Bill C-13 (Historical)

Budget Implementation Act, 2006

An Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006

Part 1 amends the Excise Tax Act to implement, effective July 1, 2006, the reduction in the Goods and Services Tax (GST) and the federal component of the Harmonized Sales Tax (HST) from 7 to 6 per cent. It also amends the Act to provide transitional rules for determining the GST/HST rate applicable to transactions that straddle the July 1, 2006, implementation date, including transitional rebates in respect of the sale of residential complexes where transfer of ownership and possession both take place on or after July 1, 2006, pursuant to a written agreement entered into on or before May 2, 2006. The Excise Act, 2001 and the Excise Act are amended to increase the excise duties on tobacco and alcohol products to offset the impact of the GST/HST rate reduction. The Air Travellers Security Charge Act is amended to ensure that rates for domestic and transborder air travel reflect the impact of the GST/HST rate reduction. Those amendments generally apply as of July 1, 2006.
Part 2 implements income tax measures proposed or referenced in Budget 2006 to
(a) reduce personal income taxes;
(b) increase the child disability benefit;
(c) increase the refundable medical expense tax credit;
(d) eliminate capital gains tax on charitable donations of publicly-listed securities and ecologically-sensitive land;
(e) reintroduce the mineral exploration tax credit for new flow-through share agreements entered into before April 2007;
(f) expand the eligibility criteria for the disability tax credit;
(g) expand the list of expenses eligible for the disability supports deduction;
(h) expand the list of expenses eligible for the medical expenses tax credit;
(i) clarify the eligibility of home renovation and construction expenses for the medical expenses tax credit;
(j) double the amount of disability-related and medical expenses that can be claimed by a caregiver;
(k) introduce a tax credit in respect of adoption expenses;
(l) introduce a tax deferral for shareholders of agricultural co-ops;
(m) reduce corporate income taxes;
(n) eliminate the federal capital tax; and
(o) extend the carry-over period for non-capital losses and investment tax credits.
Part 3 amends Schedule I to the Excise Tax Act to repeal the excise tax on clocks, items made from semi-precious stones and items commonly known as jewellery, effective May 2, 2006.
Part 4 amends the First Nations Goods and Services Tax Act to facilitate the establishment of taxation arrangements between the government of specified provinces and interested Indian Bands situated in those specified provinces. It also amends the Yukon First Nations Self-Government Act to provide transitional income tax measures consistent with negotiated agreements.
Part 5 amends the Excise Tax Act, the Excise Act, 2001, the Air Travellers Security Charge Act and the Income Tax Act to harmonize various accounting, interest, penalty and related administrative and enforcement provisions. These amendments will apply based on an implementation date that is the later of April 1, 2007, and Royal Assent. It also amends the Excise Tax Act to confirm that debt collection services that are generally provided by collection agents to financial institutions are not financial services for GST/HST purposes and are therefore taxable for GST/HST purposes.
Part 6 enacts the Universal Child Care Benefit Act to assist families by supporting their child care choices through direct financial support to a maximum of $1,200 per year in respect of each of their children who has not attained the age of six years. It also makes consequential and related amendments to the Income Tax Act, the Employment Insurance Act, the Children’s Special Allowances Act and the Old Age Security Act.
Part 7 amends the Federal-Provincial Fiscal Arrangements Act to determine the amount of the fiscal equalization payments to the provinces and the territorial formula financing payments to each of the territories for the fiscal years beginning after March 31, 2006 and to authorize the Minister of Finance to make an additional fiscal equalization payment to British Columbia and Newfoundland and Labrador, and to make an additional territorial formula financing payment to Yukon and Nunavut, for the fiscal year beginning on April 1, 2006.
Part 8 provides for a total payment of $650,000,000 to the provinces and territories for the fiscal year 2006-2007 in respect of early learning and child care. It provides for payments to the territories for the fiscal year 2006-2007.
Part 9 authorizes the Minister of Finance to enter into an agreement to provide protection to mortgagees in respect of mortgage insurance policies that are provided by a mortgage insurer that is approved by the Superintendent of Financial Institutions to sell mortgage insurance in Canada. It also fixes the maximum amount of such protection and determines how that amount can be changed.
Part 10 extends the sunset provisions of financial institutions statutes by six months from October 24, 2006 to April 24, 2007.
Part 11 amends the Canadian Forces Superannuation Act, Public Service Superannuation Act and the Royal Canadian Mounted Police Superannuation Act to change the existing formula by which adjustments are made to a contributor’s annuity.
Part 12 enacts the Mackenzie Gas Project Impacts Act, the purpose of which is to create the Corporation for the Mitigation of Mackenzie Gas Project Impacts. The corporation will provide contributions to regional organizations that will fund projects that mitigate the existing or anticipated socio-economic impacts on communities in the Northwest Territories arising from the Mackenzie gas project. The Part also provides that a payment of $500,000,000 may be made to the corporation and adds the name of the corporation to the schedule of certain federal Acts.
Part 13 amends the European Bank for Reconstruction and Development Agreement Act to permit the European Bank for Reconstruction and Development to carry out its purpose in Mongolia and to allow the Governor in Council to amend, by order, the schedule to that Act. It amends the Freshwater Fish Marketing Act to increase the Freshwater Fish Marketing Corporation’s legislative borrowing limit from thirty million dollars to fifty million dollars. It also amends the Public Sector Pension Investment Board Act to create share capital for the Public Sector Pension Investment Board

Budget Implementation Act, 2006

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, as we go through the debate on Bill C-13, the budget implementation bill, it strikes me as I listen to the debate that we seem to be missing the big picture here.

We hear a lot of specifics about various minutiae of the budget, but I have with me a chart that shows total family incomes, adjusted to real 2004 dollars, from 1989 to 2004. This bridges some Tory years, but it mostly shows Liberal years. I was shocked to see that the real family income or take-home pay during that period of time for the lowest quintile, the lowest 20% of all Canadians, actually went backwards by 9%. We actually slid by 9% over 15 years. Even though the economy grew and the business climate was favourable for many of those years, the redistribution of wealth did not reach the bottom quintile.

There is that common yarn we hear about how a rising tide lifts all boats, but the rising tide did not lift the boats on the bottom quintile. It did not lift the boats of the second quintile either. The families in this column made about $26,000 or $28,000 a year. Their real family incomes went down by 4% from 1989 to 2004. That was a lesser amount, but they were still going backwards.

In the next quintile, for those making around $45,000 a year, on average their real earnings and real family incomes, all adjusted to 2004 dollars, went down 3%. It is only when we get into the fourth quintile, those making about $65,000 or $70,000 a year, that real family incomes, their real earnings, went up by 2%. In the highest quintile, the wealthiest of Canadians, real family incomes went up by 15%.

I do not know if it is the goal or the objective of either the Liberal Party or the Conservative Party to elevate the wages and living conditions of all Canadians. That is the stated objective of the NDP. I do not know if it has been a priority or if those parties had other competing interests and priorities, but if that was their objective, if that was their economic strategy, it has not worked for the last 15 years. This goes back to 1989.

I think that maybe this is what we should be reflecting upon in this debate. We live in the richest and most powerful civilization in the history of the world, but we are not sharing the wealth. We are not showing a meaningful increase in the financial quality of life of fully 60% of Canadians, and the other fourth quintile only marginally. It is only the very wealthy who got richer. It is almost a cliché that the rich get richer and the poor get poorer, but unfortunately that is the empirical evidence to date of the economic strategy of the last many years in this country.

All the other issues that we are complaining about here kind of pale in comparison to this failure in what we in the NDP see as the single most important thing: sharing the wealth, sharing one's birthright as a Canadian, and growing forward. The next generation will be the first ever to not have the economic well-being that their parents did. I did not state that very well, but members get the idea.

I am going to move on to something that I think should have been in this budget. We did hear quite a bit in the budget about tax cuts. I will concede that there were many, many small and medium sized tax cuts, but there was very little about tax fairness, and there is one point I want to raise.

I am reading a book called Pigs at the Trough: How Corporate Greed and Political Corruption Are Undermining America. I argue that the same applies to Canada. This book talks about a trend that is very popular in corporate Canada and America. It is called tax motivated expatriation. It is a chartered accountant's term for what I say is a sleazy, tax-cheating loophole, where businesses use offshore tax havens and actually become tax fugitives. They set up dummy companies offshore so they can funnel the profits of their activities and avoid paying Canadian taxes.

During the Liberal years, the Liberals tore up 11 such tax treaties with offshore tax havens, but they left just one. The one they left in place is the one where Canada Steamship Lines has nine such paper dummy companies used as a tax haven for corporate tax fugitives. It is estimated that between $7 billion and as high as $15 billion a year in tax revenue is lost just because of that one remaining tax haven that people use.

I thought the Tory government in its first budget may have wanted to address that. I am optimistic that the Tories might want to revisit this at some time. If the Conservatives are going to lower corporate taxes, and I accept their word that they believe that is the right way to go, they should at least ensure that those remaining corporate taxes that are still left are paid, that the application of their tax regime is fair and that there are not people being tax fugitives in tax havens.

The last thing I will address is the corporate welfare bums. The former leader of the NDP, David Lewis, coined the term. We in the NDP are not fans of this and we are against corporate handouts. It seems contradictory, especially with the current government, whose political philosophy is to let the free market prevail, to not prop up failing enterprises, to let them rise and fall based on their merits and their abilities. Yet we still see, beyond reason, what we in the NDP call “corporate welfare” being doled out to specific sectors, especially sectors that do not need the support.

There is a time when we may want to support certain industry sectors to stimulate growth because we are trying to develop a certain region or sector, but the oil industry? It boggles our minds in the NDP as to why there is still $1.5 billion in subsidies to big oil when it is going through a period of such record profits. We do not believe that big oil needs that economic stimulation and we think it is wrong.

The other one is the asbestos industry. A lot of people would be shocked to learn that Canada is still third largest producer and exporter of asbestos in the world. Even though it is a deadly product and no good can come from being exposed to even a single fibre of asbestos, we still export 200 million tonnes per year.

We do not use it in our own country. We do not use it in the European Union or any of those countries that have banned asbestos completely, such as Japan, Australia, Great Britain, the entire European Union and even South Africa. They banned asbestos because it is deadly.

What we do is export it to developing nations and third world countries.

This is an industry that should die a natural death because it is killing a lot of people. There is no market for it anywhere in the developed world. Anywhere safe handling practices have to be applied makes it uneconomical, and the health costs compound to the point where people are made sick by it to such a degree that there are other cheaper alternate products available.

For some reason, though, the federal government continues to prop up, support, underwrite and promote asbestos in developing nations where there are no safety rules and regulations. Or if there are safety rules and regulations, they are not enforced at all. In fact, there is not just the direct subsidy to the asbestos industry. The government spends tens of millions of dollars sending lawyers around the world to challenge any country that may want to ban asbestos. When France wanted to ban asbestos, the federal government went to the WTO to argue that France was interfering with our ability to market this product. Fortunately for the French people, Canada lost the appeal and France did the right thing and banned asbestos.

There were 120 conferences to promote asbestos put on in 60 different countries and paid for by the Canadian government, the most recent one in Indonesia, where the Canadian embassy hosted this, paid for by the Canadian taxpayer, to foist this killer product on the poor people of Indonesia. Another one is to be hosted in Montreal on May 23 as we speak, to try to deny the fact that asbestos is deadly, to try to say that there are safe uses of this horrible, horrible mineral.

We should be out of the asbestos industry. There should be no more corporate welfare for the asbestos industry, these corporate serial killers. The asbestos industry is the tobacco industry's evil twin. We should not be subsidizing the development of this horrible product.

[Michael Chong, Conservative, President of the Queen's Privy Council for Canada]

Mr. Speaker, it is interesting to listen to the member for Winnipeg Centre and hear his criticisms, what he calls his anti-corporate rhetoric, his criticism of the corporate agenda and what he calls corporate welfare and the like. I cannot help but think when I listen to his rhetoric that it really echoes to another era. It is an era that many other social democratic parties, countries and provinces have moved beyond.

For example, the New Democratic government in Manitoba sees provincial corporate tax cuts as an important part of its overall agenda. Over the years, the Labour Party in the United Kingdom, under that prime minister, has moderated itself and has not embraced its anti-corporate and anti-business rhetoric of the past. They are social democratic parties, while the Conservative Party is not in that vein, and they have realized they need to work with industry and business to balance the public good with corporate interests. That is the best way forward as they see it.

Would my colleague from Winnipeg Centre comment on whether or not he sees a need for the federal New Democratic Party to do the same thing and to move beyond that and into balancing not only the public good but also corporate interests?

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I thank the hon. member for an opportunity to perhaps clarify my remarks. At no point in my speech did I really say much about corporate tax cuts or corporate taxes, other than that it would be wrong to allow corporate tax havens and these tax fugitives who do not pay any corporate taxes and in fact gain an unfair competitive advantage.

There are two negative things about these tax havens. First of all, these people are not paying their fair share of taxes in Canada. When I say “fair”, it is whatever the government says that tax rate should be. If it is brought down to 10%, so be it, but I want them to pay it in Canada.

The second thing is that profits that are funneled through tax havens are taxable only when they are brought back into Canada, so they are not brought back into Canada. There is an added incentive for that business to then invest those profits further offshore and never repatriate that money.

That is what we are talking about when we mention tax motivated expatriation of dollars. It does not benefit the Canadian economy if that money leaves the country in the avoidance of paying Canadian taxes, gets further invested offshore and is never repatriated. That does not grow our industries and it does not grow our job base.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am always interested to hear what the member has to say. He is multi-tasking. I think the member should also have an opportunity to comment on the complete abandonment of the climate change file by the government with the budget.

The fact is that all the government can boast about is a monthly transit pass credit, which is only going to benefit existing transit riders. The fact that it will not have anything whatsoever to do with climate change shows how bankrupt the government is in terms of ideas, in terms of what we are going to do about dealing with the severe problem of greenhouse gases and their effect on climate change. I wish the member would get on the bandwagon as well, with his colleagues and everyone else in the House, just simply to reaffirm what a travesty this is in terms of the whole environment file.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I will briefly add my support for this idea. This budget really does disappoint the whole population. It disappoints the global movement to try to address climate change.

I remember when Nelson Riis, a former NDP colleague of mine, had the transit pass idea as a private member's bill. It then became an opposition day motion in the House and was passed back in 1998, I think, when we all agreed that there should be a tax deduction for transit use to encourage more people to do so. This is not a radical and revolutionary idea. Drastic change is required and then bold action is required. There was a paucity of that in the budget.

[Andrew Telegdi, Liberal, Kitchener—Waterloo, ON]

Mr. Speaker, as I begin my debate I want to say that as a country we are in the best fiscal shape since 1867. We have been through a lot.

As members know, the Liberal government inherited a half a trillion dollar debt after nine years of Conservative rule. During that time the debt grew from $200 billion to $500 billion. If the Conservatives had been in power another 13 years I would guess we would have probably had $1.5 trillion worth of debt.

[An hon. member]

We would have been bankrupt.

[Andrew Telegdi, Liberal, Kitchener—Waterloo, ON]

There is no question that the nation was on the verge of bankruptcy. There was a lot of despair in the country. Industries were being torn down. Unemployment rates were up. Interest rates were up. There was a general funk in the land.

What we need to look at is where we arrived as Canadians. In all those years we got to the point where, not only did we deal with the fiscal deficit and make strategic investments, but we ended up having the best economy in the G-7 and a post-secondary education sector that was paying huge dividends.

We will be going through the experience of a Conservative government once again. It is important to look at some of the senior folks who came in from the province of Ontario because it tells us a whole lot. Some of these folks are the finance minister, the President of the Treasury Board and the health minister, all of whom occupied senior positions in the Progressive Conservative government in the province of Ontario.

Those of us from Ontario know the record. We know the record of Ipperwash and of Walkerton. We know the record of messing up on hydro. We know about the sale of Highway 407 for a fraction of its value. We know how the government savaged universities and hospitals and eliminated social programs. It also promised a balanced budget and delivered a $5 billion to $6 billion deficit. I think that is telling.

I want to start off with what happened to the Kelowna accord. It is not unlike us to talk about what the Conservative government's dealings were with our first nations and aboriginal peoples. It totally trashed an agreement that was agreed to by the territories, all of the provinces and the federal government. The first nations and aboriginal peoples were pleading with members of the New Democratic Party not to bring the government down because I think they saw what was going to happen. Now Premier Campbell is carrying on the fight with some other premiers.

In the area of education, the Liberal government put a huge emphasis and priority on it. It really spoke to our values. We invested billions of dollars into research, student aid and the millennium scholarship program. We were going to make post-secondary education accessible to all Canadians. A strategic plan is when a government plans for the future but that is not in this budget.

The billions that were put into research and development will not be dealt with by the government opposite.

One of the most important features of the strategic plan was the early childhood education component. In my community we are losing child care spaces because the money that was promised will end this year. The dreams of single mothers and people in need of early childhood education have been shattered. The money will no longer be there and spaces are being cut back right now. The Conservative Party is proud and happy about that.

The Conservative government will hire 1,000 more RCMP officers and it will build more jails. Let us look at 1,000 RCMP officers and then look at the number of early childhood educators we could have. We could have, dare I say, at least 5,000 given what the early childhood education folks get paid. One can just imagine how many child care spaces could be constructed with the money being used to build penitentiaries.

The party opposite needs to recognize that the United States of America practises the kind of philosophy it wants to make happen here. However it does not work. The state of California spends more money on incarcerating people than it does on post-secondary education. Would anyone in this chamber say that the U.S. has safer communities? Far from it. The U.S. incarcerates more people per capita than any other country in the western world. It is one of the few nations that still executes people and that kind of approach does not work. It breeds violence, it makes society less secure and it wastes money.

With the money it costs to keep a young offender in jail for one year we could pay for a master's program for that individual. Do we want to invest in sending somebody to jail? We can call it post-secondary education for crime because that is what it is. Or, do we want to invest in them by giving them opportunities to train and become educated so they can become productive members of our society which, in turn, produces a safer community?

Prior to coming into Parliament, I used to work in crime prevention and crime prevention really does work. The general rule is that $1 invested pays off $7 in dividends. If we look at what happened in the province of Ontario where the get tough on crime approach was taken up, more problems arose, particularly in the inner cities where programs that were meant to deal with youth at risk were destroyed by that government. This is essentially the same road that the federal government is heading down.

We have heard a lot of talk on the issue of citizenship and immigration in the last couple of days. The government opposite mentioned that it would cut in half the right of landing fee. The Liberal government was going to eliminate over a number of years the right of landing fees. It was in our platform. I know my friends opposite do not like it but that is the reality. We put more money into settlement and integration funding than the Conservatives did with this budget.

In terms of credential recognition, we actually did something about it. In the last election the Conservatives promised that they would set up an agency to deal with credentials and now we learn in the budget that they will be studying it for two years. They will have to learn to watch their rhetoric. This is a cynical budget.

In terms of the environment, Kyoto is dead. The Conservatives killed Kyoto. Many have asked why our emissions are up. Our emissions are up because the production of the tar sands is up and the tar sand production goes to the United States as an export. That could be solved very easily. It could be solved by taking $1 per barrel of oil from the tar sands and buying the credits that we rightfully should and quit giving the Americans a free ride.

[Michael Chong, Conservative, President of the Queen's Privy Council for Canada]

Mr. Speaker, budget 2006 invests in many areas that the hon. member questions. We have acknowledged that the previous government did make some reinvestments in post-secondary education through the Canada social transfer, which was $17 billion in tax transfers and cash. We supported that program which is why budget 2006 continues those measures.

The budget contains measures to continue with $5 billion in direct support for students through tax credits and other direct grants and loans. We support that program and we will be building on it. Budget 2006 contains additional measures to help students with the cost of their textbooks and to assist those wanting to enter the skilled trades.

However, the previous government often promised great things but it failed to deliver on them. For years aboriginal Canadians have been suffering some of the worst living conditions in our country and yet the previous government never delivered additional money for it. Budget 2006 delivers new additional money, the first new additional money in years for aboriginal communities.

The same thing goes for child care. The previous government promised for 13 years to put in place a child care system and failed to deliver on that. Budget 2006 delivers on it.

Despite the economic record of the previous Liberal government and despite the fiscal and monetary position the country is now in, why did it fail to win the faith and the confidence of the Canadian people?

[Andrew Telegdi, Liberal, Kitchener—Waterloo, ON]

Mr. Speaker, I will touch on the last part of the question. One of the problems we had in the last campaign was that the Conservatives were very good at borrowing from the Americans and practising drive-by smears and our party failed to respond appropriately.

All any objective observer has to do is read a book entitled, On the Take: Crime, Corruption and Greed in the Mulroney Years. If they ever put that open to a kind of Gomery inquiry, instead of using the criminal standards that were used in one defence, that would prove to be the mother of corruption of all time. We could add up all the other corruption and they would be tiny compared to it.

Let me touch on post-secondary education. My riding has two universities and a college. They were very happy with the performance of the Liberal government but they are very sad about the budget produced by the Conservative government. When they get the chance they will express the same wishes again.

In terms of child care, we delivered. We got spaces but spaces in the Waterloo region are now being closed down because they know there will be no funding for those spaces next year. You as a government should be ashamed--

[The Acting Speaker, Andrew Scheer]

I would remind the member for Kitchener--Waterloo to address his comments through the Chair.

Questions and comments? The hon. member for Madawaska—Restigouche.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Mr. Speaker, my question will be relatively brief because I know time is limited.

The new government decided to cancel the program that we had created for day care and early childhood development. I ask my colleague if it is true that, by cancelling this program, the government has also abandoned workers--who might have received better salaries--as well as the day care and early childhood development infrastructure that would have allowed them to acquire more recent manuals.

We must not lose sight of the fact that the program would have allowed parents to benefit from reduced costs. Would my colleague agree that, by cancelling the $5 billion program, all of these people have been abandoned: young people, parents, grandparents, and child care workers? This is unacceptable.

I would like my colleague to confirm that this is true--that by its actions the government has abandoned all of these people.

[Andrew Telegdi, Liberal, Kitchener—Waterloo, ON]

Mr. Speaker, my colleague is 100% correct. We are not investing in the youth of this nation.

As I mentioned before, hiring police officers and building more jails is not going to solve the problem. This is the problem with the government. It is the same spirit by which the Conservatives gutted the Kelowna accord. It is not strange to us on this side and it is not strange to progressive people in our country that the neo-cons have destroyed programs that invest directly in people and are strategically important to move our country forward and maintain the kind of prosperity that we have.

The House resumed, from May 15, consideration of the motion that BillC-13, An Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006, be read the second time and referred to a committee, and of the motion that the question be now put.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Mr. Speaker, the Bloc Québécois has already made known that it intends to vote for this budget.

As the hon. members know, one reason is that the Conservative Party promised in writing to correct the fiscal imbalance. We will make sure that it keeps its promise to Quebeckers.

We are particularly concerned because late last week, in the media, the Prime Minister was already backtracking, and his commitments seemed less firm. We hope that this was simply a moment of weakness and that he will keep his promises.

The Bloc Québécois had been proposing a number of other measures for quite some time, and we worked hard to get them. We got $1 billion for post-secondary education, $800 million for affordable housing, assistance for farmers and a tax exemption on bursaries. The Bloc Québécois had been calling for that for a long time, and we are glad to have obtained that gain for Quebec. As well, we obtained a tax credit for public transit users, something we had also long been calling for in this House. We are happy to have gotten the excise tax lifted from jewellery and to have obtained a tax credit for tools and a reduction of the tax on the landing fee. While we would have preferred that this tax be completely eliminated, this is a step in the right direction.

That said, the budget includes several negative measures that we do not agree with. I have already spoken in this House about all the government's continued and new intrusions into the jurisdictions of the provinces and Quebec. The $1,200 child care allowance is one example. We had suggested a refundable tax credit, which would have respected the provincial and federal jurisdictions, but the government did not want this.

The budget talks about creating a Canadian securities commission. Again, the Government of Quebec has always refused to allow any interference in its exclusive jurisdictions.

The annex on the fiscal imbalance cites notions of accountability, of Canada-wide standards. They say they are driven by considerations of the social union, but Quebec has always been opposed. As far as the fiscal imbalance is concerned, it is simple. All we need is an unconditional transfer of tax fields to Quebec.

This budget also talks about new research foundations, which is yet another overlap. It talks about a cancer strategy, which already exists in Quebec. The money should have been transferred. In connection with immigration the issue of refugee credentials is another good example. The government is interfering in something that is none of its concern. This area is one of Quebec's jurisdictions. Furthermore, when it comes to looking after its own jurisdiction and setting up a Refugee Appeal Division, which would require only $10 million, the federal government is not assuming its responsibilities. It is quite sad and I have seen the impact this has had in my riding.

As hon. members know, Abdelkader Belaouni is currently in a presbytery in Pointe-Saint-Charles. He did not have the opportunity to appeal the arbitrary decision made by a commissioner. All Quebeckers are allowed to appeal decisions they disagree with, but new arrivals are not allowed to do so.

This budget still contains far too many encroachments on jurisdictions of the provinces and Quebec.

In addition to being an interference, the allowance for child care services is very unfair in its proposed format because it will be taxed based on the lowest income and not on the family income.

I have two examples to illustrate this point. In a family of four, only one person works and earns an annual income of $213,500—a federal minister, for example. The other adult stays home with the two children. The tax on the allowance will apply on the lowest income, which is zero dollars in this case. This family will receive the entire initial sum and will not pay any tax on it.

On the other hand, the head of a single-parent family who earns $28,000 will have to pay an additional $800 in income tax whether in Quebec City or in Ottawa.

Our proposal was to solve this problem by introducing an income tax credit based on family income and a decreasing contribution based on income. The cost would be the same. Frankly, we have a hard time understanding why the government did not consider our proposal. This still has not been explained.

It surprises me that during the debates we have held in this House, not a single Conservative has ever explained what is wrong with our proposal. They are always trying to avoid the issue, always handing us the same old lines. They talk about choice, but what about Quebeckers' choice?

Quebeckers have chosen to have child care services that they pay for through their income taxes. But then they are penalized because when they fill our their federal tax return, they declare lower child care costs on line 214 than other Canadians. That means the federal government saves money every year because Quebeckers chose to set up their own system. The government is $250 million a year to the good on the backs of Quebec parents, who are paying for these daycares with their income tax dollars that go to the rest of Canada.

If the federal government really wants to respect the choices made by parents and by Quebec society, it will give the $250 million it is saving thanks to Quebeckers back to the Government of Quebec.

As far as older workers are concerned, we have often asked for an assistance program to be set up for older workers who lose their employment following a mass lay-off . Sometimes this affects two people from the same household who have worked for the same company for 20 or 30 years. The day the company closes, these people have difficulty qualifying for other jobs. They end up having to spend all their savings and going on welfare until their retirement at age 65. What a sad way for them to end their career after being contributing members of society their entire lives.

This program was not expensive. We know what we would be getting into since it already existed. The federal government did not include it in its budget, but opened the door to it in the Speech from the Throne. We hope this will be a done deal as soon as possible.

There is nothing in this budget on the Kyoto protocol. We understood why last Tuesday. It is because this government is against the Kyoto protocol. What were this government's arguments? It said it was unable to keep this commitment. Rarely have we seen a government cite its own incompetence for not moving forward. Essentially what the Conservatives are saying is that they are not competent enough to do the job.

The argument that our reduction goal of 35% would mean shutting down the transport sector, simply does not hold. That would be like a person who lives a lavish lifestyle drinking alcohol and partying being asked by his accountant to cut his expenses by 35%. That person could retort that this would cut into his rent and that he would end up on the street. Of course, everyone would tell him to cut from his excesses. The same goes for the federal government.

This government has not met Quebeckers' expectations. In the case of the Kyoto protocol, it chose the oil industry over the interests of Quebeckers. We will be watching this government over the next year.