Bill C-52 (Historical)

Budget Implementation Act, 2007

An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007

Part 1 implements income tax measures proposed or referenced in Budget 2007 to
(a) introduce a tax on distributions from certain publicly traded income trusts and limited partnerships, effective beginning with the 2007 taxation year;
(b) reduce the general corporate income tax rate by one half of a percentage point, effective January 1, 2011;
(c) increase the age credit amount by $1,000 from $4,066 to $5,066, effective January 1, 2006;
(d) permit income splitting for pensioners, effective beginning in 2007;
(e) introduce a new child tax credit of $2,000 multiplied by the appropriate percentage for a taxation year, effective beginning in 2007;
(f) increase the spousal and other amounts to equal the basic personal amount, effective beginning in 2007;
(g) increase the age limit for maturing registered retirement savings plans, registered pension plans and deferred profit sharing plans to 71 years of age, effective beginning in 2007;
(h) expand the types of investments eligible for registered retirement savings plans and other deferred income plans, effective March 19, 2007; and
(i) increase the contribution limits for registered education savings plans and expand eligible payments for part-time studies, effective beginning in 2007.
Part 1 also amends the Canada Education Savings Act to increase the maximum annual grant payable on contributions made to a registered education savings plan after 2006.
Part 2 amends the Excise Tax Act to clarify the legislative authority that allows the Canada Revenue Agency to pay refunds of excise tax directly to end-users, where fuel subject to excise has been used in tax-exempt circumstances. It also amends that Act to repeal the excise tax on heavy vehicles and to implement the Green Levy on vehicles with fuel consumption of 13 litres or more per 100 kilometres. It also provides an authority for the Canada Revenue Agency to pay a refund of the Green Levy for vans equipped for wheelchair access.
Part 3 implements goods and services tax/harmonized sales tax (GST/HST) measures proposed or referenced in Budget 2007. It amends the Excise Tax Act to exempt midwifery services from the GST/HST and to zero-rate certain supplies of intangible personal property made to non-GST/HST registered non-residents. It also amends that Act to repeal the GST/HST Visitor Rebate Program and to implement a new Foreign Convention and Tour Incentive Program, which provides rebates of tax in respect of certain property and services used in the course of conventions held in Canada and the accommodation portion of tour packages for non-residents, and establishes new information requirements in the case where rebates are credited by the vendor.
Part 4 implements other measures relating to taxation. It amends the Customs Tariff to increase the duty-free exemption for returning Canadian residents, from $200 to $400, for absences from Canada of not less than 48 hours. It amends the Federal-Provincial Fiscal Arrangements Act to clarify that when a federal corporation listed in Schedule I to that Act pays provincial taxes or fees, wholly-owned subsidiaries of that corporation also pay provincial taxes or fees. It also authorizes the Minister of Finance to make payments totaling $400 million out of the Consolidated Revenue Fund to the Province of Ontario to assist the province in the transition to a single corporate tax administration. This last measure is consequential to the October 6, 2006 Canada-Ontario Memorandum of Agreement Concerning a Single Administration of Ontario Corporate Tax.
Part 5 enacts the Tax-back Guarantee Act, which legislates the Government’s commitment to dedicate all effective interest savings from federal debt reduction each year to ongoing personal income tax reductions. That Part also commits the Minister of Finance to report publicly at least once a year on personal income tax relief provided under the Guarantee to Canadians.
Part 6 amends the Federal-Provincial Fiscal Arrangements Act to set out the amounts of the fiscal equalization payments to the provinces and the territorial formula financing payments to the territories for the fiscal year beginning on April 1, 2007 and to provide for the method by which those amounts will be calculated for subsequent fiscal years. It also authorizes certain deductions from those amounts that would otherwise be payable under that Act. In addition, it makes consequential amendments to other Acts.
Part 6 also amends that Act to provide increased funding for the Canada Social Transfer beginning on April 1, 2007, and to provide for the method by which the Canada Social Transfer and the Canada Health Transfer amounts will be calculated for subsequent fiscal years, including per capita cash allocations. It also provides for transition protection.
Part 7 amends the Financial Administration Act to modernize Crown borrowing authorities.
Part 8 amends the Canada Mortgage and Housing Corporation Act to permit the Minister of Finance to lend money to the Canada Mortgage and Housing Corporation.
Part 9 amends the Bankruptcy and Insolvency Act, the Canada Deposit Insurance Corporation Act, the Companies’ Creditors Arrangement Act, the Payment Clearing and Settlement Act and the Winding-up and Restructuring Act to allow the Governor in Council to prescribe the meaning of “eligible financial contract”. Those Acts are also amended to provide that, after an insolvency event occurs, a party to an eligible financial contract can deal with supporting collateral in accordance with the terms of the contract despite any stay of proceedings or court order to the contrary. This Part also includes amendments to the Bankruptcy and Insolvency Act and the Winding-up and Restructuring Act to provide that collateral transactions executed in accordance with the terms of an eligible financial contract are not void only because they occurred in the prescribed pre-insolvency or winding-up period.
Part 10 authorizes payments to provinces and territories.
Part 11 authorizes payments to certain entities.
Part 12 extends the sunset provisions of financial institutions statutes by six months from April 24, 2007 to October 24, 2007.
Part 13 amends the Department of Public Works and Government Services Act to provide the Minister of Public Works and Government Services with the power to authorize another minister, to whom he or she has delegated powers under that Act, to subdelegate those powers to the chief executive of the relevant department. That Act is also amended with respect to the application of section 9 to certain departments.
Part 14 amends the Financial Consumer Agency of Canada Act to allow the Minister of Finance to provide funding to the Agency for activities related to financial education.

Budget Implementation Act, 2007

[Robert Thibault, Liberal, West Nova, NS]

Mr. Speaker, I have the pleasure of serving on the finance committee in which we saw the absolute horror of the financial damage done to thousands of seniors with the income trust debacle, the pure lie of the Conservative government of promising not to make any changes in income trusts and then coming in with a huge change wiping out $25 billion of savings from seniors from the market capitalization.

We heard that this was done on the basis of tax leakage by the government. Experts told us that this was not the reason. The governor of the bank told us there were business sectors in there that were perfectly legitimate and in which it was perfectly useful to have.

Could the member tell me if it would have been possible in this budget to repair some of those damages? Does he see anything in the budget that should restore confidence in the voters of Canada in the ability of the current government to manage our economy?

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

Mr. Speaker, there are different ways in which the whole income trust issue could have been addressed. It is not for me to say, but the Liberal suggestion is the one that I would have chosen.

The government's solution was to hit the seniors with a $25 billion to $30 billion hit and then give them an extra $1,000 on income splitting if they made $50,000 to $60,000 on their pension incomes. I am not sure that is a solution. I would rather have seen more of a delicate approach toward the income trust aspect announcement so Canadians in general would not have been hit with a $25 billion to $30 billion market devaluation overnight.

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

Mr. Speaker, I want to speak about a missed opportunity in the federal budget, and that is, one of investing in a national children's food initiative to make safe and healthy food available to all of Canada's children.

The children's health and nutrition initiative calls for universal nutritious food programs to make breakfasts, snacks or lunches available to any child in Canada under the age of 18 in venues most appropriate, as decided by each local community. This would be based on a flexible, made in Canada community development model. This initiative would be delivered through existing programs, local organizations and communities and parents groups, based on community models that are proven. We know they work.

Any non-profit organization, parent council, principal or local government could start such a program, but the food would have to nutritious, with an emphasis on locally grown food. The federal government would provide $25 million to get this under way. The federal government would also set national standards to ensure we achieved healthy nutrition in every part of Canada.

This initiative would mean that no Canadian child would go to school hungry and would help working families address real concerns relating to childhood obesity and malnutrition.

Overweight and obesity doubled among the six to seventeen year olds between 1979 and 2000 and obesity tripled among Canadian teenagers. Many children's diets are poor and diet-related outcomes, such as obesity, type 2 diabetes, hypertension and high cholesterol are rising among Canadian children. Poor nutrition has been linked to low academic performance, classroom behaviour problems, low self-esteem, as well as long term health risks. More than seven out of ten children do not eat the recommended daily minimum of five servings of vegetables and fruit as recommended by Canada's food guide. Even more alarming is that a quarter of grade 4 students and almost half of grade 8 girls do not eat breakfast every day.

Health Canada estimates that diet related cases of cardiovascular disease, diabetes and certain forms of cancer among adults rob the national economy of $6.6 billion annually due to health care costs and lost productivity.

The sad truth is Canada is one of the few developed countries without a nationally funded child nutrition program. Child nutrition programs already operate in some parts of the country, but not all Canadian children have access to these programs and the continuation of these efforts usually is subject to fundraising and volunteer time.

Dramatic changes have been made recently in other jurisdictions. For example, the British government is spending an extra £240 million, that is $520 million Canadian, to subsidize healthy ingredients for children's school meals. However, we do not have that in Canada.

In the U.S., 29 million children participate in the national school lunch program through more than 98,000 schools and child care institutions. On a typical day, 59% of these kids receive free or reduced price lunches. About 9.6 million children also participate in the school breakfast program. The total federal funding for these programs was $8.8 billion U.S. in 2005. However, we do not have that in Canada.

In Italy 68% of school meals use organic products and many municipalities are emphasizing local and traditional food. The 140,000 meals serve every school day to children in Rome must include a healthy and organic snack and a warm meal based on traditional recipes. The government offers rebates to public sector caterers that purchase local and organic products.

The incentives help increase the production of quality foods, lower environmental impacts, because they do not have to fly food from different places, provide more sustainable local employment and support better child nutrition and health. However, we have nothing like that in Canada.

Today and tomorrow, children and youth advocates across Canada are gathered in Ottawa for a National Learning Summit on Middle Childhood. Breakfast for Learning, a national organization, will be presenting a paper on child nutrition, and children's health is very much on the agenda at this conference.

The benefits are clear, For children. It means better health and a better opportunity for learning. I saw that first-hand as a school trustee 20 years ago. If children are hungry, they do not learn. This is not just about hunger, or poverty, or undernourishment. It is about bad nutrition, about junk food, about obesity. If children are obese, they cannot participate in all school activities and they also have trouble learning.

We can think of the human toll on children and their families, but let us also think about the toll on society and on the health care system. Total health care spending was $4,548 per person in 2006, with more than two-thirds of direct health care costs being expended on chronic diseases, such as cardiovascular disease, diabetes and certain forms of cancer. These kinds of disease rob the national economy of $6.6 billion annually due to health costs and lower productivity.

If we do not do something about children's health today, it will get worse. It is already really poor. Bad eating habits can last a lifetime and can be passed on to the next generation. Therefore, this initiative is also good for the economy.

Having healthy children means better learning, better academic performance, reduced medicare costs and higher productivity for Canada. Also by emphasizing local and sustainable food sources, the initiative will support production of quality food, strengthening the local farm communities and lower greenhouse gas emissions.

The need for this is very clear and so is the support from leaders in this children's healthy nutrition initiative.

We have a list of a broad range of groups that support this program, such as food writer, Natalie MacLean of Ottawa, James Chatto, Sasha Chapman, Liz Feltham and award winning chef Susur Lee, Sash Simpson, Chris MacDonald, Chris Wood, Winlai Wong, Ian Sorbie, Chris Klugman, Anthony Walsh and so on.

Therefore, food writers and chefs are all in support of this program. It is time for Canada to show leadership in children's health with a practical children's healthy nutrition initiative.

Good nutrition is vital to the health of children in Canada. Unfortunately, the Conservative budget has massive corporate tax cuts, but nothing to ensure that safe and healthy food is available to all Canadian kids.

It is not fair and it is a complete missed opportunity.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Mr. Speaker, the member for Trinity—Spadina represents a beautiful riding in downtown Toronto. I have many fond memories of it, having lived there for many years on Brunswick Avenue and on St. George Street.

Nevertheless, I listened to her debate on the budget. While I disagree with her about her arguments with respect to agriculture, because I think the government has done a lot for Canadian agriculture and for our food supply in the last year or year and a half, it is work that is much needed, and we are moving in the right direction in Canadian agriculture.

I am particularly interested in her comments about sourcing local food supplies. We all know in the House that chicken, eggs, milk, milk products, like butter and cheese, and turkeys are all locally sourced. They are produced through supply management and therefore they are Canadian produced and Canadian consumed.

However, with respect to other commodities like beef, wheat and products like that, which are not in the supply managed chain, how does she propose to ensure that locally grown products are locally consumed? Is it through some sort of marketing identification program like Foodland Ontario, or is it through some other measures?

I would be interested to hear the views of the member Trinity—Spadina on this.

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

Mr. Speaker, many things can be done to ensure locally produced food is available, whether it is local markets or community markets. For example, in June in my riding there will be a new community market for local farmers to bring food into the communities and sell it directly to people who want to shop locally.

Also there is a proposal in Toronto right now to establish a processing centre so that the foods that are being produced in southern Ontario can be processed in a place in Toronto, for example, and then can be kept. It can be an incubator to help some of the ethnic communities, for example, that want to create or process their food. It will create a lot of jobs and it will help local farmers. It will also be able to be sold back to a lot of the citizens, not just in downtown Toronto but across southern Ontario where there is a very large population.

Instead of bringing food from different places, such as Chile, Mexico, China or many other places, we can eat local food. It is good for the economy, for the farmers, for our kids' health and for reducing greenhouse gas emissions.

If there were a national food program, whether it is in schools or community centres all across the city and in different parts of Canada, we could do bulk purchasing.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I congratulate the member for emphasizing food for schools. I also congratulate the thousands of volunteers across the country who work in that area. I have always been very supportive of this. It is absolutely fundamental. I have arranged a room so its members can lobby on the Hill. I cannot imagine any member of Parliament who would not support food for learning. It almost should be a human right that when a child goes to school they do not need to go hungry. How can they even concentrate when such a basic need is missing?

Along the same theme, would the member support another initiative I am trying to push, which is to increase the subsidy for fresh foods in the far and remote north? It is a different situation in the north. The food is so expensive that even middle income people might not be able to afford the food for their children, certainly not expensive food. Dried junk food might be cheaper because the freight rates are not so high.

Would the member support increasing the subsidies so that high quality fresh foods and vegetables and nutritious foods can be sent to the children of the north?

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

Mr. Speaker, absolutely. In some of the northern communities right now it is cheaper to buy a bottle of Coke than fresh milk or apples. It is a desperate situation especially in some of the aboriginal communities. We have worked together with them through breakfast for learning. All the volunteer sectors across Canada are saying that we need to invest in food, especially in remote communities, which is why this model we are talking about is a made in Canada, very locally driven initiative.

Some of the food will be more expensive in other locations, which is why the Canadian government must invest in this. We are only talking about $25 million. It is not a very expensive program. I hope one day that all Canadian children will have access to nutritious and healthy food.

[Robert Thibault, Liberal, West Nova, NS]

Mr. Speaker, it is a pleasure to speak to the budget. It would be impossible to not have a few good things in a budget of this nature. This is the biggest spending budget in the history of the country. What is disappointing is the missed opportunity to assist Canadians and to build a nation.

The government, obviously, was trying to find pockets of potential support, people who would be more apt to change their vote to them in a federal election and stuff their pockets, so it wanted to do a few things for them, but there was no consideration to building a nation.

I believe that the way to build a nation is by helping those who are most in need achieve their potential. We cannot make everybody rich nor can we make everybody equal but we can assist people to achieve their potential. However, we do not see that in the budget and we do not see any attempt at it. We do not see any real investment in education or any real investment in assisting the people who are struggling the most.

What is worse, when I look down the line, I see more budgets like this. I see transfers of some $37 billion to the provinces, not on the basis of need but on the basis of demographics, where the potential is to win an election.

I even see areas of high need, like Nova Scotia, Newfoundland and Saskatchewan where a promise has been broken. In the case of Nova Scotia, the Atlantic accord has been completely shattered. When the Conservatives were in opposition they were screaming out for the accord. Nova Scotia and Newfoundland were to get the benefits of the accord independent of any other programs, independent of any future changes in the equalization program, another part of the cost shared program.

What do we have now? The premiers must decide whether to take the new equalization formula instead of the Atlantic accord. All of a sudden, the premiers are forced to play a game of roulette. The provinces can take the instant money now and forego any future benefits of the non-renewable energy and non-renewable resources and the investments that could happen in their provinces.

Now we hear rumours that the government is negotiating in order to save the suggestion of the member for Central Nova and Premier MacDonald. It is trying to find some little deal that would permit the Premier of Nova Scotia to say that he supports the federal Conservative government. The Conservatives have him over a barrel. He is coming up to an election and he is in a minority situation. The popularity of his provincial government is not very high. He will need to come up with some agreement. He will need to settle.

That was not the intent of the Atlantic accord. The intent of the accord was to give stability to Nova Scotia and Newfoundland. Here we have, exactly as we had in the income trust question, a bald-faced lie with a broken promise. The Prime Minister promises one thing but at the end of the day does something completely different.

The other thing that scares me for the future is the fact that the Conservatives have committed to another GST cut. They keep putting it back because they are running out of room. They are spending money very fast. They are making these transfers to the provinces but they are limiting their ability for revenue in the future. The real risk here is that in a few years, if trends continue and there is some decline in the economy, we could be in Mulroney-type deficits again, which is very scary.

The Conservatives say that they want to cut the GST by another percentage point in a few years. That is $6 billion. If they put $6 billion toward the child tax credit, that money would take one million kids in this country above the poverty line. That is not rich and it is not out of poverty but it is above the statistical measure that we call the poverty line. It is, in my opinion, the absolute least that someone needs to survive in this country. One million kids could be brought above the poverty line. There is some potential to do it but that is not the intent. According to the government, it is not here to build a nation, it is here to worry about the next election.

I was pleased to see pension income sharing for seniors in the budget, which is a good thing, but there is a whole segment of seniors who I see every day in rural Nova Scotia who are suffering and having a hard time and there is nothing in the budget for them. The budget increases taxes for them by 0.5% but they have received no assistance. I am talking about single seniors.

If a senior couple live in old stock housing, as they typically do in rural areas, and they both receive the senior benefits and the guaranteed income supplement, they can get by. However, when one goes, the other is left with the same expenses and a lot less revenue. It is often the wife who is left behind and often some of the work and the repairs that could be done by the spouse cannot be done any more. The costs are more but the government has nothing in the budget to assist these people.

We have the small craft harbours in Atlantic Canada and the Minister of Fisheries did not receive a penny. He was not able to get any assistance from the federal government. When he was a member of the fisheries committee he was asking for more money for small craft harbours. Along with my colleagues, I was able to get $100 million over five years for small craft harbours but that expires this year. The $20 million a year will not be replaced and the total amount was reduced. The Conservatives voted for a motion put forward by the member from Prince Edward Island to increase and put back the $50 million. They voted for it but they did not do it. They then cut that $100 million over five years, which means $20 million less work is being done to support these communities.

While in opposition, the Conservatives screamed that the port of Digby had to be taken care of and yet there is not a penny and not a word, not taking it back as it should be.

It is not their fault that the problem is there. I was not elected at the time but the Liberals were in government when it was done. It was a bad contract negotiated by Transport Canada. For 16 months the government has had the report indicating that it is the federal government's fault, a bad contract, and yet it has done nothing. They have not taken that port back but they screamed about it forever.

We see huge investments in the Coast Guard. The Conservatives re-announced the money that we had already announced. The government has changed the tact of the Coast Guard. I always understood that the Coast Guard was there providing for the security of mariners. However, apparently the Coast Guard is now out there to save ministers. Two vessels were taken from Halifax and moved to two different ridings in Newfoundland, with no logic to it other than to try to save a couple of ridings because the government knows the political problems it is having in Newfoundland.

A fisheries research vessel was moved from the Maritimes to Newfoundland because the Minister of Fisheries was worried about his own election success. He is not worried or concerned about the future of the fisheries, as I mentioned earlier.

When we were examining the main estimates in the House, the Minister of National Defence was before us. I asked him about a contribution to the Pearson Peacekeeping Centre operating out of Cornwallis Park. He said that absolutely the funding would be there, that there would be funding from external affairs, from CIDA and that he at national defence would do his share. It has been operating internationally out of that area for seven years and creating very good jobs and doing good work around the world. Now we hear that the government will cut the funding. That is the rumour and usually those rumours are true when they are heard.

There is no mention of the Pearson Peacekeeping Centre in the budget, not anywhere. It will not be found on any line, although the minister promised and said it in the House.

The minister also said that Greenwood would be very pleased with the investments at the Greenwood base. What do we hear now? We hear that the work on the upgrade of the Aurora aircraft will stop and that the fleet will be cut by half at the Greenwood base. That is the rumour that we are hearing. Apparently the minister was to announce it a few years ago but he is having so much trouble in his public acceptance that he backed off. We hear that it will be announced after the election. That is absolutely unacceptable.

We also know about the income trusts and now we hear of the foreign investment income trust polices being cancelled. As a great saviour for tax fairness, we hear that a bunch of Canadian companies are being sold offshore. This is a hollowing out of our corporate sector. This is the same as the government did with income trusts, the other bald-faced lie.

Finally, I would like to talk about education. Nova Scotia has more seats in its universities per capita than any other province in this country but is that reflected in the transfers for education? No. It is completely per capita, by the individual number of people living in each province. Once again, we see that Quebec and Ontario get the gold mine and Nova Scotia gets the shaft.

This budget is absolutely unfair to the people who need the support the most, the people who want to develop their potential and build this country, not just a meaningless Conservative majority.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I listened intently to the member's speech and he seemed to drift from one side to the other on the budget. I am not exactly sure what he was getting at.

I would point a couple of things out in his speech. He spoke a little bit about post-secondary education. I am very proud of what the government has done on post-secondary education with a 40% increase in post-secondary funding.

I am very proud of the investments that the government is making in infrastructure. The member forgot about infrastructure which was a major failing of the previous government. The Liberals allowed infrastructure to decline to the extent that they did, a $60 billion deficit nation-wide. I never heard anything about that in the member's speech.

I would also like to know why he alluded a couple of times to income trusts and so forth. I am very proud of the actions the government has taken. I would like to know why he supports his government's position for a corporate tax holiday? Why does he think corporations should not pay tax? I would really like to know that because what people in my riding of Peterborough do not like hearing is that they must pay taxes while others do not.

We believe in tax fairness on this side of the House. I would love to know why the Liberals do not.

[Robert Thibault, Liberal, West Nova, NS]

Mr. Speaker, everybody in the House who clearly understands it believes in tax fairness. The problem is that the member does not understand it. He believes the buzzwords of a Harris flunky on tax fairness. As we heard the critic for finance say, every time the Minister of Finance talks about tax fairness, taxpayers have to reach into their pockets to give more.

Tax fairness does not include a system of taxation for investments that puts external companies ahead of Canadian companies and reduces the competitiveness of Canadian companies. In order to grow, often companies have to grow internationally. If our companies cannot invest internationally, they are going to be sold internationally and that is the absolute truth.

I believe in tax fairness. We need a good tax regime. We cut taxes on this side after we eliminated the deficit. We cut taxes by over $100 million, I think $130 million and some, to make ourselves more competitive. We made investments in education, research and development, and infrastructure.

There is still a lot to be done, but what did we see? We saw the Conservatives inherit the best financial and fiscal situation of any government ever and they cut the infrastructure program with provinces and municipalities. They made a straight transfer of less money to the provinces and ruined the partnerships that had been created with municipalities, communities, and provincial governments just to get their quick sound bite. I do not think a fashion consultant is going to be able to fix the incompetence of this government.

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

Mr. Speaker, I would like to thank my colleague for his speech and address one of the points he raised toward the end on a matter that in my view is essential and very important to our communities, and that is the matter of small craft harbours.

The situation is beyond catastrophic. As we know full well, a solution had been implemented by the previous government, the Liberal government, but unfortunately the Conservative government is up to its old tricks. At least the Liberals made an effort for small craft harbours. Nonetheless, the budget far from addresses the situation.

The solution that was introduced, when a wharf was dilapidated or causing problems, was to install a gate rather than repair what should have been repaired over the years. The simple excuse was that this was in the interest of safety for those who use the wharf.

Instead of repairs being made, the situation was allowed to deteriorate to the point that the safety of the fishers from the various communities was jeopardized.

I can only support the hon. member's initiative in this matter. However, I would like to point out that the port administrations in these communities are being run by volunteers. Recently, during a meeting of the Standing Committee on Fisheries and Oceans, these people told us they were exhausted. In my opinion, it is high time the federal government stepped in.

[Robert Thibault, Liberal, West Nova, NS]

Mr. Speaker, I would like to thank the hon. member for his speech. He is quite right. When I was elected in 2000, the annual budget allocated to the small craft harbours program was approximately $100 million. That was nowhere near sufficient.

The quality of our small craft harbours has consistently diminished. The size of the boats was increasing and the harbours were getting bigger. Modern harbours were needed. Old harbours could not even be maintained. Funding was increased by $20 million per year for five years. It was still insufficient, but it was an improvement. It was a great leap forward.

In our election platform, we promised to increase this amount by another $150 million a year. That is what is needed. Some $250 million a year is needed for five years to restore and maintain our harbours, and some $150 million a year will be needed to prepare for the future. At present, there is a decrease of approximately $35 million a year.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, it is my pleasure to enter into the debate at the final stages of the implementation of the budget put forward by the Conservative government.

I represent the riding of Winnipeg Centre which has the highest aboriginal population of any riding in Canada. There are roughly 16,000 people who self-identified themselves in the last census as being either first nation, Métis or Inuit. I point out that this would be by far the largest aboriginal reserve, were my riding considered a reserve. On the face of it, the city of Winnipeg, and more often than not the inner city of Winnipeg, the city centre I represent, is becoming increasingly the area where first nations people leave the desperation of their reserves to seek opportunity.

Let me say by way of introduction that the social condition of Canada's first nations, Métis and Inuit people is Canada's greatest failure and perhaps Canada's greatest shame. Fully 46% of all the families in the riding of Winnipeg Centre live below the poverty line. I say that with no pride, believe me, and 52% of all the children in the riding of Winnipeg Centre live below the poverty line. These are staggering statistics.

It ties in with my first point that overwhelmingly the face of poverty in my riding is Indian, if I can use that term. People are not finding opportunity as they flock to the inner city. They are living on the margins. They are living on the edge. I point this out only to make the point that when we do not deal with social conditions, we run the risk of social unrest.

I want to recognize and pay tribute again, by way of introduction, to the aboriginal leadership within my riding and on first nations reserves, among the elders, the chief and council, for keeping a lid on social unrest that is just at the verge of boiling over at any point in time.

Let us not kid ourselves. We are living in some kind of a vacuum in the House of Commons if we do not recognize and acknowledge that there is an underclass in Canada, and it is native. That underclass will not remain peaceful when it loses hope.

We lived through the Oka crisis. This is a cautionary tale I am speaking of here, but we lived through the Oka crisis and we were virtually on the edge of civil unrest at that time. The Oka crisis was not isolated to that area of the outskirts of Montreal. In fact, there were rumblings of discontent right across the land. The leadership in other areas kept a lid on that social unrest and discontent, watching what would be the outcome of Oka.

Fortunately, we got through that with a minimum of violence, a minimum of social unrest on the condition that we gave some promise and some hope. That was the Royal Commission on Aboriginal Peoples, a five year, $500 million comprehensive royal commission on the state of the social conditions of first nations, Métis and aboriginal people. That was hope. There was hope generated. There was optimism in the land that finally Canada would decide once and for all that society does not move forward unless we all move forward together. There is an enlightened self-interest associated with not having a permanent underclass.

That was the optimism around the Royal Commission on Aboriginal Peoples. That hope, that optimism, has been dwindling ever since the tabling of the royal commission, which I believe was in 1995. Since then it has been gathering dust. There was a summary report on the implementation of the recommendations of the royal commission. It was called “Gathering Strength” and the joke in Indian country was that it was gathering dust because not a single one of the recommendations of the Royal Commission on Aboriginal Peoples had been implemented, not one.

To this day, the hope and the goodwill that was generated by the recognition of the social conditions that first nations people face has been dissipating and dwindling to the point where we are back at this crisis point, where I do not know if the leadership of first nations, Métis and Inuit communities can hold their dissidents back. I do not know when that is going to boil over into social unrest.

We have seen the riots in L.A. We have seen in the civil rights movement, the major American cities boiling over and then blowing up. It was burn, baby, burn as people were lashing out in their frustration and the inequity of living in the richest and most powerful civilization in the history of the world, and we cannot even provide for the basic needs of a family to survive if they are Indian and living in the inner city of Winnipeg.

There might be 1,000 reasons for it, and I am not making excuses here, but believe me the reason is not that people are not pulling themselves up by their bootstraps, as some critics would have us believe to be the case. There are inequities that have not been addressed. There are legal obligations that have not been addressed and not budgeted for in this budget, to stay on point and to stay relevant.

My colleague, the Minister of Indian Affairs, says that we are spending more money than ever on the aboriginal peoples, up to $10 billion, but he is being disingenuous in a sense because some of that $10 billion is in fact just meeting legal obligations in court cases that we have lost over land issues or land claims. That is not part of the social spending that we believe is necessary to elevate the standards of living conditions of aboriginal people to the mean average that Canadians enjoy.

I say this with the greatest respect. We have failed in our mission by ignoring the greatest social crisis in our midst. I have spoken to first nations leadership and I will be speaking to them this Wednesday at a rally in Winnipeg specifically about this budget. They feel that their legitimate claims and concerns have been ignored by a government that would rather see them simply get on with it, solve their own problems and move on.

There is nothing more unfair than treating unequal people equally. There is an equality issue we have to deal with here. A lot of people say that aboriginal people have the same opportunities as any other person in Canada. I read an appalling paper written by a Professor Tom Flanagan, who was an adviser to this government, I understand, called Why Don’t Indians Drive Taxis? Why do they not just get on with it? Other immigrants come to this country and they drive taxis, and their children go to university, and within a generation they are middle class. He just does not get it. If that is the type of logic that is informing the policies of this government, then we are on the road to conflict.

I do not know how much longer the aboriginal leadership can hold their people back because they deserve a medal for patience so far and for the restraint that they have shown in seeking an essentially Gandhi-like commitment to peaceful negotiation and demonstrations. That will not last forever.

I caution this government and all members of Parliament that we cannot have our heads in the sand about the inequities that are inherent in our current paternalistic relationship with first nations. Unless we address a meaningful transfer of control of land and resources, no amount of social welfare is going to change the status of aboriginal people.

We are embarrassed internationally by the third world conditions. Some of the only successes aboriginal leaders have seem to be when they block a railroad or a highway, or when they go to the United Nations and show the rest of the world this glaring social crisis that we have in this country, where a significant number of Canadians are being left behind.

Living in the richest and most prosperous civilization the world has ever known, there is no excuse to have a permanent underclass. We are not trying hard enough if we are not bringing aboriginal people along with us in the prosperity of this great nation.

I felt it was my duty to use these few minutes to remind the House of Commons of our obligation to live up to the legal obligations, our commitments to aboriginal people, whether it is in the implementation of treaties or the implementation of the recommendations of the Royal Commission on Aboriginal Peoples.

[Lynne Yelich, Conservative, Parliamentary Secretary to the Minister of Human Resources and Social Development]

Mr. Speaker, just as the member thought it was his duty to remind us of how important aboriginals are, I too think it is our duty to remind people that we found it was important to address aboriginals with a strategy. Therefore, we did commit to aboriginal Canadians, provinces and territories to find a workable, innovative solution.

For example, in budget 2006, we provided $300 million for off reserve aboriginal housing and $300 million in affordable housing, and also $300 million starting in 2007-08 for aboriginal communities in the priority areas of education, women, children, families, water and housing.

In 2007, we had initiatives such as $14.5 million over two years to expand the aboriginal justice strategy. As the member said, is not always about money. It is about addressing some of the social issues too. The $300 million to give first nation members the opportunity to own their own homes is a very good start. I know that in our riding and in Saskatchewan one of the issues was that many of the aboriginal women said they would appreciate being able to own their own homes and to have property and matrimonial rights. I could go on, but I think the member can see it for himself.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, the total commitment to first nations, Métis and Inuit issues in this budget is $14 per head. That does not even scratch the surface in the appalling need that is illustrated out there. It is not lost on aboriginal leadership that we seem to be able to find billions of dollars at any time at the drop of a hat to buy more tanks or to buy submarines that do not even float, or sink, or whatever they are supposed to do.

However, if we try to raise the point of the appalling social conditions of first nations people and the incidence of poverty and neglect and the wasted opportunity of another generation of children not taking part fully in all that our society has to offer, people scream bloody murder that we are giving money away to the Indians again. This is an appalling contradiction.

I should remind my colleague, the parliamentary secretary, that the $300 million in the 2006 budget is money that the NDP negotiated and it was wrestled out of the Liberals in Bill C-48 to be spent on aboriginal housing. It was like pulling teeth.