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

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I congratulate the hon. member for Abitibi—Baie-James—Nunavik on his eloquent speech. He has criticized the new tax which the finance minister has just slapped on the airline industry and which will directly hurt regional air carriers.

As my colleague mentioned earlier, regions are already penalized by distance and by the fact that private carriers are dropping routes that are essential for regional development.

Recently, we learned that Air Alma will no longer provide service to the Magdalen Islands. It is a tragedy.

I had the opportunity to visit my colleague's region. Many economic stakeholders say that, because of the low frequency and low quality of air transportation, we can have all the fine tourism development policies we want, but we will not be able to draw tourists to regions like his to bring greater prosperity.

I congratulate the hon. member but, at the same time, I would like him to put his words into action. If he is so deeply convinced that the government is making a mistake on something as fundamental as the finance minister's tax policy, and that the government is further strangling the regions in Quebec, including his, let him vote against Bill C-49, hand in his resignation and sit as a Bloc Quebecois member, because we are the only real advocates for Quebec and its regions.

That was my question. Let him draw the logical conclusion of his argument.

[Guy St-Julien, Liberal, Abitibi—Baie-James—Nunavik, QC]

Mr. Speaker, thank you for your intervention, but I knew that the members opposite were agreeing with me because this is an important issue. It is important from a family point of view.

Let us talk about airlines which have been hurt by Bill C-49, such as First Air or Air Inuit, which create many jobs in Montreal and elsewhere, such as Val-d'Or. Transportation of perishable food to the north under Northern Airstage Services to Northern Communities is funded in part by the sale of postage stamps, the Department of Indian Affairs and Canada Post, but mostly by the government and taxpayers.

When I spoke to these people, they said “For remote regions, it is important that this tax be abolished”. There can be an emphasis on security in Montreal, because the transportation volume is high there, but when one looks at the small cities in the north, whether in James Bay in Nunavik, or in medium size cities like Rouyn-Noranda and Val-d'Or, it is not the same thing. The inhabitants of the Magdalen Islands will have to pay $24.

It is inconceivable that these people should be required to pay charges. Let us not forget what Transport Canada and the Government of Canada are now imposing on airlines such as First Air and Air Inuit. An individual leaving from Ivujivik does not pay the $12. Once they get to Kuujjuaq, they wait inside the airplane, like one does when one lands in Boston en route to Miami. One is not permitted to leave the airplane.

With the new tax, this person will have to get out of the airplane in Kuujuaq, go and wait in the terminal and, upon reboarding, will be required to pay $12. They will have to pay $24 for a return trip. This means that, by imposing these charges, Transport Canada is forcing someone sitting in an airplane, or worse, someone who is seven and a half months pregnant, to get out of the airplane, walk over to the terminal in temperatures approaching minus 40 and pay $12 before being allowed to reboard.

On behalf of the women of Nunavik, we need to find a solution. We cannot choose people, and tell them “You will save $12”. It is everyone, white people as much as our Inuit friends, who is affected. There must not be a $24 fee. If someone travels once a month, at the end of the year, it will add up to nearly $300 return to get medical care in the south because there are no specialists in the north.

It is important to make changes and correct this for people who live in remote regions. This Liberal government bill is quite voluminous, some 110 pages long. The government is requiring that we vote on the bill as a whole. However, I would like to state publicly that changes are in order.

I would like to come back to another aspect of this bill: strategic infrastructure. With respect to strategic infrastructure, it is clear that in remote regions, which some people refer to as the far reaches of Quebec—that is what some people in Quebec City have said, but we prefer the expression remote regions—the issue of this $2 billion is an important one. This $2 billion for all of Canada is destined for large-scale strategic projects, according to the bill. The bill mentions “highway or rail infrastructure”.

The railway system does not reach Kuujjuaq, Radisson or any of the 14 Inuit villages and nine Cree communities of James Bay. This means that we are penalized at the outset and we will not receive any money for this. When it comes to local transportation infrastructure, that is a different story.

In this bill, the government will have to make a breakdown by percentage for the resource regions of Quebec and of Canada. Out of the $2 billion, the major urban centres could receive $1 billion or $1.5 billion, and the other $1 billion could be for the regions. If there are $2 billion for all of Canada, let it be split 50-50; I will explain why.

In the Abitibi—Témiscamingue region, whether Val-d'Or or Rouyn-Noranda, our raw materials go to Montreal. For example, in the forestry sector, 68% of the raw materials end up in Montreal for secondary, tertiary or quaternary processing. The resource regions create employment in Montreal. The same goes for the mining sector. We create close to 75% of the jobs in the processing and shipping sector in Quebec City and Montreal. The resource regions are being penalized because there are no set percentages for the $2 billion in strategic infrastructure funding.

There should be a breakdown, as there is in the November 2000 Canada-Quebec agreement. The two governments consulted each other and set out the division for the infrastructure projects in Quebec. In the Canada-Quebec agreement, Quebec is the overseer. When a project is carried out, the city or municipality invoices Quebec, which then sends the bill to the federal government for its share. That is the way it works, as many people are aware.

A percentage of strategic infrastructure funds must be spent based on regions, not only based on population.

When public officials figure a percentage for resource regions, they need to take into consideration the geography. My riding is over 802,000 square kilometers and the whole province of Quebec is 1.4 million square kilometers. In my riding, there are 65 mayors for approximately 100,000 people; there are four provincial MNAs to do the work that I do alone at the federal level; there are four salaries, four expense accounts, four travel accounts.

Remote regions may well be neglected, but I am asking the government to find a solution to eliminate this air transport tax.

Have you ever heard of a summit held up north? There have been summits held in Quebec City and in other big cities. Right now, the best place to organize a summit would be in Kuujjuaq in the winter. There would not be any protesters because there are no roads. It is the best place in terms of security, and we would save millions of dollars if we held a summit in Kuujjuaq.

Especially since a conference centre is being built in Kuujjuaq, with money from the governments of Quebec and Canada, under the Canada-Quebec infrastructure agreement. A summit in Kuujjuaq would save millions of dollars, but this money would have to be transferred to resource regions. If there was $300 million saved, then it would have to be divided up.

To come back to serious business, I want to say that we are being penalized. We have no roads, we are far away. If the government starts taxing people who go south with skidoos or snowshoes, I will have a field day. A solution should be found for people who travel with Air Inuit, First Air and the other airline companies—

[Guy St-Julien, Liberal, Abitibi—Baie-James—Nunavik, QC]

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

I could mention all of the ridings one by one to show that my own riding covers an area of 802,000 square kilometres, compared to some other ridings with an area of only 10 to 14 square kilometres. Coming back to the bill, I intend to criticize it. And if I intend to mention all of the ridings one by one, I am sure, Mr. Speaker, that you will stop me once I get to the opposition ridings.

I will be speaking on behalf of taxpayers of Abitibi—Baie-James—Nunavik and certain regions of Quebec. Even though I represent a very remote area of Quebec, if members take a close look at the bill, in particular from page 70 on, they will see that we are being penalized in terms of air security fees charged in airports. There is no problem in major centres, but if members look at the list of airports on page 70, they will see that some are located in remote areas.

On January 30, the Liberal member for Nunavut asked a question to the Minister of Finance, and I quote:

How will the Minister of Finance protect northerners from these added costs? Is he prepared to reconsider the charges in the North?

The Minister gave an excellent answer. In the second paragraph of his answer, he stated, and I quote:

In that context, I am very pleased to confirm that the charge will not be applied to direct flights to or from the smaller and remote airports that make up the vast majority of the airports in the North.

[Val Meredith, Canadian Alliance, South Surrey—White Rock—Langley, BC]

Mr. Speaker, I would love to have an hour but I am splitting my time with the member for Saskatoon--Humboldt, so I will have to keep my comments fairly brief.

Bill C-49 is a response to implement the budget tabled on December 10, 2001. Although there are six major parts to the bill, I would like to concentrate on three of them: part 1, the air transport security authority act; part 2, the air travellers security charge act; and part 6, the Canada strategic infrastructure fund act.

I will begin my comments by following up on what my colleagues have said on the government's decision on the Canada strategic infrastructure fund act. When the government announced this in the budget, the money was to be administered by a foundation with a board of directors. The foundation was to be responsible for assessing the potential of these projects and making the decisions on key public infrastructure projects based on their merits.

Somewhere between December 10 and February 5, the government changed its mind. We have heard all kinds of explanations as to why it changed its mind, but there seems to be only one simple reason, that is, government members of parliament do not want an arm's length foundation and do not want to have to go to it to lobby for money for projects in their ridings.

There is widespread support throughout our country for this type of infrastructure program. We have seen, at least in my part of Canada, some really good projects like the Annacis Island sewage treatment plant for the greater Vancouver area. However we have seen an awful lot of wasteful projects as well, like the fountains in the Prime Minister's riding, projects that occur when funds are distributed for political reasons.

It is amazing that it took the Liberals almost two years to come up with a budget but less than two months to change the delivery of that budget.

The Canadian air transport security authority is also covered in this act. It creates this arm's length authority to oversee activity in Canada's airline industry. What is really significant about this in Bill C-49 is that it totally ignores a report from the committee on transport. The transport committee studied aviation security from October to December. We heard from dozens of individuals and organizations in our hearings on aviation security. We received testimony from individuals and groups on every aspect of the aviation industry in the country. Not only that, we travelled to Washington, D.C. and heard from senior members of the federal aviation administration and other authorities in the United States regarding civil aviation. The committee took in all this information. Those of us on the committee worked in a non-partisan manner and I mean that honestly. We produced an excellent report on aviation security.

One of the major recommendations in the report was the creation of a new secretary of state for transportation security. The reason is that we realized the importance of having an elected official who would be responsible for aviation security as well as the other modes of transportation and who would report back to parliament and be held accountable. However the government decided to ignore the report and instead created an authority to oversee aviation security. This authority will consist of a board of 11 directors, including a chairman.

What type of airport or aviation security will we have? We do not know, because of course the bill does not go into details as to what the security will be and it passes on this decision making authority to this board of directors. Whether we have government employees or contractors providing this aviation security, it will depend on a decision by this arm's length authority. Given the tax the finance minister is imposing on air travellers, this authority will have a budget of $2.2 billion over the next five years.

In comparison let us look at the two ways of dealing with things, the infrastructure and the airline security.

The government rejects the use of an arm's length foundation to be responsible for the $2 billion strategic infrastructure fund, with the Prime Minister claiming that these decisions should be made by a minister of the crown who is accountable to the House of Commons. Then in the very same bill, it rejected the Commons committee report that asked for the creation of a new minister of the crown who would be accountable to the House of Commons and instead put it into an arm's length authority for a budget of $2.2 billion.

Why the discrepancy? Why on one hand the argument to have an arm's length organization to oversee the $2.2 billion and on the other hand the need to have a minister overseeing $2 billion? It just does not make sense. Could it be that the Liberals have not yet figured out how to use the aviation security budget to line the pockets of their friends for patronage purposes?

When we look at the $2.2 billion budget and the air traveller security charge that is included in the act, we have to look at what it is about. This is a $12 one way ticket charge for all air travellers in Canada and a $24 return charge on international flights. Look at an airline that is trying to reduce the cost of air travel to get passengers off the roads and into planes. The fare for a trip between Calgary and Edmonton or Vancouver and Kelowna is under $100. This tax that will be imposed on the traveller will increase their airfares by over 20%. This increase will take hundreds if not thousands of people off planes and put them on our already crowded road infrastructure.

We can understand why there were over 15,000 passengers with WestJet who signed a petition asking the government to reconsider.

Compare that to how the United States handles this. The United States has implemented a similar fee, but it is only $2.50 U.S. one way with a maximum of $5. Why are the Americans, with their overwhelming airline security, two or three layers of screening, bomb sniffing dogs and the use of the national guard only charging $2.50 while the Canadian government is charging $12 a flight? There are two possible explanations.

The first explanation could be that this is the way the government is handling the value of the Canadian dollar, that it believes that the $2.50 U.S. will be worth $12 Canadian at some point this year. The other explanation is that the $12 fee is needed to provide patronage positions to Liberal hacks.

The response of the government to this outrageous tax is ludicrous. The government and the Minister of Transportation have said that the high security tax would actually increase airline traffic by reassuring the travelling public that they would be safe. These comments demonstrate how disconnected the minister and the government are from reality. If they really believe this why is the tax not $100?

It is ironic that the day Air Canada announced that it lost $1.25 billion last year, the government did everything possible to prevent more Canadians from flying.

Then we have the finance minister saying that this is just a user fee and that airline passengers are the only ones who benefit from the airline security. Did the finance minister not watch what happened on September 11? More people died in offices and going to work than people who were in the airplanes. Those people who died were policemen, firefighters and people sitting in their offices. Aviation security is everyone's concern and that cost should be shared by all. That was a recommendation from the transport committee and was ignored by the minister.

In conclusion, there should be one individual responsible and that person should be sitting in the House of Commons reporting to parliament. The security tax is out of proportion and will probably become the next Liberal billion dollar boondoggle.

[Pat Martin, NDP, Winnipeg Centre, MB]

Here is one example that might interest the hon. member. In 1996 to 2002, Bombardier received $87 million of these particular loans and its donation to the Liberal Party in the same period of time was $411,713. Even more startling is that out of all the loans only 2% of that money has been paid back. Out of $1.7 billion in loans, less than $20 million has been paid back. These are not loans, they are gifts. There is no yardstick to measure progress by. There is no obligation for companies to create a certain number of jobs. There is no obligation for companies to expand and grow their companies. It is simply that they are given the money and then at election time they are asked for their cheques.

Pratt & Whitney Canada is not a small company. I do not really know why it needed $301 million worth of technology partnership loans. It would have done this research anyway because it is a healthy, vibrant company that wants to grow and succeed. During the same period of time it sent $131,373 to the Liberal Party. That is a big chunk of change. That is more than the Royal Bank gave. This is a whopping contribution.

SNC-Lavalin, one of the largest and best engineering firms in the world and one we are proud to have in the country, received a technology partnership loan. I do not understand why a company like that would get a loan since it is not a high tech company. However after receiving an $8.7 million loan it kicked back $129,656. That is the highest ratio so far that we have come across. This is staggering .

Everyone can understand why we are apprehensive when we see another $2 billion strategic infrastructure fund being set up under the control and direction of the Deputy Prime Minister, not some arm's length, impartial and objective board that would review these grants and send the money around the country. It will be on the basis of a phone call to the Deputy Prime Minister. No one can tell me that those choices do not get political. It is only natural. We are very critical of this program.

The real contrast that brought this to my attention yesterday was a bunch of students demonstrating on Parliament Hill about high tuition fees. In fact demonstrations were being held in every major city right across the country. The students were arguing that they were being crippled by the high cost of education and that they wanted something to be done about tuition fees. What struck me as I was doing this research was that the payback of student loans by university students was about 94%. The other 6% get hounded mercilessly by the federal government. They are pursued and dogged right around the country. Their wages are garnished. They are harassed and harangued for relatively small amounts of money. Here we have a much larger distribution of money, so-called loans, with a payback rate of 2%.

Those companies are the corporate welfare bums of this decade. We need to start using that language again because it is absolutely scandalous. I would rather advocate on behalf of those students who are doing their best to pay back their loans and put an end to this.

If there is anything about the current budget that we are critical of it is that it has failed to do anything about the growing gap between the rich and the poor. Whenever we raise this, and the NDP is always harping on it, people want to know where the money will come from. They do not want their taxes raised so that more money can be spent. The government does not need to raise taxes. It needs to stop throwing our money away. If it would stop giving our money to the corporate welfare bums we would have a little bit of money for some social spending. We would be able to invest in people for a change. What irritates the NDP is the blatant evidence of waste and mismanagement of that type.

I come from the riding of Winnipeg Centre and, as I have told the House before, it is a very low income, inner city riding. I would like to point out some new statistics that illustrate some of the shortcomings of the budget: 49% of all families in my riding and 52% of all the children in my riding live below the poverty line. Could the government tell me what there is in the budget that I can tell the people of Winnipeg Centre will improve their day to day lives in any way, shape or form? I cannot find anything. For some reason there has been a conscious choice not to bother with this pressing issue. The bottom 20% of the electorate is ignored.

Either the government has given up trying and do something about this alarming incidence of poverty because the job is too tough or, in a very cynical way, it has disregarded this part of the electorate because they do not vote.

Everybody knows that low income people at the bottom 20% of the socio-economic ladder do not come out and vote. Therefore I suppose they do not deserve the attention of a government that is more preoccupied with power than meeting the basic needs of a great number of Canadians.

When I look at the budget and the implementation bill, Bill C-49, I do not see anything in it that I can bring back to my riding and tell people that things will be a little bit better next year. I guess the $500 million for Africa is kind of nice, but that will not elevate the standard of living conditions for the people in the riding of Winnipeg Centre.

We thought we were going to make some breakthroughs. The aboriginal people in my community listened to the Speech from the Throne and to all the flowery language. This was to be the decade when we would finally address some of the historic grievances the aboriginal people have had about their treatment in our society. There is nothing about that in the budget either. All those things went down to the bottom of the list of priorities. We can find very little solace or comfort in the budget or in Bill C-49.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I am pleased to have the opportunity to join the debate on Bill C-49 on behalf of the constituents of the riding of Winnipeg Centre. I would like to add some remarks about the bill respecting an act to implement certain provisions of the budget tabled in parliament on December 10, 2001.

This omnibus bill deals with a number of issues that have been touched on by other speakers. I would like to go over them briefly and then deal with some of the shortcomings and serious omissions that we wish would have been dealt with in the budget.

The first point of great interest to Canadians that we note in Bill C-49 is that it will establish the Canadian air transport security authority, CATSA, to deliver improved security at Canadian airports and on board flights.

The new authority is to have the full power of a crown corporation. I note with interest that it will be run by 11 government appointees, a rather odd arbitrary number, one would think at first glance. It is probably how many old Liberal hacks needed patronage jobs on any given day so they conveniently rounded it out to the odd number of 11.

Our point of view is that the authority would abide by business standards rather than safety standards. CATSA may well turn around and hand off the duty or the responsibility for delivering the security to the airport authorities.

We really do not know. We are being asked to buy a pig in a poke when we hand over the authority to this newly established organization. We really do not have any firm understanding or any real picture of how it will ultimately wind up.

Who will be delivering the service? Will they be public servants? Will they be private sector employees? Will they be better trained? Is there any real obligation? Will any rules be put in place under this new authority to assure Canadians of an improved airport security system?

That is an unknown commodity and we are very critical of that. The government has been unable to paint a picture of what we will be buying, and we are buying.

The hon. member for Calgary Southeast very capably pointed out that we would be paying $24 per round trip on every flight, whether it is from Winnipeg to Toronto, Vancouver Island to Vancouver or any little hop, skip and a jump. That $24 could in fact represent 30%, 40% or 50% of the airfare.

The Minister of Finance is like Rumpelstiltskin in this regard. He is turning straw into gold. He took a negative situation, the need for improved security, and turned it into a revenue generator. By its own admission the government will only spend $2 of that $12 per leg fee on the actual implementation of improved airport security. The other $10 is another cash cow.

The government seems to find very clever ways to generate revenue that no one ever would have dreamed of. We have to give it full points for that. It turned the EI system into a cash cow. It turned the public service pension plan into a cash cow. Now, of all things, it has turned airport security into a revenue generator. We are very critical of this issue.

We are not really sure what will be the status of the working people who currently do the checks at airports. We do not know if they will be federal employees. Currently most of them are represented by the United Steelworkers of America.

It becomes a jurisdictional issue too. If they are to become public federal employees, will they then be represented by the Public Service Alliance of Canada or will they maintain their relationship with their former union? What about the terms and conditions of their workplace? Will the collective agreements be modified or interfered with in any way?

These are unknown commodities on which we have not had much direction from the government or any indication of how these issues will be resolved.

The NDP caucus has serious reservations and concerns about this new CATSA. We do not feel that the Canadian public feels any safer as a result of the implementation of this aspect of the budget.

We note with interest that in the U.S. the extra service fee or charge is $2.50 per flight compared to $12 per leg here or $24 for a round trip. How does the government justify that? Where will it spend this extra $2.2 billion?

We have written a blank cheque. It is estimated that throughout the year the fee would generate $2.2 billion. We have no idea how that money will be spent or any guarantee at all that the money will be spent to try to improve the safety issues at airports. We do not know what the federal government has in mind for it. It will just go into general revenue.

The federal government was also very shrewd in making a further revenue grab now because it caught Canadians at a very sensitive and vulnerable time. Immediately after this terrible tragedy is when it polled Canadians. At that time about 80% of them supported the idea.

When asked if they would be willing to pay a bit more on every plane ticket to ensure they were safe or safer, about 80% of Canadians gave approval, I suppose, to implement some sort of a surcharge. However I criticize the government for taking advantage of people's vulnerability after such a terrible tragedy.

If we asked the same question today I think we would get dramatically different results now that Canadians have had time to deal and cope with the tragedy of September 11. Those are our observations on this aspect of the implementation bill.

I would like to touch now on another thing Bill C-49 intends to do. It intends to implement the amendments to the EI act relating to maternity and parental benefits in certain situations.

The NDP aggressively argued for that part of the EI program to be amended. The federal government did listen but it missed the opportunity to implement a comprehensive review of EI to make the program work again. It is again tinkering and fiddling with the edges of EI, throwing a little bone to those who are advocating on behalf of working people. However the great EI robbery continues in that every month that goes by there is a surplus of $700 million in the EI program. Working people and their employers are paying in $700 million a month more than is being paid out. That is absolutely unacceptable. We have raised it time and time again. The government again has chosen to bypass the issue in this particular budget.

We argue and have maintained all along that the EI system has ceased to be an unemployment insurance system because hardly any unemployed people actually qualify for any benefits. If less than 40% of unemployed people are eligible for any benefits, how is it a universal unemployment insurance program?

We have also made the point that a program is mandatory if one has to pay into it even though one has a less than 40% chance of collecting. In our mind and point of view, to deduct something from a person's paycheque for a specific reason and then to use that money for something completely different is an absolute breach of trust.

When money is deducted from the employees' paycheques for the purpose of receiving benefits and some income maintenance in case they become unemployed, they have the reasonable expectation that the money will be there if they need it. They do not want to find out after they become unemployed that they are not eligible for benefits. For the life of me I cannot understand how the government has gotten away with this year after year.

The EI fund has become the government's number one revenue generator. If we look at the $100 billion surplus over five years that the Minister of Finance points to and often brags about, $8 billion per year is coming from the EI fund, for a cumulative total so far of $40 billion in surplus contributions in the EI program. That money was supposed to go for income maintenance for unemployed workers.

The impact in my riding of Winnipeg Centre alone is $20.8 million per year. Just the changes made to EI in 1996 caused a loss of income maintenance and benefits in my riding alone of $20.8 million. Imagine trying to attract a new business to a community that had a payroll of $20.8 million per year and what a difference that would make to an inner city riding like mine. The inverse is also true. When $20.8 million is sucked out of the local economy in my riding the impact absolutely is devastating.

While we support the implementation of the amendments to the EI Act regarding maternity leave and parental benefits, in all good conscience we have to point out that the EI system is still an absolutely dysfunctional, broken instrument and should be dealt with promptly so that it provides the benefits people actually need.

Regarding the income tax amendments announced in the 2001 budget, we support the small business taxation deferral. We think it is a sensible thing.

The second item we cannot understand is allowing apprentice vehicle mechanics to deduct a portion of their cost of new tools. Why were only vehicle mechanics mentioned? I am a journeyman carpenter by trade. An apprentice tries to buy one new tool with each paycheque because one has to slowly acquire a garage full of tools to be able to practise the craft. Why did the government not involve all skilled tradespeople? It is an insult to those of us who have gone through the trades and are not offered this special benefit.

There have been private members' bills in the House--I think it has been raised 10 times over the last decade--calling for a tax deduction for all tradespeople. Why the government stopped short and only gave it to auto mechanics is an absolute mystery to me. While we wish the vehicle mechanics well, and I am sure they will enjoy this small benefit, we really regret that it did not include other working people.

The last thing I would mention regarding Bill C-49, the budget implementation act, 2001, is the $2 billion strategic infrastructure fund. I know all members will want a chance to have a go at this. People have already nicknamed it the strategic Liberal fund because no one is convinced there will be any more fairness in the distribution of these moneys than there has been in any evidence of other corporate welfare that we have seen handed out to Liberal ridings around the country. We are as critical of this as we are critical of, for instance, the technology partnership loans from Industry Canada.

I would like to give an example of why we disapprove of the structure of the infrastructure fund. I think anybody who reads the documents I have here will agree that the other structures were no good either. What I am reading from is a list of the cumulative technology partnership loans from 1996 to 2002 . The other column is donations to the Liberal Party from 1996 to 2002.

The first thing I want to point out is that every one of the following companies are stable, healthy companies that do not really need any kind of loan to keep operating. We are giving corporate welfare to companies like IBM, Bombardier, Spar Aerospace, Pratt & Whitney and Raytheon Canada. These are the companies that are lining up at the trough and getting these handouts.

[Jason Kenney, Canadian Alliance, Calgary Southeast, AB]

Mr. Speaker, as I was saying before being so rudely interrupted, Bill C-49 seeks to give statutory effect to provisions included in the ways and means motion and announced in the budget of last December.

As my colleagues before me have said, we in the official opposition oppose the bill just as we opposed the budget and the ways and means motion. Through the bill the government fails to reflect the priorities of Canadians at a time of serious economic decline. It fails to grasp the opportunity to increase Canada's productivity, competitiveness and standard of living at a moment when we see our dollar at all time lows which reflect a decline in our standard of living.

The bill would fail to provide any stimulation for the economy at at time of job loss, increasing unemployment, and economic decline in the midst of recession. It would fail to offer any reduction in the national debt at a time when Canada continues to have the third largest debt to GDP ratio in the OECD among the major developed countries. It would fail to reallocate resources from low and falling priority areas such as corporate welfare, subsidies to bloated crown corporations like the CBC and grants and handouts to interest groups into high priority areas such as national defence and security.

The budget, its ways and means motion and Bill C-49 all represent an enormous missed opportunity for which ordinary Canadians will pay in terms of seeing our standing of living and economic prosperity continue to diminish.

Bill C-49 seeks to do specific things. First, it would create the Canadian Air Transport Security Authority. We in my party support the creation of the Canadian Air Transport Security Authority, in particular the provisions of the bill which allow for the employment of air marshals.

We in the official opposition take considerable pride in the fact that while we have no real political power in this place we have the power of ideas. Following the great tragedy of September 11 we introduced an entire suite of security related proposals which we had long advocated but which gained new relevance in the post 9/11 world.

One of the proposals was to create a corps of armed air marshals to serve as law enforcement officers on civilian aircraft. My colleague from Port Moody--Coquitlam--Port Coquitlam, the opposition transport critic, did a superb job of making the argument for letting Canadians know they would have secure enforcement of the law when they boarded an aircraft, the absence of which was a contributing factor to the tragedy of September 11 where the four hijacked aircraft were without air marshals.

There has never been a hijacking of a commercial civilian flight where an air marshal has been aboard. Terrorists throughout the world now know countries like Canada which take the matter seriously will be much less hospitable targets for hijackers and terrorists aboard aircraft given this provision of the bill.

Again, while we do not have formal political power in this place we have the power of ideas. In the debate that occurred last fall we saw Canadians respond positively to the idea of air marshals even though initially the hon. Minister of Transport dismissed the proposal as somehow “un-Canadian” or “not in the Canadian way”. I think those were his words. However at the time he suggested through the minister of defence that it would be appropriate for CF-18 fighter aircraft to patrol the skies over our major metropolitan areas ready and willing to shoot hijacked aircraft out of the sky.

It struck Canadians as being absurd and ridiculous that we were unwilling to place a trained, armed, discreet air marshal aboard a flight, yet we were willing to watch for hijacked planes with fighter aircraft. Fortunately greater common sense prevailed around the cabinet table. I commend the Minister of Transport for accepting a sound idea from the opposition which is partly implemented in the bill.

While we support the principle of a transport security authority, we do not support the means by which it will be funded in the bill. The bill provides for the notorious $24 round trip flat charge for all domestic flights, even those where there may not necessarily be an air travel security arrangement. There are many short-haul flights off the west coast, off the east coast and in the north where scheduled aircraft take a small number of travellers who do not have to go through airport screening. Yet these people in many instances will have to bear the burden of the $24 flat fee. We anticipate it will raise at least $430 million this year.

We in the opposition have asked the government to give us clear assurances that the new air security charge will not end up being used in a fashion similar to that of employment insurance premiums, namely as a slush fund for general government revenues. We are very concerned that it could run a considerable surplus above and beyond the actual costs associated with the new security measures in the air transportation authority and that the surplus could be siphoned off for general purposes in the general revenue fund, thus undermining the ostensible purpose of the charge.

The government has not provided the House with adequate assurances that this will not occur. Frankly, given the experience we have had with other taxes and charges, we are going to oppose the bill in part because we believe there is a very great likelihood the air security charge will end up providing for much more than just air security in terms of a government tax grab.

On that point, the transport minister has on occasion suggested that the $24 round trip charge on domestic flights was somehow the adoption of a recommendation by the Standing Committee on Transport and Government Operations. Nothing could be further from the truth. In fact, as my colleague from Port Moody has so frequently pointed out, the transport committee recommended a shared cost structure for new air security measures, a cost that should be borne more or less equally by the traveller, by the government, by the airlines as well as by the airport authorities themselves.

One might say that ultimately there is only one customer and the costs would filter down to the customer. Perhaps, but it would be far more rational to see the kind of blended funding of new security measures recommended by the transport committee. In fact, that is what happens in most other jurisdictions. In the United States the security charges are a fraction of what are being proposed here, which are two or three times higher than what is charged in the United States on similar flights.

This is really a very blunt instrument the government has created in terms of a $24 flat fee. One could fly from Victoria to St. John's, Newfoundland in business class at a fare of about $4,500 and pay the $24 charge. Yet one could fly from Vancouver south harbour terminal to Salt Spring Island at a $60 fare and be paying the $24 fee. This would represent a price increase of nearly 50%.

This could put many short-haul domestic air carriers out of business. WestJet, the most vibrant, competitive and successful airline in Canada, has complained bitterly about the impact the fee will have on companies such as itself which are very sensitive to price. They work very hard to produce a good product at a very low price. When a flat fee of $24 is imposed on every single ticket they sell, including $70, $80, $90 tickets between western cities for instance, this will have a very detrimental impact on their bottom line just at a time when we need to do more to create increased passenger traffic on our domestic airlines.

My colleague from Port Moody--Coquitlam will be addressing these issues in greater detail later in the debate. Let me just say that this is a very wrong-headed approach the government is taking with respect to the new transportation security costs. It will end up costing Canadians jobs.

The bill also seeks to make some changes with respect to the Employment Insurance Act. In particular it extends benefits for parents of newborns who need to have extended stays in hospital. This is obviously something anyone would want to support. All parties would say the government ought to do whatever it can to assist parents who find themselves with medical difficulties with newborns. However, let me raise the question as to whether or not the employment insurance system is the right place in which to provide such assistance.

The employment insurance program, particularly after the retrograde changes made in this parliament last year, has grown far beyond its original conception as a program to provide limited insurance to people who lose employment for a short period of time while they seek new employment. That kind of program run on an actuarially sound insurance basis is sensible.

Governments for the past 25 years, and especially since the so-called reforms to employment insurance in 1972, have continued to layer upon the EI system new mandates and new programs which are not immediately related to the question of employment insurance per se. This has created an enormous program which has required enormously high premiums to finance it. In so doing consecutive governments have seen the unintended consequence of an employment insurance program which in many respects is a disincentive to employment.

The premiums themselves a payroll tax are a tax on job creation, particularly insofar as they are disproportionately borne by employers. We know there is an enormous notional surplus in the EI fund of upward of $40 billion and an annual surplus of at least $6 billion. The government is skimming several billion dollars a year in premiums above and beyond benefits paid out through the program. We are killing jobs through extraordinarily high premium levels. They are unnecessarily high. Also we create incentives for people not to work through the design of the program, particularly through some of the regional special elements of the program, through the lack of experience rating in the system.

If we as a country want to become more competitive and more productive, if we want more and better paying jobs, if we want a 90 cent dollar as opposed to a 60 cent dollar, if we want a standard of living that equals or exceeds that of our friends in the United States, one of the things we must do is to liberalize our labour markets.

One thing we at the federal level can do is reform the employment insurance system along the lines of an actuarially sound, experience rated insurance program. For people who have lost their jobs through no fault of their own, it would provide a good benefit on a short to medium term while they seek gainful employment. It would not treat people in different regions differently.

Other supplementary programs, including the maternity benefits in the bill, and important social policy objectives would be provided through other programs. They would not be loaded wrong-headedly into an employment insurance program.

Yesterday I met with members of the Canadian Restaurant and Foodservices Association. It represents an industry that employs over one million Canadians, particularly younger Canadians who are at the entry level in the labour market. They are getting their foot up on the first rung of the labour market ladder. They are people who make the minimum wage or slightly above it. That industry is very, very sensitive to payroll taxes. They told us as parliamentarians that if there were to be a significant reduction in EI premiums, this would likely result in tens of thousands, if not hundreds of thousands of new jobs, particularly for people at the entry level of the labour market.

It seems to me we should listen to sensible proposals from organizations such as CRFA. They have proposed, and the finance committee echoed their call in its prebudget report, a yearly basic exemption of I think it was $2,300 in EI premiums. An employer could hire a young person, or a new employee of any age of course, and would be exempt for the first $2,300 in EI costs. Perhaps we could come up with a lower exemption if there is not the fiscal capacity for a YPE of that size in the employment insurance system right now.

The principle they are driving at is to create incentives for entrepreneurs in industries like theirs, in service industries, to hire more people and to create more wealth and more employment in our economy. I wish the government would listen to recommendations such as theirs.

The bill also seeks to make changes to the Income Tax Act further to the October 2000 budget. This allows me to say that in this budget there actually is no net tax relief.

The government claims it is in the process of its so-called $100 billion tax cut. That is a very bogus figure. Anybody on the other side of the House who is serious about this will acknowledge that number was arrived at for strictly political purposes and has very little basis in fact.

In reality, any objective economist who can read an account or any sensible person with a pencil and a calculator who looks at the Liberal budget will realize that the tax cuts scheduled in the October 2000 budget amount to less than $50 billion. In fact, we calculate that they amount to about $43.7 billion.

A huge chunk of the so-called tax cut is taken up by a $23 billion increase in Canada pension plan premiums over the course of that budget's five year cycle. The government is also counting increases in the child tax benefit, which is a social transfer program, an entitlement program, as a tax cut, which is disingenuous. It is counting the value of reindexation of the tax code as a tax cut. In a sense the government has said that it will no longer force people into higher tax brackets as they get cost of living adjustments. In other words it will stop raising taxes, but it will count that as a tax cut, which is pretty specious.

In this particular budget the government will not be initiating a single personal income tax cut in the bill before us. There is a small two point rate cut in the corporate income tax. There is a measly five cent reduction in employment insurance premiums. However, that is quickly gobbled up by $2.08 billion in Canadian pension plan premium increases, the $430 billion air security tax to which I have referred, and by the nearly $500 billion in additional tobacco taxes.

To be on the record in this regard, we are not necessarily against raising tobacco tax prices to reduce demand among youth, but we think that it should not be a back door tax grab. Any increased revenues in that area ought to be offset by tax reductions elsewhere. This all adds up to a net tax increase this fiscal year of $1.258 billion. That is madness in the current economic context of a recession.

We had negative growth in the third quarter of 2001. We had negative growth in the fourth quarter of 2001. Those two consecutive quarters with negative growth constitute a technical recession. We are almost certainly in either negative growth or a stagnant economy right now.

Let me close by saying that we will oppose the bill on the grounds that it provides for no reallocation of resources to the critically important areas of defence and security. It does nothing for the economy. We will oppose the bill as vigorously as we did the budget.

[Jason Kenney, Canadian Alliance, Calgary Southeast, AB]

Mr. Speaker, I thank the government House leader. He was a very good boss in the past. The opposition won the voice vote. We are happy to see the official opposition was opposed to Bill C-49.

The bill would give enactment to several provisions of the budget speech of last December. Last week we concluded debate on the budget and voted on the ways and means motion. Bill C-49 is further to the ways and means motion.

[The Acting Speaker (Mr. Bélair)]

There are two issues. First, the vote that was supposed to be taken will be deferred until Monday in two weeks when we return.

Second, is there unanimous consent to revert to Bill C-49 and resume debate under the conditions that have been described?

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, I rise on a point of order. In light of the unusual circumstances in the House, there have been some discussions during the period the bells were ringing and I believe we have an understanding that we will not have a vote at this time with respect to the budget bill but will return to debate at second reading of the bill.

There is an understanding among the parties that we would debate Bill C-49 for the balance of the time available today and tomorrow and that we would conclude debate at the end of the day tomorrow with any votes required at that time deferred until after the week parliament is adjourned.

[The Acting Speaker (Mr. Bélair)]

Is there unanimous consent to revert to Bill C-49?

[Gerry Ritz, Canadian Alliance, Battlefords—Lloydminster, SK]

Mr. Speaker, I rise on a point of order. There have been discussions among the House leaders that we go back to Bill C-49. There are a number of questions we would like to raise and speakers we would like to add to the list. If you would seek unanimous consent to get us back to Bill C-49, we would deem it not put and continue debate at second reading on the bill.

[Jocelyne Girard-Bujold, Bloc, Jonquière, QC]

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

I would like to begin by congratulating my colleague for Saint-Hyacinthe—Bagot for his speech yesterday after this bill was introduced. My colleague dubbed the Minister of Finance Mr. Flip-flop. I looked that term up in the dictionary and I find it applies to someone who says one thing one day and the opposite the next.

I am disappointed because last December 10, in bringing down his budget, the Minister of Finance committed to putting all of the foreseeable surplus into the foundations that were going to be set up to get the economy back on its feet. As my colleague said, we are obliged to conclude that the minister has changed his mind; he no longer has any idea how much of a surplus there will be in the budget. He is changing the rules.

As hon. members are aware, I am the Bloc Quebecois critic for regional development and infrastructures. My speech will address three elements of this bill: the one setting a security tax for air passengers, the one relating to employment insurance, and the one relating to the $2 billion Canadian strategic infrastructure fund.

I come from what is considered an remote area. As my Canadian Alliance colleague has said, it makes no sense. People living in the regions are finding it harder and harder to travel by air. I think that air service is essential to such communities. It enables people to get from point to point quickly. WIth the imposition of this air security tax, airline ticket prices will make another jump. They have gone up 9.3% since 1993.

At the present time, it costs me about $900 for a round trip between Bagotville and Ottawa. I am now going to have to pay more. Do hon. members think that ordinary people with ordinary incomes will be able to afford it? This tax is anti-region.

What is this government up to? It tells us there will no longer be any competition. We used to have a regional carrier, Air Alma. This small company connected Alma to several other regions of Quebec. It kept going for 23 years but had to shut down before the holidays. It could no longer compete with Air Canada. In my region we are served by Air Nova, a subsidiary of Air Canada.

This measure will kill competition in the Canadian skies, particularly in Quebec. As for small carriers, which could, directly or indirectly, take pride in having a head office in the regions, which were the pride and joy of our regions—like Air Alma back home—we will lose them because of this government, which did not come to their help and will now impose this tax.

In Quebec, 20 airports will be affected by that measure, compared to only 16 in Ontario. Moreover, these are all regional airports. I say that this is an anti-region tax. It is about time the government realized that the regions are fed up.

The government will have to respect our rights. We pay taxes and we also pay to ensure our security and mobility. That mobility must exist in both directions, that is for people coming to the regions and for people travelling from the regions to major centres. It has to exist both ways.

The government will have to be more open-minded. I think that the Minister of Transport did not do his job. He will have to review his position and, finally, allow our regions to develop through this means. This is just a beginning.

I also want to talk about employment insurance. The measure proposed in Bill C-49 to help parents whose children are temporarily hospitalized is wonderful. We have been asking for such a measure for a number of years.

The Minister of Finance should have endorsed the 17 recommendations of the Standing Committee on Human Resources Development, which said that a reform of the employment insurance program is really in order. As the Canadian Alliance member said, the employment insurance fund does not belong to the government.

Today, the newspapers reported that the surplus was an astonishing $43 billion. You and I do not pay EI premiums, Mr. Speaker. Most contributors to the fund do not earn more than $39,000—they are average wage earners. They represent companies, SMBs, small SMBs. That is who we are talking about in my riding. These are the people contributing to the fund.

We know that, right now, despite what the Minister of Finance is saying, although he is beginning to get it, we are experiencing an economic downturn in response to the events of September 11 in the United States. Measures are going to have to be taken if we are to get the economy back on its feet.

There was a way this could have been done. It would have been good if the surplus had been used to help our workers. I suggest that, with the huge surplus, they be given a premium holiday. This would not be permanent. It would be temporary and would help get the economy going again. This could have been done. What did the minister do?

That is what is serious. Before the holidays, the government party admitted that the fund was a virtual one. Again, I consulted Le Petit Robert . Something which is virtual is something that does not exist. It is in the imagination. Does this mean that the money in this fund was taken and put somewhere else?

What sort of trickery is this? What would you do tomorrow morning, Mr. Speaker, if you had a large amount of money set aside for active measures to get the economy back on its feet and were told that actually there was no money, that it was only virtual? You would define criteria to deal with this virtuality.

Today,as the member for Saint-Bruno—Saint-Hubert has pointed out, it is one flip-flop after another when it comes to the forecasts and vision of the Minister of Finance and of this government.

Employment insurance is there for a reason. It belongs to workers and employers. It must be used for them, for their needs and for what they want to do to advance society.

That is why the Bloc Quebecois is calling for the creation of a separate fund, so that workers and employers will be the ones in charge of it. It belongs to them. I think that this is necessary and we are not going to back down on this issue.

Let us talk about infrastructures and the Canadian strategic infrastructure fund. This is a great victory for the Bloc Quebecois. When the Minister of Finance brought down his budget last December 10, the comments about creating a foundation were that this was a serious matter. Even the auditor general said it made no sense. This was money belonging to everyone, and it was going to be handed over to a corporation made up of friends of the government who would do as they pleased.

I think that they have listened to reason. We said no, parliamentarians need to be answerable for investments made with the taxpayers' money.

We have won a great victory; the government met our expectations. Now the Minister of Finance is saying “There is $2 billion in this fund and it available immediately”. I would be very pleased if this were the case.

I believe I must live in the finest and most beautiful region of Quebec and of Canada, because of all the visits it gets from Liberal ministers. It is incredible, they must really love my region because they come to it so often. We must be such friendly folk, so likeable, that they cannot help but keep thinking about us.

We had a number of visits during the last election campaign. I hardly dared count them because the total was so embarrassing. I said “My goodness, this makes no sense”.

My region was visited by the following ministers among others: Public Works and Government Services, Justice, Finance, Immigration and Industry, and by the President of Treasury Board.

In my region, we have a major project, highway 175. I do not know if hon. members are familiar with it. It is called the Parc des Laurentides highway. At home we have a wildlife preserve. People coming from Quebec City must travel through an extraordinary wildlife preserve before arriving in the Saguenay region, at Laterrière. We have a highway that goes through the Laurentides wildlife preserve and we have a project that was defined by the region.

A number of people say it is after meetings where they were asked what kind of development people wanted so as to be prepared for the third millennium that it was decided they absolutely needed a four lane divided highway in the Parc des Laurentides. The region unanimously supports this project.

Liberal ministers paid quick visits and left. But they did come and say “We will definitely give you the money for your highway, but there is one condition: the Quebec government must make it one of its priorities”. This is what everyone said.

So, we turned to the Quebec government and met Guy Chevrette, whom I want to salute and thank for everything that he has done for Quebec, because he is a friend. This is a man who did a lot for the cause that we are defending, the sovereignty of Quebec, and I salute him.

We went to see the Quebec government and said “This must be included in a memorandum of understanding to show the Government of Canada that we want to go ahead with this project”. So, we went to see Guy Chevrette and also Mme Marois.

This had already begun with Lucien Bouchard, when he was Premier of Quebec and MNA for Jonquière, the riding that I represent at the federal level. At that point, the Quebec government decided to put $260 million on the table. I remind the House that this is a project worth almost $600 million.

They told us “We are contributing $262 million”. Mme Marois approved it immediately, to show that we wanted to move on this. Furthermore, a memorandum of understanding was drafted and sent to the federal government stating “All you have to do is sign; we are ready to move on this”.

This was before Christmas, in September, October and November. The ministers said “We do not have any money” but that they were committed nonetheless. They said “When we do have money, we will do it, because we think it is an important project for your region”. They also said “There will be criteria; it will fall within the criteria of what you have contributed”.

There is at present a program called the Canadian strategic infrastructure fund, and this falls within its scope perfectly. Yesterday, I asked the Deputy Prime Minister “Who is responsible for infrastructure projects? When will this person sign the agreement on highway 175 in my region?”

There is highway 185 in the Lower St. Lawrence. I remind the House that during the Christmas holidays, there were six deaths on this highway. This is the highway that goes from the Lower St. Lawrence toward Edmundston. There were six deaths. It is an extremely dangerous highway. It is an extension of the Trans-Canada. There is also highway 30.

There are three memoranda of understanding on the table. Why is it that the government cannot start right away? This is the dance of promises, the dance of hesitation and the dance of the unspoken starting all over again. I find it deplorable.

The money is there; the Minister of Finance told us so. But the Deputy Prime Minister said “Wait. I have to establish criteria. I have to draft a bill. I have to say how the program will work and propose this to the Treasury Board”. Enough already. This government needs to stop making promises to people left, right and centre, starting up with its dance of promises over and over and undermining the confidence of those who believe in their projects.

The people in my riding believe in their projects. At the end of February, the mayor of our new large city—we had a municipal amalgamation of six municipalities, creating the large city of Saguenay—will meet with the Prime Minister . He is going to ask him “When are you going to put in some money? Quebec put in money, when are you going to do so?” It is what the folks back home want. I hope that the Prime Minister will meet with him and say “We will put the money in before March 31”.

When Mr. Chevrette asked Quebec's finance minister for more money, he met with all the stakeholders. I know because I was there. The Government of Quebec's ministers invite us to be there when they meet with someone. When the federal Liberal ministers visit our regions, they do not even show any respect for the elected representatives. They do not invite the elected officials of the riding they are visiting. They imply that they have been elected by proxy in regions where they did not win a majority of the votes. Mr. Chevrette invited me and made promises to people.

Mr. Speaker, I do not know whether you are familiar with the winter works program; I heard about it from my father. This was one of the things my father told us about that used to go on in his day. Winter works were a way of giving the economy a boost when times were tough; it got people working. Road construction is one area in which direct jobs can be created the most rapidly.

Investing $1 billion in roads creates 12,500 direct jobs and an equal number of indirect ones. Imagine what this would mean for my region. We have the highest unemployment rate in Canada, which is not something I am not proud of but there is no denying it. Imagine what this would mean for us; it would practically be the Klondike. It would be a way of countering the exodus of young people, because the equivalent of one busload of them is leaving my region for the major centres. I would like to see the opposite happen. I would like to load up two busloads full of young people from the major centres and bring them to my region.

This is part of what we want to do in our regions. This government comes to our ridings and boasts that it is looking after our resources. In my view, it is taking them away from us. It is using them for its own ends and not making sure that there is some benefit for us.

I call on the Deputy Prime Minister to tell us “Yes, it is true. We are serious. We have the money and we are going to move quickly. We are going to take what is on the table and get the economy going again”. That is what everyone is waiting for in Quebec and in the other provinces of Canada.

I am referring to Quebec but I hear from colleagues in other provinces, and find they have the same problems. Let us not forget that the Minister of Transport for Canada met two years ago with all provincial and territorial ministers of transport. These ministers said “Mr. Minister, our highways are so out of date that we will need a hand from the federal government to get our economy back on its feet and get our highway system back on track”. The Canadian Minister of Transport was presented with an investment plan for $16 billion over the next five years. The Minister of Transport did not have the clout to sell the Minister of Finance on this plan, but now I believe the money is there and I would call upon them to act.

Although people find this comical, if it happens I am going to buy a great big red carpet. I will set it up at the entrance to the Parc des Laurentides, which is in my riding, for the Prime MInister to walk on and I will say “Hooray, this is what we wanted”.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, I am honoured to represent the people of Elk Island and, I suppose, the majority of Canadians when I stand in the House to discuss budget issues and demand from the government a proper and transparent accounting of the way the government spends taxpayers' money.

We all know that the government has a number of important functions. Undoubtedly one of the most important is to provide for the personal security of its citizens. That would extend into areas like health care. We need to have a fiscal regime in which business thrives, because that is the true development of our standard of living in this country. We also need to have a fiscal regime that will protect the value of Canadians' savings, of retirees and others. In the last eight years the Liberal government has done a dismally poor job of this. I do not want to be involved in too much hyperbole here, but I honestly do not think the government could have done worse if it had planned to do a bad job.

I base that on some very important principles. First and most important, to me at least, is the fact that there is no better time to pay down the principal value of a debt than when we have good times, especially nowadays when interest rates are very low. In the last three or four years the government has missed a tremendously wide open, golden opportunity to reduce our debt and thereby substantially reduce our interest payments. We know that the government has done some work in this area, but it could have done so much more.

We are talking about some of the measures taking place, here a billion, there a billion, with a little bit for the military, a little bit for homeland security. We are talking about $1 billion, $2 billion or $3 billion in different categories. For example, we want to give more money to our armed forces. That pales in comparison to the $40 billion a year spent on interest. I cannot emphasize strongly enough or often enough the missed opportunity. The Liberals had the opportunity, but it has now slipped away from us. In our present circumstances we are forced to pay attention to the security needs of the country. Our surpluses will be gone next year. The capacity to reduce the debt has evaporated. The opportunity was there and it was missed.

This reminds me of a story I heard many years ago about a guy who was mountain climbing. He was on a shelf in the mountains and unfortunately his rope slipped out of his hand. He knew that he had only one opportunity to grab the rope and that was the next time it swung back toward him. With nothing beneath him, he leaped for the rope, caught it, swung himself out and back and got back on the ledge with the rope in his hand. Had he missed that opportunity, he would have been stuck on that ledge with the rope hanging out there beyond his reach and that is where he would have stayed until being rescued who knows how many days or weeks later. That is like the government. It has missed an opportunity to substantially reduce the debt.

I want to address some of the issues in the bill before us today, Bill C-49. Interestingly, the bill was introduced in the House on Tuesday. The first debate on it was held yesterday. Here we are, two days after it was introduced. The bill is only 50 or 60 pages long, but I am quite certain that there are some negative things in the bill which I have not identified simply because of the lack of time. Other duties of course keep us busy as well.

One of the first things in the bill is the issue of air transport security. I fly frequently as do most members of parliament. I have really wondered about enhanced security at the airport. Sure, now we have to turn our computers on. Every day when I walk into the airport through security I am asked to show that my solar powered calculator works. That is supposed to somehow enhance security.

My little one inch blade that I had on my nail clipper was taken away. I was told that was very dangerous for a law abiding Canadian citizen to have. Frankly, when that happened, my mouth said to the security personnel that they could have it. I appreciated what they were trying to do, but in my head I was wondering how was this flight safer?

Now if we have hijackers on board we will just have to tackle them with our bare hands. Of course we have other devices which we will not tell them about.

The culture on airplanes has changed. We have had a number of instances of passengers becoming unruly and in some instances seeking to do harm to the plane and all its passengers. Passengers are now taking action. No longer are passengers docile, sitting there and obeying, and hoping the plane may be allowed to land safely. We know that is no longer a certain possibility so passengers are thinking quite differently.

One of the things that we promoted was the bringing on board of armed air marshals. We said that very soon in the aftermath of September 11. Eventually the government caught up with it and this is now being done.

We are talking about Bill C-49, the budget implementation bill, and this really disturbs me. The federal government wants to put greater security enhancements for air travel but it is proposing to ding the passengers for that cost.

There would be a new $12 or $24 tax depending on the destination and other different factors that are built into the bill. As an aside, let us proudly announce to Canadians that it includes the GST. The actual bill reads that the amount of the tax would be $11.22 but when the GST is added to this security tax, it would come to $12. The announced $12 or $24 would actually include the GST. Let us congratulate the government for doing that at least. It is about the most I can say.

However, it is a wrong decision for aircraft security to tax only people who are flying. By far the most people who were killed on September 11 were not in airplanes. There were a number of them in the airplanes themselves that went down on that fateful day but most of the people who died in the World Trade Center and the Pentagon were not in airplanes. It is in the public interest to have air security.

It is a wrongheaded idea for the government to target a tax with a fixed rate to provide for this air security. First, it does not distribute the price to those who are actually benefiting from it, and second, it is a tremendous disincentive to fly. This tax would have a great impact on our aircraft companies which are already suffering in these tough economic times and added security risks.

I will use the example of travelling between Edmonton and Calgary. If one drives within the speed limit, and of course I always do, this is about a three hour trip. From the time I leave my house, go to the airport and take the one hour or one hour and a half that I need to go through the security lineups and the check-in lineups because everything is so very slow these days, I could be over halfway to Calgary if I stay in my car and drive.

Now, taxes have been added. The cost has become prohibitive, not because of the cost of providing the service, but rather because of the cost of the taxes that are involved.

It is justifiable, to a degree, to charge air travellers for the cost of running airports and we do not worry about that too much. In the example I gave I picked a typical airfare ticket of approximately $119. In the particular airport I chose, a $100 ticket has now attached to it $150.12 worth of taxes and fees. In other words, the taxes are in excess of the ticket itself. We then add a security fee of $24 and believe it or not, a ticket where the value of the travel was $119, has attached to it $174 of taxes, fees and the security fee. That is a total of 146% of the value of the ticket before taxes. That is atrocious.

Every small community that enjoys travel, and I am thinking of places in Alberta between Grand Prairie and Edmonton, will be included in the fee because these are listed airports. It will add tremendously to the cost to the point where these businesses will not make any money because they will be unable to attract the clientele to use their business.

WestJest put out a press release yesterday. This is a very innovative young airline in our country. I should not do any free advertising for it, but I was on the Internet last night trying to get some stuff out of our national airline, Air Canada. Its website frustrated me to no end. It insisted that before it answered any question, I had to enter an e-mail. When I tried to enter my e-mail, after five or six characters it stopped accepting them. I tried to enter without my e-mail and it said “Sorry, your e-mail is invalid. You have to enter an e-mail”. I said forget it.

In contrast, WestJet has a website which is easy to use. It is the most user friendly site I have ever used. I have used it quite a bit because it is so easy to book a ticket. It has electronic tickets; it is great.

The press release put out by WestJet's CEO, Mr. Beddoe, stated that this boost in the price of airline tickets by $12 for a one way trip and $24 for a two way trip was enough to convince many people that it was better to drive 300 to 400 kilometres than to fly. He said it would be inevitable that many of the small cities that were served by WestJet would probably lose the only air service they had. That is shameful, just because of a tax.

The government, in previous times, used taxes in trying to prevent people from smoking. I talked about this before. The $12.75 cost of cigarettes has $16.69 worth of taxes. That is a tax of 130.9% on the price of the product. The government claims that is sufficient to cause people to stop smoking in some numbers. If a 130.9% tax for cigarettes would cause people to stop smoking, what would a 146% tax on flying do? It would probably stop people from flying and as a result we would end up with less service.

It does not have to be this way. Different airlines have asked that instead of making this a flat fee to simply make it a percentage of the ticket. That would be fair. It would be in proportion to the cost of the product.

The Liberals keep saying that they are in favour of a progressive tax, not the regressive one that taxes the little guy or the poor people inordinately in disproportion. They are doing just that in this particular case.

I would like to mention a few other things. One of the other items that the bill would do is make some income tax amendments. There is one shortcoming that I wish would have been here. During our finance committee hearings we had a number of people make presentations who asked to have the capital tax removed. It is a huge business disincentive. It prevents corporations from settling down in Canada to make this their business home because of this excessive tax. The costing of this would have been manageable within the budget parameters.

Our finance committee recommended it to the finance minister and it was one of the things he chose not to do. The capital tax remains and the disincentive to businesses operating in the country remains. It is a shortcoming of the budget and one I regret. The government should have done a lot better than that.

The bill talks about the ability of apprentice students to deduct from taxable income some amount of the cost of purchasing their tools. This part of the bill is so restrictive that all it does is give the Liberals something to crow about.

I have been a member of parliament for over eight years. There has been a member every session for as long as I can remember who has had a private member's bill to make a mechanic's tools tax deductible. It is a huge expense to mechanics. It is required for them to earn their income, and they are discriminated against because they cannot deduct that expense from their income.

I remember the member for Lakeland having a private member's bill as well as one of the Bloc members. Finally, a Liberal member came up with a bill after some prorogations later. It passed in the House that a mechanic's tools should be tax deductible.

What does the government do? It puts it in the budget but with restrictions. It applies only to apprentice students. Mechanics who are operating from day to day who have finished their apprenticeship training are not eligible. It has a $1,000 deductible. In other words, the first $1,000 is not deductible. It is only the amount of those expenses that exceed $1,000. An apprentice student in training needs to have that deduction on the first $1,000 not just on the amount by which it exceeds $1,000. It is also limited to 5% of income. As soon as apprentices make more than $20,000 a year, which means they are still on the poverty line, then that limit goes up. If, for example, they make $30,000 a year, then they would only be able to claim that amount over $1,500.

In summary, I would like to say that changes that the bill would bring in our income tax and fiscal considerations are woefully inadequate.

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

Madam Speaker, it is a pleasure to rise today to speak to Bill C-49 regarding the budget, which was a great disappointment to many Canadians. On the day after he introduced the budget the finance minister stated during question period in the House:

--what is important in a budget is the way...it is received by the public.

We should all be disappointed by a finance minister who believes that public opinion and focus group economics is the way to govern a country when sometimes the most important and best decisions for the long term good of a country are not always the most popular decisions. I am speaking of decisions like free trade, the deregulation of financial services, transportation and energy, all of which were controversial and many of which were not popular. Even the replacement of the manufacturers sales tax, which was the euphemistic way of introducing the unpopular GST, was not popular but has proven to be the right policy down the road.

Canadians have paid a significant price for this type of government that focuses on polls and focus groups and does not have a vision or the wisdom and foresight to make the types of decisions which will improve the lives of Canadians well into this century.

Let us look at the budget from the perspective of the finance minister's statement, “what is important in a budget is the way it is received by the public”. The public includes Canadian farmers who have spoken out loud and clear on the budget. They were as disappointed as all Canadians and as they have been with every budget the finance minister has introduced by the fact that the minister and the government have failed to deal adequately with the crisis facing farmers across Canada.

There is a view in the federal department of agriculture that if something is not raised or grown in the west it is not agriculture. As the member of parliament for the riding of Kings--Hants where 50% of all the agricultural products of Nova Scotia are produced, with a larger output of agricultural product than the entire province of Prince Edward Island, I urge the department and the government to take seriously issues of agriculture which have not been dealt with properly by the government. It has failed to recognize the important contribution made by Canadian farmers to the lives of all Canadians.

The budget failed to deal with the crisis the Canadian military is facing. Even in a pre-September 11 context our Canadian military had been starved of resources. In the budget the government did not deal with the crisis that existed in military funding pre-September 11. If we add to this difficulty and the stretching of scarce resources the September 11 imperatives, the new security imperatives, and the increased levels of duty and tasks added to our Canadian armed forces, clearly the budget does not come close to addressing these needs. It was supposed to be a security budget and it did not even address those issues.

Numerous presentations were made to the House of Commons finance committee by the non-profit sector urging a permanent elimination of the capital gains tax on gifts of publicly listed securities. In the budget the government made permanent a reduction to the capital gains tax on publicly listed securities, but that was a baby step in the right direction. The Canadian philanthropic sector, Canadian charities whether a university foundation, the United Way or a hospital foundation, is at a competitive disadvantage when competing with funds currently being drawn to places in the U.S. and the U.K.

The government has not worked with the non-profit sector to make it easier for Canadian institutions, the non-profit sector, universities, hospitals, foundations and charities to raise money that is necessary, particularly during a period of decreased federal and provincial funding.

Even with the minister's view that we should judge budgets based on public opinion the budget was a gross failure. Probably the most damning gauge by which to evaluate the budget is what the international markets have said about it and about the performance of the government.

Under the government the Canadian dollar has lost 20% of its value against the U.S. dollar. The Prime Minister's response is typically that this is not really a problem and a low dollar is good for exports. If we think about the logical corollary of the Prime Minister's arguments and follow his flawed logic, by reducing the Canadian dollar to zero Canada could be the greatest export nation in the world.

Another argument that the Prime Minister makes about the Canadian dollar is that although we are doing badly against the U.S. dollar we are doing well against other currencies. He is right. Our dollar is doing better than the ruble at this time. All we have to do is wait, because we have lost 15% against the British pound and we have lost significantly against the Mexican peso.

A 20% drop in the value of the Canadian dollar represents a pay cut to every Canadian, a drop in our standard of living and a reflection of the fact that Canadians are getting poorer as Americans are getting richer under the watch of the government.

Last week the Prime Minister and the Minister of Finance went to New York for a couple of days. During the period of time they were out of the country the dollar improved marginally. Since they have returned, however, the dollar has dropped again.

I would suggest that the government seriously consider sending the Prime Minister and the Minister of Finance out of the country for about 30 days. Based on that performance, if they stayed out of the country for 30 days the Canadian dollar might ascend to the level at which it rested prior to the government taking power in 1993. Maybe the answer is to get the Minister of Finance and the Prime Minister out of the country.

If they are not here they certainly will not be able to direct funding to departments and misguided spending programs where it ought not to be going. They will not be able to spend money in one of the sixteen departments the auditor general described as having out of control spending.

When the finance minister was given an opportunity to reduce spending in some key areas he did not take that opportunity at all. He did not cut one area in a $130 billion budget. No one is saying that the finance minister should be cutting in health care, the military or agriculture, the prime areas he ought to be investing more in.

However there are areas of government waste. There is no member on either side of the House who does not realize in his or her heart there are areas of government spending which do not reflect the priorities, the needs, the values and the long term interests of Canadians.

This is not an esoteric debate we are making as people with so much money that we do not have to worry about how we balance the budget. Based on U.K., U.S. and German accounting standards the fact is that Canada is in a deficit right now.

Based on our own accounting standards Canada is sliding toward a deficit position next year. This year the government provided not a tax break but a deferred corporate tax benefit to next year. Why did it do that? Did it do that to be nice to people? Did the government do it to try to help corporate Canada? If it were interested in doing that it probably would have applied it in some way that would have benefited mom and pop operations and would have been more broadly based.

The government did it for one reason and that was to avoid the stark reality of being in a deficit next year. The only thing that is keeping Canada out of a deficit position right now is Liberal leadership politics. A stark fear exists on government benches that because of its lax spending and the fact that it has not monitored spending it will slide back into a deficit. It wants to avoid that reality.

In terms of health care there is a health care crisis in every province in Canada. We cannot blame provincial governments for the health care crisis in Canada.

The blame belongs squarely on the desk of the Prime Minister and on the desk of the Minister of Finance who have cut transfers to the provinces. In an unprecedented cruel way they have put provinces in a position where they have not had the resources to meet their basic needs. The provinces are now paying 85% to 88% of health care costs. When medicare was first introduced the federal government was actually paying 50%. Now it is down to 10%, 12% or 15% depending on the province, to a point where a province like Nova Scotia is now facing a health care crisis, a province that does not have the tax base of Alberta or Ontario. A province like Nova Scotia is hit disproportionately hard by these types of cutbacks.

That is why provincial governments are in such a difficult position trying to keep clinics and hospitals open. The waiting lists for surgery and treatment have grown well beyond what anyone considers acceptable. The blame belongs squarely on the government which has not only failed to respond in every budget prior to this one but has disappointed all Canadians concerned about health care in the latest budget.

If the government were serious about addressing some of the real challenges facing Canada in this century, a century during which Canadians will face an even greater rate of change and challenge than they have faced in the last century, I would posit that the government would have used the budget to strengthen our health care system, to strengthen our commitment to agriculture, to rationalize spending in other departments, to find areas of government waste where it could have reduced some of that spending and to address the fundamental issue plaguing Canadians, the Canadian dollar.

The Canadian dollar should be a source of pride for Canadians, not a source of embarrassment. The Canadian dollar should not be a joke. It is really terrible when our friends and family in the U.S. talk to us about how they are being paid in American dollars and laugh at us. The Canadian dollar is more than just a bread and butter or nuts and bolts issue. It is a symbol of Canada.

Earlier today we were speaking in the House in honour of Queen Elizabeth whose face graces our Canadian dollar. What an embarrassment that we honour Queen Elizabeth in the House yet we embarrass her by failing to introduce the types of economic policies that would strengthen the dollar bill upon which her face is placed.

If we are serious about honouring Queen Elizabeth and the Canadian dollar, we ought to introduce a productivity agenda. That means tax reform focused on productivity. That means regulatory reform focused on productivity. That means the rationalization of spending focused on the types of initiatives that would lead to the long term success and prosperity of Canadians.

I recognize education for very important reasons is under provincial jurisdiction in Canada, but by restoring transfers to the provinces to the levels at which they ought to be the federal government could help significantly in terms of ensuring that all Canadians have the opportunity to obtain an adequate education. Not only has health care been devastated by the cuts of the federal government but our education system has as well.