representatives from the airline industry. It was bidding out the contracting of the security services to the lowest bidder. We would ensure they are on there because this is a business decision.

We would have the airport authorities on there because we all know that the airport authorities are not trying to make a buck. Who are we trying to kid? That was recognized. The airport authorities are now competing with each other so if they have to somehow cover the cost of the security they would put it out to the lowest bidder because they are trying to make a buck.

Who is really caring about the security of Canadians and passengers in our airlines? It was suggested that there be some labour appointees to represent the workers in the industry. We have the airlines, the airport authorities, and the Liberal government appointees. We all know that the airport authorities are Liberal appointed airport authorities so it is a double whammy.

It was recommended and agreed to by the committee that we would have labour representatives. What did we see in the House? The government brought an amendment to not have any labour reps. Why? What did the transport minister say? He said that it would only be the one union right now and what would we do when it is representing another union and what if there are other workers involved or labour groups involved? So what? It is a labour rep.

It did not recommend one union, one particular person or individual. All workers involved would have some representation. They are being recognized to have a say in the security. How many members of parliament from the Liberal side were on those planes when they went down? I can say that there were a lot of workers. There were pilots, flight attendants and other crew members. They deserve to have a say in what happens with the airport security after September 11. But not this minister. It is more important that we look at the business aspect. That is much more important.

The government has exploited the September 11 issue, pure and simple, no question about it. It is exploiting the September 11 incident to get more money so the finance minister can talk about a surplus. It is absolutely wrong to charge Canadians for security.

I will not call on the government to lower the tax. There should be no tax. No individual in the country should have to pay for his or her own security. No one industry should be made responsible for the events of September 11. That responsibility belongs to each and every one of us. It is time that we stood firm and said that this should not happen and we should not allow the government to pass the bill.

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, in the wake of September 11, the Minister of Finance brought down in December his budget entitled “Securing Progress in an Uncertain World”.

Now, as then, the minister has not succeeded in convincing anyone of the merits of his budget, which many criticized then, and are still criticizing today. The government was going to make security its top priority and relegate its health funding obligations to second place.

During the prebudget consultations, the Standing Committee on Finance, of which I am a member, heard from many witnesses, here on the Hill, and during cross country meetings. Many people recommended that the federal government give the economy a boost. Instead, the Minister of finance was satisfied with a budget just for the sake of form, without any measures to revive the economy and reverse the slowdown.

This budget boils down to a series of spending programs, the main purpose of which was to reassure the Americans. It contained very few measures to ensure the economic security of our citizens. The budget contained nothing new for health, the government merely reiterating old announcements, and nothing, of course, about equalization.

Sticking with the approach it has taken since 1994, the federal government decided to leave the provinces to find their way out of their financial difficulties. The Minister of Finance preferred to turn a deaf ear to the requests for assistance he received.

I also wish to speak about part 1 of the budget, which deals with air transport security. Having turned over responsibility for airport security to the airlines, the government has decided to take back control by establishing the Canadian Air Transport Security Authority. The agency's mandate is to provide key air transport security services in a uniform and comprehensive manner throughout the country, and to provide performance standards and improved security services.

Just days away from the introduction of this new federal agency, air industry officials note that its mandate is not clearly defined. It has the mandate to screen persons and their belongings at airport screening points. But what about the people working in proximity to airplanes: mechanics, baggage handlers and others? The Canadian Air Line Pilots Association has not hesitated to criticize the oversights noted.

Does the Minister of Transport intend to hand over other responsibilities to this new agency? If so, why not have spelled them out?

In connection with the training of security personnel, creation of the Canadian Air Transport Security Authority suggested improved quality. The general principles call for staff less subject to turnover, and equipped with the appropriate skills and equipment. Now we learn that this federal agency can contract out airport security to the companies already providing it. Will this bring any new and real improvements?

Passengers are already undergoing longer and more stringent controls before takeoff, yet their baggage is being loaded onto planes without a proper inspection.

The act contains transitional provisions to ensure a smooth transition from the old regime to the new. The minister has, however, taken care not to indicate exactly when these new measures and new equipment will be in place.

The government has not succeeded in convincing us of the utility of creating a new authority to provide security services. This is, in fact, just one more structure and one more expense.

What more is this new agency going to do to provide security that is not already being done in our airports? What is this highly professional service the Minister of Transport is promising?

The second part refers to the security charge. According to the announcement, the creation of the Canadian Air Transport Security Authority will cost $2.2 billion. One cannot oppose a good thing, of course. Improving security is a laudable objective in itself. The bad news for air travellers is—and this is the rub—they are the ones who will be paying for the measures put in place.

Many feel that security is a national issue. What then are we to make of the decision this government has made to make air travellers pay? Why not extend this to all taxpayers? Is travel by ship, rail or road any less risky?

The Minister of Finance's decision is unfair and certainly will not help the tourism and airline industries get back on their feet again after the events of September 11. In addition, already in the first year of this new tax being implemented, there is a surplus of approximately $223 million being forecast. The tax then will be bringing in more money than needed. Perhaps the Minister of Finance is not aware that this is called a surplus, that it can be forecasted, that it matters and that it comes out of the pockets of taxpayers.

The Liberals would like everyone to think that they are a good government that is ensuring everyone's security. However, it is travellers who are footing the bill. Not only must they pay for the cost of these new anti-terrorism measures, such as the presence of police onboard aircraft, but they will also pay for passenger screening, something that used to be done by airlines and airport authorities.

This September 11 tax is regressive and does not amount to any savings, particularly since it is added to the list of fees that are paid when purchasing a plane ticket. It is in addition to the fuel surcharge, airport improvement fees, the GST and other security charges that are paid out. Now, on a ticket that costs $800 with Air Canada, or $150 with WestJet, consumers will have to pay a $24 fee for a return trip, while the American government is charging a maximum fee of $10. This suggests that security is more expensive on our side of the border.

If the mandate given to the new security authority is similar to that of Nav Canada, how can the government justify a new structure? Why should we pay more when the airlines were providing the service for $72 million?

Does the Minister of Finance believe that this tax grab of $2.2 billion from travellers' pockets over five years will improve the situation of this industry that has been badly shaken since September 11? Is he not aware that there have been significant financial losses suffered by travel agencies and others, to the tune of more than $20 million, and that he has done nothing to respond to demands from the Tourism Industry Association of Canada and airlines, for compensation for the losses incurred when airspace was shut down?

Do our constituents not have the right to expect adequate security? From that perspective, these measures should have been implemented a long time ago. The commitment to improve aviation safety made in the 2001 budget will be financed through this new airport security tax that will take effect on April 1. It is not an additional cost to the government. Travellers are going to be paying for that. As surprising as it may seem, the government is going ahead with this initiative without first assessing the impact of this new tax.

The government does not yet know what the economic impact of this new measure could be. It is an aberration.

The Minister of Finance and the secretary of State have both been telling anyone willing to listen that the introduction of this tax would have hardly any impact; we even heard them say it would have no impact on demand in the air travel industry, regional development and tourism. On what basis did they make such statements? There was no basis. These were totally unjustified. Does the government realize how serious this is? Since when do responsible politicians manage by instinct?

We asked that all impact studies related to the introduction of this new tax be tabled, but to no avail. The minister's officials remained silent. The Minister of Finance told us on several occasions that he had to act quickly. It was our American neighbours who were targeted in the unprecedented events that occurred on September 11.

With this kind of approach, the government is giving us the impression that it neglected our own security.

The Liberal government is invoking the urgency of the situation, but the evidence heard by the powerful Standing Committee on Finance should not be ignored. Witnesses from all sectors of the economy told members that this new tax will have devastating effects. Airline carriers fear that it will result in fewer people flying. Why did the government not conduct studies? What good would be the hours spent in committee if the government turns a deaf ear to our recommendations? By acting in this fashion, the federal government is being irresponsible.

The government, which has a duty to ensure national security, could have fully funded the improvement of security on board aircraft and at airports, with the budget surpluses that it has, without imposing another tax on users.

Instead, the government smelled an opportunity. A sniffer dog would certainly think that it stinks. But the minister is going ahead anyway. The Minister of Finance will become the minister of surpluses, and his security tax is just one more tool in his hands.

Somebody once said “Why have teeth so white when your tongue is so dirty?” Why is the Minister of Finance promising to review the relevancy of this tax in the fall, when his party got elected on the promise to abolish the GST?

The government is in such a hurry to tax travellers that it has not yet put everything in place to ensure the smooth implementation of that tax. It is surprising to read that, with less than 19 days left, the travel industry is still wondering how to accurately measure the impact on airfares. There are still doubts as to whether that tax may be imposed on stopovers and connections.

Airlines must prepare for major changes to their computer systems. Will these changes be completed on time? And has the minister included a grace period, in case mistakes are made in collecting the tax?

The stakeholders whom we met suggested that, while the tax seems easy to understand—$12 for a one way trip and $24 for a return trip—calculating it may be complicated. The definition of a continuous trip is not clear and suggests that a traveller could sometimes be taxed twice when he makes a stopover or catches a connecting flight.

The vice-president of the Air Transport Association of Canada feels that the number of hours that a stopover can last without imposing a new security tax on the second leg of a trip is ambiguous.

What will the government do in the case of clients who believe they have paid too much for security on their tickets? To whom do they file a complaint? The agency that issued the ticket, the airline or directly with the Canada Customs and Revenue Agency? These are questions that have yet to be answered.

The government ministers are not acting on this issue with the same sense of urgency. The Minister of Finance sets a tax, in a rush to take action, he says, because of events. His colleague over at Transport however, is unable to say exactly when the new measures will be implemented and the new equipment will be in place.

Our neighbours to the south say that all baggage will be screened for explosives before the year is out. In Canada, the Minister of Transport raises his eyebrows at the Americans' assertions and admits that it will take us between three and five years to get there.

The government announced that it would spend $1 billion to purchase explosive detection systems, provided such equipment is available. As I have already said in the House, there are only two companies in the entire world that manufacture this equipment, and they cannot keep up with the demand.

After the explosion of the Air India flight at the Toronto airport, we implemented a system whereby baggage was matched with the passenger list. The purpose was simple: preventing baggage from traveling without its owner. Many airlines found the idea to be a good one and implemented it. However, this system does not eliminate the possibility of a suicidal passenger being on board.

In the new security measures it announced, the government decided to put undercover police officers on board aircraft. While the cabinet is unanimous that this should occur, union representatives of both pilots and flight attendants have yet to see them. The only times that these constables have been seen was on flights to Reagan airport in Washington.

The government has yet to set up its software to screen passengers that may represent a threat to security. The software should be able to do this by reading the passenger list. The plodding pace of progress on this is causing concern among airlines that travel to the United States.

We know that no system is failsafe, but a good knowledge of the identity of passengers, combined with explosives detection and stricter security screening measures at boarding can improve our security.

Not only do we need to wait for these mechanisms to be put in place, but as well the government needs to demand more of the RCMP and CSIS.

It is particularly disturbing to see this Liberal government putting its hands on $2.2 billion over five years without being in a position to provide us with a detailed breakdown of the costs that make up this amount.

Are we going to be witness to another misappropriation of funds, like what this Liberal government has done with the EI fund? We are not the only ones to doubt the government; the Canadian Taxpayers Association finds that there is something a bit fishy about this. The associations representing travel agents and the tourist industry are opposed to this tax. The Bloc Quebecois is opposed to the imposition of this tax, imposed willy-nilly as it is. Our colleagues in the other opposition parties also agree with us on this.

The Canadian tourism industry, ACTA, describes this tax as punitive and feels it will have serious impacts on their industry. A poll by Ekos, a firm known to those across the way, which was commissioned by the CAA, produced some food for thought. It reports that 16% of people who currently travel by air have said that they will travel less once the tax is in place.

Is this what the secretary of state calls minimal impact?

Even the representatives of WestJet told the Standing Committee on Finance that this new security charge will have a negative impact if it is imposed regressively, as is the plan at present. Why? Because this approach means that the amount paid is a higher percentage of the cost of short flights, and this will be counterproductive, stopping new competitors from entering the market. We must not forget that Air Canada has a virtual monopoly.

By maintaining its decision to impose this tax, the government is acting in a remarkably cavalier way.

We are afraid that smaller communities will no longer have air service, because it is not cost effective. A number of regional airports have already been dropped by the major carriers in recent weeks.

The people of New Brunswick can attest to that. The Charlo airport has never recovered from the disappearance of InterCanadien when Canadian merged with Air Canada. In January 2001, Air Labrador also packed it in, so this airport no longer has any regularly scheduled flights.

Most fortunately, a new airline, Baie Chaleur Air, will soon be plying the skies over Montreal and Toronto. Baie Chaleur Air will be offering service to the peripheral regions of Quebec and Canada, regions that are experiencing difficulty maintaining air service.

Will the impact of Bill C-49 undo the efforts of areas such as the Gaspé, Lac-Saint-Jean and the North Shore, to name just a few, which have been fighting for years to find a viable solution to the monopoly of Air Nova, Air Canada's regional service in Quebec.

The number of questions which remain unanswered show just how imperative it is that there be studies of the impact of this tax on air fares. Candidly admitting that none were requested shows an unacceptable lack of concern.

Part 3 of the budget deals with employment insurance. As we have been telling people for years, the Minister of Finance is helping himself to the surplus in the EI fund in order to pay for the measures in his budget.

The Bloc Quebecois has repeatedly said that this diversion of funds must stop, and the Canadian Taxpayers Federation supports our position. My colleague from the Lower St. Lawrence can attest to this, as he has been denouncing what can practically be described as the theft from the EI fund since we have been here, in other words since 1993-94.

We were expecting reductions in EI premiums, as were workers and employers.

True to form, the government is using the surplus in the fund to improve its financial situation.

This budget contains nothing for workers, and SMBs are fed up with paying more than necessary for the EI fund.

Instead of getting the message, the government conceals from us the report of the actuary for Human Resources Development Canada, a report that would show us the real needs of the fund so that premiums could be set accordingly. That is what clarity means to this Liberal government.

Part 6 of the budget deals with the Canada strategic infrastructure fund. Another aspect of this bill particularly caught our attention: the decision to invest $2 billion in this fund, with part of it to be available for fiscal year 2001-02. We are a few days away from the end of the year and all signs are that the fund is empty.

I am dismayed. The Minister of Finance said in his budget, and I quote:

This budget commits a minimum federal contribution of $2 billion...with an initial allocation from this year's surplus funds at year-end.

More recently still, on February 5, the backgrounder put out when the bill implementing the 2001 budgetary initiatives was introduced says:

In the 2001 budget, the government announced that it would provide at least $2 billion for major infrastructure projects. These goals and this $2 billion initiative, as set out in the budget, are those of the Canada Strategic Infrastructure Fund

My hon. colleague from Jonquière who has a special interest in regional development and the implementation of infrastructure projects, has tried several times in this House to get information concerning this fund and to find out when the money will be made available.

Time is running out and the government must act quickly if it intends to use the surplus from the current fiscal year, since March 31 is the deadline. What makes it even more troublesome is that no amount appeared for the Strategic Infrastructure Fund in the Supplementary Estimates tabled on February 28, 2002.

Need I remind the House that Bill C-49 has yet to be passed and that the infrastructure fund has not been officially established yet? Therefore, the money that was announced cannot be made available. Once Bill C-49 is passed, we will need another bill to allocate part of the surplus to the fund.

Given the situation, how could the Deputy Prime Minister maintain, in an interview he gave on March 6, that this $2 billion fund is a good start?

The Deputy Prime Minister then added that the launch of this program would probably be postponed until next autumn and that the eligibility criteria would be submitted to cabinet somewhere around April or May.

This total lack of planning makes the government look pretty bad.

I am curious to hear how Liberal members will explain the fact that all the highway construction projects that they promised are now at risk because of a lack of funds.

Voters should know that this government is incapable of fulfilling its commitments. Back home, this is called lying through one's teeth.

It may be that members opposite have a rabbit hidden in their hat. They should bring it out soon. But we all know that the Liberals, and particularly their leader, do not really take seriously the promises they made during the last election campaign.

If these election promises were fulfilled, it would force the government to come up with $1.9 billion, that is 50% of the money needed to complete the projects that they pledged to do, and 80% of the funding that is necessary for highway 185. The Liberals promised a federal contribution of $1.1 billion for highways 175, 185 and 30. Currently, there is only $108 million available, over a four year period, for these projects.

Where is the money that should come from the Canadian strategic infrastructure fund for this year? What is the basis of the comment made by the member for Beauharnois—Salaberry during the election campaign, to the effect that the bridges on highway 30 were a done deal?

In conclusion, the federal government has been achieving significant surpluses since the mid-nineties. Since 1997-98, federal budgets have always generated surpluses ranging from $2.9 billion to $17.1 billion in 2000-2001.

The conference board itself feels that the current positive gap between federal revenues and expenditures will continue in the future and will even increase, because the debt is going to be paid off with the employment insurance surpluses, with the new tax on security and with the unpaid benefits to seniors under the guaranteed income supplement program.

From the time he delivered his budget until the time he introduced this bill to implement it, the minister has missed the boat.

This government does only as it pleases. It did not take into account the work of parliamentarians and the needs expressed by the witnesses who appeared before the Standing Committee on Finance.

The government keeps governing by acting unilaterally to ensure that it enjoys surpluses.

The provinces, the workers, the employers and the unemployed all told this government what they expected from it. The government replied by tipping the scale in its favour and by ignoring the needs of these people. The government let them down, as it always does when there is a consensus.

Sovereignty is the only option for Quebecers who want to get out of a system that stifles them.

[Monte Solberg, Canadian Alliance, Medicine Hat, AB]

My hon. friend says it could have bought a report for that. It is a good point.

Given what we have seen in the last few days with the missing report, some of the scandal that has come out of public works, and the Canada Lands Corporation scandal if I can call it that, we have good reason to wonder what is going on with the $400 million in repayable loans that has been handed out to different companies through ACOA. We know the government is prone to helping its political friends with taxpayers' money. What has happened to the $400 million? If the government cannot answer the question the money should not be spent. The government could get funding for its security measures from this area instead of driving up spending by a whopping 9.3%.

As an aside, between 1996-97 and 2005 the government will increase its overall program spending by around 33% or somewhere in that range. The overall level of spending will go up dramatically. We should be concerned about that. I will say more about some of the big reasons we should be concerned about it in a few minutes.

There is another example of how the government has been lax with taxpayer money: the GST home heating rebate. The auditor general's report pointed out that “At least 4,000 Canadian taxpayers who did not live in Canada and 7,500 deceased people received cheques”. It also said “about 1,600 prisoners could have received cheques”. It is pretty obvious the government does not have its eye on the bottom line when it comes to expenditures.

An example I hear about over and over again in my riding is the firearms registry. It is an especially sore point with people who are being required to register their firearms. My hon. friend from Yukon is here. I have no doubt he is getting lots of calls about the issue. People are concerned because they think the firearms registry will be completely ineffective. I agree with them 100%. They think it will breed false security. They have concerns about privacy. Their other big concern is how inefficient the government is when it comes to big registries.

I talked about the home heating rebate and how frequently the government got it wrong. I will tell the House about other things I am hearing from people in my riding.

A fellow contacted me the other day who said he had already registered handguns on the handgun registry. He is now being asked to re-register them. Why is that? I did some poking around to find out. It is because the government has lost the information for about 300,000 registered handguns. That is unbelievable. Speaking of things that go missing, there is still the half million dollar ACOA report that went missing.

There have been more mess ups in the firearms registry which I could talk about endlessly. Recently my hon. friend from Yorkton-Melville got up in the House and told the story of a man in Vancouver who heard a knock at the door. The man went to the door to find a SWAT team. Someone had told the SWAT team the man had unregistered firearms that he owned illegally. The SWAT team came to the door only to find a man who was able to produce a certificate showing he was registered with the government.

My point is this: The government is famous for being inefficient when it comes to the delivery of programs and services. There are billions of dollars it could find if it wanted to reduce overall spending. The firearms registry is costing around $640 million. It was supposed to cost $72 million when the government announced it in 1995. It is now approaching a billion dollars. The government is completely out of control when it comes to these issues.

I could give many examples but I will touch briefly on some of the big areas where there is tremendous waste. Aside from ACOA there is waste in other regional development programs and western diversification programs. All these departments have oodles and oodles of waste. We completely disagree with the idea that government should be involved in funding businesses. It is crazy but that is what the government does.

We disagree with the ridiculous spending that occurs in departments like CIDA. We have deep concerns about it. The previous auditor general said many programs did not have proper monitoring or accounting so the government could not tell whether the programs were working. This seems a rather obvious criteria for going ahead and funding a program. The government should know if a program it is funding is working. However that is another example.

Let us look at Indian affairs. Auditor generals have said much of the money that goes to Indian reserves and band councils disappears. A colleague told me the other day about problems on one of the reserves in Alberta. The chief is being paid $400,000 and there is no money left for some of the health care services on the reserve. That is obviously a concern. Perhaps the government should propose deep reform of Indian affairs before it advocates spending more money.

There are many other examples. I could talk about them all day. The Department of Canadian Heritage devotes much of its efforts to handing out grants and subsidies. There are deep concerns about whether that is the best use of taxpayers' money.

I will not go into all the examples. Suffice it to say the government has not done a good job of managing the public's money. It has not been a good steward of precious taxpayer dollars. We disagree fundamentally with the idea of raising spending as dramatically as the government has done in the budget.

That is one of the big reasons we oppose Bill C-49, the budget implementation act. However it is not the only reason. I will say more about that in a moment.

Another thing that concerns us, which I mentioned at the outset, is that the government has no vision or strategy for making Canada more productive and competitive in the world. This is obvious in the budget which does not even give a nod to the need to dramatically reduce taxes.

People on the government side will say they have reduced taxes. To be fair, they have reduced some taxes. Others have gone up. The government has reduced income taxes a little. That is fine. However we need to understand that we are not in a closed environment. Canada, the businesses that set up shop here and the people who earn their livings here are in competition with other countries around the world, primarily the United States. Having the United States on our southern border should be a huge advantage but because of the business environment in Canada it is not.

What happens is that instead of people mining that $11 trillion economy, the largest economy in the world, with 25% of the world's GDP coming from the United States, instead of using it to our advantage, too often we are becoming victims of that big economy because people are leaving Canada and going to the United States to set up shop. We could do so much more in Canada. What I mean by that is that we should be lowering taxes. We should have a long term strategy for lowering taxes of all kinds, personal income taxes certainly, but also getting the high marginal rates down and much more aggressively than the government has already proposed.

We think corporate taxes have to come down. I know that members on the government side will say that overall corporate tax rates are lower in Canada than they are in the United States, but that is only one of the factors when it comes to determining where a company will set up shop. We need to be quite a bit lower in order to lure some of these companies and this investment into Canada or to keep companies here that are already here. It is only one of the factors.

Another factor is access to the U.S. market since September 11. A large business casting about for a place to set up a new factory or plant might have considered Canada before September 11, but now because of increased uncertainty about the ability to have access to the United States from Canada because of border restrictions and that kind of thing, it will say that this tiny little difference in tax rates on the corporate side really is not enough of a difference to cause it to stay or to set up shop in Canada. Those companies will go to where they have access to the U.S. market. They will go directly into the United States.

We need to have a strategy which guarantees that Canada will be a leader when it comes to luring investment from around the world and keeping investment here. Part of that is lower taxes of all kinds. On capital gains taxes the government will say it has lowered them, but it has not lowered them anywhere near enough to encourage investment in Canada and to lure people to Canada as opposed to other places around the world.

It is almost as though the government, and I would characterize the government as operating this way on just about all issues, always manages the issue by taking it off the front burner and putting it on the back burner. It does not fix the problem. It does just enough to remove it as a constant irritant in the public's mind. It just pushes it off onto the back burner where it simmers and is not dealt with completely. It simmers away until it starts to boil over again and then the government again manages it a bit and it goes away for a little while. That is how the government deals with many issues.

We believe that taxes have to come down dramatically across Canada, but what else should the government be doing? One thing it should be doing is dealing with issues like internal trade barriers. In the Canadian constitution it is left to the federal government to establish the rules for commerce in the country, but for some reason over a period of 100 years in Confederation the provinces have started to set up interprovincial trade barriers.

I saw one report from the Fraser Institute, from a number of a years ago now, which indicated that internal trade barriers were costing the country between $6 billion and $40 billion a year in productivity. That is a tremendous amount of wealth that we forgo because of internal trade barriers. I think it is time for the federal government to assert its authority when it comes to commerce and knock down those trade barriers.

When we do that we should do some other things too. We should re-balance the federation and allow the provinces some freedom in areas that they currently do not have freedom in. I think that would be a good quid pro quo, but again, this is a federal power that the federal government has ceded to the provinces over a number of years and in my judgment it should not have done that.

There are many other things we could do. We should be freeing up trade with our trading partners because that benefits everyone. One of the big frustrations for me is to know that on the one hand Canada claims to care about continents like Africa, and my friend across the way spoke a few minutes ago about the Africa fund, but it is also true in Canada that we have tariffs in place, for instance, against textiles and agricultural products from developing countries.

If a developing country's biggest exports are textiles or agricultural products, which very often they are from these developing countries, it cannot easily get things into Canada. Why? Because we have tariffs in place. We never do allow those countries to become developed countries. We stand in the way of that, so how can we make any claim to be truly compassionate about these other countries when we do those sorts of things?

Again, the quid pro quo is that we should have access to their markets and we should be allowed to sell products into their markets. In doing that, every economist will tell us that free trade improves both parties when they engage in these voluntary exchanges. It does not matter whether we are trading with somebody in the next room or around the world. It makes no difference. The fact is that trade always leaves both parties better off. We should be encouraging that. I think that the government has not done a good enough job on encouraging trade around the world.

To be fair, I realize that sometimes, for instance, the United States does not play fair when it comes to trade. The softwood lumber dispute is a perfect example. I would even point to the tariffs it has raised on steel, which are not affecting Canada because we are part of NAFTA, but the big tariffs it has placed on steel imports from around the world into the United States to me demonstrate that the U.S. has lost its way to some degree when it comes to free trade. However, having said that, I will say that Canada could do a lot more to push trade issues. If we did those sorts of things, Canada would be a lot wealthier.

Another thing we need to do is undertake regulatory reform. I will tell the House about something that people should do once in a while just to get a sense of how overregulated Canada is. Some day people should go to the Government of Canada website on the Internet and look at the website that displays regulations in Canada. It is absolutely amazing. It is a website without end. It goes on and on and on. There is no question that this costs business in Canada today tremendous amounts of money.

When President Reagan was in office in the United States the Americans undertook regulatory reform. They reduced regulations dramatically. I have forgotten just how many. I think they cut something like 50,000 regulations. They knew at the time that there would be a direct impact from doing that. Of course the direct impact is that the compliance costs for business go down so they have more money for other things, rather obviously. One of the things they did not realize is that by reducing those regulations they dramatically improved the efficiency of the trucking industry in the United States, because there were so many regulations that bogged down the ability to move trucks across state lines and that kind of thing. As a result of that, the concept of just in time delivery was born or at least realized in the United States and it had a dramatic impact on improving the output of the economy, the productivity of the economy. It was not something that people really predicted, but it was a result.

The same sorts of things can happen in Canada if we start to take that issue seriously. That is something else the government should be doing when it comes to bringing down budgets. It should be producing budgets always with an eye to making Canada more productive. The former chair of the finance committee often spoke of the need for a productivity covenant in Canada. Although we crossed swords from time to time, I think my friend was on to something when he proposed that. Unfortunately his own government has not adopted it.

We do need a government that takes the issue of productivity seriously. These are some of ways in which we could start to deal with it: lower taxes; reduce spending; deal with regulatory reform; knock down interprovincial trade barriers; and promote free trade. Those things all make the economy much more productive.

Why is it important to make the economy more productive? Because that is how real incomes are raised. The only way we can become wealthier is to produce more. It does not mean we have to work harder, but it means that we have to produce more by using our enterprise and our knowledge and by using capital to invest in machinery and equipment that will allow us to produce more goods and services. If we do that, everyone benefits, but do we know who benefits most? It is people on the low end. It is counterintuitive, I know, but it is people on the low end of the income scale.

Why is that? Because, rather obviously, an already wealthy person who has enough to look after all of his or her needs does not benefit nearly as much when the economy picks up or when the nation produces more goods and services. It is the people on the low end, the people who are unemployed or underemployed today, who are working in entry level positions at middle age, for instance, who could be doing much better if there were more activity in the economy, so that instead of three people chasing one job we would have three jobs chasing one person. If we had that kind of an environment, that kind of an economy, people on the low end, who are struggling to find work that will allow them to look after their families, pay for the basics, buy homes and those sorts of things, will benefit the most.

That is one of the big reasons why the government should never take its eye off the ball when it comes to improving productivity. It is not just because we get those big boxcar numbers in terms of our overall GDP. Yes, we want to see the GDP grow bigger and we want to see more wealth created, but really it is the people who have not had the opportunities thus far who would benefit the most.

I have often used this example in the House, and at the risk of doing it to the point of boring people I will do it one more time. The best example of how this can work is what happened in the United States during the recent expansion. At the height of the expansion, the poorest quintile, the poorest 20% of the black population in the United States, which is the poorest population overall in the United States broken down by ethnic groups, by race, had an unemployment rate of 7%. That was the same average that we had across Canada at the very same time.

We would think that the unemployment rate of those people would be 15%, 20%, 25%, but because the economy was so hot in the U.S. and it was producing so much wealth, what we found was that all these businesses could not find workers so they went into areas of high unemployment and offered jobs to people. They said to people “We know you don't have any skills, perhaps, in this line of work, maybe you didn't finish high school or maybe you've been on welfare your whole life, but we will give you a job because we need workers”. These people, who had no hope previous to that, who could not find jobs and were trapped in this cycle of poverty, finally were given jobs and given contacts. They got a paycheque and of course they got some hope, which is what governments should be doing.

Another example is Ireland, a perfect example. It is a country that for 150 years had as its biggest export its people. Ireland decided to change how it structured its economy, saying that it could not continue to try to get by on the sort of semi-socialist economy it had. It was losing people. It had unemployment rates that were through the roof. It was a disaster. It was running big deficits.

Ireland took a different approach, saying that it would buy some labour peace, settle down and see if it could work out something with the unions. Ireland bought labour peace. It balanced its budget and dramatically lowered taxes. As a result, it saw billions of dollars of investment flow into Ireland, to the point where it now, with 1% of Europe's population, gets 20% of all the new investment. There is so much money coming in the door in Ireland right now that it is able to provide its people not only with very low taxes, cutting the corporate rate from 40% to 10%, but it also has so much money coming in now it provides all its people with free university education.

That is what can be done with an economy that is really on fire. The way to do that is to give the rest of the world an incentive to come to that country and invest. That is what Ireland did. Just ahead of St. Patrick's Day we thought we should pay a compliment to the people of Ireland on the fantastic job they have done in turning around their economy. They really are a fantastic example. I will point out, too, that Ireland is a country that is stuck out in the Atlantic, a long ways away from big markets and a long ways away from having resources. It does not have resources like we do.

If we applied that same approach in Canada, can we imagine what would happen? We are a country that is blessed with resources, really unparalleled in the world. We sit north of the United States with an $11 trillion economy, the biggest economy in the world. Can we imagine if we applied the same sorts of policies in Canada? Our economy would go through the roof. It would be unbelievable. People from around the country who have never had a chance at getting a good job all of a sudden would be breaking down doors for people to hire them to work at different things.

The government cannot seem to get out of the rut it is in. It only moves in fits and starts when it absolutely has to and put band-aids on whatever is the problem. It never fundamentally takes on this challenge. That is a shame because if it did Canada would blossom as a country. Unfortunately we do not see any sign of that happening.

I want to talk for a moment about the air traveller security charge which is part of Bill C-49. The official opposition is very concerned about what the government is doing with the air traveller security charge. This charge, by the way, will raise the cost of a ticket to $24 for a round trip fare. Previous to this about $72 million a year were being spent by airlines to provide security for the travelling public around Canada. This will raise the average cost per passenger for security from about $1.10 to $24. That is a huge increase. On a one way fare it would go up $12 or over 1,000%.

The impact that has on short hop flights rather obviously is dramatic. If someone was paying $60 for a ticket and now has to pay $24 more to meet the security charge, all of a sudden there is a big incentive not to fly. People will find other ways of travelling or they simply will not go. That is bad for the economy. That is a disastrous thing for the economy and certainly a disaster for airlines like WestJet that really rely on a lot of the short hops. We think the government has made a grave error.

Actually I am pleased to announce that many government members are deeply concerned about this matter. The member for Hillsborough from Prince Edward Island spoke up when he was on the finance committee. He thought the government was out to lunch in this regard. I have some quotes which I cannot find right now, but he pointed out at the finance committee that this would have a dramatic negative impact on small airports like the one at Charlottetown where people have to make short hops, or Victoria to Vancouver or Calgary to Edmonton.

These short hops for some people will not be economical any more so they will simply not do it. Airlines like WestJet and some of the smaller airlines will face real challenges in staying afloat because of this issue. The government has made a big error.

That is not to say there should not be increased security. Of course there should be. Our party believes that we should first of all respect the recommendation of the transportation committee that any increase in funding for air travel security should be funded both by a security fee and out of the consolidated revenue fund, out of general revenues, because public security is a public good. It is not like a special program that only a few people use. It is really a public good.

We need to remember, as my friend has pointed out in the past, that when the airplanes hit the World Trade Center many people were obviously killed in the buildings themselves. All of the public is in danger when someone hijacks a plane. The entire population of a country could be in some kind of jeopardy when such things happen. We argue it is a public good and therefore at least to a large degree should be funded out of general revenues.

I simply say this is an important fact with which I am not certain the government has ever come to grips. In my riding of Medicine Hat there is a small airport that will be dramatically affected by the security charge. I can assure everyone of that.

People in the past have flown from Medicine Hat to Calgary. Now it may not be economical for them to do it. They may just drive instead, and that would be a real blow to regional carriers. We are quite concerned about that.

When this whole issue was first debated in the finance committee a number of things were raised and good amendments were brought forward which unfortunately were defeated by the committee. One of them was a proposal by the Canadian Alliance that these fees be determined on the basis of distance.

My friend spoke a minute ago about not wanting to do that and suggested that people who go on longer hauls would subsidize people on shorter hauls. I understand his argument, but rather obviously it would minimize the impact of the security fee in terms of being a disincentive to travel. A small percentage more will not necessarily deter those who are already paying $3,000 for a ticket to go across the country, but a $24 fee on a $60 trip could absolutely be a very big deterrent to people travelling. That is something we proposed which the Liberals in the finance committee denied.

We also proposed that there be greater accountability when it comes to the authority that is to oversee the new fee and security at the airports. We asked that a representative of the travel industry be put on that authority. Unfortunately Liberal members voted it down. That is regrettable because it would have ensured some accountability. It would have put people on that authority who understand the issues and who can see the direct impact of that kind of security charge.

Along with my friend across the way we also voted in favour of having a labour representative. My friend spoke on that a moment ago and pointed out that people who were a part of the labour force understood better than most the problems when providing security in an airport. It was a very good point. Unfortunately the government has moved an amendment to change that, which is regrettable because it would have been good to have someone from labour on it as well.

These are some of the very specific things we regret in Bill C-49 when it comes to the air travel security charge. We think that the government has not done the country a service by bringing in that security charge without some of the amendments I have just talked about.

As I said at the outset, overall I am alarmed by the budget. I have said that in every speech I have given on the budget. It really misses a tremendous opportunity to improve Canada's competitive position. It misses the opportunity to deal with reckless spending. It misses the opportunity to act aggressively to bring about fundamental change in how we provide security in Canada when the country is demanding it.

We have not done a good job in the past. The government has ripped the heart out of funding for the RCMP, CSIS and national defence. It has not even begun to address the funding issue for some of those agencies even yet, even after the budget. Those are some of the things it could have done and did not do, and that is regrettable.

I will simply conclude by issuing a charge to the Liberals across the way. The government will be in power for a couple more years at least before an election. I urge them to take the opportunity, with the official opposition supporting them, to bring about some of the changes I have talked about that would make Canada a leader again when it comes to providing well-being for its people.

[Monte Solberg, Canadian Alliance, Medicine Hat, AB]

Mr. Speaker, it is a pleasure to rise and address Bill C-49, the budget implementation act. Although there are things in the bill I will speak to specifically I will start by talking about the overall budget and addressing some issues my hon. friend raised a moment ago.

The hon. member said he thought it was a courageous budget. I could not disagree more. As I have said various times in the House in the last month when I have had a chance, it is the worst budget the government has ever brought down. In the past the government has done things I grudgingly had to admit were good. However this is the worst budget it has ever brought down.

Not only did the government raise the level of spending dramatically in the budget by 9.3%. It was also careless. It brought in all kinds of innovations it later had to turn around and change because the budget was not well thought out. The government had to change how it would handle the Africa fund. The infrastructure program is another example.

There is no excuse. This was the first budget in about a year and a half. The Liberals had lots of time to think about it. It is not like they were pushed into coming up with something at the last moment. They had lots of time to consider it but they absolutely blew it.

As important as what is in the budget are the things the government left out. I will start at the top. The thing that characterizes the budget and the government the most is a complete lack of vision. When looking at the budget there is no sense that the government understands Canada is losing the competitive battle in the world. We are falling further and further behind. This is reflected in our falling dollar and our falling standard of living. It is never seriously addressed. It is like an elephant in the middle of the room that no one wants to talk about. However we face it every day as citizens trying to make a living and scrape by.

As responsible adults we have an obligation to leave the country better than we found it. We are not meeting that obligation. The country is getting poorer and poorer. We are losing many of our young people to the United States. That is the vision that is not in the budget. There is no ability or willingness to confront the fact that Canada is losing the competitive battle in the world.

There are many things we could do. My hon. friend spoke a moment ago about Kyoto. Is it not wonderful that the government is coming to grips with Kyoto? However there are many other issues. The government wants to take the initiative on Kyoto even though we would be completely out of step with the Americans. However in terms of the day to day things that fundamentally affect people the government is completely out of touch.

What could the government have done? There is no question that in the wake of September 11 security spending has been necessary. The government has never addressed the question of why it cut defence and security spending so deeply in the past while maintaining high levels of spending for grants and subsidies.

However let us set that aside for the moment. The truth is that we need to invest more in our military, in intelligence gathering, and in defending our borders through increased enforcement by customs and immigration officials. We need to do these things. The opposition does not quibble with that. We have absolutely no objections.

Instead of raising the overall level of spending we should be cutting spending in other areas. The auditor general brought out her report not long ago which mentioned many areas where the government is failing the test of fiscal prudence.

One example is ACOA. ACOA is a regional development agency in Atlantic Canada. It provides what it calls non-repayable loans to different groups which sounds an awful lot like grants. The auditor general noted in chapter six of her report that ACOA had “not reported publicly on its performance in managing $400 million of repayable contributions”. This should give us pause. An agency supposedly answerable to parliament and the Canadian people has for some reason not reported publicly on the management of $400 million in repayable contributions.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I am pleased to rise to enter the debate on Bill C-49. This bill would implement the provisions of the budget that the Minister of Finance brought down on December 10, 2001, a budget that was cast in the midst of unprecedented uncertainty, with an economy that was in a slow down and, of course, it was post the terrible events of September 11.

The finance committee, of which I am a member, travelled across Canada on a prebudget consultation exercise and listened to what Canadians had to say. I am very pleased to say that the Minister of Finance and the government listened to the priorities that Canadians reflected in the consultations that we undertook. Basically, there were four main areas that Canadians talked to us about. There were other areas of course, some very specific, and other proposals but there were many common themes. These themes centred on four major factors.

First, Canadians told us that they wanted the government to respond to the national security agenda. They wanted the Minister of Finance to provide the funding that was necessary to assist Canada in dealing with the threat of terrorism that presented itself so horribly on September 11.

Second, they wanted the government to protect the $100 billion tax cut that was introduced in budget 2000 and the economic update in the fall of 2000, the largest single tax cut in Canadian history.

Third, they wanted the government to protect the $21 billion invested in health care and post-secondary education, an historic agreement that was reached by the government, provinces and territories. A further $2.5 billion was dedicated to early childhood development. Canadians told us they wanted us to protect those investments in health care, post-secondary education and early childhood development.

Fourth, Canadians told us that, after all the hard work that had gone into eliminating the deficit, they wanted us not to go back into deficit at all costs.

Those were the main themes that were presented to us as we travelled across Canada. As I said, there were other proposals, propositions and concerns but those were the major themes that were expressed by Canadians.

I can say that our Minister of Finance and the government listened. The minister protected the tax cut in the budget that he delivered on December 10. The government will not be going into deficit this year or for the next two or three years at least. He protected the investments in health care and also provided $7 billion in funding for the national security agenda.

The national security agenda will encompass a range of things. It will include money to deal with the needs of CSIS and the RCMP, as well as the needs at our borders for the Canada Customs and Revenue Agency to improve the movement of goods and people across our borders in a secure and efficient manner.

The budget will also provide additional funding for the Department of Citizenship and Immigration so that it can improve the processing of applicants for immigration as well as refugees. It will do a number of other things but those are the essentials. It will provide a significant amount of funding to achieve those ends.

I am very happy to speak to some of the detail in the budget because I know there has been a lot of discussion in the House and in committee on the provisions of the airport security fee for example. I for one, and I know the feeling is shared by many of my colleagues on both sides of the House, am sensitive to the fact that the airport security fee, which is $24 for a round trip and $12 for a one way ticket with no stops, should be monitored very carefully to ensure that the small communities which are accessible only through short haul flights are not jeopardized. A $12 or $24 tax on an airfare of $100 or $200 is a very significant amount. We want to ensure that this is monitored carefully.

The fee may end up being too high because the data, that the government had at the time when it had to come up with the tax, was fragile. Looking at the post-September 11 events we were presented with a situation leading into a budget in November where we had to firm up certain assumptions with respect to air travel. One can imagine the situation that put the Minister of Finance in where he had to guesstimate as best he could the air traffic volumes that would be going through this upcoming fiscal year.

The minister sought advice from Transport Canada and the airlines and got whatever information he could. However he was estimating under difficult circumstances. Therefore the airport security fee at $24 for a round trip was developed. That fee will cover the cost of improving security at 90 of Canada's main airports. There will be better equipment and more trained people to process people going through airports.

One of the points that is sometimes lost in the House is that members opposite say it is a fixed fee and therefore for someone travelling on a $100 or $200 ticket that is a huge percentage and is a tough thing to face. Granted that can be a challenge but we need to remember another thing and that is if individuals are going through airport security it does not really matter if they are travelling from Toronto to Vancouver or from Victoria to Kelowna, the same amount of effort is required to process them through security. Basically it is a fixed cost.

We cannot always look at these things in strictly economic terms. There have been discussions and proposals that the airport security fee be based on what we call ad valorem or a percentage of a passenger ticket amount so that, for example, on a longer haul in absolute terms the airport security fee would be higher.

That would mean that people travelling on longer trips would subsidize the cost of those travelling on shorter hauls. There is an argument for that I suppose but there is also an argument to say that if one is presented with a fixed cost then the people who choose to travel, the users, need to understand that there is a cost of processing them through measures that Canadians look to in terms of the standards of excellence and diligence that are required to make sure that people getting on aircraft are indeed secure. That is the reality.

Some ask why that fee would not be abolished completely and be borne by general taxpayers. A good part of the $7 billion that I mentioned earlier for security measures is being borne largely by the taxpayer in general, as a whole. However the feeling of the government was that for the user fee, for the tax, it should be focused on those people who choose to travel.

It is a very small part of the total security cost that the government has absorbed and all Canadians, including those in the gallery and in the House today, are absorbing. This is a very small element of the national security agenda that is being passed on to users.

The Minister of Finance indicated clearly that this situation would be monitored very carefully to determine whether the fee was too high, in other words, whether it was more than was needed to pay for the additional cost of security, as that was the only thing this tax would be used for.

If members opposite would read the budget papers they would see that the revenue that comes in from this airport security fee over five years, if it matches the cost over the five years, would be incurred by the government to increase security at airports.

Of course the costs are higher in the first year because there is the purchase of equipment and the training of individuals who will have to be in these situations. Therefore in the first year the costs are higher than the revenues, but over the five years the whole account balances out.

This is not a money making exercise but an attempt by the government to match revenues to be brought in with the cost of improving security at our airports so that passengers can travel safely and securely. That is what it is about.

If after six months, or a year or two, the government becomes aware that the fee is too high and it is more than what is needed, I am sure that it would review it. The Minister of Finance said quite categorically that he would review the fee and if necessary bring it down. If it has the effect of jeopardizing communities that rely on these short haul routes then that is something I am sure the government would also review.

However there are no easy solutions. For easy answers members opposite would be on this side solving everything in one easy moment. These are tough and difficult times.

The bill would implement another element to establish the authority that would oversee these security measures. It would have 11 board of directors, a broad range of people. There was an amendment considered by the Standing Committee on Finance that would put a representative from labour on the board. I supported that because, as I said in committee, when we go through security at airports we all have various experiences.

For example, the other day I had a pair of little scissors that we use to trim the hair out of our noses or whatever. They went through the screening and the person asked me to unzip my bag. They were taken out and confiscated.

It is a hard thing to take. I have had people tell me, I have never checked it myself but I am sure it is probably true, that one can actually walk from outside the security area and buy a pair of these little nose scissors in one of the convenience stores. I do not know. I have not tried it.

The point is that there are a lot of people who are working in security. They probably see things and have some wisdom and experience to share. I think that if they fed that to a board rep we would probably get some good enhanced decision-making by the authority.

The Minister of Transport has said that he would absolutely make sure that whoever goes on the board would have a knowledge of labour and who are plugged in to labour because this is a resource that we should be tapping into. Why do we avoid it? I do not understand but there are only so many board seats available. I suppose it comes down to that.

I do not know if members read a book that is old now called “Managing by wandering about”. It was written by a former chief executive officer of a corporation. Instead of being stuck in his office with all the trappings of power, fame and all that, he went out and walked around. He visited people at machines, in the warehouse and people who were keeping the cardex of the inventory in the warehouse. He kept wandering around. He said he got more answers about the business than by sitting in meeting upon meeting with all his management staff and executives, and others.

The point is we should reach out to these people. They have a lot of experience. They see a lot of things right at the job site of which we should be taking advantage and I think that our government understands that.

The bill would implement some other important items that were included in budget 2001. One is the Africa development fund, a half billion dollars that would go toward assisting those countries in Africa that have dedicated and committed themselves to good governance and have a respect for democracy and human rights.

Africa is a very complicated place. I know my colleague sitting here has, for many years, worked diligently and forcefully in understanding Africa, so I feel somewhat humbled by speaking on Africa in this House.

We have some significant challenges. We want to help Africans help themselves but by the same token we want to ensure that they are committed to good governance, transparency, accountability and fighting corruption.

The residents in my community are saying that if they send $1 of tax to Ottawa and we send that to Africa, 40 cents of it ends up in some Swiss bank account of some corrupt leader and the other 60 cents goes to help the people. I am sure that is not acceptable to the people in the House and to the people of Canada. We need to ensure that our government is committed to those principles, that we would only support those countries in Africa, and indeed around the world, that need a helping hand and are committed to good governance.

We read in the paper about the various things that are going on in Africa and the troubling news out of Zimbabwe, but we cannot turn back our eyes from this hugely important continent. We need to help those people help themselves. This fund of half a billion dollars would be used for those purposes. The Prime Minister, in chairing the upcoming G-8 meeting in Kananaskis, has said that Africa would be a priority and that this fund would be used to assist those in need.

I have heard some Canadians ask, “Why are we helping them when we have difficulties and poor people in Canada?” That is true. However, as a government, we must take our responsibilities on a number of different fronts. We must ensure, as part of the global world in which we live, that we are playing our role helping others help themselves. That is why this is so important.

Another initiative that is encompassed in the bill before us today would put into play $2 billion of funding that would be earmarked for strategic infrastructure. These would be projects of national significance across Canada. They would depart significantly from the infrastructure programs that the government has put in place already.

There have been three of them and the amount of funding provided has been significant. The last round was approximately $3.7 billion. The federal government puts up money and that is leveraged with moneys from the provinces and municipalities. A whole host of projects are done, from sewer and water systems to cultural initiatives. However, that is a separate program.

The $2 billion announced by the government in budget 2001 would be used for larger projects. They would be strategic in focus and national in significance. This budget would allow for that fund to be set up. Originally, it was to be a foundation. That is how it was announced in the budget. The advantage of a foundation is that it provides a continuity of funding. There is no difficulty in terms of lapsed funds. There is a question of governance and of it being at more arm's length from the government. Some would argue that is a good thing.

The government, in its wisdom, decided to move that from a foundation into an annual appropriation. That would mean that members of the House, people who are elected by the citizens of Canada, would be able to influence the priorities that are established for these national infrastructure projects. The minister responsible is looking forward to working with members on this side and that side of the House for input into what those guidelines should be and what criteria should be applied to the various projects as these proposals come forward.

We need to invest in infrastructure. Not only is it sound public policy but it would create employment, economic activity and makes us more competitive. Many of the projects make us more competitive and some make us a better nation. I am very happy that the budget puts in place the funding required to implement the $2 billion of federal funding leverage with other funds over the next few years.

The budget also implements a number of other measures. What is often lost in the debate in the House, especially by the members opposite, is the tax holiday the Minister of Finance announced for small businesses. Their income taxes will be deferred for about a year. It is especially helpful to them in these difficult economic times in their cashflow management. That is a very significant measure that was incorporated into the bill.

I have other examples. I know there has been much interest and debate in the House about mechanics' tools. I know on this side of the House we have looked at a number of different initiatives. The initiatives that were placed before the House in the past basically did not differentiate between the tools used by mechanics and the tools used by people in other employment. If we had adopted some of those proposed measures we would have left the door open for people who work in offices to write off the cost of their computers, their palms or their research in motion gizmos.

Some would say that would have been a good thing. Any time we cut taxes it is a good thing for taxpayers but taxpayers pay us to manage the fiscal resources in the wisest and most prudent way possible. When we look at a tax measure and say that we will just deal with tools used by employees, and we do not restrict it or ring fence the issue, a term used by the Department of Finance, there could suddenly be a whole host of other implications such as someone who needs research materials for a job or needs to subscribe to publications, et cetera.

The problem with that proposition before the House in the past was that it could be as wide as it was broad and there was no way for the government to contain its exposure. When I say the government would contain its exposure, I mean on behalf of all taxpayers. Many people work as individual contractors, as entrepreneurs and in many different ways. If we had allowed this type of employment expense deduction it would have opened things up very widely. I certainly support the government's decision.

In budget 2001, the minister came out with provisions that would allow the deduction of mechanics' tools for apprentices if they were part of a recognized apprenticeship program in a province or territory. The amount they could deduct would be limited to the extraordinary costs they incurred and would be based on a certain percentage of income.

We all know that the income of an apprentice mechanic is very low. At the same time the apprentice has to build up his or her tool kit by investing in tools. Therefore the bill would enact those provisions. It states that if one is an apprentice mechanic and part of an approved apprenticeship program in a province or territory, one can deduct one's costs up to a certain point of one's income, and in fact can carry the costs over. Let us say in the first year an apprentice has to buy a big chest and put a lot of tools into it. Because the apprentice's income is low, $24,000 or $25,000, he or she might be limited that year but would be able to carry the amount over. I think that is a fair way to proceed.

Likewise, we had to look at other trades. What about electricians, plumbers and carpenters? The government, through the Department of Finance, actually surveyed the various trades. It discovered in the data, which I think was available at Human Resources Development Canada and from various associations, that mechanics' tools were by far a significantly higher expenditure than the tools used in other trades. That is what the data showed and that is intuitively what one would think.

There is a question in all this. If one were a salaried employee of, let us say, Midas Muffler, why would Midas Muffler not supply the tools? However, it apparently does not. The rationale for that is that these tools walk, and I am sure tools do walk.

We have many situations in workplace environments where organizations, companies, whatever they might be, have to put in controls necessary to safeguard these tools, this equipment, these drugs, whatever they are. I am not sure that is a totally persuasive argument but the reality is that the people working at many of the shops are contract employees.

It is interesting to note that self-employed people can buy tools, set them up as a capital cost and the tools can actually be depreciated for tax purposes. Someone might ask why it would be different for a contractor versus an employee. The rationale is that a contractor, in most cases, has additional business risks.

If a person had one employment contract with one employer, the tax department would probably come along and say that the person was not really a contractor but an employee because the employee was taking his or her direction for the day to day work from the employer.

Since a true contractor has more business or personal risk than an employee, the income tax allows the contractor more latitude with respect to the tools he or she can claim as a business expense through a capital cost allowance.

Bill C-49 would implement the provisions to allow apprentice mechanics to deduct the extraordinary costs of tools against their employment income.

Bill C-49 has other very positive features, basically implementing the provisions of budget 2001. Tax incentives to encourage organizations to move from non-renewable energy sources to renewable energy sources is another feature in the bill. These are tax incentives for producers to move to renewable energy sources as opposed to non-renewable.

I think all of us in the House and indeed across Canada probably support the government in its efforts to reduce emissions and take us toward our Kyoto target of reducing greenhouse gases and cleaning up our air. This is one measure, in addition to the many other initiatives, that the government has financed over the last few years. In budget 2000 and in the economic and fiscal update, I think the government committed about $1.2 billion to cleaning up the environment. However, more has to be done. An issue before us is Kyoto and what that does. I am sure the government is examining that very carefully.

We know the United States is doing something but it is certainly not ratifying Kyoto. I for one believe greenhouse gases are a problem and I think most people in the House believe that as well. We need to deal with the problem but with the Americans dragging their feet, we need to be careful.

On the one hand, we want a sovereign, independent policy and we want to deal with the issues as we see them, but if we were to put restrictions or impose conditions on companies in Canada which were not prevalent in the United States, we could create some competitive difficulties for them and that could translate into jobs and economic activity. I am not sure how that will be factored into the equation but I know the government is seized with the issue and wants to ensure there is more data, more information.

Various organizations have said that the costs of implementing Kyoto are in the billions of dollars. We have another study saying that it will cost $500 million at most. The numbers are all over the page. What we need to do in the House, in fact it might make a good study for a committee of parliament, is look at the economic costs and benefits of implementing Kyoto and maybe look at the costs and risks of not implementing Kyoto to see how all those factors fit into the equation.

In conclusion, I believe the bill, which would enact the budget that was tabled by the Minister of Finance on December 10, should be supported by the House. It was an incredibly brave and courageous budget that was brought out in very turbulent times and meets the objectives that were presented by Canadians as we travelled across Canada. It is a well-crafted budget. As the bill would allow the government to implement the budget, I would ask members to support it.

[Ralph Goodale, Liberal, for Minister of Finance]

moved that Bill C-49, an act to implement certain provisions of the budget tabled in Parliament on December 10, 2001, be read the third time and passed.

[David Collenette, Liberal, for the Minister of Finance]

moved:

Motion No. 22

That Bill C-49 be amended by adding after line 5 on page 85 the following:

“22. (1) The portion of paragraph 38(a.1) of the Act before subparagraph (i) is replaced by the following:

(a.1) a taxpayer's taxable capital gain for a taxation year from the disposition of any property is 1/4 of the taxpayer's capital gain for the year from the disposition of the property if

(2) Subsection (1) applies to dispositions that occur after 2001.”

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, there are so many areas in which to criticize the government in terms of general fiscal direction at this time. I do not have to remind anyone in the House of the decline of the Canadian dollar by 20% under the government's stewardship as a result of its failure to adapt and develop policies in Canada that reflect the needs of the 21st century, particularly in terms of what has happened in other countries. As other countries have focused on productivity and on the type of tax and regulatory reform to vault their economies proudly forward, the government has dilly-dallied, dithered and focused on short term focus group economics and on next week's polls as opposed to the challenges and opportunities in the next century.

I will not focus on the lack of vision. Canadians are aware of that. Canadians are aware that the government has done nothing for nine years except basically live off the proceeds of the previous government's policies, including free trade, the GST and deregulation of financial services, transportation and energy, which were all the very policies that party opposed in opposition and then swallowed themselves whole in government to accept, to embrace and to live off the proceeds of.

However, I will not be pithy and partisan today in the House of Commons. Instead, I will focus on some of the specific shortcomings of the current piece of legislation at hand.

First, the government has imposed a $2.2 billion tax. It is not just a fee, as even the Minister of Finance in the House of Commons is referring to it. It is a tax on Canada's most vulnerable industry, the airline industry, during a period of time when we see the great and tremendous need for competition in Canadian airspace, which is so sadly lacking. It is a tax aimed disproportionately at discount and short haul carriers, the very type of competition we need across Canada, particularly in regions like Atlantic Canada and British Columbia at a time when those regions depend on affordable access for air travellers.

There has been absolutely no impact analysis by the government, either by the Department of Finance or by the Department of Transport, on what the impact of this new $2.2 billion tax will be on competition in Canadian airspace, on the regions of Canada and on the struggling airports. In and of itself it is dismaying that the government would not do any type of study of what the impact of such a major policy would be.

Further, we have learned this week that the Department of Finance actually based the $2.2 billion tax figure, the $12 per flight or $24 per round trip, on specious data. The bureaucrats in the finance minister's department actually developed their estimate of what that fee ought to be on information that was categorically wrong, on estimates that actually reduced what the realistic number of air travellers would be, in an effort to inflate revenue over the next several years. The government has now created, through this new air security tax, a $1 billion surplus for itself which will go into general revenue.

The Minister of Finance is saying “we will revisit this”. The government is saying “we will revisit this in the future and if it is too high, we will cut it back”. Why should we believe the government when it is the same party that promised to scrap the GST when in opposition and then after forming the government embraced the GST? Now the Prime Minister brags about the GST and takes credit for it during foreign travels.

It is offensive that the government is trying to profit on the back of Canada's most vulnerable industry, the airline industry, and in fact in many ways is exploiting the genuine sympathies of Canadians in a post-September 11 environment to actually create another cash cow for Liberal spending in other areas. That is obviously wrong.

I was disappointed that the government did not move more aggressively on one specific area of policy, one further area: to eliminate the capital gains tax on gifts of listed securities. In the legislation, the government does make permanent the 1997 reduction of capital gains tax on gifts of listed securities to 50%. That is a baby step in the right direction, but the fact is, in the U.S. or the U.K., universities, hospital foundations and general charities all benefit from government policy whereby there is absolutely no capital gains tax on gifts of listed securities. This means that our Canadian universities, our Canadian hospital foundations and our charities, ranging from the big charities like the United Way in Toronto to the smaller charities across our country, operate at a competitive disadvantage with charitable foundations, organizations and philanthropic interests in the U.S. and the U.K.

Clearly this is bad public policy. At a time when the government has so dramatically cut social spending and transfers to the provinces we need to engage our volunteer and philanthropic sectors more fully. At the finance committee we asked representatives of these sectors what we ought to do to increase levels of donation and participation to meet the needs of Canadian communities. Every one of the witnesses before the committee said we should eliminate the capital gains tax from gifts of listed securities.

The government has failed to do this. The previous reduction of the capital gains tax on gifts of listed securities has resulted in over a billion dollars going from private hands to charities in Canada over the last four years. Completely eliminating the capital gains tax on gifts of listed securities would have an amazing impact on the growth of charitable contributions in Canada at a time when social needs across the country have expanded and governments are playing smaller and smaller roles. We need to do everything we can to ensure the volunteer sector has every possible advantage and tool at its disposal to succeed.

The cost to the government today of completely eliminating the capital gains tax on gifts of listed securities would be about the same as the tax revenue loss in 1997 when the government reduced the capital gains tax by 50% on gifts of listed securities. However the impact would be far greater. The United Way of Greater Toronto has received gifts of shares exceeding $10 million since 1997. In every province across Canada, from universities in Nova Scotia to hospital foundations in Toronto and British Columbia, there are examples of charities and community based foundations that have benefited as a result of the policy.

This would have been a simple way for the government to demonstrate that it cares for community based organizations which are trying to meet the needs governments have become less able to meet in recent years. The government has failed to move more aggressively. There were members of the Liberal government on the finance committee who supported a PC/DR motion to amend Bill C-49 to completely eliminate the capital gains tax on gifts of listed securities. The motion exists in the group today because we were successful at the finance committee. The government must now reintroduce a motion to reinstate the previous policy.

We will be voting in favour of making permanent the 50% reduction in capital gains tax. We support it as a baby step in the right direction. However we are profoundly disappointed that the government did not take advantage of an important opportunity to eliminate the capital gains tax from gifts of listed securities. The government ought to move to a broad based policy of eliminating the capital gains tax permanently in any case.

We did not have a capital gains tax in Canada until 1971. No tax has a more pernicious and negative impact on the growth of capital, investment, productivity and jobs across Canada than the capital gains tax. It acts in many ways as a cancer on the types of investment that would lead to the productivity and growth the Canadian economy so sorely needs. Our low Canadian dollar reflects the very opposite of such growth. One of the reasons we have a low dollar is that productivity rates have lagged since 1993 relative to our trading partners, particularly the U.S.

There are many areas of weakness in the government's general fiscal direction. The lack of enough vision to see the need for broad based tax reform focused on productivity, growth and opportunity is probably the biggest leadership deficit Canadians face. The government may be in surplus but there is a leadership deficit across the way.

Canadians are paying a big price for the government's failure to grasp opportunities and challenges. Our low dollar is probably the price tag we have paid for a government that has been on cruise control for eight years. I am afraid this great country of ours will cruise control into a ditch unless the government starts seizing opportunities as opposed to dodging the challenges facing the country at this critical time.

[Lynne Yelich, Canadian Alliance, Blackstrap, SK]

Mr. Speaker, today I am speaking on a concern I have with the proposed air security surcharge. The Liberals' Bill C-49 introduces an air travel tax of $24 and is set to become effective April 1. As a person who travels frequently, I find this tax outrageous. As a parliamentarian, I find it unnecessary.

On the six month anniversary of the attacks on America and the World Trade Center it is evident that the world is still mourning. As well we see that what happened just a short six months ago is still fresh in our minds. It was these acts that prompted the government, my colleagues and myself to take a closer look at the security measures that we take in this country.

When our neighbour is this vulnerable a target for terrorism, then we have to ask how safe we are. I believe, as do my colleagues in the Canadian Alliance, that we need heightened airport security, but to gouge Canadian travellers with this new tax is to wrongly take advantage of their fears and their mourning.

The tax as it stands now will hurt Canadian travellers and ultimately the companies that supply this travel to Canadians. Surely the government would know better than to implement a tax that will destroy smaller air carriers and limit the choices of travelling Canadians. Surely common sense would prevail.

I believe that if one has the courage to stand and criticize someone's ideas, then one must be prepared to give a better solution. The Canadian Alliance, and specifically my colleague the member for Port Moody--Coquitlam--Port Coquitlam, has brought forth a number of alternatives and improvements to this tax.

The first suggestion, and probably the most important, is that air travellers should contribute to the cost of improved airport security but they should not bear the total weight of these new improvements.

The approach taken by the United States is to have air passengers pay for part but not all of the cost of aviation security. A fee of $2.50 per flight to a maximum of $5 per day is a much more reasonable and workable fee.

The Standing Committee on Transport and Government Operations agreed unanimously that having the travelling public pay for 100% of improved airport security would be an exorbitant tax and would be unfair, yet this is exactly what has happened.

Mark Hill, the vice president of WestJet was quoted as saying “Once the tax is implemented, we believe that traffic will evaporate off the short haul routes. Once the traffic goes, we will have to back out of some of our short haul flying. Once that begins, the genie is out of the bottle and it is very hard to stuff the genie back into the bottle once that happens”.

These comments scare me. They scare me because they affect my constituents directly.

Saskatoon airport services most of my constituents. Its flights service travellers primarily to Winnipeg, Calgary, Prince Albert and Regina. These are all short haul flights. If this tax dissuades short haul flights, then it will destroy the business that is fundamental to the Saskatoon airport. This means not only the loss of valuable resources for my constituents but also the loss of jobs and a valuable part of the Saskatchewan economy.

Doug Schmidt, a WestJet pilot who originated from my area, was in Ottawa recently. As a concerned pilot he presented a petition to the Canadian Alliance opposition critic for transport to be tabled in the House of Commons on behalf of the WestJet pilots, flight attendants and fellow employees.

The petition urges the government to scrap the currently proposed system and replace it with one that is fair and equitable. The petition suggests that a percentage of airfare based formula would be far more fair to all air carriers, air travellers and supportive to airport communities.

The petition also outlined some very stark examples of what is wrong with the tax. On a $57 one way ticket between Edmonton and Calgary, a flat rate of $12 will represent more than a 20% increase in price for travellers. This increase in price could very realistically result in the removal of this short haul flight. However the same $12 fee on a $319 fare from Moncton to Vancouver will represent only a 4% increase. This increase is reasonable for long haul flights. This example clearly shows the discrepancy and the unfairness of the tax.

Mr. Schmidt and his co-workers brought forth this petition because they feel strongly about the company that they work for. They believe in their company. It is also driven from a fear that this tax will destroy this company which is largely based on short haul flights.

I was overwhelmed by the effort made by WestJet employees to save their company. I was even more overwhelmed when at a recent community event constituents rallied to sign the petition and show their support for the short haul flights. These constituents wanted to express personally the value that these short haul carriers have in their lives.

The service provided by WestJet and similar companies, and the affordable rates that they provide, are what Canadians have come to expect. It is what they deserve. Bill C-49 will surely take this away from them. How can we stand by and let this happen?

The Saskatchewan government has also been very vocal about questioning this new tax. Saskatchewan's own highways and transportation minister was quoted as saying that the Saskatchewan government fully supports enhanced security, but it is adding its voice to the growing number of others questioning the federal government's decision to beef up national and international airline security at the expense of local airports and short haul passengers.

I support my provincial government in this line of reasoning. It was clear the government was not willing to help Saskatchewan farmers with this budget, but I am surprised that it would add to this disgrace by destroying our air industry.

David Eckmire, chair of the Air Services Group, said the fee will generate $5 million annually from travellers using the Saskatoon airport which almost equals the airport's entire operating budget.

Many within the airline industry view this new airport security tax as a tax grab. It has not gone unnoticed that the money will go into the general revenues of the federal government and not a special security fund. My airport of Saskatoon, Saskatchewan will pay in taxes what is equal to its operating budget and in the end it will be stashed away into a federal reserve, benefiting no one. Tell me, where is the common sense?

This tax will be extremely detrimental to smaller communities, communities that are in my riding of Blackstrap.

I had mentioned earlier the need for the government to apply common sense to the airport security tax. Now I am going to put forth some common sense statements made in several of the presentations to the finance and transport committees.

Mark Hill, vice president of WestJet, suggested that a flat fee would be simpler to administer. This would mean that the tax would be based on a percentage of the fare and not a head tax. This system would be far less detrimental to short haul flights. Mr. Hill went on to tell the finance committee that this tax will be an auditing nightmare for airlines to try and figure out who owes what to whom and when.

Mr. J. Clifford Mackay of the Air Transport Association of Canada said “The implementation of this new tax or charge is frankly extremely complex. We have spent hundreds of hours trying to figure out how to do this. It is not going to be easy”.

Randy Williams, the president and CEO of the Tourism Industry Association of Canada, said “This tax will hurt an industry still recovering from the September 11 terrorist activities and the economic slowdown”. He went on to say that the travelling public does not support this tax.

These are very important points. They illustrate quite clearly that the government ignored the work in committee, the airline industry and the travelling public when it introduced Bill C-49.

This sort of separation between the people and the government is what has caused so much distrust and resentment for the political process. If we want to restore the belief of Canadians that their government is working for them and not against them, then we need to start listening to these common sense statements.

The government ignored them. I am asking members of the House from all parties to think carefully about why they are here. I want them to consider what is best for their constituents and what is necessary for a healthy airline industry in Canada. I am certain when they have done this that all members will vote against the implementation of this tax and they will do so with a clear conscience.

[Irwin Cotler, Liberal, Mount Royal, QC]

Mr. Speaker, today marks six months from September 11, the day the world was changed and where the protection of human security emerged as a central motif in budgetary planning and process which was finally expressed in Bill C-49.

The protection of human security, as I have said in the House, includes not only funding the components of a counterterrorism law and policy. It includes investing in people, in securing and sustaining a healthy and holistic environment, and in improving the health of Canadians by investing in the environment.

Indeed investment in a healthy environment, as in Bill C-49, can confer an economic benefit in job creation and the promotion of technological innovation, a resource and energy benefit in the conservation of energy and increasing the security of energy supplies, and a health benefit in improving the quality of our air and water and in reducing the toxicity of our environment.

For example, it is estimated that air pollution is responsible for 16,000 premature deaths and hundreds of thousands of incidents of illness. There are at least 10,000 abandoned toxic sites across Canada, including some 5,000 within federal jurisdiction.

It can confer a heritage benefit in the protection and conservation of our natural heritage and a political and juridical benefit in permitting us to undertake our responsibilities as global citizens.

One can only welcome, therefore, the investment in tax initiatives in Bill C-49 intended to promote and protect a cleaner and healthier environment, including a partenariat with communities to help the environment and support for communities both urban and rural that actively contribute toward a healthier environment.

Launched last year and administered by the Federation of Canadian Municipalities, part of this partenariat, the green municipal enabling fund and the green municipal investment fund have been effective in stimulating community based feasibility work and investments in more than 100 projects to improve the environment in diverse areas such as energy and water savings, community energy systems, urban transit, waste diversion and renewable energy.

The budget doubles the green municipal enabling fund and the green municipal investment fund at a cost of $25 million and $100 million respectively in the current fiscal year. These funds in addition to the new strategic infrastructure fund and the existing infrastructure fund will help protect our natural heritage while creating jobs, promoting technological information and providing affordable housing.

It will protect air quality and promote energy efficiency through incentives for clean energy and energy efficiency. Renewable energy and reducing energy consumption are essential components of the government's strategy to address climate change and improve air quality.

Budget 2001 supports this objective by investing $260 million in a 15 year program that will offer production incentives for electricity that is produced from qualifying wind energy projects and will encourage investment in these wind energy projects.

Budget 2001 also invests $5 million a year to broaden eligibility for the income tax incentives that apply to renewable energy and certain energy efficiency projects.

It will promote sustainable woodlot management. The budget sets aside $10 million a year to eliminate a provision related to the intergenerational tax deferred rollover for farm property that sometimes led to the premature harvest of woodlots. This will ensure better management of the resource.

The next area is the toxicity of contaminated land. Across Canada as in most countries in the world contaminated land lies unused and unproductive. Such sites known as brownfields may have the potential for rejuvenation, bringing both health and economic benefits to communities.

Therefore a little noticed but very important item in the budget is that in response to the government the National Round Table on the Environment and the Economy has agreed to develop a national brownfield redevelopment strategy to ensure that Canada is a global leader in remediation.

There is a recent series of federal initiatives in support of the environment such as an initial $100 million for the sustainable development technology fund to stimulate the development and demonstration of promising new environmental technology, a contribution of $60 million to the Canadian Foundation for Climate and Atmospheric Sciences to support academic research on climate change and air pollution, $150 million to renew the climate change action fund, $60 million for energy efficiency and renewable energy programs to lay the foundation for future greenhouse gas emission reductions in accordance with the Kyoto protocol by facilitating the development of technology and supporting energy efficiency and renewable energy projects, and $90 million allocated for the national strategy on species at risk to support habitat stewardship programs and other species protection activities.

This leads me to address three important initiatives regarding the promotion and protection of a healthy environment by way of conclusion. The first relates to the Kyoto protocol. As we can appreciate the world's climate is changing at an unprecedented rate. Without government action the long term consequence will be dramatic. In the north of Canada, as the Minister of the Environment has demonstrated, permafrost and sea ice are in retreat or melting. As a result Hudson Bay polar bears are at an increased risk of starvation because of a shorter seal hunting season.

The cost of moving supplies to communities on resource development projects is increasing because the ice road season is shorter and the traditional lifestyle of aboriginal peoples is threatened. We also feel its effects in the south with droughts affecting the agriculture and forestry sectors and the lower water levels of the Great Lakes disrupting our inland shipping routes.

In a word, both domestically and globally climate change is a major environmental problem that has an impact on the quality of life of all. Fortunately this past summer 178 countries finally reached agreement on the primary rules to implement the Kyoto protocol. In Marrakesh, Morocco in November we reached a final agreement on the crucial legal and technical details for the implementation of the protocol.

Canada played a key role in the four years it took to conclude the international rules to implement the Kyoto protocol. We now have a solid agreement that is good for Canada, that is good for the economy, that is good for the environment. We have a deal that will allow Canada and other developed countries to achieve the greenhouse gas emission reduction commitments they made in the Kyoto protocol in ways that are environmentally and economically sound in both the short and long term.

Admittedly there are challenges to overcome in reducing our emissions but there are also opportunities. Canadians have considerable expertise in clean energy and energy efficiency and there will be vast new markets for our know how.

Like the industrial revolution and the information technology revolution we are now in the cusp of the clean energy revolution. Clean sustainable energy can do much more than just reduce the risk of climate change and ensure cleaner air. It can also bring jobs, investment income and a competitive edge.

Similarly we recognize that the actions that need to be taken to achieve our climate change commitments will have costs, but there are also significant benefits such as lower health care costs resulting from cleaner air; job creation through, for example, cost effective building retrofit projects; lower costs for the forestry and agricultural sectors through the adoption of sustainable production methods; lower operating and production costs from energy efficiency; and revenue sources for municipalities from, for example, using landfill gases to generate electricity and the potential for exporting our technology and expertise.

When we hear the fears expressed with regard to the economic costs we should look at it in its total context, not only in terms of the economic costs but the economic benefits and the benefits to the environment, the benefits to health and the benefits to job creation and the like.

This brings me to my second major initiative: the species at risk bill. I support the amendments from the Standing Committee on the Environment and Sustainable Development that were put forward in three respects. The first is strengthening habitat protection in areas of federal jurisdiction. This addresses the most contentious issue of witnesses with Bill C-5, that it does not make the protection of critical habitat mandatory even in areas of federal jurisdiction.

While the committee amended the bill to make habitat protection mandatory in areas of federal jurisdiction, protection is delayed for at least two years after listing until the action plan stage. This will allow ample time for input from provinces, territories, stakeholders and negotiating voluntary stewardship agreements with landowners or companies.

The second amendment I support is ensuring that the decision to list a species is science based and accountable. Bill C-5 allows cabinet complete discretion to decide which species to list at risk. There is no requirement to act based on science, no time limit and no obligation to provide reasons for not listing a species. It is important to note that a decision not to list a species can result in a species extinction.

The committee made three changes to the process for listing species. Cabinet will have six months to decide whether to accept a recommendation by the scientific committee. The recommendation then takes effect if it is not varied or rejected by cabinet and the minister must give reasons if the recommendations are not followed.

These changes were themselves a compromise.

The third recommendation that I would--

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I am pleased to address Bill C-49, an act to implement certain provisions of the budget tabled in Parliament on December 10, 2001.

As the Bloc Quebecois critic on transportation, I will discuss the infamous tax on airline security. But I would be remiss if I did not take this opportunity to comment on the remarks made by the Liberal member who just spoke regarding the investments made by this good Liberal government, including in health research.

It was mentioned that the government doubled its investments in health research. This is fine, except that when it comes to finding new technologies to cure sick people and discovering new drugs for them, we must ensure that this is done through the universal medicare program that exists across Canada.

When the time comes to pay for the research conducted to help cure the sick—with the product of that research— it is the provinces that foot the bill. The federal government is only contributing 14% of health costs in the Canadian provinces. Such is the reality.

It is fine to double investments for research, but if the government wants to be logical in its approach, it should double its investments in health across Canada and Quebec. That would ensure fairness. Instead, the government is doubling investments for research in health. Again, that is fine, except that in a universal system, it is Quebec's social program that pays to treat the sick, to treat Quebecers who are in poor health, with the product of that research.

The federal government is not ensuring that investments keep pace. It has doubled investments in research, but it has not doubled their amount or their percentage in terms of health costs across Canada, particularly in Quebec. This is why all the Canadian provinces are once again unanimous in saying “the federal government only pays for 14% of health costs across the country”.

What the provinces are asking the federal government is very simple: to up its contribution to 18% in the coming years. But there is nothing in this budget in this regard. Do not try to find new money in all that is proposed in Bill C-49, the act to implement certain provisions of the budget. There is nothing in it for health related costs. Nothing has been increased. There is no indication that investments in health across Canada might be doubled.

I will continue more specifically with the measure that involves a tax, once again. In order to solve security problems—which is all very fine in itself—the government has decided to create a Canadian Air Transport Security Authority for the purpose. The decision was made to allocate to it a budget of $2.2 billion over five years in order to bolster security in airports across Canada. Obviously, despite a surplus estimated at over $9 billion—we shall see within a few weeks—the decision was made to create a $12 air travel tax for an outward bound trip, and $12 for the return half, for a total of $24, the famous 12-24 tax.

Taking this past weekend's newspapers—and I do not have any problem with doing so—more particularly a Canadian Press story of Saturday March 9, picked up in Le Droit , reference is made to the fact that “The air security tax will apparently bring in more revenue than is necessary”.

So, the decision has been made to create a tax that will bring in more revenue than is necessary. No studies have even been done. This has been proven in the House, because the Minister of Finance has been asked and has responded: “Given the urgency of the situation, we have not had the time to carry out an exhaustive study”.

Today, they are imposing a $24 tax that will bring in more revenue than necessary. What is more, an article in the Journal de Montréal on Sunday March 10 quotes the Minister of Transport as saying “The airlines should cut ticket prices”. The airlines had the responsibility for part of security—spending $120 million on it—but now it is the responsibility of the state. Quoting again from this article, “The Minister added, however, that any such decision should be left to the discretion of each carrier”. They will not, of course meddle directly in the administration of the airlines, but a tax will, nevertheless, be imposed, saying “It is up to the companies to lower the price of their tickets”.

This industry has undergone drastic drops in business because of the tragic events of September 11. Yet the federal government has never done anything to bail it out. Forget it, no help has ever been forthcoming.

Companies were compensated for the six days that airspace was closed, which is only right. Then they received a small amount of compensation for the increase in insurance premiums. As for anything else, that was it, nothing.

It was decided that free market forces would be allowed to operate. The result was the closing of Canada 3000 and cut-throat competition by Air Canada, which created subsidiaries, such as Tango, to try to shut down almost all other air carriers throughout Canada.

Free market forces were allowed to operate and Canada's sorely burdened airline industry was saddled with a tax which will not apply to all airports in Canada; we have drawn up a list. Twenty airports in Quebec will be affected, as opposed to 15 in Ontario.

I would like to read the list of airports in Quebec which will be affected: Alma, Bagotville, Baie-Comeau, Chibougamau/Chapais, Gaspé, Îles-de-la-Madeleine, Kuujjuaq, Kuujjuarapik, La Grande Rivière, La Grande-3, La Grande-4, Lourdes-de-Blanc-Sablon, Mont-Joli, Montréal (Dorval international airport), Montréal (Mirabel international airport), Québec (Jean-Lesage international airport), Roberval, Rouyn-Noranda, Sept-Îles, Val-d'Or.

All these cities in the regions will be stuck with a new tax. I can never say it often enough: when we want to discourage people from smoking, we increase tobacco taxes. The government has increased the tax on flying. It has created a new tax and it thinks that this will encourage people. It is even telling air carriers, “You should lower air fares. We did not help you when you needed help. We let free market forces operate, but now we are going to tell you what to do. We are going to tell you that you should lower the cost of a ticket by $24 so that passengers do not notice they are having to spend $24”.

I repeat, it is one surprise after another in the House. The Liberal government will never cease to surprise me. One day, Quebecers and Canadians will catch on.

One day, the government will have to account for its management. It is not true that companies can always be told what to do, how to operate, when the government is not investing a cent, in the airlines for instance. This is a real problem.

The federal government never once helped out this industry that experienced the heaviest losses in the history of Canada and Quebec in such a short time. It decided to charge users a tax to try to give a boost to business. Once again, it has the gumption to say in the House that it doubled health research, but at the same time, it did nothing to invest more in the health care system, in treatments needed by sick people. When we find a drug for a someone who is sick, we have to be able to buy the drug, to buy the technology and to train staff. This means nothing. The government decided to double its research budget, but is not investing any more in the health care system. That is left up to the provinces.

The same can be said of the airline industry. The government decided to create a new tax. Today, in order to help travellers swallow the bitter new tax pill a little easier, the Minister of Transport said, and I quote, “the airlines should lower their ticket prices”.

So, every time the government invents a new tax, it is up to the industry in question to find a way to absorb the costs for the Liberal government's good decisions.

I repeat, what has happened in the airline industry is serious, it is a situation without precedent in history. I think that some day, and I hope it will be as soon as possible, people will judge the government for its acts, for the fact that it has come out of this so brazenly, without investing, and letting companies such as Canada 3000 go bankrupt, leaving workers on the street.

[Gary Lunn, Canadian Alliance, Saanich—Gulf Islands, BC]

Mr. Speaker, I am pleased to rise to debate Bill C-49, the budget implementation act. There are many areas we could talk about that would be affected. I will try to focus my remarks on a few.

The previous member referred to the fact that this government brought forward the largest tax cut in Canadian history. People are now filling out their income tax forms. I had constituents come to me on the break last week who said that that was ironic. They read that the current federal government provided the largest tax decrease in Canadian history. However they asked me why their take home pay was smaller. They said they never got more take home pay, that in fact it had gone down.

The government takes from one hand and then it gives a little back. The government takes a dime and gives two cents back and then wants Canadian people to thank it. We should get down on our knees and thank the government for getting two cents back.

There are a lot of tax increases but government members do not like to talk about that. They talk about the tax cuts but we do not see them. I tell people to look at their paycheque stub. That is the best test to see if they are getting another $100 more or $50 more a month. The answer is very clear that we do not. There is probably the odd case where a person actually has more take home pay for a number of reasons, but by and large almost 100% of people get less and less to take home. There is no question about it.

Our dollar, or as some refer to it the peso, this year hit an all-time low of 62¢. In November it hit five record lows. Canadians, with our 62¢ dollar, are still taxed at a 40% greater rate than that of our neighbours to the south. My wife's siblings were raised in Canada. They all have moved to the U.S., not because they wanted to but because of the job opportunities. People say I always talk about the U.S. and that I want to compare our dollar to the U.S. Let us look at the facts.

Since the government took power in 1993, our dollar has fallen 20% compared to the U.S. dollar. It has fallen 15% compared to the U.K. pound. It has fallen 9% compared to the Japanese yen. People ask why our dollar is performing so poorly. It comes back to the government. Our country has experienced poor GDP growth and poor productivity relative to the countries I have just mentioned.

It comes back to the economic policies of the government and its status quo style. The government does not want to engage or provide Canadian people, the entrepreneurs, the young people, the legislative framework or allow them to succeed. There is a mentality in the country that we should punish people who do well. If people are successful, they are taxed even more. This is not the right way to go. If there is a single thing we can do, we can allow people to be successful. We can encourage them.

Quite often we talk about brain drain in Canada. Some people will float out different numbers and say that we have a brain gain. They will do some math which will include the number of immigrants or whomever who come to the country. It is not the amount of people we are losing in this country; it is the quality. It is the entrepreneurs. It is the economic engine 15 years from now. It is the people who will create the wealth in this country and create long lasting sustainable, well paying jobs. These are the people leaving this country. Once they go, they will not come back.

If the country does not have a strong economy and if the economic engine is leaving us now, the people 15 years from now who will provide these jobs, we will not be able to afford the social safety nets. We will not be able to afford the public funded health care as we know it today. It is critical that the government act and act now, but we do not see that.

I will give hon. members an example. We have heard a lot about another new tax, which was just announced. Of course this is the airport security tax. The Liberal member stood up and said that it was a good thing, that the government had responded and increased airport security.

What the hon. member did not say was that the government was going to take $24 out of taxpayer pockets for every round trip ticket to provide that. In the U.S. it probably costs close to $5 to provide that airport security. Here was the telling part for me.

Members should talk to the airport security people at the airports. The Victoria airport is in my riding. I went through there yesterday. When I went to the screening booth, these people wanted to talk to me. They wanted to know what was going on. They had not heard anything. They did not know if there was a central agency. There was no training and no standards. This is the gospel truth. I was told that there was some new equipment coming in, but the security people were given only one copy of the manual at which they could look. This is airport security.

There is no question that the Canadian people want these security people to do a good job. The airport security tax for a round ticket will be $24. That will paralyze the new airlines coming on stream, such as WestJet which is providing incredibly good service and is making a profit. Imagine, a person can fly to Calgary from Victoria for $100. Canadians cannot do that on Air Canada. WestJet has targeted a different market, but it has a successful business plan and is making money. What is the government's objective?

If the government slaps on this new security tax maybe WestJet will move to the U.S. What is the government trying to do? Is it trying to drive another successful operation out? That is where the House needs to focus. How can we help Canadians to succeed? How can we help them keep more of their own wealth? That is what Canadians want.

Canadians do not mind paying taxes, but they want value for their taxes. Canadians want to see where their money is going. If hon. members talk to Canadians now they just about choke because they do not have a clue, They see the unaccountability, the spending and what is happening, and that is not right.

I could go on and on about this airport security tax. Then we have softwood lumber problem which is another whole issue. If I had to summarize the single biggest issue that I think the government should focus on, it is changing its philosophy and mentality of punishing people who are successful. We should be rewarding people who are successful because they will create more wealth, more jobs and encourage more people. Then our country will thrive.

We have the number one resource and that is our people. Our people want to be leaders. We must take the shackles off and reward them instead of punishing them for being successful in this country.

[Myron Thompson, Canadian Alliance, Wild Rose, AB]

Mr. Speaker, here we go again. This is number 83 in terms of closures and time allocations. It is a new record. It was the Liberal Party that complained about the Mulroney government when it invoked closure and time allocation more than any government had done in the past. The new record holders are here with us. The Liberals have been holding the record for some time.

Let us look at the way we operate in this place. The opposition usually has three or four times as many members present for debates as the government. We might as well shut the House down. No one seems interested in hearing the other side of the argument. That is too bad in a democracy. The government could have its representatives here to seriously debate the issues but that does not happen.

When the parliamentary secretary was answering questions earlier today a question was asked with regard to the committee coming up with a number of amendments that had been agreed to by members on both sides. Committee members had unanimously agreed, based on the testimony of witness after witness opposed to the tax grab, that the amendments were essential and necessary. However we might as well send a bag of hammers to the committees and spread them around the table because when they report back to the House nothing will have happened.

With the government and the way it rules it does not matter what committees recommend or what they hear from witnesses. The government will implement what it will implement whether we, the witnesses or Canadians like it or not. That is what we get because the PMO and all the front line guys that surround the Prime Minister have made up their minds. All the little puppets are prepared to jump up in their seats and support the government of the day even though committees, witnesses and Canadians do not. I say welcome to democracy, particularly in Canada.

I was relaxing on the plane to Ottawa. I was reading the newspaper as most of us do when we are on a plane. Lo and behold there was a nice little article in the newspaper. It said the solicitor general's department would spend $500 million to create cottage style facilities in our penitentiaries.

I found headlines regarding the air traveller fee. I brought some of them with me. One reads “One billion dollar Grit gouge takes off: Government underestimates passenger numbers in calculating flight surcharge, which will create a huge surplus”. Another says basically the same thing. It reads “Rage against the air tax from people who are affected most”. Another talks about “Sniffing out a pile of tax dollars”.

The government is good at doing that. For the nine years I have been here government members have sniffed around like a bunch of bloodhounds to find out where to get more tax dollars. Maybe that is why we are number one among the G-8 countries for paying taxes. It is because the government gets to do all these flowery, fuzzy little deals like building cottages in our penitentiaries for $500 million. Where will it get the money? It will sniff it out. Maybe it will get it from the flyers who go from point to point.

In my province of Alberta I have the pleasure of having a number of WestJet employees in my riding. They have visited me on a number of occasions asking me to fight hard against this kind of thing. We have a lot of flights going back and forth between Edmonton to Calgary. It is about a two and a half hour drive in good conditions, maybe three if one stays within the speed limit. Under Bill C-49 the flights would be $24 extra for those who go back and forth on them to do business. They would not do it any more. They could not. It would cost too much. They would drive.

Who would be affected? Maybe government members would be happy if WestJet joined Canada 3000 and the other five or six small airlines that went belly up. They would probably smile because they would have destroyed another one.

Thank goodness WestJet is bound and determined to stay strong and be competitive. The little competition it has exists in spite of and not because of the Liberal government. The government's proposed action would have a drastic effect on WestJet's situation and the Liberals know it. They ought to be ashamed for allowing it to go forward. However in their usual democratic process they will pop up in their seats like a bunch of sheep and puppets and do as they are told by the Prime Minister and his cronies. That is the way we operate in Canada. Lord help us.

In the meantime we have a serious situation across the country not just in the western prairie provinces but in Ontario, Quebec and many other areas. Once again in the budget there are zero dollars for agricultural assistance in spite of all the severe droughts we have had over the last three years. If we had another one this year it would be worse than we could imagine. What would it do to the number one industry in the country, the industry that provides more jobs and opportunities in small communities than any other? The government says it will provide zero dollars for extra assistance. What kind of outfit would think that way?

Yet the government can put $500 million into building cottages for bank robbers, thieves, sexual predators and murderers. That is the Liberal way of thinking. I do not know how much longer the taxpayers of Canada will put up with such nonsense. I do not know why they continually put people like that into positions of authority, people whose priorities are way out of touch with the normal people of our land who work daily to maintain our standing as the number one highest taxed country in the G-8. That is something to be truly proud of.

We have people who throw money this way and that way. Some $500,000 went to a company to provide a report. No one knows what the report is, where it is or what it is all about. The company that got the job to do the report had donated $70,000 to the Liberal Party. Is that not convenient?

We should not worry. It is only tax dollars. If we run a little short we will tax the airlines and put it under security measures. The U.S. can do it for $2.50 per head which is a whole lot less. We must do the same thing for $24 a head. However we must factor in that we have a government that does not care that the Canadian peso is hardly worth much any more.

What do Liberals care about? Is getting elected the most important thing? When will they start caring about victims of crime and doing things for them rather than building cottages for those who perpetrated the crimes against them? When will they do something about people working for minimum wage or maybe a little more who cannot afford to rent a good place? They are jamming together in warehousing situations and trying to exist under a high tax and high gouge government.

I have a hope before I die. Because I am getting pretty old that could happen any time. As long as we put up with people like this it might happen sooner than I want it to. I hope the day will come when Canadians wake up across the land and tell the Liberals enough is enough. I hope they tell them they are throwing money around like it does not mean anything for all these flowery, fuzzy, good Liberal things while they ignore farmers who are our number one industry, victims, homeless, and those living in poverty in the cities. It does not make sense to me. One day the Liberals will pay the price.

[Alex Shepherd, Liberal, Parliamentary Secretary to the President of the Treasury Board]

Mr. Speaker, it is my pleasure to enter the debate on Bill C-49, the budget implementation bill.

We have discussed back and forth to some extent the concept of the airport security tax. In fact, the member who spoke previously discussed her dissertations in the transport committee of which I am also a member.

It is interesting to note that the agenda of that committee took us as far away as Washington to discuss with the American authorities the implementation of the U.S. airport security tax.

Much has been said in the House about the Canadian tax being $12 and the American tax being only $5. The theory is that somehow we are trying to gouge the travelling public in Canada.

We had the opportunity to talk to the director of aviation in the United States. It was clear in discussions with him that the Americans believe the $5 tax is inadequate to support the cost of the security implementation program and think the tax will have to be increased in the near future.

It is unfortunate that the opposition has focused on this discrepancy because in reality we are shooting at a moving target. We are a much more responsible government here in Canada because we realize the true costs and we are telling the general public what the costs will be. It may well be after the legislation is reviewed in due process that the tax can be reduced. It is better to have a reduction rather than an increase. We will see how it unfolds in the United States.

The previous speaker said that we were using this as an opportunity to increase taxes for the travelling public in Canada. I do not think anything could be more absurd. Today is the six month anniversary, if we can call it that, of the tragic events of September 11. That somebody would stand in the House and say that we are trying to take advantage of a situation as disastrous as that simply to increase taxes is absurd and I say that for what it is.

Debate in committee centred on the issue of who should pay and what and why they should pay. I talked to my constituents. Probably less than 20% of them are regular travellers on the airlines. They asked me why they should pay this tax because they are not users and do not consume the services, that it is the travelling public who do that. I have a lot of empathy for that. That is a fair and reasonable process.

Those people who use the airlines should pay. People who go to the theatre pay to go to the theatre. People who go to hockey games pay to go to those games. It is surprising to me that the Canadian Alliance, a party which believes in user fees, would actually have the whole Canadian population pay for the business people who travel on the airlines from Toronto to Montreal. Such is the strangeness that comes from that side of the House.

A number of members asked about the float planes and so forth. I notice that certified takeoff weight of not more than 2,700 kilometers is exempt from the charge. In other words, smaller aircraft are exempt from the charge. Similarly, the schedule of the legislation states that this charge would be imposed on about 90 airports. That means if it is not on the list, simply put, the fee will not be charged. There is a process to recognize smaller airports and smaller aircraft.

There has been ongoing debate within the country and within this place about whether short haul takeoff and so forth should pay the same fee as longer duration trips. It makes no difference if somebody has to go through a security system.

It does not matter if it is in Vancouver or Kelowna and it is somewhat irrelevant how many actual kilometres people are travelling, they still have to go through a security system. There is a cost to the government to administer that. Clearly, people have said if people are going to travel, then they are likely going to pay.

Some people in our northern communities and so forth are going to be upset with that. They are going to say that they have to travel. If they need medical help for example they are forced to travel. It is not always a luxury item. There may be other ways to deal with that than trying to use the airport security tax as a way of exempting some and dealing with others.

It is a problem not only in Canada. When we talked to the director of aviation in the United States he said exactly the same thing. There are many places in the United States where they cannot service the outlying areas with the current fee structure.

To use that terrible word subsidize, maybe we should subsidize certain types of travel in certain parts of the country to offset it. I think we are doing that in reality anyway.

It does not take a rocket scientist to know that it costs $700 return airfare from Toronto to Ottawa. A lot of us could not get halfway to Europe for the same kind of money.

There is a methodology of moving money around. I am sure many routes are not viable in Canada but we defend them because we believe that our country is bigger than simply small concentrated areas of high population.

The airport security tax is fair. Some people are concerned about the accounting methodology. The reality is that the Government of Canada had to pony up $90 million to start this. The airlines that were directly or indirectly responsible for airline security had not been keeping up.

The equipment that the airline securities corporation absorbed from the government in its setup to my understanding had never been updated. When it showed up on the screen that we needed more equipment and more modern equipment, the federal government had to fork out $90 million to make the system work. It is a reasonable proposition that the government is now trying to recover that. That is basically what the airline security tax is attempting to do.

People have made disparaging remarks about the accounting procedures and maybe we should amortize the cost of the equipment and so forth over a longer period of time. That is very well and good but the reality is the accounting for the federal government has always been based on fund accounting. That means that when it is off our books, it is off our books.

We are getting into a larger argument if people want to find ways to amortize the cost over longer periods of time. We are talking about changing the basic fundamentals of the accounting of the Government of Canada, but I do not think it is really part of the debate on the airline security tax.

In conclusion, I would like to say some positive things about the budget. I always put out a little circular for my constituents, which goes back to 1993 surprisingly enough. Our total expenditures as a percentage of our GDP have gone from 16% to only 12% but in fact the debt as a percentage of our GDP has gone from 70% all the way down to less than 50%. That is an excellent record for this government and one which I support. I am sure we are going to continue with that agenda.

[Gary Pillitteri, Liberal, Niagara Falls, ON]

Mr. Speaker, I am pleased to speak to Bill C-49, the budget implementation act.

Today is the six month anniversary of the September 11 tragic attacks on New York City and Washington, D.C. The world is a very different place from what it was just six months ago. Those brutal attacks changed how we look at our security and our relationship with the rest of the civilized world.

After the horror and grief our thoughts turned to broader concerns. Canadians were understandably asking questions about our national security in the wake of those terrible events. Moreover they were worried about the possibility of repercussions on the Canadian economy. While we were not a target of the attack we saw how easily it could happen and how vulnerable we all were. The attacks could come from anywhere, be launched from anywhere, and take us by complete surprise.

It would have been easy to surrender to fear and shut our borders. Because of the terror experienced on September 11 we knew it was essential to restore a sense of personal security for Canadians. We knew something had to be done. It did not mean closing our borders. Our borders are the arteries that feed our economy and our prosperity.

I believe that the Liberal government acted quickly but not impulsively or irrationally.

The budget, dubbed a security budget, was not focused on raising bridges to the outside world or on isolating ourselves from the rest of the civilized world. The budget was aimed at making us better at determining where the threats would come from and to try to stop them before they could cause the sorrow and destruction experienced by our neighbours.

Beefing up security did not mean spending money to build walls but it meant investing wisely to determine who were our friends and who were our enemies. Budget 2001 earmarked $1.2 billion for border security. More than $600 million would buy new equipment to help customs officers detect explosives and other dangerous materials while still allowing people and goods to move smoothly.

The added funds would enhance our ability to respond to any unconventional attack, to improve our emergency preparedness and increase support for the military. Additional funds would go the Canadian Security Intelligence Service and the RCMP for intelligence and policing. The screening of new arrivals would be enhanced. In addition, the funds allocated would buy new information-sharing technology that would help Canada and American border authorities screen travellers at airports and other border entry points that line our 4,000 mile frontier.

My riding of Niagara Falls is a border riding where enormous amounts of goods move between Canada and the Untied States each day. Great numbers of my constituents depend upon the safe, secure and fast movement of people and goods. Many of my constituents feed their families and build their homes and dreams from trade with our great ally, the United States.

In December 2001 I accompanied the Minister of National Revenue to Washington, D.C. There I met with the head of U.S. customs to ensure that the fear and anger that was generated by the kamikaze-like attacks of September 11 would not result in the closure of our borders. The results of a move like that would only make all of us poorer.

Canadians want smarter borders that would maintain our prosperity and build a sense of security in all of us, borders that would tell our greatest trading partner that we are its best defence. More secure borders mean better roads and bridges.

In this budget the government has created a $600 million program to improve the nation's infrastructure that supports major border crossings.

However the budget is not just about security. It is also about the well-being of Canadians. Lately there have been those who say the federal government is not doing enough to ensure health care for Canadians. Budget 2001 confirms that the publicly funded health care system reflects more than ever the fundamental values shared by all Canadians.

This budget confirms that the $23.4 billion in funding to support the health and early childhood development agreements reached by the first ministers in September 2000 would be fully protected notwithstanding the economic instability that we experienced at the time of the budget. Reinvesting in health care has been the number one priority of our government since balancing the budget. Provinces are receiving $2.8 billion more in social transfers. Next year the increase would rise to $3.6 billion and these amounts would keep growing.

I take this opportunity to remind those who insist that the Government of Canada is not doing its part when it comes to health care that by the year 2005-06 the Canada health and social cash transfer would increase by $5.5 billion. This is a 35% increase over the 2000-01 levels. By then the total cash transfer to the provinces would reach $40 billion. The federal involvement in health care includes not only health services but also health information and health related research and innovation.

This budget would strengthen the federal government's contribution to Canada's social health care system by providing $95 million to the Canadian Institute for Health Information. Those who claim that the Government of Canada is not doing enough conveniently forget all about this. They forget that budget 2001 would provide a $75 million increase to the annual budget of the Canadian Institutes of Health Research.

Budget 2001 would ensure that the environment remains a priority. Both the green municipal enabling funds and the green municipal investment fund would have their funding doubled in this budget by $25 million and $150 million respectively. Our commitment and resolve to balanced budgets did not change. Budget 2001 is a balanced budget and we foresee balancing the budget for the next two years as well.

This budget would protect the tax cuts as well as the health and early childhood development agreements with the provinces. The government's sound fiscal management would result in a falling debt to GDP ratio. Next year for the first time in 17 years it would fall below the 50% mark. This is an achievement.

At the same time the government would increase program spending for the year 2001-02. Seventy-five per cent of that program spending would be earmarked for health care, security, employment, insurance benefits and the elderly. Budget 2001 shows how our country is committed to the global campaign against terrorism. With the measures announced in this budget Canada has demonstrated its solidarity with the United States and has pledged its support. However, the government will continue to work hard to manage our economy, to ensure a safe society and to improve the quality of life for Canadians.

Canada has been transformed economically since the Liberal government took office in 1993. We are now facing unforeseen and enormous fiscal pressures. The good news is that, thanks to the efforts of Canadians, our country is well positioned to withstand these pressures and to enjoy renewed growth in the next year. We plan to do this by keeping Canada safe, terrorists out and our borders open.