Bill C-52 (Historical)

Budget Implementation Act, 2007

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

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

Budget Implementation Act, 2007

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

moved that Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007, be read the second time and referred to a committee.

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

Mr. Speaker, l am very pleased today to be able to present the budget implementation bill at second reading.

This year's budget is historic.

It is historic because it accomplishes so much to ensure that Canada remains strong today and becomes even better tomorrow.

That is because Canada's new government has an economic plan for Canada, a plan that will create greater opportunities for Canadians to fulfill their dreams of a good job, a world class education for their children, a home of their own, and a retirement that they can count on.

To that end, budget 2007 follows through on our plan with key investments in Canada's future.

This year's budget invests in Canadians, preserves and protects our environment, and improves the quality of our health care system for all.

Budget 2007 also restores fiscal balance by working with provinces and territories to deliver sustainable services for Canadians and their families.

The budget creates competitive advantages for a stronger economy for Canada, an economy that will put us on a solid track for tomorrow. It does this by reducing Canada's debt and lowering the taxes of hard-working families.

Budget 2007 also ensures that multinational corporations pay their fair share of taxes.

It helps Canadian businesses compete globally by making unprecedented investments in the infrastructure that connects our nation.

Budget 2007 does much more.

It makes our communities safer and more secure.

It supports the men and women of the armed forces, including our veterans, and it brings new hope to people beyond our borders through more effective international aid.

As the Minister of Finance said when he introduced budget 2007 in this chamber, “it is time to unleash Canada's full potential”, and unleash our potential it does.

Budget 2007 aims to create a Canada that we will be proud to pass on to our children, with a standard of living and quality of life second to none.

The measures contained in this bill before the House today reflect those goals. I would now like to take a few minutes to illustrate.

Bill C-52 contains some of the key initiatives taken by Canada's new government to make Canada a better place in which to live and do business. Legislation to implement the remaining budget 2007 measures will be introduced in a later bill.

First is tax relief. Our government has heard it from Canadians from all across this great country of ours: we pay too much in tax.

Budget 2007 builds on the previous action in last year's budget by reducing personal income taxes to encourage people to work, save and invest. It also helps businesses succeed, through lower taxes to spur innovation and growth.

Those of us with children know that raising a family can be a challenge. With higher costs of living, housing and energy, it is not easy.

That is why in budget 2007 Canada's new government makes life more affordable for hard-working families by creating a working families tax plan.

The government understands that no two Canadian families are exactly alike. Each has its own circumstances and needs.

Budget 2006 introduced the universal child care benefit, which provides $100 per month for each child under age six to help parents choose the child care option that best suits their family's needs, whether that means formal care, informal care through neighbours or relatives, or a parent staying at home.

This benefit provides more than $2.4 billion each year to one and a half million families and over two million children.

Bill C-52 proposes to provide even more support for families to recognize that raising children involves additional expenses.

Effective January 1, 2007, families will be able to claim a new tax credit for each child under 18. The new child tax credit proposed in this bill will benefit about three million taxpayers. This measure takes up to 180,000 low income Canadians off the tax rolls and provides more than 90% of taxpaying families with the maximum benefit of $310 per child.

Currently, taxpayers who have low income spouses or single taxpayers who support dependents such as a child or elderly parent receive a tax free amount of up to $7,581 in 2007. The tax relief for the supporting person is reduced as the spouse's or dependent's net income increases and is fully phased out once it reaches $8,340.

Bill C-52 will increase the credits for low income spouses and dependents of single individuals. This measure will provide up to $209 in additional tax relief so that single earner families will receive the same tax relief as that already provided through the basic personal amount to two earner families. The new child tax credit and increases to the spousal and dependent amounts will provide significant personal income tax relief to families.

Bill C-52 also enacts the tax fairness plan, which delivers over $1 billion in additional tax savings for Canadian pensioners and seniors. This plan, introduced last fall and committed to in budget 2007, proposes to increase the age credit amount and allow pension income splitting for pensioners. This builds on the almost $20 billion over two years of tax reductions provided for individuals in budget 2006 and will significantly enhance the incentives to save and invest for family retirement security.

Canada's new government delivers on its commitment from our economic plan, Advantage Canada, to dedicate all interest savings from federal debt reduction each year to ongoing personal income tax reductions. This is our government's tax back guarantee. It will ensure that Canadians benefit directly from federal debt reduction.

To ensure that happens, as the federal government pays down national debt it will be required to use the interest savings to cut personal income taxes for hard-working Canadians. Bill C-52 proposes to set out the tax back guarantee in legislation.

Budget 2007 takes historic action to restore fiscal balance in Canada.

A restored fiscal balance will ensure that provinces and territories have the means to build and provide things that matter to Canadians. When the provinces and territories invest in health care, post-secondary education, modern infrastructure, child care and social services, everybody wins and all of Canada is stronger.

Budget 2007 invests an additional $39 billion over the next seven years and puts all major fiscal arrangements on a long term, principles-based track to 2013-14. Bill C-52 implements a number of key fiscal balance measures.

It renews and strengthens the equalization and territorial formula financing programs, which will be providing $2.1 billion more in the next two years to eligible provinces and the three territories. It improves the fairness of the Canada social transfer and the Canada health transfer by legislating an equal per capita cash support for these transfers as they are renewed.

It also renews and strengthens the Canada social transfer by making new and growing investments in support of post-secondary education, children and social programs. The restoration of fiscal balance will allow governments to go forward and focus on building a stronger and more prosperous Canada.

It is our responsibility as Canadians to protect our environment. It is only through a healthier environment that Canadians can create the quality of life and the standard of living to which we all aspire.

That is why budget 2007 invests $4.5 billion to clean our air and water, reduce greenhouse gases and combat climate change, as well as protect our natural environment.

Bill C-52 proposes to enact one of the important environmental measures from this year's budget, a new Canada ecotrust for clean air and climate change, announced by the Prime Minister on February 12, 2007.

Climate change and air pollution affect all Canadians. That is why our response must be national in its scope.

The new Canada ecotrust for clean air and climate change will provide support to those provinces and territories that identify major projects which will result in real reductions in greenhouse gas emissions and air pollutants. Moreover, the provincial and territorial initiatives supported by the ecotrust will complement industrial regulations and existing federal initiatives.

Projects could include provincial and territorial technology and infrastructure development, such as carbon sequestration and clean coal and electricity transmission, which will lead to a significant decrease in greenhouse gas emissions and air pollution.

Under Bill C-52, the government will invest over $1.5 billion in the trust.

Few among us would disagree that the Canadian health care system is one of the things that makes Canada the modern, compassionate and prosperous country that it is.

Budget 2007 takes action to improve our health care system by helping reduce wait times, preventing diseases like cancer of the cervix, and modernizing Canada's health system.

Bill C-52 provides funding for the development of patient wait time guarantees, which will be used to assist the provinces and territories as they move forward with the implementation of guarantees.

Specifically, to support jurisdictions that made commitments to patient wait time guarantees prior to the end of March 2007, Bill C-52 proposes to set aside up to $612 million, well over half a billion dollars, to be used to help accelerate the implementation of patient wait time guarantees.

There will be $500 million allocated on an equal per capita basis and funding for eligible provinces and territories will be paid into a third party trust. Through the trust, those eligible provinces and territories will also be provided with base funding of $10 million per province and $4 million per territory to move forward with patient wait time guarantees.

We know that immunization is considered a very cost effective means of preventing illness and provides long term savings to the health care system. When effective new vaccines become available, it is in the best interest of Canadian families to receive them as quickly as possible.

Cancer of the cervix is the second most common cancer in Canadian women aged 20 to 44, after breast cancer. In July 2006 the government approved a vaccine for use by young girls and women that prevents the majority of this type of cancer, providing protection against the two types of human papillomavirus, or HPV, that are responsible for approximately 70% of cancers of the cervix in Canada.

The government will provide funding to the provinces and territories to support the launch of a national program for the HPV vaccine that will focus on protecting women and girls from cancer of the cervix. Bill C-52 proposes to put $300 million, a third of a billion dollars, into a third party trust in 2007-08 for the benefit of provinces and territories, allocated on a per capita basis.

Canada's new government understands that a strong system of higher education is a crucial source of ideas and innovation, creative energy that our economy needs to foster national prosperity. We know that having a post-secondary education contributes to the well-being of Canadians and that of their communities.

The government is also aware that parents across this country are struggling with the costs of post-secondary education. We are helping parents save for their children's education by strengthening the RESP program, and we have invested more in post-secondary education.

Bill C-52 proposes to increase the Canada social transfer by $800 million per year starting in 2008-09 for provinces and territories with the objective of strengthening the quality and competitiveness of Canada's post-secondary education system. As a result, CST funding for post-secondary education will increase by 40% to $3.2 billion in 2008-09.

Just as importantly, this support will continue to grow over time as a result of the annual 3% escalator that is part of the renewed CST. This increased and earmarked transfer of funding meets the government's commitment to deliver a new approach to funding support for post-secondary education by ensuring long term predictable support for provinces and territories, and greater transparency and accountability to Canadians.

In summing, what does Bill C-52 mean to Canadians? For one thing, it means lower taxes. Canada's new government followed through on its commitment to cut taxes for Canadians and going forward we will continue to look at new ways to reduce the tax burden on hard-working Canadians.

Bill C-52 also proposes funding to ensure that our major fiscal arrangement with the provinces and territories are on a sound and principled track for the future. This bill proposes initiatives that will help improve the operation of our education and health care system.

In short, Bill C-52 will deliver significant benefits to Canadians, benefits that help secure a strong future for Canada. I would therefore encourage all members of the House to support this budget implementation bill.

[Charles Hubbard, Liberal, Miramichi, NB]

Mr. Speaker, I would call this a salt and pepper budget. It increases government spending by $10 billion. It takes an ever greater percentage, ratio, of federal spending to the GDP than we have seen in some time. It advocates very little money for research and development for the future of our country and for secondary education. The list could go on.

I know in terms of what was presented today, we do not see a lot of money allocated for so-called tax relief to those people most in need, the people with low incomes.

We have seen here this week a challenge to our party on the budget. We noticed that the Bloc was able to support it, but I know the people who talk about the people who are most in need in this country are not getting a lot of tax relief.

The tax relief is mainly for those earning a lot of money. It certainly does not help out the working poor. I would like to hear more from the parliamentary secretary on a budget that has no vision, no direction, and no great programs to educate people. It sees an additional tax revenue, additional spending, and not good control of our federal money.

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

Mr. Speaker, the member ought to read the budget. If he were to actually study the figures, he would see that from 2005-06, when our government came to office, to 2008-09 spending growth would average 4.1%, almost a full percentage point below the projected rate of economic growth in that period. That is substantially below the rate of growth under the Liberals, when the average spending was over 8% per year and in the final years of their mandate was 15%. We have brought that down to 4.1%.

Setting aside the cost to restore fiscal balance, which was a one-time cost which we promised in the election, tax cuts established since budget 2006 are more than twice as much as spending measures in the budget. I know that the member will be happy about that and that his concern has been well met.

With respect to low income Canadians, we have done so much for low income Canadians, again something that the member either missed or chooses to ignore because he is following his leader's directive to go out and trash the budget for partisan purposes instead of giving the facts to Canadians.

In fact, we have a new working income tax benefit for the working poor. He knows that. We have a new $2,000 child tax credit for the poorest Canadians. He knows that. We have reduced the GST, which is the only tax that lowest income Canadians pay. He is aware of that.

This past budget and this budget takes three-quarters of a million Canadians completely off the tax rolls because they will be paying less tax under our measure. He is aware of that as well.

I would suggest that the facts do not square with the trumped up concerns that the member tries to bring forward. This is a good budget for Canada. It is a good budget for Canadians. It is a good budget for every Canadian.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Mr. Speaker, the Bloc Québécois has been fighting a long time to have the fiscal imbalance corrected. We have decided to support this budget because it starts to address fiscal imbalance.

We are well aware that this is a minority government budget, and that this government would never have begun to do anything for Quebeckers if there were not 50 Bloc Québécois members and a minority government. However, there is still a lot of work left to do, partly because the fiscal imbalance cannot be fixed without a tax solution. What we have here is a monetary solution.

I would like to ask the parliamentary secretary a question on equalization. It was completely arbitrarily decided that non-renewable natural resources would be excluded from the calculation and the inclusion rate set at 50% and even 0% in some cases. This is completely arbitrary and is designed to favour some provinces over others.

I would like the parliamentary secretary to explain why they made this decision. For example, why were aerospace revenues not excluded? It would be a good idea to exclude these revenues, 60% of which happen to be in Quebec. Why are hydroelectricity revenues not excluded, which would also help Quebec? Out of the entire tax base, why was the only tax revenue excluded one that just happens to be something that puts Quebec at a disadvantage in the equalization calculation?

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

Mr. Speaker, we certainly appreciate the Bloc's support for this good budget. I suspect if the Bloc had not been willing to support the budget, one of the other parties might have found it in their hearts to do so.

However, with respect to equalization, I remind the member of a few things. The new equalization formula, which brings the equalization program for have not provinces back onto a principled, certain and long term track, was actually the work of an independent third party panel. This panel was set up by the former Liberal government. It was run by experts in this field, well respected people, and they came up with this formula, which I believe most objective people believe to be extremely fair, extremely principled, and extremely balanced for Canadians.

For a member from Quebec to complain that somehow this was not good for this province probably would not find a lot of support in the rest of Canada, and I might suggest that the Bloc itself acknowledges that this new formula is very good for the province of Quebec.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Mr. Speaker, Conservatives are very good at telling us to read the budget. I did read the budget. I read it twice. There are so many things missing, but with the shortness of time I will concentrate on one issue.

When the hon. member for Calgary—Nose Hill was in opposition, she was a terrific critic for her party, going after the Liberals, and rightfully so, on many faults they had. When she and her party were in opposition she was very well known for saying that when a motion passes this House of Commons, this should reflect the government's ideology and what it should be doing because the will of Parliament has spoken.

Not only did the Conservatives ignore the veterans' first motion in the budget, helping VIPs, widows and injured soldiers, for example, but they completely omitted autism. Autism did not even get a mention in the budget, even though it was passed with Conservative support in a motion by the hon. member for Fredericton.

I have a simple question. With a $14.2 billion surplus, could the Conservatives not find it in their hearts, one, to have included autism in the budget to help those families and children across the country; and two, why did the government ignore a motion passed by this House of Commons?

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

Mr. Speaker, the member knows that the government does have a very strong advocate for autism. One of our own members has a young child who has this difficulty and the government is moving on this front.

I find it very interesting that we have a budget that provides $39 billion in new funding for health care, education and infrastructure, $4.5 billion to clean up Canada's air and water, a $2,000 tax credit for every child under 18, a working income tax benefit, a tax fairness plan to reduce taxes for seniors and on and on, and the only thing the member can find to criticize is that somehow there was not a specific announcement about a specific condition that the government is already addressing.

I think that is a ringing endorsement for the budget which is so good for Canada and all Canadians.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, I want to congratulate the parliamentary secretary for her very eloquent summary of budget 2007. I am getting extremely positive feedback from my constituents in Kitchener—Conestoga, specifically as it relates to the support for working families.

It is clear that by removing 180,000 people from our tax rolls, we have listened to ordinary Canadians. I wonder if the parliamentary secretary could confirm that with the measures in this budget and 2006 that we have actually directed 75% of our tax relief to those who are earning $75,000 or less.

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

Mr. Speaker, this is a fact and figure that is in the budget which some members who are trashing the budget on the orders of their leader must have read. They say they have read the budget, but somehow missed the fact that the budget is targeted largely to lower income Canadians, middle class Canadians, and hard-working Canadians who pay their taxes and look after their families. This is the focus of our budget.

Parties who are not supporting the budget need to explain to their own constituents why a new working income tax benefit for the working poor is not worthy of their support and why a new $2,000 child tax credit should not be supported. Why are they not supporting $16 billion in new infrastructure funding? Why are they not supporting a 40% increase in support for post-secondary education and on and on.

Members of the House who are trying to trash the budget for partisan purposes should have to explain that to their own constituents and to Canadians.

[Brent St. Denis, Liberal, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, it is a pleasure to join the debate today on the government's second budget released on March 19. On behalf of the constituents of Algoma—Manitoulin—Kapuskasing in northern Ontario, I would like to offer a few opinions.

First, I would like to point out that among the various instruments that governments have to tell voters, tell the public what it is they are about, what it is they plan to do for a country, the two main instruments are throne speeches, which we see typically every two years, and budgets, which we see every year usually in February or March.

In the span of 100 years, we would see 100 budgets from different governments. That underlines how important budgets are. Not only do they set a course, or they are supposed to set a course, but they are also supposed to provide the government's vision for the months and years ahead. They are supposed to tell Canadians how the current government of the day wishes to continue building the nation.

Quite frankly, as important as budgets are, I believe the government has missed a very serious opportunity to add its piece to the grand and important puzzle which is the building of this nation. I am not going to say that it lacks an agenda but indeed, it lacks a vision.

What I find most interesting in the budget is what the budget does to fulfill what I consider to be the hidden agenda of the government, which is to actually weaken the central government of this country. In so doing, it limits the capacity of the central government to create programs of national concern, whether they are in the economic domain, the social domain or the environmental domain. When one weakens the central government's ability to lead, to draw in the provinces and territories on national initiatives, one in fact weakens Canada.

There have been numerous surveys over the years which have indicated over and over again that of all levels of government, the public trusts most the federal government, its national government. The public sees in its national government the best tools, the best ability, the strength to keep our country together for all citizens from coast to coast to coast, regardless of where they live, whether they live in rural areas like my area in northern Ontario or in urban areas like downtown Winnipeg, Vancouver, Toronto and so on. Fundamentally Canadians are generous. They want to share this nation with each other and with those who come from foreign shores to join us and to live in Canada. That generosity means that Canadians want, as much as is reasonable, that programs and initiatives be for everybody.

Let me give an example of the government's attempts to weaken the central government. I have to reach back to last year's budget. This budget is a continuation, in my view, of that central theme of a hidden agenda to weaken a central government. There was an announcement last year, and we were expecting to hear more about it but for some hidden reason we did not hear part two, but last year there was an announcement that the government would cut the GST by 1% and eventually by another 1%. This was against the advice of virtually every economist in the country. We have to trust our professionals. They said that giving away between $5 billion and $6 billion on a 1% GST cut would only weaken forever the central government, because we cannot get that percentage back.

Think back to governments that tried to increase taxes. We cannot get that percentage back. That $5.5 billion that was lost in the first 1% GST cut is $5.5 billion that is not available for the government to invest in health care, in municipal infrastructure, in the Kelowna accord which, incidentally, would have cost about $5 billion. One year of that 1% GST cut would have funded the Kelowna accord. We are talking about 1% every year ongoing, every year indefinitely.

It is interesting that the government in this budget did not mention what was going to happen to the second 1%. It may be that the government finally listened to the advice it received last year, or it just felt that it would prefer to do that in a majority government.

I do not think Canadians are going to be easily fooled. Frankly, I do not recall meeting any constituents in my large riding who said, “Wow, that 1% GST cut really was a great benefit to me and my family”. In fact, the opposite is the case. When I asked them, virtually every one of them said that they did not notice that 1%. I pointed out that a wealthy person who bought a $100,000 boat would receive $1,000 in GST relief and that wealthy person would notice it. My constituents replied, “Of course they would notice it, but I am an average Canadian and I am not buying a $100,000 boat”.

In fact, the average Canadian family would have to consume taxable goods for years and years to achieve that $1,000 in GST relief that the wealthy person would enjoy when buying that expensive boat. To me, what the budget really does is it promotes further the hidden agenda.

Let me speak to some of the concerns in northern Ontario in my riding. I will start with forestry and I will continue with concerns for my aboriginal constituents and aboriginal Canadians from coast to coast.

In the forestry sector, communities such as White River, Smooth Rock Falls, Chapleau, Espanola, Nairn, Opasatika, Hearst, Kapuskasing, and the list is far too long, are experiencing tremendous layoffs and cutbacks. Much of the layoffs and cutbacks are in the softwood sector. There are key industries that have suffered in the pulp and paper sector in my area as well.

There is no mention in the budget of what should be done to deal with a sector of our economy which is extremely significant not only in direct jobs and what it does for our single resource communities, but the incredible spinoffs as well. A tremendous price is being paid by families in these communities and the communities themselves as well. Those communities see the loss of their capacity to keep their schools open and in fact, to maintain their basic infrastructure because people have to leave those communities if they can.

At the very least I would call on the government to bring together all stakeholders, community leaders, unions and companies, all those who have a stake in the forestry sector. The government should bring them together in a national forestry summit so that our best minds and our best efforts can be focused on that one issue to see if something can be done for the long term of this country.

Quite frankly, when we consider what the softwood lumber deal has done to communities in my riding, I looked for measures in this budget that would have assisted them. The day before the agreement went into effect, the import tax in the U.S. was some 10 point something per cent, roughly 10.5%, but the day after the agreement was signed, it shot up to something like 15% because the U.S. import tariff was replaced by an export tax.

It will take me a long time to understand how that is good for our industry. I understand it is the Canadian government that has had to advance the duties from the U.S. back to Canadian companies, because the U.S. actually has not repaid those funds, to the best of my knowledge.

I will move on to my aboriginal constituents on Manitoulin Island and on the north shore of Lake Huron and the Chapleau and Wawa areas and up at Constance Lake near Hearst.

When the aboriginal leadership in my region and all Canadians saw their premiers, the prime minister and the senior aboriginal leadership of this country sign the Kelowna accord in November 2005, they saw the parties come together to sign a historic agreement. Funding for that agreement was put in place immediately thereafter. The money was booked, as our then finance minister confirmed and has confirmed numerous times.

For some reason the Conservative government has repeatedly refused to acknowledge the validity of that agreement. As recently as last week the government voted at third reading not to support the private member's bill of my colleague the member for LaSalle—Émard, which further calls upon the government to honour the Kelowna accord.

Our aboriginal Canadians, our first nations leadership, have been severely disappointed by what they have seen from the government when it comes to measures to understand and appreciate the great heritage, the great history, the great culture that our first nations bring to this country. They are disappointed that as a nation we have still not adequately dealt with the needs of our first nations communities and people when it comes to education, health, water, and those supports that are necessary to live in a modern society. After all, it is our aboriginal youth we will count on considerably in the years ahead as the labour shortage in this country continues to increase.

I recall before the last election that our then leader and prime minister, the member for LaSalle--Émard, made a commitment to students to pay up to $3,000 per year toward tuition fees. That was a significant offer to Canadian families. Then the election came along and we can debate whether that should have happened. However, I look at this budget and there is nothing for undergraduate students. There is a bit of money for post-grads and that is great, but it only assists about 4,000 students.

I go back to my comment about the hidden agenda and the fact that this budget has no vision. There is no overarching view of what the future of this country will be like. It is a hodgepodge of small measures designed to attract individual demographic groups within the larger society. I do not begrudge that there are certain small measures that are important to some people in the budget, and that is great for them, but even they would agree that the government should have a vision with its budget. It should have an overarching idea of where the country is going.

When we were in office great progress was being made with respect to research and development and post-secondary education. We were making sure that our best minds could do research and network with the best minds around the world. It seems that we are now taking backward steps. We must take care of the fundamentals of education. If I could speak to each of my colleagues here one on one, I doubt anyone would disagree that education is the basis of all that we do not only in our personal lives, but as a nation.

I was very disappointed to see the lack of any grand vision when it came to education and productivity for this nation. We are competing in a world that is advancing rapidly. It is our duty to make sure every day that not only individual Canadians but our nation together keeps up and demonstrates the leadership that Canada has become known for around the world.

There are about 55 small communities in my large riding of 110,000 square kilometres. The leadership of these small communities, mayors, reeves, chiefs, are all struggling to maintain the basic infrastructure of their communities.

I know the budget mentioned a short term commitment to share the gas tax with municipalities, unlike the leader of my own party who said that commitment will be an indefinite commitment. Some off my colleagues who have been here since 1993 will remember that when the previous Liberal government brought out a municipal-provincial-federal infrastructure program there was tremendous resistance from the then Reform Party and later Alliance Party. In fact, MPs from those parties would not even participate in local ceremonies to launch infrastructure projects. They were dead set against infrastructure.

I know the Conservative Party is the current metamorphosis of the original Reform and Alliance Parties, but the genes of the Reform and Alliance Parties are still present and we still see a lack of real commitment to local governments.

When the Liberal government was first elected in 1993, one of the first commitments we made was to help local governments improve roads, sewer and water systems and so on because we understood that there was an infrastructure deficit in the country at the local level and that the federal government had to take its share.

It is not only local infrastructure. Where is the grand vision when it comes to those nation building projects that Canada needs to address? If there is one that stands out among others, it is the whole issue of climate change. If there is a national project, indeed, an international project, that requires our very best efforts, it is climate change.

I am very pleased that my colleagues in this party and the opposition parties have been able to craft a renewed Bill C-30 which I believe will move the standards quite considerably when it comes to Canada's responsibilities in the world with respect to climate change.

I will now talk about northern Ontario in general. Northern Ontario, like other regional rural parts of the country, is experiencing a population loss. It is not difficult to explain. Families are not as big as they used to be. Our population growth, and happily so, is made up of fine new Canadians who come from all parts of the world to our country. At the same time, it is important to remember that it is from the rural areas from which Canada was first built. If we forget where we came from, we will soon forget where we are going.

It is very important that the present government and any future government, whether it is my party or another, take measures to ensure the strength and vitality of rural Canada, whether it is through immigration measures or supporting programs like FedNor. As much as the government might say one thing about FedNor, one thing we know for sure is that there was a cut in the total funding for FedNor.

FedNor, by the way, for those who are not aware, is the federal economic development agency for northern Ontario, an agency which we were very happy, through the years 1993 to 2006, to support and to in fact increase and grow the funding and supports for.

FedNor needs to be further supported. We need to increase the funding for FedNor, as we need to do for the other regional economic development programs in the Atlantic, west Quebec and so on. I referred to the genetic predisposition against municipal infrastructure support from the federal government. That also exists when it comes to economic development. If anyone has old copies of the Reform and Alliance platform documents, it is explicit that they do not support regional economic development programs.

One cannot change one's genes. Some may try but they cannot do it. Either the government owns up to what it really believes about economic development or it can keep trying to fool the country for another little while.

I will conclude by saying that I still have constituents in my riding, some of the older ones, who refer to the Diefenbaker times and the fact that it has usually been Conservative governments that have put us into deficit.

When we came to office in 1993, we had to deal with a huge $42 billion deficit and, with the help of Canadians, that deficit was slain which put the country in the enviable position of having surpluses that could then be invested in health care, infrastructure, education and so on.

My constituents may not for the most part really think tax cuts are the most important thing that we should be doing. I am not against appropriate tax cuts targeted to the poor and middle income Canadians but these shotgun blast tax cuts, like we have with the GST, do not really do anything positive. With that kind of an attitude and the $10 billion in new spending in the last budget, which one of my colleagues mentioned, I am really worried that we will be going back into deficits. It will only take some kind of calamity to cause that unfortunate time to reappear. It would not be any surprise to see this happen under--

[The Deputy Speaker, Bill Blaikie]

The hon. member for Sackville—Eastern Shore.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Mr. Speaker, my hon. colleague and I work together on the veterans affairs committee and he knows very well, as he has been a long time member of this chamber, that when the Conservatives were in opposition they always mentioned the fact that when motions are passed by the House that should express the will of government in its financial statements and in everything else.

The hon. member knows very well that we passed a motion in the House recently that would assist widows, widowers and veterans themselves. In a couple of cases, the VIP, which he knows was promised to Joyce Carter, a lady from St. Peter's, Cape Breton, in a letter written on behalf of the then opposition leader, saying that if the Conservatives formed a government they would immediately bring in the VIP for all widows and widowers of veterans, regardless of the time of death.

That was almost 16 months ago now and we are still waiting. If the government is going to deliberately mislead widows of veterans, who else is it going to mislead in the country? It has easily mislead Atlantic Canada on the accords, for example. It is quite despicable that the leader of our country, in previous opposition times, can have a letter which deliberately misleads a widow of a veteran.

The budget did not even mention the VIP for widows of veterans, even though it was a motion passed in the House.

Does my hon. colleague, who is also on the veterans affairs committee, not find it despicable that a government, with a $14.2 billion surplus, cannot find a couple of hundred million dollars out of that, less than 2% of the total budget, to assist all widows and widowers of veterans who helped serve our country so greatly in its time of need?

[Brent St. Denis, Liberal, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, both my colleague from Nova Scotia and I are vice-chairs of the Standing Committee on Veterans Affairs. Indeed, the motion to which he referred was passed in the House. It was a motion that really underlined the current government's promise made during the election.

I almost wish I could have Premier Danny Williams of Newfoundland and Labrador in my place right now to maybe answer his question about things said during elections and things being done now. If I could not have him in my place, maybe I could have somebody representing the modest income families that had their life savings in income trusts. I guess the list could go on.

It is indeed unfortunate, as my colleague said, that the budget did not mention one word about the VIP for widows of veterans.

The member does great work on the committee and he is one of the House's finest advocates for veterans. I concur with him. I think it is, I will choose my words carefully, extremely unfortunate that that campaign commitment has not been kept.

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

Mr. Speaker, I noted that when the member made his intervention he said that the government does not have a plan. I guess he missed the fall update when the government brought out its advantage Canada economic plan for a strong future for Canada, to give Canada a tax advantage, a fiscal advantage, an infrastructure advantage, a knowledge advantage and an advantage in less red tape for our businesses.

The member also criticized the GST but one of his own members, the member for Halton, said that the GST would actually put more money into the pockets of low income Canadians.

I sometimes wonder how members opposite can look themselves in the mirror when they blindly follow orders from their leader to trash a budget that is so good for Canada, that follows a clear economic plan and that will build a strong future for our country. How can they look themselves in the mirror and follow those kinds of orders?