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

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

Mr. Speaker, I listened with interest to the speech of the member for Vancouver East. She mentioned various groups that have been, in my phrasing, left behind as a result of the budget. She mentioned students, artists, aboriginals and a few others but she made no mention of single seniors.

All that I get from the budget is a provision for pension splitting among senior couples but nothing whatsoever in the budget which provides for single seniors. I am wondering if the member opposite agrees with that and what her thought is about that.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I concur that the issue of seniors, particularly single seniors and particularly women who live below the poverty rate--I forget what the percentage rate is but it is very high--are another part of our community who were completely overlooked in the budget.

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, it is an honour to speak in the House to what I think ordinary Canadians want to see in a budget and juxtapose that with what we actually get from the government.

The budget is the foundation. It is a critical social contract that any government has with its citizens. What we have seen in this budget is a contract that seems to have been broken.

I listened carefully to one of the government members who asked about supporting the budget because of affordable housing. I am glad my colleague from Vancouver set the record straight. If we had not been here in this place to ensure corporate tax cuts were not put at the front of the line ahead of affordable housing, many of our citizens would not have any supports at all for affordable housing.

When Conservatives say that we should have supported the budget, the last budget or this budget, because of the money for affordable housing, it would be laughable if it were not so serious. The fact is that the government has no interest in investing public dollars in things like affordable housing.

We need to recall that in the last budget at the last hour the government put money into trusts for things like affordable housing for aboriginal peoples and first nations. The government wanted to get a deal from us to support it on the budget if it would commit to keeping the money that was already committed and put it into the next year's budget. Of course we said no because the money was already there. It then put it ahead into the budget.

That is the real story on the government and affordable housing. It is just taking money from Bill C-48 and putting it in place and saying that it has actually done something. Nothing could be further from the truth. It is abandoning people on the issue of affordable housing and that affects all of us.

If we look at what is missing in the budget, it is long term care and home care for seniors. I have spent the last couple of months going door to door in seniors' residences in the downtown area here. It is appalling. We have seniors who are abandoned. They are not getting the care they need when they need it. They get one level of government giving a pittance of support and another level of government taking it away. They are tired of that. They are tired of government not being there for them.

Families are being squeezed. I had a gentleman come into my office just two weeks ago. He is feeling the squeeze on his income as he tries to help his mother. He needs to be there for her because no one else is. He does not begrudge supporting her but he is wondering where his government is, the government to which he pays taxes. He wants the services for the taxes that he pays. I want to be very clear. He does not want another tax cut. What he has been saying to me is that before we start into more tax cuts he wants to see home care, pharmaceutical care and support for his mother. He would like a nurse to see his mother, not for any luxurious kind of visit but for basic primary care. He is not getting that from his government and we are not getting it from the budget, which is why we cannot support it.

When we look at how the government is treating seniors, it is not good enough to say that they have a deduction here and a deduction there when the core services that they need in their community are not there for them now.

With all due respect to the government, before it comes to this place and passes out another tax cut, it should take an inventory of what is going on in the communities. Before it proposes another tax cut, it should take a look at the waiting lists for housing, the waiting lists for long term care and the waiting list for home care and tell my constituents, tell the seniors in my community that it is good enough that they get up to an hour a week. It also should not fob it off on the provinces because that is the politics of shame when it does that.

When we look at what is in it for seniors, the budget fails. When we look at housing, it fails. When we look at students, it is interesting. We need to look at the bookends of our society, those who helped build this country and now need our support. They were there for us when they helped put this country together and built our communities.

Let us look at the other bookend, the students. I paid $1,200 for my tuition. If we were to ask the students in my constituency who are attending Carleton University or the University of Ottawa how much they are paying for tuition, it would blow us away. Tuition is from $5,000 to $6,000.

What are we doing for young people to get post-secondary education, or training for jobs, or just a hand up to help them move along in terms of the next step in their lives, which is education? We are failing them. The budget contains nothing of any substance for them and that is not good enough for them. It is also not good enough for their parents who are being squeezed.

As we have mentioned in our party, the prosperity gap is ever widening. We are talking about people who are on the margins, who are falling off the table, and not only them. What is stunning is that we are seeing our middle class being squeezed so that they are now having to make very difficult choices and often, as members will appreciate in this so-called sandwich generation, are making choices on who to help, their senior parents or their sons or daughters who are trying to make it in university or post-secondary education. That is not right.

When we had a $13 billion surplus without a debate about where that money would go, it was absolutely wrong. We could do better. We should do better and this budget does not do better.

I recall the former government and that party at the time asking where the debate was on where the surplus would go. They were high and they were mighty but where are those words now? They are gone. They have evaporated at the cost of those who are most vulnerable in our society. We can do better.

When we sit around the kitchen table and talk about what is important in our families, do we look at the hole in the roof of our home and say that we should go build a white picket fence? No. We deal with what is important. We deal with the hole in the roof. We have a hole in our roof and it is called the prosperity gap and that hole is getting ever bigger and wider. The government seems to think it is fine so it will put a toll on the road outside, hand us a nickel and say that it is fine. Well it is not fine. It is not good economics and it is not sound investment. It is very poor policy.

I will now turn to where this budget fails, not just for seniors and young people, but on the infrastructure of this country, I will just turn to our cities. It is very clear, from mayors of small towns, big towns and big cities that our government needs to do more. It needs to do more to build the infrastructure to make our cities livable and make them environmentally more sustainable.

We should not have to wait for a health advisory before we send our children out to play but that is what is happening. My colleague from Windsor told me horrific stories about kids not being able to go outside on some days because of the quality of the air. We could have done something about that. We could have had a transportation policy that would have helped all our kids and all our citizens in the long term but hat is not in this budget.

Quite frankly, the fact that people can write off their bus passes, which we had to ensure the government fixed because it messed that up too, is not good enough because these buses are not going far enough. This city does not have a train because the government would not support our the light rail plan.

We need to see more substantive commitments and better commitments, which is why our party cannot support the government's budget.

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

Mr. Speaker, I am surprised when the member says we have not done anything for education. Our party has spent more on education than any government has. Just this year we have proposed to increase the Canada social transfer by $800 million per year beginning in 2008-09 to ensure that the provinces have the resources they need to maintain and strengthen Canada's colleges and universities, including better access. We also raised the minimum amount of the Canada education savings grant, which goes directly to help poorer families.

Another initiative of the government that certainly helps a lot of people is our national anti-drug strategy. As the member knows, drugs cause many problems among poorer families and many families in my province and on the streets. In fact, it is his party which suggests that is why there is so much homelessness: because we do have some huge problems with crystal meth and other illicit drugs. We have taken that under our control with an anti-drug strategy.

Some of the things that party has asked us for we have implemented in our budget, but we have done it with a strategy and a focus so that we are going to help the real people, the real people who will benefit the most from it. The money will not go just to governments, for example, just like our universal child care benefit goes directly to the child.

The government is addressing education and the drug strategy. I think the member has become carried away with rhetoric when he speaks about what we are not doing.

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, I do not think I was carried away with rhetoric when I talked about how much I paid in tuition. I am not sure what the member paid in tuition. Maybe she would have an opportunity to tell us and compare it with what students are paying right now. Did she pay more than $1,200 a year? Perhaps, but the reality is that right now students are paying $6,000 a year for tuition. That is a fact. That is not rhetoric. The member can ask any student.

The other issue the member brought up was the fact of passing this money on to people, “real people”, as she called them. I am not sure what she meant by that, perhaps to distinguish them from other people, I suppose. As for the money that is being passed on for child care, my colleague from Toronto has pointed out that it is not real child care. In fact, what many people are waking up to now is that this money that was supposed to be there for child care is actually being taxed back.

Finally, if she wants to talk about a drug strategy, let us talk about why people turn to drugs. They do not turn to drugs because everything is going well in their lives. We have to take a look at the social determinants of health. These people do not have a job. They do not have a place to live. They may not have the supports within their community. That is one of the indicators of health. That is one of the ways to fight drug abuse.

How about having some nurses and public health officials, real people, if I may quote her, to be there for them when they need that help? They are not in our communities. They are not in our schools. We need those public health nurses there. That requires real commitment from the government and that is not in this budget.

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

Mr. Speaker, I know that the member for Ottawa Centre and I have similar ridings in that we both have large immigrant populations. He will know that Statistics Canada recently reported that the prosperity gap for immigrants is increasing in Canada. It is now over three times as likely that an immigrant will live in poverty in Canada.

One of the things this budget does is promise more money around the issue of international credential recognition, but what it does is put forward some money toward a referral agency. I find that a little insulting to the people who are struggling to have their credentials recognized and work at the professions that they were called to and have been trained for and have experience in. They have knocked on every door in this country to try to find work in their field and have been denied at every step along the way. They do not need a referral agency. They need some real help. I wonder if the member could comment on that issue.

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, the Conservatives have failed in this regard. We understood there was going to be a strategy that would be comprehensive. Sadly, as the member has pointed out, it is a referral service. The men and women who need this help need more than--

[The Acting Speaker, Royal Galipeau]

The hon. member for Thunder Bay—Rainy River.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Mr. Speaker, this budget of 700 pages should have said a lot, but what it does not say also speaks volumes.

I am going to address some remarks today to regional economic expansion, particularly for Ontario with regard to the FedNor program.

When I was mayor of the city of Thunder Bay and also president of the Northwestern Ontario Municipal Association during particularly difficult times in the 1990s, regional economic expansion programs such as FedNor were essentially in many cases the only economic activity for many communities during those difficult years and certainly the only source of support.

Recently, the province of Ontario, and I recognize the province for coming through, has allocated more resources through a program known as the heritage fund. Nonetheless, when we try to compare what that means province by province, territory by territory and regional program by regional program, we find that regional economic expansion is not mentioned in the budget. We can compare Ontario's $60 million from its heritage fund versus a $36 million funding program from FedNor, which has been reduced by $5 million from what it was the year previously.

We know that these programs are essentially the catalyst for economic diversification and growth in many areas. Let us talk about what not restoring the budget cut means. Most of Ontario's municipalities are eligible for FedNor. There is a total of 446 municipalities in Ontario, of which roughly 420 would have populations of less than 250,000, so we are talking about a huge number of municipalities that are simply going to have to compete for relatively small amounts of money. With decision making now left in the minister's hands, it really emphasizes the need for a full time minister for this particular portfolio.

When people read that budget of close to 700 pages and do not see any mention of this whatsoever, they get a little nervous. We cannot blame anybody for feeling that way because people who understand regional economics know that underutilization of a resource is as bad as the underfunding that accompanies it.

FedNor itself is what one could describe as under-resourced. An appropriate response in the past budget would have been to restore the money that was cut and indeed ensure that there was more local authority so that we could see some of these larger projects in the half a million dollar range. This really is the time in the regions and the small communities of Canada for the government to not only get more involved but to restore the confidence and commitment that it used to have.

This of course is not a complaint about the field staff. We have excellent field staff across northern Ontario. Indeed, the federal definition of northern Ontario extends into the southern Ontario Muskokas, whereas provincially it is at the French River.

I am not complaining about the fact that as an MP I do not get invited to or notified of the announcements. It is the business community that is coming to me and saying that businesses cannot wait for 15 months or 18 months for notification of whether they have been successful or not or whether it is going ahead or not. These time delays have now become unconscionable. The budget should have addressed this.

No decisions means that business and non-governmental organizations are wallowing in an era of not knowing and that is very difficult. If there is one thing that I can impress on the government side today it is that the Conservatives must realize that in small communities a little actually goes a very long way, and that kind of support would be very helpful.

As I have been touring northern Ontario and talking to people, the business community says it does not need any more worries and uncertainty. With the budget not mentioning the regions, it means that these communities need to be reassured. It is time for us in government to recognize the needs of regions and to recognize that governments really should not be excluding these major parts of our country.

Diversification is talked about throughout the budget, but if the tools are not there for small communities to utilize, how is government going to help these communities get through that transition?

When I was president of the Association of Municipalities of Ontario, I was part of the team that lobbied the federal government and the provincial government to ensure that gas taxes were utilized for communities large and small. In Ontario, we were successful in having the government allocate 2¢ per litre for public transit, a very significant contribution. Each municipality using it is very grateful for it.

The Federation of Canadian Municipalities lobbied for a share of the gas tax to go into infrastructure or into those projects deemed worthwhile by communities. The second component of that was the GST rebate. The third part, of course, was infrastructure funding, and one of the concerns is that we do not see this in the budget.

Although there is reference to some continuation of this funding, what municipalities need and have been asking for is that it be permanent so they can plan long range knowing this funding is not going to end in three or four years. They have to be able to plan further ahead because many of their projects, such as their water systems and the revamping of waste treatment plants, are very capital intensive. These become very large commitments and are very demanding in terms of time.

My riding of Thunder Bay--Rainy River extends from Lake Superior to the Manitoba boarder, which means driving 7.5 hours over two time zones. We have 27 communities. When people in my riding see that the previous allocation of $298 million over three years had to address somewhere in the vicinity of 420 municipalities, we can see that there was a vast concern that there would not be enough to warrant supporting the municipalities with infrastructure deficits.

Let us address it in that way. The cost of applying for even that limited amount of money means that small communities that do not have the resources to pay for engineers and designers in the first place are essentially saying that if they had money they would do it but they do not have the money, and now they have been reduced to what is essentially a lottery system.

People who are applying want the federal government to apply a fair funding formula. There was a gap. I believe that almost all members here, whether they represent an urban or rural area, or a hybrid of those, understand that municipalities are applying because they have determined needs. They are not applying just for the fun of it. This means that we have to eliminate the lottery system and get into some sort of priority system, because for a municipality that applies in year one for funding and does not get it and still does not get it in year three, that does not help it repair the bridge it wants repaired. I am asking the minister to reconsider that.

Just as important for pockets of the country, although many of the urban people may have a difficult time understanding this, high speed broadband is something that all Canadians deserve in much the same way as we expect effective telephone service. We have now come into an era where it is almost indispensable for business, for health and for education. That need also is a glaring gap in the budget.

For all the good things in a surplus budget, there are some things that still need to be addressed. I ask the government to reconsider them.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, that was an excellent speech by my hon. colleague. I have a fairly simple question for him.

When the Conservative government came to power it made what I think was a massive financial blunder. It actually dropped the GST, a consumption tax, then raised the lowest tax and also lowered the basic personal exemption. Most economists would say that reducing a consumption tax is one of the most inefficient ways of stimulating the economy. A much better idea is to keep money in people's pockets.

Does my colleague not think a much more intelligent idea that the government should have adopted would have been to reduce the lowest tax rate from 15.5% to 15%, which is what we did, or lower it further and raise the basic personal exemption, rather than the blunder of decreasing the GST, which is a very costly and inefficient way of attempting to stimulate the economy?

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Mr. Speaker, one thing about the value added taxes around the world is that their goal is essentially to assist the lowest income levels. By reducing them so they do not actually help, or say a person who buys a Mercedes for $100,000 ends up paying less tax than someone who buys a lower priced vehicle, then we are defeating the whole purpose of value added taxes such as the GST.

A number of people have come to my office and said that they thought the taxes had been lowered but theirs had gone up. The fact that taxes went up from 15% to 15.5% really shocked many people. Those are the people who walk to my office and probably do not even take a bus. They certainly do not drive there. They can see the difference quite tangibly.

For someone who has a lower income .5%, it is a great deal of money. We have to understand that these people really budget their money accordingly. For them, it is very difficult to try to understand what the effect of a large scale GST cut will mean when it affects them directly in a very personal way.

From an environmental standpoint, I also believe value added taxes such as the GST kept at its previous level would have been more helpful in addressing many of the concerns we have.

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

Mr. Speaker, one aspect of the budget that concerns me greatly is the facilitation of the entry of temporary foreign workers into Canada. The government has sunk a lot of money in the budget into expediting that process, making it easier for temporary foreign workers to come to Canada to work, but there is no guarantee that Canadians will get first crack at the jobs available in Canada.

There is nothing, for instance, that ensures the mobility of Canadian workers to travel across the country to take up a job in another part of Canada. There is the whole problem of flawed labour market studies, which do not estimate the availability of Canadian workers properly and overinflate the need for foreign workers.

There is also the problem of temporary foreign workers often being some of the most exploited workers in our country. We have a long history of that. Employment and workplace standards are not well policed for temporary foreign workers. There is nothing in the budget to ensure that with increased numbers of foreign workers coming here those standards are going to be maintained.

I do not think anybody wants to see projects not being completed because there are no workers to do the job, but should Canadians not get first crack at those jobs and should there not be something in the budget to ensure that happens?

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Mr. Speaker, the question is valid because over the course of time in meeting with representatives from national Canadian unions and labour groups trying to move skilled workers from province to province, they are finding different standards and having difficulties getting them transferred.

The question in terms of unskilled workers is as valid because there are probably enough people in the country who would willingly move to other places for employment should they get the type of assistance that should be addressed in the budget. By that I mean some kind of mobility allowance, retraining and assistance. If there is an obvious need and we have to go to the length of advertising in other countries when we know we have unemployment rates of 6% and 7% and sometimes higher in some of the regions, it is the regions that suffer—

[The Acting Speaker, Royal Galipeau]

Resuming debate, the hon. member for Windsor West.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I appreciate the opportunity to speak to the budget. It is very important for Canadians to look at the budget in a holistic sense. At the same time, with only 10 minutes, I will focus my comments around manufacturing and, in particular, the auto industry.

It is important for me to acknowledge that not everything is bad in the budget, but there are so many problems with it that it is not worthy of support and it is not what Canadians expected. We did not expect to see a government so quickly adopt its predecessor's tactics of withdrawing from any type of vision of what Canada can be and where we will go in the next century.

It is important to note on the manufacturing side that plenty of warning signs have been out there. Since November 2002, approximately 250,000 manufacturing jobs have been lost in Canada. This is billions of dollars of annual tax revenue, not only from the companies, but also the workers. When workers lose their job in the manufacturing sector, the Canadian Labour Congress, was apt to point this out, they usually lose about 25% of their income when they try to find another job.

I know the government members have been attempting to concoct a type of strategy around the environment, one that placates some people and one that they feel they can sell to Canadians, but it is not working. The most recent was the Minister of the Environment who put out a doomsday scenario that manufacturing would lose. At the same time he has been a wilful part of the government not addressing the manufacturing sector.

It is important that I not only criticize, but that I offer solutions as well. That is what happened with the industry, science and technology committee. Committee members took a full year to study the issues under manufacturing. We understood that the industry was hemorrhaging losses, that workers were feeling more discontent with their future. They felt there was an opportunity that would be lost, and we witnessed job after job loss.

We expected the budget to reflect some of the recommendations that we unanimously supported. That meant we all had to compromise. It takes a lot of will, a lot of effort, but it shows the gravity of the seriousness in the manufacturing sector when all political parties, despite their ideologies, their backgrounds and their political manoeuvring, decide to come together and bring forward a unanimous report with over 22 recommendations.

Those recommendations were put forth to the government to act upon and not a one of them was recommended, not one, despite the unanimous support of the committee that tabled the document in a minority Parliament. What type of totalitarian government do we have that will not even listen to the democratic will of members of Parliament as opposed to lobbyists?

It is unfortunate. There was one half measure and it was a capital cost reduction allowance. It is a very good thing and it needs to be done, but it is for two years. I put in a specific amendment for five years, which would be reviewed for a potential further five years. What did the Conservatives do? They did not act on it. I do not understand that we have all the evidence in front of us and they only provided it for two years.

In particular, the auto industry is suffering quite significantly right now. In Windsor, Ontario my constituents go home every single night with a more uncertain future. DaimlerChrysler is looking to spin off the Chrysler division. Ford is not making renewed investment when the timetable shows that it should. General Motors, because of the budget and because of the government's decision to continue to pursue a deal with South Korea that will put the auto industry on the auction block, has put its investments on hold.

That is what has happened. It is unfortunate because good things are happening in our plants. Good workers are in those plants. Value added jobs are in our plants. Conservatives have ignored that. They have gone with the ideological point that it will give general corporate tax reductions, but that is not what is necessary.

We have seen incentives to some of these plants to try to keep them here, but ironically sometimes those incentives result in less jobs because there is no strategy. The most recent, the most egregious one was the fee bates that were introduced in the budget.

I will go through 10 reasons why these fee bates are very curious and problematic. We all want a greener community. We all want a greener economy. We have been pushing for a green auto strategy for years now, one done with the CAW and other vested partner groups, including the automotive manufacturers. They have looked at our information. These issues are very important.

These are the fee bate policy flaws.

The first is it damages domestic automakers. There would be $67 million of levies on domestic vehicles, which is 80% of all levies collected, and it would transfer $47 million in benefits to Toyota, with 75% of the rebates to Toyota, almost half of all the fee bates go to the Yaris.

Almost all the fee bates we have right now will go to one particular model of a car made overseas. I do not know why any Canadian sitting at the dinner table right now wants to see their taxpaying money going to Seoul, Beijing and Korea. I do not know anybody who wants that, but that is what will happen. The Yaris, in particular, will really benefit. Happy to be Toyota, too bad to be anybody else.

The second is it damages the Canadian subcompact market. A thousand dollars per Yaris makes up almost half of all rebates. It undermines the ability of other dealers and manufacturers to sell equally beneficial subcompacts competitively.

What that means is, with a low-end vehicle like the Yaris and other subcompacts, there is little or less margin for profit, so the $1,000 is a bigger economic incentive than if the vehicle is a higher price. We are actually putting some of our Canadian vehicles in a wider gap of problems to compete with that vehicle because it has the $1,000 rebate. It is significant. They cannot make it up. In fact, I think Volvo is looking at disabling some of its safety equipment so it can get a little more fuel efficiency and qualify for the fee bate. That is not right. That is done without public policy. Why are we forcing people to choose between safety and fuel efficiency? Why not have a public policy that does both?

The third is it is a disincentive to Canadian green technology. The policy levies a $1,000 to $2,000 tax on Canadian made advanced technology engines, cylinder deactivation, yet it offers a $1,000 rebate for an imported conventional gasoline Yaris vehicle without any significant advanced technology.

That is important because cylinder deactivation, which is a Canadian innovation, is something that reduces more greenhouse gas emissions because it gets to some of the higher polluter vehicles. Therefore, we are getting to the lower end hanging fruit, which we can get right away, and punishing Canadian technology. I do not understand that.

The fourth is it hurts suburban families. Levies of up to $4,000 per vehicle are passed on to suburban/rural families purchasing these larger vehicles, which offer needed utility. We know there is a disincentive, for example, for those families that require those larger vehicles for their personal and other businesses as opposed to moving for a greener technology that would fix this.

The fifth is it will not impact segment choices. In terms of the market, the fee bates will not shift the actual public policy to producing and purchasing smaller vehicles.

The March report for vehicle production, manufacturing and selling is out today. Interestingly enough, after the introduction of the fee bate program, luxury SUVs are up 15.1% and large SUVs are up 8.6%. We have a policy that has not even moved in the direction it is supposed to move. There are all kinds of issues. I know the list has been interesting in terms of monitoring. Cars go up on the list on the website then they go off. It is unacceptable.

The New Democrats, and it is important that I conclude with a couple of points about this, have been asking for a green auto strategy, one that looks at procuring the jobs in our own communities. Investment is important and it can be value added. This is why we supported the capital cost reduction allowance for machinery and equipment for five years instead of the two years. Right now those companies have pretty well decided upon the two year window.

The fact is the oil and gas sector gets 100% for another eight years. Manufacturing, which is being obliterated by a high dollar and bad trade policies that the government is pursuing, only gets 50% for two years. The oil and gas sector is booming. Then the other manufacturing sectors, aerospace, textiles, get 100%. We are asking for good sound public policy, public policy that looks at trade issues, manufacturing issues and ensures that if we give incentives, they get to the workers' floor so our workers can compete fairly. They are only asking for that.