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

[Lorne Nystrom, NDP, Regina—Qu'Appelle, SK]

Mr. Speaker, Bill C-49 implements many details of the December budget. It was a budget of missed opportunities and failed to address many important problems facing Canadians.

The implementation bill contains five or six key aspects of the budget. A major change has been made in the last eight weeks in the way part of the budget is organized, namely the infrastructure program and the Africa fund.

Last week the budget went through the House and there was no whimper, no scuttlebutt, no talk whatsoever about making a major change in the administration of a major part of the budget. I speak about the infrastructure fund that was supposed to be administered at arm's length from the cabinet, from the federal government, from the politicians. It was to be run like an arm's length foundation.

I also have some concerns about the terms of accountability to parliament. The attitude of the government has changed 180 degrees. It has decided that the infrastructure fund will be under the responsibility of the Deputy Prime Minister.

There is a danger of it becoming a politically targeted infrastructure fund for the Liberal Party of Canada if it comes under political direction. The temptation is there, some $2 billion. There would be a real temptation to put some of that money into more politically sensitive projects than if the fund were administered totally at arm's length from the Government of Canada.

The other big change was the $500 million Africa fund. Again, the fund was to be administered at arm's length from the federal government but there was a change and it too is under the political responsibility of the Deputy Prime Minister of Canada.

I wonder whether or not the finance minister has lost a little tug of war within the cabinet. The Prime Minister seems to be favouring the Deputy Prime Minister as his successor as leader of the Liberal Party. He tried with Mr. Brian Tobin who was the Minister of Industry but that did not work out. That fizzled and failed. He has made the former foreign affairs minister the Deputy Prime Minister. He has given him a lot more responsibility and a lot of political clout in terms of doing favours for all kinds of government members. That is a real concern to me and many other members of the House of Commons.

The implementation bill, in addition to what I have already mentioned, brings in a number of other aspects of the budget. It establishes the new Canadian air transport security authority, because of what happened on September 11. The new authority will be responsible for security at the airports. It will have the full power of a crown corporation and will be run by 11 government appointees. I would bet dollars to donuts that most of those 11 government appointees will be people who are very active in the Liberal Party of Canada. Another 11 people will be put in patronage positions.

From the way the legislation is written and from the briefings we received, I do not think regular travellers will see much of a change at the airports as they go through security screening. I think the same or similar private sector contractors will be running airport security.

It is interesting to note that a public opinion poll was taken and 70% of Canadians wanted the security services at the airports to be under the authority of federal officials. Only 20% wanted to have private contractors responsible for screening at Canada's airports. I predict that the screening will continue to be provided by private contractors and I do not think that is the way the general public wants to go.

I am also concerned about the rights of workers who are already there. Many of them are members of the United Steelworkers of America union, which represents many of the people who work in airport security. I am concerned about what kinds of rights they will have as we go through this changeover and phasing out of the present system into the new.

The other thing we should be noting is that last year the Toronto airport authority gave the federal Liberal Party a contribution of $7,500, and I think that when we have this new crown agency its 11 government appointees will be looking at political considerations, not necessarily solely the safety considerations for the people of our country.

Second, I would like to mention something new in the bill, the implementation of the air traveller security charge as of April 1, 2002, to fund the air security enhancements at airports in the country. This will be a charge of $12 a flight, $24 per round trip, plus the GST. It does not matter in most cases how long the trip will be. Whether it is a long haul flight from Vancouver to Halifax or a short haul flight from Ottawa to Toronto or Regina to Winnipeg, there will be a charge of $24 plus GST. Meanwhile in the United States the equivalent fee that the Americans will be charging is $2.50 U.S. a flight. Let us say that is $4 Canadian a flight. Our government is charging $24 Canadian a flight, fully $20 Canadian more for a flight in this country than is being charged in the United States. According to some of the research that has been done, only about $2 of that new fee will go to fund the new agency, the Canadian air transport security agency, and $10 from that flight will go into general government revenues or coffers. In other words it is just a new tax grab. It is a fee. We get tax reductions on one side and fee increases on the other side and the ordinary person will pay through the nose once again.

We are concerned about this. It is something we will fight against in the committee. I am sure the Canadian people will be on our side in terms of mobilizing against this new airport tax, most of which will not be for airport security but will go into government revenues for other purposes.

There is one more point I would like to mention and it is one thing that I certainly agree with in the budget implementation bill, because we should not forget that a bill like this is an omnibus bill. It has the good, the bad and the ugly. The ugly is the airport tax. There are a lot of bad things in the bill but there are some good things as well.

One of the good things is the deferral of taxes for six months for the small business people of the country. The federal government will be deferring tax instalments for January, February and March of 2002 for up to six months to assist small businesses in their cashflow. This is $2 billion. It is not a tax writeoff. It is a tax deferral. Because of the slowdown in the economy, the recession or near recession in the economy, and because of what happened on September 11, there is a deferral of taxes for up to six months for small businesses that want to exercise that deferral right. We support that, because small businesses in the country employ about half the Canadian population and now create about 80% of the new jobs in Canada.

When I talk about small businesses, I mean really small business. In fact, 80% of small businesses in the country have sales of less than $1 million a year. Eighty per cent of the new jobs are in small business. Sales for 80% of those small businesses are less than $1 million a year. They employ from one to twenty people, maybe up to thirty or so. Many of these small businesses are single person operations. Many people operate these companies out of their own homes or have a small retail operation such as a hair salon. These businesses create about 80% of the new jobs in the country.

This is a sector we should be looking at in terms of creating jobs, creating wealth, helping Canadian people and putting Canadian people to work. This deferral is one small way of helping people who are employed by small business or who indeed are owners of small businesses. I remind the House that the majority of small business owners and those who work in small businesses in the country now are women, not men. This is an area that needs a lot more assistance in the future.

Another positive thing in the bill is a new provision to allow an apprentice vehicle mechanic to deduct a portion of the cost of new tools acquired after 2001. Mechanics, men and women, who bought tools for their businesses could not deduct them as an expense. They buy these tools to work. People in a business operation who have a legitimate business expense can deduct it on their taxes, people such as doctors, dentists and many other professionals, including consultants. Consultants who have home businesses can deduct a portion of home expenses on their taxes. They can claim 20% of their home expenses or whatever amount it is and telephone costs and a certain amount for utilities. They are deducted as legitimate expenses. Yet we had mechanics, young people in the country starting out, who were spending thousands of dollars on tools but could not deduct them as a legitimate expense.

In 1999, I introduced a private member's bill in the House, Bill C-338, calling for the deduction of costs of mechanics' tools from income tax. I did that after circulating a petition throughout my riding and parts of Saskatchewan, getting signatures from hundreds of mechanics who were saying they wanted fair treatment, justice and equality in the tax laws. I have raised this issue time and time again at the finance committee. The government has not gone as far in the budget as mechanics want it to go, but at least this is a start. It is going in the right direction and it will allow the deduction of some of the cost of purchasing tools. I will keep pushing to make sure that we get the full deduction of the cost of tools for mechanics in the years that lie ahead.

Another part of the budget in terms of the implementation is the change for companies that want to donate securities to public charities. In our country when people have capital gains they are taxed on 50% of the capital gains. The 1997 change to the law for companies making donations to charities was that instead of having 50% of that income taxable, the government put it down to 37.5%. This budget brings it down to only 25%.

In the United States and the United Kingdom there is no tax whatsoever when securities are contributed to charitable organizations. What we have done in this country is strike a note halfway between what happens in the U.K. and the United States and what we used to have here. I certainly support that provision as well. I support making it easier for companies to donate to charities. There has been a lot of lobbying on that in the finance committee over the last while. Indeed, many members of the finance committee would like to see the capital gains tax eliminated altogether for securities donated to charities by companies in our country. I have not gone that far and the Minister of Finance has not gone that far, but at least there is some progress in that direction.

There is another thing I wanted to mention again. I started to say at the outset of my remarks that a big thing that is happening is the $2 billion Canada infrastructure fund, which will provide assistance for infrastructure in the country. We need a massive infrastructure program in Canada. This is one of the ways to create jobs. It is one of the ways to build the country, to build the economy. We need a vision of building our country and our economy, a vision of building the roads, highways and water systems and cleaning up the environment. What we get in the budget is a $2 billion fund over six years.

In the United States over the equivalent period of time, the Americans have committed $217 billion in transportation infrastructure alone. In our country we have some $2 billion to cover all infrastructure over a period of six years. If we were to have an equivalent measure of investment into infrastructure, comparing our population to that of the United States, we would need at least $18 billion more than we are seeing in this budget implementation bill.

These are some parts of the bill that will be debated in committee. Some of them are negative, some of them are positive and some of them are really bad, like the airport tax that everybody will have to pay.

Another part of the bill is the African development fund to reduce poverty, provide education and set the African people on the path to a more sustainable development of their societies and their lives. This is a promise that was made by the Prime Minister to Nelson Mandela many years ago. It is $500 million over six years.

Despite this, we are now spending only .25% of our GDP on foreign aid. The goal for many years has been .7% of our GDP. We are spending just a bit over a third of what we should be spending to help countries in the third world. It is a sad commentary on our country. In Canada we should be strong advocates of a world economic development agency that has a vision of a new development plan, a modern day Marshall Plan that would develop places like Africa, Afghanistan and many other parts of the world. That should be one of the things that we advocate as a Canadian parliament and as a Canadian government.

We need to solve some of the problems of world poverty, world despair and world hunger. People are dying of starvation as we speak in the House of Commons today. Hundreds of people in the world are literally dying from a lack of food, yet we have the means in this country and in this world to produce a great deal of food. We have the means for international development in the world. If we do not solve some of these problems we will have more tragedies like those of September 11 and more calamities that will haunt us in the years that lie ahead. We have the means.

About three years ago, parliament passed a private member's motion I introduced, stating that we endorsed in principle the idea of the Tobin tax, a tax on the speculation in currency around the world. This is a tax that was suggested by an American professor named James Tobin whereby we would put a very small tax of about .1% or .2% on speculation in currency. In the world today over $1 trillion is traded in currency every single day, mostly by big banks. With this small tax we could raise hundreds of billions of dollars for international development and environmental cleanup. Much of it could be spent in countries around the world to develop social programs, to help eliminate poverty and to help reduce the gap between the rich and the poor. We have the means in the world to have these kinds of funds developed to help all Canadians and help all peoples of the world, whether is it a Tobin tax or some other means of funding some of these initiatives.

I conclude by saying that the budget brought down by the Minister of Finance was a budget of missed opportunities. It was a budget that did not tackle some of the real problems that we have today. It was a budget that failed to address the real issues of the economy and unemployment. Back in December the unemployment rate rose to 7.5%.

Today, the national unemployment rate if 8%. This is the highest rate in years. In the forecasts the finance minister issued two months ago, there was nothing regarding job creation for Canadians.

We have to create jobs and we do that by investing in infrastructure, by putting money into affordable housing, into cleaning up the environment and into water treatment facilities across the country.

We also do it by making sure that we have a fair deal for the farmers of Canada. The farmers of Canada are in a real crisis, largely because of massive government subsidies for farmers in the United States and Europe. There is now a bill before the American congress, supported already by the house of representatives, I think, and going to the senate. It was agreed to by the president of the United States. It will inject into the American economy over $170 billion American in additional money in terms of farm subsidies to support the farmers of the United States of America. We should think about the impact that will have on Canadian farmers. Yet the government brought down a budget with absolutely nothing in it for the farmers of our country. Canadian farmers need a fair shake and a fair deal. The foundation of the country is agriculture and when the farmers are better off we are all better off. There would be job creation in the towns and cities from coast to coast to coast. We need more assistance for our farmers. We have missed the opportunity. The Minister of Finance should be changing some of those things instead of the changes he made in terms of infrastructure and the African fund.

Since the government took power, the gap between the rich and the poor has widened. We have a part time, high unemployment, low wage society and that is what must be changed.

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

Mr. Speaker, I was explaining to my colleague, the Bloc Quebecois critic for international affairs, how this budget had totally changed if one is to belive the statements made yesterday by the finance minister.

This is the first time I see a finance minister, eight weeks after tabling the budget, completely change his mind on some basic aspects of the government fiscal policy that was read here in the House, described in the budget documents and announced during several scrums after the budget speech. This gives us a peculiar image of this government, especially the finance minister, who does not seem to know where he is going. This does not make sense and I will give two rather obvious examples of what happened yesterday.

Eight weeks ago, we were told that during the current fiscal year, 2001-2002, the finance minister would not spend one dime on paying down the debt because of the downturn we are now experiencing and other priorities the government had, including investing in infrastructure to encourage economic growth and setting up a fund to help Africa, which is welcome news under the circumstances.

Yesterday, and I will borrow the phrase used by the Prime Minister during oral question period, the finance minister flip-flopped magically. He has now decided to apply any surplus accumulated at the end of fiscal 2001-2002, the fiscal year ending March 31, 2002, to the debt.

As for the foundation, it remains to be seen, we do not know yet. The infrastructure foundation has become the Strategic Infrastructure Foundation and we do not know the rules yet. We do not know how it will work. It would have been too simple to simply renew existing agreements, especially with the Quebec government, regarding the infrastructure program and allocate new money.

It is difficult to understand where the finance minister is going. Not only did he say yesterday that he would apply any surplus, which might be bigger than planned, to the debt, but today during oral question period he is saying surpluses are dwindling and might be insignificant.

How can we understand what the government is up to, in terms of management, when in just eight weeks, the finance minister changed his policy on the use of surpluses, in a few hours, modified his vision concerning the scope of these surpluses, and in a few minutes, went from the infrastructure fund to the infrastructure foundation, after we were told yesterday that the foundation no longer existed? The unbelievable confusion around this minister's management makes us think that he doesn't know where he is going.

How can we have confidence in the initiatives he has announced and which were in the budget tabled eight weeks ago? Since yesterday, he has put himself in a shameful contradiction in terms of the debt and the infrastructure fund.

Before getting into the bill and its various proposals for review and comment, I would like to recall certain elements of the financial framework designed to help assess these measures.

First, it is wrong to say—as the Minister of Finance did today while he said the opposite yesterday—that surpluses are not important.

We will end the current fiscal year with substantial surpluses, probably double what the Minister of Finance initially announced. Even taking into consideration the new initiatives totalling about $4 billion that were handed out eight weeks ago in the budget, the net surpluses after subtracting the cost of all these initiatives will probably exceed $6 billion.

Before the initiatives announced eight weeks ago, we had anticipated that surpluses between $10 and $12 billion. Even after factoring in the initiatives announced in the budget eight weeks ago, there will still be a 6 or $7 billion surplus. People must know that it is still possible to do things.

Second, this is rather astonishing, yet the Minister wonders why he is not being taken seriously and why he is regarded more like a stand-up comic than a real manager of public funds. Yesterday, I read the budget over, because I was not sure I had clearly understood the Minister of Finance and his statements regarding the debt and the foundation compared to the infrastructure fund.

In reviewing his estimates, I noticed that he overestimated his expenditures. There is a $11 billion year over year increase in expenditures, which is not supported by the facts.

Third, he underestimated his revenues. For example, if one looks at the employment insurance fund, one sees that, a few weeks after the actuary for the fund indicated that the surplus could exceed $7 billion, the Minister of Finance wrote in his budget that the surplus in the EI fund would be about $3.5 billion. That is half of the amount estimated by the chief actuary.

The government must quit taking people for fools. It must quit doing these kinds of flip flops on such important issues. What do people on the outside think of the Minister of Finance and this government when they see such flip flops eight weeks after the tabling of a budget? They do not take them seriously.

When I went to New York City last weekend, I met business people. I also met forecasters, serious people. And I can tell you that the Prime Minister and the Minister of Finance are not taken seriously when they show up in New York City saying that everything is fine, that our fiscal house is in order, particularly since we have just learned, eight weeks after the tabling of a budget, that there has been a change in policy and that there will not be a debate on the issue of monetary instability and monetary integration for the Americas.

People must not be taken for fools. Those who take an interest in the evolution of the Canadian economy, in public finances, in the budgets and in the great debates on currency know full well that when the government steers the House away from this kind of debate, it is because it does not want to talk about these issues. And if it does not want to talk about them, it is because there is a problem.

And the Minister of Finance tells them “Perhaps we could advertise in the New York Times and in the Washington Post , to sell the Canadian dollar”. It is not smart at all to say such things. It creates doubt in the financial sector.

We say “If there is no problem, why advertise in the New York Times and in the Washington Post to promote the value of the Canadian dollar and say that it is not appreciated at its fair value?” By doing so, we are drawing attention to the problem.

The government may spend billions of dollars in advertising, but this will not enhance the competitiveness of Canadian businesses versus American ones, and that is the main reason why the value of the Canadian dollar has been decreasing over the past 30 years.

Moreover, this will not convince international speculators, who make billions of dollars on infinitesimal variations of secondary currencies such as the Canadian dollar, to stop making billions by speculating. This is totally ridiculous.

Fortunately, ridicule does not kill, otherwise a number of government members would no longer be around. It does not make sense to manage public funds the way the Minister of Finance has been doing, especially in the past 24 hours. That is unbelievable.

There are also dubious and questionable decisions in this budget—I am going back to the specific bill, Bill C-49—particularly the imposition of a tax on domestic air transportation.

Some sad events occurred on September 11 in the United States. If there is one sector that was directly hit, and in a catastrophic way, it was the air transportation industry. And, in his great wisdom and with surpluses that far exceed what he claims to have available for the current fiscal year, the Minister of Finance has decided to impose a new tax on air transportation.

What a nice way to help the airline industry. What a nice way to get the economy back on track, as we have been asking him to do since September, because we were already experiencing a slowdown, and September 11 just hastened things. What a nice way to help the airline industry, and regional development too.

It is ill-advised—and I am being polite when I say that—to impose a tax on air transportation services provided by small carriers, particularly those serving remote regions. They have enough problems as it is, but the government imposes a new tax on them. What a bright idea.

Moreover, some regional carriers are pulling out of some areas, because the routes are no longer financially viable. Because of this tax that is coming up, it will be even less worthwhile. Air travel will no longer be competitive. The people in the regions will be considered second class citizens. We have just learned that Air Alma has dropped its Alma-Montreal service, and recently Alma-Magdalen Islands as well. What sort of country will we end up with? Only someone who was not in his right mind would impose such measures. There are plenty of questions to be answered about this.

In the budget implementation bill, the airports where security is improved with the funds from this tax have been classified. It will be collected at 20 Quebec airports, for example, and the charge will range from $12 to $24 per ticket, as if the price of tickets were not already high enough. I will remind hon. members that the price of air travel has risen 9.2% since 1983 in Canada, overall, while there has been a drop of 43% in the United States over the same period. This is a fine way to improve our competitive edge.

Instead of making ridiculous statements, like saying they will bail out the Canadian dollar by putting ads in the New York Times or the Washington Post , they should show more intelligence, and take some measures that are not counterproductive, unlike the ones in the airline sector. The situation is totally ridiculous.

One might well wonder, in connection with the airports affected by these improvements to security, why there were 20 in Quebec out of the 90—all over the regions, as will be seen when I list them later, which is rather peculiar—whereas there are only 15 in Ontario. Why is a greater need being felt to improve security in airports in Quebec than in those in Ontario?

This means that there are more airports in Quebec where this tax will have to be paid, more airports in Quebec that will be affected, as will the air carriers themselves, by this new tax, which will be detrimental to their competitiveness. This means that there will probably be more residents in remote parts of Quebec whose areas will be served less frequently or certain routes will simply be eliminated altogether. May we have an explanation of why this is the case? This is the type of question that will be raised in committee. We will have a lot of questions to ask.

Here is the list of the affected airports throughout Quebec: Alma, Bagotville, Baie-Comeau, Chibougamau, Gaspé, Îles-de-la-Madeleine, Kuujjuaq, La Grande Rivière, La Grande-3, La Grande-4, Blanc-Sablon, Mont-Joli, Montreal, Quebec City, Roberval, Rouyn-Noranda, Sept-Îles and Val-d'Or. Virtually all regions are affected.

Do people really think terrorism will be an issue in Kuujjuaq, and that we should improve security there that much in case something unfortunate happens?

Sometimes, a little bit of logic helps. Once again, why are there more airports in Quebec than in Ontario that are dealt this blow against the competitiveness of airlines? Will the prejudice caused by this charge be greater in Quebec than in Ontario? We need an answer.

Just like the general content of the budget did, Bill C-49 makes us wonder about the abilities of the Minister of Finance. And we are left to wonder even more, after what happened in the last 24 hours. We have to ask whether the minister should let somebody else take over. It is fortunate the Deputy Prime Minister is there to put a semblance of order in government business. Otherwise, the government and its management would really not look good.

The Bloc Quebecois has always strived to improve things. Right after the events on September 11, we urged the government and the Minister of Finance, who is forever doing flip-flops, to help the economy weather the storm, but the minister did not listen.

At the time, either late October or early November, we even presented a five-point emergency plan to help the businesses and workers who could be seriously affected by the economic downturn, not to say recession, then anticipated. We even put down suggestions in writing and sent them to the Minister of Finance, who has run out of new ideas and does not know where he is headed.

We said, “We will sit down at the drawing board. We will make some appropriate suggestions and we will give him a little help. He may have run out of ideas and have problems, but we have ideas on how to help people and companies”. We then made public our emergency plan, which included a real reform of employment insurance. Why? Because this government has slashed EI benefits and literally stolen from the pockets of unemployed workers and people who pay into the EI fund.

People should never forget that the federal government is no longer putting a red cent into the fund. Proportionately speaking, the premiums paid by employers, employees, SMBs and average wage earners account for the bulk of the fund. But, year after year, for the last five years in particular, this government has literally been stealing the surplus from the EI fund. This minister keeps telling us how well he is doing his job, but the real reason he has a surplus and can look so good is that he has been stealing other people's money.

Our emergency plan included provisions for improving the EI system so as to help support the economy in two ways. First, by helping those who make the economy run and who were in danger of being affected by the downturn. We have seen the increase in unemployment in recent months. Our plan was to help these people qualify for EI, because many of them could have been excluded by the stringent and inhumane requirements imposed by this government. Our plan contained provisions for helping current and future unemployed workers with a humane and decent system, which would not be governed by completely inhumane and vicious criteria, like those this government introduced a few years ago.

Second, our plan provided for the injection of new funds into the economy. Let us not forget that each time there is a flow of new money, it can help boost the economy. It can help the regions through the economic downturn. We were told no.

The Standing Committee on Human Resources Development made 17 recommendations. These were unanimous recommendations. Unanimity is not common here. All members of the Standing Committee on Human Resources Development, including Liberal members, signed a report containing 17 recommendations designed to improve the employment insurance plan by making it more humane, more accessible and more universal. Right now, only 40% of Canadians are covered under the plan. Is it not stupid to have a plan that does not even cover the majority of the people it should help? It is absolutely ridiculous.

Despite such unanimity—and we know the proverbial courage of Liberal members, who may say many things in committee but later get their arms twisted and say nothing when it is time to vote because they all have the ambition of becoming ministers—they all voted in favour of the budget even though it contained only one measure out of the 17 recommendations. We do welcome this measure, which gives more flexibility to parents with children who are hospitalized for extended periods, because we, in the Bloc Quebecois, fought for it. It was part of the improvements we asked for so as not to exclude certain people, especially among the most disadvantaged.

My colleague, the member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques fought for this. Before him, it was my colleague, the member for Mercier, who is now our party's critic for foreign affairs. All of the Bloc Quebecois fought for these types of improvements. We are being shown an improvement when there were 17 recommendations that would have used part of the $7 billion surplus from the employment insurance fund, not all of the surplus. The measure proposed involves spending some $50 million.

They must be joking when they say “We are helping the unemployed”. One would have to be a heartless millionaire to propose this kind of thing and then say “we are helping the unemployed”, while proposing measures as insignificant as these. Eventually something is going to have to happen, because it is ridiculous to manage taxpayers money like this and mislead Canadians every year with surplus forecasts that are way off.

We had also asked, as part of our emergency plan, to anticipate—because we, on this side of the House, are responsible—measures which are not costly but which could provide a leg up for business, particularly in times of crisis, after the events of September 11, to help them weather the economic turbulence that we experienced at that time, but also to help them get through the economic downturn, which had begun prior to that.

We proposed a measure that would cost the government virtually nothing. It was the deferral of corporate tax instalments. We know what businesses must pay periodically. We said, “Let us allow them to regroup. Let us allow them to assess the situation, take corrective measures, in terms of managing their business, strategic planning, and as a result of the events and the downturn. And in order to give them a real hand, it would be a good idea to defer their tax payments, their corporate instalments, by six months”.

Mme Marois, in Quebec City, did not wait until December. She proposed this measure right away, and was applauded by the business leaders. But no. Our Minister of Finance was thinking. He was not acting. And when he thinks, it is dangerous, because he changes his mind about four times in 24 hours.

We are pleased with this measure, because it is included. The Bloc Quebecois fought to have this measure included, to allow small and medium size businesses to defer tax instalments, so as to make it easier for them to make it through the economic downturn. It would have been so easy to announce and implement this measure at the end of October. It would have been a breath of fresh air for businesses. But no. The minister had to think. And since this idea was not his own, perhaps it was not such a good idea. There is a bit of narcissism in politics. The Minister of Finance is not immune to it.

We are also pleased about another measure. It would be difficult to feel differently, because we are the ones who proposed it. I am referring to the tax deduction for mechanics' tools. It was my colleague, the hon. member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, our deputy whip, who made that suggestion through a bill he introduced in the House several months ago. We are not talking about last week. That was a number of months ago. He was a forerunner and his proposal is included in the December budget.

When my colleague presented this most beneficial bill—because tools now cost a mechanic or an apprentice a small fortune; there are incredible technological advances in this area and there is a need for this type of measure—our Minister of Finance, the stand-up comic, told his Liberal colleagues—we saw him, we were there—to oppose my colleague's bill, instead of supporting it, because he had not sponsored it. This minister is as proud as a peacock.

Mr. Speaker, we sometimes we get carried away by our emotions. But I refrained from saying certain things. It could have been worse.

We were pleased to see this measure included in the budget. But again, why wait almost a year before implementing such a measure, when it would have been so easy to announce it immediately? The minister thought this was a good idea since he used it. He thought the Bloc Quebecois had a good idea since he included it in his budget.

But why did he vote against the bill introduced by the hon. member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans? This is called petty politics. To engage in petty politics is to put one's image, one's prestige first, it is to give the impression that we have ideas and to present them in a budget and get all the praise. One can either engage in petty politics or truly help people.

The Minister of Finance decided to turn the budget into a show, with surprise announcements at the end of the year about surpluses that were larger than expected, when one would have to be completely stupid to come up with the sort of forecasts he did, containing errors that gave him an extra $50 billion to play around with over six years.

This is called looking out for one's political career, one's political image, one's chances of winning the next leadership race. It is a cheap stunt, because the money we pay to this government does not belong to the Minister of Finance. It is not his to do with as he pleases. It belongs to taxpayers. Taxpayers expect their money to be used honestly and in a transparent manner, and they are tired of being fed ridiculous forecasts.

We came up with a good measure. The Minister of Finance waited, presented it himself, and it was passed by a majority. However, this measure only went part way. My colleague's bill was much more complete. It affected all mechanics, not just apprentices. Bravo, we are happy for apprentices, but it would have been a good idea to allow tax deductions for all those in this line of work, to make deductions universal, as with other professions. But no.

Sometimes we have trouble understanding the reasoning and the philosophy behind the decisions and the flip-flops of the Minister of Finance.

I am sorry that the Minister of Finance is not more clairvoyant and not more courageous in his ideas and measures. In the last budget, there could have been tremendous opportunities for improving the general wellbeing of society, of taxpayers, of unemployed workers and of companies. The Minister of Finance could have jumped at this chance to show us just once that he was capable of coming up with ideas, that he too had a vision for the future.

Taking Quebec—not that we want to imply that we are better than anyone else—just look at what has happened in the last two budgets. Quebec's minister of finance and deputy premier, Mme Marois, has succeeded, with the little funds available to her, to put in place some forward-looking meaningful measures. Do hon. members realize why we have so few measures in the Quebec government, by which I mean budget measures? It is because the federal government has deprived it of them. SInce 1995, the federal government has outrageously slashed transfer payments for health, education and income security. This leaves Quebec in a budget situation that is not characterized by the same huge surpluses that are enjoyed here by our minister, Mr. Flip-flop.

Nevertheless, we have successfully put in place programs to assist the regions, to attract investors to the remote regions, to improve the secondary and tertiary processing sectors in the resource regions, to attract foreign capital, to earn Montreal the reputation of an international financial capital, to make the regions more than just the source of workers for the major centres. We have put measures in place to allow young people in the regions to stay home, to enjoy a decent life, to earn a living and to prosper and thus improve regional prosperity.

While over here, nothing at all was happening, Mr. Landry's government was helping the Gaspé. With very little means, helpful measures were developed. It does not take billions of dollars to do so.

We have living proof. The Minister of Finance has billions of our dollars, taken in excess from our pockets, and he is still unable to come up with development policies and policies to help support the economy. He shows up late with his measures. They are pieced together and based on the most erroneous forecasts of the surplus.

And to top it all off, eight weeks later, he changes his mind. I do not know how he manages to maintain his credibility, but his is a pretty strange way of managing public finances.

I was saying that despite Ottawa robbing the provinces when it comes to transfers for health, education and revenue equalization, Quebec has managed, in its two most recent budgets, to come up with measures that help people, that help business and that help the regions that are in trouble, whereas here, we have not even been able to lift a finger to help the regions that are experiencing hard times, not even to improve the employment insurance program, even though we are experiencing a downturn, and unemployment has risen.

I find it somewhat indecent that Bill C-49 is being introduced and that we are being asked to support it because it contains good measures. If it does contain good measures, where did they come from? They come from suggestions made by the Bloc Quebecois. Because the pressure on the Minster of Finance was too great, he had to give in on certain small measures, otherwise he would not have survived.

If there is one thing the finance minister should be thinking about first and foremost, it is the well-being of our fellow citizens. First and foremost, he should serve taxpayers well and stop using his office as a platform for the upcoming leadership race. Every single one of his budgets, especially the 1996 one, was aimed at boosting his ratings, taking credit for unexpected surpluses, claiming to be a good manager who made all the right decisions, when in reality the provinces, especially Quebec, have fallen on hard times since he became finance minister. He ruthlessly cut health and education transfer payments that should have been maintained.

The Government of Canada invests respectively 8 cents and 13 cents for every dollar invested by Quebec in health and education. That is the contribution of this government. This is the lowest in history.

This government is sending us by mail documents—in Quebec this document is not the same as in the rest of Canada— which state on the first page that health is paramount and education is an investment. Oh yes? The Government of Canada contributes 8 cents out of every dollar invested in health and 13 cents for education. And health is of paramount importance and education is an investment?

One has to have a lot of gall to advertise how much the Canadian government invests in health and education, when in reality it hardly contributes any money any more to these areas. One has to have a lot of gall to say that the government actually contributes 50%, because it includes the tax points transferred in 1977 in the calculation of federal expenses regarding transfers to the provinces. One has to have a lot of gall to do that.

When you sell your house, Mr. Speaker, do you go and tell the new owner 20 years later that this house still belongs to you? Tax points were transferred and the tax system was rebalanced. In those days, we had ministers, and prime ministers too, who were intelligent enough to know that the tax powers of the various government levels were in need of rebalancing.

What we are asking for today with regard to correcting the tax imbalance is nothing new. History has seen two major conferences aimed at balancing the taxing powers of the provinces and the federal government, namely the Quebec City conference and the one that took place in 1977. That is when tax points were transferred. At that time, nobody used the kind of demagogic arguments and meaningless rhetoric used by the Minister of Intergovernmental Affairs to lead us to believe that there is no tax imbalance. No. People had discussions and they believed that it was a good idea to do some kind of realignment, especially since the main functions of provincial governments and of the Government of Quebec are to provide essential services in areas such as health and education, and now manpower training as well.

For all these reasons, we, in the Bloc Quebecois, will continue to defend the people, to fight for the most effective use possible of the funds entrusted to this government and to see to it that the flip-flop minister quits changing his mind this way every 24 hours, quits promoting himself as a politician and starts putting the well-being of those people whom he purports to represent above everything else.

We will keep working for the major reforms we have been demanding for years, especially the reform of the employment insurance plan, so that we will have a fair and decent plan. We will keep fighting for the elimination of outrageous conventions between Canada and Barbados, for example, that allow tax avoidance with the complicity of the government and the Minister of Finance, who may have assets in Barbados. Actually, he does have some. The organization chart of his companies shows that he has some in Barbados.

We will continue our fight to help the Quebec government and other provincial governments to get a new fiscal balance in Canada. While the federal government puts up a big show, flip-flops, smiles broadly and boasts about the economic and financial performance, there are real decision makers and managers in the Quebec government and other provincial governments who look after the people, because their job is to manage health care, education and income security.

A time comes when some have it easier that others. In the coming months, the Bloc Quebecois will work eagerly to get a better balance in taxing powers to better serve the citizens, and not the ambitions of the Minister of Finance.

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

Mr. Speaker, my friends across the way honour me with their presence in wake of the speech I am giving.

I want to say a few words about something that is perhaps the greatest flaw in this budget and it is really the greatest flaw of the government in general. The Liberal government has been in power since 1993. Where it falls short, more so than in any other way, is with respect to the economy.

The government makes decisions every year about how to spend roughly $170 billion of taxpayer money. I think it is engaging in a game. It takes the hard earned dollars of taxpayers and appropriate them to itself in the form of taxes and then hands the money back to those same taxpayers and tells them to be grateful. That is fine as far as it goes. However, as members across the way know, that has a terrible impact ultimately on the economy. I will get into that in more detail in just a moment.

The truth is that in the last number of years Canada's standard of living has fallen rather dramatically. I want to quote some statistics in order to help make that case. The 1990s really was a decade of drift in Canada. I want to touch on some numbers and I hope members will allow me to do that.

Taxes drifted higher as a share of the economy in 2000 to 44.3% of GDP, up from 44% in 1999. The Canadian living standard fell $44, or about 0.2%, from $17,915 in 1989 to $17,871 in 2000. Over that entire decade our standard of living actually went down.

The U.S. standard of living increased by $2,573 or about 13% from U.S. $20,546 in 1989 to $23,119 in 2000, an average annual increase of 1.1%. An average American could buy more in 2000 than they could in 1989. They were much richer.

The gap between Americans and Canadians increased 61% between 1989 and 2000. By 2000, Canadians were just 70.3% as well off as Americans, down from 79.3% in 1989.

I want to underline that those are not my numbers. It was just a couple of years ago that the former industry minister, now the Deputy Prime Minister, raised these issues as the industry minister in the House. He said that the average standard of living for Canadians at that time was lower than that of the poorest of the poor U.S. states, Alabama and Mississippi. That was a tragedy. Does anyone know who that was a real tragedy for? It was a real tragedy for the poorest of poor Canadians.

For years I have sat in this place and listened to the government lecture us on how it cared about the little guy. However when the economy does not move at its full capacity, who are the people who are hurt? It is not the people with big incomes and all kinds of education. It is not the people with all kinds of contacts. It is not part of the family compact. It is not people who are connected to the government. Those are not the people who are hurt. It is the people without skills. It is the people who come from underdeveloped regions of the country.

The reason our economy does not move at full capacity and why we have an unemployment rate that has gone from 7% to 8% to 8.4% in the last several months is because the government decided it was willing to sacrifice economic growth in order to sustain billions upon billions of dollars in funding that it can use to politically benefit it and its colleagues. That is a moral outrage and a disgrace but it happens every budget.

What the Liberals should do, and they know this because they have economists who sit in their caucus, is pare out the unnecessary spending. By definition, if it is unnecessary, it is a waste and should not be in there. They should turn it back to people in the form of lower taxes, which creates more activity in the economy and broadens the tax base. When more businesses start up because of more activity, more jobs are created and eventually the unemployment rate is lowered.

The best example is the recent expansion in the United States. I pointed to this many times in the House. During the height of the U.S. expansion, the unemployment rate in the black community in the United States, which traditionally has been the poorest ethnic community in the United States, dropped to 7%. It was the same as our national unemployment rate in Canada. That was a wonderful thing because the black community had been disadvantaged for so many decades in the United States.

As a result of that great expansion, many companies that could not find workers when the unemployment rate was 4% went into areas where the unemployment was very high. They went into ghettos. They said they would train the people because they wanted them to come to work for them. Maybe these people had been on welfare their entire lives, or did not have the skills or had not finished school. However the companies wanted them to work for them. The companies said that if they did, they would not only get a wage but they would get some training, some contacts, some confidence and some hope, something they had not had that until then. That is the great triumph of an economy that is moving at full capacity.

In Canada, our economy cannot move at full capacity because it so weighed down by taxes and debt that the government has built up.

The way to change that is to change the entire course of what we do. We do not just maintain the status quo or make it worse by increasing spending by 9.3%, which was what the government did last time around. We shed all that heavy baggage of extraordinary spending that is not needed and offer it back to people in the form of lower taxes. We cut unnecessary regulation and pay down debt. The government should focus on its core role, which is to ensure that we have a peaceful country and that people are protected and secure.

If that were done, eventually underdeveloped regions of Canada, just like occurred in the United States in the recent expansion, would see industries move into them, like Cape Breton, Newfoundland, or northern Canada, northern Ontario, northern Alberta, northern Saskatchewan. Industries would move there because of the pools of labour, those people who do not have jobs but want them. Pretty soon people would have the opportunity they did not have before.

It is to the shame of the government that it has never ever recognized this obvious fact that it needs to do things to make our economy work much faster so that people who are on the bottom end and who have never had a chance in Canada will finally have some kind of an opportunity.

I promise the government that as long as I am in opposition, I am going to harry it on this every chance I get. It has been completely hypocritical to the point where the Liberals speak forever in this place about how much they care, yet on the other hand, their actions show something completely different.

I am simply going to conclude by saying the budget implementation act should not be supported. Again, this is a disgraceful budget, the worst effort ever by the finance minister. We see that in recent developments where the government is still trying to tinker with it two months after it coming out. We see the judgment of the markets in the form of a falling dollar. It is rather obvious the markets do not care for it and think the government is out of control. A 9.3% spending increase is absolutely shocking.

For instance, the government has not put any emphasis on providing for our military, those brave men and women who are going to Afghanistan. It has not put a priority on protecting them by funding them adequately and ensuring they are well equipped. The same applies to customs officers, immigration officials, RCMP and CSIS agents, all those people who do so much to protect our country.

I urge members around this place to vote against Bill C-49, the worst budget ever produced by the government.

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

Mr. Speaker, it is a pleasure to rise and address the budget implementation act, Bill C-49. I regret to tell the hon. member who just spoke that it does not enjoy the support of the official opposition.

As I have said before in the House, this is the worst budget the finance minister has ever brought down. Frankly, it is a disgrace to see spending rise by 9.3% and to see some other things that have occurred. We had a $6.2 billion planning deficit until this year when the government conveniently changed how the books were kept to avoid the embarrassment of having the deficit exposed by its own documents. These are not just my observations. Others have observed them. I will say more about that in a moment.

The markets have passed judgment on the budget. We saw this in the precipitous fall of the dollar in the last several weeks. The decline has been absolutely amazing despite the amateurish efforts of the government to talk up the dollar, as if anyone could talk up the dollar on a permanent basis. It can only be done in the short run.

The government is confused. We have seen that in the events of the last couple of days. The government is talking about changing the infrastructure program it proposed from an arm's length program into one run by the Deputy Prime Minister and subject to the caprices and whims of a politician. At bottom that is what the Deputy Prime Minister is. Being a politician he is always tempted to use government money for his own political ends. It is a dangerous situation and we need to be wary of it.

We saw the government propose another accounting trick in the budget where it would take $500 million and put it into a trust. This is what it did with the Africa Fund. The finance minister today said no, that would not happen. He said the money would go into debt retirement. The government has been stung by the accusation that it has not retired debt this year. Even $500 million is a pittance when we have a debt of $547 billion. It would take hundreds of years to pay down the debt if we proceeded at a pace of just $500 million a year.

The budget is a disgrace for other reasons. At a time when the whole world has been rocked by the events of September 11 and when the first role of government must always be to protect its citizens, it is an absolute disgrace that so little emphasis in the budget was put on protecting the public. I will talk in greater detail about that in a moment.

It has been revealed that the government has made a $3.3 billion accounting error à la Enron in the last couple of weeks. This points to how money seems to flow through the fingers of the government like water. It calls into question whether the government has done an adequate job of scrutinizing all it does to find waste and mismanagement. I would argue it has not. I will say more about that in a moment.

To sum up, this has been a terrible budget. It does not do the finance minister any credit. The finance minister has won plaudits even from the opposition for some though not all of the things he has done. However he blew his reputation completely with this budget.

I will offer as evidence some newspaper commentary we saw in the wake of the budget. Here is one from the Montreal Gazette . Commenting that the finance minister “spends like Santa”, it says:

As the first budget in 22 months, it was unforgivably tardy. As a security and military spending boost, it was undeniably tepid.

Here is another from the Montreal Gazette . It quotes Jack Mintz, president of the C.D. Howe Institute and one of the most trusted economists in the country. He called the infrastructure foundation “the Liberal Leadership Candidates' Strategic Slush Fund”, noting it could be used for anything that fits under a broad description.

Here is what TD Canada Trust had to say about the budget:

--under the older planning framework, the government would be targeting a deficit in the order of $5.5 billion for fiscal 2002-03.

Here is an editorial from the Ottawa Sun :

This budget demonstrates marvelously that the biggest threat to the nation's finances isn't recession or terrorism, it's this government's abject refusal to embrace a policy of spending restraint, especially during tough economic times.

Andrew Coyne's headline in the National Post calls it:

A reckless, dishonest, two-year con job: Budget casts aside undeserved cloak of fiscal responsibility.

Here is what Terence Corcoran of the National Post had to say about the budget of December:

--Paul Martin reiterated his commitment to the contingency reserve as an annual $3-billion pool that would be used to cover forecasting risks and other economic errors. “It is not a source of funding for new policy initiatives. If not needed, it will be used to pay down the public debt.” Yesterday, Mr. Martin rewrote the rules.

Walter Robinson of the Canadian Taxpayer's Federation said:

Minister Martin has once again refused to institute a schedule of legislated debt reduction...and thereby, continues the fiscal crime of intergenerational tax evasion perpetuated against our children--

I offer these quotes as evidence of my assertion that this is the worst budget the minister has ever brought down.

I will say a few things about what the budget did not do. It did not inspire confidence in the ailing dollar. The fall in the dollar since the budget came down is evidence of that. It has done nothing and will do nothing to improve our productivity. That can only happen when the government withdraws to some degree from the economy, is less intrusive, lowers taxes and provides some kind of economic vision for the future. That has not happened.

As a result the budget has done nothing to offer new job opportunities at a time when unemployment is rising. Surely to goodness the government should be concerned about that but it was not reflected in the budget. The budget has done nothing to offer new opportunities for investment in Canada, something which is completely linked to the concept of productivity.

In short, there is no vision to help Canada reach its incredible potential as a nation. The government did not rebalance its spending. In the wake of September 11 that is shocking. In not doing so the government is almost guilty of gross neglect.

For every year in the $170 billion budget a spending envelope of about $15 billion would go to grants and subsidies. I will not say the entire $15 billion consists of things that can be cut out of government without harming people. However billions of dollars in the envelope are examples of unnecessary and low priority spending.

Grants to artists and regional development grants have been shown over and over again to distort the economy and hurt businesses that are making it on their own. They are always subject to politics. We have often revealed in the House how the government rewards its political friends by handing out grants and subsidies so liberally. I say that both figuratively and literally.

In not addressing the $15 billion envelope of grants and subsidies the government did not find new money without raising taxes that could have been used to help it fulfill the most important role of any government. What is the primary role of government? It is to uphold the law. No society can long survive unless there is a government that consistently upholds the law.

In order to do that we would need a strong criminal justice system. We would need the police to enforce it. We would need good controls on our borders and on immigration. We would also need a strong national defence and a strong intelligence arm.

However the record of the government is to take what is the core business of government and chop it to the bone while it expands spending in all other areas that really are slush funds, in my judgment, and money the government uses to help it win elections.

The result is that organizations like CSIS, which is our intelligence arm in helping to protect the Canadian public, has been slashed to the bone. Previous to this budget, the government introduced cuts to CSIS of about 28%, and even with the money it put back into CSIS, we are still at 1993 funding levels in inflation adjusted dollars.

CSIS, an organization that has been charged with finding out if there are terrorists or criminal elements trying to get into the country, if they are active in the country, what they are doing, how active they are and if they are infiltrating government, for instance, has been cut to the bone under the leadership of the Liberal government.

The government should be roundly criticized for that because when it does something like that it puts public security at risk. We have seen many examples in the last several months of terrorists who were allowed into the country, in some cases being sought by international authorities in connection with the efforts of al-Qaeda and perhaps even in connection with what happened on September 11. That is disgraceful and we should not be allowing it.

It is not to say that could never happen, even with a fully funded organization, but obviously the government has to put more priority on it. The same applies to immigration. We pointed to problems over and over again in the House. We think immigration is positive and it is a good thing but it does not mean that we just let everybody in. There should be some scrutiny at the borders but that does not require a bunch of new laws, laws like the government gave to itself in the wake of September 11 that allow it to do all kinds of things without consulting parliament, things that are contrary to our common law tradition, where the government can arrest people for 72 hours without allowing them to access a lawyer and without pressing charges.

We really need more officials at the border to handle all the cases we have but we do not have that. It is well know that there are many thousands of people who have been allowed into Canada as refugees and were subsequently turned down but we have no idea if they actually left the country.

Why were they turned down? They were suspected, in many cases, of being a security risk. We have no idea whether they left the country. There are some estimates that as many as 27,000 of those people may be running loose in Canada. Rather obviously, that should be a huge concern of the government but the government has always shortchanged security even though it is the primary role that any government should play.

It was a few years ago that the Canadian Alliance pointed out in the House that the RCMP in British Columbia did not have enough money to put new tires on its cars. It did not have enough money to put fuel in its boats and planes, and to do drug interdiction on the west coast. It was an absolute disgrace.

The primary role of government is to set the laws and enforce them because no country or society can exist without that. However the government had no money for that while it spent billions upon billions for discretionary spending on all kinds of crazy things. That was a disgrace.

We are now trying to play catch up, but it really is an indictment of the government that it made it such a low priority for so many years. Over the last couple of days we have had examples of how the government has failed our customs officials who are the first line of defence when people come into Canada.

When people enter the country the first people they meet are our customs officials. Customs officials must uphold dozens and dozens of statutes in Canada. We have heard stories of how customs officers, who are not armed by the way, have been so afraid of some of the people they are dealing with at the border that they have actually allowed them into the country because they themselves were not armed and feared that the person on the other side of the window was. We have heard from customs officials themselves that this has occurred.

We are arguing that the government has done a terrible job of looking after our customs officials to make sure they are adequately protected and can make sure that these people who are suspected of criminal activity or even terrorist activity not be allowed into the country or in fact arrested.

It was revealed the other day that customs officials at Pearson airport do not have any protective gear. They do not have pepper spray, batons or flak jackets. However we understand that immigration officials have been issued those things. Is that not a little ironic? The customs officials are the first ones to deal with new arrivals into Canada but they are not given those things. It is only after these people have been pulled aside by the customs officials that they are handed over to the immigration officials.

We asked the Deputy Prime Minister about that yesterday and he was quite confused about it all. He did not know that it was happening. We have it on good authority that it is happening. We want the government to start taking the security of Canada seriously, something that was simply not reflected in the budget.

I find it ironic that in the last number of days there have been a lot of concerns coming from the Liberal backbenches and actually even from former cabinet ministers, like Lloyd Axworthy, about sovereignty in the wake of what happened on September 11 and in the wake of discussions about co-operating more fully with our allies, especially the United States, on security measures, for instance. The reason this is very ironic is because the same people who have repeatedly voted against increasing funding for Canada's military, the RCMP and CSIS, are the same people who complain about a threat to our sovereignty by the United States.

They do not worry about the threats to our sovereignty by terrorists or criminals that are caused by a lack of funding for officials who have to greet dangerous people at our borders. However the moment we talk about working in a co-operative way with the United States and exercising our sovereignty by making a decision in the interest of Canada to work with the United States, they rise up on their hind legs and start to scream bloody murder. I think they are guilty of gross hypocrisy.

It does not end there. What do we mean when we talk about sovereignty? I think we mean that if a country is sovereign it has the ability to make decisions that affect its own destiny. What happens in Canada if we as a country make the decision to work co-operatively with the United States on issues that we think will benefit Canada? What if we exercise our sovereignty in that way? Is it offensive to members across the way if we make that decision? We are exercising our sovereignty.

I do not think the issue here is the issue of sovereignty. What members across the way have a problem with is co-operation with the United States of America, which many of them frankly resent. They resent the Americans because they have become so extraordinarily wealthy at a time when our standard of living is falling against that of the United States. They resent them because they are able to put more money into public health care than Canada has with its socialized medical system.

They have become resentful. They mask this resentment with the argument about sovereignty but let us look at it for what it is. It is bitterness and resentment, and it is time it was exposed.

I want to--

[John McCallum, Liberal, Secretary of State (International Financial Institutions)]

Mr. Speaker, I welcome this opportunity today to present Bill C-49, the Budget Implementation Act, 2001 for second reading. This bill would implement many of the measures announced in the 2001 budget.

I would like to begin by giving an overview of the 2001 budget, which will set the context of the measures contained in this bill.

Allow me to go back for a moment to September 11. The terrorist attacks perpetrated that day in the United States constituted first and foremost a great human tragedy, measured in lost lives, destroyed families and rekindled fears,as the minister of finance pointed out. Budget 2001 deals with the economic impact of this tragedy.

It is based on a long term government plan to build a strong economy and to ensure a safe society, but it also responds to Canadians' immediate concerns regarding the economy and security following the events of September 11, in four ways.

First, the budget stimulates the economy in this period of global downturn and uncertainty. It provides Canadians with the means to fully benefit from the expected recovery.

Second, it acts to build personal and economic security by protecting Canadians, by keeping terrorists out of our country, and by maintaining a secure, open and efficient border.

Third, it keeps the nation’s finances healthy by balancing the budget this year and for the next two years.

Fourth, it fully protects the $100 billion tax cut announced in October 2000 and the $23.4 billion in increased support for health care and early childhood development announced in September 2000.

I wish to assure members of the House that the events of September 11 have not shaken the government's budgetary convictions.

Our government continues to lay the foundation for a better future. It continues to invest in human resources, to cut taxes, to pay down the debt and to build a strong economy.

We stand by our commitment to reduce the debt. In addition, the 2001 budget confirms that the government will continue to implement its long term plan of investing in the future without falling back into a deficit situation. This is the result of our prudent approach.

Having given a background regarding the budget, let me turn now to an overview of the bill. The major points the bill seeks to achieve can be summarized as follows.

First, with respect to transportation there is the creation of the Canadian air transport security authority, along with the introduction of the air travellers security charge. Second, there are some measures to improve the income and business tax system, as well as the employment insurance system. Third, there are measures to establish the Canadian strategic infrastructure fund and the Canada fund for Africa.

Let me speak briefly to each of these major areas in turn, beginning with the Canadian air transport security authority. As part of the government's comprehensive response to the events of September 11, the 2001 budget committed $2.2 billion over five years to enhanced air travel security. This commitment is crucial to assuring air travellers that Canada continues to have one of the safest and most secure air transportation systems in the world.

Air security services will now be consolidated under the new Canadian air transport security authority which will provide key air transport security services, a consistent and integrated air transport security system across the country, and enhanced security performance standards and services.

The authority will be responsible in the following areas. The first is the certification of screening contractors and officers. The second is pre-board screening of passengers and their belongings, taking over this function from the airlines and of others who have access to aircraft or restricted areas through screening points. The third is the acquisition, deployment and maintenance of explosives detection systems and conventional pre-board screening equipment at airports. The fourth is federal contributions for airport policing related to civil aviation security measures. The fifth is contracting with the RCMP for armed police on board aircraft.

Transport Canada will continue to regulate and monitor the provision of security services while the new authority will be responsible for delivery. This separation between service delivery and regulating and monitoring will enhance checks and balances in the system. Air travellers can now be assured that Canada continues to have one of the safest air transportation systems in the world.

I come now to the question of the air travellers security charge. The enhanced air travel security system will be funded by a new air travellers security charge. The charge will be collected by air carriers or their agents when airline tickets are purchased.

Enhanced air travel security will principally benefit air travellers using the air transportation system. A user charge is therefore fiscally responsible and reasonable.

For travel within Canada the total cost of the charge will be $12 for a one way ticket and $24 for a round trip. The charge on a ticket to the continental U.S. will be $12. It will be $24 for a ticket to travel outside Canada and the continental U.S. These amounts are inclusive of GST where the GST applies.

For travel in Canada the charge will apply to flights connecting the 90 airports where the government is planning security enhancements. Small aircraft such as those carrying only four to six passengers as well as certain specialty services such as air ambulance services will be exempt. All proceeds of the charge including net GST will be used to fund the enhanced air travel security system.

The last point on this issue is a critical and very simple one. If revenues exceed costs over time, the government will reduce the charge.

Let us now look at the measures having to do with the EI system.

The first measure I would like to examine improves parental benefits under the EI program.

In order to improve the support provided for families, among other measures, the 2000 budget extended the duration of parental benefits under the EI program from 10 to 35 weeks, thus allowing parents to spend more time at home with a newborn or a newly adopted child. Bill C-49 further improves these benefits.

Under the current EI program, certain seriously ill women may not qualify for extended parental benefits because of the 50 week ceiling on the combined total of sick leave, maternity benefits and parental benefits an individual is allowed.

Bill C-49 increases this ceiling by one week for each week of sick leave taken by a mother during her pregnancy or while she is receiving parental benefits, so that she may benefit fully from the special benefits. This change will take effect on March 3, 2002.

The second measure takes into account the fact that parents must now apply for parental benefits in the year following the birth or adoption of a child. This may limit benefits when a child is hospitalized for a long period after birth or adoption.

In order to allow a bit of leeway to parents who want to start applying for the parental benefit once the child comes home from hospital, they will now have up to two years to apply. This change will come into effect once Bill C-49 is passed.

I come now to the third element, the Canada strategic infrastructure fund. As I said, the government's long term goals are to build a strong economy and a secure society and to improve the quality of life for Canadians. The strategic investments in the 2001 budget help achieve these objectives by dealing with today's needs and bridging to a better tomorrow.

The modern economy of the 21st century requires a backbone of sound physical infrastructure to sustain the nation's growth and our quality of life. Canada must have the physical infrastructure it needs to succeed. Previous budgets allocated funding to improve provincial and municipal infrastructure. In particular the 2000 budget introduced both the infrastructure Canada program and the strategic highway infrastructure program.

To meet the need for additional support for large strategic infrastructure projects, Bill C-49 will establish the Canada strategic infrastructure fund with a minimum funding of $2 billion as set out in the 2001 budget. This new fund will compliment other federal infrastructure initiatives such as the two programs I just mentioned.

Working with provincial and municipal governments in the private sector, the Canada strategic infrastructure fund will provide assistance for large infrastructure projects in areas like highways and rail, local transportation, tourism, urban development, and water and sewage treatment.

Investments in these projects will stimulate job creation and confidence in the short term and will make the economy more productive and competitive in the medium term. The minister of infrastructure will be responsible for all government infrastructure initiatives to better co-ordinate all government activities in this area.

I come now to the subject of the Canada fund for Africa. As my hon. colleagues will recall, the Speech from the Throne last January indicated the long term well-being of Canada and Canadians depends upon success in improving global human security, prosperity and development.

At the G-8 summit in Genoa last July, African leaders presented their proposals and G-8 leaders, Canada included, pledged to support this initiative. The partnership is about Africans taking control of their own development.

Since then the Prime Minister has restated his commitment that development in Africa will be one of the principal themes of the G-8 summit that we will host this coming June. As was stated in question period today, the Prime Minister's support recently in New York for this project received strong support.

In recognition of this commitment the 2001 budget announced $500 million for African development. The new Canada fund for Africa will provide $500 million in funding for activities that will help reduce poverty, provide primary education and set Africa on a sustainable path to a brighter future.

I come now to investing in skills and learning. Another strategic investment in the budget involves these very things. The acquisition of skills and learning is further encouraged through a number of changes to the tax system.

First, tax assistance will be provided to help apprentice vehicle mechanics cope with their extraordinary costs. A second measure affects adult students who received government assistance to pay their tuition fees for basic education at the primary or secondary school levels.

This assistance must be included in income without any offsetting credits. For many the tax cost of receiving this assistance is a real burden and discourages them from advancing their education. Bill C-49 will exempt from tax the tuition assistance for basic adult education provided under certain programs including employment insurance. This measure will apply to eligible tuition assistance received after 1996.

A third measure will help more students undertake lifelong learning. Beginning in 2002 the education tax credit will be extended to students who have received financial assistance for post-secondary education under certain government training programs including employment insurance.

These changes would provide significant tax relief to approximately 65,000 Canadians for upgrading their skills and give them access to the same tax benefits that are available to other post-secondary students.

I will briefly mention a number of tax measures to improve the personal income tax and business tax system. First, there would be an improvement of the tax treatment of intergenerational transfers of woodlots.

Second, we would make permanent the 1997 budget measure that provided special tax assistance for donations of certain securities to public charities.

Third, there is a measure to improve the system for providing GST credits.

Fourth, to provide a cash flow benefit to small business, federal corporate tax instalment payments for January, February and March 2002 would be deferred for at least six months without penalty.

Finally, although this is not an exhaustive list of measures, the budget allows full deductibility for the cost of meals provided to employees at temporary construction work camps where employees could not be expected to return home each day.

In conclusion, Canada's air system is among the safest in the world. The new air security authority will make it even safer.

The charge for air passenger security is financially wise and reasonable, and it is only logical that the costs of these new expenses relating to security be borne by passengers using the airlines rather than all taxpayers.

The changes to the parental benefits available under EI will help families of newborns or newly adopted children.

The Canadian Strategic Infrastructure Fund will make it possible for Canada to have the material infrastructure it requires for success in the 21st century.

The Africa Fund is concrete proof that Canadians have not lost sight of their obligation to help those who are less well off than themselves.

What is more, the income tax changes help enhance the simplicity and fairness of our taxation system.

The 2001 budget reflects the decisions reached by the government in these uncertain times. Managing the economy in hard times is a matter of balance. The 2001 budget is the best example of this. It provides the support that is essential during a crucial period, but not at the expense of past progress or future prospects.

In conclusion, I encourage hon. members to give the legislation their full support. I remind them that both the Canadian Air Transport Security Authority and the Air Travellers Security Charge must be in place by April 1.

[Ralph Goodale, Liberal, for the 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 second time and referred to a committee.

[John McCallum, Liberal, for the Minister of Finance]

moved for leave to introduce Bill C-49, an act to implement certain provisions of the budget tabled in parliament on December 10, 2001.

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

Nunavut Waters and Nunavut Surface Rights Tribunal Act

[Gerald Keddy, Progressive Conservative, South Shore, NS]

Mr. Speaker, without having been at committee to listen to all of the argument it is difficult to respond, but I will respond to the member's direct question.

It would seem that the government has once again, in pursuing legislation, just simply ignored some amendments that certainly would have improved the legislation and allowed for more self-government.

As far as charging a fee for water is concerned, the area of Nunavut is still a territory although we may not completely support that and would expect that it would move toward further and greater self-government and actually to complete responsibility for its own area. However, as long as it is a territory the minister would have to sign and it makes absolutely no sense that the minister would have final authority for water on Nunavut owned lands. The whole principle behind the evolution of responsibility and devolution of power is to actually give power to Inuit organizations, to first nations.

A good example of that for the hon. member is Bill C-49, which we passed in this House. It gave greater power and full control of land and the resources on it to first nations on reserves in southern Canada. There were 14 first nations in the original group in Bill C-49 when we passed that legislation. For the first time it gave those first nations full control of land use on reserves.

Many Canadians thought that first nations already had full control of land use on reserves, but they absolutely did not. They needed a permit from the minister if they were to cut logs, cut firewood, dig a well, put in a septic system, gravel a road, build a road or even start a gravel pit.

This is good legislation. It is legislation that is needed, but it is certainly not the end of the road for this piece of legislation or any other. It is not untypical of a lot of legislation that the government brings in. It goes partway but it really does not finish the job.

I hope those comments are satisfactory to the member.