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.

(The House resumed at 12 p.m.)

The House proceeded to the consideration of Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, as reported (with amendment) from the committee.

Speaker's Ruling

[The Acting Speaker, Royal Galipeau]

I have a ruling by the Speaker concerning Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007. There are nine motions in amendment standing on the order paper for the report stage of Bill C-52.

Motion No. 2 will not be selected by the Chair, because it requires a royal recommendation.

Motions Nos. 1, 3 and 4 will not be selected by the Chair, because they were defeated in committee.

All remaining motions have been examined by the Chair and the Chair is satisfied that they meet the guidelines expressed in the note to Standing Order 76.1(5) regarding the selection of motions in amendment at the report stage.

Motions Nos. 5 to 9 will be grouped for debate and voted upon according to the voting pattern available at the table.

I will now put Motions Nos. 5 to 9 to the House.

Motions in Amendment

[Monte Solberg, Conservative, Medicine Hat, AB]

moved:

Motion No. 5

That Bill C-52 be amended by deleting Clause 45.

Motion No. 6

That Bill C-52, in Clause 46, be amended by replacing lines 1 and 2 on page 51 with the following:

“46. (1) Section 234 of the Excise Tax Act is amended by adding the following after subsection (2):”

Motion No. 7

That Bill C-52, in Clause 48, be amended:

(a) by replacing lines 1 to 4 on page 53 with the following:

“the Minister shall, subject to subsection (8) and section 252.2, pay a rebate to the person equal to the tax paid by the person in respect of the accommodation.”

(b) by replacing lines 30 to 34 on page 53 with the following:

“the Minister shall, subject to subsection (8) and section 252.2, pay a rebate to the particular person equal to the tax paid by the particular person in respect of the accommodation.”

(c) by deleting lines 37 to 46 on page 53 and lines 1 to 3 on page 54.

(d) by deleting lines 25 to 30 on page 54.

Recommendation

(Pursuant to Standing Order 76.1(3))

Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the following amendment to Bill C-52, “An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007”. That Bill C-52, in Clause 48, be amended:

(a) by replacing lines 1 to 4 on page 53 with the following:

“the Minister shall, subject to subsection (8) and section 252.2, pay a rebate to the person equal to the tax paid by the person in respect of the accommodation.”

(b) by replacing lines 30 to 34 on page 53 with the following:

“the Minister shall, subject to subsection (8) and section 252.2, pay a rebate to the particular person equal to the tax paid by the particular person in respect of the accommodation.”

(c) by deleting lines 37 to 46 on page 53 and lines 1 to 3 on page 54.

(d) by deleting lines 25 to 30 on page 54.

Motion No. 8

That Bill C-52 be amended by deleting Clause 50.

Motion No. 9

That Bill C-52, in Clause 51, be amended:

(a) by replacing lines 20 to 32 on page 57 with the following:

“51. (1) Paragraph 252.4(1)(a) of the French version of the Act is replaced by the following:

a) la fourniture de biens ou de services relatifs au congrès, effectué par un inscrit qui est l’organisateur du congrès;”

(b) by deleting lines 33 to 42 on page 57 and lines 1 to 28 on page 58.

(c) by replacing lines 29 to 42 on page 58 and lines 1 to 13 on page 59 with the following:

“(5) Paragraphs 252.4(3)(a) and (b) of the Act are replaced by the following:

(a) the tax paid by the organizer calculated on that part of the consideration for the supply or on that part of the value of property that is reasonably attributable to the convention facility or related convention supplies other than property or services that are food or beverages or are supplied under a contract for catering, and

(b) 50% of the tax paid by the organizer calculated on that part of the consideration for the supply or on that part of the value of property that is reasonably attributable to related convention supplies that are food or beverages or are supplied under a contract for catering.”

Recommendation

(Pursuant to Standing Order 76.1(3))

Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the following amendment to Bill C-52, “An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007”. That Bill C-52, in Clause 51, be amended:

(a) by replacing lines 20 to 32 on page 57 with the following:

“51. (1) Paragraph 252.4(1)(a) of the French version of the Act is replaced by the following:

a) la fourniture de biens ou de services relatifs au congrès, effectué par un inscrit qui est l’organisateur du congrès;”

(b) by deleting lines 33 to 42 on page 57 and lines 1 to 28 on page 58.

(c) by replacing lines 29 to 42 on page 58 and lines 1 to 13 on page 59 with the following:

“(5) Paragraphs 252.4(3)(a) and (b) of the Act are replaced by the following:

(a) the tax paid by the organizer calculated on that part of the consideration for the supply or on that part of the value of property that is reasonably attributable to the convention facility or related convention supplies other than property or services that are food or beverages or are supplied under a contract for catering, and

(b) 50% of the tax paid by the organizer calculated on that part of the consideration for the supply or on that part of the value of property that is reasonably attributable to related convention supplies that are food or beverages or are supplied under a contract for catering.”

[The Acting Speaker, Royal Galipeau]

The hon. member for Markham--Unionville is rising on a point of order.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, I rise to contest a ruling by the chair of the finance committee during clause by clause consideration last week. During that consideration, the chair of the committee ruled that an amendment referenced at the committee under the number 2972723 was out of order and could not be moved.

The amendment in question sought to provide a tax reduction to a group of taxpayers who would have otherwise paid 31.5% tax on proceeds from income trusts. Under my amendment, they would pay only 10%. The amendment also provides for a tax refund or credit of this tax for certain taxpayers. Both of these measures are clearly tax reductions.

With respect to the general tax reduction from 31.5% to 10% contained in the amendment, it was in no way questioned by the chair at the meeting. The chair presumably knew that such a tax reduction was in order. However, in committee, the chair ruled out of order another part of the same amendment that I proposed to clause 21 of the bill to reduce the tax on Canadian residents even further by way of a tax refund or credit, in subclause 2.1. Here I will quote the chair of the committee, who said that this “would require government spending”.

He then concluded, again erroneously, that this latter tax reduction required a royal recommendation, which if this was the case obviously could not be moved in committee. Therefore, the chairman mistakenly ruled the amendment out of order and the committee did not consider the amendment that I was proposing.

In addition, a number of amendments standing under my name at the committee simply could not proceed because the central amendment, which I have just described, could not be moved. The chair's ruling thus had an adverse effect not only on the amendment itself but on a number of other amendments as well.

I now want to touch briefly on the procedural arguments as to why I think the committee chair's ruling was erroneous. While I accept that increasing a tax or levy as well as increasing a benefit or grant are prerogatives of the Crown, my amendment did no such thing. It dealt with refunding a tax to a group that would otherwise have paid it.

On Monday, October 9, 1957, Speaker Lamoureux ruled in this place that reducing a tax by way of an amendment and without a royal recommendation was in order. This decision can be found in the Journals of the House of that day at page 254.

Speaker Lamoureux, in his decision, was basing himself on Erskine May's treatise on parliamentary procedure and form, the 15th edition, which says at page 704 that provisions for the alleviation of taxes are not subject to the rules of financial procedure. At page 572, May also states that a bill diminishing or repealing a tax or other public burden, unless the imposition of a new tax is proposed by way of substitution, needs no royal recommendation.

In our own House in the last Parliament, a number of private members' bills were passed, without royal recommendation, to provide tax alleviation. Two such examples were the bills to provide for a tax deduction for tools for automobile mechanics and a bill to provide similar relief for workers who purchase transit passes.

Only a few weeks ago, we passed private member's Bill C-294 to reduce income taxes for the benefit of lodging and other such allowances to young athletes, mainly hockey players. This bill was sponsored by the Conservative member of Parliament for Prince Albert.

Surely if it is in order to offer an exoneration of taxes for hockey players, which it certainly was and which I supported, it is equally in order to offer an amendment to reduce taxes to Canadian senior citizens who are now the innocent victims of the Prime Minister's broken promise on income trusts.

Finally, I wish to draw to the attention of the House a booklet published by the Procedural Services of the House of Commons under the authority of the Speaker and entitled “Amending Bills at Committee and Report Stages in the House of Commons”. At page 5 of this document, under the rubric “Financial Initiative of the Crown”, it is stated, “Any amendment to reduce public spending or to reduce a tax is admissible”.

Clearly the chair of the Standing Committee on Finance erred when he refused to allow me to move my amendment at committee. Equally clearly, the effect of not being able to move this important amendment was such that other amendments which I was offering either could not be moved because they were subordinate in nature or, in the case where they could be moved, did not carry much support simply because the main subject could not even be debated.

For greater clarity, I note that the Chair of the committee was in error when he suggested that subclause 2.1 was new tax expenditure. It is not. The subclause itself makes this point when it states, “Every individual who is resident in Canada and liable to pay tax under Part 1 may claim a refund or credit against tax otherwise payable”.

This subclause involves no new net tax expenditure by the Crown. It simply allows an individual taxpayer who is a Canadian resident to recover tax already paid on his or her behalf to the Crown.

A taxpayer who is a Canadian resident can recover not one penny more than that which was remitted on his or her behalf already to the Crown. Therefore, there is no new tax expenditure whatsoever.

In short, the withholding in question is then reimbursable to a specific category of investors, namely, Canadian residents, who would get their money back. For example, foreign investors would not qualify because they do not pay sufficient or any Canadian taxes. Pension funds would not qualify either because of their tax exempt status.

Therefore, there is a clear case of tax alleviation as identified by Erskine May, as I mentioned earlier.

That is why I am seeking this remedy in asking the Speaker that my amendment be allowed to be debated and voted on at report stage. The Chair of the committee provided an erroneous ruling which prevented me from doing my work of representing my constituents and Canadians generally at the committee.

[Diane Ablonczy, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I have a few comments on my friend's point of order that may prove helpful to the Chair.

First of all, we note that the four motions he brings forward today are, as he mentioned, similar to motions that were already proposed and defeated at committee stage. Further, they are flawed on so many levels that it is difficult to know where to begin, but I will touch on just a few of the many problems with these proposed amendments. Fortunately for all concerned, I believe they are entirely out of order and that the Speaker will find them so, but I do want to add the concerns that the House should be aware of.

It is well recognized that rules of parliamentary procedure preclude the introduction of a motion to amend a bill if the motion exceeds the scope of the notice of ways and means motion on which the bill is based, without the introduction of a new notice of ways and means motion on which the House has concurred. Further, the introduction of a motion is precluded if it increases the amount of an appropriation without having first obtained a royal recommendation.

Contrary to what my friend just said, these motions fail on both of those counts. The hon. member for Markham—Unionvale did not obtain the concurrence of this House on these motions before they were moved, nor was a royal recommendation obtained. Thus, these motions should be ruled out of order on this basis alone.

Furthermore, an amendment that would make a clause unintelligible is also out of order. For reasons which I will explain, the proposed amendments are simply incomprehensible. Accordingly, these motions should be ruled out of order. Should they proceed, they should be defeated on the basis of their confusion and questionable policy. I would like to explain briefly.

Motion No. 1 proposed by the hon. member for Markham-Unionvale is a prime example of an amendment that renders a clause unintelligible. In particular, the draft purports to apply a 10% tax on certain distributions made by trusts described in subsection 197(1). The difficulty here is that there are no trusts described in subsection 197(1), either as proposed in the bill or as amended by any other motions put forward by the hon. member. Accordingly, the motion is totally ineffectual and should on that basis alone be ruled out of order.

However, if one were to give the hon. member the benefit of the doubt and accept that the amendment proposed is actually meant to reference a trust described elsewhere, then there is another problem. I suspect the hon. member thinks he is reducing the trust distribution tax proposed by this bill to 10%. However, the text of the motion actually adds the proposed 10% tax to the existing 29% tax applicable to trusts.

Hence, the motion would, if one could make sense of it, expose trusts to a 39% tax on distributions of non-portfolio earnings. This compares with the 31.5% tax proposed in the bill for 2011 and therefore clearly represents a tax increase. This tax increase is not within the scope of the notice of ways and means motion on which the bill is based and the motion should therefore be ruled out of order.

Motion No. 2 appears to be another attempt to impose a 10% tax on SIFT trusts, curiously in a part of the act that is under the title “Tax on SIFT Partnerships”. Further, this 10% tax purports to apply to all distributions by SIFT trusts and not just distributions on non-portfolio earnings. The text of the motion also again adds the proposed 10% tax to the existing 29% tax applicable to trusts.

Hence, if we ignore Motion No. 1, Motion No. 2 would expose trusts to a 39% tax on distributions by SIFT trusts.

On the other hand, the hon. member who tabled these motions has given no indication that the motions are to be alternatives. Accordingly, Motions No. 1 and 2, read together, would increase the tax on distributions by trusts of non-portfolio earnings to 49%.

Both of these scenarios would clearly be a tax increase, which exceeds the scope of the notice of ways and means motion on which the bill is based, and should, therefore, again, be ruled out of order. Indeed, by proposing such tax increases, one has to wonder what the hon. member has against income trusts.

Motion No. 2 also expresses a very strange policy. It subjects existing income trusts to the new Liberal tax but does not apply this tax to new trusts created after October 2006. Motion No. 2 goes on to allow individual Canadian residents to claim a refund of an amount designated by an issuer of the security in prescribed form. The member talked about that.

Further, the motion goes on to allow a beneficiary of an RRSP to claim a refundable tax credit equal to the amount of the tax paid by a SIFT trust or partnership. This would create a right for any beneficiary of an RRSP, whether or not liable to pay tax, to receive an amount to be taken out of the consolidated revenue fund.

Given that this motion would require that money be taken out of the consolidation revenue fund, it should be ruled out of order on the basis that it was not accompanied by a royal recommendation.

Again, the motion shows the difficulty that the hon. member's party has with developing tax policy.

The bill before us today already allows for a dividend tax credit claimable by Canadian resident individuals and respective trust distributions that are subject to the SIFT tax.

The dividend tax credit is intended to provide an offset against tax payable by an individual up to the amount of tax payable on the distribution of the trust. This distribution is deemed to be a dividend eligible for a dividend tax credit.

This motion would allow an individual to claim a refund for the trust tax paid but would also allow a dividend tax credit to be claimed on the same income. Perhaps the double credit for the individual investors has some connection with the Liberal proposal to tax trusts at 39% or 49%, but I suspect it is just another example of the flaws in the thinking behind these motions.

As well, the refund for individuals is in an amount designated by the trust in prescribed form, but no guidance is provided for the calculation of the amount that can actually be refunded. Could it actually exceed the tax paid by the trust on the distribution?

Just briefly again, let me say a few things about Motion No. 3. Motion No. 3 adds yet another 10% tax to trusts that fail to comply with the provisions of the part of the bill that apply to SIFT partnerships. Now we have an amendment in the partnership provisions that purports to add yet another 10% tax not only on SIFT partnerships but also on SIFT trusts. This time bringing the tax up to what, 59%?

There is precious little in the partnership provisions that a trust could be non-compliant with. Or, it is just an attempt to confuse. Again, this motion clearly purports to effect an increase in a tax that would exceed the scope of the notice of ways and means motion on which the bill is based and should therefore again be ruled out of order.

Finally, Motion No. 4 is consequential to the other motions. Since those earlier motions should be ruled out of order so, too, should Motion No. 4.

I trust you will find that of assistance, Mr. Speaker.

[The Acting Speaker, Royal Galipeau]

Are there any other points of order? The hon. member for Markham—Unionville on the same point of order.

[John McCallum, Liberal, Markham—Unionville, ON]

Yes, Mr. Speaker. I thank my hon. member for her help. However, her error is not limited to referring to my riding as Markham--Unionvale rather than Markham--Unionville.

I am afraid she is complicating the matters in an effort to sow confusion because my point is a very simple one. I believe that her allegations about us raising the taxes are due to the fact she forgot that we proposed to delete certain provisions which are part of the government's plan. However, that has nothing to do with my appeal to the Speaker.

My appeal to the Speaker is on one particular amendment which we presented to the committee regarding the refundable payments to residents. That was the only thing ruled out of order. Our arguments, as I have just presented, and she did not counter them at all, are for the various reasons I have described.

The amendment that we proposed and that was ruled out of order by the chair should indeed be in order. That is my sole request to the Speaker, apart from the fact that once the Speaker admits that amendment has been in order, then the associated amendments, which we presented before committee, should also be voted upon as a group.

[The Acting Speaker, Royal Galipeau]

Is the hon. member for Mississauga South also rising on the same point of order?

[Paul Szabo, Liberal, Mississauga South, ON]

Yes, Mr. Speaker. That indeed was the gist of my comments, that the matter raised by the hon. member has to do with the decision of the chair, which based on the evidence that was presented in the presentation of the point of order by the hon. member would tend to bring into question whether or not the chair had erred in its ruling and therefore there were consequential amendments.

With regard to the report stage motions that were proposed, Motions Nos 1 to 4, Motion No. 2 was with regard to a royal recommendation requirement. The other three were, according to the Speaker's ruling, on questions that were already defeated at committee. As a consequence, it is very clear that the items in question are not the ones in fact on the report stage listing in the order paper today but rather with regard to another matter on which the chair ruled and which has consequential amendments.

Accordingly, I believe it would be appropriate, Mr. Speaker, to review the basis for the decision by the chair. Should there be a clarification or correction of that decision, it then would appear that there may be other consequential amendments that would be necessary to make to the bill at committee stage which would also obviously impact possibly further report stage motions.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, first of all, let me sincerely apologize to my friend, the hon. member for Markham—Unionville for misspeaking the name of his excellent riding.

I would just point out that the information I provided to the Chair I think should assure all members of the House that the chair of the finance committee in fact made a correct ruling and that the ruling should not be tampered with by the House because that was an entirely defensible and proper ruling.

I hope, Mr. Speaker, that this matter will be put to rest and we can get on with debating the bill.

[The Acting Speaker, Royal Galipeau]

Does anyone else wish to speak to the point of order?

I thank the hon. members for Markham--Unionville, Mississauga South and also the Parliamentary Secretary to the Minister of Finance for their submissions. They will be reviewed by the Speaker who will return to the House with a ruling in due course.

Resuming debate, the hon. Parliamentary Secretary to the Minister of Finance.

[Diane Ablonczy, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I see everyone is very happy that I am getting up on debate and I too am very pleased to rise today to speak to Bill C-52 at report stage. It has been a long road but here we are at report stage.

The bill proposes to implement certain measures from budget 2007 along with other tax initiatives along with other tax initiatives that were announced prior to the budget.

I would like to start today by giving a quick tour of the key themes and messages of budget 2007. I will then outline the key measures in Bill C-52 and illustrate how they fit into the big picture.

Today, Canada is strong. Canada's new government has a plan to make it even better for tomorrow. The measures in budget 2007 will help up achieve that goal. It will do so by delivering on the commitments made in “Advantage Canada”, the government's long term economic plan for Canada.

It takes historic action to restore fiscal balance with the provinces and territories by investing an additional $39 billion over the next seven years. These important investments are made in things that matter to Canadians: a modern health care system, a strengthened post-secondary education system, new child care spaces, a clean environment, an approach to labour market training that is more responsive to the needs of Canadians, and infrastructure like roads, bridges and public transit.

Budget 2007 builds on action from budget 2006 by further reducing the tax burden in Canada to make it easier for working families to get ahead and stay ahead through initiatives such as the tax back guarantee and our working families tax plan.

This year's budget cracks down on corporate tax avoiders to restore fairness to Canada's tax system. It invests in the social priorities that have come to define Canada as one of the truly great and caring nations of the world. In short, budget 2007 is an ambitious catalyst for action that builds upon the tremendous progress we made in our government's first budget.

This budget is about making our strong economy even stronger. We know that by creating a climate of hope and opportunity, and providing the necessary tools so Canadians from all walks of life can reach their full potential, Canada can be an example to the rest of the world, an example of a truly great and prosperous nation, an example of a compassionate and benevolent nation.

Canada's new government aspires to a stronger, safer and better Canada. Budget 2007 is a path to those ends.

Bill C-52 gives effect to the policies and programs that will get us there. A key element of budget 2007 is the restoration of fiscal balance with the provinces and territories and Canadian taxpayers.

Bill C-52 proposes to legislate key budget measures on fiscal balance, delivering on the specific commitments made in budget 2006 regarding fiscal balance and going even further. Through these measures fiscal balance is restored in a principled way, in a national context, and by respecting existing agreements and commitments.

To begin, the fiscal balance is being restored with the provinces and territories by putting transfers on a long term principles-based footing.

Bill C-52 proposes to legislate renewed and strengthened equalization and territorial formula financing programs that will provide more money over the next two years to eligible provinces and the three territories.

It also proposes to renew and strengthen the Canada social transfer making it fair by providing the same support to all Canadians regardless of where they reside and by making significant new investments in support of post-secondary education and children.

The budget also takes another step toward restoring fiscal balance with Canadian taxpayers through major tax reductions and the tax back guarantee. I will come back to the tax reduction point in a moment.

Moreover, we are making governments more accountable to Canadians by clarifying roles and responsibilities, and we have strengthened the economic union based on the plans set out in “Advantage Canada”.

Canada's new government has said all along that Canadians pay too much tax. We have not just talked about doing something about it, we have done something about it in our very first budget last year and again this year in budget 2007.

Since coming to office, Canada's new government has taken action that provides almost $38 billion in tax relief for individual Canadians. Over this year and the next two years, there will be $38 billion in additional tax relief. This kind of action illustrates our commitment to deliver on our promise to reduce taxes for Canadians.

Budget 2007 not only takes historic action to restore fiscal balance in Canada, but provides significant tax relief for individuals, with a focus on supporting working families with children. For example, budget 2007, through Bill C-52, would introduce the working income tax benefit and the working families tax plan. The working income tax benefit would build on the recent progress made in lowering the so-called welfare wall, notably for families with children, through the federal, provincial, territorial national child benefit initiative.

For some Canadians, the working income tax benefit could represent the difference between being better off and worse off as a result of taking a job. For example, a single parent who takes a job, before the bill is passed, can lose almost 80¢ of each dollar earned to taxes and reduced income support, and that is not accounting for additional work related expenses or the loss of in kind benefits.

The working income tax benefit would reward work and strengthen incentives to work for more than $1.2 million low income Canadians by providing up to $1,000 for families and $500 for individuals. To help Canadian families get ahead, the working families tax plan would also introduce a new $2,000 per child tax credit for children under 18. The new child tax credit would benefit about three million taxpayers. What is more, it would take up to 180,000 low income Canadians off the tax rolls and would provide more than 90% of taxpaying families with the maximum benefit of $310 per child.

We also propose to increase the spousal amount to the same level as the basic personal amount. We also, in the bill, enact the tax fairness plan, which delivers over $1 billion in additional tax savings annually for Canadian pensioners and seniors, including income splitting.

We also, as I mentioned earlier, in this bill have the tax back guarantee. This means that the government guarantees that it will use the interest savings from national debt repayments to reduce personal income taxes.

We also have invested in the health care system, the 10 year plan to strengthen health care, which provides $41.3 billion over 10 years to provinces and territories. In this budget we built on that commitment with Canada Health Infoway and with other measures. We also have invested in a cleaner, healthier and safer environment.

I urge the House to support the bill and the measures in it, which would take our country forward in a better and stronger way, and will be helpful for all Canadians, whatever their situation.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, I think the parliamentary secretary's comments were notable for what they did not say more than for what they did say.

The biggest problem with the budget, especially in her own province, is the government's broken promise on income trusts. She has personal experience on that because her riding meeting was flooded with angry income trust people. Therefore, I do not know why she did not even mention it.

It is clear that this was a huge broken promise made by the government. It is clear that it was a badly executed broken promise. It was not necessary to drop a nuclear bomb on that industry. It is clear that tax fairness has become tax unfairness and that tax leakage will be worse because the companies buying up these income trusts are likely to pay no tax at all. It is clear this is a comedy of unintended consequences. It is clear that the income trust holders are deprived of a very useful instrument, especially for seniors who have to use their savings to pay their bills.

Why did she not say a single word about the most disastrous element in this overall disastrous budget?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, I know my hon. friend is having the time of his life bashing the government on the income trust decision.

This was a difficult decision. As the member rightly points out, when we took office, we did not think this move would be necessary. However, the hon. member knows that the landscape changed rapidly with sectors either moving to the trust model or saying that they would move to the trust model and planning to do so. This means we would have most of our businesses in Canada paying no tax. That could not happen because then the tax burden would shift entirely on to the shoulders of individuals.

As I have said before in the House, it would have been easy for the government simply to save its political capital, not take any criticism, especially the criticism the hon. member is enjoying levelling at us, and do nothing about this. However, we have a duty to our country and we have a duty to the future of individual Canadians who need tax revenue for these services, and we moved to do what was right for Canada.

I hope Canadians will appreciate that and support it. I note that the government has kept its promise in every instance where it is able. The hon. member knows this and I think he should applaud that, instead of being so mischievous about something he knew had to be done and he himself said that it was absolutely the right thing to do.

[The Acting Speaker, Royal Galipeau]

The hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup. Please keep the question short, since other members would also like to ask questions.

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

Mr. Speaker, at the report stage, we are studying an amendment that would make it easier for tourists attending conventions to get GST rebates. I would like my colleague to tell us whether the government intends to give further thought to reaching a similar conclusion for duty-free shops. A program that was a great incentive for tourism was scrapped. Now, the newspapers show just how important it is.

Could the parliamentary secretary assure me that in the coming months, the government will give further consideration to restoring this incentive to what had been planned, in order to attract tourists to Quebec and Canada?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, as the member pointed out, this program was not working previously. We have introduced it in a form which we believe and which the industry believes will help our foreign visitors and tourism in a very big way. In fact, it ensures that the goods and services tax do not apply in certain circumstances to the supply of a convention admission to a non-resident person. It also will help bring tour groups and other activities to Canada.

It has been applauded by the industry and by the provinces. We are very proud of it.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, what plans and what in the budget responds to the very desperate situation that exists today in the manufacturing sector? We had the Canadian Labour Congress here last week, speaking very passionately and emotionally about the job loss in the country in that sector.

Could the parliamentary secretary please let us know what we might look forward to in the budget which will deal with that?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Briefly, Mr. Speaker, there is the accelerated capital cost allowance for the purchase of machinery and equipment that will help the sector. There are also job training measures in the budget and lower taxes for everyone involved in the sector. We have a strong economy that we believe will help everyone in whatever sector they are in to succeed.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, I will focus my 10 minutes on a single theme, which is that the finance minister, through his actions, has demonstrated himself to be more out of his depth than any finance minister in living history. As if honest incompetence was not enough, in some instances there was less than total candour involved as well.

I will make my argument through five exhibits.

Exhibit one goes back a bit in history when the minister was a very senior member of the Ontario government. It ran an election campaign on a balanced budget, which turned out to be a $5.8 billion deficit. Therefore, it was incompetent to have a $5.8 billion deficit, but it was less than candid to claim to be running on a balanced budget.

Exhibit two is he raised the income tax and cut the GST. He paid for the GST cut by raising income tax. Not only is such a move denounced by every economist on the planet, but I think most Canadians would rather have more money in their wallets through an income tax cut than an extra penny on the price of a cup of coffee. To compound this economic incompetence with the lack of candour, he keeps referring to a cut in income tax when all Canadians know that he raised the lowest rate of income tax.

Exhibit three is the feebate structure in the auto sector. This is an incredible design where 75% of the money goes to one model, which is not particularly better than others environmentally speaking and it is made outside Canada.

Mr. Dennis DesRosiers, who I know the gentleman and who usually speaks very mildly, was so moved to say the following:

(Honda) felt so slighted by this stupid `feebate' that they have...come out guns ablazing. The feds now not only have a policy in place that does not work, they have also turned the company most willing to work...to address the auto issues of the day into an advertising juggernaut criticizing the federal government's policies.

That is another piece of evidence suggesting he is out of his depth.

Exhibit four is interest deductibility. Here again we have people who do not usually use such strong language in respect to a minister of finance. Allan Lanthier, retired senior partner of Ernst & Young, has said it is “the single most misguided policy I've seen out of Ottawa in 35 years”.

Claude Lamoureux, chief executive of the Ontario Teachers Pension Plan, has said, “This is unbelievable. I don't know who in finance looked at this. I can't believe any sensible person would do this”.

At the end of the day those people and the Liberal Party plan got to the minister because he did a flip-flop on interest deductibility, but it was even an incompetently executed flip-flop. The solution that he has gone to is not the right solution.

The abuse in this area is related to debt dumping, not double-dipping. To paraphrase former President Bill Clinton, it is debt dumping stupid, it is not double-dipping that is the problem.

Last but by no means least, there is the issue of income trusts. Here again we have people who normally use moderate language. I will quote two international experts, who make me somewhat embarrassed to be a Canadian in the face of this incompetence.

We have the Gartner Letter, a well-known London expert who sends his letter to people in the financial world all over the world. He said the Canadian finance minister's “idiotic 'trust' taxation decision rendered last October 31st, which we still believe ranks as one of the worst decisions ever rendered by a person in a position of monetary authority”. That is from a British expert in the financial markets and it goes out all over the world.

If that is not enough, here is what an American expert said.

It is interesting that a program which was originally designed to enhance 'tax fairness' may end up not only costing the government revenue but ownership is passing from Canadians to foreign entities. I doubt this was the plan.

The question now is, how much of this can the government take? Will they admit this was an ill-conceived idea, revise it, drop it or dig in their heels and in the face of the evidence which is starting to build, stay the course and let the foreigners buy up Canadian assets on the cheap?

That is from a U.S. income fund report.

We in the Liberal Party have fought the government's income trust plan from the beginning. We have sought allies from our colleagues in the other opposition parties.

I should add that at the beginning of the debate, the Bloc was with us on this. Together, we tabled a report in the House and we presented two options: the Liberal option and the Bloc option. Naturally, I found the Liberal option to be the better of the two, although the Bloc option was much better than the status quo.

Last week, in committee, I was astonished to see the Bloc vote against its very own proposal. The Bloc, which claims to stand up for the interests of Quebeckers, failed to stand up for the interests of Quebeckers; instead, it voted against its own proposal.

If the Bloc's problem is a lack of courage, the NDP is beyond the pale. Let me quote Don Francis, a 63-year-old individual who has lost $70,000 and who said the following before committee:

The NDP needs to rethink its position. This proposal targets hard-working Canadians for the benefit of all those fat cats. This is as clear a case of those fat cats eating the mice as this country has ever seen. Tommy Douglas is spinning in his grave to see NDPers like you acting like fat cats.

I would like to conclude by addressing all those hundreds of thousands of Canadians who lost millions and billions of dollars because of the government's broken promise on income trusts. I would like to tell those people that the fight is not over. We are at the beginning of the end of the battle and the battle will continue.

Even if this bill should pass the House, as it probably will, there is still the Senate. Even if that does not work, we will fight the income trust issue across the country. We have had many town halls before. Thousands of Canadians have attended. The Liberal Party will be holding one in the finance minister's riding soon. We will fight this proposal in the Senate and in town halls across the country throughout the summer. Last but not least, we will fight this in the next election.

The Liberal policy is clear. We are standing by our policy. It is better for the country. It provides help for all those income trust holders who lost thousands, millions, or billions because of the Conservative government's broken promise. We will get re-elected and we will bring back our own income trust policy, which will be a fine replacement to the terrible disastrous broken promise that has been imposed by the government, aided and abetted by the NDP, on hard-working Canadians.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, that is quite the panacea the member is living in over there, I suppose, by his closing comments and I will start with that. I find it remarkable that the Liberal Party, with the support of nobody else in the House and nobody who came before committee, has made the proposal on income trusts that it has made. I really want to get to something that is more important.

The member is from Ontario. He should know that the government of Ontario specifically talked about what a great budget this is for Ontario. It is great for all of the country because it gives more to all regions and provinces but specifically Ontario. This budget will give Ontario $12.8 billion in 2007-08. There is $8.1 billion for health transfers and $3.8 billion for Canada's social transfer, including a 40% increase in post-secondary spending alone.

How could the member stand in the House and oppose this budget? Does he stand up for his constituents or not? This budget works for his constituents. Dalton McGuinty loves this budget. I cannot understand why the member does not. He can take the fight wherever he wants, but hard-working Canadian families and Canadian small businesses know this budget works for them. That member is not down with them at all.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, it is noteworthy what the member did not say. He did not refute any of my five pieces of evidence pointing to the desperate incompetence of the Minister of Finance, so I can only assume he agrees with me on the essential point.

It is a bit much to suggest that the Conservative government supports Ontario when it gutted the Canada-Ontario agreement that had been passed by the previous government. The Conservatives took billions out of the pockets of Ontarians by gutting that agreement, not to mention that their environment policy was slammed by the premier and the environment minister. The Conservative government is not standing up for Ontario. Ontarians are not fooled.

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

Mr. Speaker, I listened with interest to my colleague's speech. I would like to correct some of the information he provided.

In a report of the Standing Committee on Finance, the Bloc Québécois put forward a proposal to mitigate the negative impact of the income trust issue.

However, had we amended the budget implementation bill, we would have prevented it from going through and prevented implementation of the budget, which, financially at least, made it possible to partially correct the fiscal imbalance for Quebec. Quebeckers would never have forgiven us. As to income trusts, a basic issue had to be resolved. However, as to implementing the bill, further consideration may be required. We could not continue in that direction.

Does my colleague agree that in light of the situation, the Bloc did the right thing by choosing Quebec, by working toward eliminating the fiscal imbalance and by asking for more discussion on this matter?

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, the facts are very straightforward. The Bloc itself recommended a 10-year period. Yet, in the end, the Bloc voted against its own proposal. The Bloc abandoned Quebeckers and Canadians who had bought into income trusts. That is what I said: the Bloc abandoned Quebeckers on this issue.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, I am having a hard time this morning sorting out the Conservatives from the Liberals on some of this debate. The Conservatives have moved to a position now where they are beginning to close some of the loopholes that we as New Democrats have always complained about. The Liberals at one point agreed with that, although when they were in government they certainly did not move to resolve that issue.

The member is aggressively and passionately opposed to closing some of these loopholes. How does he propose that we get the taxes that Canada needs to continue to provide health care, housing and drug coverage, et cetera, to the many seniors whom he purports to be the champion of here this morning when we that kind of money is taken away from the public purse?

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, what the hon. member does not seem to realize is that there is no such thing as a tax leakage. The government is losing revenue from its income trust policy. I return to my earlier point that Tommy Douglas would be spinning in his grave when that party that purports to be social democrats abandons hundreds of thousands of Canadians of--

[The Acting Speaker, Royal Galipeau]

Resuming debate. The hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup.

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

Mr. Speaker, we are debating report stage of Bill C-52, the budget implementation act.

Of course, it is very important for the Bloc Québécois to see this struggle through to the end. We are the ones who raised the fiscal imbalance issue in this House. We feel that this government has taken some steps, thanks to the Bloc Québécois' support—because without this support, Parliament would not have passed this budget. In order to at least improve the fiscal, financial, monetary imbalance, it was to our advantage to support the government on this.

We continue to believe this, and we know that Quebeckers support our position. The Bloc Québécois has led other parties in this House to adopt the same position. Only the Liberal Party does not support this position. Furthermore, it is voting against this budget, when all is said and done.

Today's debate at report stage allows for an amendment that results from an ill-considered decision on the part of the Conservatives, who decided to eliminate the GST-HST visitor rebate, thereby reducing Canada's appeal as a tourist destination. As evidence that this step had a negative impact, the Canadian Tourism Commission has had to shift some of its budgeted funds intended for Canadian tourism within Canada and use them to attract tourists from outside our borders, because we are losing ground to the tourism appeal of other countries.

Given the criticism and arguments received, particularly from the Bloc, in order to allow outfitters and conferences, for example, to continue to benefit from such a program, the Conservative government decided to propose an amendment in the context of budget implementation. This will help correct the situation, at least for outfitters and conferences.

This does not address the issue of duty-free shops, which remain victims of the government's decision. Initially, in the fall of 2006, the government made a series of rather drastic cuts to various sectors without really analyzing the situation, and it got rid of this program—which cost something to administer but attracted tourists—instead of modifying it and finding other solutions. In response to representations from various organizations, supported by the Bloc, the government made a partial correction.

What has still not been corrected is the situation of duty-free shops, which also play an important role in promoting tourism. Previously, when tourists visited duty-free shops, they obtained a credit that they could spend in the shop right away. As a result, the money quickly went back into the system.

In my opinion, no one, not even the Conservatives, is denying the aim of this program. The problem lay in the cost of administering the program. Instead of throwing the baby out with the bathwater, the government should have let the program keep on attracting tourists and found other ways of funding it. I hope that discussions will continue and that a satisfactory result can be reached.

Today, at the report stage, adopting this amendment will correct the situation with regard to outfitters and conventions. Representations were made by groups including the association of Quebec outfitters. When a convention is being planned and organizers want people to hunt and fish with the help of our outfitters, we have to make this prospect as attractive as possible so that people will choose to come here instead of going to other countries.

One of the benefits of coming here had been removed. Now, thanks to the amendment that is before us, we can maintain that benefit. It will therefore be important to adopt this bill at the report stage. The Bloc Québécois will support the bill at this stage, as it has done at all the other stages, so that the bill reaches third reading as soon as possible and the government can finally finish putting in place the measures to correct the fiscal imbalance.

It is clear how much Quebec needs this money. An important debate was held in the National Assembly of Quebec last week and for good cause; in the end, additional money from Ottawa became available. However, that is a monetary solution. A complete, legislative, fiscal solution is needed, which would transfer tax points to Quebec in order for it to no longer be dependent on the federal government's decisions, the vitality of the Canadian economy and other such factors. As of today, this is a three-year program that will have a significant financial impact and that is why the Bloc supports this bill. However, it will not resolve the matter permanently.

In fact, the Conservative government itself, which says that the fiscal imbalance is solved, has run attack ads against the Liberal Party and its leader stating that, if the Liberal Party were to return to power, it could overturn the decision on the fiscal imbalance. The Conservative Party has contradicted itself. On the one hand, it says it has solved the fiscal imbalance and, on the other, in ads taken out to denounce the Liberals, it says that the decision could be overturned. The solution is to ensure that permanent arrangements are made and that the transfer of tax points is put in place.

The starting point remains the same: the needs are found in the provinces and Quebec, but it is the federal government that holds the money. The announcement last week that last year's surplus is about $13 billion illustrates this reality better than any explanation. The federal government still collects a great deal more money than it needs and allocates most of it to paying down Canada's debt.

It makes sense that some of the funds should be allocated to that, but in the meantime, the provinces need money. They need money to pay for their own services. They have to be able to develop multi-year programming and plans. The Bloc will continue to work toward eliminating the fiscal imbalance once and for all through tax point transfers. Then, when Quebec wants to implement social programs and programs to support business, it will be able to do so within its jurisdiction because it will have the necessary financial means.

After the report stage, the bill will come back to the House for third reading. It also includes measures that will affect the manufacturing sector. We followed a number of recommendations from the Standing Committee on Industry, Science and Technology. However, the Conservative government will have to do better than the positions it has put forward on this issue. For example, the committee recommended accelerated capital cost allowance over five years for businesses to buy equipment to improve their productivity. The government is only offering this over two years.

Nor is it giving refundable tax credits to businesses that do not make much profit, which is now the case in several sectors that are in trouble because of global competition. The government should be even more creative, and it should follow the 22 recommendations of the Standing Committee on Industry, Science and Technology instead of barely touching on them or following the ones that suit it best. That is the next step, to come with the fall economic update.

In the meantime, I think that Quebeckers have made their views known: they agree with the Bloc Québécois, which supports the Conservative budget because it delivers considerably more money to Quebec. Quebeckers want to truly correct the fiscal imbalance. Thus, the Bloc Québécois is representing the will of Quebeckers, and wants the budget implementation bill to be passed as quickly as possible. We have made a significant and positive contribution towards achieving that, and we want the money to be available this year and in years to come based on what was announced in the budget. So no matter what government is in power in Quebec, the necessary funds will be invested, the proper political debates held and the money spent on the right things.

But there is a big problem: we have no guarantee that these funds will be available. This is a weakness of the Canadian confederation and Canada's federal system, which must be permanently corrected by the transfer of tax points. Let us hope that the Conservative government will move in that direction as soon as possible so that we achieve this permanent and long fought for correction. For four years, the Bloc has been arguing for this. I remember the member for Saint-Hyacinthe—Bagot and the member for Joliette, who preceded me as finance critic. We hammered away at this repeatedly. The parties in the National Assembly did the same thing, and today we are taking another step towards putting this in place. Let us hope that it will come about as soon as possible.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, I appreciate the member's particular focus on the tax rebate for tourists who come into the country. In my own community, an area where tourism is very important, that hit very hard. From what I am gathering from people in that industry, what the government has brought forward by way of replacement is very narrow and will not benefit everyone. It will benefit a few, mostly in larger centres, but it will not benefit in a significant way or attract tourists to my area.

I also want to ask the member about the fiscal imbalance. This weekend I was listening to some of the conversations in the media, particularly by the Federation of Canadian Municipalities, stating that the fiscal balance has probably hurt municipalities and communities more than any group or government in this country. How does he see this response working its way down so that municipalities now get the money they need to provide the services they are asked to provide?

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

Mr. Speaker, I would remind my hon. colleague that the current situation with respect to the GST visitor rebate program comes as a result of the rather drastic cuts made by the Conservative government, which did so without really thinking it through.

After hearing some arguments, it partially corrected the situation in the case of outfitters and conference organizers.

I agree with my hon. colleague. A large part of the problem still needs to be addressed. Duty-free shops, for example, need a similar solution.

This program helped draw tourists. Eliminating the program and giving up its advantages simply because of problems with administrative costs was, I believe, a bad decision on the part of the Conservatives. This comes at a very bad time, because tourism to Canada is currently at its lowest, compared to other countries.

We have seen the figures and we recently received a letter confirming that the Canadian Tourism Commission had to reallocate its budgets from promoting Canada within Canada to promoting Canada abroad, although it should have the funds it needs to fulfil both objectives. We must therefore continue our efforts in this area.

With respect to the fiscal imbalance, I would like to complete my colleague's response. I think it is important that this debate continue, in order to ensure that Quebec and the provinces receive the money they need to fulfil their obligations. We must never forget that the municipalities are creatures of the provinces and they must set their priorities in line with what Quebec, for instance, wants to develop. There have been some initiatives in the past, such as the Canada infrastructure program. There could be others that we would be willing to examine, which would respect jurisdictions, but that—

[The Deputy Speaker, Bill Blaikie]

The hon. member for Mississauga South.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member will know, from the parliamentary secretary's discussion about the income trusts, that there was an offset. She referred to it as “income splitting for seniors”.

The member may want to comment, but the budget in fact does not provide for income splitting for seniors. However, it does provide for pension income splitting for seniors but 70% of seniors do not have pensions. After we take out those, they are already at the lowest possible rate. In fact, only about 14% of seniors are eligible for any benefit under there. It seems to be a very weak response in terms of the damage that was done to Canadians who lost $25 billion in the value of their hard-earned retirement savings.

I wonder if the member would care to comment or to reaffirm that the budget provision relating to pension splitting only benefits about 14% of all seniors.

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

Mr. Speaker, I will respond quickly to my colleague. The measure taken is a step in the right direction. Further thought is needed. Let us hope that in the future, the Conservative government will ensure that the measures it puts forward are as fine-tuned as possible. One of the characteristics of the last budget concerns the fiscal imbalance and is a big victory for Quebec. Also, the Conservative government must work on its presentation and the details of its initiatives. This merits further thought. Let us hope that we will be able to pass other amendments that will ensure greater fairness for seniors and people who have reached retirement age.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, I appreciate the opportunity to offer a few thoughts in this important discussion about the budget.

I find it interesting and somewhat passing strange that at a time when we should be discussing matters that affect the lives of all Canadians, which is the delivery of programs that support working families, their children and communities in some very challenging times, particularly in northern Ontario where the forest industry has struggled, continues to struggle and is collapsing in front of us, that we would be debating the importance of closing or not closing loopholes for people at the higher end of the income scale, for the most part. I will talk about income trusts in a couple of minutes.

In this debate it is hard to figure out who is Conservative and who is Liberal. Over the years, the Liberals, when in opposition, tended to talk from the left and speak a language that was compassionate and caring. They seemed to understand social justice. However, when they were in government, which we saw for 13 years, they became the most aggressive cutters and slashers of money going to provinces for programs that move us forward in a way that speaks to justice, caring, compassion and believing in community.

We are here today having this debate, listening to the two sides banter and bicker back and forth about who will or will not close the loophole and how that might happen, when what they should be talking about, in my view, is the very integrity of the taxation system so we have the resources at our disposal to provide for the programs that people out there know, understand and have come to accept that federal and provincial governments need to deliver.

I would like to be here listening to people speak about the imbalance that exists between the rich and the poor and the growing poverty in our communities because we are no longer providing the kind of national leadership and vision that the people I speak to want from this level of government. Many people are no more than a paycheque or two away from poverty themselves as they look at the way the economy is evolving and the insecurity that seems to have taken hold.

In my part of Canada, that wonderful forestry laden area of northern Ontario, community after community are losing their mills, their source of income, losing the place where people got up in the morning and went to work so they could bring a paycheque home in order to look after themselves, their children and their families. These are people who went to work weekdays and then on the weekends and evenings ran the soccer club, worked in the arena, organized the volunteer sector and volunteered at the hospital.

Because the government is not giving the kind of leadership that is required, where the economy and particularly this budget are concerned, people are finding themselves without jobs and without much alternative but to leave town and head to other places where there are possibilities of jobs, leaving their families behind, all of the stress that brings with it and all the difficulties it creates.

I have travelled across the country over the last nine months to a year looking at that sort of soft underbelly of many of our communities, particularly the areas where the economy is supposed to be booming and there are jobs. There is encouragement from government. We hear it here on a regular basis day after day that if people do not have jobs and are struggling financially that they should move to Alberta or British Columbia where the economy is doing well.

In some cases that is a good thing to do but for many people who actually hear that clarion call and respond to it because they have lost their jobs at home, their own community is suffering and they must leave, they find when they get there it is not the greener grass that they had anticipated or thought would be there for them.

There are all kinds of challenges that the government has not thought through or worked cooperatively with other provinces and communities to make sure that the fundamentals are in place, the foundational structure that needs to be there to support these people and their families when they come looking for work.

Over and over again, in communities that I visited, we have a housing crisis. We have people living on the streets. Calgary, for example, is a bastion of free enterprise, the place that everybody points to as the mecca. It is where oil and gas, and the benefits come from. While on one hand we as a government provide literally billions of dollars every year in subsidies to the oil and gas industry, we find that communities like Calgary are having a very hard time providing housing for their own people, never mind the new people who are coming in response to the invitation to come and work in Alberta.

When I was there, a study had just been done on the homelessness that exists in that city and it was wavering around the 3,500 level every night. I was there in the winter and I showed up at a shelter where in fact somewhere around 1,200 people were housed a night. The people drive up with city buses, load those two buses up and send about another 100 homeless out into the suburbs, where they bed them down in warehouses on mats on the floor.

These are people who are struggling in some cases, people with drug addictions, people with alcoholism, people with mental health issues, but mixed in among that group is a significant number of people who came to Calgary looking for work, who got work, but then discovered that there was no place to live.

The reason that we have so many of the poor now out on the streets in places like Calgary and Victoria is because these new people coming and getting work, who can afford to pay for housing, are pushing the poor out onto the street, and many of them are finding that even if they have the money, they cannot get the housing that they need anyway.

Therefore, we have this terrible evolution of difficulty and challenge happening out there for people who really do want to work, who want to work full time to support their families, but we have not, as a country, responded to some of the challenges and some of the difficulties that come with the way our economy is evolving and changing.

I guess I am a little disappointed here this morning that there is not much debate about that, not much discussion coming from the Liberals particularly about that nor the Conservatives. There is nothing in this budget that I can see, and maybe some of the Conservatives who are here, and there are a few who are participating in this discussion, can tell me what is in this budget that is going to respond in an immediate and constructive way to some of these real challenges that exist out there now.

As long as we do not do anything about them or respond to them, or in some instances ignore them or pretend that they do not exist, they will grow, and we as a country will pay the price for that. It will cost us more in the end because we will then have all of the social and health problems that come with not looking after the basic needs of people who need to look after themselves and their families.

That is one issue that I was hoping that I would hear addressed by the government members and hear some contribution to from the Liberals.

The other is an issue that was brought very forcefully, aggressively and passionately, to this place last week by the Canadian Labour Congress. It brought people here, literally thousands of them from across the country, who are struggling with the demise, the falling apart, and the difficulty that is being experienced by our manufacturing sector.

I have to look no farther than my own area of the country, wonderful northern Ontario, and particularly northwestern Ontario, where community after community over the last couple of years has awoken in the morning to find that their mills were closing. There is no alternative. There is no response. There is no coming to the table by the federal government to say, “We are having difficulty in the manufacturing sector. Here is a strategy that we are trying to bring in and roll out. Why do we all not get together on this and see if we can make something happen?”

The doom and gloom, the black cloud, that hangs over that part of the country and down into southern Ontario and across into southeastern Ontario is very alarming.

We had workers here telling their stories to members of Parliament, who chose to come, that were heart-rending, that were gripping in their honesty and intensity. Workers told us that with the loss of their jobs go the losses of any benefit packages they had to look after themselves and their children in terms of health, dental needs, loss of any support for glasses, all of the things that those who are working at good jobs with benefits and pension packages often take for granted.

Yet, here we are today with an opportunity to respond very directly and clearly to that challenge and not doing that. Instead, we are bantering back and forth, and arguing over whether a tax loophole should exist or not exist, and whether there should be fairness in the taxation system.

Well we all know that there should be fairness and that we as a federal government need to be looking after the integrity of the tax system, so that we can provide support and services to communities, working families and the manufacturing sector.

We need to get the country back on the rails, and ensure that everyone has a chance and an opportunity to participate and do well.

[Diane Ablonczy, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, the member had asked me earlier about the manufacturing sector. I had a very brief time to answer, but I would like to address that again because he talked about that so much in his speech.

The member will know, because he has been involved in this, that the industry committee of the House issued a unanimous report on how to assist our manufacturing sector in meeting the challenges it faces in the new global economy.

The member will know that there were 22 recommendations to the government from the industry committee. He will know that these recommendations were unanimously put forward by all parties on the committee. This was a rare unanimous report.

The member will also know that the government accepted all 22 of those recommendations including $1.3 billion for this two year writeoff for manufacturers to buy equipment and technology that I reminded him about. There was $.5 billion for worker training that I spoke about, $33 billion for infrastructure renewal to help with our trade routes and our commerce, and $9.2 billion for research and development including a new science and technology strategy. The list goes on.

In addition to that there is our balanced approach to tackling climate change which gives industry ambitious but realistic targets to help it with transition to the new green economy.

What did this member's party do when the government accepted all 22 of those unanimous recommendations? It voted against these measures for equipment and technology, worker training and infrastructure--

[The Deputy Speaker, Bill Blaikie]

The hon. member for Sault Ste. Marie.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, it is easy for the member to stand up and spout off all of these wonderful things that the government is looking at perhaps proposing to do somewhere down the line that might help or might not help.

What the people who were here last week were saying to us was that there is really nothing in their experience and in their understanding of what is happening in their industry and their community. There is no leadership. There is nothing in the budget that gives them any hope, for example, in the auto sector there is no strategy coming forward.

We are watching the demise of industries, forestry, the auto sector, going down the river in this country with each day that goes by. Yet, we have a government that is experiencing record high surpluses in its budget and there is nothing there to respond to the very real and heartfelt needs of those workers who were here last week telling us that they need answers. They want leadership. They want a vision for this country and they are not getting it.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, I think my colleague from Sault Ste. Marie touches on several very important points.

I would like to ask him something specific. It has to do with the performance of the government over the last number of weeks and what we have seen with its approach to funding student summer jobs.

We have seen the mess that has been made in restructuring that program with the students who have been hurt and the community groups that have been devastated. The government has tried to keep the company line saying that this was the right thing to do, but it knows that it has jigged up. It has gone back to try to straighten it out and it is going back to try to support some of these very worthy groups. I commend the groups for being vigilant and trying to stay on this message and fight for what they have been doing over the years.

My question for the member is this. Where is this money coming from? There is no new pot of money. Will the government be stealing from other sources, perhaps from programs that could benefit the workers whom he represents? Is this going to be another excuse that, “We had to take the money to straighten out the mess that we made for the students”? Is this going to be another excuse to walk away from the workers who need that money now?

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, the member raises a very good point. Yes, the student summer job program was a disaster. As the Conservatives rolled it out, they tried to bring in a new formula, but did not think it out very effectively, so when it hit the ground, it did not provide the kind of support and jobs that we thought it should.

I would like to say to the member, though, it was in the last Parliament that those of us on the HUMA committee detected that the program under the Liberal stewardship was not working very well either and was not delivering the kind of results, particularly to economically depressed areas of the country, that it needed to deliver. In fact, it needed more money then.

The hon. member is correct that this program needs to be reviewed and implemented in a way that responds to the real needs of communities and students, and it needs more money.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, as the Conservatives go to their riding meetings and open houses their constituents are yelling and screaming them down. People across the country are furious. I want to use my time today to talk about the 10 reasons this budget and the government have so upset and betrayed Conservatives across the country.

The first reason is that when the Conservatives were elected to government people thought that they would get a cut in government spending. For years the Conservatives, especially the Reform Party, talked about how the government was overburdened, how the socialists were spending too much money on all sorts of things. They talked about how the government was getting way out of size and was overrunning the country. Then what did the Conservatives do? They brought in the biggest spending budget in history. It is no wonder that Conservatives were shocked. They could not believe what they saw.

The second reason Conservatives are shocked is they expected another thing from their government and they were jubilant when they were elected because they expected to see tax reductions. Much to their shock and surprise they saw their income tax rates go up. This occurred mostly at the lower level for the most vulnerable people.

I have with me the revised income tax schedule one. In the last year of the Liberal government the tax rate was 15%. On the tax form that everyone filled out this year that tax rate was 15.25%. People across the country will get a shock next year when they see it is 15.5%. The tax rate will be going up again.

The third reason a number of Conservatives across the country are so angry and feel betrayed is income trusts. The Prime Minister made a promise during the 2006 election campaign that income trusts would never be taxed. On October 31, 2006 the finance minister announced a 31.5% tax. This took $25 billion from the personal savings of Canadians. The Toronto Sun reported on February 21:

This is not fair to hard working seniors who have saved all their lives and depend on the income trusts' high yields to pay their bills.

Whether or not it was the right decision, the fact is that the Prime Minister said he would not tax income trusts. People invested in that mechanism based on the word of the Prime Minister. Canadians expect that the one person's word that they can believe for sure would be the Prime Minister's. This was a tremendous shock and disappointment and betrayal to Conservatives across the country.

The fourth reason that Conservatives are upset with the government is the broken promise on equalization. I quote from the May 8 edition of the Leader-Post of Regina, Saskatchewan:

Premier Lorne Calvert has reason to be peeved by Saskatchewan's 12 Conservative MPs and their lack of backbone in fighting for the equalization deal they promised the province.... Instead these MPs have demonstrated far more loyalty to the [Prime Minister] than to the voters.

It is not the voters' fault. They had no choice. It was the Prime Minister and the finance minister.

What about Nova Scotia? There is the unheralded example of a province talking about taking the federal government to court over the budget. Was it an NDP or Liberal premier? No. It is a Conservative premier.

What about Newfoundland? Everyone knows about the huge expenditure of taxpayers' money to run full page ads in newspapers across the country. People in Newfoundland and Labrador are so furious at the broken promise. Once again it is not a Liberal premier, not an NDP premier, but a Conservative premier.

The fifth reason that Conservatives across the country are shocked and dismayed by this budget and the government is regulatory reform. Canadians thought that they would get reduced government spending, but they did not. They thought they would get a reduced tax rate, but they did not. They thought that at least they might get some regulatory reform so that the government would get out of interfering with their lives and businesses.

The pipeline minister responsible for northern affairs talked about how the regulatory regime in the Northwest Territories was stopping development and it needed to be fixed. What has happened? Nothing. There has been no change. We heard recently from Exxon Imperial Oil that the biggest project in the history of the north may not go ahead partly due to regulatory problems.

What about their boondoggles related to the environment? This is from the National Post, a quite Conservative oriented paper with Terence Corcoran:

After last week producing a sound and lucid report on how Canada's Kyoto carbon emission targets were unworkable and economically dangerous, the Conservatives yesterday set course for even greater lunacy than Kyoto, led by...the Environment Minister. In a speech that even Sheila Copps in full discombobulated flight could not have delivered, [the environment minister] invented, distorted, misrepresented and fabricated his way to a potential regulatory nightmare.

The fifth reason is this lack of regulatory reform the people hoped they would see when they elected Conservatives.

The sixth reason, of course, is the elected Senate that the Conservatives when in opposition talked about and talked about. A few hours into government, the Conservatives appointed a senator as opposed waiting for one to be elected. It was not just any senator. He was made a minister of the Crown. And he is not just any minister. He is responsible for the largest spending department relating to contracts in government. A party which talked about the importance of accountability put the minister with all that spending power in the Senate where he cannot be asked questions.

Some members of the public who are watching may think that a minister could be asked questions in the Senate. Question period in the Senate is not like the one in the House of Commons where the ministers answer all the questions. It is the leader in the Senate who answers. The unelected senator appointed by the Conservatives for all that spending power cannot be asked questions.

Lack of accountability once again is upsetting Conservative members. The Prime Minister will not declare his 2002 leadership donors. He refused to make time for the Ethics Commissioner in the Gurmant Grewal affair. They are complaining that they are the laughingstock of the country related to accountability because they put out a manual on how to block and stonewall parliamentary committees, where the business of parliament is done. Once again, I cannot actually blame the backbenchers because they probably did not have a lot to do with that.

The ninth reason is related to gas prices. Another big area the Conservatives when in opposition talked about at length was the problem of gas prices and what they would do about it. What they have done about it is close the gas monitoring office that was recommended in the last Parliament that would let Canadians know whether there was any collusion in the setting of gas prices. It would provide all the information and details in this very complex field and let Canadians know. The man in the street would have felt much more comfortable knowing the background to these huge recent increases in gas prices.

Then of course there was the promise the Conservatives were really looking forward to regarding addressing the double taxation, taking the GST off gas prices, which the Conservatives promised as soon as prices were over 85¢ a litre. A couple of weeks ago in my riding the price was $1.40 a litre which is a lot more than 85¢ and yet the GST has not been removed. That promise has not been kept.

The tenth reason they are upset is that unlike the old Reform philosophy, the Conservative backbenchers and even the ministers are not to allowed to talk against the government or to vote against the government.

According to the April 20 edition of the Whitehorse Star in the story about the hijab, “One government member said an order not to comment came directly from the Prime Minister's Office”.

Now they have even cancelled the November policy convention where ordinary members could talk and complain about these things.

Those are the 10 top reasons the Conservatives across the country are upset by their government, the one they were originally excited about getting elected. If those are not enough, in case someone disagrees with one of those reasons, I will give a spare reason, the elimination of interest deductibility which the past chairman of the Canadian Tax Foundation said is the single most misguided policy he has seen in Ottawa in many years.

Those are just what members of Parliament from all parties in the House of Commons have seen as reasons that Conservatives are upset.

There are Conservatives who are talking about starting a new party. According to the May 12 issue of the Globe and Mail May 12:

“This new party will never be infiltrated by Red Tories, special interest groups”....“Has the Prime Minister been 'Otta-washed?'” Mr. Byfield, a strong voice for small-c conservative Alberta--

The article goes on about being deluged with e-mails and calls from people who are frustrated with the direction the Prime Minister is taking.

I share the disappointment of Conservative voters across the country. They are getting all these things that they did not expect from the government. If the Conservatives have a philosophy, they should at least be true to that philosophy and the promises they made to voters. The Conservative government should not disappoint Canadians by breaking so many promises.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, I listened with interest to my hon. friend from Yukon. As a Conservative member for the province of Alberta, I have not been deluged with e-mails and faxes and so on about disappointment.

We have been given credit for making tough decisions on things that had to be done. Notwithstanding, we do not have to go back over the past 13 years as that has been done enough.

My hon. friend talked about $25 billion having been lost in the income trust market. Would he look beyond November 1 and perhaps look to May 31--

[An hon. member]

Maybe June.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

--or maybe June and see what the difference is. I think he would find that the difference is negligible for those who did not panic in the face of the Liberals' and other people's rhetoric which was so over the top that it in fact induced people to make rash decisions and is what caused anybody to actually lose money, not those who stayed with it and had the common sense to sit tight.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I am glad that particular member was not deluged with e-mails and calls like others are receiving, as I quoted from the paper.

Some people may have stuck with it and did not lose as much, but let me give the member an example of a single mother who contacted me with respect to this issue. Based on the Prime Minister's promise, she invested all her money from her child's registered education savings plan into income trusts and lost about 30% on the first day. A single mother who is scraping up money for her child's education cannot necessarily hold on through bad times in the hope that it might come back and she might have money for her child's education.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, the member outlined the fact that this budget does have a significant amount of new spending and the government has not been shy in pointing that out to people. I would like to point out to the member a bit about the spending.

First of all, the overwhelming amount of new spending addresses the fiscal imbalance that was created under the former government. This government promised to address the fiscal imbalance in order to provide the provinces with a lot more capacity to provide the social services we all rely on.

If the member looked at the monitor of federal government spending, he would find that the three areas where the government has increased spending in a very significant way outside the fiscal imbalance is agriculture, defence and child care, in that order.

I would like to know if the member would like the government to take any money out of those three portfolios. Perhaps he would like us to spend less money on assisting farmers, or perhaps less on defence. We know that was the Liberal way. Perhaps he would like us to take away money that is assisting hard-working families in Canada. Which of the three would he like us to take away?

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, that is an excellent question.

My colleague said that the biggest expenditure was on equalization. Then I do not why there is chaos in Saskatchewan and Nova Scotia and the other maritime provinces. People are saying that the Conservatives broke their promise. If what they did on equalization is the greatest thing the Conservatives have done, then they are really in trouble.

I am glad he raised defence. Several years ago the Liberal government's biggest priority was to replace the search and rescue planes. For the first time in history we would have put four of them north of 60 so Canadians could be protected. I do not know what the Conservative government has done with its defence expenditures, but this has been ignored. There is no tender out to replace those aging planes. The defence department did not purchase the planes that were planned for years ago. When one of those old planes crashes or cannot get to a rescue situation people are certainly going to hold the Conservative government to account.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, it is my duty and pleasure to speak again on the budget and try to reveal to Canadians the truth in regard to some of these allegations that have been thrown around over the course of this debate taking place this morning and throughout the rest of the day.

Certainly we have heard ad nauseam from the Liberals about the role of the New Democratic Party in the income trust fiasco. I want to go back through it for members and give a little history lesson. Income trusts have been in place for a while. The previous finance minister, in September 2005, gave indications of his sense that they were not going quite right. That caused a great disruption in finance fields in this country and eventually led the Liberals, over the course of the next few months, to come up with a different position, such that they kept income trust legislation intact through the federal election of 2006.

I think it is pretty clear that when the Conservatives got in they had supported the income trust legislation as well. The Prime Minister, in his comments during the election, certainly indicated that he was fully supportive of income trusts and the people who were engaged in them. He made some very valiant and self-serving statements during the election campaign about how he was going to continue to do this.

However, once the Conservatives assumed power, had full access to the finance department and understood the nature of what was going on with income trusts, their mood began to change. This change in mood took a while to build as a political entity, because of course we could not have this happening overnight. However, over the course of time and over the last year, the Conservatives came to the realization they had to move on income trusts, so they did, and in this budget they made those moves.

We in the NDP, who of course have been opposed to the concept of income trusts from the very beginning, were fine with what was happening here. We recognized its importance for fairness in the tax system and for the real need to ensure that we were going to collect full revenue from the variety of sources investing in our country, including people within the country.

Today we have the Liberals trying to make time on this issue. They are trying to work harder on this issue to make it appear as though there is a groundswell of bitterness and discontent over this issue across the country. We have all received emails that are very similar in nature and scope. They come to us over and over again in our email boxes from purported hordes of people who are concerned about the income trusts, and quite rightly, because many Canadians took a hit over the income trusts.

Really, these Canadians trusted those two other parties to fully represent the issues to them in a clear and precise manner. They thought the truth was there for them and they invested, but really it was not there and the nature of the income trusts was such that they could not proceed forever.

That is the historical nature of the income trust debate here in Canada. I certainly would like all in this House, and whoever may be listening, to understand that the only party that has had a consistent position on this is the New Democratic Party. We take some pride in that.

It is important that there is consistency in what we do. If we make a mistake, we have to acknowledge it. That is certainly something that the party to my left here needs to do. It is probably a little more to my right, but it sits on my left, and it certainly needs to do a little soul-searching in terms of its apologies to the people of this country for some of the obvious mistakes it made during the election campaign. That does not take away from the importance of what had to be done and now has been done.

As a new MP I have been quite interested in listening to the argument and debate over tax loopholes that has gone on in this Parliament. It is certainly encouraging to see that the budget contains elements that may actually address some of these issues. What the Conservatives were talking about was not very well outlined in the budget, but we certainly got the sense that they would like to pursue reducing the tax loopholes that are available in this country. That is something with which the Liberals had a great degree of difficulty for many, many years, even though, as we have seen, many, many reports told them to do exactly that, to reduce those loopholes, and they did not do it.

Once again, perhaps out of this will come a sense of more fairness in the tax system. We will wait and see what the Conservatives do with what they said in the budget they would do.

After I listened to the debate this morning, those are the tax issues that I thought needed some clarification.

The issue on which I tend to focus as energy critic is the need for an energy strategy in Canada. This budget clearly demonstrates that. We are spending money in areas such as renewable fuels, with $2.2 billion over seven years. It is not really about renewable energy, because by and large the program is about providing some further future methods of subsidy for farmers and for that approach. That is fine, but in terms of greenhouse gas reduction it really represents a very small amount of greenhouse gas reduction for a very large expenditure of government funds. As well, as we have seen lately in some of the reports and in the scientific information that has come out, even in terms of air emissions the move toward renewable fuels does very little to reduce smog.

We have seen a large expenditure of government funds for a purpose that I think we all sort of support, but really it is not tied to what arguably in the first effort of any energy strategy is energy efficiency and conservation.

Leading that back to our auto industry, an investment of some of that money, some of those large capital sums, in retooling our auto industry would mean that it could start to compete for the small scale automotive highly efficient vehicle market that will develop over the next number of years, and that would probably achieve much more return for the economy and for greenhouse gas reductions and the reduction of smog and air pollution.

In the absence of this energy strategy, which looks at all the issues and puts them together in a fashion such that we can see the logical progression forward of our economy and society, the budget, in its dealings with energy issues and climate related issues linked to energy, has not really accomplished what I think all of us are looking for in the expenditure of public funds. I will not go into a lot of other examples of that.

I will wrap up by saying that the NDP clearly did not support this budget. It was supported by the Bloc and has moved forward. It has a more regional aspect, while I think that most of us in the NDP would have liked to see more directed programs. That did not happen. We will continue not to support the budget, but in the spirit of working together in Parliament we will try to find solutions that can be put forward in the future.

[Robert Thibault, Liberal, West Nova, NS]

Mr. Speaker, the member for Western Arctic spoke about the energy component. I realize that he is the critic for energy, but he speaks in defence of the Conservatives' position on income trusts. He would know that the governor of the Bank of Canada indicated at committee that income trusts were a completely reasonable and preferable vehicle for managing mature oil fields and depleting access, and in the absence of having these income trusts in that field, the beneficiaries would be offshore owners, American owners, and, mostly, multinational big oil companies that now have no competition in buying and operating those fields.

In light of the words of the governor of the Bank of Canada, how can the member, in the spirit of energy independence for our country, maintain the position that all income trusts are inherently bad?

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, quite clearly there is concern about the mature nature of our oil and gas fields in the western Canada sedimentary basin. We should all be very concerned about them, because as those resources move to depletion, we are going to be taking on much more difficult energy solutions, much more carbon intensive energy solutions, and solutions that are not always going to work to Canada's benefit.

The ability to develop those mature fields certainly has some interest for me, but once again, in terms of an energy strategy for Canada, one where we bring the industry to the table so that we can understand what it sees as the proper vehicle for ensuring that the mature fields are completely run out, which is what I suppose most of us would like to see, I would wait until we have that kind of debate where all the options are put on the table.

To say that the vehicle that was designed for this is working pretty well on this road does not suggest there are not other things that would be more appropriate to do and to put on the road to carry forward.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I would like to begin by pointing out that of course the governor of the Bank of Canada said no such thing. In fact, he said that the significant tax advantage that existed in the income trust model would lead to less investment, lower productivity and less economic growth for all Canadians. Perhaps the Liberal Party wants to see that for Canadians. The Conservative government does not. We appreciate the NDP's support in that regard.

I would like to ask the member specifically about the budget. There are a couple of quotes that I thought I would run by him to see whether he is supportive of them.

The Canadian Federation of Independent Business said that budget 2007 is “a big budget for small business”. The Conservative government, it said, “met and exceeded our expectations”.

On forestry products, to which an NDP member spoke briefly, it was stated that the Conservative government “has sent a strong signal that it understands the need to encourage investment and innovation to keep jobs in Canada”.

The Canadian Home Builders' Association said that budget 2007 “will benefit a large number of businesses across the country”.

They have been very clear that this is a good budget. It is a good budget for industry, for manufacturing, for families, for health care and for post-secondary education. What is the NDP looking for? What would it support? I would love to know that. If not this budget, what? This budget is good for a lot of people.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, perhaps I will touch on the forestry issue, because the NDP was not in favour of the softwood lumber deal. We saw that as a job losing proposition, which is exactly what it was. The investments that forest companies are making now are in sawmills across the border in the United States. Raw log exports are on the way up. The Canadian worker is going to suffer as a result.

We did not see anything in the budget that could change that rather alarming state of affairs in the forest industry in terms of employment. There was nothing in the budget that could possibly curtail that, other than perhaps a quota on raw log exports or offering up incentives such as making these raw log exports tariff free and putting them under the same tariff as lumber. That might have changed the nature of the softwood lumber deal. It might have made it one that was more in favour of keeping production in Canada.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I rise on a point of order. I would just like to ask the member if we could move on to S. O. 31s so that we get the timing good and we do not get too far behind today because there is a lot of important stuff happening this afternoon.

[The Deputy Speaker, Bill Blaikie]

I thank the hon. member for that point of order. It was indeed a very useful intervention from the point of view of the Chair.

Statements by members, the hon. member for Sarnia--Lambton.

The House resumed consideration of Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, as reported (with amendment) from the committee, and of the motions in Group No. 1.

Budget Implementation Act, 2007

[Robert Thibault, Liberal, West Nova, NS]

Mr. Speaker, it is my pleasure to speak to the report stage of the budget bill.

We are looking at the question of the treatment of the tourism industry and our competitiveness in the tourism industry. That is one element.

A very good program was brought in forward by the Liberal government, the GST rebate for tourists from other nations. This program encouraged them to visit Canada. It also helped us compete with other jurisdictions around the world, particularly important for the convention and tour business. However, it was also important to purveyors, to people who would come here to hunt and fish and to people who would come with their families.

We were able to get the Conservatives to move on some elements of that, but they could go forward and reinstate the full program. It was not very expensive, nationally, when we look at the total value of the tourism industry. It was very important to the operators and to our country. I will go back to that later.

If I look at the context of the budget generally, I see two things. One is we evaluate the intention of a government and its competence through a budget. The other thing is we see what opportunity we have and how a government wants to grasp it.

Now we have the most buoyant economy in the history of our country. When the government came into power, it inherited surpluses, the lowest unemployment rate ever, very stable and low interest rates, an economy growing faster than almost every other nation in the world and a very stable one. It has a surplus of $13.2 billion this year from last year's operation.

Let us see what the Conservatives did in their budget.

First, because the economy is so buoyant, this is the highest spending budget in the history of the country. However, when we look at where these investments are made, it leaves a lot to be desired. Rather than building a country, looking at the nation and asking where are its weak elements, where should we be making investments to bring the potential up so we can achieve the national dream and individual can achieve their dreams, the government does not do that.

This is a purely political budget, looking at a very quick election. I think when the budget was drafted, the intention was to go to an election before we would get to this stage, before we would talk about budget implementation.

We see promises to Ontario, Quebec and Alberta of huge transfers of funds. We talk about fiscal imbalance, but we see that these funds were promised before we even voted on them in the House.There were tax cuts within Quebec for political advantage, something we learned had been negotiated, which is distressing when we look at everything else that was left out and not done and everything that was cut.

The same day a $13.5 billion surplus announced, a million dollars was cut in social programs. I have spoken to those at large. We talked about the CAP sites across our nation. We talked about summer employment. For summer employment this year, $11 million have been cut, and we saw the ramifications of that across the nation. We saw students all across the nation, volunteer groups, not for profit sector losing their ability to carry out their work and the students getting revenue and that experience.

Now the Conservatives are backing down part way, another one of those famous flip-flops that we have seen from the finance minister, but again not enough. Imagine if the government had been in a majority situation.

We saw it in the income trust sector, and we raise this often. I think it is symbolic of the problems with the government. It makes a promise and then flat out breaks that promise. By making the promise not to tax income trusts, the Prime Minister encouraged people to put more of their investments in that sector. Then he broke that promise and taxed them heavily.

We had very good committee hearings on this, and we invited him to have a look at it. Admittedly there were problems in the sector. If we can only look at the testimony of one individual, I encourage people to look at the testimony of the Governor of the Bank of Canada, which was quite well balanced. He indicated there were problems within the sector and that action was warranted. He pointed out that there were problems in governance in certain elements within the sector. He also said that it was an excellent vehicle for the capital markets in certain parts of the sector.

The Minister of Finance has a lot of people investing in real estate in his riding and in his communities. He agreed with that. His friends all in real estate trusts, REITs, were not touched. He left it in that sector, but he did not look at other sectors, such as energy where it was an excellent vehicle. Rather than having a surgical strike, repairing the problems within the sector, there was a nuclear blast that destroyed the whole sector. We know the results: $25 billion in capital losses to the people in that sector.

We have the Atlantic accord. If members remember, I was on the government side of the House. The Conservatives were so in favour of the Atlantic accord. When we went through the budget at the end of the last Liberal government, they asked that we divide it. They wanted to vote on the Atlantic accord separate from the budget, because they wanted to vote in favour it only. What did they do in their budget? They reneged on the Atlantic accord.

Now the Conservatives have negotiations on the background. We know Premier MacDonald in Nova Scotia is in trouble. We watched Nova Scotia lose $1 billion, and not a word from this guy in the last little while. He did not come to finance committee last week. I thought that was regrettable. While Nova Scotia's economy is at risk and burning, he fiddles.

Danny Williams is being a little bit more vocal. I am pleased to hear that somebody from the Atlantic is speaking.

However, the promise made through the Atlantic accord was that independent of any other program of government, if there were changes in equalization, changes in transfers, Nova Scotia and Newfoundland and Labrador would not be affected. The Atlantic accord was above and beyond all the programs.

Then what does the Prime Ministerdo? He said that either they kept the accord or they took the new equalization formula. He has said that it is not capped. We heard that in the House today, but it is capped. On equalization, Nova Scotia is capped as soon as the economy reaches the amount of the least of the non-receiving provinces. We know it is capped. That is the ultimate level at which it can receive money. If it chooses to go to the new equalization, which is better on the short term, it gives us $1 billion in the long term through the Canada-Nova Scotia agreement, which I think is not at all reasonable.

We saw the CAP sites being closed down. Giving Internet access to rural communities, small communities, disadvantaged people in urban areas, we saw that being closed down. The Conservatives refused to make the announcement. We kept the pressure on and now they are talking about making it, another flip-flop that I am very happy to see.

We saw an increase in taxes to the most vulnerable Canadians. The lowest paid Canadians who are paying taxes are seeing their taxes go up from 15% at the start to 15.25% and 15.5% next year.

Reducing consumption taxes by reducing 1¢ on the GST, which the Conservatives did last year, helps those who are at the upper end of a lot of discretionary spending. At the lower end, most people's spending goes on items that do not attract GST, so those people do not benefit.

We heard promises by the Minister of Fisheries and Oceans when he was on the fisheries committees. He supported the report on the fisheries committee that we needed more investments in wharves. Not a cent was invested. There was a reduction when we should have been investing more.

We know the problems of the harbour in Digby. One of the members in opposition was always speaking about that harbour. When the Conservatives came into power, they got the report of the arbitrator, the perfect thing they needed to make that investment and take over the wharf. There was complete and utter inaction.

We get signals every now and then that they will be doing it, but they are not doing it. They are probably waiting for an election. It is the responsibility of the government to give service to the people of Canada between elections, not only during elections.

We saw the problems within the lobster industry. To be a hero, the Minister of Fisheries and Oceans announced a huge change in the licensing procedures and the way that licences were held. He reduced the value of these licences by half. About $600 million of capital value in these licences, retirement funds of these families, was lost overnight with one announcement.

Again, the Conservatives say that are willing to reconsider. I wrote the minister about six weeks ago, but I have had no answer yet. I have brought it up in the House, but I get no answer. Then they give us the same promises on the bill. The bill has many of those same elements. If the ministerial order can be modified, how can we be confident that they will act accordingly and responsibility if we pass a bill that gives the minister and his appointed tribunal so much power?

There are many things that we would like to see. There were huge announcements made by the government in the area of defence spending. They were huge. Where have we seen them? Where are the contracts? Very few--

[The Acting Speaker, Royal Galipeau]

It is with regret that I must interrupt the member, but he will know that I gave him the two minute and then the one minute notice.

On questions and comments, the hon. member for Peterborough.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I appreciate the opportunity to address the member's speech. He certainly has been very crafty in talking about issues that he wants to talk about but not talking about the benefits of the budget, certainly the benefits for the people of Nova Scotia and in fact for people in all parts of Canada. These benefits are significant. I know that ultimately the member supports them, but for partisan reasons he cannot.

I want to address one issue with the member. He talked about equalization. I want to ask him whether equalization inherently means equal, or whether equalization inherently means that some regions should be better off than others and supported in such a manner by the federal government.

Ultimately, here is what the Liberal Party is missing. When the Liberal Party was in government it always spoke about less being more. In fact, it would give less to the provinces but talk about how much more it was doing, which was impossible. In this budget this government is providing more money. It is providing more money to Nova Scotia and to every single province and territory, which means more capacity for all provinces and more money for health care and infrastructure. More is more.

Why is the member not supporting this? It is more money for Nova Scotia and Nova Scotians. It is more money for every Canadian, distributed in a fair fashion. The member should support it. Fair is fair.

[Robert Thibault, Liberal, West Nova, NS]

Mr. Speaker, the question here is about the Atlantic accord. The Atlantic accord was of great advantage to Nova Scotia. It said that the revenues from Nova Scotia's non-renewable resources will not be calculated against its money in equalization. Therefore, it would get that money to invest in the future of the province, because those are non-renewable resources.

Maybe that was better than fair. Maybe it was a disproportionate fair share. Maybe it was not completely equal with other provinces, but when the Conservatives were in opposition they supported it. As well, during the election campaign, the Prime Minister made the promise that he would not go back on the Atlantic accord.

That is what the question is here. It is a question of integrity. It is a question of how much people can trust the Prime Minister, and to that I say zero, zero on the Atlantic accord, zero on income trusts, and zero on ethics when we look at the way he dealt with Senator Fortier, to whom he gave the department with the biggest spending. Senator Fortier is not here to answer questions in question period, but the Prime Minister said during the election that he would not appoint cabinet ministers who were not elected.

These are the fundamental questions. Can we believe this person? Can Canadians believe the Conservative Prime Minister?

The Conservatives like to call themselves the new government, Mr. Speaker, but I show you the next opposition.

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

Mr. Speaker, the hon. member talked about the need for investment in tourism. One of the ways that cities can benefit is through investment in the arts.

We know that a lot of artists earn very little. Their earnings are below minimum wage and they live in poverty, yet they produce amazing and creative work that enlivens our cities and communities. It brings in tourists from all over the world. Yet there is very little investment in this budget for the Canada Arts Council, or to help filmmakers and documentary makers, or to help people involved in the arts, the playwrights and actors. They have to leave the country in order to find jobs. It is a very desperate situation.

Does the member think there should be more investment in the Canada Arts Council, in our film industry and in our artists so they can continue to create their very dynamic and vibrant materials for our country?

[Robert Thibault, Liberal, West Nova, NS]

Mr. Speaker, that is an excellent question. I do not know that we can have a socialized or state arts system, but what we can do, and what the government is refusing to do, is support the infrastructure that artists depend on, like Canadian television production within the rules, in drama, and we can fund festivals, which is where artists have a chance to sell their wares and be seen.

We can support the Canada Arts Council, regional economic development and summer students. Many summer students in my riding work in small, private or community galleries, which give artists a chance to show us their wares and skills.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to participate in the debate on the report stage of Bill C-52.

Earlier today the Speaker ruled on the admissibility of the report stage motions proposed by members. Motion No. 2 was not chosen for debate as it requires a royal recommendation. Motions Nos. 1, 3 and 4 were also not chosen because they had been dealt with and defeated at committee.

That left us with Motions Nos. 5 through 9. Those motions actually have to do with a subject matter that only the previous speaker spoke about. We are here debating changes to the bill that have been proposed on matters which have not been dealt with at committee or which have been brought forward by the government. In this case, they in fact are brought forward by the government so I would at least like to put on the record with regard to the five report stage motions that these all relate to the visitor rebate program.

Most of them are technical amendments. They have to do with a matter that came from and was suggested by the industry. There were some questions. The committee was not able to deal with it or was not aware of the matter. What they relate to in amendments Nos. 5 through 9 is that they actually make certain deletions to some of the clauses. Members will see it in the Order Paper and Notice Paper today. As well, they make some technical corrections to references to other pieces of legislation.

The effect of those changes is that non-resident persons and unregulated non-residential tour operators may apply for a rebate of the GST and the federal component of the HST paid on the supply of a tour package that includes short term accommodation or camping accommodations that will be used by the non-resident. The amendments also ensure that the rebate also applies to the provincial component of the HST.

Having taken the time this morning to review the amendments, I believe that these amendments are appropriate and reflect the fairness and intent of the House with regard to the visitors rebate program, so I am pleased that the necessary amendments to the bill have been proposed. I will take the opportunity to look at them in more detail as soon as I can get the legislation to which they relate to ensure that the language is in order, but subject to technically checking them, I believe that the report stage amendments should be supported.

That is a pretty short speech on the report stage motions, but I would like to comment further on the point of order raised by the finance critic for the Liberal Party with regard to amendments members attempted to raise at the committee stage of Bill C-52. They had to do with changes to the bill that would reflect what the Liberal Party believes to be a preferable approach to the so-called disparity or gap between the taxation of income trusts and dividend-paying corporations.

In the point of order that was raised, it was noted that a question raised in committee was ruled out of order by the chair. Certain reasons were given. Those are now being challenged. Hopefully the Speaker will have an opportunity to look at them.

I took the opportunity to review the basis of the proposed amendments that were submitted by Liberals at committee. They had to do with a commitment that the leader of the official opposition made.

The gist of it was that in relation to the proposed tax on distributions from publicly traded income trusts or publicly traded partnerships, other than those that hold passive real estate investments, the government should repeal the 31.5% tax regime and replace it with a 10% tax to be paid by such entities, with the revenue to be shared equitably with provincial governments. That is the first part.

Interestingly enough, the point raised in the point of order and the discussion about the propriety of the punitive tax on income trusts was whether or not a change from 31.5% to 10% was a matter which would require a royal recommendation or was out of order. Clearly, I think the argument showed with reference to precedent that the amount of a tax being imposed is certainly not beyond the scope of the committee's work to change.

The second part has to do with the revenue being shared equitably with the provincial governments provided that the tax would be refunded to investors who are Canadian residents in order to, first, minimize the loss of tax savings to Canadians who invested in income trusts; second, to preserve the strengths of the income trust sector; third, to create fairness by eliminating the tax leakage caused by the income trust sector; and fourth, to create neutrality or approach neutrality by eliminating any incentive to convert from a corporation to an income trust purely for income tax reasons.

Let us look at the elements. One is the amount of the tax and whether it is 31.5% or 10%. The second item has to do with a refundable tax credit, which basically means that should the Liberal proposal be adopted, the tax would be substantially less but would be applied immediately, rather than deferred for the five year period proposed by the government. As a result of it being refundable to Canadians, the burden of that tax would be paid only by non-residents, where the majority of the so-called tax leakage occurs. Timing, of course, is always a question.

I am sure that after a review of the transcript or the proceedings of the committee, the Speaker may very well find that the decision of the chair was based on incorrect information and that indeed the amendments proposed at committee maybe should have been in order. As a consequence, other amendments may also be in order.

It will be very interesting to see how this plays out, because clearly the idea is that we want to make sure we get it right. That is why we have a rigorous legislative process. That is why committee does its work. When the chair has to rule a matter out of order, we would hope that the understanding and the determination of fact brings a good decision. In this case, I am sure that it warrants review.

Finally, while most members seek to talk about the budget in general, I can tell members that with regard to the broken promise of the government on income trusts, the Prime Minister said that the greatest fraud “is a promise not kept”. He also said that he would never tax income trusts, but on October 31 of last year he turned around and did exactly that.

The consequences were that over two million Canadians lost about $25 billion of their hard-earned retirement nest eggs. That is very harmful. In fact, I have been told by some that four to five million Canadians have been directly or indirectly adversely affected by that broken promise.

Also, there were other consequences. We have been talking about tax leakage. Members well know that so far, because of the depressed value of income trusts, the taxes to be paid by these corporations are actually going to be less because of the significant takeovers. I believe there have been at least a dozen takeovers of these energy trusts, which means that their structures have been set up so that they are not going to pay any taxes.

The consequences of imposing that tax are far worse than the government ever dreamed.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, this is interesting. The Liberal government used to talk about things that mattered to Canadians, such as health care, infrastructure, post-secondary education and transfers to the provinces. Those are things that matter to Canadians, but the Liberals do not talk about them any more because this Conservative government has dealt with them and is doing a much better job than the previous Liberal government.

So what do those members talk about now? They talk about trying to win tax loopholes for their wealthy friends. They do not believe that corporations should pay tax. That is what those members are standing up and saying in the House today.

Our government believes in tax fairness. It is unfortunate that the member does not.

However, having said that, I would just love to hear him respond to what the governor of the Bank of Canada said, although I know he is going to dodge the question. Certainly he will bridge it and speak about something else, because he does not have the courage to answer the question.

The Governor of the Bank of Canada specifically said that the Liberal motion on income trusts would lead to less investment, less productivity and, indeed, less wealth for Canadians.

Why does this member want to stand for those things? Why does he not believe in prosperity for all Canadians?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, you may want to seek some guidance on this, but I think it has always been the case that to question a member's courage is inappropriate in Parliament. It really has no place here.

The member has often spoken on this subject. If we check the record, clearly, he always says that he does not want corporations to pay their fair share of taxes. But what he does not say, and shows that he really is ignorant about the facts, is that when we look at the tax implications to the Government of Canada, we have to look at the taxes paid by a corporation and the taxes paid by the taxpayer.

In the event that we have a dividend paying corporation, that corporation pays income tax on its corporate income and the person receiving the dividend also pays income tax on the dividends subject to a dividend tax credit.

With regard to the income trusts, they are established and have been established under the laws of Canada to provide that the income trust itself, the business entity, does not pay the taxes at the business level but in fact transfers it all to the shareholders. The shareholders are then responsible for paying the taxes on all of the amount, certainly a much greater amount than they would pay if the amounts were paid in dividends.

So, if the member is going to participate in debate on income trusts, he should inform himself on the taxation and the full loop, and the full impact on the Government of Canada's revenue, not just the corporate impact.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, I will give my hon. colleague credit for being courageously wrong. However, I would like to ask him a question.

Does the member disagree with every province that supported the move of this government on income trusts? Does he disagree with the Governor of the Bank of Canada who supported what this government did on income trusts? Will he agree, I suspect not, that those people who did not panic, who took good advice, who waited it out, are just as well off or better off today than they would have been had they not panicked? Or will he continue to be courageously disingenuous and misleading?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, he member for Peterborough also misled the House on other cases where he said the income trust sector is all recovered and is all there.

He should understand that the pricing of a security is based on the discounted value of its future yields and if people are going to be taxed at 31.5% on their future earnings starting five years hence, that is why the $25 billion was lost. That is not going to be recovered. It is a permanent impairment of the investment.

If the member wants to look at indices, he better be careful not to include the total indices. He has to back out a bit the impact of REITs, real estate investment trusts, which in fact are not taxed and have a significant impact on that.

He also has to take into account that there have been a very large number of income trusts that have in fact been bought out, are owned by foreigners, and are no longer reflected in the indices.

This member in his question made reference to people panicking. The fact of the matter is that people did panic--

[The Acting Speaker, Royal Galipeau]

The hon. member for Trinity—Spadina.

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

Mr. Speaker, tomorrow is national hunger awareness day. This budget could have done a lot to deal with child poverty, yet there is hardly any investment in it to reduce poverty.

In just over 15 years, there has been a 99.3% growth in food bank use by hungry Canadians, and yet we have the means to provide all Canadian adults and children with a fair share of food if we had the political will to do so.

The face of hunger will surprise all of us because it is the face of children. We need to recognize the reality and the depth of hunger that Canadian families face every day. Some 41% of them are children and 13.4% are people who have full time jobs, and 53% of households visiting food banks are families with children. Many of them of course are working several jobs, yet still cannot pay the rent and feed their kids. This is according to the hunger count of 2006.

In March 2006 more than 753,000 individuals in Canada used food banks because they were hungry. We know that there are many hungry people across Canada in our neighbourhoods and our communities, and that we all need to take action to make sure that all Canadians have their fair share of food and no one is going hungry.

To reduce the root causes of hunger in Canada, we absolutely have to invest in affordable housing and child care, and increase the minimum wage to at least $10 an hour.

I want to speak a bit about building affordable housing. Yesterday, hundreds of women in my riding in Toronto and their allies walked through the streets of Toronto and went to a building in the riding at 4 Howard Street. It is one of the hundreds of buildings in Toronto that has been allowed to sit empty and deteriorate until it either falls down or must be torn down.

These young women are saying that we need to build affordable housing because many of these women are victims of domestic abuse, and their kids are stuck in shelters, in unsafe housing. They have to move every two or three months, sometimes even sooner because they cannot find affordable housing. They do not go to the same schools. Their kids cannot form any kind of friendships because they do not have permanent housing.

Some even go back to their abusive relationships because they have no place to live and they are desperate. Homeless women face violence every day on the streets, whether they are in Toronto, Vancouver, Montreal or Halifax, in big cities or in small towns and communities.

These women yesterday said that we have to push the Canadian government to establish a decent affordable housing strategy and that there needs to be extra money in the federal budget to build affordable housing.

We know that the Canada Mortgage and Housing Corporation has a budget surplus of at least $5 billion in its reserve funds, and that while this money is sitting in the reserve funds, there are hundreds and hundreds of Canadians who are homeless. This really was a complete missed opportunity in the budget.

There are also people who live in affordable housing now but their buildings are falling apart. Just in Toronto alone, the Toronto Community Housing Corporation said that it is in need of at least $300 million to maintain these buildings because they are falling apart. The elevators do not work. Many of these building are heated by electricity, and a lot of the tenants end up paying a lot of money for heat or hydro. They have very little money left to buy food and pay for transportation. There is a huge backlog of maintenance and there is no money to support the existing affordable housing in this budget.

Even though the government announced a new program in the budget called ecoENERGY to help homeowners to renovate their homes to make them green and to retrofit their homes so that they can save energy and burn less energy, this new program does not cover affordable housing. The program does not cover condominiums, rental housing or high-rises.

In my riding, such as at 55 Prince Arthur, the condominium owners are saying that they would like to do a lot to fix their building. However, there is really no incentive and no funding to support their renovation needs. Whether they are condo owners or if they live in affordable housing in city homes in Toronto Community Housing Corporation's buildings, they do not have any funds to fix up their buildings.

The deterioration of affordable housing and the condition the housing is in sometimes create a terrible sense of alienation and despair among the people who live there. Recently, we heard of the shooting death of a young man named Jordan Manners in Toronto. In my riding, in Alexander Muir Park, last Friday I met with a mother whose only son was shot to death only two weeks ago. The despair in her eyes was phenomenal. She said that there is a need for decent programs for young people.

We know that after school or in the summertime young people when they do not have a lot to do they end up causing trouble. They end up joining the wrong crowd, joining gangs. We know that statistically the crime rate for young people spikes at around 3:30 p.m. or 4 p.m. when school is out.

If we are to reduce crime what we need to do is to invest in youth employment projects, child care, recreation activities, permanent funding for boys and girls clubs all across Canada, so that we do not end up having young people not having a whole lot to do, and feeling despair and joining the wrong crowd.

There is a cost benefit in investing in young people. Why? We know that putting a young person in jail costs at least $65,000 to $70,000 a year. Yet, creating decent and affordable recreation programs is a very small amount. Many of these programs help young people. They hire young people and some of them even rely on volunteers. It is really a good investment.

It was a missed opportunity by the budget in front of us. We should be investing in children and youth, in arts and housing, in the cities and our future. Unfortunately, this budget does not do so.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I am curious as to why this member from Ontario would not support this budget. This budget has brought a tremendous amount of fairness to all provinces. It has specifically been very helpful to Ontario.

The Ontario provincial government used some of the capacity provided to it with this budget to address child poverty, homelessness, and some of the difficulties that we know some lower income families are facing

There is the WITB initiative for low income individuals and $250 million in additional funding for child care, huge transfers for health care and especially to the province of Ontario. There is proportional funding for the environment. Ontario received almost $600 million for new eco-initiatives that will help the province clean up its act.

I cannot understand why this member would not support this budget. There are so many good things in it for the people of Ontario and especially low income individuals. This member should absolutely be supporting the budget.

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

Mr. Speaker, the budget actually does not help a single mother on welfare. For example, because she earns less than $20,000, this means that she does not qualify for the new child tax benefit. Because she is not working, since there is no child care for her, she does not qualify for the program that the hon. member talked about, the working tax credit. She loses out on both of these new programs. The parents of the poorest children are not able to benefit from this new budget.

Furthermore, on the investment that various governments have made on child care, and the hon. member talked about child care funding, in Ontario, for example, close to $1 billion has been transferred to Ontario and guess what? The provincial government has not invested this money, close to $1 billion from 2005, 2006 and 2007 in child care. Most of this money has gone somewhere, but we do not know where. The funding has not gone to the child care providers. It has not gone to create affordable child care. There is really no accountability on the funding that is transferred to provinces on child care. What good is it to transfer funding to provinces without any strings attached, with no standards whatsoever?

Many of the provinces, whether it is B.C. or Ontario, do not invest this money in providing affordable child care. Thousands of parents across the country are desperately waiting for child care and who knows what happened to the funding? Who knows what the Ontario government has done with that money?

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

Mr. Speaker, on behalf of 93,000 Hamiltonians, many of them children, who live in poverty, I want to thank the member for Trinity—Spadina for reminding us of the failures of the government with this budget.

In fact, just yesterday I was at a walkathon, an annual charity fundraiser for Wesley Urban Ministries. The $85,000 that was raised is going to be applied to the needs of children in the east end of Hamilton.

It is very shameful from my perspective when so many people are hungry and are living on the streets of our country that the government would pay $15 billion down on a debt, but it could not spare $4 billion or $5 billion to address poverty in this country. To be quite clear, the Conservatives are just not getting this job done.

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

Mr. Speaker, I have been in correspondence with the uncle of Jordan Manners, the young man who was shot to death. His uncle said that we absolutely need to invest in our young people. That is why he has organized a march for change this coming Sunday, June 10 at 1 p.m., to say let us invest in our young people. If not, despair is going to come into different neighbourhoods.

[The Acting Speaker, Royal Galipeau]

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Windsor West, Gasoline prices; the hon. member for Cape Breton—Canso, Equalization; and the hon. member for Davenport, Wage Earner Protection Program Act.

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

Mr. Speaker, I will be splitting my time with my esteemed colleague from St. John's.

I am not going to engage in a diatribe against the government on the failures in this budget. What I will do is point out what it did and then offer solutions as to what it could have done in a time of opportunity.

In a time of large surpluses of $14 billion, which is what the government enjoys today, the government had a great opportunity to put forth a number of initiatives that would help Canadians from coast to coast. We can be sure that the prosperity we are enjoying today will not last forever. There will come a time when our extractive energies will be depleted. We will know that we should have at least prepared for that day some time in the future, so that our country would have an economy that would be ready for that time in the 21st century and we would have a workforce that was able to compete not only domestically but also internationally.

When the government increased spending by three times the rate of inflation in this budget, it compromised the very ability of our country and the government to invest in the things that are required. I wonder why the government did not take an opportunity during this time of surplus to invest in those elements of a productive economy that we need to do right now. To be sure, the world is running ahead of us. China, India, other Asian countries, South America, eastern Europe and Russia are all surging forward. If we do not adapt to these changes, we will be left in their wake.

Why did the government not take the opportunity to invest more in education? Why did it not work with the provinces to lower tuition fees so that people could access post-secondary education not only in universities but also in trade schools. There is a huge deficit in the skilled trades area in our country. If we do not fill the deficit in the skilled trades, we will pay a price.

Why was there not a greater effort by the government to work with the provinces to reduce the barriers to trade? Folks watching this debate would find it extraordinary that there are more barriers to trade in our country east-west than there are north-south. My province of British Columbia has been working very diligently with the government of Alberta to reduce the trade barriers, to improve the east-west movement of goods, services and people. This will be an incredible benefit to the western provinces in their ability to compete. That ability should be provided across the country. The government has an opportunity to work with the provinces to reduce those barriers to trade.

In 2005 when the Liberals were in government, we started a smart regulations initiative. That initiative, instituted by the former prime minister, was done in an effort to reduce the rules and regulations that can constrain the government and the private sector. At the start of the process it was very effective but the new government has failed to proceed with this. There is no reason whatsoever that the government cannot continue with the smart regulations initiative that we started in the previous Parliament.

In the area of productivity, why did we not see greater investment in the ability of the federal government to listen to the provinces on infrastructure?

My colleagues have spoken about the cities agenda that the Liberals implemented. The cities are sitting at the sharp edge of investment into our communities. They need the resources to provide for the sewers, the roads, and other projects that are required to ensure that cities are able to function, are livable and that we can move goods, services and people forward in an effective way.

Without that infrastructure, cities do not function very well. We have heard examples from colleagues across the House of where this is not happening. Why on earth did the government not take the opportunity to reinvest in the cities agenda? It would have willing partners in all of the provinces.

Regarding the fiscal imbalance, it is not an imbalance between the feds and the provinces. The real fiscal imbalance is the imbalance between the rich and the poor, between those who have and those who have not. I am not for a moment advocating and I would firmly oppose any efforts that are meant to penalize those who have money for those who do not. However, the government could adopt initiatives to elevate the least fortunate in our society, to give them hope. We need to give them the tools to lift themselves up. For those who cannot lift themselves up for reasons that are beyond them, if they have a number of circumstances in their lives that make them unable to work, then we should at least give them the resources to live a comfortable life.

From coast to coast in our country in every one of our cities some people live in an an environment of dire poverty and quiet desperation. We do not hear about them. We will see them if we are looking for them, but they do not have a political voice. They suffer. It is the role of any humane government to work for those people. We are judged by and marked on our ability to help those who are least fortunate.

The finance minister could have implemented a Canadian low income supplement that would give $2,000 to every family that makes less than $20,000 a year. Notice that I did not say “working” because there are people who are retired who live lives of quiet desperation. They have medical bills and costs when they retire and they are unable to provide for themselves. The monies they receive through their pensions are simply not enough to live a reasonable life. If we were to walk into their homes, we would see conditions that would break our hearts.

I would argue that health care is actually the number one most important issue which affects people in their homes. Most of us have parents and some of us have grandparents who are still alive. They need health care. Some of us need health are. The problem that is happening is that the baby boomers are aging. In most provinces the number will actually increase by 120% over the next 10 years. That is going to put an enormous burden of chronic disease on our health care system. It will increase the cost 80% from what it is now. Imagine that, an 80% increase in the costs of our health care system.

It is not a matter of more money. The federal government has to work with the provinces to implement solutions to deal with a national medical manpower strategy, so that we have enough workers, the right type of workers in the right places in the future. We need to have the tools and the investment in a preventative way, not some oblique and obtuse concept, but specific solutions on prevention that work.

I will give one example. The headstart program for kids that strengthens the ability of parents to have good parenting skills is something that works. If we look at the Hawaii healthy start program or the Ypsilanti program in Michigan, $7 is saved for every $1 invested. Youth crime has dropped 60%. Teen pregnancies, poverty, all of those parameters have dropped considerably. It works very simply. The feds should work with the provinces to implement this as part of the early learning child care program that we implemented.

The early learning program would pull kids away from television screens and computer screens. It would get them out, get them active, get them playing. They would be healthier for it. As a result in the future the burden of chronic disease in our country would diminish.

On the issue of international development, I just came back from Berlin last night. We have an opportunity at the G-8 summit to make some intelligent interventions in the area of international development. I was specifically there on the HIV-AIDS pandemic.

Some 50% to 80% of the monies that we and other countries give for health care do not get to the people on the ground. It is incumbent on the government to ensure that those monies are targeted to things that will make a difference on the ground. We should not silo on a particular disease but make sure that the parameters of a primary health care system are there. There needs to be access to potable water, access to adequate nutrition, access to medications, access to health care workers. Those individuals and those workers in developing countries are dying, they are leaving or they are being poached.

We have an opportunity to implement effective solutions for those countries that have extraordinary and appalling health care circumstances. In order for people to lift themselves up and lift their countries up, they need to have an adequate primary health care system.

In closing, those are some of the solutions that I hope the government will consider. It should not simply spend willy-nilly in trying to get re-elected. It should do the right thing, put public policy first, put public service first and implement solutions that are in the interests of Canada and Canadians.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I listened with interest to the hon. member's speech and I have a number of questions.

I think he has forgotten some of the previous government's record on things like post-secondary education. As we know, one of the best things people can do to lift themselves from poverty is to invest in education. We know tuition fees doubled and even, in some cases, tripled under the federal Liberal government's rule.

I would like to point out a number of things that budget 2006 and 2007 did which the hon. member did not acknowledge. First, we believe that the best social program to help people out of poverty is a job and we are certainly seeing the lowest unemployment rates since December 1974.

We have removed 885,000 low income Canadians from the tax rolls and reduced the GST for the one-third of Canadians who pay no tax at all. We brought in a working income tax benefit, a working families tax plan, a registered disability savings plan and the list goes on and on. This government has worked very hard for low income Canadians.

What the hon. member did not talk about is how the former government presided over the largest widening of the gap between rich and poor and it did absolutely nothing to stand up for them. This finance minister has stood up for them and it is a privilege for me to stand behind him on that.

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

Mr. Speaker, the hon. member should look at his tax forms to see what his government did. It inexplicably raised taxes on the poor and actually lowered the basic personal exemption. I do not know how he can actually compute that in his own mind. His government actually increased the lowest tax rate from 15% to 15.5%.

I also need to remind the member that his government received the benefits of the fiscal probity of our government. We presided over the biggest change of moving from a massive deficit and debt situation that almost drove our country into a third world situation and where our bonds were actually going to be downgraded. We inherited that situation in 1993 when we formed government but, due to strong fiscal measures by the then finance minister, over a period of time the situation changed from a deficit into a surplus which the Conservatives are enjoying.

I do not know how the member can actually explain in his own heart how his government is spending at three times the rate of inflation, the largest rate of spending that any government has ever seen.

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

Mr. Speaker, I find it quite astounding to listen to the government member talk about people in poverty being able to raise themselves up with education when they do not even have enough money to eat. It is hard to fathom. As I indicated before, there are 93,000 people in Hamilton living in poverty.

However, the member opposite talked about interprovincial trade barriers. I spoke against that in the 1980s and it is still there.

I agree with the early learning and child care. It is not often that I find myself agreeing with Liberals but on this occasion, as a former school board trustee, I was there when that program started and it was a vital program for our young people.

Would the member opposite agree that it is also time for a national drug program for Canadians throughout this country? When the government has $15 billion, why can it not do things like this?

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

Mr. Speaker, that is a very prudent suggestion. Catastrophic drug coverage should be something that the federal government should work on with its provincial colleagues. Why on earth do we have silence from the government at a time when individuals, frequently seniors and those of limited incomes, are facing enormous costs for their drugs and medications?

I do not think it is necessarily possible to have a complete drug coverage policy across the country for everything but there is room for a catastrophic drug coverage program that the government should adopt and, in doing so, it would relieve a lot of suffering and insecurity among people.

I want to attach one other provision, which goes to the government member's comments previously. Not everybody who is poor is of a working age. A lot of seniors are poor. A lot of seniors live lives of quiet desperation because they have added costs at that time of life and they are on fixed incomes, which is why a Canadian low income supplement would help those seniors who are suffering today.

Speaker's Ruling

[The Speaker, Peter Milliken]

The period for questions and comments now being over, the Chair is now prepared to rule on the point of order raised by the hon. member for Markham—Unionville concerning an amendment ruled out of order during the deliberations of the Standing Committee on Finance on Bill C-52, the Budget Implementation Act, 2007.

The Chair would like to thank the member for Mississauga South and the Parliamentary Secretary to the Minister of Finance for their input, which was very useful.

As a starting point to this rather complex matter, I wish to review what happened in committee. During consideration of Bill C-52 in the Standing Committee of Finance on Wednesday, May 30, several amendments were proposed by the hon. member for Markham—Unionville dealing with SIFT or income trusts. In dealing with the amendments, the chair expressed some doubt as to their procedural admissibility but asked for guidance from the mover and the departmental official present as to what the amendments were attempting to accomplish. From the exchange that occurred, the chair concluded that Bill C-52 was creating a non- refundable dividend tax credit whereas the amendment was:

...putting in place a refundable credit that requires additional use of monies from the consolidated revenue fund, and therefore that particular amendment is not in order.

That ruling was challenged and sustained. The other amendments from the hon. member for Markham—Unionville were defeated.

Before considering the impact of Motion 2 at the report stage, which is identical to the amendment ruled out of order at the Standing Committee on Finance, the Chair would like to quickly review the basic rules that must be followed when the Crown exercises its financial initiative.

The first is that any increase in a charge to the public, that is, a new tax, an increase in an existing tax or the continuation of a tax which is to expire, would need to be preceded by the adoption of a ways and means motion. An alleviation of taxation, that is, a reduction in an existing tax, does not need to be preceded by the adoption of a ways and means motion.

The second is that any appropriation of public moneys, that is, the spending of moneys from the consolidated revenue fund, must be first recommended by the Crown before being approved by Parliament.

In this particular case, we have a unique situation. The amendment by the hon. member for Markham—Unionville appears to effect “a refund or credit against taxes otherwise payable”. Is this the alleviation of taxation or is this an authorization for a new and distinct program of spending? If it is the former, no ways and means motion is required. If it is the latter, a royal recommendation would need to accompany the amendment.

In reviewing the evidence of the Standing Committee on Finance, I am inclined to agree with the conclusion of the chair, that is, that the amendment proposes to create a new initiative, in this case, it is called a refundable tax credit, which results in the appropriation of moneys from the consolidated revenue fund for a distinct purpose.

Therefore, I would conclude that Motion No. 2 cannot be selected for report state as it requires a royal recommendation and that Motions Nos. 1, 3 and 4 ought not to be selected as they were defeated in committee.

I thank all hon. members for having raised this issue.

Resuming debate. The hon. member for Saint John.

Report stage

[Paul Zed, Liberal, Saint John, NB]

Mr. Speaker, since March 19, when the budget was first presented, the Liberal Party has been very clear with Canadians about why we oppose it.

We look at this mixture of electoral posturing and bad public policy and see Canadians left behind and entire regions of our country forgotten. For some reason, the Prime Minister thought that dividing Canadians would unite his ambition and political fortunes.

Over the last months, Canadians have told him and this party that they have other ideas. Just as troubling as the government's political approach to governing is its inability to coherently implement its agenda.

With all of the flip-flops and the disconnections between the Prime Minister and his front bench ministers, the so-called further clarifications, Canadians are right to be asking themselves whether the government has the ability to formulate a plan and to competently manage one of the largest and most complex economies in the world.

The most recent example of the government's naiveté on financial matters was the announcement by the Minister of Finance that the government had reversed its policy on income deductibility. For weeks and weeks the Liberal Party told the Prime Minister and the Minister of Finance that their decision to revoke interest deductibility for Canadian multinational corporations made our business leaders less able to compete. As a party, we repeatedly said that was simply not the way to manage our economy in the context of gruelling international competitive forces.

Though he failed to consult any stakeholders before bringing down his budget on this specific point, we are pleased to see that the Minister of Finance has listened to our position on this matter and for once chose reason over ideology.

I would hope that the minister will take our advice and also look at debt dumping. The double-dipping he has sought to curtail is still taking place as foreign companies, and with affiliates, are permitted to borrow Canadian dollars and invest them in their home countries and do so without paying Canadian corporate taxes.

A further question of competence arises with the issue where Canadians from coast to coast are concerned about the government's total flip-flop on income trusts. As he surely remembers, the Prime Minister campaigned in the last election as the defender of income trusts and investments of Canadians. He took advantage of trumped up gossip against the Liberal government and promised Canadians that his government would preserve their financial security. What a surprise we were all in for when the Conservatives abruptly altered their course and completely changed that position.

In one day, $25 billion of Canadians' investments were wiped out. Since then, the Liberal Party has proposed a reasonable 10% tax on income trusts as opposed to the punitive 31.5% tax levied by the government. This is fair-minded public policy and, frankly, would have avoided the financial disaster that was brought upon many Canadians who were moving into retirement years or were in fact retired. Canadians retired based on the Prime Minister's promise that he would not change his position on the income trusts and he broke that trust and that promise.

Canadian tax policy is just one area of financial policy that the Conservative government has been unable to effectively manage. The federal government's relationships with the cities is another black hole of public policy.

The Prime Minister's only announcement since he has been elected, which addresses the issue of cities, is the transit strategy, and that is perhaps the most blatant example of the Conservative government taking credit for successful Liberal programs and initiatives.

In March the Prime Minister announced funding for a variety of transit projects in the GTA totalling $927 million. However, this money was Liberal government money that was set aside as funding for infrastructure spending in 2006-07 and 2007-08 that until now had not been used by the Conservative government.

Furthermore, just last week the Prime Minister spoke to the Canadian Federation of Municipalities convention and called the government's investment in Canadian cities “historic”. What he failed to mention was that the programs he touted were put in place by the past Liberal government. When is the Conservative government going to show some leadership on this file? As Canada is fast becoming an urban country, what the assembled delegates in Calgary were waiting to hear from the Prime Minister was a plan to provide cities with stable, predictable and long term funding.

As part of our new deal for cities, the Liberal government made a five year, $5 billion commitment to directly fund cities, including $20 billion for 2010-11, but the government has been silent on whether it intends to make this annual contribution permanent.

Cities can no longer depend solely on property taxes for revenue generation. What they need is a commitment from the federal government. They can no longer be treated as creatures of the province. With their ever increasing range of responsibilities and services, cities require some indication that the federal government is interested in ensuring their success.

Clearly, the Conservatives are ignoring the plight of our Canadian cities and communities. How many desperate calls are going to have to be made from mayors across Canada before the government realizes that cities and communities are the drivers of our economy? When will the government wake up and see the need to deal with cities directly to address these issues?

Perhaps the strongest reason to oppose this budget and its implementation is the crassly political way the Conservative government has favoured one region of Canada over the other. The Prime Minister came to office advocating a new approach to federalism. The numbers speak for themselves. Quebec received a 29% increase, or $698 million in equalization. New Brunswick, my home province, received a mere meanspirited 1.8%. Atlantic Canada received only 4% of all new money spent on equalization. Newfoundland and Labrador and Nova Scotia received zero increases in payments.

For a second straight year, ACOA, Atlantic Canada Opportunities Agency, has failed to receive mention in the budget or the Speech from the Throne.

The Prime Minister memorably attributes a culture of defeat to the Maritime region. His budget seems designed to give his claims a ring of truth.

The sad reality is that when we listen to Saskatchewan Premier Lorne Calvert, or Progressive Conservative Atlantic Premier Rodney MacDonald, or Progressive Conservative Premier Danny Williams, we get the message loud and clear: Canadians who need the most support have been left out of this budget.

The Conservative government has simply shown that it does not have the right plan to run the country nor the competence to implement the meanspirited and narrow-minded policy proposals it has put forward. With this budget, the Prime Minister has failed to address the concerns of Canadian industry, sold out investors, picked winners in the equalization sweepstakes, ignored Canadian cities, and punished Canadians who need the most help.

The Liberal Party cannot support the passage—

[The Acting Speaker, Royal Galipeau]

It is with regret that I must interrupt the hon. member. I had given him a two minute signal and a one minute signal.

Questions and comments, the hon. Parliamentary Secretary to the Minister of Veterans Affairs.

[Betty Hinton, Conservative, Parliamentary Secretary to the Minister of Veterans Affairs]

Mr. Speaker, I do not have a question, but I do have a comment.

As I was listening to the opposite member speaking, most of what he was saying was complete and total nonsense, but some of it he may actually believe. However, the one thing he said that spelled it out extremely clearly and put it in a nutshell in terms of how the former Liberal government treated taxpayers' money was the phrase he used, “Liberal government money”.

The Liberal government, or any other government for that matter, has no money. The money belongs to the taxpayers of Canada, and perhaps the biggest difference between the Conservative government and the Liberal government is that the Conservative government recognizes that fact. We know where the funding comes from. We also realize that we are supposed to, as a government, use that money wisely and judiciously to help as many Canadians as possible, and that is what we have done.

The arrogance in the comment, “Liberal government money”, sticks in my craw, as I am sure it sticks in the craw of many people in this country. All Canadians contribute.

The other comment I would like to make is that, in case the member opposite is unaware of it, no government generates income. The only income we have is the taxation that we take from everyday Canadians who work very hard for that money and expect us to do the right thing with it.

We are doing the right thing with it, and if that bothers the member opposite, he has my sympathy; but that is it, just my sympathy.

[Paul Zed, Liberal, Saint John, NB]

First, Mr. Speaker, I do agree with the hon. member on one point that she raised and that is the fact that it is taxpayers' money.

However, when a government tries to pit one region of the country against another and, more important, one taxpayer against another, that is what we, as Canadians, find offensive about the budget and about this political party.

The other thing that the hon. member raised, which I think is very important, is what about the ordinary taxpayer? What does the budget mean to the ordinary taxpayer? The budget means in fact an increase on those who have the least amount of income in our society. The increase at the lowest corporate rate, from 15% to 15.5%, is not only offensive, but it is disgraceful to those Canadians who need the most help from our national government.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, last week when the Canadian Labour Congress came forward, they made the case that some of the new jobs that are being created and that the government wants to talk about ad nauseam, a big percentage of those jobs are actually low wage and part time.

The Conservatives introduced a concept of temporary agencies which get jobs for people and take a percentage off the top. These are the kinds of jobs that are now being generated in the economy that are beginning to be rolled out under the leadership of the government.

There are people who had lost manufacturing jobs in northern Ontario, southern Ontario, southeastern Ontario and across the country. The only choice they have is to take these low wage, no benefits, no pension, oftentimes temporary agency jobs in order to feed their families, pay the rent, and contribute in the way they have grown accustomed.

I wonder if the member would like to respond to that.

[Paul Zed, Liberal, Saint John, NB]

Mr. Speaker, the reality and one of the concerns we all have in every region of Canada is the migration of our workforce.

Certainly in my area of the country in Atlantic Canada, a lot of our workforce is migrating to places west and throughout the United States. We have a big concern about that.

We also have a large concern as it relates to these temporary and part time permanent jobs, but I have to say that one of the concerns we all have is pitting region against region. That is why I am voting against the budget.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, it is a pleasure to rise and speak to the budget. Again, like many, I have had a chance to talk about it on a number of occasions.

To be very honest and upfront, and I do not want to disappoint anybody, I do not like it. I do not think it is a fair budget. I do not think it is a budget that does anything to decrease the gap between the rich and the poor and, in fact, it increases the gap.

I want to echo the comments of my colleague from Saint John. I want to speak a little bit to the issue of how I believe that this budget divides Canadians, which I think it does.

I am going to talk about three examples. The first is the Atlantic accord. The accord has received a lot of attention, particularly where I come from in Nova Scotia, in Newfoundland and Labrador, and also across the country. It is a sign of how a government should not do business by alienating one region and playing one off against the other in a game of what I would call crude political arithmetic. The government thinks it can afford to maybe lose a few seats here if it gains a few seats there, and it adds up to where it wants to go.

When the Atlantic accord was torched, when it was betrayed so callously in the budget, it set off a firestorm. It did not just set off a firestorm among opposition MPs in Ottawa. It set off a firestorm among Progressive Conservatives in Atlantic Canada.

I have recited some of these before, so I will not spend a lot of time on this. Back home the premier of Nova Scotia, Rodney MacDonald, rather mildly rebuked the government. The premier had to say something and he acknowledged very quickly that the Atlantic accord had been betrayed. The accord had been worked on by his former colleague, Dr. John Hamm, the former premier of Nova Scotia, a very distinguished leader in our province. Premier MacDonald today acknowledged the fact that Dr. Hamm's work had all gone for naught with the betrayal of the Atlantic accord.

Premier Danny Williams has been reasonably vocal in his concern about the Atlantic accord and what he thinks it means to Newfoundland and Labrador. He has spoken out loudly. Premier Rodney MacDonald has not spoken out as loudly. I think we can be fortunate that we have a new Liberal leader in Nova Scotia, Stephen McNeil, who will stand tall for Nova Scotians and demand fairness.

Premier MacDonald and all legislators in Nova Scotia in an all-party resolution of the legislature, including the wife of the Conservative member for South Shore—St. Margaret's who was a minister in the Rodney MacDonald government, condemned the federal government for breaking its word on the Atlantic accord.

Here is a commentary from back home the day after the budget. Marilla Stephenson, a columnist in the Chronicle-Herald, said, “If any theme rang through the Harper budget delivered on Monday night, it was that the have-nots are to remain--

[The Deputy Speaker, Bill Blaikie]

Order, please. The hon. member cannot do indirectly what the rules prohibit him from doing directly. I would ask him to please refrain from referring to the Prime Minister by name.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

I apologize, Mr. Speaker. The article states:

If any theme rang through the Harper budget delivered on Monday night, it was that the have-nots are to remain, well, have-nots.

Jim Meek indicated:

Jeering from the sidelines were the budget's unlucky trio of obvious losers: Nova Scotia, Newfoundland and Labrador, and Saskatchewan. All are now victims of a calculated insult—the effective federal clawback of resource revenues under the new equalization schemed insult.

David Rodenhiser said:

Nova Scotians are left asking themselves: Who's standing up for us?...Right now, the answer is no one....Certainly not our federal cabinet minister, [the member for Central Nova], who's defending Ottawa rather than Nova Scotia on this.

An article in the Chronicle Herald states, “Atlantic Tories running for cover”.

On the weekend, the member for Cumberland—Colchester—Musquodoboit Valley on the government side indicated, acknowledging that the Atlantic accord has been betrayed, that it gave him concern about how he should vote. That is not easy for anyone. I wish him well in his deliberations. All government members should have the same principled approach to this.

The Atlantic accord is gone. Atlantic Conservative candidates, people who were going to run for the Conservatives in Atlantic Canada, like Jane Purves in Halifax, are having second thoughts. A candidate in Newfoundland said, “That's it, I can't run for these guys. What chance would I have? We can't win if we're going to be breaking accords like the Atlantic accord which was so important. You can't do it”

The Atlantic accord was opposed by virtually everybody in Atlantic Canada, again, dividing one part of Canada against the other.

I want to talk about the Coast Guard. A month or so ago we had an announcement in the riding of Dartmouth—Cole Harbour that two icebreakers, employing some 130 people plus support staff, would be moved from Nova Scotia to Newfoundland, to the two ridings where Conservative members happen to reside.

Nobody in Nova Scotia wishes Newfoundland and Labrador anything but good fortune, but there was no business case along with this move, no discussion with workers and union and no discussion even with regional management of the Coast Guard. A draft business report for a business plan for the next three years of the Coast Guard, dated April 1, had no mention of this move. This was a crass political move and it is the crassest kind of political move not only to divide region against region, but province against province for political purposes. It is wrong.

I would be remiss if I did not mention the debacle, which is the summer grants program. Last year it was the subject of a $55 million cut. In the fall the program was cancelled. It came back in the spring with an $11 million cut, and no explanation of what happened to that $55 million. Maybe it is still in play and maybe it is not. We do not know. We only have budget documents and press releases to tell us, and there has not been much about that recently.

Two or three weeks ago, organizations across Canada started getting letters in the mail, like the Autism Society of Nova Scotia. It was told that it did not qualify for the summer jobs program, although it had for years under the Liberal program. It had seven people last year and ten the year before, in the last year of the Liberal government. This year the society did not qualify.

The minister keeps telling us that the old program was Liberal MPs dispensing patronage. Hogwash. It was Wal-Mart, Rogers and Bacardi giving jobs. If the Conservatives do not like them giving jobs, take the jobs away from them and give them to the Autism Society of Nova Scotia. Do not take them away from the Autism Society of Nova Scotia. Do not take them away from the Diabetes Society.

I want to read a letter from an organization called Edward's House, which deals with young students at risk, students who have either been kicked out of their home or lost their parents. The only way they can stay in school is with this program, which provides shelter, comfort and food and allows them to go to school. On May 15 it received a letter dated May 10. Always having had summer students before, the letter stated, “Thank you for your application...Your application was assessed and received a rating of 23 out of a total of 70. It did not rank high enough on the list of assessed applications to be funded. Since the demand exceeded the budget, we are unable to offer you funding at this time”.

Representatives came to see me and we talked about it. Miraculously, when we went on the summer break, the minister denied there was a problem.

We had a minister in New Brunswick saying it would be fixed a certain way. A MP in Nova Scotia there was 15% more money. A cabinet minister of the Government of Canada blamed it on the bureaucrats, scrambling everywhere. It was a disaster that had to be fixed. All of a sudden, Edward's House received a call and was told the government could fund it. Even though the letter said that the demand exceeded budget and there was no money, all of a sudden there was money. What kind of program is that? Only when the government gets caught does it throw money in.

The minister said in the House that we would soon see on the website the names of organizations requesting funding, which ones received it and which did not. I and my colleague from Saskatchewan beside me had a motion before the HRDC committee, stating that by June 1 we would know what organizations had applied, what ones received funding and what ones did not. Late in the afternoon on June 1, we received a letter saying that because of privacy concerns, we could not received that information. However, the minister can stand in the House and read a list when somebody asks him a question, but parliamentarians are not allowed to know.

That is dividing Canadians, not only region to region or province to province but non-profit organization to non-profit organization. Organizations in our communities across the street from each other are now pitted against each other because of the political crassness of the government.

We have a large and diverse country and we take pride in that. We come here to represent our constituents. Surely, there is a special place for all of us in our hearts and in this place to represent those who need help the most. For years we have done that in Canada. We have built a social infrastructure. I am concerned that this budget and last year's budget will signal the end of that belief in the social infrastructure if we do not soon do something to fix it.

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

Mr. Speaker, earlier the member for Saint John spoke about Bill C-45, which was a Liberal budget bill from the last Parliament. He talked about the transfers to cities for transit. It struck me how ironic that was because it was known in many circles as the NDP better balanced budget, after the member for Toronto—Danforth negotiated with the then prime minister, the member for LaSalle—Émard, to change from $4.5 billion of corporate tax breaks and have that money transferred to the municipalities.

Which way did the member support that bill, for the tax breaks for corporations or the transfers that we negotiated?

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

If I recall correctly, Mr. Speaker, that was Bill C-48, not Bill C-45. The money was not specifically for cities. It was for four areas: overseas development, the environment, post-secondary education and housing. I absolutely supported that motion.

I remind the member that the $1.5 billion negotiated by the leader of the NDP and the then prime minister of Canada for post-secondary education was dwarfed in the economic update six months later, when the Liberal government promised $2.2 billion for students who needed it the most, making the $1.5 billion irrelevant. Unfortunately, the NDP did not vote to adopt it.

When the Conservative government came in, it changed that $1.5 billion to $1 billion. It changed it from student access to infrastructure. There was very little benefit for students in that bill, but I was happy to vote for it at the time. I thought it was a good initiative and it showed that Parliament could work when leaders worked together on priorities.

[Rick Dykstra, Conservative, St. Catharines, ON]

Mr. Speaker, I appreciate the perspectives of the member for Dartmouth—Cole Harbour and respect his work, but I have difficulty trying to understand his view on the budget.

He picked on one program within the budget, upon which changes were said to come from the very beginning. It was a new program that needed to be implemented based on getting rid of the situation where MPs were signing off. We would turn it into a system that was fair and equitable, a system that would be reviewed after it started, and it was.

He asked a question in the House as to why that association had not received funding. He stood in the House today and acknowledged that it did receive funding. Congratulations, the organization deserved and received the funding it should have.

The one thing he did not talk about, and the member for Saint John did not speak about beforehand, was the $1.4 billion under new equalization for New Brunswick, the $1.3 billion for equalization for Nova Scotia, the $512 million under the Canada health transfer for New Brunswick and the $639 million to Nova Scotia for health care transfers. Talk about the big impact this budget will have on provinces that for years cried to the former government for help and what did it say? Nothing. Newfoundland and Labrador had to lower the flag in order to get attention.

Why will the member not acknowledge the good, the intent and the funding that will help his province? Why he will not support the budget?

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, I am tempted to ask if hogwash is a parliamentary term. Maybe it was not until the Conservative government came in and it became accepted.

The member talked about the organization that eventually received funding. If I could find it, I could read the email in which it thanks me for the funding it received. I raised the issue. Is that how it is supposed to work?

Are organizations supposed to go cap in hand? Should the Autism Society of Nova Scotia beg for support from the government and only get it because the government was shamed into doing it? Surely, my colleague, the member for St. Catharines does not think that makes sense.

Everyone in Nova Scotia, except a couple of old fashioned Conservatives, knows it got rooked in the federal budget. We got slaughtered in the federal budget. The Atlantic accord was not just money. The Atlantic accord was the future of Nova Scotia. It was the future of young Nova Scotians. It was callously pushed aside and cast aside by the Minister of Finance. The government is trying to fix it up now and perhaps trade off something else.

All the Conservatives have to do is honour the Atlantic accord as they said they would when the Liberals brought it in.

[The Deputy Speaker, Bill Blaikie]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker, Bill Blaikie]

The question is on Motion No. 5. A vote on this motion also applies to Motions Nos. 6 to 9. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Deputy Speaker, Bill Blaikie]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker, Bill Blaikie]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker, Bill Blaikie]

In my opinion the yeas have it.

And five or more members having risen:

Call in the members.

And the bells having rung:

There has been a request that the vote on Motion No. 5 be deferred until the end of government orders tomorrow.

The House resumed from June 4 consideration of Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, as reported (with amendment) from the committee, and of the motions in Group No. 1.

Budget Implementation Act, 2007

[The Acting Speaker, Andrew Scheer]

It being 5:30 p.m., the House will now proceed to the taking of the deferred recorded division--

[Jim Karygiannis, Liberal, Scarborough—Agincourt, ON]

Mr. Speaker, I have a point of order.

[The Acting Speaker, Andrew Scheer]

We are going to move on to the deferred recorded division and if the member for Scarborough—Agincourt has a point of order dealing with Bill C-45--

[Jim Karygiannis, Liberal, Scarborough—Agincourt, ON]

Mr. Speaker, it deals with Bill C-57. I mentioned that I would like to table something. Since I have read it into the record, I am sure members would like to see it. Therefore, I would like to seek unanimous consent to table the document that I read from.

[The Acting Speaker, Andrew Scheer]

The hon. member for Scarborough—Agincourt perhaps can come back to the House to request unanimous consent to table it, but we have to move on to the deferred recorded division on the motions at report stage of Bill C-52.

Call in the members.

And the bells having rung:

[The Speaker, Peter Milliken]

The question is on Motion No. 5.

The vote on this motion also applies to Motions Nos. 6 to 9.

(The House divided on Motion No. 5, which was agreed to on the following division:)

Vote #195

[The Speaker, Peter Milliken]

I declare Motion No. 5 carried. I therefore declare Motions Nos. 6 to 9 carried.