Bill C-28 (Historical)

Budget Implementation Act, 2006, No. 2

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

Part 1 implements the following income tax measures proposed or referenced in Budget 2006:
–       the new Canada Employment Credit;
–       the new Textbook Tax Credit;
–       the new tax credit for public transit passes;
–       the new deduction for tradespeople’s tool expenses;
–       a complete exemption for scholarship income received in connection with enrolment at an institution which qualifies the student for the education tax credit;
–       the new Children’s Fitness Tax Credit;
–       a doubling, to $2,000 from $1,000, of the amount on which the pension income credit is calculated;
–       an extension of the $500,000 lifetime capital gains exemption, and various intergenerational rollovers, to fishers;
–       the new Apprenticeship Job Creation Tax Credit;
–       a reduction of the current 12 per cent small business tax rate to 11.5 per cent for 2008 and to 11 per cent thereafter;
–       an increase, to $400,000 from $300,000, of the amount that a small business can earn at the small business tax rate, effective January 1, 2007; and
–       a reduction of the minimum tax on financial institutions.
Part 2 implements the proposal in Budget 2006 to lower the income tax rate on large corporation dividends received by Canadians.
Part 3 implements the proposal in Budget 2006 to reduce excise duties for Canadian vintners and brewers.

Budget Implementation Act, 2006, No. 2

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, neither of us were in politics in 1993 and it sounds like the two of us were not in the same room when I did these polls. With group after group, there was either unanimity in opposing the GST cut, and once in a while a few people abstained, perhaps because they feared the--

[The Acting Speaker, Royal Galipeau]

Resuming debate, the hon. member for Winnipeg North.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I am pleased to have an opportunity to participate in the finishing touches on the Conservative budget of May 2.

The bill we have before us today is one of a number of budget implementation bills that deal with the Conservative plan for this country and, as my colleagues from the Liberal Party have said, it is truly a budget without vision. It is truly a budget that is meanspirited, short-sighted, and will hurt Canadians in ways too numerous to mention in the short 10 minutes that I have. Needless to say, when we opposed the budget on May 2, we indicated our general position on the budget, so we oppose this bill.

The part that I find the most interesting, having listened to my colleague, the Liberal finance critic, is the similarity between the Liberal budgets of the last 10 years and the Conservative budget of May 2. It is hard to really tell the difference.

When the Liberal finance critic stands up and talks about a meanspirited budget, I can only think of half a dozen Liberal budgets. When the finance critic for the Liberals stands up and says this budget lacks vision, I can only think of Liberals and a decade of leaderless budgets. When I think of meanspirited, callous, short-sighted, and hurtful budgets, I think of Liberals and Conservatives.

I cannot tell the difference between this budget of May 2 and what the Liberals handed Canadians over the past decade, both equally hurtful, both equally lacking in vision, and both equally missing the mark in terms of what this country needs at this moment.

We described the Conservative budget on May 2 as being a missed opportunity. That it was, just like the last several budgets of the Liberals were missed opportunities because we have been in a significant surplus situation for a good number of years. We have actually considered how Canada could reap the benefits of this new-found wealth, and how for once in this period of 13 or more years, we would see money actually invested in things that matter to Canadians. Money invested in those areas would actually grow the economy, get people working again, and allow people to juggle work and family responsibilities with some comfort and some ease. It would also see that money generated back into the economy in terms of more taxes being paid, a better quality of life for all Canadians, and a benefit for all of us, in fact, the debt going down.

Instead, again we are faced with the same simplistic approach that the Liberals have used for a decade, being used now by the Conservatives, They are using the simplistic approach of simply taking any dividend, any surplus, and putting it against corporate tax cuts and benefits for the wealthy in this country, and putting the money against the debt. That is the simple scenario. That is what we get with Liberals and Conservatives, nothing more. There is no sophisticated analysis, no ability to think in terms of a balanced position, and no understanding of real economics in terms of what it means to actually pay down a debt and how to pay down a debt.

We keep getting efforts that in fact set Canada further and further behind. They are efforts that cut off our nose to spite our face. If we were to take every penny of our dividend and every cent of our surplus, and put it into corporate tax cuts or against our debt, we would do nothing to get ordinary Canadians working to their fullest potentials, contributing to the economy, and paying taxes, and thereby growing the economy and bringing down the debt. That is what we in this party have asked for during the last decade.

We have not asked for a complete allocation of money to go toward program spending. We have not said to not pay down the debt. We have said bring some balance to this place. As long as we have a surplus situation, we should make an annual contribution of significance toward the debt. We should take another part of that surplus and invest it in programs that have a dual purpose: first, they should help Canadians deal with difficult economic and social problems, and second, they should help them contribute back to the economy. They should help them participate in the economy so that we all benefit.

Every economist in this country will demonstrate for us and Conservatives and Liberals right across the board that we do not pay the debt down much faster than a few seconds by putting all of our money against the debt and none into programs that grow the economy.

It is a simple economic fact that if we were to take money and invest it in areas that help people achieve employment that matches their skills, we would reap some benefit. If we were to help women, who would now like to use their skills to get into the workforce because quality day care is available, we would reap the benefit. If we were to put money into pollution saving technologies, we would not only save costs in terms of our health care system but we would invest in a whole new direction of economic growth.

A new set of possibilities opens up this whole area for new green technologies. It will be a new economy that our young people can participate in and feel good about their participation. They will not feel like they are just another cog in a wheel and not feel that they have to handle two or three part time jobs in order to provide for their families. They will not feel they have to give up their quality of life or participation in their community or their church life. They would not have to give up being good parents; being there for their children at school, in their sports days and other activities; and being able to do it all without feeling guilty, without feeling depressed, and without feeling hamstrung by virtue of what the government has done to our economy.

We are here today to make one more plea to the Conservatives because there is a new opportunity unfolding. As my colleagues on the Liberal side have mentioned, we have just criss-crossed the country to hear from Canadians about the next budget. We have heard again what we have heard over the last number of years. Canadians want some of their money invested in programs that will help themselves, their families and other Canadians. They do not want a government to simply ram through a budget and with some deal-making get the Bloc on side to sustain the government, only to see programs that they believe in cut back.

They are appalled number one, by the low balling of the surplus dollars that we have seen now repeated by consecutive Liberal and Conservative governments, which means we as parliamentarians and as Canadians do not have an opportunity to actually deliberate upon where the money should go when there is a surplus. Number two, we have seen through consecutive Liberal and Conservative governments money slip out of this country into tax havens. We just saw it in the news this week. Under the Conservatives, we have $2 billion of lost revenue because Merck Frosst, a large brand name drug company, has shipped that money into a Barbados tax haven to avoid paying taxes. That is just like the Liberals did for years. We saw in the Auditor General's report comments to the effect that tax arrangements for foreign affiliates have eroded Canadian tax revenues of hundreds of millions of dollars over the last 10 years.

Finally, just like Liberals, we have seen with Conservatives that once the budget is through, they slip through cuts to programs that in fact have no mandate. They do not have to return to Parliament but they do it anyway. They cut literacy, job career placement programs for young people, housing, child care, women's resource centres, volunteer initiatives, social economy initiatives, and housing co-ops. They cut anything that is important to the life, breath and depth of our communities. That we speak against.

We speak against this measure, we speak against this budget bill, and we speak against this tradition of meanspirited, visionless budgets by Liberals and Conservatives.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, I always listen with interest to my hon. colleague's impassioned speeches. She is very good at that and I know she cares about the issues deeply, but unfortunately I also think she has a tendency not to let the truth get in the way of a good story.

Even though we have saved $1 billion, 37% of which was money that was not spent at all and 63% of which in total was money that was either not spent at all or spent with no return on investment, what she neglects to say is that at the same time we have increased program spending by 4.5% to deal with some of the issues that she feels are so important. I do not disagree that they are important.

I think we do know how to pay down debt. We reduced the debt by $13 billion, freeing up $650 million next year and every year thereafter for program spending, which I am sure the hon. member would have good ideas on how to spend. I am interested that she can speak for every single economist in the country from coast to coast as well.

We have looked at other examples around the world. Ireland is a good example from some years past. It bit the bullet, took some very tough measures and is now one of the strongest economies, with the kinds of social services, education benefits and so on that I am sure the hon. member and everybody here would like to see. I am wondering if she has any comments on the Irish example and how that may or may not apply to hard lessons for Canada, to things we might consider.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I want my colleague to know that I will concede that I do not speak for every economist in this country. I will speak for the facts about what most economists say when they analyze what happens to our debt to GDP ratio when a lump sum is put against it, as the government just did with its $13 billion and is likely to do again next year because it has lowballed the surplus once again. We are already at $6 billion at the five month mark, which is $2 billion over anticipated revenues.

What happens when that is put against the debt is that the debt to GDP ratio is reduced at about the same rate it would be if we had put that money into areas that grew the economy. That is a known fact. That is the kind of balance we in the NDP are asking for. That in fact is what Ireland did.

The member should also know that while there was a government in Ireland that was committed to reducing taxes, it was also committed to putting money into education, for example, so that post-secondary education is available without charge. Ireland in fact has done what we have called for, which is a balanced approach so that we invest in our economy, address taxation on a targeted basis, where productivity and competition are increased, and ensure that the debt to GDP ratio is going down at a reasonable rate.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Mr. Speaker, the member for Winnipeg North has given a very passionate speech. In fact, I am a great believer in and a strong supporter of the agenda for social vision that we should have for this country, but at the same time we must have strong fiscal management.

I am certain the member knows that when the Liberals took power away from the Conservatives in 1993 Canada was going down and was in debt by $40 billion. We had to do something and we did it. At the same time, we restored social benefits, whether it was child care agreements with the provinces, health care or home care for seniors.

However, she talked about what economists have been saying for the last 13 years. She should look at the report in The Economist magazine, which said that workers were taking home 11% more income than they were in 1993. The hon. member can look at that magazine's report from last year which said that Canada was the second best country to invest in, next to Denmark. I do not believe that the hon. member is giving a fair statement when it comes to the record of the Liberal Party.

[The Acting Speaker, Royal Galipeau]

There are 45 seconds left for the answer.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

First, Mr. Speaker, I would like to point out that most economists and analysts in this country will give credit to NDP governments, whenever they have been in power, for running good, sound fiscal programs. In fact, recent surveys show, by the government's own statistics, that of those governments that balanced their books, 49% were NDP, 39% were Conservative and only 23% were Liberal.

The NDP has as good a track record as anyone in the House for being good fiscal managers. The Liberals, unfortunately, were not. They approached the deficit situation in 1993 like a bull in a china shop. They put all of their eggs in one basket. They took the biggest bite in history out of education and health--

[The Acting Speaker, Royal Galipeau]

Resuming debate, the hon. member for Dartmouth—Cole Harbour.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, I am pleased to have an opportunity to speak on the budget implementation bill. I am following the member for Markham—Unionville, who took an awful lot of good arguments, so I will try to scrape together what is left.

I think that this particular time at which we are debating this bill we have the most attractive economy in the history of Canada. We can recall headlines in the Globe and Mail not too long ago which said that Ottawa is “awash in...cash”.

That cash is the cash of the people of Canada and it is the fiscal dividend of a decade of effective financial management. It was not an easy time in Canadian history. Canadians made sacrifices. In Atlantic Canada, we saw many sacrifices. The employment insurance system was changed. In my own community of Dartmouth—Cole Harbour, the Shearwater base was closed.

There were a lot of cuts. There were reductions in the CHST, health care, social services and post-secondary education, which were necessary in order to preserve those very things. Would we even have a publicly funded health care system today if we had continued in the ways of the Conservative government that we took over from in 1993?

Since we got the economy under control, the Liberal government has reduced taxes. We reduced the deficit prudently. We balanced our priorities, much like the previous speaker said we should. We in fact did that, bringing in things like the child tax benefit, which economists have attributed with actually having had an impact in reducing childhood poverty, although there is much that we need to do.

When the economy improved, we put money into post-secondary education, health care, the child tax benefit and a host of other things. Today we have an unprecedented opportunity and I believe it has been wasted. It is an unequalled opportunity to invest in the social infrastructure that makes Canada unique, to close the gap between the rich and the poor, between those who have and those who have not. This budget does not do it. In fact, it does not even speak to the millions of Canadians who need a hand up.

The major priorities of this government do not make sense. The GST cut from 7% to 6%, and perhaps eventually to 5%, has been called the “triumph of politics over policy”. No serious unbiased economist in Canada thinks it was a sensible thing to do, particularly from a productivity point of view. It does nothing to help low income Canadians.

In fact, the government could have put the money into the child tax benefit. We hear, and the government seems to believe it, that the GST is good for lowest income Canadians because they do not benefit from personal income tax reductions, but there are other ways of helping the lowest income people in Canada. There are many others who would benefit from lower marginal income tax on the lowest rate and increasing the basic personal exemption to where it was in the economic update that we introduced last year.

Even business groups said this. My colleague from Markham—Unionville indicated his survey. He mentioned St. John's and Vancouver. I know he did it in Halifax and I know it was unanimous. I do not believe that in Halifax anybody even dissented or abstained. They all said it does not make any sense. They said that we have all these priorities in Canada, such as regional development and child care, and that there all kinds of things we could put the money into instead of wasting billions of dollars giving it to people who buy expensive cars and furniture.

And there are other priorities. We all would like to have low income tax and we would all like to have a lower GST, but the job of government is to make priorities. Surely when a government is awash in cash those who most need the help should be at the top of the list. It did not happen.

As for child care, in our finance committee travels, which my colleague mentioned, we met with dozens of groups to talk about child care. I am not sure of the exact number. It could have been 25, 35 or 40. Overwhelmingly they preferred a plan similar to the previous Liberal government plan of putting the infrastructure in place, because money on a monthly basis does nothing if one cannot find a space.

Even with the government bringing in the universal child care benefit, the $1,200 a year, it should have been done in such a way that it actually went to the people who needed help, not the way the government did it, where in many cases it actually favours people with higher incomes versus low income families who are struggling to get along.

In the budget, the cut for the GST and the child care plan are flops. They do not help Canadians who need help the most.

What is missing in the budget? I would have to say, first of all, that regional development is missing. We heard all the time from ministers of regional development agencies that they would not in fact be hurt, and then we saw the cuts of a couple of weeks ago, cuts that take the social economy initiative out of budgets like ACOA's, for example, which means $7 million to $10 million for worthy organizations. Co-ops, for example, came before us and said it was crazy and did not make any sense, and they are right.

Next let us talk about post-secondary education, which is a particular interest of mine. This has to be if not the most pressing need for Canada, then certainly one of them. How can any government in Canada have five priorities but not have one of them include education? I think it is the biggest issue facing Canada.

We have an educated population. We have done a good job of educating Canadians, including in post-secondary education, but other countries are catching up. We all know the story of the emerging economies and how they are investing. Countries in the European Union are putting money into education as well.

We need to keep up the strength on the research side, as an example, which the Liberal government invested in once we controlled the economy. We have put in some $13 billion since 1998, taking Canada from the bottom of the G-7 to the absolute top in terms of publicly funded research.

That is an amazing accomplishment. It has reversed the brain drain. That is what we heard all over the place five years ago. Now we do not hear about it. In fact, there is a reverse brain drain. Universities across Canada will tell us about accomplished scholars, researchers and graduate students coming back to Canada, choosing Canada because of our investments in the granting councils and CFI, Genome Canada and others. It is a significant contribution.

In fact, the government's own budget books indicate that the federal government contribution to post-secondary education has stayed constant over the past 10 years. We often hear that it has been gutted. In fact, the contribution has stayed constant and, although it has not been in the direct transfer, in the CHST, it has gone into research and to students in forms like the millennium scholarship, the learning bond or the Canada access grants at 25%.

However, I would argue that is the challenge of Canada because of the changing nature of the world. Although enrolments have not declined, we do know that there are three areas in which Canadians are not getting to post-secondary education, be it university, community college, apprenticeships, advanced training or catch-up training. We know there are three areas of Canadians who are not accessing it: low income Canadians, aboriginal Canadians, and persons with disabilities.

Last fall, the member for Wascana, who was the minister of finance, introduced an economic update that addressed these needs in a huge way, but budget 2006 did nothing. Tax tinkering assists those who are already in university or community college; it does not help those who are not there to get there. I believe that should be a role of the federal government, both from a social justice point of view because we want all Canadians to have equal opportunity, and also in an economic argument, in that it is good for the county.

Canada is a unique nation. It is a nation that we are all proud of. There are many things that symbolize Canada, both to Canadians and to the world: this great geography of a vast land; our cultural diversity, Canada being the first nation on earth to proclaim multiculturalism as a national policy; and our linguistic duality.

I also think Canadians take pride in the belief that we believe government has a role to play in bridging the opportunity gap between the richest and those most in need. Even some Progressive Conservative governments in the past have stated that as a goal and have done some things to try to make it better.

The budget does not even pretend to help those who need help. The government is neither progressive nor fair. The government speaks to a narrow constituency with narrow views. Canada is a wide country, of huge dimensions, huge dreams and huge visions, and Canadians reject the government's view of their land.

[Brian Pallister, Conservative, Portage—Lisgar, MB]

Mr. Speaker, up until the tail end of that presentation I kind of enjoyed it. It was largely factual until that little partisan diatribe at the end. I thank the member and congratulate him for his comments and his participation on the House of Commons finance committee in the pre-budget consultation process. It has been engaging in a very inclusive and educational way. The member for Markham—Unionville who spoke earlier, has also been part of that process.

I would like to respond though because I am sure the members would not want any kind of misperception to be on the record concerning the polling to which the member for Markham—Unionville alluded in terms of polling people who came to the committee and asking them a question concerning the GST.

It is important to put on the record that the question and the way in which it was worded was essentially this: “Would you support raising the GST to 7% again if it meant that we could then fund your specific project?”. The member directed that question to each of the witnesses, as he did at numerous meetings across the country.

Naturally, as we all understand very well, the fundamental principle of concentrated benefits versus disbursed costs, it would be very logical that the people to whom he would direct the question, who would be there on behalf of specific interest groups and lobbying on behalf of their chief issue of concern, would naturally answer yes, that they would like to see the GST higher to support their specific project because they would like to see, obviously, benefits concentrated in the hands of those they are there to represent.

That is quite defensible, However what is not defensible is putting on the record that it is somehow an indication of a broad based concern that the GST was lowered. It certainly is not evidence of that and I am sure the member knows that.

As far as the comments concerning mean-spiritedness, the member did not address a number of issues which I guess is understandable because they certainly supply strong and compelling evidence of something more than a compassionate nature, certainly more compassionate than would be the case under the previous government, the transit pass program, the tools programs, the textbook programs, the kids sports programs and numerous others which the member chose note to address.

No member here has yet addressed those issues. Those seem to be very well received and I think acknowledged by most in the House as positive and progressive initiatives that would be well received by Canadians, most of which were issues that we raised as a party in the last election campaign which saw considerable support brought to our party as a consequence.

The member is essentially saying to the witnesses who asked for more money from the taxpayer that they should trust us with the money. What the members are saying, in contradiction to their previous position on the GST reduction which they supported the abolition of in the past, is that we should keep it higher. The Liberals are asking us to trust them with the money but that they will not trust Canadians with 1% less on the GST. I would like the member to explain why that is.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, I enjoy being on the finance committee. The hon. member is a good chair and I actually look up to him, but he is six foot nine so that is about what one might expect. However, what he says, unfortunately, is hogwash. We do not mistrust Canadians at all.

He mentioned many things in his 25 minute question, things like the tax break for students and the tax break for recreation. We actually asked a number of witnesses who were involved and liked those measures as well if they would prefer to see tax tinkering, little bits here, throw crumbs out to people or would they rather see investment in infrastructure, for example, recreation infrastructure through their municipalities, or the child care program as opposed to little bits of money. Most people, even people who were directly involved in the areas he mentioned, preferred the investment in infrastructure that all Canadians could use without a membership card and without having to pay a membership fee, that they would have access to whether it is education, whether it is child care, whether it is physical recreation.

It is all a balance but Canadians do not want little piecemeal solutions. We heard that from the Chambers of Commerce in Kingston and Waterloo. Canadians want solutions, they want vision and they want a government that understands their problems and will work on them. They have not seen it from the current government.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, I appreciate the opportunity to put a few thoughts on the record because I believe, and I think everyone would agree, that one of the most important things that we have responsibility for as a federal government is laying out a budget and speaking to the priorities that we see needing to be looked at, invested in for the people of our constituencies and the country and doing that in a fiscally responsible and fair way.

Members will note and people listening to this debate will note that the budget that was brought down by the Conservatives earlier this year is not that dissimilar from the budget that was initially brought down by the Liberals of the previous Parliament. The only change in that budget came when we as New Democrats found a way to wedge ourselves into the debate and make some significant changes that reflected the priority that we would bring if we were government in this place to the budgetary process to which I will speak just briefly because I have such little time.

The things we brought to the budget at that time, which were so important to people across this province, were gas tax flowing to municipalities, foreign aid, the first affordable housing project in years and investment in post-secondary education. Those things were just the beginning of the kinds of things that I believe people want the federal government to be taking a serious look at, be willing to give leadership on and to actually invest in if this country is to move forward.

We as New Democrats, wherever we have governed, are shown now, by way of a federal government financial department release, to be of the most responsible of governments, balancing our budgets 49% of the time when we have had a chance. The Conservatives have only balanced their budgets 39% of the time, while the Liberals, lagging behind, balanced their budgets only 23% of the time.

When we talk about delivering budgets that reflect the priorities of communities, families and individuals across the province, we are not talking about breaking the bank. We are talking about being very particular in terms of where we spend our money and where we make our investments. We certainly would not be going down the road of huge, mega tax breaks to corporations and individuals in this province who really do not need them and, in the long run, as has been proven over time, do not really reinvest them in things that help communities, people and workers across this province.

As I scoured my community over the last month to hear what they would like to see in a budget certainly reflected the priorities of the New Democratic caucus and the New Democratic Party. They were concerned that the money that has begun to flow by way of the NDP budget of 1985 might not continue to flow. They want the investment in affordable housing, the investment in post-secondary education and the investment in communities through the flowing of the gas tax to continue.

They also told us that they were very concerned about the cuts announced recently by the Conservative government. They said that if that were an indication of where the government was going that they would be thinking twice and working hard to ensure the Conservatives would not be returned after the next election to be the government of this country.

In my own riding, the municipalities had real concern that the gas tax that has begun to flow would continue to flow because the municipalities have been the biggest victim of the download by federal government to provincial government to municipalities over the last 10 to 15 years as the previous Liberal government tried to balance its budget on the backs of communities and on the backs of the families who live in those communities who are now expected, through their property taxes, to pay for health care, affordable housing, public health care and a number of things that previously the senior level of government, which, as everyone knows, has most of the money, used to work with them in partnership to ensure every community had those things in place and everybody who lived in those communities were allowed to live in a dignity that reflected the richness of this country.

In my community, which is a border community, the government did not support the cut in the GST rebate to tourists who come into our country.

We are living in very difficult times now with the fear of terrorism and the agenda of the American government to put in place the western hemisphere initiative, to put gunboats on our Great Lakes, to build fences and to erect towers. All of those things send the wrong message but that is under the control of the U.S. government.

However, Canada has control over things like the GST rebate. The rebate is an enticement or a little bit of a carrot for Americans who are looking at Canada as possibly a good place to have a vacation and perhaps buy a few items. The Americans now receive a rebate on their GST but the government intends to cut that.

The Chamber of Commerce in my community, which came to one of the prebudget consultations I had in my community during the constituency week, said that its number one priority when it was looking at the budget and what the government was doing in my community, which is very tourism oriented, was to stop the cut of the GST rebate. The rebate is only one of a few things that businesses have in their arsenal to compete and do well in the tourism industry.

On behalf of my Chamber of Commerce and of all of those tourism organizations across my region I would ask the government not to cut the GST rebate and to put that rebate back in place because it is important and very helpful.

The other thing that often came up as I met with constituents and had my consultations was the fact that the government does not seem to be able to do anything about the ever increasing price of gasoline. Anyone who lives in northern, remote or rural Canada will know that transportation is essential to any economy in those areas. If people need to travel everyone knows that gasoline is one of those fundamental basics that everyone has to put out for.

If the price of gasoline continues to rise and to vacillate as it does, we have no confidence that we will continue to be able to compete in a positive way in today's economy. Energy and gasoline prices are killing industry across northern and rural Canada.

The forestry industry is one example in northern Ontario that is on the ropes. Some communities are finished because the government has not been able to get its head around and work collectively on something that will bring some common sense and reality to this issue of the burgeoning price of gasoline.

If the government is not willing to regulate, it should, at the very least, put in place some vehicle that could force those companies that deliver that product that is so essential to us to justify their increases. The NDP is not against people making a profit. We know that is what makes the economy in this country run. However, when it becomes gouging and profiteering, my party has a problem.

The other issue that was raised very clearly with me by a number of groups and individuals in my community is the cuts to literacy. The government recently announced cuts to literacy programs that are so very valuable to individuals who want to participate, to communities that want their citizens to participate and to the economy. Any good economist who has looked at the question of literacy will say that an investment in literacy produces threefold down the line. When these individuals learn to read, write and use computers they can participate in the workplace in a more positive way and become better and more productive workers which makes the company more efficient.

I do not understand what the underlying value was of the government, and in fact of the previous government, when it came to budget making. If members would look at the NDP budget of 2005 it would understand what the priority is for the New Democratic caucus here in this place today.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, I have a couple of things I would like to point out for the member. Perhaps he is driving an electric car and does not buy gas. If that is the case, I commend him, but I fill my tank fairly regularly and the price of gas has gone down considerably in the last little while.

This government would not take any credit for that nor would it take any blame for the cost of gas increasing.

The member talked about workers and supporting workers and he mentioned the forestry industry. Is he aware that $945 million went out this week to Canadian forestry companies which will clearly support the industry, the workers and the towns across Canada that rely on the forestry industry? Does he think that is an important thing for people in those communities today?

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, the member has raised two very important questions.

I do not think he would deny that the approach the gasoline companies seem to be taking in raising the price of gasoline is that they raise it to $1.25 a litre and then drop it back to $1.05 a litre, and we think, “Oh my God, we have ducked a bullet. Look how low the price of gas is”. He keeps forgetting that before Labour Day last year, the prices of gasoline was between 70¢ and 80¢ a litre. It is now up over 90¢ a litre in my community. Only a year ago it was hovering up around $1.25 a litre.

That is the game the companies are playing and the member has obviously bought into it. The people who live in my jurisdiction in northern Ontario have not. They understand. They know that when the prices of gasoline goes up to $1.25 a litre and then goes back down to $1.15, it is still higher than the 75¢ it was the month before. That is their trick. Somehow we have to find a way to bring the companies before us an ask them to justify this. We have to look at the patterns, look at the money they are making, the profiteering that is going on, and challenge them so that we can act as a government in the best interests of our communities and the workers and the people who want to drive an economy in this country.

In terms of forestry, certainly in northern Ontario we have seen no benefit and no effect. St. Marys Paper, the paper mill in my community, just last week filed for bankruptcy protection. I dare say that in northwestern Ontario there is not a community that has not been drastically negatively affected by the way the previous Liberal government and the current government have acted on their behalf.

We are killing an industry that should not be killed. It should be viable and vital to this country. Unless we do something about it, that is the direction we are going in.