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

[Denise Savoie, NDP, Victoria, BC]

Mr. Speaker, I will answer the member's first question referring to Bill C-48. The bill allocated $1.5 billion to post-secondary education. In their budget, the Conservatives chose to redirect only a part of that amount through the provinces to institutions for their infrastructure. I agree that this is problematic because it does not help students. It does not reduce tuition fees. It does not help students with their huge debt load.

On the member's second question, yes, I certainly agree that increasing the tax for the lowest economic group is highly unfair. The Conservatives seem to be practising old, discredited trickle-down economics, which does not work. It has been shown not to work and it still does not work.

[Lloyd St. Amand, Liberal, Brant, ON]

Mr. Speaker, although I have made statements and asked various questions during this session of Parliament, this represents my first full speech. I want to say at the outset how very grateful I am to the residents of Brant for re-electing me to serve as their representative here in Ottawa. As so many fellow members of the House have stated, it is truly a privilege and an honour to serve one's constituents. I feel sincerely indebted to the citizens of Brant for their confidence in me and for providing me the opportunity to be here.

Just briefly, I would like to tell members about Brant. It is a most interesting riding that comprises the city of Brantford, with a population of approximately 90,000, and also encompasses the most populated first nations community in Canada, that being the Six Nations of the Grand River. In addition, within my riding are the picturesque communities of Paris, St. George and Glenn Morris. I also represent the hard-working individuals who form a rural sector in my riding, individuals who live in or near the villages of Burford, Oakland and Scotland. All in all, Brant is diverse in its population base and rich in both its industrial and its agricultural history.

The budget which we are debating does not represent the shared feelings or views of the hundreds of Canadians with whom I speak. As someone once said, taxes are the price we pay for a civilized society. I rarely hear from a constituent complaining about the level of taxation in Canada. Much more often, I hear from constituents who are prepared to share, who are prepared to do their part financially and otherwise to build a tolerant, generous society.

The budget delivered by the Minister of Finance does not, in my respectful view, represent the best of Canada and does not represent the best of Canadians, nor does it in any way present a compelling vision for the way our country should now advance. A country is not ultimately gauged or judged by how much money it returns to its shareholder residents. Rather, a country is properly assessed or judged by how it treats all of its citizens. I was extremely disappointed with the treatment afforded to the citizens of Brant and, by extension, of Canada, in this budget.

I think, for instance, of those hundreds of Brantford families who live in very close proximity to brownfields, acres and acres of industrial wastelands that have lain dormant and decrepit for many years. These brownfields are unsightly, they are dangerous and they need to be cleaned up.

Communities like Brantford, as vibrant and as economically viable as we have become, cannot count on private developers to spend the millions of dollars needed to remediate or clean up the brownfield sites. A prudent developer simply will look elsewhere and will typically choose to build on a greenfield site, away from residential areas.

Without federal government assistance, as it is frankly beyond the financial means of municipalities to clean up brownfield sites, those families who live in very close proximity to brownfields will continue every day to walk or drive past contaminated acres of land, which their children are warned not to play in or near.

That is why I was very pleased to receive from the Liberal government in 2005 a $12 million commitment to assist my city of Brantford in the remediation of the Mohawk-Greenwich brownfield site. The members of my community were ecstatic. Nearby residents could finally look forward to the day when their neighbourhood would be like other neighbourhoods, with a park close by rather than an ugly brownfield site.

When the Prime Minister campaigned in my riding in January, he stated, “We will help you clean up your brownfields”. As other members on this side have stated during their speeches, the environment was barely mentioned in the budget, and there is seemingly no realistic expectation that brownfield sites will be the beneficiary of federal money, notwithstanding the Prime Minister's campaign promise.

In the budget of 2005, delivered by the then Liberal minister of finance, $150 million was committed to the remediation of municipally owned brownfield sites. There is absolutely no mention of federal assistance for those sites in this budget.

The issue is leadership. It is about the federal government taking a leadership role. It appears from this budget that the leadership role has been abdicated.

The termination of the early learning and child care agreements is extremely disappointing to parents and caregivers in my riding. The government has a view of a typical Canadian family as consisting of two parents residing together and able to afford a home having a value of $350,000. What a peculiar example the Minister of Finance used in making reference to his much vaunted but only marginally important 1% cut in the GST.

A $350,000 home does not represent all Canadian families or most Canadian families. Thousands and thousands of single parent families have children under the age of six. I spoke to many parents who were very pleased with the early learning and child care agreements which had been signed by the then minister of social development and his counterparts in all parts of Canada.

Parents were pleased as they finally saw an opportunity to return to school to better themselves or to accept an employment opportunity without having to worry about what would happen to their children. They were pleased that their child or children of pre-school years would be stimulated, nurtured and cared for during the parents' studying or working hours by a licensed, certified and very capable early learning and child care provider. They were gratified that early learning and child care centres would be assisted by federal funding.

Their hopes and expectations have been dashed and the provision to them of a few dollars a day in order to obtain care for their child is insulting and grossly inadequate. These young parents will have no choice now but to stay home, will have no choice but to put their education plans on hold and will have no choice but to reject any employment opportunity.

How visionary the early learning and child care agreements were. What a demonstration of leadership those agreements represented. Unhappily, in this budget there was no such vision and no such leadership.

How disappointed the 11,000 residents who live in the first nations community of Six Nations on the Grand River were when this budget effectively scuttled the Kelowna accord. How ironic for members opposite to talk about the longstanding problems faced by our first nations communities and how long term solutions will be required in order to correct problems which have taken years to develop. How sadly ironic it is that the long term problems have not resulted in a long term commitment by the government to one of Canada's founding peoples.

The budget, rather, presents temporary band-aid solutions only, and inadequate ones at that, for the significant economic, social, health and educational issues which confront first nations communities across Canada. How much better it would have been for the budget to speak about long term plans for first nations, a real commitment to our first nations peoples.

Other components of the budget have been trumpeted by members opposite as being generous but, in reality, those measures are almost inconsequential. How meagre the assistance is to our post-secondary students, the non-taxation of their scholarships and bursaries, when we all know that most students pay no income tax in any event. How token is the $80 credit for textbooks.

The Liberal Party would have provided to all post-secondary students, unconditionally, $3,000 outright in their first year of studies and $3,000 in their graduating year. This was not a tax credit. This was not a token. This was an outright grant of $6,000 to students so that education, one of our most precious resources, could be affordable for anybody who wanted to attend a post-secondary institution.

Under the budget tabled by the government, presumably the sons and daughters of parents who live in $350,000 houses will be well able to afford a university or community college education, but the more typical Canadian student will suffer the loss of $6,000 which would have been provided to him or her by the Liberal Party.

All in all, this is a disappointing budget and one that, in my view, does not speak to Canadians, does not speak to their core values and does not speak to the advancement of a society that should be inclusive of everyone.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, my question is for my colleague who just spoke.

In the coming months, important decisions will have to be made in the textile, clothing and furniture sectors in order to avoid major catastrophes. This budget contains nothing new for these sectors, which are suffering economically. The government rejected POWA. We have the CANtex program, but it does not fully meet all the needs of these industries. We must take action.

The government can act by imposing safeguards to protect the industry until 2008, setting import quotas and introducing modernization programs. But this new budget does nothing.

How does my Liberal colleague explain the Conservative government's inaction and its lack of sensitivity toward these sectors, which are faced with serious problems because of globalization? The government has the means to act, but it is not doing anything. That is my question for my colleague.

[Lloyd St. Amand, Liberal, Brant, ON]

Mr. Speaker, I cannot in any way explain the lack of action on the part of the government with respect to the textile industry. I can only indicate that there are small companies in my riding that will suffer the loss of any type of assistance vis-à-vis the textile industry. I shared the member's hope that something would have been put into the budget for the textile industry.

The reality is that there are small companies, particularly in my riding, that are hurting and need some assistance. They need the proverbial hand up but this budget does not help them or speak to them in any way.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, my question for the hon. member goes to the issues he raised around support in the budget for aboriginal people. He spoke about the Kelowna accord and the failure of those dollars to show up in a meaningful way in this budget.

Over the past many years we have seen a status quo or a decline in the standard of living and the opportunities aboriginal people have in our society.

Does the hon. member feel that the Kelowna accord, which would have delivered $5 billion over a number of years, had adequate funding to deal with the large problems facing over one million of our citizens across the country? Maybe the hon. member could outline how he feels those dollars would have given aboriginal peoples across the country the opportunity for a better future.

[Lloyd St. Amand, Liberal, Brant, ON]

Mr. Speaker, the member opposite has properly stated the grossly inadequate standard of living that most first nations people have.

The Kelowna accord, signed not quite six months ago, was hailed by everyone who knew the details of it as a watershed moment in the lives of our aboriginals. It would have significantly assisted them with respect to health, housing and education. Those are three areas in which our aboriginal peoples have not kept pace.

Simply put, they need considerable assistance and the Kelowna accord would have provided them with that assistance. I share the member's disappointment that the Kelowna accord has been scuttled.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, it is a pleasure to speak to Bill C-13, the budget implementation bill.

I believe the Conservative budget is a missed opportunity, an overall disappointment and does not serve the people of Burnaby--Douglas well, which is why I voted against it earlier this session. I will talk about some of the issues that are important to my riding and some of the things that did not happen for my constituency.

A budget that includes over $7 billion in tax breaks for corporations and throws another $5 billion against the debt shows that there is a lot of room to do things for Canadians, such as invest in programs that mean something to Canadians, but the Conservatives made other choices.

We know families need those investments. In fact, families have been losing ground. In a study that looked at family income in Canada since the NAFTA agreement was signed, only the top 20% of Canadians were doing better, and dramatically better, whereas in every category below that the real incomes of families have gone down. That is not a good situation and does not speak well to the situation of most Canadians. We needed some investments in programs that help Canadians and help reverse that trend, which is totally inappropriate in our society today.

Furthermore, we have seen that the government can forgive $1 billion in illegal levies against our softwood lumber industry and ignore the fact that Canada won every decision under NAFTA panels. This comes from a government that supports the NAFTA agreement. It does not look like it is worth the paper that it is written on. If our neighbours to the south cannot abide by the terms of that agreement, then what good is it?

As well, last night we made a commitment in this House, unfortunately in my opinion, to start a new mission in Afghanistan beyond February 2007. We already know that the mission in Afghanistan has cost $4.1 billion and we know that our financial commitments will rise over the next few years.

The surpluses for the next five years have been projected at $83 billion and yet the budget did precious little to show how that would be spent to improve the situation of Canadians.

I now want to talk about immigration, which is important in my riding because almost 50% of the people of Burnaby--Douglas came to Canada from other countries. On the immigration file, we are seeing a trend from the Conservative government that we saw from the Liberals, where they announce over and over again the same things. We saw the commitments in the budget and in its platform but then, last Friday, the Prime Minister had a big event somewhere in Toronto and announced them all over again like they were brand new. What is even more interesting is that the media covered them like this was some new revelation from the government on immigration policy. It was not new. It was the same old stuff. We are going through that same cycle of announcing and re-announcing things that are already on the books and in the public domain. It is a strange way to run a program.

One of the components for which the Conservatives are very proud, and I agree that it is an important step, is the reduction in the right of landing fee from $975 to $490. That is money new immigrants need. When people move halfway around the world to start a new life in Canada, they need all the money they have to establish themselves here and acquire the basic necessities to re-establish themselves in a new country. The $975 fee hurt new immigrants dramatically at a time when they needed the money the most. When the Liberals introduced that, the NDP argued that it was an unfortunate tax that would hurt people at a time when they needed all their financial resources.

In this corner of the House, we, as New Democrats, have always called for the total elimination of that right of landing fee. The Conservatives only reduced it. If a $975 fee is wrong, then a $490 fee is wrong. This is money that people need when they arrive in Canada and it should remain in their pockets so they can use it as they see fit to establish themselves here.

We know about the significant financial pressure that new Canadians face and refugees face. These people need the dollars to which they have access. This could be considered an anti-poverty measure, given the rate of poverty among new Canadians. Unfortunately, it is a missed opportunity. The Conservatives could have done the right thing by getting rid of it all together. It is a step in the right direction, but it does not go far enough.

The other aspect of the budget around immigration was an increase in settlement funding. That is necessary, and I applaud the Conservatives for that. However, we have not seen how they plan to dole out that money or the program that will accompany it.

In settlement funding we know there is a huge imbalance among provinces. If we want to talk about fiscal imbalance, all we need to do is look at settlement funding across the country. Quebec gets almost $4,000 from the federal government per immigrant. Ontario, under the terms of the agreement negotiated last fall, will get $3,800 per immigrant. British Columbia gets a third of that, around $1,000 per immigrant. There is a huge difference in how funding is distributed for settlement work in Canada. We know how absolutely crucial settlement funding is to the success of our immigration program. If we are not putting money into the adaptation and integration programs, or into language training, the success of new immigrants is dramatically affected. This is a very important aspect of the settlement program.

We need to ensure that all provinces and every immigrant gets the same amount of money directed toward the settlement programs they desperately need. We have to watch. We are all anxious to know how the Conservative government will roll out that program. We need to ensure there is increased funding for language training, that the skill level which comes through the language training offered to new immigrants is much higher and that professional language skills are included in this. We know that it is crucial to the success of our immigration program.

Right now there is greater competition for immigrants around the world. This afternoon in this place we will hear from the prime minister of Australia, Mr. Howard. Australia is now an increasingly stiff competitor with Canada for immigrants from around the world. There are many people who think Australia is winning that battle. If we are not paying close attention to the settlement program in our country, we will lose that battle for the best immigrants from around the world. We need to ensure that this is a key part of what we do as a society and that it is a key part of what the government does.

The other thing the Conservatives announced was $18 million over two years for an agency to deal with foreign credentials. We still do not know what that means. There is no plan. The minister appeared before the Standing Committee on Citizenship and Immigration last week and could not illuminate any plan for what that agency would look like, what it would or how that money would be spent. This is an urgent need.

The Conservatives, when they were in opposition, talked a lot about the importance of international credentials and to ensure that when people came to Canada, they would be able to use their education, training and work experience. Every day they are out of the workplace and workforce, it gets harder for them to get back in. When they are away from the work they are trained to do and they do not keep on top of those skills, it becomes increasingly difficult to get back in.

We are not sure what this means yet. We have to keep the pressure on the government to follow up on its promise, to follow up on its campaign promise, to follow up on the work it did in previous parliaments and to ensure there is significant action that comes from this. The $18 million could easily be a drop in the bucket in terms of what is really necessary around the whole issue of international credentials.

A number of things are missing. There is no new money to deal with the backlog. In fact, at the citizenship and immigration committee, we heard that the backlog, which was 700,000 applications, is now up to over 800,000 applications. We are not making progress in that area.

The refugee appeal division, an inexpensive measure by any account of around $8 million a year, which would bring fairness to our refugee system, is not included in the Conservative budget. It is the law in Canada. The Liberals refused to implement the law. Now the Conservatives are refusing to implement the law. That is a serious problem.

There are no measures around family reunification. In fact, the minister addressed the standing committee. In the usual mantra about immigration to Canada, we usually hear about the needs of our economy and the need for the protection of refugees. Then we always hear about the importance of family reunification to both nation building and to families in Canada. That was missing from the minister's statement. Therefore, I am worried that it is a significant departure. We need to keep on top of this.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, the hon. member for Burnaby—Douglas questioned the funding in the budget for work in Afghanistan.

We had a vote in the House last night. I respect the point of view of many of my colleagues and others in the House who voted against the motion. I supported the motion for two basic reasons.

First, I think it is important for Canada to be in Afghanistan. Second, it is important for our government to play a role in the world. I supported our government when we did not go into Iraq, but I believe we have a role to play in Afghanistan.

The Afghani people are asking for our help. If we look at other aspects as well, we know that in Afghanistan there are the poppy fields and the drug trade that comes out of there is enormous. We have to deal with that issue. We know that terrorists are embedded in that country and Canada cannot claim immunity from terrorism. We know we are on al-Qaeda's list. Canada has a contribution to make. Being in Afghanistan is a contribution that we can make.

I supported the motion last night because it is important that Canada be in Afghanistan. If we are realistic, we have to understand that this mission could go beyond two more years. For me, it was that kind of fundamental question. However, because of the process of putting this before the House with such short notice, I can appreciate why many of my colleagues voted against it.

Would the member for Burnaby--Douglas comment on why he would object to Canada spending money in Afghanistan, which is uplifting the lives of women, giving people more human rights and freedom, giving them the opportunity to build democratic institutions and dealing with terrorism? The Afghani government has asked for our help. Why would he deny them that help?

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I am not really keen about going through the whole debate we had here yesterday and the one we had weeks ago on Afghanistan.

I am concerned about the cost of the mission in Afghanistan. It has already cost Canada over $4.1 billion to be part of the military effort in Afghanistan.

I do not support a combat role for Canada in Afghanistan. It might be different if it were a UN exercise, if we were under UN command, but it is not. We are participating in an American exercise, a combat exercise. We are not there to separate combatants, which is our traditional peacekeeping role. We are there as an active combatant. Many people in my constituency do not support the Canadian military effort in Afghanistan.

If the member wanted to talk about development assistance for Afghanistan, I would be happy to engage in that. However, right now we are trying to deliver development aid by the military and we know is not working. In fact, I heard from a constituent, through his mother who lives in my riding, who is serving in Afghanistan. He talked about the efforts of the Canadian armed forces to build schools and dig wells in communities in the Kandahar region, only to leave that community and find them targeted by the opposition forces. That is the first thing they target when Canadians leave. That is not an effective way of delivering development aid. Constantly we see this happen in Afghanistan.

That is not the way Canada has chosen to deliver development aid in the past, and I have a serious problem with that.

[Gary Goodyear, Conservative, Cambridge, ON]

Mr. Speaker, I was here all night long listening to the debate. I find it quite shocking that the hon. member would bring forward solutions such as not to dig wells because they would be targeted once our troops left. However, last night the hon. member voted against extending the mission.

There are so many contradictions. The member's party joins us when we fight for women's rights around the world. Yet our troops in Afghanistan have supported some 1,200 widows. There are 4.5 million children in school, but apparently that is too expensive.

Is it the member's intention, as his party whines and complains, to push for more support in Darfur? Ever since I came to the House, I have been in full support of doing what we can in Darfur. However, the minute we go to Darfur, should we be able to do that, and as soon as someone pulls out a little gun or a threatening rubber chicken, I suspect the member and his party will want to cut and run again.

What the world needs is a commitment that is solid, not chicken legs.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I will not engage in that kind of rhetoric, which is demeaning and ridiculous.

I have every confidence in members of the Canadian armed forces. They know how to do the jobs they are asked to do and they perform that job admirably around the world. When we send them to do a job, I want to ensure that they have the support of Canadians and that they do the kind of work Canadians want to see done on our behalf.

I am distressed that we may be unable to make a contribution to addressing the important issues in Darfur, to addressing what everybody seems to recognize is a genocide. Because of our overcommitment in Afghanistan, perhaps we will unable to play a role in Darfur. That is a very serious issue and I think Canadians want to see us address that.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, today we are debating Bill C-13, the budget implementation bill. I had an opportunity to speak for about five minutes last week on the budget. I tried to give my perspective as former chairman of the finance committee and I would like to continue in the same vein as in the last budgetary debate.

Usually the debate is the highlight of the government's agenda, whether it is a new government or not. The budget outlines where a government's priorities lie. How? By providing funds for the programs it holds most dear, while at the same time setting out the government's long term vision of where it wants the country to be in five or 10 years. This sounds like an easy concept, but it is much more complex.

This brings me to one of the reasons why most of us come to Ottawa. We come to serve our constituents and all Canadians by trying to influence the government's policy, so that our concerns are reflected in their vision for the country.

We also come to Ottawa to have the government listen, so that it can build a Canada that we stand for, a Canada that our constituents and all Canadians stand for. That is precisely what the finance committee did during our pre-budget consultations last year. We listened to the concerns of Canadians from coast to coast to coast.

We heard testimony from experts from different financial and scientific fields. We heard from artists and environmentalists. They spoke to us about the Canada that they wanted, about what concerned them for our future. Sadly, their concerns are not reflected in the government's budget.

During the budget debate many members of the House have spoken at length about Kyoto, child care, infrastructure and post-secondary education. These are all complex issues that require a proper and well thought out strategy, not just a tax credit here and a taxable payment there. How we handle these issues today will affect the way our country will grow and continue to prosper, a vision. A vision for the future, a vision for tomorrow and the next day.

Canadians have had to make sacrifices and decisions in the past to be where we are today. Do we need to throw that all away? How can we attain the vision we want for this country for tomorrow with such a shortsighted budget?

Sadly, the budget lacks depth as it introduces tax credits that will be costly and inefficient. I will point to some of the tax credits the government is offering, so that we can see how difficult and costly it will be to implement these measures and how these measures lack any long term vision for Canada.

The first is transit passes. How will the government's plan be implemented? Are commuters supposed to save their monthly transit passes and then send them to Revenue Canada at tax time? How much will it cost Revenue Canada to process all these transit passes? Have the Conservatives seriously thought about how this credit will be implemented and what it will cost?

Although Canadians may appreciate a transit credit, most of the transit companies across the country are more than likely to increase their fares in order to clawback these tax benefits. Canadians certainly will not appreciate that this quick fix is replacing time tested environmental programs such as EnerGuide.

Canadians will not be pleased when they discover that the government's idea of saving the environment amounts to nothing more than a few dollars off their bus pass. The Conservative transit tax credit will cost between 10 and 100 times more than the proposed Liberal plan. Is this the kind of shortsighted vision the Conservatives have brought to the table after waiting in the wings for 12 years?

Second, there is the government's infamous cut to the GST. We already know that virtually every economist in the country is against cutting the GST and instead they are in favour of the Liberal plan to reduce personal income taxes. We already know that this cut to the GST will only help Canada's most wealthy, leaving low and middle income Canadians out in the cold.

Most Canadians spend their income on rent or mortgage payments, food and medical expenses, things that are not subject to the GST. Let us leave that aside for now and look at how this GST cut will be implemented.

How much has the government thought about the implementation of the plan? Retail owners, for example, already have their cash registers programmed to calculate GST at 7%. Will retailers have to overhaul their cash systems? How much will that cost? Did the Conservative government bother listening to business owners? No. It preferred to grab votes with flashy announcements instead of consulting with Canadians.

To implement the reduction of the GST by 1% it will cost the Government of Canada at least $10 million in administration costs per $1 billion reduction in GST revenues of which $4 billion to $5 billion of GST revenues are expected to be lost. This is without even bothering to see how much it would cost businesses.

The Liberal plan of reducing personal income taxes would have been much more effective and less costly, since it would only affect a change on the income tax form. Is this short sighted GST cut the kind of long term planning that will allow Canada to prosper into the future? I do not think so. Where is the vision?

The 2006 budget is indicative of the Conservatives' mentality. This budget raises the tax rate on the lowest income bracket to 15.5%, which is 0.5% higher than the rate the Liberals set in 2005, and reduces the basic personal amount by $400 effective July 1, 2006.

The tax increases, which hit Canadians with the lowest annual incomes, largely cancel out any benefits from the other measures the Conservatives announced, including the reduction in the GST, which puts only a few cents a year into low-income earners' pockets.

All the noted economists in the country have said that eliminating the Liberals' tax cuts and replacing them with a one-point decrease in the GST will benefit affluent Canadians at the expense of the most disadvantaged.

What are we to think of the Canada employment credit, which is almost completely cancelled out by this same increase?

Next I will examine the Conservative plan to help students, the textbook credit. Giving an $80 credit to fix the debt load of Canadian students is almost absurd. A book credit sounds attractive but does not make for good policy.

Furthermore, there are details to this provision that need to be cleared up by the Minister of Finance. Will all textbooks be covered for this credit? If not, then which ones? Will students have to save their book receipts and send them in at tax time? How will Revenue Canada prove that the books were required for school? Will books only sold at university libraries count? What if a student is required to buy a textbook at an off campus bookstore? Maybe the government will ask students to save the course outlines they receive at the beginning of the semester and ask them to send those in when they file their taxes in order to prove what books they had to buy. Will this credit be available for all students: part time students, full time students or even adult education students?

Will this textbook credit secure post-secondary education in this country and ensure that our students are among the best in the world? I do not think so. Will it ensure that they do not graduate under a mountain of debt? I doubt it. I doubt that the Conservative government was thinking that far ahead when it drafted its budget. Again, it comes down to the kind of vision Canadians want from the government and how this Conservative government is failing them.

With regard to the child care plan, this is what the Liberal Party proposed. It was a vision that was about providing early learning opportunities to all children and giving them an equal and fair start in life. The Conservative answer is simply to give parents a taxable $100 a month allowance and let tax authorities collect the taxes on these amounts at the end of the year when families have already spent the money they received all year long.

This is not a plan. What about the tax credit for physical fitness? Do I need to explain the bureaucratic nightmare to first implement the legislation, which has not even been provided yet, and then to administer the program? To look at it another way, in order to implement its plans, the government is going to have to increase the amount of bureaucracy in Ottawa. I thought Conservative governments advocated less government bureaucracy, not more, but I suppose if that makes for good politics, the Conservatives can sacrifice some of their core beliefs.

For a government that prides itself on efficiency, the implementation of this budget will be everything but. This budget offers no long term vision for the future of Canada. It offers no indication of what the government wants for our country. Where is the leadership Canadians deserve to lead our country into the 21st century? It is not in the party sitting across from me today.

[Garth Turner, Conservative, Halton, ON]

Mr. Speaker, I found the remarks of the hon. member from Saint-Léonard—Saint-Michel very interesting. I share a position with the hon. member on the House of Commons Standing Committee on Finance. I really thought he had a better grasp of the budget than he apparently does, which is somewhat distressing.

Nonetheless, I would like to ask the hon. member if he has actually read the budget. When he makes comments about the marginal tax rate for the lowest tax bracket individuals being raised by a point, I think he conveniently ignores the fact that we are adjusting the bottom tax rate. The effective rate for the taxation year 2006 will be 15.25% as opposed to 15%, not that much of a change. At the same time, the personal basic exemption is going up for all Canadians and, in addition to that, we are adding in a Canada employment credit of $500 this year, moving to $1,000 next year.

Just in the area of personal taxation alone, does the hon. member not agree that the overall tax burden for taxpayers in all categories actually goes down? That of course is quite apart from the other cuts in this budget, such as the GST. Has the hon. member read the budget or is he simply speaking partisan words that would somehow, unfortunately, mislead the House?

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, the member and I do sit on the finance committee together. Finance officials did appear before the finance committee a couple of weeks ago.

It is a technicality. The budget does in fact state that the tax rate will be going down from 16% to 15.5%. The reason for that is because of a ways and means motion that was filed. Tax rates are actually going up. When the finance officials appeared before committee, they told us that the tax rate was going up from 15% to 15.5%.

From what I understand in reading the budget, the employment tax credit will become effective on July 1. From July 1 to December 31 it will be $500, and 17.5% of that is $80. Is the member going to tell me that is a great benefit for working class and middle income earners compared to the 1% decrease in the tax rate that the Liberal government proposed?

I have been going through some old newspaper articles and letters from middle income families who say that the changes overall are minor, but lowering income tax would have helped a lot more.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, what an excellent choice in this wall of conservatism that we have to jump over in order to enter this debate and talk about the things that people actually care about.

For many years the Conservatives rallied in the House and said that money must not simply be assigned without a plan for that money. They said it was bad fiscal prudence, bad for Canadians, and bad for the economy because it would send unclear signals. Lo and behold, the Conservatives now break tradition with their allocation of $2 billion supposedly for climate change initiatives while at the same time cutting and gutting other programs that actually benefit Canadians such as the home retrofit program.

At the international meeting in Bonn, non-signatories like China and India produced plans to close the gap on their greenhouse gas emissions and increase the amount of green energy and green technology in their economies. Yet Canada, as the chair, was unable to produce a plan. Canada's only statement was that we were not going to meet our targets and to even attempt to meet such targets would absolutely shut down the Canadian economy. We would have to take every car off the road and every plane out of the sky was what was said by our so-called Minister of the Environment. I wonder if he could comment on that.