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

[The Acting Speaker, Royal Galipeau]

It is with regret that I must interrupt the hon. member but he cannot go on and on because his time is up.

Questions and comments, the hon. member for Yukon.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I would like the member to finish his last thought.

Does the member know why the government conjured up that trick last Friday? Why would it do those types of tricks? There are two weeks left in the session. Speakers like my colleague and others had not had a chance to speak to the budget. Does the government not want honesty and transparency? Does the government not want people to speak and provide their opinions on the budget? Why would the government do that on a Friday when most MPs are working with their constituents in their ridings except those on House duty? Does the government not want members working with their constituents?

Did the government do that because the budget is falling apart with respect to income trusts and interest deductibility? Was it because the budget is falling apart as far as the provinces are concerned with respect to the Atlantic accord? In fact, the Canadian Press reported this morning that the Prime Minister told Saskatchewan and Nova Scotia to sue him.

Did the Conservative government not say that it was elected on accountability? Does doing something like this not fly in the face of that philosophy?

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, the reality is that the government is now facing a perfect storm on its budget. A member of its caucus has already been kicked out. Other members of the Conservative government are under pressure from their constituents to leave the party.

With the collapse of the Atlantic accord, the government is facing a storm because the premiers across Atlantic Canada are now coming out against the budget. The premier of Saskatchewan, who has a tremendous reputation and a great deal of credibility, has also been speaking against this appalling budget. We have not heard a peep from any of the Conservative members from Saskatchewan in support of their province. Not a single member of the Conservative Party from Saskatchewan is actually willing to stand up for the province of Saskatchewan.

In British Columbia we have a proud tradition of standing up for our constituents. There used to be Saskatchewan members in this House who would stand up proudly for Saskatchewan. Now we have a troop of sheep, none of whom, not a single Conservative member, will stand up for their province or their constituents. It is unbelievable. Not a single Conservative member from Saskatchewan has dared say anything about the farm crisis or the destruction of the Canadian Wheat Board. Not a single Conservative member from Saskatchewan has dared say anything against the talking points they are getting from the Prime Minister's Office.

With that crisis in confidence from Saskatchewan and Atlantic Canada, the Conservative government is clearly in trouble. It knows its budget is in trouble. However, rather than consenting to honest debate so each of the issues, which it has failed to address, would be out in the public domain, which is our responsibility as parliamentarians, it tried to get the budget adopted by using a cheap and tawdry trick. However, it did not work because members of the New Democratic Party and other parties were here and we simply stopped the government in its tracks from what was a conjuring trick to try to get a budget passed that no longer has any legitimacy whatsoever.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, I was really impressed by the breadth of my colleague's knowledge about the impact of this budget on his home province of British Columbia and on his own riding.

My home riding is Hamilton Mountain in Ontario. Our province has been absolutely decimated by the loss of manufacturing sector jobs. In my home town alone, 11,000 of those jobs have been lost.

When people look to this budget and to the government, they want real help. What they had hoped for, at a minimum, was some real investment in employment insurance and some real access to retraining so they could get jobs in new fields because the manufacturing sector is being decimated in part because of the trade policies that were started under former Conservative prime minister, Brian Mulroney, but the same environment exists now for trade and for the economy in this country today.

I know the member does not have the same manufacturing base that I have in my riding but I would think that issues like EI and retraining would be equally important to the forestry sector. He has been an eloquent spokesperson against the softwood sellout that was so readily supported by other parties in the House but which has devastated many workers and their families in my colleague's province.

I just wonder whether my colleague could comment on whether he is getting the same groundswell of outcry because the government failed to do anything for working families in this country.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, the member for Hamilton Mountain has been a passionate advocate of advancing through Parliament the quality of life of ordinary working families and, as has all the NDP caucus, has been pushing forward an end to this economic disillusion that somehow just continuing to give to the wealthiest in the country will somehow, through some magical, mystical trickle down theory, bring prosperity for all Canadians. Clearly, that has not worked.

We also have the failure of the budget to deal with employment insurance, retraining, access to apprenticeship programs and post-secondary education programs. What we have seen instead is an incredibly short-sighted, misguided trade policy that continues down the same road that the Liberals took. The definition of insanity is doing the same thing over and over again and expecting a different result.

We see the Canada-U.S. Free Trade Agreement and NAFTA, because we capitulated on all points, are leading to an actual fall in the income of most Canadian working families. They certainly understand it. When we ask families whether they are doing better now than they were 15 years ago, most say that they are not. Most families say that they are struggling to make ends meet. They said that they are working harder and longer hours and yet they have fewer and fewer financial resources.

After the government capitulated on NAFTA, it moved forward with the softwood lumber capitulation. Now we are seeing the trade minister, as a renegade because the Prime Minister has no understanding of trade policy whatsoever, moving forward to sign free trade agreements that will lead to more catastrophic job losses. The FTA will gut our shipbuilding industry. The trade minister, who has betrayed his constituents and who is now betraying the whole country, which makes him consistent, is now trying to sign a trade agreement with South Korea which will devastate our auto sector. What is next?

Time and time again we have seen the government capitulate and give away everything. The results for most working families from coast to coast to coast are lower incomes and part time, temporary minimum wage jobs, such as burger flipping because that is all that is left when the auto sector is gutted, the shipbuilding sector is gutted, the textile industry is gutted and the softwood lumber industry is gutted. When, in every sector, our value added manufacturing is simply tossed away so that some banker in Toronto can make another million dollars then we can understand why we are seeing greater and greater frustration arising across the country.

The government is off the rails. It said that it would be different than the previous Liberal government and yet we now see the exact same inability to grasp economic fundamentals. It does not understand that when most working families are earning less it must change the policies in order to address the fundamental income crisis. It is same old, same old.

The NDP will continue to push and say that the emperor has no clothes and that the government needs to start taking action on these issues. We will continue to press because we are the only voice for ordinary working families who have seen their incomes erode, their manufacturing jobs taken away, the doors to post-secondary education and apprenticeship training closed and access to health care when they need it no longer there. Alberta and Saskatchewan are experiencing an agricultural crisis but the Alberta and Saskatchewan Conservative MPs will not say a whit about that. We are here to stand up for Canadians and we will continue to do so. We know there will be a lot more of us in the House after the next election.

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

Mr. Speaker, I am pleased to speak today to Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007.

As vice-chairman of the Standing Committee on Finance, the committee and I had the opportunity to study the bill in detail and we heard from numerous witnesses on some of the bill's more contentious issues.

For the past 16 months, one of my major grievances with the government has been its lack of vision. Since my time on Parliament Hill, I have never seen a government anger and disappoint all sides of the political spectrum the way this Conservative government has. It has not only managed to alienate its former supporters but it has also failed to endear itself to its adversaries.

At several points during its mandate, the Conservative government enacted piecemeal legislation that had not been well researched, developed or consulted upon. It has botched several files, most recently the Canada summer jobs program where hundreds of community organizations were left without funding. Even worse was the fact that these groups had no contacts and could not receive straight answers from the ministry because of government mismanagement.

First the Conservatives cut the program and then they reintroduced it but with less money. They received thousands of complaints and put more money into the program. At this point we still do not know which group is getting funding and how much. This is just another example of how far removed Conservative values are from the values of most Canadians. It took intense pressure from this side of the House, as well as protests from groups across the country, to get the government to backtrack on its ill-conceived plan and to reinstate funding to non-profit community groups across Canada.

I have spoken to the budget on several occasions and have highlighted all my preoccupations with the Conservatives, mainly that they lack any vision whatsoever and look only to immediate, political gain instead of long term goals for Canada. A perfect example of this are the green levy and the auto eco-rebate. Those are the only green initiatives contained in the budget and they were developed without any consultation with the automotive industry.

Encouraging Canadians to purchase fuel efficient vehicles is a step in the right direction, but an additional tax on certain vehicles is not the answer. In fact, it is a simplistic solution to a complex situation that instead requires a multi-pronged and careful approach.

According to testimony the committee heard from both industry and environmental groups, the proposed green levy and auto eco-rebate will fail to produce any meaningful change in reducing carbon emissions. These programs damage domestic automakers by placing $67 million worth of levies on domestic vehicles, which is about 80% of all the levies that will be collected. The transfer of $47 million in benefits to one company, which is 75%, for one vehicle that is produced offshore.

We should remember that when Canada imports foreign cars, greenhouse gases are produced by ships that cross the ocean to get them here. The more cars Canada imports, the more emissions the ships produce. Therefore, when the government offers a feebate benefit to only one foreign produced car, not only is it discouraging people from buying cars made in Canada, it is also encouraging increased emissions from a greater volume of imports which essentially cancels out the emissions difference the rebated cars produce.

Only three of the twenty-one eligible cars under the feebate program are made in Canada. While I do not want to give cars that are not fuel efficient an easy pass, I do think the government should not be punishing Canadian automakers at a time when our industry has suffered so many job losses in the last decade.

2006 marked the first time in 18 years that Canada had an automotive trade deficit. This was down from a $15 billion trade surplus only seven years earlier. In those seven years, Canada has gone from being ranked number four in auto assembly worldwide to being ranked number nine in 2006.

Companies such as Ford, Chrysler and GM account for eight out of every ten auto workers in Canada. However, with these measures in the budget, Canadian workers are being punished. These measures also damage the Canadian economy segment in vehicles. The $1,000 rebate for one vehicle, which makes up half of all rebates, undermines the ability of other dealers and manufacturers to sell equally beneficial subcompacts competitively on the same basis. Perhaps the biggest failure of these measures is that they fail to help get older cars off the road.

The majority of greenhouse gas emissions produced by Canada's on road fleet of cars are produced by older vehicles. There are significant differences between the amounts of emissions a 1990 model creates as compared to its 2007 counterpart. The Conservatives were better off putting more money and more energy into getting older cars off the road than they were by punishing new cars.

Recently, the finance minister has been quoted on committing another flip-flop by announcing that he would reconsider the way that the green levy and the auto ecorebate would function. This is a good sign, but it is too vague to have much meaning.

During the clause by clause of this bill in committee I put forward a motion to remove the clause dealing with these measures in order that the government would be able to rethink its policy on this issue, but without success. I only hope that the minister will stay true to his word and look at alternative measures to deal with the auto industry. These measures should not punish Canadian automakers which is currently the case, and should emphasize getting older cars off the road.

As I mentioned earlier, these vehicle feebates were some of the only green initiatives contained in the budget. The Conservative government is failing to protect the environment and Canadians are getting fed up.

The environment minister has attempted to douse the fires by putting together more piecemeal legislation but, guess what? That has also failed. By not consulting environmental groups the government demonstrated its arrogance and its ignorance on the issues of climate change and the environment.

One specific example that was raised during the finance committee study of this bill was in the crucial area of ocean conservation. The government has reduced the budget of the Department of Fisheries and Oceans by $105 million and has only allocated $18 million over two years to the conservation of oceans in our economic zones.

It is a sad statement when experts agree that it will take over $100 million per year to get Canada on track to meeting its international commitments in ocean conservation.

In 2005 the Liberal government announced the Canada's oceans action plan and had begun allocating money when a premature election was called. Since coming into power the Conservatives have mismanaged all environmental files, but perhaps they have done the most horrendous job of protecting Canada's oceans.

Canada has only protected less than 1% of our economic zone and with the Conservatives in power that figure will surely not improve. I cannot understand how the Conservatives can spend millions of dollars buying military equipment to protect Canada's Arctic region, but allocate practically nothing to protect the Arctic Ocean.

They can spend millions on patrol boats, but refuse to allocate money into protecting our oceans, which directly employ approximately 98,000 Canadians. Seafood exports account for about $5.5 billion of our economy, yet the government does not deem the oceans important enough to properly fund their conservation.

These measures contained in the budget have not endeared the government to environmentalists and we can forgive climate change experts for doubting the Prime Minister's new found devotion to the environment. We can also forgive these same experts for going one step further and calling the government's environmental plan a fraud and sellout.

As I was saying, the Conservatives have not only raised the ire of the left, but they have turned their backs on their allies on the right. I am talking of course about the energy sector in Alberta and its dissatisfaction with the government's decision to tax income trusts. I suppose that when he came into power in 2006, the Prime Minister never imagined that the Liberal Party would come to the defence of so many energy corporations in Alberta and the way in which they want to structure themselves.

The Prime Minister and the Minister of Finance delivered a low blow to investors and corporations when they blindsided them on Hallowe'en with a 31.5% tax rate on income trusts.

Several months ago, the Standing Committee on Finance tried to understand how the government calculated the so-called tax leakage in the income trust sector. After the committee was repeatedly denied access to these documents, it came to the conclusion that the government's decision to tax income trusts was based on imprecise data and was another case of mismanagement. Unfortunately, the Conservatives' mismanagement of the income trust matter cost Canadian workers $25 billion. These working people had found a high performance investment mechanism for their retirement. From one day to the next, the Minister of Finance destroyed years of savings. And the government has the audacity to claim that this measure is part of its tax fairness plan. I do not see what is so fair about liquidating Canadians' savings or the consequences of this decision to the energy sector in Alberta.

Small oil companies are having trouble because of reduced access to capital. These companies are using all of their resources just to stay afloat. That means that they have less to invest in reducing greenhouse gas emissions and making their production systems more environmentally friendly. Moreover, the income trust decision is threatening our energy corporations. They are at risk of being taken over by foreign interests. Recently, we have seen a number of takeovers and takeover attempts by foreign companies, which will weaken the Canadian economy and reduce the government's tax revenues. Rather than help Canadian companies, the government has hurt our industry and has made an unprecedented number of foreign takeovers possible.

The Liberal Party proposed a fair solution to income trust taxation. It was a solution that experts, businesses and investors agreed on. Unfortunately, the government ignored our proposal, which was rejected by the Standing Committee on Finance. Then the Liberal members proposed adopting the Bloc Québécois' income trust amendment. The amendment would have extended the grace period from four years to 10. Thanks to Liberal support, that amendment would have been passed had the Bloc members not changed their minds and voted against their own proposal. This proves that the Bloc Québécois has no useful solutions to offer to Quebeckers and that it is not protecting Quebec's interests.

During a meeting of the Standing Committee on Finance, a Bloc member said:

Let's not forget that when we examined the report, the bill had not been submitted to us. We wanted to find the best possible solution. However, in the present context, what we really hope for is speedy passage of the bill so that the budget can be implemented as soon as possible.

In other words, the Bloc members are here for the sole purpose of protecting their own interests. An amendment could easily have been adopted to allow Quebeckers and all Canadians to benefit from a four- to 10-year grace period. After speaking out so vigorously against taxing income trusts, the Bloc members changed their minds. Moreover, they lack courage when real changes have to be made.

I doubt that the many people who have invested in income trusts in Quebec and Canada are pleased with the Bloc's about-face.

Another area where Canadians will be feeling the crunch from Conservative mismanagement is set to begin as the summer gets underway. With Canada's tourist season in full swing, a thriving section of our economy must deal with the elimination of one of its greatest selling tools, the visitor rebate program.

The program gave Canada's tourism industry a valuable tool to help it compete for global tourists. Once again, without any consultation with the tourism industry, the government eliminated the program. Only a small handful of developed nations do not have a federal sales tax rebate program for tourists. Thanks to the Conservatives Canada can count itself among these few. It is difficult to understand why the government wants to weaken Canada's tourism industry since so many Canadians are dependent on this industry.

After the special finance committee's hearing requested by Liberal MPs to study the visitors rebate program, and along with the help of industry stakeholders, the continued pounding of the government on its ill-developed decision finally convinced the finance minister to announce a federal foreign convention and tourist incentive program in Bill C-52. That measure in the budget partially corrects the mistake made by the government when it first eliminated the GST rebate program, but it does not go far enough.

Why was the government determined to destroy a program that worked as it did with the Canada summers job program? The argument surrounding the GST rebate could not be timelier as summer is now upon us. I am glad to see some reversal by the government on this matter, but there is another set of seasonal problems for which the government must account.

As we know, summertime is also a season of festivals in Canada. My hometown of Montreal is host to an endless number of world renowned festivals which draw millions of visitors each year. Anyone who has seen the international jazz festival and the just for laughs festival understands how important festivals are to Montreal's economy. I wonder if the current Minister of Canadian Heritage and Status of Women has been to Montreal during festival season because her actions have led us to believe otherwise.

Just a few weeks ago, the presidents of Montreal's two largest festivals spoke out against the minister's lack of action to secure funding in time for the summer. Festivals are a huge economic boost to local economies across the country and the minister's inability to assure funding for these festivals is a complete failure on her part and on the part of the government. I cannot understand how the Conservatives can mismanage such an obvious and crucial file such as this one.

Art groups across the country have been criticizing the government for months about the disastrous underfunding of the arts. Cultural groups in the country have felt insulted and ignored by the government and it has caused well-known authors and artists to speak out. We cannot allow Canada's vibrant arts community to suffer under the Conservatives' ideological program cuts and mismanagement.

We have already seen them mismanage countless files by closing Liberal programs and then reopening them only a few months later under a new or different name, whether they wanted to take credit for these supposedly new programs or whether they just thought that no one would notice that they were gone remains unclear.

This began in September 2006 when the Conservatives cut a number of effective Liberal programs. The Liberal Party protested these ideological cuts, as did the public. Since then we have seen the government re-announce these programs under new names and pretend as if the Liberal initiated programs never existed.

Canadians deserve better than what the government has given them, ill-conceived, piecemeal programs that will not help Canada advance into the 21st century. The government is much better at photo ops and slander than it is at governing and our country is not any better for it.

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

Mr. Speaker, my colleague's very thoughtful speech reflected a depth of knowledge and understanding of financial issues that I know he certainly possesses.

Members of the Conservative government were arguably the last group of Canadians to understand the issue of climate change and to understand the necessity for the federal government to actually do something about climate change or global warming.

It was not, for instance, one of its much vaunted five priorities. There was nary a mention made by anybody on the Conservative benches in 2006 about climate change or global warming, but it is funny that a couple of public opinion polls published in December 2006 sort of coached, cajoled or finally led the government into doing something about climate change.

A couple of years ago a budget was introduced by the then Liberal government. It talked about project green. I would ask my hon. colleague how the measures contained in project green in 2005, and the half measures contained in the most recent budget from the Conservative government, stack up?

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

Mr. Speaker, I did not get a chance to talk much about environmental issues, nor am I an expert on those matters. There are hon. members in my party who are much better at it than I am, but I could provide a couple of numbers and some information on what the Liberals did in 2005.

Some of the facts have changed because we have lost two years in advancing on project green which the Liberal government announced in 2005. The federal government's action to implement the Kyoto protocol peaked with the release in 2005 of a climate change plan which set up a series of funds and initiatives designed to assist with the costs of achieving them. It also set sector by sector targets and a mix of voluntary and regulatory measures.

In budget 2005 the Liberal government had committed $10 billion by 2012 to meet all those targets. That spending included a climate change fund of $1 billion over five years which was booked to create a permanent institution for the purchase of emissions reduction and removal credits on behalf of the Government of Canada. The focus of this program was by and large to encourage and fund domestic projects that would qualify under the Kyoto protocol.

We also introduced a partnership fund that was created to work with provincial governments on the reduction of greenhouse gases and a role in combating global warming. Budget 2005 also booked $250 million for large projects to be undertaken in conjunction with the provincial governments toward national objectives. Funding was scheduled to increase to $1 billion and would have provided $538 million to support closing coal fired electricity production in Ontario and a further $328 million to support Quebec's Kyoto plan.

We also introduced a one tonne challenge and the EnerGuide retrofit program, which I mentioned in passing in my speech. The Conservative government decided to cancel that and reintroduce it with less money. This program had been assigned $120 million to reduce emissions. The EnerGuide retrofit program included EnerGuide for low income housing. It was designed to help Canadians save energy and money by making their homes and buildings more energy efficient.

There was also a wind power production incentive and renewable power production incentive. The Liberal government set aside $1.8 billion in funding over 15 years for that initiative. There were some other initiatives for sustainable energy and science and technology strategies in budget 2005. Some $200 million was dedicated for that.

When we hear that there was no plan and no moneys put aside, I am not sure what members of the Conservative government are thinking about when they make those statements.

[Vic Toews, Conservative, President of the Treasury Board]

Mr. Speaker, I note the member said that money was set aside for this and that. In fact, when the Conservatives came to government there was no money set aside for any of those things.

I want to bring the issue back to my home province of Manitoba. The Liberal government had promised money for the floodway. Manitoba is deluged from time to time by the flood waters of the Red River, the Assiniboine and other bodies of water. The Liberals were good at promising money. Indeed, they made the promise publicly over and over again.

When the Conservatives came to government, the promise the Liberals had made of cost sharing the floodway, which was a $650 million project, the outstanding money was simply not there despite public assurances by former Treasury Board president, Reg Alcock, that the government was onside.

It took the Conservative government nine months of trying to ensure it had money and not take it out of local infrastructure money. In trying to find the amount of money that I was looking for in terms of the $171 million that was outstanding from the federal government, we could not take it out of local infrastructure money. We had to go to a national infrastructure program. Despite the assurances that the money had been set aside, that money had not been set aside. It simply was not there. We had to identify it.

With regard to the numbers that the member has pointed out, where were the moneys set aside specifically in terms of money that had been appropriated by any budget, a budget that had in fact been passed?

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

Mr. Speaker, I find it odd that a Conservative member, a cabinet minister, would ask me a question that is specific to his own riding and how moneys are spent.

In the budget book there are some comparative numbers. I hope, especially since the member is the President of the Treasury Board, he understands where money is being spent. In this budget book there are comparative numbers where the government has said it spent between $130 billion to $140 billion on programs. I am hoping some of that money is accounted for reasonably and there are some controls in place.

I stated that most of the money was committed for programs. I do not think I have to tell the hon. member how that works, but the programs are developed. These are some of the arguments that we hear from the heritage minister when she says that the details for allocating the money for festivals have not been finalized yet and that is why the money cannot be allocated.

I am not sure where the hon. member is going with this, but in answer to his question, the money had been allocated for project green. The criteria on how the money was going to be spent were to be developed with the industry, environmental groups and stakeholders across Canada.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, I will be very brief because I am so surprised that I am actually in agreement with something that one of the government cabinet ministers would say that I really do not quite know what to do. I am in agreement that the Liberal record is not actually anything to crow about.

In particular, I want to take the member back to Bill C-55. I have spoken in the House about how the manufacturing sector in my community is being decimated and I will talk about that again later when I get my own turn to speak. Members will recall that we hoped that at a minimum the Liberal government would address wage and pension protections in cases where companies went bankrupt.

The member will want to speak about the Liberal government's record some more, but the Liberals introduced Bill C-55. The bill did not do enough on pensions but at least the Liberals started to move forward on wage protection. That bill passed through the House. It passed through the Senate. It received royal assent, but when push came to shove, that bill was never proclaimed. Once again the Liberal government let down workers right across the country.

[The Acting Speaker, Andrew Scheer]

I am going to have to end the question there to allow the hon. member for Saint-Léonard—Saint-Michel about 30 seconds or so to respond.

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

Mr. Speaker, I find it curious that the NDP is now worried about workers' retirement money when that party was not in favour of the Liberal amendment to no longer tax income trusts. We know that a high percentage of retirement funds and retirees who invest in income trust funds were hit with a $25 billion shot overnight on Halloween. Therefore, the NDP should not be asking questions about the retirement money of Canadians.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I am very pleased to have the opportunity to raise a matter that remains extremely contentious about the budget that has yet to be voted on and which presumably will be voted on within a short period of time.

It would not surprise anybody that I am rising on my feet to take this opportunity yet again to express the strongest possible feelings about the betrayal so far, and I underline so far, of the government in the current budget. This is about the promise made in the Atlantic accord which is most important and most advantageous to the people of Newfoundland and Labrador and of Nova Scotia. However, it is not missed on all Atlantic Canadians that the impact would affect the whole Atlantic region. The impact of this broken promise, of even the threat of the government cancelling the deal that was sealed in the Atlantic accord, is one that would be felt negatively if the government persists in cancelling the deal, or positively if the Atlantic accord is respected and upheld by the federal government. It is something that would impact on the whole of the Atlantic region.

One might ask why I would raise this yet again today. I have raised it again and again. The other New Democratic Party members from Atlantic Canada have raised it again and again. My leader has done so. A great many people who are in the public domain but not necessarily as partisan as we are have spoken out on the subject and have been of one view, which is that a very definite commitment was made in that accord in 2005. No matter how many different constructions the Prime Minister, the finance minister and the ACOA minister, the so-called political minister for Nova Scotia, put on it, it is actually, by the provisions in this budget, a deal that is broken, period, full stop.

The reason I rise on it again today is, as I have said every other time, it is never too late to fix something that every indication simply reinforces is something that has to be fixed. It has to be fixed because it is immensely important to the people of Atlantic Canada. I think there is some indication that Conservatives are beginning to understand that it needs to be fixed as well. It is seen as an astounding breach of faith, an obscene breaking of a promise that was in black and white, that was sealed in a deal, for which the government can offer no excuse or no acceptable explanation.

One dramatic moment in this saga was the decision of the member for Cumberland—Colchester—Musquodoboit Valley to actually incur the wrath of his party to kick him out for indicating that he would be voting against the budget in its final form unless it fully honoured the Atlantic accord.

I see this as a moment of opportunity, another dramatic moment in this saga. I want to stand in my place and unreservedly thank the Premier of Nova Scotia for coming off the fence. I do not want to say that in a pejorative sense but rather to acknowledge that he made a decision. Holding his nose, he made it clear that he was very unhappy with what this budget did to Nova Scotia and to Atlantic Canada. I do not think any of us could totally fault him for saying that he was going to continue to try from the inside, in the back rooms, in the wheeling and dealing and negotiating back and forth between the Prime Minister, the Minister of Finance and the premier, as well as their senior officials, to see that it is fixed. The premier also signalled, and I noted it here in the House, that he would be making a very different decision if he reached the point that he felt that there was no good faith, that there was no real attempt taking place to move toward a satisfactory resolution of this broken deal. That moment has clearly arrived.

We have made repeated attempts to say to the premier that we want to work across party lines to fix this broken promise. We have pleaded with Nova Scotia politicians of all political stripes to work across jurisdictions to fix this. I respect the fact that Premier MacDonald has now reached the point where he has felt compelled, and I am sure he did not arrive at this lightly, to publicly announce there is no movement or no resolution in sight. The moment has arrived where he recognizes that giving leadership to the people of Nova Scotia, in the tradition of his predecessor, former premier John Hamm, requires and demands he stand up, be counted and make it clear that he is pressing for every Conservative member in the House, representing a constituency in Nova Scotia, to vote against the budget unless it can be fixed.

My plea, once again, to the government and my words to the members on all sides are these. By working together, we can fix this, and it is in everybody's interests to fix this. This is one of those episodes. Some people may say that it is only Atlantic Canada, that they are four provinces, but they do not make up a huge population. They may say that they do not have as many people in all Atlantic Canada, despite the four provinces, as there are in the province of Quebec, or Ontario, or Alberta, or British Columbia. That is true, but we live in a federation. We have four provinces on the Atlantic side of the country that are very upset about this broken promise.

Some of us have hurled some harsh words to say that we understand what is going on. First, we understand that the Prime Minister made a very definite commitment, and he is breaking it with this budget. We understand that the Minister of Finance is aware of that. He is from Ontario. We also understand that there has been a cynical, crass decision made that there are more votes to be courted, as we say in Atlantic Canada, more fish to be fried, by going after the more prosperous and populous provinces where there are more votes. Therefore, the decision was made to throw the Atlantic provinces overboard.

However, that is not good for the federation and it is not good for what plagues this land today, and that is a lot of disillusionment and cynicism about politicians and governments breaking their promises. This is one reason so much appreciation and respect has been expressed, within my own province but across the country, for the member for Cumberland—Colchester—Musquodoboit Valley. He knew he would incur the wrath of his party by standing tall, standing firm, and if necessary, putting himself in that position. Even though he was told he would not be thrown out, within moments of standing up and being counted in the House last week, he was informed by his whip that he was out on his ear. I watched it happen behind the curtain.

The issue is, what needs to happen to fix this? As the member for Cumberland—Colchester—Musquodoboit Valley has said so many times, it is quite simple. Just honour the deal. What is the problem? It is a legal deal. It is a negotiated agreement that has the effect of law, unless the government brings in this final budget measure, which tears it up and throws it away.

As Darrell Dexter, the official opposition leader in Nova Scotia, has again and again proposed that all of us need to pull together, all parties, all elected members, provincially and federally, to say that we stand in unison and in solidarity for the future of Atlantic Canada. To do that, we need to stand together and insist this deal be honoured.

The premier today indicated that he read the statement of the finance minister, which made it perfectly clear that the government was not working to fix it, despite a lot of talk by Conservative members of Parliament from Atlantic Canada, especially by the Nova Scotia Conservatives, who could not bring themselves to stand together with the member for Cumberland—Colchester—Musquodoboit Valley.

Everyone was working hard to fix it, but what kept coming back from the Minister of Finance, the Prime Minister and the officials was there was nothing wrong with what was happening. They have said that the deal is fully honoured by the budget, even though it is perfectly obvious that is not the case. On that side, it really seemed to be a case of one hand clapping.

Now the jig is up and the truth is out. I suppose I should applaud the fact the Minister of Finance saw fit to tell the truth and acknowledge that, as far as he was concerned, for the sake of a few votes, he would not honour this deal. If we turn that around and look at the other side of that coin, what he is really saying is there are more votes to be had in other parts of Canada by throwing this deal overboard.

He wrote an op ed article, and applaud the fact that he actually told the truth. There is no interest and no indication that the government is serious about fixing the deal. In fact, the it does not even consider it a broken deal.

In part, here is what he said in his op ed article, which is a direct quote:

Our government is not in the process of making any side deals for a few extra votes. You cannot run a country on side deals. Equalization has been restored to a principles-based program for the first time in many years. That’s what all premiers asked us to do and that’s what all Canadians expect us to do.

The problem with that is a new equalization formula was brought in and in defiance of the Atlantic accord, the decision was made to bring that after the fact equalization deal down hard on the Atlantic accord, tear it apart and toss it aside.

It is true that the equalization formula is immensely complex and it hard for Canadians to fully understand. Let us be honest, it is hard for every member of Parliament to have a full grasp of all the complexities of that formula. However, what is absolutely clear is the Prime Minister, the Minister of Finance and the Nova Scotia Conservative members and all Conservative members in Atlantic Canada, except the member for Cumberland—Colchester—Musquodoboit Valley, hope the complexities of the equalization formula are such that Atlantic Canadians, and all Canadians, can be bamboozled into thinking that there is not a problem with the Atlantic accord being tossed overboard. The real problem is that we do not understand the equalization deal.

I think people understand the fundamental principles of the equalization deal. I think they also, with no difficulty whatsoever, can understand what is wrong with this picture. In the process of bringing in an equalization formula in the budget, on which we are about to vote, the government has decided to violate clause 4, which says that notwithstanding any new equalization formulas, the Atlantic accord shall be honoured.

One thing is for sure, no Canadian anywhere, with any sense of fairness, cannot understand what it means to decide to scrap the whole deal, in defiance of clause 4, and clawback funds that it was promised would not happen. Some will say, “There go the four Atlantic premiers, what's their problem”. Let me remind the House that it is not only Nova Scotia and Newfoundland and Labrador that have a problem with the budget and with the broken deals.

I will quote directly from an article that appeared this morning in CanWest News Service, which leads me to believe it probably landed in a lot of places across the country. The Premier of Saskatchewan has equally and eloquently argued the case for his province and his constituents province-wide. The premier said that he received a letter from the Prime Minister saying “there will be no more side deals”. Referring to the Minister of Finance's weekend letter saying there would be no deal with Nova Scotia, he said “It's becoming like Alice in Wonderland. It gets curiouser and curiouser”.

The reality is a similar deal was made, a promise was made, on the eve of an election. At the time, a lot of us thought, perhaps a bit cynically, that there was probably not much of a guarantee that the government would honour the deal. However, the government made the commitment in the light of day and in black and white. It is absolutely understandable that the people of Saskatchewan and the premier and the government of Saskatchewan are equally outraged that the Conservative government has ignored the commitment made with respect to the treatment of the revenues from Saskatchewan's resources as well.

What is not understandable is the fact that Conservative members in the House, knowing what the negative impact both economically and politically would be, could entertain the possibility of supporting the budget. This is causing a lot of anguish on the part of a lot of people not just from Atlantic Canada or Saskatchewan, but in all parts of the country. Further than entertaining the possibility of supporting this budget, Conservative members have made it quite clear they have no intentions of standing against the budget. At the end of the day, this causes a serious problem. This feeds into the sense of disillusionment that people feel. It is hard to perhaps imagine the degree of fury, the sense of wrath, being expressed in Atlantic Canada.

I do not think polling is a good basis for making public policy. However, I do think that when a dramatic number of people say they are outraged at what the federal government has done in the budget with respect to the Atlantic accord and promises made to the people of Saskatchewan, that it behooves the government of the day to consider this. All those people cannot be imagining that this is a grievance.

People are surprisingly forgiving, and I say that as a member of a party, which at the federal level, has never made huge breakthroughs. Sometimes it is disappointing that people are so forgiving of governments that break their promises. Again and again this has come up for mention in this debate over the last many months. It is amazing how people are sometimes prepared to be fairly forgiving and how that is sometimes detrimental to other political parties or politicians trying to earn people's confidence and their support and hopefully retain it.

This is very pertinent to the debate today. The last time the Liberal government, in a major shift of policies and with an absolutely devastating budget affecting Atlantic Canada, turned its back on Nova Scotia, the 11 Liberals representing Nova Scotia's interests in the House of Commons were defeated in the 1997 election. None of the members were prepared to stand up against a very harsh, punitive budget. I would have hoped people would have a bit longer memory and not opened the door for some of those very same members to come back in, but that is the democratic process and I accept this.

In wrapping up let me again appeal, through the premier of Nova Scotia, to all politicians of all stripes, provincial and federal, to stand together to get this job done.

What is the job? It is to fix the budget by honouring this simple, straightforward agreement, the Atlantic accord, and honouring the commitment made to the people of Saskatchewan, though not identical but along the same lines. Let us be able at the end of the day to say that Atlantic Canadians and the people of Saskatchewan are not second class citizens, and that this is a government that honours its commitments.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, the member might want to get her pencil because I have four quick questions and she can write them down. I know that in her speech she outlined how this budget has devastated Atlantic Canada and indeed Saskatchewan, and that is in chaos now for the government. I want to ask questions in regard to other areas.

First, search and rescue planes were high on the agenda of the government. It should have put a contract out. If Canadians are now going to be at risk because of the old planes or if our soldiers die, Canadians will hold all Conservative members accountable. Would the member comment on why that has not gone ahead and what other spending has taken place?

Second, what do the Conservatives have against the north? Why did the government break its only promise to the north which included icebreakers and a northern port? The government got people all excited about a northern port, but that has now disappeared.

Museums across the country are in an uproar today because of insufficient funding. Does this affect the member's riding? Does she have a comment on that?

Finally, does it hurt her riding as much as it does mine that the government cancelled the GST rebate for individual tourists? That has not been reinstated. It is certainly hurting my riding as are other cuts to tourism.