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

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Mr. Speaker, I am very pleased to speak today to Bill C-28, A second Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006. This bill is over 130 pages long.

In this bill, the budget that the Minister of Finance tabled last spring is divided into five broad areas. It addresses a number of issues and sets out tax measures affecting individuals.

This bill also proposes to extend tax benefits given to farming and fishing businesses; it deals with corporate taxes; it amends the tax rate for banking institutions; and it reduces the excise tax on volumes of beer under 75,000 hectolitres.

In the 20 minutes allotted to me to talk about Bill C-28 today, I would like to address the aspect relating to tax measures affecting individuals, but more specifically the 15.5% non-refundable tax credit for public transit that was announced in the budget. In order to be eligible for the credit, taxpayers must supply a receipt or proof of purchase of a long-term public transit pass.

I certainly do not intend in this speech to dispute the measure proposed by the government in the last budget; rather, I would like to demonstrate that this one measure alone, the 15.5% non-refundable tax credit, is insufficient to reduce greenhouse gas emissions. In fact the government committed itself in its budget to presenting us with a climate change plan, which we are still waiting for. The only environmental measure that the government is proposing is the non-refundable tax credit for public transit.

We believe, however, that this is not sufficient to reduce greenhouse gas emissions and to meet Canada’s commitment to reducing greenhouse gas emissions by 6% from 1990 levels during the period between 2008 and 2012.

Why is it not sufficient? Because a 15.5% non-refundable tax credit is not a sufficient incentive for people to use public transit. If the government genuinely wants to reduce greenhouse gas emissions and promote public transit, it will have to ensure that this measure is accompanied by adequate funding for public transit infrastructures, particularly in municipalities.

In fact it bothers me that the government is presenting this measure to us today, because the Department of Finance submitted a report to its minister showing that this measure alone would be ineffective in reducing greenhouse gas emissions even before he tabled this budget.

The minister had available to him a report showing that this measure alone would lead to a reduction in greenhouse gas emissions of only 0.01%, when Canada has to reduce those emissions by 300 million tonnes. Plainly this measure alone will lead to a reduction of only 13,000 tonnes in Canada.

The government, which sometimes says it believes in climate change and sometimes says it does not, is presenting us today with this tax credit that is the only environmental measure it proposed. Obviously that measure alone will contribute to reducing greenhouse gas emissions by only 0.01%.

This is not enough. We have a government that is refusing to honour the commitments Canada made in the fight against climate change and that, in its budget, is promising to table a climate change plan in the future. Where are we at today? We have a government that is refusing to honour the commitments Canada made in Kyoto, that had promised in the budget to table a climate change plan and that said it would use tax measures in the fight against climate change. What do we have now? A government that is not honouring its international commitments, that has not tabled a climate change plan and that is tabling tax measures and environmental measures that will enable us to reduce greenhouse gas emissions by a mere 0.01%.

How can the minister tell us today that this one measure will help reduce greenhouse gas emissions? According to his own department, the finance department, this measure will increase transit ridership in Canada by only 2.5% to 3.3%, even though this government feels that we must fight climate change.

The minister is well aware that there were at least five options on the table, and he chose the worst one, the one least effective in reducing greenhouse gas emissions. According to the Department of Finance and the report that department officials submitted to the minister before the budget was tabled, the reduction in greenhouse gas emissions will be minimal. The government and the department had clearly indicated that this measure would not be effective in reducing greenhouse gas emissions and that, in addition, it was extremely costly. Officials estimated that it would cost $200 million annually to implement such a measure. What does that represent in terms of the cost of every tonne of greenhouse gas emissions that is eliminated? It represents $2,000.

So when the government tells us that we cannot achieve the Kyoto protocol targets and that it would cost a huge amount to do so, the government should look at the measure it has introduced. According to its own officials, this measure will cost the department $200 million a year, or $2,000 for every tonne of greenhouse gas emissions that is eliminated.

Far be it from me to criticize this measure, as I said earlier. I think that this measure can be effective only if the government decides to make the financial means available to the provinces to strengthen and improve the public transit network.

The government probably sees what I am getting at. The Government of Quebec wants $325 million to fund its plan to fight climate change. It clearly showed its hand to the government in Ottawa by saying it would use Ottawa's $325 million to strengthen its transportation network. That is the missing link that would make the measure announced in the budget—the 15.5% non-refundable tax credit for individuals who purchase public transit passes—really effective for Quebec.

I would like to quote an environmental economics professor at the Université de Sherbrooke, Alain Webster. He said, and I quote:

Ottawa's measure rewards people who are already doing the right things.

There is no clear evidence that the 15.5% credit will convince a lot of people to switch from cars to buses. On its own, such a measure is deceptive and totally inadequate.

This measure will not boost ridership. Yes, public transit ridership in Canada will increase, but according to the Department of Finance's own analyses, ridership will increase only from 2.5% to 3.3%. So what should we do? This is the only measure the government announced in its last budget to fight climate change.

What would we have liked to have seen? We would have liked the government to confirm Canada's support for Kyoto by committing to reducing greenhouse gas emissions to 6% below 1990 levels between 2008 and 2012.

We would also have liked the government to indicate that Ottawa intends to transfer to Quebec the $328 million committed by the federal government. That commitment was made not only by the previous government but also by the new government. We have some evidence of that. It has been confirmed not only by Bloc members but also by the Government of Quebec which, today, as part of a partnership, stated that it wants the Kyoto protocol commitments to be met in their entirety. Several individuals involved reacted by estimating that it would also take at least, and I insist on that, at least $328 million in order to ensure that Quebec reaches its targets.

We should point out that the government decided to continue with plans laid out by previous governments to give tax incentives of about $250 million to the Canadian oil industry—even though, since 1970, this industry has received more than $66 billion. That is quite a contrast with federal investments in renewable energy.

Why should we continue to fund the oil industry when we have a government, the Government of Quebec, that has submitted an action plan to reduce greenhouse gas emissions, to respect the Kyoto protocol, and which is asking Ottawa for $328 million, or 20% of the action plan on climate change. Something does not add up.

What we believe is that if the government wants this measure to be effective, it must be accompanied by concrete agreements with the provinces. Concrete agreements that can result in improvements to infrastructure.

Some have said, and I will again quote an individual involved, “Such a measure was evaluated”. These are quotes and comments from federal public servants in the Department of Finance who made a recommendation to the minister regarding the measure included in the budget and who stated that such a measure had been evaluated. It could be implemented without fiscal implications.

What officials are saying is that we cannot consider this measure alone. Why did the government not announce a tax credit for more fuel efficient vehicles when it tabled the budget? Such a measure would have been more effective. According to the Department of Finance figures, this type of tax incentive for citizens who decide to purchase more fuel efficient vehicles would have resulted in a 0.3 million tonne reduction in greenhouse gases in 2010 and a 1 million tonne reduction in 2020.

We have always believed in this House that, in terms of fighting climate change, we must use both tools at our disposal: legislation and regulations, which must play in important role. Furthermore, upon analysis of the approach introduced by the government last week, what is it? It is an approach that aims only to go back to consultation with the provinces and discussion with industry. It is no more and no less than an approach in three phases, which might—and I stress might—lead to regulations in 2010.

I have been a member of this House since 1997 and I remember very well the previous government's commitments. In 2000, after ratifying and signing the Kyoto protocol, that government began extensive consultations with the provinces and with industry in order to implement the Kyoto protocol in Canada.

The government before us today has decided to throw away nearly six years of negotiations with the industrial sectors and begin all over again, although negotiations had already been undertaken by the Department of Natural Resources, among others.

I remember very well the Assistant Deputy Minister, Howard Brown, who had begun negotiations with the industrial sectors and was making progress in those negotiations. Of course, in certain cases, they led to only voluntary agreements. We would have liked to see stricter regulations, but this government decided not to take into account the negotiations with the various industrial sectors and to start all over again.

Consider, for instance, the automotive industry. It signed a voluntary agreement with the federal government in which it promised to reduce greenhouse gas emissions by five megatonnes within the automotive sector. What have we learned and what do we know about the viewpoint of the government sitting opposite, regarding that agreement? We are told that they are going to let that voluntary agreement run until 2010 and we will harmonize our automobile manufacturing standards with those of the United States, more particularly with the Environmental Protection Agency. While we were hoping that the government would harmonize our automobile manufacturing standards with more rigorous, model standards, such as those adopted by the state of California, our government decided to let the industry continue on its course, although, incidentally, that industry has yet to present any reports on how it is respecting that voluntary agreement.

I would say that the Commissioner of the Environment and Sustainable Development informs and guides us on the evaluation of this agreement. She says there is no independent mechanism—independent being the operative word—to ensure that the automobile industry will respect its commitments on the five megatonne reduction in the voluntary agreement. There is no independent compliance mechanism and no guarantee that the industry will respect its commitments. By the way, the industry can withdraw from this agreement at any time.

In closing, this measure could be interesting provided that it comes with a significant transfer, for Quebec in particular, of $328 million to allow us to consolidate and broaden our public transportation network.

Alone, this measure will not result in significant reductions in greenhouse gas emissions; its impact is small. Furthermore, the government had five other options and it chose the least effective one as far as greenhouse gas emissions are concerned.

We hope the government now understands that Quebec wants this $328 million to allow us to meet our commitments to reduce greenhouse gas emissions in accordance with the Kyoto protocol.

The House resumed consideration of the motion that Bill C-28, A second 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.

Business of the House

[Rob Nicholson, Conservative, Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, today we will continue with Bill C-28, the bill to implement the 2006 budget tax measures. This would be followed, time permitting, with Bill S-2, hazardous materials, and Bill C-6, the aeronautics amendments.

Tomorrow we will continue with the business from today with the possibility as well of completing the third reading stage of Bill C-16. I will talk to the opposition House leader about that after this.

Next week we hope to begin debate on some of the government's justice bills. The first one will be on the age of consent, Bill C-22. If we could get unanimous consent to pass that at all stages that would be very much appreciated.

We will go then to Bill C-27, our dangerous offenders bill and any cooperation we can get to move that along would be appreciated, I think, by the people of this country.

I am looking forward to sitting down with the official opposition and other parties to discuss the speedy passage of the many popular bills that the government has introduced and I am looking forward to their cooperation on that.

Pursuant to Standing Order 66(2), I would like to designate Tuesday, October 31, as the day to continue debate on the second report of the Standing Committee on Agriculture and Agri-Food.

In response to the member's questions, consideration in committee of the whole of the votes under the Department of Human Resources and Skills Development on the main estimates for the fiscal year ending March 31, 2007, shall take place on Wednesday, November 1, 2006, pursuant to the Standing Orders. The second day for consideration of committee of the whole will be November 7, 2006.

As well, I should indicate that Thursday, November 2, 2006, shall be an allotted day.

With respect to the member's questions with respect to the same sex marriage, we will fulfill our campaign promise on that and we will be proceeding with it this fall.

Budget Implementation Act, 2006, No. 2

[The Acting Speaker, Conservative, Royal Galipeau]

It is with regret that I interrupt the member but we will now go to statements by members. When we return to the study of Bill C-28, there will be sixteen and a half minutes left in her time.

[Maria Minna, Liberal, Beaches—East York, ON]

Mr. Speaker, I am happy to speak against the government's Bill C-28. I do this because it is part of the budget of 2006, which we on this side of the House are completely against.

Although there are provisions in the bill that we do support, as they are Liberal proposals from our budget in 2005, we do not support the agenda of the minority Conservative government at this time. Speaking of its agenda, it is important to note that, as we campaigned on, the Conservatives are showing their true right wing hidden agenda now that they are in government.

When the Conservatives introduced the budget, they announced massive spending cuts within it, even though they were handed a $13 billion surplus from previous Liberal governments. Why would they do such a thing when we have so much richness in this country that was left to them by our government? They did it because they had to appease their ideological, right wing Conservative base.

What did the Conservatives do with those cuts and where did they cut? They eliminated the early learning and child care program agreement across this country. It seems that the signature of the Crown means absolutely nothing. The fact that the Government of Canada and the provinces signed an agreement means nothing. By the way, that also happened with the Kelowna accord. Everybody had signed the agreement but again those signatures meant nothing.

I will not go through all the draconian cuts to Status of Women Canada of $5 million, plus changing all the criteria, which means that equality seeking groups can no longer get funding. Justice seeking groups can no longer get funding. It seems that the minister responsible for Status of Women said that women were equal in this country anyway because it says so in the charter. The fact that we need programs and advocacy organizations to ensure that actually happens means nothing to them.

They made cuts to the literacy program. I do not know what the Conservatives have against people learning to read and write in order to improve their skills so they can get better jobs. Productivity in this country is a major issue. The government says that it is interested in productivity and yet it is cutting literacy education which is where it is most needed.

Cuts to affordable housing affect the most vulnerable in our society but the Conservatives do not care. They have their narrow voter base to support and that is as far as they will go. They pick and choose income tax measures that satisfy the minority voters who support the Conservative Party. They believe it does not matter if it is bad for the economy as long as it helps them to get a majority government. Even their own right wing think tank has said to them that cutting the GST is a bad move because it does nothing to increase productivity in this country, but they did it anyway.

The NDP is no better. It used its own agenda to force an election and now it must deal with the consequences of a Conservative government.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I am pleased to rise today and speak to Bill C-28 and express many of the concerns raised in the Hamilton community around the budget.

This spring's budget saw the Conservative government essentially continue the Liberal income tax cut. The government added cuts to the GST and business taxes. It simply left what I would argue would be the most important social responsibilities to the province.

On the spending side, the government has all but turned its back on the Kelowna accord with aboriginal people, with only modest funding for housing. The government's decision to go beyond the GST cut and to proceed with further personal and corporate tax cuts is troubling. This will cause a significant shrinkage in government's fiscal capacity to invest in the aspirations of ordinary Canadians. It betrays their hopes in many ways.

The Prime Minister has talked at length about being inclusive. He has all but ignored the call by the provinces for substantially increased federal funding for post-secondary education. Post-secondary education in Canada has been subjected to public cuts in funding for over 20 years. This has led to higher tuition fees and higher student debt.

The government has substituted tax incentives and individual credit measures and has taken away funding for direct programs. This is unconscionable when the government is sitting on a budget surplus of $13 billion. Much of that $13 billion was hijacked from the EI fund as far as I am concerned. It has chosen instead to throw away a chance to give real relief to our post-secondary students and to their parents.

On May 2 of this year, George Soule, national chairperson of the Canadian Federation of Students, responded to the spring's budget announcement and said:

Tinkering around the edges of the tax system is not going to increase access to college and university. This government should be restoring the billions of dollars that were cut from post-secondary education transfers during the past decade so that tuition fees can be reduced.

In my opinion the budget bills of 2006 very much follow the failed Liberal legacy of building on ineffectual patchworks of short term band-aid solutions, with no long term plan to enhance access to quality, lifelong training and learning opportunities. A lifelong learning strategy would finally reinvest in our colleges and universities and it would increase accessibility. I said earlier that there is a student debt crisis in our country which is unconscionable.

Tax credits are no substitute for restoring core funding to post-secondary education. Tuition has almost tripled since 1992. It is becoming increasingly out of reach for even middle class Canadian families, much less ordinary hard-working Canadians. The student debt crisis averages over $21,000 per student. In some cases it reaches $50,000. Imagine trying to enter the workforce carrying that burden. Instead of reinvesting in core funding and tackling the student debt crisis, as the NDP did in Bill C-48 in 2005, the Conservatives simply tinker with taxes.

Tax credits in budget 2006 will cost $185 million a year to help those students who already have $3,000 a year in scholarships. That money could have been used to pay the full tuition for 38,000 students, those students in greatest need. Budget 2006 will increase the amount of debt by allowing more students to borrow more money. That only helps the banks. It is absolutely terrible.

Another area of concern in the budget is housing and homelessness. Day in and day out in the House we hear question after question on SCPI and they are deflected by the minister. What is in the budget? The Conservative money in the budget was money that was already committed to be spent in the NDP budget, Bill C-48 from last spring. The Conservative money actually falls $200 million short of Bill C-48.

Accountability? There is no mention in the budget of who will oversee the funding and ensure the money is spent by the provinces on much needed affordable housing.

Previous Liberal governments allocated a substantial amount of money to the provinces and territories, around $474 million, but this money was not spent. It was not spent because of the failure of the Liberal government to gain a consensus with the provinces on how to do that. That is one of the major failures of the last 15 years in regard to social housing in this country. There is no mention in the budget of a national housing plan that would ensure that affordable housing is available in the long term.

Speaking more to my riding, in particular the city of Hamilton, there was a study done called “On Any Given Night”. On any given night, 399 men, women and children stay in emergency shelters in Hamilton. There are over 4,200 active applications for social housing in our community. Over 2,400 women and children stayed in a violence against women shelter during 2004 and 2005. Twenty-one point nine per cent of renter households spend more than 50% of their income on housing. It is only thanks to SCPI, which we fear is in jeopardy, that the infusion of funding for shelter beds in Hamilton was meeting the needs of single men for the very first time.

I would like to refer to a report from the social services committee of the city of Hamilton. Again, speaking to the committee's concerns around SCPI, it said:

Whereas, having a safe, secure home is a basic human right; and

Whereas, children and families are the fastest growing segment of Canada's homeless population eroding efforts by municipalities and others to nurture healthy, stable communities; and

Whereas the City of Saint John's, the Federation of Canadian Municipalities (FCM) and other organizations across the nation have recognized that homelessness and the lack of affordable housing is a national concern requiring long term solutions; and

Whereas, the National Homelessness Initiative was established by the federal government in 1999, investing $1.2 billion over the past six years in local solutions that address homelessness; and

Whereas, the National Homelessness Initiative is strongly supported by local organizations and the Government of Ontario and is recognized as an international best practice by the United Nations; and

Whereas, the National Homelessness Initiative will expire on March 31, 2007 unless the new federal government acts soon to renew the program;

THEREFORE, BE IT RESOLVED THAT the City of Hamilton urges the Government of Canada to renew and expand the National Homelessness Initiative, and calls upon municipalities and provincial and territorial governments across Canada to add their voices in support of this important program.

The concern for SCPI, the concern for our homeless, our families in jeopardy is at the forefront of the concerns of municipalities and municipal governments across this country. It is the concern of representatives in this House, but it does not seem to me to be the concern of the federal government. I cannot understand for the life of my how it can turn its back on homeless Canadians.

In closing, these are concerns that have been expressed to me by the constituents of Hamilton East—Stoney Creek and I am pleased to put them before the House this day.

[Shawn Murphy, Liberal, Charlottetown, PE]

Mr. Speaker, I rise today to participate in the debate on Bill C-28. I will confine my remarks during the early minutes in my limited time on the $1 billion in cuts that were made mainly to social programming here in Canada that were all part and parcel of the budget.

Most Canadians share my view that these cuts were directed at the most vulnerable people, groups and organizations in Canada, and the most vulnerable regions in this country. The cuts were based very much on ideology. Today's editorial in the Vancouver Sun accurately describes the nature of these cuts and the direction of the minority Conservative government. In actual fact, Barbara Yaffe introduced a new term into the lexicon of this assembly. I agree with her proposition that the government is suffering from a rare disorder called “ideology restrictus”. That is the problem here and I am not sure there is a known cure for ideology restrictus.

I agree with the thesis of the article that normally, when a minority government is elected, it is elected on a certain base. Once it gets into power, it attempts to broaden that base and reach out to other groups, individuals, organizations, so that the government can be the government of all Canadians in all regions of the country. With this particular minority Conservative government, that in fact did not happen. In fact, it is becoming narrower and narrower.

The Conservatives are narrow casting to their own group. Canadians have seen that very clearly from the $1 billion in cuts to social programs that were recently announced by the minority government. I want to speak about these cuts and how they affect these groups, individuals and organizations in this country and how devastating and cruel these cuts will be and the very unpleasant effects that will result. Before I do that, I want to put the cuts into context.

I agree that sometimes a government has to reorganize its priorities. There are certain times when tough decisions have to be made. Simply because a program was funded 10 years ago does not necessarily mean that the program has to be funded in perpetuity. I agree with that. A government should on a daily basis be looking at and prioritizing its agenda, programs and initiatives. However, I want to put this into context because it is very important.

In 1993 when the Conservative government under prime minister Mulroney lost after nine years in office, this country was in devastating financial circumstances. Interest rates were close to 12%. Unemployment was in excess of 11%. The annual deficit of Canada was $43.1 billion, and I said billion, not million. The debt to GDP ratio was at 73%, its highest level ever. Unemployment was increasing. The World Bank had basically given up on this country. I believe that Canada was headed for bankruptcy.

In that case there were some tough decisions. There were cutbacks that were necessary. Through good government and with the necessary control of the fiscal monetary levers available to the government, Canada's success has been startling. We all know the results.

Canada has had eight consecutive surpluses. Interest rates are at an all time low. Three million jobs have been created over the last five or six years. Whatever context we want to use, whatever we want to compare it to, whether it is debt to GDP ratio, jobs created, interest rates, et cetera, the country, when compared to the G-8 or any other countries in the OECD, has been ranked one, two or three and it has certainly been very successful.

That was the context back in 1993. In 2006 when this Conservative minority government came it power, it inherited a surplus of $13.2 billion. That was just a little contextual background leading up to these devastating cuts that were made to certain vulnerable Canadians and announced last month.

The first one I want to talk about, in the whole scheme of our $210 billion budget, perhaps does not amount to a significant amount of money, I found very cruel and devastating. It is the $5 million cut to the budget of the Status of Women. Coupled with that was the pronouncement of the government that it would no longer consider any applications for funding to any women's groups that advocated equality. In my riding, and I believe the riding of every member from across Canada, it will have a devastating effect because that is what a lot of these groups do, and they do it successfully. Their job is not done.

I want to quote from a release from Kirstin Lund who is the chairperson of the Prince Edward Island Advisory Council on the Status of Women. She says:

If Canadian women are equal, how is that they made just 62% of men's incomes in 2003, even though they made up 47% of the workforce? If Canadian women are equal, why is it that 43% of all children living in poverty live with a single mother? If Canadian women are equal why are there over six times as many female victims of sexual assault as male victims? Why are female victims of spousal violence more than three times as likely than male victims to fear for their lives? And why do women make up 84% of all victims of spousal homicide?

This question has been asked of the Minister of Canadian Heritage in the House a number of times and people are very upset. This group is upset. Groups right across Canada in all 308 ridings are very upset. The answer I have heard over and over again from the minister was that the government considers women to be equal and it was not necessary. Again, I find that totally unsatisfactory. I do hope that as we go forward this particular cut, more important, this particular restriction, will be lifted and we can go back to the way it was funded in the past.

The second area I want to talk about goes back to my original premise that these cuts are focused. It is like a rifle. They are targeted at certain groups. They are targeted at the illiterate, women, aboriginals, youth, poor people and environmentalists, as well as certain groups within society that this particular minority government, for one reason or another, just does not like and does not feel that it represents.

The second cut that was announced by the finance minister was the $17.7 million from the budget under the literacy skills program. As everyone in the House and most Canadians are aware, this is a very serious issue. Most studies indicate that over 30% of all adults have certain literacy and numeracy deficiencies and until some form of remedial action is taken, they cannot participate in the knowledge economy. In the province I come from, Prince Edward Island, under this program the provincial government received approximately $325,000 of annual funding for a literacy program. There was another voluntary alliance, the Prince Edward Island Literacy Alliance, which received approximately $100,000.

It was not a great amount of money, but it was to be used to coordinate a lot of volunteer organizations that were working in the communities each and every day dealing with this literacy issue. They were doing very good work. That is gone now. This money was leveraged to the volunteer sector and the government's response was that the sector was not doing its job and was not successful. The government needs to tell that to the groups and volunteers who were involved and to the people who benefited from those programs.

I want to quote from the executive director of the Prince Edward Island Literacy Alliance, Catherine O'Bryan, who said:

Why isn’t our government concerned with the betterment of all Canadians? This cut comes at a great expense to the very people who struggle to participate fully in the community--the message from this federal government is clear: People with low literacy skills don’t matter.

I would like to quote a statement in the Globe and Mail of October 5 made by the President of the Treasury Board in response to those people who have friends and relatives who have some degree of literacy problem and are concerned about these groups, individuals and organizations. He said:

I think if we're spending $20 million and we have one out of seven folks in the country that are functionally illiterate, we've got to fix the ground-floor problem and not be trying to do repair work after the fact.

That was a quote from the government. That was the response to those groups, individuals and organizations that are so concerned about this important problem.

Another cut was made which I do not believe has sunk in yet. It is going to affect the tourism industry which has been struggling over the last couple of years. A whole host of factors have been working against it: the price of gas has gone up, the Canadian dollar has risen significantly over the past six or seven years, security issues restrict a certain number of visitors crossing the border into Canada, and the lack of international marketing.

A whole ménage of factors have driven down the number of tourists, especially international tourists. I am talking about the $78 million cut from the visitor GST rebate program. This program allowed international visitors to get a rebate on the GST they paid on goods purchased here in Canada. This is going to make us much less competitive on an international basis.

Two particularly important segments of this industry that are going to be affected are the bus tour business and the international convention business because this rebate is built right into their budgets. If a bus tour is coming up from New York City and it is going to spend seven days touring Quebec, Atlantic Canada, and Ontario, the GST rebate is built into its budget. When it loses that rebate, that basically makes our product 6% less competitive than it was before this cutback was announced.

It is my position that this cut was not well thought out. The Canadian Tourism Commission, all the provincial industries, and all the tourism groups, are dead against this cut. I do not think this was actually thought out and it is going to make us less competitive. This is just one more nail in the industry's coffin.

I understand the finance committee has voted to review this particular cut because it is very concerned about it too. I hope that after the finance committee has done a thorough review on the issue and hears from members of our tourist industry from all provinces, the government will reconsider this particular cut.

Another cut that was made and I do not know why this was made, it was a small amount of money, but there was a cut made to the museums assistance program. It was not big bucks but this small amount of money was leveraged through the volunteer sector and a lot was accomplished with a very few dollars.

In my province seven museums received between $20,000 and $24,000. From a Government of Canada context, that is not a lot of money. However, they were able to take this money and most museums were also able to access one student under the youth employment strategy which I am going to speak about in a few minutes because that was another cut we have seen.

They were able to leverage those two programs and keep open their very small community museum. It is not a lot of money, but the effects of the cut will be devastating on these seven communities that had community museums. Hopefully, they will continue to open, but it is going to be a real struggle. We, representing all Canadians, have to ask the question and that is, why? Silence. Why would the government do it?

The court challenges program was ideologically based. This was a program that allowed certain groups and organizations to challenge a particular law, especially with the enactment of the Canadian Charter of Rights and Freedoms. We did not have any judicial interpretations, how it would be interpreted by our courts. There were certain groups and organizations that took advantage of it. It changed certain laws. It changed the way it responded.

An example from the east coast of Canada was the whole Marshall initiative dealing with native rights in the fishery. A lot of the Acadian groups made certain challenges to determine what was their right under the Canadian Charter of Rights and Freedoms to access schooling for their children, what cluster had to reached and what criteria had to be formed. This was tremendous for these groups and organizations, but again, that is gone, out the window totally.

The youth employment strategy was also cut. Again this was a small program that communities, groups, and non-governmental organizations were allowed to access and that they could lever. Every member of Parliament is fully aware of this program. Probably 70 or 80 students from each riding on average were able to access the youth employment strategy. It was a very low budget program.

If it were a non-governmental organization like a community museum, like the Canadian Cancer Society, or the heart foundation, they would be able to access students, not for the full summer but I believe the maximum was 8 weeks or 12 weeks. They were only paid a limited amount of money, around $7.50 an hour and an NGO would get 100% financing and private enterprise would get 50% financing. There has been a 60% cut in that program.

Again, I just have to shake my head. I ask why, what are we doing here? We had a $13.2 billion surplus. In most instances this was a young student's first entry into the workforce. It was so important for these young people and again, for no reason, just thrown out the door and everyone here is shaking their head.

There were other programs like the Canadian volunteer initiative. When we look at all these cuts, they were made to the most vulnerable people living in Canada. What scares me the most is that the finance minister announced there are another billion dollars of cuts coming next year. There have been accusations over the past that the Prime Minister has a hidden agenda. I disagree with that proposition. The agenda is clear, the agenda is obvious, and the agenda is very disturbing.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I rise on a point of order. As you know, earlier this morning I had the pleasure of addressing Bill C-28 in the House. I have reviewed the bleues and I noted that as I was speaking to Bill C-28 I mentioned that our tax initiatives regarding seniors would remove 85,000 pensioners from the tax rolls.

I was then asked a question by the hon. member for Yukon and inadvertently responded that it would remove 850,000 pensioners from the tax rolls. I would like to correct the record as it pertains to my response in that our tax measures for seniors and pensioners will remove 85,000 pensioners from the tax roll.

[Pierre Paquette, Bloc, Joliette, QC]

Marcel Gagnon. I can mention his name because he is no longer a member here. He really sounded the alarm about the fact that thousands, if not hundreds of thousands, of older people were not receiving the guaranteed income supplement and that the federal government was dragging its feet in promoting awareness of this program. Several thousands of them were able to correct the situation, but there are still tens of thousands of people who have not been informed of their rights.

For our part, we would have preferred that this measure be accompanied by a real campaign to make this program known to older people who are entitled to the benefit. At the same time, we would have liked to have seen a retroactivity rule so that those people who had not received the supplement because they did not know about it could obtain the payments of which they had been deprived. Once again, these people have had to face the bureaucratic indifference of the federal government.

Still dealing with individuals, they have created a non-refundable $1,000 tax credit for employment income. For 2006, the amount will be $250; it will be increased to $1,000 for 2007. A non-refundable public transit tax credit has also been established. I spoke about that previously, and I will refer to it again later because this is an extremely important measure in the campaign against greenhouse gases.

The Bloc Québécois would have preferred a refundable tax credit, because we know that people who use public transit—not all of them, but many—do not have their own cars, have low incomes and therefore do not pay taxes. This is a first step, but we should improve this measure in a future budget by making the tax credit refundable.

A tax credit has also been introduced for textbooks, as I mentioned. This credit will be up to $65 a month for full-time students and $20 a month for part-time students. Considering the cost of textbooks, I think everyone will agree that this is an extremely beneficial measure for students. It will also help to reduce student debt—though obviously not as much as might be liked.

All in all, this is a positive measure and in the future, other measures should be added, in order to improve the situation of students, who, particularly in the Canadian provinces, may incur a lot of debt. As we know, Quebec has a system of loans and bursaries needing improvement, because the government in place, led by Mr. Charest, skewed it by transferring to loans a whole series of items formerly covered by bursaries. Some corrections will be made in this respect, I am sure, once the Parti québécois resumes power in the coming months.

And that goes for student debt, too. Very clearly a substantial transfer for social programs and post-secondary education will be required in the next budget. The Bloc Québécois imposed this condition, prior to lending its support for the upcoming budget.

With the Standing Committee on Finance, I have been able to travel all across Canada. Yesterday we were in Quebec City. Everyone acknowledges that a transfer of $4.9 billion is needed, including $1.2 billion for Quebec and some $550 million for universities and CEGEPs in this province. This measure is aimed at individuals, but it does not deal with the whole problem of student debt.

Another measure consists of raising from $767 to $1,000 the refundable supplement tied to medical expenses; this was simply indexed. This measure, aimed at people who need special care is positive, all in all. Let us hope, though, that it is not a way of fostering development of the private sector, which already plays a large part in our health system.

As I said earlier, these are the provisions that affect individuals. We feel that the most important of these elements are the tax credits for public transit, textbooks and tools. The Bloc Québécois made all of these suggestions in the past in private members' bills that we introduced but that were never passed. I would emphasize that these are only first attempts that ought to be improved upon in coming budgets.

I mentioned the tax credit for public transit. We must also ensure that tradespeople can benefit from a $1,000 deduction for expenses related to tools. In some trades, tools must be upgraded regularly because of changing technology. Lastly, with respect to the tax credit for textbooks, we think it would be logical for the federal government to abolish the GST on books, which are a cultural product that must be as accessible as possible.

Because of the positive elements in this first area, the Bloc Québécois will support Bill C-28.

With respect to businesses, specifically fishing businesses, as I said before, the Bloc Québécois has always supported Quebec fishers. We are keenly aware that the number of new people going to work in the fisheries sector is dwindling, just as it is in agriculture. This problem will get worse over the coming years. The fishing industry is vital to the survival of several of our regions, especially in coastal areas. The government's proposed measure encourages the intergenerational transfer of fishing businesses. We will support it. However, we will continue to demand greater tax benefits for the transfer of agricultural and fishing businesses to individuals outside the family.

Of course the emphasis should be on transfers within the family, but, as we all know, children of farmers and fishers may very well opt not to follow in their parents' footsteps.

There should also be tax credits for businesses that are transferred outside the family circle in order to keep them going. This is important for the economic vitality of our regions and the occupancy of the land, which is a consideration that deserves greater attention.

It would not make any sense to allow regions to empty out even though they have good potential for economic development if just given a little help to do what needs to be done. It would not make any sense to empty out these regions only to discover that social costs in the large urban centres are going through the roof because of the ensuing rural exodus. We should attend, therefore, to the occupancy of the land, and this is a measure that does so. As I was saying, though, it should be expanded.

Finally, food security is very important to Quebec. Quebec is virtually autonomous in regard to food. Some crops, of course, do not grow very well in Quebec, for example oranges. However, enormous progress has been made with products that can be adapted to the Quebec climate.

For example, in my riding of Joliette, we used to have a flourishing tobacco industry. The reduction in tobacco use—obviously a good thing—and the decisions made by multinational corporations to purchase more from emerging countries like Brazil and China have resulted in nothing less than the closure of this industry over the space of only a few years. Of the 56 farms that existed in 2000, only three still produce tobacco. The others had to be converted to other crops.

The federal government created a $12 million conversion assistance program for Quebec. This is a step in the right direction, but it is not enough. When farmers change to a new kind of crop—for example melons, Chinese cabbage, asparagus or cauliflower—they are not always successful because their land is not necessarily suitable or because certain crops are very difficult.

There may be a period of trial and error therefore. I want to take advantage of this opportunity to say that our tobacco producers in Quebec—although it is true of Ontario as well—need more assistance in converting their land because we do not want to lose these agricultural areas.

As for corporate taxation, I will focus mainly on small and medium sized businesses, because, as I mentioned earlier, they have become, in a sense, the victims of the fiscal imbalance and inequity. We would therefore fully support an increase in the sales figure that would allow small and medium sized businesses to have access to a lower tax rate.

Our 2000 election platform included the following demand:

Corporate taxation should be reformed to ease the tax burden of small and medium-sized companies to help them become more competitive on international markets.

That is exactly what we stated in our party platform in 2000.

Small and medium sized businesses, by their very nature, are often the starting point for new ideas. They are also better adapted to the reality of the regions. Consider the following example.

We know that businesses in the softwood lumber industry are growing larger and larger in terms of production volumes. This is true in western Canada and the United States, and in emerging countries and the Scandinavian countries. Quebec has focused on development in which the regions have their place within the chain, but the only way to guarantee their competitiveness is by ensuring that smaller sawmills have a certain specialty and orders that cannot be filled by the larger businesses. This will therefore require a great deal of work in research and development.

Furthermore, we would have liked to see the government add a surtax on oil industry profits in Bill C-28. Yesterday, we began to see some results. Sky-high profits were taken straight from consumers' pockets because of the absence of competition in this sector.

As a final point, we also called for a reduction in the excise tax on volumes of beer brewed under 75,000 hectolitres. This would allow these businesses to remain competitive within the domestic market and to think about developing external markets.

Accordingly, for all these reasons, and despite the shortcomings I mentioned, the Bloc Québécois will support Bill C-28.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I am pleased to take part in this debate on Bill C-28, an act to implement certain provisions of the budget tabled in Parliament on May 2, 2006.

As hon. members know, the Bloc Québécois supported this Conservative budget, essentially because the Prime Ministerand his government promised to correct the fiscal imbalance in the next budget, which is expected in February or March 2007 to cover 2007-08. Those were the circumstances in which the Bloc Québécois gave its support.

The budget also contained provisions that addressed issues raised historically by the Bloc Québécois, such as the tax credit for public transit. I remember that a member from the Chicoutimi area—from Jonquière, to be exact—had introduced a private member's bill along those lines. We are glad to see that Bill C-28 includes a tax credit for public transit. There is also a textbook tax credit, something the Bloc Québécois has consistently called for, to give students the easiest possible access to textbooks. In fact, we would like to go ever further. I will come back to this.

Lastly, there is the tax deduction for microbreweries. I would like to pay tribute to the extraordinary work done by my colleague and friend from Saint-Hyacinthe—Bagot—I cannot say his name, but he knows who he is—who led the charge on this issue, which I also helped to promote and which was finally addressed in the last budget. I congratulate him on this work and on this success, which is due primarily to the efforts by the Bloc Québécois to convince the other parties, especially the Conservative Party when it was in opposition, that this request was worthwhile. I will come back to this as well.

Because of these provisions, we are going to support Bill C-28. I will describe the bill very briefly, because the people following this debate at home must sometimes be wondering what it is about. It is extremely technical—always a bad thing—but that is the way budget bills are. Nevertheless, it will affect the daily lives of a huge number of Quebeckers and Canadians.

The bill has five main provisions. The first implements a series of tax measures for individuals. For example, it implements credits for apprentices and tradespersons. I want to point out that this is something the Bloc Québécois has been seeking for a long time. Our member from the North Shore introduced—a number of times—a private bill along those lines. It also increases the non-refundable credit for persons receiving a pension, implements a public transportation credit, which I talked about earlier, and increases the refundable credit for medical fees. This is the first main provision, which affects individuals.

The second main provision is on extending benefits to businesses. For instance, it extends to fishing businesses a number of benefits that already existed for agribusinesses. There are various measures in this second section on businesses, capital gains, the transfer of a business to other members of the family and anything to do with agribusiness tax benefits. That is the second main provision, which affects businesses.

The third main provision in Bill C-28 implements various tax measures for businesses, but on other levels. Among the measures in this bill, we find the abolition of the surtax on the revenue of Canadian corporations and an increase of the amount a small business can earn if it wants to benefit from a tax credit. This last item is particularly interesting. Tax equity has not yet been achieved in the federal tax system. This is true for individuals and businesses alike, as we have realized. The purpose of this last measure in particular is to correct, but not entirely, this unfairness in the tax system for small and medium sized business, which, I would like to remind hon. members, are the lifeblood of the Quebec and Canadian economy.

The fourth main provision or series of legislative changes is on lowering the tax rate on capital property for Canadian banks. I will come back to that another time.

Finally, the fifth main provision is on a series of measures to lower excise tax on the first 75,000 hectolitres of beer brewed in Canada in order to stimulate the growth and emergence of microbreweries.

Members know that this is a very buoyant industry in the regions. This is true of Quebec, but it is also true of the rest of Canada. However, our industry is facing ferocious competition from foreign microbreweries, especially American ones, which are not so much on the micro side. They may not qualify as macrobreweries, but almost. These are breweries producing millions of hectolitres of beer each year, while ours produce less than one million. We called for a reduction in excise tax for these businesses, like the one most of our competition is benefiting from in Europe and the U.S. As I indicated, microbreweries are not the same size over there than they are in Quebec and Canada. It would therefore be important that ours have a comparative advantage.

I will not expand any further on that. I will not be able to address all the measures contained in this bill, which, as hon. members can see, is pretty thick. Nevertheless, I will focus on those measures I saw as the most worthwhile or interesting, which I mentioned at the beginning of my speech.

The first tax measure for individual taxpayers described in this bill is a deduction for tool expenses for apprentices and tradespeople. As I said, the government is allowing expenses to be deducted up to a maximum of $1,000 or the lowest of $1,000 or 5% of the apprentice's income over the year. If 5% of the income comes out to less than $1,000, the deduction will be 5%; if it comes out to more than $1,000, then the maximum deductible amount for tools will be $1,000.

Permitting the deduction of those tools is an important step because, as a rule, these people are self-employed workers who live on incomes that are extremely variable. Some apprentices and tradespeople who work for companies are required to buy their tools at their own expense. For example, in most of the garages where our cars are repaired, the tool kits belong to the tradespeople and mechanics. They have to pay for those and, even if they sometimes are on salary, that represents an extremely significant expense.

The maximum will be $1,000 for apprentices and $500 for established tradespeople. This is a measure that we have been demanding for a long time, as I mentioned. Once again, it is late in coming but at least it is there. Tradespeople will be able to benefit from it in coming years.

This tax measure also increases by $1,000 the maximum non-refundable credit to which pension recipients are entitled. The maximum non-refundable credit will now be $2,000. This is obviously a positive measure but it does nothing to correct the poverty in which many of our older people find themselves. In particular, this does not respond at all to the demand that the Bloc Québécois has made many times. Again, I pay tribute to our former member for Saint-Maurice—Champlain, Marcel—

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, it is always so interesting to participate in these debates and hear how everybody has their own terms and their own thoughts about what are successful programs and what are not. Our whole intent, as elected officials, is to help Canadians and ensure our country continues to be productive. We all have choices to make on what we consider are priorities.

I am pleased to have a chance to speak to Bill C-28 today and to tell members why I cannot and will not ever support the bill before us. Frankly, it is nothing short of being a disgraceful, selective document that panders to the very narrow electoral base of the Conservatives. As such, I believe it is bad for our country.

Yesterday marked the 13th anniversary of the 1993 election, when the Liberal Party won government from the Mulroney Conservatives. Our Liberal government eliminated that deficit of $42 billion and balanced our budget, finally, in 1997, with the help of Canadians and with the leadership shown by the government. We went on to record eight consecutive balanced budgets and restored the nation's AAA credit rating.

I would remind members that we were at a point of almost bankruptcy and were being referred to as a third world country. I also remind members of the amount of work that Canadians had to do to get us out of that debt and to put our country on a balanced footing.

We slashed the federal debt, both as a percentage of the economy and in absolute dollar terms. Canada's debt to GDP ratio dropped by 50% over our government's tenure. We achieved the best fiscal record of all the G-7 group of world-leading economies and the best of any Canadian government since Confederation in 1867. We are very proud of that.

Prior to this past spring, the federal Conservatives last balanced a budget in 1912. We wonder what the future will hold as we go forward.

However, I will go back to the present situation.

The minority Conservative government inherited the best fiscal situation in Canadian history and it is failing Canadians now by neglecting the future challenges in putting forward this visionless budget. It is a simple case of some sort term gain and long term pain for our great country, which we have all worked so very hard to build over the last 13 years.

Budget 2006 has done nothing to bolster Canada's productivity and make it more competitive on the world stage. David Crane and other senior newspaper columnists talk about how important it is to have that productivity agenda moving forward. There is nothing in the budget that relates to that or is going to be investing in those areas.

The budget neglects to make any significant improvement and investments in education and innovation. Our Liberal government had a concrete vision that would have put us at the forefront of competitiveness and innovation. This lacklustre and visionless budget contains virtually nothing in this regard.

Another example is our last fiscal budget update provided $2.5 billion for university research, which is an extremely important area for our country. The Conservative budget provides $200 million, which is less than one-tenth of our commitment. Under the Liberal government, the best and brightest were flocking to Canada, due to our sound investment in research and development.

How will Canada compete on the world stage, in the future, with a visionless budget? How can Canada continue to nation-build when it has a government and its budget that cares more about politics and how to score points than sound fiscal management?

The minority Conservative government is continuing its legacy of failing Canadians through our post-secondary education system, forcing the provinces to go it alone and abandoning our students across the country. I remind hon. members that our students are our future.

Prior to the Conservatives and the NDP forcing the last election, the Liberals had made significant commitments in the November 2005 fiscal update, including $4.1 billion toward post-secondary education.

The Conservatives offer a measly Canada textbook credit, a $500 annual credit for textbooks. One wonders what that really means in dollars. This is worth exactly $77.50 per year for students who spend $500 or more on textbooks.

The Liberal Party had proposed a fifty-fifty plan to pay half of the tuition in the first and last years of post-secondary programs, which would have been worth thousands of dollars per year to students and would have been of enormous benefit to Canada and to Canada's future. Seventy-seven dollars and fifty cents will do nothing to increase access or decrease student debt.

Simply stated, the Conservative government has failed to make post-secondary education a priority.

The Liberals know that we must invest in our students and ensure that they have the tools they need to succeed in life. I am very pleased to remind hon. members that Liberals actually care about Canada's students, and I think our past practice has shown that.

In fact, in our 2006 election platform, we had proposed to expand Canada access grants to cover all four years of study and to develop a fifty-fifty plan, which would have paid for half of the tuition of all Canadian students for both the first and the last year of study. We proposed to conduct a comprehensive review of student assistance, to provide additional funding for Canadian students who study abroad, and to make a 50% increase in funding for graduate scholarships. These were all important initiatives, as I am sure all of my colleagues would agree.

These Liberal initiatives were very popular in my riding of York West, especially York University, which, I am very proud to say, is in my riding. This exceptional school prides itself on the pursuit, preservation and dissemination of knowledge. It provides excellence in research and teaching in pure, applied and professional fields, testing the boundaries and structures of knowledge. This community of faculty, students and staff is committed to academic freedom, social justice, accessible education and collegial self-governance. I am very proud to represent it.

Another failure of the Conservatives is their transit credit, which is another selective tax measure designed to cut greenhouse gas emissions, which we all want to see done, by increasing public transit ridership in the cities. However, a small price decrease in public transit does nothing for ridership. Those who use transit will continue to use it because it is convenient for them. Those who do not use transit will not suddenly run out and buy a transit pass for a $12 a month tax break. I wrote the book on cities and urban transit issues, so I know that this $12 will do nothing to increase ridership.

The Canada employment tax credit is essentially a $1,000 increase in the basic personal exemption, but it applies only to employed taxpayers. I favour an increase in the basic personal exemption for all Canadians, so that seniors and stay at home moms could benefit as well.

But budget 2006, while proposing this selective tax break, decreased the basic personal exemption, effectively hiking income taxes for all Canadians. The minority Conservative government's budget actually raises income tax rates in the lowest tax bracket, which it clearly denied while this was acknowledged by others.

Despite the government's claim to be helping Canadian families, it has raised the tax rate from 15% to 15.5% for the lowest income Canadians. Clearly, the lowest income Canadians are not the priority of the new minority Conservative government. I think it is nothing short of disgraceful. Low income families need our support, yet the government is quietly raising their taxes and giving tax breaks to companies.

The budget fails to provide real tax relief for low income and middle income Canadians. Eliminating Liberal income tax cuts in favour of a 1% GST cut has been panned by every serious economist in the country as a plan that will benefit higher income Canadians at the expense of those who need it most. The Conservatives are actually increasing income taxes, which means that many people who got a refund for 2005 will end up paying in 2006.

The children's fitness credit sounds wonderful but, like the textbook tax credit, it is not actually worth $500 per year. Tax credits are multiplied by the lowest bracket rate, giving this measure a final value of $77 per year. Parents across the country know that it costs a lot more than that to enroll children in much needed sports programs.

The Liberal government's great achievements as a nation builder are also at risk with this flawed budget. Canada remains an exciting and prosperous country, but we must look forward for an agenda with a renewed national purpose. Thanks to the efforts of my previous government, this country can afford a national housing program. It can afford a universal child care program. It can afford investment in research and development to ensure our future priorities.

This budget is unfair and inequitable and increases taxes on the lowest income Canadians while the richest few would benefit. The Conservative government's first budget fails to address the real needs of Canadian families, abandons fiscal responsibility and fails to provide an economic vision for the future. If the government continues down this road, it will undo all of the good work that we did to put Canada at the head of the G-7 and, in the end, only the wealthy will benefit while those most in need will be left behind.

Many of the provisions in Bill C-28 underscore the selective and narrow governing style of the minority Conservative government. It has become frighteningly clear that the government is completely willing to sacrifice our long term economic health for potential political gain. This is clearly unacceptable to Canadians.

I cannot support this budget at this time. It would be wonderful if the government would stand back and try to make some of the changes that clearly need to be done to be more reflective of the Canada we want to see.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, it is a great pleasure to speak to Bill C-28. This budget is full of good news for the people of Canada and the people of Edmonton Centre. I intend to highlight the benefits that it will have in my community.

I am very proud to represent the constituency of Edmonton Centre. This is a time of great economic growth in the province of Alberta, but that growth also comes with great challenges that must be met if we are to enjoy the benefits of growth. The vibrant and diverse people of Edmonton are up to this challenge, and I am pleased to see in this budget that the government is giving them the tools that they need for this task.

First, I would like to talk a little about the constituency of Edmonton Centre. The riding includes the downtown core as well as some of the oldest residential neighbourhoods in the city. It includes part of the scenic river valley, one of the oldest municipal golf courses in Canada, and the oldest municipal airport in Canada, Blatchford Field.

A tour of the riding will show us the Alberta legislative buildings, as well as the Royal Alberta Museum, the Art Gallery of Alberta, the Citadel Theatre, the Francis Winspear Centre for Music and the historic Hotel Macdonald. There are corporate headquarters, along with a thriving small business community and the World Trade Edmonton Centre.

We have two of the busiest hospitals in the city, as well as two of the largest post-secondary institutions in the province. There are new condo developments in historic old houses. There are many shops devoted to antiques, as well as many private galleries showing off the best that western Canadian artists and artisans have to offer.

Edmonton's menu of fine restaurants rivals any city in Canada. There are industrial areas and beautiful parkland. The area is as rich and diverse as Canada itself. There are many seniors' residences alongside condos where young families are moving to bring up the next generation.

There has always been a large immigrant community in Edmonton Centre. Where once Ukrainians came to build better lives for themselves and their children, we see the same thing happening with new Canadians from China, Vietnam, Somalia, Sudan and many other places around the world.

I would like to touch upon the importance of students and the measures that the government has taken for their benefit. At schools, like Grant MacEwan Community College, I am extremely pleased to note that post-secondary students will now have their entire scholarship, fellowship and bursary incomes exempt from income tax. For many of these students, that money represents their entire income and this will free them from having to juggle a part time job while studying for exams. More than 100,000 students will be affected by this measure.

Another institution that is important to Edmonton is the Northern Alberta Institute of Technology. This school is the largest supplier of skilled trades and apprentices in the province and supplies fully 17% of apprentices for the entire country.

Several measures in the budget will apply specifically to students at NAIT. I have been to many forums at NAIT and I have been fortunate to be part of a major funding announcement for new programs and services. I have talked to the students at these events and have listened to their concerns. People accept that tuition fees are part of getting a good quality education, but one of the single biggest costs associated with getting an education and which affects the students' standard of living is the cost of textbooks. It is for that reason that budget 2006 has instituted a new textbook tax credit. This will help students where they need it most, and this credit applies to both full time as well as part time students.

Apprentices are critical to the future of the Alberta economy and, in fact, Canada's economy. There is a surge in demand now and this government is moving to ensure that that demand is sustainable. That is why we have introduced the $2,000 job creation tax credit. Eligible employers will now receive a tax credit equal to 10% of the wages paid to qualifying apprentices in the first two years of their contracts, to a maximum of $2,000 per apprentice per year. This helps maintain a supply of apprentices by ensuring that people look at this training as a stable opportunity for future jobs. It will also encourage employers to grow their businesses with a steady supply of skilled labour.

Once the students leave NAIT, they will also receive a benefit from this budget in the form of a $500 deduction for tradespeople's tool expenses, as has already been mentioned. This measure recognizes the cost of tools beyond the $1,000 that is covered by the new Canada employment credit and provides yet another helping hand exactly when and where it is needed.

Successful students are vital to our future and are represented in the budget by several measures, but I also want to highlight another segment of our population that needs a helping hand.

Our senior citizens have lived and worked through some of the darkest times as well as the brightest. They have raised families. They have fought Canada's wars in the cause of freedom. They have started and run businesses and they have paid a lot of taxes. For too many of them, however, life is a struggle, being caught between the rock and a hard place of a fixed income and a rising cost of living.

It is for this reason that the initiative to raise the maximum amount of pension income, which can be claimed as pension income credit, is so important. Since its inception 30 years ago, the credit has been $1,000. Recently we measurably increased it to $2,000, affecting 2.7 million taxpayers and taking 85,000 taxpayers off of the tax rolls altogether. Those people have worked so hard so we can enjoy our prosperity. It is critical to know that 85,000 pensioners will no longer face the burden of income tax due to this budget, and I am extremely pleased to be able to say that.

Another new credit in the budget will help seniors, but it will also help students and all of us. I am referring to the $500 public transit pass credit. One does not have to spend a lot of time in Edmonton Centre to see how important the public transit system is to that community. Whether it is students making their way to college or school, seniors shopping for groceries or businessmen heading for downtown, the Edmonton transit system covers all parts of the constituency and is relied on by a very large number of people.

This new credit will increase ridership and, thus, also increase the frequency of services. It will also reduce the amount of air pollution that is caused by the large number of cars on the road. This is a tangible measure to conserve our environment and protect the health of Canadians and its value will be felt by those who need it most.

The budget has measures to help out the thriving small business sector in Edmonton. Small and medium enterprises are the real engine of our economy and they need a clean and sustainable supply of fuel on which to run. That fuel is capital and our new government wants to keep their tanks full.

Specifically, the government is reducing the current tax rate of 12% on qualifying small business income to 11.5% in 2008 and to 11% in 2009. In addition, we are increasing the amount of income a small business can earn before it has to pay federal tax from $300,000 to $400,000 as of January 1, 2007.

I take great pride in going back to the riding to tell business owners that we are listening to them, that we understand their concerns and that we are taking steps to help them solve their business problems and develop even more jobs and prosperity. Some of these small businesses are companies that provide tax advice to people who are fighting the high cost of living and the high cost of taxes at the same time. They are the ones who have known for a long time that there is an inherent advantage to being a small business owner when the tax man comes knocking.

There are many more deductions that people can claim and a variety of options for lowering the overall tax burden. Those who receive regular employment income rather than owning a small business have always suffered in comparison, but budget 2006 recognizes that unfairness and treats the problem properly with the Canada employment credit. The new credit covers things like personal computers, stationery, uniforms, clothing and a long list of items that people sometimes are required to purchase for their work. If they were small business owners, this would all be deductible as the cost of doing business.

Now the people who earn employment income will be recognized as well. Every Canadian who receives employment income will get up to $500 for the 2006 calendar year and $1,000 for 2007. This benefit will be felt by all working Canadians, especially the low income earners who face barriers in the form of work related expenses.

This budget makes a difference. It is targeted and focused on helping those who need help while providing much needed tax relief for all Canadians.

The seniors and students in my riding will see a significant difference in their cost of living when these tax measures take effect. Working Canadians will take home more of their money at the end of the day. Small businesses will be able to grow without extra penalties and be able to increase employment. In short, this budget is good news for Canada, good news for the province of Alberta and good news for the riding of Edmonton Centre.

I am privileged and proud to be part of the government that has delivered this budget to the people of Canada and I encourage all opposition parties to help us in making the bill become law as soon as possible.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Mr. Speaker, there are many different ways to assist seniors and we have taken a very dramatic step in assisting our seniors by doubling the amount of pension income that is non-taxable, that is doubling it from $1,000 to $2,000. We have also taken other measures, for example, lowering the GST, so when they spend money they are actually saving on the GST.

We are helping seniors on other matters. such as health care. One of our priorities is ensuring that health care is more readily accessible to our seniors.

I would like to talk about the surplus. We put $13.2 billion down on the debt, thereby saving Canadians interest charges of $650 million per year. The $650 million per year will be reinvested for the benefit of Canadians. We have other strategies that we will be presenting in the future to further assist our seniors.

I would like to underline that Bill C-28 takes direct action to benefit seniors, especially those on fixed pension incomes.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I would like to split my time with my colleague from Edmonton Centre.

I am very pleased to have this opportunity to rise and speak on behalf of Bill C-28, the budget implementation act, which, as the title indicates, is designed to implement certain measures outlined in our budget 2006.

On January 23, Canadians voted for change: a change in government, a change in fiscal accountability, and a change in fiscal management. These are changes to the benefit of all Canadians.

With that change came the direct support for our new government's five priorities. These priorities were outlined in the Speech from the Throne as well as in budget 2006, delivered by the finance minister on May 2.

On June 22, Bill C-13, the first budget implementation act, was given royal assent and many of our fiscal promises were fulfilled. These measures included reducing the GST from 7% to 6% and introducing a $1,200 per year universal child care benefit for parents of children under the age of six.

We introduced other tax cuts as well, tax cuts that Canadians have not seen before. Our first budget cut taxes by an incredible $20 billion over two years. Yes, $20 billion over two years. Our budget offered more in tax cuts than the four previous Liberal budgets combined.

Canadians are very happy with our budget, and I am happy to say that not one of the opposition parties opposed our budget when it came to a final vote, not one. They grumbled at first, but then they studied our budget and saw the great benefit of our government's budget to Canadians. In the end, they did not oppose it, so our budget has the support of Canadians and of the opposition.

I am pleased to be here today supporting the second budget implementation act, Bill C-28. We want to keep rolling out the tax cuts for Canadians and, in doing so, show Canadians that when we make a promise, we keep it.

The action taken with Bill C-28 will cut taxes for pensioners, families, students, users of public transit, and each and every worker in Canada. These measures will make a real difference to Canadians by focusing on their priorities, priorities like lowering taxes for working families, assisting small and medium sized businesses achieve real growth, and helping tradespeople, students, families and seniors.

In short, Bill C-28 delivers on our budget and delivers real tax relief for Canadians. This government recognizes that Canadians pay too much tax. As a colleague of mine previously reported, according to the Fraser Institute, while the average family's income has gone up 1,100% since 1961, its taxes have shot up a whopping 1,600%, outstripping the growth in income.

As I mentioned, this is a new government with a new respect for our fellow Canadians. We need only look at the measures in Bill C-28 to see exactly how we are putting more money back into the pockets of hard-working taxpayers.

Working Canadians are the foundation of Canada's economic growth. However, choosing to work also means additional costs, costs for everything from uniforms and safety gear to computers and various supplies. For some, particularly low income Canadians, these additional costs can impose a barrier to joining the workforce. For others, work related employment expenses are another factor that limits the rewards of their hard work.

In recognition of this, budget 2006 introduced the Canada employment credit, a new employment expense tax credit for employees' work expenses. A credit on employment income of up to $500 will be provided effective July 1, 2006. The amount of employment income eligible for credit will rise to $1,000 effective January 1, 2007.

Budget 2006 also recognizes that creating an environment for more and better jobs and for strong economic growth depends on having a competitive tax system. The engines of our economy, our wealth creators, are businesses, both small and large, and they should not have to face the heavy burden of overtaxation. The businesses that feel this burden most are small and medium sized businesses. They create jobs and are the backbone of our country's economy.

In my riding of Glengarry—Prescott—Russell, small and medium sized businesses are essential. They are the economic backbone of my riding: farms, farm equipment retailers, manufacturing, industry, pharmacies, grocers, et cetera. Without their success, ridings like mine would struggle. Many of us are employed by them. Small to medium sized business is responsible for the majority of all new jobs created in Canada. Whether we live in an urban riding or a rural riding, all of us turn to small businesses for services, and our future economic growth will depend a great deal on their success.

An important way that Canada's federal income tax system supports the growth of small businesses is through a lower tax rate on the first $300,000 of qualifying income earned by a Canadian-controlled corporation. This helps these small businesses retain more of their earnings for reinvestment and expansion, thereby helping to create jobs and promote economic growth in Canada.

With the passing of Bill C-28, and effective January 1, 2007, the threshold for small businesses will be increased from $300,000 to $400,000. In concert, the 12% rate for eligible small business income will be reduced to 11.5% in 2008 and then down to 11% in 2009. It is estimated that these changes will reduce government taxation on these businesses by $10 million in 2006-07 and $80 million in 2007-08.

There is more.

Hon. members from all ridings know that Canada is facing a serious shortage of tradespeople: carpenters, plumbers, electricians, cooks and others. Our government is taking action to encourage apprenticeships and to support apprentices in their training.

Specifically, we will help companies hire apprentices with a new apprenticeship job creation tax of up to $2,000 per apprentice. We will create a new apprenticeship incentive grant of $1,000 per year for the first two years of a red seal apprenticeship program and other programs.

Through these actions, our Conservative government will be investing more than $500 million over the next two years, which will help approximately 100,000 apprentices.

We will also help apprentices and tradespeople with the heavy burden of buying the tools they need to do their jobs. Our government will invest $155 million over the next two years for a cost of tools deduction, which will help approximately 700,000 tradespeople in Canada.

In regard to our seniors, members will no doubt agree that some seniors struggle to live on a small fixed income. As I travel throughout my riding, I often hear seniors ask, “Why does the government not do something to help seniors, those of us on a fixed income?” I am always pleased to state that this is exactly what we are doing. We are providing real tax relief to seniors.

The most important measure involves a doubling to $2,000 from $1,000 of the amount on which the pension income credit is calculated. A deduction for the first $1,000 was introduced in 1975, but since its introduction the amount has remained unchanged. That is unbelievable.

It took our new Conservative government to do something for our seniors to rectify this problem. We recognize and understand the difficulty faced by seniors on fixed pension incomes. To provide greater tax assistance to those who have saved for their retirement, budget 2006 increased to $2,000 the maximum amount of eligible pension income that can be claimed under the pension income credit, effective for 2006 and subsequent taxation years.

The measure will benefit nearly 2.7 million taxpayers receiving eligible pension income, providing up to $155 per pensioner, but not only that, it will remove approximately 85,000 pensioners from the tax rolls. This is real action to the benefit of our seniors.

In regard to Canadian families, they are the very foundation of our society and they play a vital role in the development of our communities. This is why it is important that we reduce their tax burden as much as possible.

One of the ways we are doing this is with the children's fitness tax credit. The health and fitness of our children is very important. As the government, we want to promote physical fitness among children and we want to do it by supporting families directly.

We take families seriously and we take physical fitness seriously. Budget 2006 provides a children's fitness tax credit effective January 1, 2007. The credit will be provided on up to $500 of eligible fees for programs of physical activity for each child under the age of 16.

I am the father of five children. They are involved in fitness activities such as soccer, basketball and highland and Celtic dance. I am pleased to state that finally we have a government that listens to families, that works together with families and that helps families with their real expenses. This is a great tax credit for families. It encourages and supports physical fitness and it is my sincere hope that the opposition parties will support it.

Lastly, I would like to highlight what we are doing for students. We believe that our post-secondary students need to be supported in their hard work in pursuit of academic excellence. Currently, the first $3,000 in scholarship, fellowship and bursary income received by a post-secondary student is not taxed, but any amounts above $3,000 are taxed. Students do not need this. They do not need to be paying tax on scholarships, fellowships and bursaries. They need to use that money toward their education.

I am very pleased to highlight that our new government understands the financial challenges that post-secondary students face and that we are on their side. We want them to succeed in their studies by alleviating financial pressures, which is why Bill C-28 proposes a complete exemption for scholarship income received by students.

Budget 2006--

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, I have Bill C-28 here. As I look through it over and over again, I really do not see how this bill actually deals with, for example, lowering tuition for students.

It does not increase pensions, whether it is the CPP, the GIS or the OAS for seniors.

I also do not see any real investment in public transit. We know that there is serious gridlock in a lot of cities. It has slowed down a lot of the small businesses. Their employees take a long time to go to work. They get stuck in traffic jams. People are crying out for investment in public transit so that we will be able to have better productivity and people will not be wasting their time sitting in traffic jams.

Those are the kinds of things that small businesses, seniors, students and a lot of working families are asking for.

Working families are saying that giving them a tax credit or a small deduction does not help, because, as we know, it takes a lot more than $100 a month to get affordable child care. There is not a chance that they even can get enough money for babysitting by April 2007. Also, this money for the so-called universal child care allowance is taxed back. When I tell working families that they had better put aside some money because the money they are receiving every month will be taxed by April, they say, “Oh, my goodness”.

This budget has nothing for working families that they can count on, especially as it relates to children.