Bill C-40 (Historical)

Sales Tax Amendments Act, 2006

An Act to amend the Excise Tax Act, the Excise Act, 2001 and the Air Travellers Security Charge Act and to make related amendments to other Acts

Part 1 of this enactment mainly implements proposed measures relating to the Goods and Services Tax and Harmonized Sales Tax (GST/HST). Part 2 contains measures relating to the Excise Act, 2001 and other Acts with respect to the taxation of tobacco, spirits and wine. Finally, Part 3 contains measures relating to the Air Travellers Security Charge.
The GST/HST measures, contained in Part 1 of this enactment, are principally aimed at improving the operation and fairness of the GST/HST in the affected areas and ensuring that the legislation accords with the policy intent. In some cases, adjustments have been made to the legislation as originally proposed in response to representations from the tax and business communities.
The principal GST/HST measures are as follows:
(1) Health: confirms the GST/HST exemption for speech-language pathology services; exempts health-related services rendered in the practise of the profession of social work; zero-rates sales and importations of a blood substitute known as plasma expander; restores the zero-rated status of a group of drugs, collectively known as Benzodiazepines; broadens the specially equipped vehicle GST/HST rebate so that this rebate applies to motor vehicles that have been used subsequent to being specially equipped for use by individuals with disabilities.
(2) Charities: ensures that the exemption of supplies by charities of real property under short-term leases and licences extends to any goods supplied together with such real property.
(3) Business Arrangements: provides transitional GST/HST relief on the initial asset transfer by a foreign bank that restructures its Canadian subsidiary into a Canadian branch; removes technical impediments that hinder the use of existing group relief provisions under the GST/HST; simplifies compliance by excluding beverage container deposits that are refundable to the consumer from the GST/HST base; permits an agent to claim a GST/HST deduction for bad debts, and to claim adjustments or refunds of tax, in respect of sales made on behalf of a principal where the agent collects and reports tax; extends the existing agent rules under the GST/HST legislation to persons acting only as billing agents for vendors; better accommodates special import arrangements between businesses in certain situations where goods are supplied outside Canada to a Canadian customer; ensures that GST/HST group relief rules cannot be used to exempt from GST/HST otherwise taxable clearing services that are provided by a group member to a closely related financial institution who will then re-supply those services on an exempt basis to a third-party purchaser outside the group; clarifies the treatment of the right to use certain types of amusement or entertainment devices, such as the playing of a game, when it is provided through the operation of a mechanical coin-operated device that can accept only a single coin of twenty-five cents or less as the total consideration for the supply; confirms the policy intent and Canada Revenue Agency’s existing practice that no GST/HST or provincial sales taxes on a passenger vehicle are included in calculating the maximum allowable value for input tax credit purposes.
(4) Governments: ensures that a small supplier division of a municipality is treated in the same manner as a municipality that is a small supplier; exempts a supply of a right to file or retrieve a document or information stored in an electronic official registry.
(5) HST-related Rules: as announced by the Government of Nova Scotia, limits the availability of the current Nova Scotia HST New Housing Rebate to first-time homebuyers and reduces the maximum rebate available to $1,500; includes in the Act the draft Specified Motor Vehicle (GST/HST) Regulations, which prescribe the value of a specified motor vehicle for the purposes of calculating the 8% provincial component of the HST in circumstances where the vehicle is brought into a participating province and prescribe the manner in which that tax is required to be paid.
(6) Administration: adds a discretionary power for the Minister of National Revenue to accept late-filed applications for the GST New Housing Rebate and the Nova Scotia HST New Housing Rebate for owner-built homes, where exceptional circumstances have prevented an applicant from meeting the normal filing deadline; adds a discretionary power for the Minister of National Revenue to accept late-filed elections between closely related financial institutions for adjustments that they are required to make for the provincial component of the HST; permits the Minister of National Revenue to exchange GST/HST information with foreign governments that are signatories to the Convention on Mutual Administrative Assistance in Tax Matters; adds a discretionary power under the Act for the Chief Statistician of Canada to provide statistical information concerning business activities to the provinces similar to an existing provision in the Income Tax Act.
The measures contained in Part 2 of this enactment amend the Excise Act, 2001 to implement minor refinements that will improve the operation of the Act and more accurately reflect current industry and administrative practices. They also implement related and consequential amendments to the Access to Information Act, the Customs Act, the Customs Tariff and the Excise Tax Act.
The principal measures related to the Excise Act, 2001 are as follows:
(1) Tobacco: extends the requirement to identify the origin of tobacco products to all products, including those for sale at duty-free shops or for export, consistent with the Framework Convention on Tobacco Control, an international treaty on tobacco control; clarifies that cigarettes, tobacco sticks, fine-cut tobacco or cigars, but not packaged raw leaf tobacco, may be supplied to the export market or the domestic duty-free market.
(2) Alcohol: authorizes private laboratories, provincial liquor boards and vintners to possess a still or similar equipment and produce spirits for the purpose of analysing substances containing ethyl alcohol without holding a spirits licence; defers the payment of duty by small vintners selling wine on consignment in retail stores operated by an association of vintners until the wine is sold.
(3) Administration: permits the Minister of National Revenue to exchange excise duty information with foreign governments that are signatories to the Convention on Mutual Administrative Assistance in Tax Matters; adds a discretionary power under the Act for the Chief Statistician of Canada to provide statistical information concerning business activities to the provinces similar to an existing provision in the Income Tax Act.
The measures pertaining to the Air Travellers Security Charge (ATSC), contained in Part 3 of this enactment, include previously announced relief provisions, as well as technical changes to the Air Travellers Security Charge Act.
The principal measures related to the ATSC are as follows:
(1) Relief: relieves, in particular circumstances, the ATSC in respect of air travel sold by resellers or donated by air carriers.
(2) Administration: provides authority for the Governor in Council to add, delete or vary by regulation the schedule of listed airports.

Sales Tax Amendments Act, 2006

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, I thank my colleague for giving me an opportunity to speak to this matter.

Indeed, this is a problem we have heard a good deal about, particularly with the border caucus we have created like our American friends. I am co-chair of this caucus with three colleagues from the three other political parties. We have heard about this problem and also shop owners met with us. The government will not be refunding tourists about $70 million in GST. This is somewhat difficult to accept because most of them were getting the refund in the duty-free shops. Instead of going home with all the money they had left, they were spending it in duty-free shops.

The government had some return on this money. I do not see this saving of $70 million on a budget of close to $250 billion as a good move. I wonder if it is too late to amend the bill. Since this is third reading, it may be a bit late.

The government is encouraged to make further adjustments in a future parliament. I believe this does not need to be done through a bill. The government could make a regulation to ensure that this measure is not implemented. The government is urged to come to its senses and not prevent the benefits linked to the GST rebates for tourists.

People are saying the refund benefited the tourists. But such is not the case. Tourists were being refunded and they would often spend the money immediately. Now, the money goes to the government. I think this is a bad move from the government and it should correct the situation as soon as possible.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, the intent of Bill C-40, which we are studying today at third reading, is to correct various weaknesses with the GST and the excise tax. First, I would like to talk about some aspects of the excise tax, more precisely the measures on tobacco and alcohol, and some other enforcement aspects.

The measures to make some provisions on tobacco in the Excise Tax Act more precise should help the fight against tobacco smuggling while simplifying the collection of the tobacco tax. The bill will extend the requirement to identify the origin of tobacco products to all products, including those for sale at duty-free shops or for export, consistent with the international Framework Convention on Tobacco Control.

We can see that the whole tobacco smuggling issue is something that comes up on a regular basis. It seems that smugglers, from one generation to the next, are more and more original and innovative in their smuggling methods. We have heard a great deal from those concerned, from grocers among others. A kind of secondary, parallel market has sprouted up across Quebec and Canada.

Now the solution lies in part in the measure contained in this bill. We will probably need to ask for other measures to add to the punishment aspect. In any event, we will have to make sure that we really know where the tobacco comes from and that we also know, when a pack of cigarettes is sold outside a reserve for example, where it comes from and where it was produced. There would be no more ambiguity then and the customer would automatically know where it comes from and could not pretend that he or she did not know anything about the situation. This has a major economic impact on the regular network, the legal sales network, including groceries and all the other businesses that sell cigarettes.

Of course we will keep on with the campaigns to reduce tobacco use and hope that tobacco use will diminish. As far as the legal aspect is concerned, we have to make sure that the current law is properly enforced. There is at least one measure that seems to go in the right direction and this is one of the reasons why we will support this bill.

As far as alcohol is concerned, part of the bill deals with some level of modernization. Provincial liquor boards and vintners would be allowed to possess a still, or similar equipment, to produce spirits for the purpose of analyzing substances containing ethyl alcohol without holding a spirits licence.

As we know, our legislation still includes old provisions dating back to the days when some very strict restrictions were in effect regarding alcohol consumption. Some of these principles are still found in various acts, and even in the basic structure of the Quebec liquor corporation act. We are finding out that, in everyday life, with the changes occurring in consumption habits, it is important to provide local producers with as many tools as possible to allow them to develop good products, because this will often help them secure new markets. Indeed, sometimes they are not able to do so at the international level, because those products that are imported in large volumes are often sold at a much lower cost. This is why it is important to move forward with such measures.

A lot of changes are occurring. In my riding, a few years ago, a wine producer created the Vignoble du Faubourg. This producer was awarded the Grand prix du tourisme in Quebec, and it has achieved promising results. Authorizing the use of this type of tools will definitely allow us to move forward in this area.

There are other things in this bill, including measures pertaining to the air travellers security charge, and some tax relief. Other measures that deal with various areas include: a tax exemption for certain medical services; a lower tax burden for charities; helping small vintners—as I mentioned earlier—and measures relating to tobacco.

So, for all of these reasons, the Bloc Québécois will support this bill. This is a piece of legislation that includes many small provisions. A large number of measures are proposed, such as those in the health sector.

For example, the government is amending the act so that, in the future, speech-language pathology services will be tax exempt. This amendment to the act will confirm the tax exempt status of those services.

The change will facilitate access to services for seniors who suffer strokes. There are many interesting measures. There is one that ensures that the exemption of supplies by charities of real property under short-term leases and licences extends to any goods supplied together with such real property. That will allow charities to fulfill their social mission with fewer financial pressures.

There are also measures concerning business arrangements. The Goods and Services Tax Act will be amended to provide transitional relief on the initial asset transfer by a foreign bank that restructures its Canadian subsidiary into a Canadian branch.

This last measure will give a foreign bank which owns a Canadian subsidiary the tools it needs to restructure it to the benefit of the Canadian economy. That will help foreign banks doing business in Canada to transform their subsidiaries into Canadian branches and will stimulate an increase in competition in the Canadian banking industry. We know that that industry will see more change in the future.

The debate on bank mergers is not over yet. Right now, measures are being introduced to allow Canadian banks access to foreign markets but when foreign banks have subsidiaries here we want to facilitate matters for them, depending on the context and according to the law.

The bill removes technical impediments that hinder the use of existing group relief provisions under the GST. This amendment simply clarifies the rules of application of the legislation already in effect. It is very technical in nature. In addition, the bill simplifies compliance by excluding beverage container deposits that are refundable to the consumer from the GST base. This will make it easier for businesses to manage collection and will lighten the regulatory burden associated with deposits, with a view to promoting more recycling and environmental protection.

The measure also clarifies the treatment of the right to use certain types of amusement or entertainment devices, such as gaming devices, when provided through the operation of a mechanical coin-operated device that can accept only a single coin of twenty-five cents or less as the total consideration for the supply.

This obviously is an omnibus bill that addresses a wide range of specific issues.

During speeches by my colleagues in this House I have often raised the issue of GST for tourists. I wanted to see in this bill or in any decision made by the government, assurances that all the negative effects of the measure announced in the budget would be eliminated.

The government probably realized in good faith that the GST rebate program was costing too much. It decided to eliminate the program, when it could have tried to find another way to manage it. Some countries that have this type of program simply outsource the management of the program. Thus, it is businesses—for example, duty free shops or other types of businesses—that ensure the administration of the tax and simply reimburse the government what it is owed. This eliminates a very costly bureaucratic process.

We should look into these avenues in order to find a way to maintain this program, which provides a significant competitive edge for the tourism industry in Canada and Quebec. Similar programs exist in other countries and some original ideas have been proposed.

What is more, a number of months ago, the Conservative government made systematic cuts in several areas. It was like these cuts were made blindly, without any consideration to their impact. We now have a concrete example that applies to the purpose of this bill before us and that calls for us to move forward to correct the situation.

I think that it is fair to say that this bill, which was introduced quite a while ago, puts forward measures worth recognizing. I would like to come back on those in relation to health, an area where speech therapy is under consideration for becoming zero rated. I do believe this is a very positive step, which would confirm the zero-rated status of speech therapy services and facilitate access to these services for youth with language disorders.

Also, this amendment will facilitate access for seniors who suffered a stroke. This is why I think it is important that these measures be implemented as soon as possible.

The sales and importations of a blood substitute known as plasma expander could also be zero rated. It is a little complicated to explain, but basically a blood substitute can be used in the treatment of people who have suffered massive blood loss, severe burns or an open fracture.

The intention was to ensure that these products would be zero rated. People's health is important, and these kinds of measures have to be put in place.

The government will restore the zero-rated status of a group of drugs collectively known as Benzodiazepines. These include medications such as Valium, Ativan and other similar products used primarily to treat anxiety, for alcohol withdrawal or as a preanesthetic medication. These help and improve people's health.

With respect to charities, the bill will allow the exemption of supplies by charities of real property. I think that is a worthwhile measure.

As a whole, this bill deserves to be passed by this House. It is currently at third reading. It has been considered and amended where necessary. It also announces work that will have to continue in these areas.

Concerning the GST and the excise tax, a thorough examination and technical improvements are often needed. Some have been suggested during this debate. It is now time to pass this bill and to ensure that it will really fulfil its role, that it will make some situations more human and that the very concrete work done to allow small wine businesses, for example, to make a name for themselves and to develop, will be made more effective.

This bill is non partisan in nature and does not require an extensive debate. Legislators have to intervene in very contentious areas, but, at times, they must support bills that are the result of in-depth discussions among participants and of recommendations coming from different areas.

Time spent on drafting a bill often impedes a lot with action. It is important to act quickly. In this case, we have already waited too long to implement some of these measures. That is why I want this bill to pass as quickly as possible.

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

Mr. Speaker, I congratulate my colleague for his speech on the bill.

Among other things, he mentioned the measures that have been announced concerning the GST collection. The member explicitly mentioned the five categories affected, one of which was charities. Charities will be exempted from all taxes on goods related to real property. These goods are supplied with real property leases and particularly short-time leases. Fundamentally, that will alleviate the burden on these organizations, which will be in a position to concentrate on their real mission as soon as the bill is enacted.

How can these measures allow charities which are in our ridings to concentrate on their mission and how will it alleviate their burden? How can we make sure that the people who receive services from these organizations can effectively receive them?

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I thank the hon. member for his question and for the details that he provided.

When we pass laws, it is particularly satisfying when such measures can be implemented. Charities are often organizations that provide services to specific clienteles, that have specific needs in terms of equipment, and that may also have specific building needs to be able to do their work.

What we hope to do with this measure is to streamline as much as possible the administrative rules governing charities, so that they will spend as little money as possible on administrative procedures.

This provision ensures that the exemption of supplies by charities of real property under short-term leases and licences extends to any goods supplied together with such real property.

For example, a building may be bought in my riding by a charity, through a foundation. At some point, the charity may find out that it needs this equipment. They have their day to day operations, and this measure will help reduce costs, particularly the administrative costs that often results from such operations.

When it comes to the GST, things can quickly get complicated. Additional administrative staff is required. It is very important that charities can fulfill their social mandate under less financial pressure. One of our responsibilities as elected people is to ensure that this is done, so as to promote the spreading of wealth. At times, this can be achieved in a spectacular fashion at specific events, but it can also be done in a concrete way, through measures such as those included in this bill.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, on a more general basis, the purpose of the bill is to make amendments to the Excise Tax Act, the Excise Act, 2001, and the Air Travellers Security Charge Act, and to make amendments to certain other acts.

The bill is some 126 pages long and it includes obscure references to amendments that are not understandable on their own. We would need to look at the existing legislation to understand where they fit and how they tie in with other things.

It would seem to me that the House has taken up a great deal of its time and the committee's time to deal with these matters because they are amendments to legislation rather than through regulation.

It would seem to me that where fine-tuning, operational efficiency and fairness issues can be the objective of the bill, there may be an opportunity here, as an example, to suggest to the Department of Finance that in crafting legislation on matters, such as we are talking about today, that these kinds of issues, rather than being incorporated into the legislation itself and therefore requiring other legislation to change it, that the more judicious use of regulations to the legislation might be a way to get swifter action on some of the important matters that the member raises in his speech about helping charities, vintners, social workers and others.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, my hon. colleague raises a very good point. He is an experienced parliamentarian and has dedicated a great deal of time to parliamentary work.

Indeed, we are talking about enacting legislation flowing from other legislation that has existed for years. I think a good parliamentary exercise with one piece of legislation would be to entrust it to the organizations responsible for reviewing the regulations so that a comprehensive study can be done and a recommendation made.

The observation that always has to be carefully considered is the following. When governments resort to regulations, the legislators are excluded from a part of the process. I have already seen this in other bills. It was a means of avoiding debate in the House to some extent, avoiding debate between legislators by saying that it would be included in the regulations. As they say, the devil is in the details. That is said in negotiations, for instance. Thus, I feel it is important that clear choices can be made between what can be addressed by legislation and what must be addressed by regulations.

This is a discussion that can take place when the Standing Orders of the House are reviewed and in the course of our various activities here. Perhaps we could also find a specific field in which to conduct such a study on a bill that will allow us to see if, indeed, there is not a specific field in which a consensus could be reached and in which studies of this nature could be conducted, and thereby avoid a partisan debate on the matter. It would have to be in a subject matter that is the result of a consensus among the parties of this House.

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

Mr. Speaker, I believe there is not much time left for what I want to say right now.

I wish my colleague could at least give me his opinion on the comment I am about to make and answer a question I will ask.

My comment concerns the hard work done by the Bloc Quebecois and that all parties should do. I believe we could serve as an example of the way members of Parliament should work. It can be seen that we are treating this issue seriously because it is very important for certain communities. This brings me to a question concerning wines.

The excise tax on wines can affect small businesses. And when we talk about small businesses we are talking about communities. I represent the riding of Gaspésie—Îles-de-la-Madeleine. Last year, the budget contained a measure on microbreweries. The same thing could happen with wine. Such measures help small businesses with one, two or three employees, to consolidate and eventually expand. This could even be made part of the appeal for tourists in certain parts of the beautiful and great future country of Quebec. This is the comment I wanted to make on the hard work being done by the Bloc Québécois.

My question is as follows. Does my colleague believe that wines will get the same treatment as microbreweries?

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I thank my colleague for his question. It gives me an opportunity to add something I did not mention before.

This bill will defer the payment of duty by small vintners selling wine on consignment in retail stores operated by an association of vintners until the wine is sold. For very small businesses, any additional cost can really eat into profits, which are often quite slim.

This measure came about because members went to see small vintners and listened to what they had to say. This measure is good for these companies' bottom line. On the one hand, we have a measure that lets them have a still to develop new products, and on the other, we have a measure like this one that relates directly to the GST.

Let us hope that all these measures will help this sector develop better in the coming months and years.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I want to congratulate a number of the members who took the time to review some of the provisions of Bill C-40 as they relate to their regions or matters which are of particular interest to them or their constituents.

In the question I asked of the previous speaker, I was not being facetious. I looked at the bill and took the opportunity to review its various provisions. Being the co-chair of the scrutiny of regulations committee, it made me wonder why so many of these provisions which appear to be clarifying or directed at operational efficiency are not necessarily changing the legislation with respect to the exigency of a tax.

One member described this as an omnibus bill. That is exactly what it is. It touches a number of acts. It does not read as a story from beginning to end where everything builds on everything else. In fact, one has to have in hand the related legislation and the specific sections to which those changes may relate and then they must be looked at in context. I suspect that if we were to take all of the related documents that tie into this to help us understand what it really meant, it would probably take days and days simply to peruse everything.

Having said that, it certainly makes a good case for those who craft the legislation to consider the use of regulations more fully in terms of providing the tools to those responsible for accountability of the legislation to be able to make the kinds of changes where fairness or operational efficiency, et cetera, may be the object. Any regulations appended to a piece of legislation must be authorized by the legislation itself. We cannot make law through regulations, but we can certainly provide the detail.

As a chartered accountant I have spent many years playing around with provisions within the income tax system. That document is very unwieldy and cumbersome, but in some respects it takes into account some of the other tools that are available to modify legislation or at least the application of legislation by the use of regulations. There is a variety of other documents, whether they be interpretation bulletins or information circulars, which also help Canadians.

I wanted to raise that point simply because it happens a lot in this place. It is very difficult for members of the finance committee who have the opportunity after second reading to have witnesses from the department come forward to provide explanations. Everyone is not a tax expert. What is needed is the lay language, what we lay out for other parliamentarians.

The way this place operates, very often parliamentarians have seconded the responsibility to do the due diligence on legislation to their colleagues at committee. They accept that the work has been done in a proper fashion and that the key elements of concern have been raised with officials and other witnesses, who may be stakeholders and have come before the committee to deal with it. It makes it very awkward to ask what the relevance is of the third reading debate if we cannot really get into some of the detail.

There is a lot of detail here. I am not sure whether or not there will be many answers forthcoming from the House. It would be a very interesting process to try to explain some of these measures. For instance, there is a page and a half which deals with the definition of what a returnable container is and a returnable container charge. The amendment in one aspect takes about a half a page to insert the words “the returnable container in a province”. That is the change. I am not sure whether or not there is anything more to that, other than there has to have been a dispute at some point in time where someone challenged the legislation on a clarity issue and this was simply a matter of trying to resolve that and put that issue to bed.

A number of members talked very well with regard to the changes as they affect charitable groups and organizations. I certainly concur with the direction of the changes that have taken place, particularly since most members of Parliament have been extensively involved with charitable groups. Those groups have had very good representation on the Hill. A number of the points they have raised, whether it be directly with members or through related committees, have been very helpful.

Scanning down the list of issues, some who may be watching will probably wonder why we are talking about the GST and HST. That came up in the 35th Parliament when there was legislation to provide for the replacement of the GST with a revenue equivalent, which was taken up by certain provinces. The HST, which stands for harmonized sales tax, rather than goods and services tax, combines both the federal and the provincial taxes into a one line item.

In this bill the principal measures that were taken with regard to the goods and services tax, or where applicable the harmonized sales tax in certain provinces, have to do with a couple of key areas, certainly in the area of health. With regard to health, Bill C-40 confirms the GST-HST exemption for speech language pathology services. It also exempts health related services rendered in the practise of professional social work, zero rates sales and the importation of a blood substitute known as plasma expander. It restores the zero rated status of a group of drugs collectively known as benzodiazepines. It broadens the specially equipped vehicle GST- HST rebate so that the rebate applies to motor vehicles that have been used subsequent to being specially equipped for use by individuals with disabilities.

I looked at those specifically. I cannot say that I have looked at much more in the bill simply because there was not sufficient time to do it properly. The one area where I thought the bill opened up some interesting horizons has to do with the exempt status of health related services rendered in the practise of the profession of social work.

If we look at the related legislation and look at the practise of social work, I have a feeling that the discussion of this and maybe the change that has been made here may open up a broader range of requests for the same exempt status with regard to social work as defined. I am not sure that is a bad thing either, but it does point out that the tax system is never static.

When certain changes are made, others in the same or similar activity want to examine the rationalization for a change in the Excise Tax Act or the Income Tax Act. They want to more fully understand whether or not we are talking about providing benefits to certain groups that may have a stronger lobby or that may have come up with certain other challenges or interpretations to the application of existing rules, to changes in regulations or to changes in the laws in other jurisdictions. We often want to look at those to ensure we are keeping up with the trends with an international filter on what we do.

I thought that was interesting and I certainly support it conceptually. I do not know what might come up, but every time we touch something, others see a relation to their work somehow.

On Friday I had an opportunity to work in my constituency office. I had a visit from a gentleman who has a business which provides home care for seniors. It is an expansive home care service, and includes such things as bathing, medication, shopping, almost whatever service the senior might need. The gentleman asked whether there was any way he could get some breaks. It is an important job and he has to pay people, which is his biggest expense. He would like some sort of subsidy or assistance because, like most social work, it is generally some of the lowest paid work on a per hour basis of most professions. There are a lot of people who are paid very, very poorly in the provision of social related work.

I am not sure how we get from here to there, but this is part of that whole argument about the prosperity gap, about the difference between the rich and the poor. That gap is widening. There are only certain amounts of money. For people who require social assistance, as related to the social work definition, there is only so much that can be afforded and only so much that can be taken out of the customer to provide the services. I flag that issue. This may open up some interesting horizons for a number of businesses that qualify under the current definition of the profession of social work.

There is the discussion also related to charities. As I said, I certainly agree with the exemption of supplies by charities of real property under short term leases and licences.

There is a section on business arrangements. I do not think I can add any more to the debate on that.

There was some discussion about tobacco and alcohol. I thought it was interesting. This morning my private member's bill related to alcohol warning labels was before the House. I looked very carefully at the provisions in Bill C-40 to see if there was a tie-in. I suppose the only tie-in is that they both relate to alcohol, but not with regard to the tax.

In any event, with regard to tobacco, this bill extends the requirement to identify the origin of tobacco products to all products, including those for sale at duty free shops or for export, consistent with the Framework Convention on Tobacco Control, which is an international treaty on tobacco control. It also clarifies that cigarettes, tobacco sticks, fine cut tobacco and cigars, but not packaged raw leaf tobacco, may be supplied to the export market or the domestic duty free market. These changes were made, I am sure, from the interventions of the duty free industry and certainly those who are involved in the export market. We have had a number of discussions over the years about how we operate vis-à-vis other countries with which we have trade relations.

With regard to alcohol, the bill authorizes private laboratories, provincial liquor boards and vintners to possess a still or similar equipment to produce spirits for the purpose of analyzing substances containing ethyl alcohol, which is beverage alcohol. Ethanol is another word that is used to describe it. It is a poison, but I will not go there because that is a whole other area of interest, certainly with regard to me, but in any event, with regard to analyzing substances containing ethyl alcohol, it authorizes laboratories, boards and vintners to possess a still or similar equipment without holding a spirits licence.

That is interesting because it seems to me that in our legislation having a licence to do something, to possess things and so on, is a precursor to doing certain activities. In this particular case, I am sure that probably a number of petitioners made argument before the tax authorities that in the case of private laboratories or provincial liquor boards and vintners, where the analyzing of substances takes place, the need for a licence was not necessary. I suspect that we are talking about some other regulatory implications, but in this particular case I suspect that the licensing process may be a problem for some of them.

The other area I simply want to comment on is the GST rebate program for tourists. As we know, this has been a very contentious issue for a number of members of Parliament, particularly with regard to those members who are in border areas.

Tourism is an extraordinarily important part of the Canadian economy. I had the opportunity to chair the outdoor caucus of our caucus in the last Parliament and I got to know quite a bit about the tourism industry. Particularly after SARS, which was I think what spawned that caucus, that group of parliamentarians interested in the tourism impacts, it was amazing to find out how sensitive the industry was to disruptions that in fact really did not affect tourist areas but were more in the urban centres. Yet we found that in a broad range of goods and services, whether it was lodging, rental of boats or fishing equipment or other purchases of equipment, all of those things took a dramatic decline.

There is another aspect. I think those members who are from the Maritimes, and in particular P.E.I., will tell you that tourism is down very substantially now. They believe, whether because of SARS or because of the GST rebate program for tourists, that those who had come here in the past suddenly found that this was enough to make them look for substitutes. They started to look for other options. In fact, many found that the substitutes, which were a better economic deal for them, had the same or similar benefits or enjoyment they had when coming to Canada.

Therefore, I am very pleased to see that this also has been resolved. I think it is important that Canada's tourist industry continue to be well supported. It is unfortunate that some damage has been done. In an economic downturn, and in particular where the dollar has been quite strong, we have to be vigilant about the unintended consequences of certain moves.

I think it behooves all of us to continue to urge those responsible for the accountability of our financial policy to think it through very carefully and to do the consultations that are necessary to ensure that our tax system remains not only operational but fair.

[Gord Brown, Conservative, Leeds—Grenville, ON]

Mr. Speaker, the member for Mississauga South talked about the tourism industry. The tourism industry is the industry I happen to have grown up in. Over the years I have seen government actions in a positive way and even in a negative way.

The member talked about the GST visitor rebate program. Now, of course, the government has introduced the tour operator and convention incentive program. There were many representations made to the government.

I have had a lot of experience with that GST visitor rebate program. The member talked about accountability. The new program, from my knowledge and understanding, is far more accountable. No American tour groups or conventions have had to pay GST that did not have to pay it before. In fact, no group has had to pay GST that did not have to do so before.

In light of the fact that the new program is much more accountable, is it something the member would be happy to support?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member is quite right. There was a significant threat to the convention industry and the member's riding would certainly have been affected by it.

As legislators, we go through this process: we do our due diligence, we determine where the problems are, and we correct them. Whenever we make changes, it is to help us, as we say in our prayer each and every day in this House, “make good laws and wise decisions”. In this regard, I believe it is good legislation and a wise decision.

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, I would like to ask my friend a question to return the favour he did for me. I missed part of his speech.

Nevertheless, earlier he asked me whether it was possible to broaden the concept of social worker. I went so far as to say that I felt the same thing could apply to a psychologist. I think my friend was afraid we would take the concept of social worker too far. The bill refers to social workers, though.

Would he be in favour of broadening the concept of social work services to include other professions such as psychology or similar professions?

I would like his opinion on this. I am simply returning the favour he did for me earlier, when he asked me about my own speech. I would like his opinion on broadening the concept of social work to include other types of jobs.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I would hesitate to give a definitive answer without having considered it carefully. However, I listened carefully to the member's comments earlier. He spoke about specific cases. He spoke about speech pathologists. He spoke about psychologists. We know that in this complicated, fast-paced world we live in, children often are the victims here.

As a value or as a principle of approach to considering it, I would say that children are important to Canada's future and that investing in their health and well-being is something that is certainly worth considering very seriously.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, the last Liberal and Conservative speakers both have alluded to the damage done to the tourism industry by the cuts last year. Surplus money that was taken from the Canadian Tourism Commission could have been used for marketing the museum assistance program, MAP. Museums are very important in tourism.

Both members talked about the GST rebate, which has been partially reinstated. I do not want the members to be under the illusion that this is fixed. The tour operators and the convention people will get the rebate, which is great, but individual tourists are very important to my riding and they will not.

On Friday night in my speech at the Association of Yukon Communities, I assured the people that we would work to reinstate that rebate. Individual tourists who drive from the United States into Canada, for instance, and we have a lot of them, do not get the rebate any more. I am asking if the member would commit to help me fight to get this reinstated to help our tourism industry.

Finally, I have a constituent named Tony Fekete, who often comes to see me at the airport and suggests that in Canada we should not be ruling by regulation. Canada is unlike Europe, where governments are not allowed to do that. He thinks we rule by regulation far too much and government is not accountable. I wonder if the member would like to comment on that for my constituent.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am glad the member raised the issue of the rebate as it applies to individuals. He is quite right. It has not come back to what it was in the past, which is unfortunate.

Many communities around the country may not have the facilities for tour operators or to host conventions. However, when people go to the local lodges or the small motels and services for the wilderness, the outdoors and the non-urban or even semi-urban, these are the areas where the vitality of that local economy depends on those people.

We often do not appreciate the sensitivity of a few dollars here or there. Even the symbolism of a tax to be paid, which people cannot get back when they go back home, knowing that others can get it, is not helpful.

The answer to the member's first question is that it is very much something that should be reinstated. I know the people in our border communities would like to see that as well.

Finally, with regard to the regulation side, things cannot be done by regulation that are not authorized by the legislation itself. A tax cannot be created in a regulation. The tax must be authorized within the legislation itself.

My comment earlier about looking toward regulations is that when there is some fine-tuning, which clearly is not changing the enabling provision of the legislation but rather clarifying the items or the language so that it clarifies the concerns that taxpayers may have raised in certain other cases, that to do it by regulations certainly is a more efficient way to do it simply because it does not need to come before the House of Commons. It can be done by order in council, basically by cabinet on the recommendation of the related minister.