Bill C-28 (Historical)

Budget and Economic Statement Implementation Act, 2007

An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007 and to implement certain provisions of the economic statement tabled in Parliament on October 30, 2007

Part 1 implements goods and services tax and harmonized sales tax (GST/HST) measures proposed in the March 19, 2007 Budget but not included in the Budget Implementation Act, 2007, which received Royal Assent on June 22, 2007. Specifically, the Excise Tax Act is amended to
(a) increase the percentage of available input tax credits for GST/HST paid on meal expenses of truck drivers from 50% to 80% over five years beginning with expenses incurred on or after March 19, 2007;
(b) increase the GST/HST annual filing threshold from $500,000 in taxable supplies to $1,500,000 and the annual remittance threshold from $1,500 to $3,000, both effective for fiscal years that begin after 2007;
(c) increase the GST/HST 48-hour travellers’ exemption from $200 to $400 effective in respect of travellers returning to Canada on or after March 20, 2007; and
(d) implement changes to the rules governing self-assessment under Division IV of Part IX of the Excise Tax Act to ensure that GST/HST applies appropriately in respect of intangible personal property acquired on a zero-rated basis and consumed in furthering domestic activities, applicable to supplies made after March 19, 2007.
Part 2 amends the non-GST portion of the Excise Tax Act to implement measures announced in the March 19, 2007 Budget. Specifically, the excise tax exemptions for renewable fuels, including ethanol and bio-diesel, are repealed, effective April 1, 2008.
Part 3 implements income tax measures proposed in the March 19, 2007 Budget but not included in the Budget Implementation Act, 2007, which received Royal Assent on June 22, 2007. In particular, it
(a) introduces a new Working Income Tax Benefit;
(b) eliminates income tax on elementary and secondary school scholarships;
(c) eliminates capital gains tax on donations of publicly-listed securities to private foundations;
(d) enhances the child fitness tax credit;
(e) expands the scope of the public transit tax credit;
(f) increases the lifetime capital gains exemption to $750,000;
(g) increases the deductible percentage of meal expenses for long-haul truck drivers;
(h) provides tax relief in respect of the 2010 Winter Olympic and Paralympic Games;
(i) allows for phased-retirement options for pension plans;
(j) extends the mineral exploration tax credit;
(k) enhances tax benefits for donations of medicine to the developing world;
(l) streamlines the process for prescribed stock exchanges;
(m) introduces an investment tax credit for child care spaces;
(n) introduces a new withholding tax exemption with respect to certain cross-border interest payments;
(o) prevents double deductions of interest expense on borrowed money used to finance foreign affiliates (the Anti-Tax-Haven Initiative);
(p) eases tax remittance and filing requirements for small business;
(q) introduces a mechanism to accommodate functional currency reporting;
(r) provides certain tobacco processors that do not manufacture tobacco products with relief from the Tobacco Manufacturers’ Surtax; and
(s) provides authority for regulations requiring the disclosure by publicly traded trusts and partnerships of information enabling investment managers to prepare the tax information slips that they are required to issue to investors on a timely basis.
Part 4 implements the disability savings measures proposed in the March 19, 2007 Budget. The measures are intended to support long-term savings through registered disability savings plans to provide for the financial security of persons with severe and prolonged impairments in physical or mental functions. Part 4 contains amendments to the Income Tax Act to allow for the creation of registered disability savings plans. It also enacts the Canada Disability Savings Act. That Act provides for the payment of Canada Disability Savings Grants in relation to contributions made to those plans. The amount of grant is increased for persons of lower and middle income. It also provides for the payment of Canada Disability Savings Bonds in respect of persons of low income.
Part 5 implements measures that provide for payments to be made to provinces as a financial incentive for them to eliminate taxes on capital under certain circumstances.
Part 6 enacts the Bank for International Settlements (Immunity) Act.
Part 7 amends the Pension Benefits Standards Act, 1985 to permit phased retirement arrangements in federally regulated pension plans by allowing an employer to simultaneously pay a partial pension to an employee and provide further pension benefit accruals to the employee. These amendments are consistent with amendments to the Income Tax Regulations to permit phased retirement.
Part 8 authorizes payments to be made out of the Consolidated Revenue Fund for the purpose of Canada’s contribution to the Advance Market Commitment.
Part 9 amends the Canada Oil and Gas Operations Act to authorize the National Energy Board to regulate traffic, tolls and tariffs in relation to oil and gas pipelines regulated under that Act.
Part 10 amends the Farm Income Protection Act to allow financial institutions to hold contributions under a net income stabilization account program.
Part 11 amends the Federal-Provincial Fiscal Arrangements Act to provide for an additional fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador. This Part also specifies the time and manner in which the calculation of fiscal equalization payments will be made and it amends that Act’s regulation-making authority. In addition, this Part makes consequential amendments to other Acts.
Part 12 amends the Canada Education Savings Act to clarify the authority of the Minister of Human Resources and Social Development to collect, on behalf of the Canada Revenue Agency, any information that the Canada Revenue Agency requires for purposes of administering the registered education savings plan tax provisions.
Part 13 authorizes payments to be made out of the Consolidated Revenue Fund to an entity, designated by the Minister of Finance, to facilitate public-private partnership projects.
Part 14 implements tax measures proposed in the October 30, 2007 Economic Statement. With respect to income tax measures, it
(a) reduces the general corporate income tax rate;
(b) accelerates the tax reduction for small businesses;
(c) reduces the lowest personal income tax rate, which automatically reduces the rate used to calculate non-refundable tax credits and the alternative minimum tax; and
(d) increases the basic personal amount and the amount upon which the spouse or common-law partner and wholly dependent relative credits are calculated.
Part 14 also amends the Excise Tax Act to implement, effective January 1, 2008, the reduction in the goods and services tax (GST) and the federal component of the harmonized sales tax (HST) from 6% to 5%. That Act is amended to provide transitional rules for determining the GST/HST rate applicable to transactions that straddle the January 1, 2008, implementation date, including transitional rebates in respect of the sale of residential complexes where transfer of ownership and possession both take place on or after January 1, 2008, pursuant to a written agreement entered into on or before October 30, 2007. The Excise Act, 2001 is also amended to increase excise duties on tobacco products to offset the impact of the GST/HST rate reduction. The Air Travellers Security Charge Act is also amended to ensure that rates for domestic and transborder air travel reflect the impact of the GST/HST rate reduction. Those amendments generally apply as of January 1, 2008.

Budget and Economic Statement Implementation Act, 2007

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

Mr. Speaker, I thank the hon. member for her question.

In last year's recommendations from the Standing Committee on Industry, Natural Resources, Science and Technology, there was also talk of using safeguards, for example, in order to avoid objectionable imports.

Her comments show just how wrong the Conservatives are to think there is no urgency. There is an emergency in the manufacturing sector. This is a very special situation. People have long thought that, since the unemployment rate was very low, the economy was doing well and things were going well everywhere. Things are going very well for the energy sector in the west, especially oil and gas, but things are not going well for the manufacturing sector.

We have the opportunity, all together, to do something to correct the situation, to adopt an aggressive policy for the manufacturing sector that will allow us to really help our businesses. Cutting the GST by one percentage point will indeed increase purchasing power, but this will not necessarily help our manufacturing industry. It could mean a rather direct transfer to Chinese industry, among others. I have nothing against the Chinese, but I would have preferred to see a manufacturing policy that created fiscal tools, in order to be able to produce goods at competitive prices so they can sell. Only then will we have protected our jobs here at home.

The Quebec chamber of commerce said that many jobs were created, but they were primarily jobs at $8, $9, $10 or $12 an hour, while the jobs that are being lost paid $15 or $20 an hour. This creates poverty, which then slows our economy. We therefore believe that it is important to move forward. I hope we will be able to reach unanimous consent, as did the Standing Committee on Finance, which is calling on the government and the Minister of Finance to come up with an action plan as soon as possible to help the manufacturing sector.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, the Conservatives have suggested that they have solved the fiscal balance in their budget and that there is peace among all the provinces. Is that true?

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

Mr. Speaker, I am not sure that I understood the question.

With respect to the fiscal imbalance, the $3 billion in the 2007 budget was money to which Quebec was entitled. We hoped to receive that money and that is why we supported the bill. However, the other side of the coin is that the fiscal imbalance has not been resolved once and for all. That would take an agreement that would actually transfer the money to Quebec.

We must stop tinkering with the Canadian federation, as was just done with the Nova Scotia agreement. That model is not of interest to us. To create a good equalization model, we must include all resources—they contribute to revenue—the revenues from natural resources. We have to come up with a formula that looks at the whole picture and, above all, that does not patch things together, piece by piece, for the purpose of electoral gains.

A much more dynamic approach is required. Specific objectives and criteria are needed. There must be the will to have good productivity and to provide support to those affected by this productivity. We are speaking of an integrated policy of assistance for the manufacturing sector, of incentives for the purchase of equipment and also of support for those who are the victims of globalization.

That is why the Bloc Québécois has taken this position and it is one of the reasons why, today, we will vote against the Conservatives' bill.

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

Mr. Speaker, there is a lot of sound and fury in the House this morning signifying not a whole lot. Why? Because ordinary Canadians cannot count on the official opposition, the grand Liberal Party of Canada, to actually do anything about the mini-budget. The Liberals will sit on their hands and not participate at all in the vote that will come after the debate.

The bill before us has 14 parts. None of the 14 parts really contributes much to ordinary Canadians and their communities. It continues the grand Liberal tradition of giving large corporate tax cuts to the most profitable organizations in Canada.

From 2001 to 2007 Canada has lost over $53 billion in revenue that we could have had. Imagine what that money could have done in terms of investing in communities. It does not surprise me that in the upcoming vote in the House, members of the official opposition will sit on their hands and not vote because the mini-budget before us continues the Liberal tradition.

Part 14 of the bill reduces the general corporate income tax rate much further, from the original 2001 tax rate of 28% to 21%. Now it will take it down to 15%, because 18% is not low enough. The government will forgo at least $14 billion per year because of corporate tax cuts.

What does that mean? When the bill passes, all the massive tax cuts in the mini-budget will mean close to $190 billion in lost revenue, a complete gutting. That is really unfortunate, because there will not be much money left to invest in ordinary Canadian communities.

Big urban centres and small communities across Canada are suffering a great deal. Every one of them is struggling to balance the budget, as they have to do. There are massive property tax increases all across Canada because the municipalities cannot handle the kind of debt load they have. They are looking to cut vital services in local communities.

In my area the library just up the street from where I live has always been open seven days a week. However, this coming month the library will not be open on Sundays. Why? Because it has no money to open on Sundays. The city of Toronto does not have the kind of funding to continue to keep that library open on Sundays. That is really unfortunate, because a lot of families and children count on the library to be open on a Sunday so they can do their homework, read, borrow books or videos. It is a place where a lot of the community gathers.

Speaking about gathering places, community centres are the lifeline in local areas, especially for the at risk youth. They have no other place to go other than the local community centre. However, the community centres are also facing trimming because there is just not enough funding.

Because of smog a lot of people suffer asthma attacks. We would think that the budget would have invested in public transit in a massive way. It does not. In municipalities all across Canada there is hardly any funding for public transit. We are seeing fare increases, service cuts or the inability to increase the service. People are standing out in the cold waiting for buses to come. The subways are jam-packed. More people want to leave their cars at home but unfortunately that is not possible because there is not enough investment in public transit across Canada.

We are looking also at a massive deficit in infrastructure funding. The Federation of Canadian Municipalities has said that there is a $123 billion deficit in infrastructure. This budget has not increased funding in infrastructure for different cities. Whether it is highways, housing or potholes, none of that work is going to be done because there is no investment for it.

Because there is no investment in communities, cities and municipalities, many municipalities are having difficulty investing in their water treatment plants and sewage plants. In Toronto, for example, the water rate is going up because the capacity is just not there to retrofit the pipes, which needs to be done because the pipes are very old.

There is really nothing to support immigrant families in the mini-budget. We have recently found out that the user fees that are being charged by the immigration department in fact are going into the general revenue stream. The department actually makes $100 million per year from immigrants who apply to bring their families, fathers and mothers into the country. Refugees have to pay hefty fees to bring their families to Canada. None of that money, the $100 million in application fees, is invested in dealing with the backlog which is now at 800,000 people. If one is sponsoring a family, it might take three, five, eight years. In fact we have heard of cases where the parents of immigrants have died waiting to come to Canada to be reunited with their families.

There is no investment, whether it is the $100 million or new investment, in terms of settlement services. We recently heard that a lot of agencies are waiting for immigrant services funding from ISAP, the immigration settlement and adaptation program. They have not received their funding so they are beginning to give out notices to many of their agencies. That means many new immigrants will not get the services that they desperately need.

In Ontario the minister recently sent out a notice saying that Ontario is missing $100 million that was promised by the federal government to the province of Ontario for settlement services. That money has not arrived.

While there is a lot of funding for tax cuts from the surplus, there is nothing for cities, for communities and for ordinary Canadians.

We have noticed that as greenhouse gas emissions rise, the ecoEnergy program is renewed in the mini-budget but there is no expansion of the criteria. Affordable housing is not included. Seniors who barely can afford to pay rent now have to pay hefty hydro bills. Some of them I have heard are not turning up their heat this winter because they cannot afford to pay their hydro bills. We would think that the government would immediately invest in retrofitting affordable housing buildings so that the buildings would be the most efficient and state of the art so that the tenants would use less hydro and therefore pay less on their hydro bills.

Unfortunately, the ecoEnergy program that is mentioned in the bill does not include affordable housing. The $100 million program which the NDP pushed the former Liberal government into establishing is also gone.

On top of that, the ecoEnergy program does not include condominiums. In my riding, there are condominium owners who would love to retrofit their buildings. They would like to find some way to make the buildings green and energy efficient, but they cannot receive $1 from the ecoEnergy program.

This legislation is not fair for people who are earning very low income. Neither is it fair for people who are living in multi-residential buildings such as condominiums.

There is nothing in this bill for unemployed people who are seeking to get some money from employment insurance. A recent United Way report said very clearly that one of the reasons people remain poor is that they cannot access employment insurance. The national average in terms of the number of workers who can access their own employment insurance funding is only 40%. In big urban centres sometimes only 22% or 30% of workers who find themselves unemployed can access their own funding through the employment insurance program. No wonder they are stuck in a cycle of poverty.

A few days ago Campaign 2000 said that we must deal with the tragedy of child poverty. Eighteen years ago, on November 24, 1989 in this House, former NDP leader Ed Broadbent said that we have to eliminate child poverty by the year 2000. Here it is 18 years later, in 2007, and there has been no improvement in the number of kids who lead a life of poverty.

There is really not a lot of funding in this legislation. There is no increase in the child tax benefit which means that there are children who go to school who cannot afford to pay $1 to buy a hot dog or a slice of pizza. They will be excluded. Because kids' feet grow fast, families do not have the money to buy their kids new running shoes and those kids will be excluded from gym classes. The cycle of poverty will continue. That is a national shame. There is funding for the biggest, most profitable oil companies and the biggest, most profitable banks, and yet there is no funding available to help kids in Canada.

Bill C-28 also breaks the Atlantic accord. It betrays the people who live in the Atlantic provinces. No doubt my colleague, the member of Parliament for Halifax, will address this in detail later on.

The bill in front of us does not do anything for aboriginal people. One-third of aboriginal communities do not have safe drinking water. For the second straight year the Conservatives have announced that they will ensure there is safe drinking water but there is no money included in this budget to accomplish this.

There is hardly any money in this legislation to support the arts. There is no new funding for the CBC, the Canada Council, or to promote our artists. This unfortunately is a missed opportunity.

There is no increased funding in Bill C-28 for foreign aid even though the House has continually said that we have to increase foreign aid to .7% of our GDP. The mini-budget actually decreased our foreign aid as a percentage of our GDP from .34% to .31%. It is hard for Canada to talk about our international relationships and our standing in the world when we do not contribute much to foreign aid.

December 1 is World AIDS Day, and we have seen a 30% cut in funding to community groups that assist groups that deal with the prevention of AIDS. In fact, organizations in my riding have come to me and have said that they are laying off staff. All the good work they do will stop because of cuts in their funding.

There is no funding for a national home care program. Many seniors desperately need a home care program so they can stay at home. It is more economic if there is affordable, high quality home care for our seniors, which allows them to live in dignity. There is nothing in the bill for pharmacare, home care or long term care, nothing new for our seniors.

Again, there is no new funding for housing. We have a national housing crisis. When the cold weather arrives, people will still be on the streets. There are no new co-ops being built. Housing does not seem to be a priority whatsoever.

The bill mentions nothing about student loans or student debt. We know the average price of tuition for Canadian undergraduate students has tripled since 1991. The minister's mini budget does not make post-secondary education any more affordable. The provinces are not accountable for the funds transferred to them. Therefore, we do not know how those transfers will be used.

Sadly, when we talk about seniors, not only do they not get the kind of home care or nursing care hey desperately need, they also do not get an increase in their guaranteed income supplement. This means many seniors will continue to live in poverty. We already know that 25% of seniors live in poverty. For women, that figure climbs to 36%. We know there is $14 billion for the most powerful companies, but nothing for seniors.

There is hardly any mention about the minimum wage. Nor is there any commitment by the government to increase the minimum wage to $10 an hour.

There is also hardly anything for the Status of Women. I know our critic and advocate for women has been saying that we need $100 million a year. The mini budget gives $10 million a year for two years. That is hardly enough funding for the women's organizations that are struggling.

Unfortunately, the budget does not invest in our communities. It does not make our country a better place to live. In fact, if we look at this, there is a photo accompanying the economic statement recently released by the government. In the photo we see a little child looking out into the world. If we look closely at the picture, the child is standing on high ground and it looks as though this child could fall off the cliff. We are doing nothing to invest in our children and our young people. This is truly a missed opportunity for Canada.

We should be following other countries such as Ireland. It has mapped out a plan to invest in children and to reduce child poverty. It is delivering on and meeting its targets. However, Canada does not have a commissioner for children. It has no plan for children and no targets have been set to reduce child poverty. Yet there is money for very big companies. This is a sad statement on how we deal with our communities.

Sadly, the Liberals, when we finish the debate, will abstain from the vote. They will not make a statement. They will do nothing to say no to this terrible plan, and that is a missed opportunity.

[Ted Menzies, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I listened with interest to my hon. colleague from the NDP and her comments about Bill C-28.

It is difficult to understand how the hon. member can say that there is nothing in all of these tax measures. We have reduced personal income taxes. All the supportive measures, in what has been lauded by many Canadians as a very forward thinking and positive move, have been wrapped into one in the second implementation act of our budget.

The economic statement was filed by the finance minister in the House, but because of the NDP members, he was unable to speak to it. They refused to allow the finance minister to make a public statement in the House about the fall economic update. I am still amazed that they refused to allow him to speak in the House of Commons. He could have told Canadians that we were giving back some of their hard-earned tax money.

It is interesting that the hon. member suggests the Liberals may abstain. The NDP will vote against this. This morning the Bloc said that it would vote against it. I have more respect for the Liberals abstaining and not blocking this than I have for some other members of the House, who will deny benefits of $190 billion over 22 months. That is what we have provided in the economic statement, when it all comes together, in reduced taxes for Canadians. The NDP is going to vote against that.

I wish the hon. member luck when she goes back to her riding and says that she opposed $12 billion in cuts to GST. How will she face her constituents when she tells them that she does not think they are worthy of a cut in taxes?

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

Mr. Speaker, I am not surprised that the Liberals would not want to comment on this budget. The not so new government, the North Star government, is following the Liberal tradition of not investing in municipalities, cities, communities and ordinary Canadians.

A tax cut does not build affordable housing. A tax cut does not mean that buses come more frequently. A tax cut does nothing to ensure libraries open on Sunday. It does not build community centres or libraries. A tax cut does nothing to help farmers. A tax cut does nothing to help people who are desperately in need of affordable child care, whether it is in rural communities across Canada or in big cities.

In fact, an OECD report came out yesterday. It said that families could not afford child care and that there was not enough decent, high quality child care out there. Therefore, what do families do? They either have to stop working or they stop having babies. No wonder the birth rate in Canada is so low. Only in the province in Quebec has the birth rate stabilized, because it is investing $7 a day child care. Outside of Quebec ordinary families cannot afford to have babies. Why? Because they do not have affordable child care.

How does a tax cut deal with the problems families face? It does not. We have seen report after report which say that among OECD countries, Canada is dead last in its investment in affordable child care.

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

Mr. Speaker, I think we all know the economic plans of NDP can be defined by high spending, high taxes, the hoary, woolly-headed socialist economic plans that were so destructive in northern Europe. We saw what happened there.

The problem with the plans of the NDP is it does not understand that we need to have a competitive private sector to provide the taxes, to support the social programs that we all want. If we are to help those who are the least privileged in our society, we cannot hammer the private sector. It is the one that pays the taxes as do all individual citizens. It is a matter of balance.

The problem is the NDP does not understand that word. Historically it has always stood for spending without any possible rational economic plan that would allow us to have a competitive economy.

Could my colleague from the other side tell us when, if ever, a federal New Democratic Party has ever put forward a rational, cogent economic plan that would produce a surplus or balanced budget?

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

Mr. Speaker, if the hon. member were to ask the Library of Parliament which party ran the most fiscally responsible budget in government, he would be surprised. It is in fact the NDP.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Sure wasn't Bob Rae.

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

Mr. Rae turns out to be a Liberal, so I am not surprised he had difficulty.

However, we have seen it over and over. Look at Manitoba and how many balanced budgets it has had. Look at the government of Tommy Douglas. Through the years there were balanced budgets.

In terms of the number of years, the member should look at the facts and the figures. He will find that when the NDP runs a government, by and large it has balanced budgets, unlike some other governments that have had huge debts. Look at the promises federal governments have made to children, that they would invest in them and make poverty history. We have had the Conservative government, the Liberal government and then a Conservative government again. After 18 years of promises, what has happened?

Another promise was made to lower greenhouse gas emissions 20% by 2000. I remember that red book promise. Guess what? It has gone up. Why? There was no investment in anything green, not in public transit, green technology or retrofit programs. How does that help the community?

For us to have a prosperous Canada with a high productivity rate, we have to invest in things like child care and post-secondary education. How did Ireland, for example, come from not doing very well to a place where it is now dealing with child poverty? What did it do? It invested in post-secondary education and in people. We do not do that. We give big corporate tax cuts, and guess what? No wonder we lag behind in our productivity. No wonder we have trouble with our place in the world.

I understand the Liberal Party likes to make big promises. I heard a recent promise on dealing with poverty, something about 30:50 or whatever. Yet where is the money to do all that? From 2001 to 2007, we saw $53 billion in corporate tax cuts. That money should have gone to deal with poverty and to investments in communities, cities, people and families. That is what we should have done.

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

Mr. Speaker, I will be splitting my time with the member for York West.

In a time of surplus, any responsible government has a duty to strike a balance and to plan for a country not for the next five years but for the next 50 years. In a time of surplus, when it does not have to deal with the crushing burden of an economic catastrophe or with deficits because of economic circumstances within or outside its control, government has an opportunity to plan for our nation and our people over that time.

Doing so requires, in my view, a balance between debt reduction, enabling us to have a strong economy that is productive, nimble and competitive, and investing in those things that help the most underprivileged of our citizens.

In these areas, what could the government have done that it failed to do? We know that the government reduced taxes both in the corporate world and for private citizens and we are fully supportive of that. To be fair, the tax reduction, particularly the lowering of the lowest tax rate, came after the government actually increased the lowest tax rate, so really, it is neutral. The government had reversed a change that happened when the previous Liberal government reduced the lowest tax rate.

The GST cut, as we have heard before, is the stupidest tax cut one could possibly make, unlike the Minister of Finance's suggestion that this is sensible. It is not sensible, because primarily it affects those who spend a lot of money, i.e., those who are rich. If we want to help those who are least privileged, we should reduce personal income taxes, because that gives individuals in the low income and middle income brackets the chance to do what they want with the money, such as invest it or spend it on food, education and basic necessities. If the GST is reduced, they do not have that option.

The government in fact is directing what the option is because people receive this only when they spend money on high ticket items. Those who are poorest generally struggle to put food on the table or pay rent for a roof over their heads, and there is no GST on those things, so it does not apply to them.

What could the government have done on the issues of infrastructure and education?

Education is critically important. What the government should do is reduce the economic burden on students by lowering tuition fees. It could lower tuition fees or, for example, turn the millennium scholarship program, which is coming to its end, into a needs based program for students who are of modest means. That would enable students to have access to education, which is a critically important pillar for our economy.

I could not have gone to medical school if the tuition fees were what they are today, because to go to school I had to earn my own money through summer jobs. Today, tuition fees for medical school can be easily in excess of $18,000 a year, which would have been completely impossible for me. I, for one, like many others, would not have been able to go to medical school.

That is the situation today with qualified students who cannot access the facilities they want for the post-secondary education they need. They do not have the money. We should not have an education system that is based on the money in their pockets. It must be based on their ability to access it.

On the issue of infrastructure, we Liberals introduced a plan that would put real money in the hands of the municipalities. It is where the rubber hits the road for the infrastructure that Canadians need. What the government should do is double the gas tax that the municipalities are receiving and give them a three year stable funding base in order for them to plan for the programs they want in the future.

With the price of gas being what it is today compared to what it was when we introduced that program, it makes umpteen amounts of sense for the government to say that since it is getting a lot of money from gas taxes because of the price of gas, it should double the gas tax revenue, give it to the municipalities for infrastructure and do it so that there is a three year stable base funding so they can plan for the future.

On the issue of research and development, we Liberals made the largest increases in research and development for organizations such as the Canadian Institutes of Health Research and Innovation Canada. Innovation is a cornerstone of a competitive economy. We need to continue to make increases in this area. It is smart for Canada and smart for Canadians.

On the issue of the environment, there are many intelligent solutions that we can apply today rather than having this continual quagmire of debate on Kyoto. I think it is important to have that, but the government should also make investments into things such as hydrogen fuel cells and operationalizing hydrogen fuel cells, electric cars, wind power and tidal power, the last which we can use because we have such a large coast. Let us get those projects on the ground and operationalized. We Liberals had a plan when we were in government in excess of $600 million for these kinds of projects. The government does not support this and it should.

For those who are least privileged in our society, I introduced a private member's bill called the Canadian low income supplement bill. That bill would put $2,000 into the hands of every Canadian who makes less than $20,000 a year. The supplement declines to zero at $40,000. It is real money, not $25 or $35 but $2,000 in the hands of the neediest Canadians. It is real money for those in real need. In effect, my Canadian low income supplement bill would obliterate any kind of federal or provincial tax on those who make less than $20,000 a year.

We also need to address the issue of housing. Housing is in crisis. In my riding of Esquimalt—Juan de Fuca, it is a huge problem. Housing is unaffordable for most Canadians. How do we address that?

The federal government must stop its ideological approach and continually must say to the provinces that provinces will deal with something and it will deal with something else. There is no reason why the federal government cannot exercise leadership in these areas. Yes, they are a provincial responsibility, but the federal government can bring the provincial premiers and the other ministers together and say that this is for Canada, that we are all in the same boat and we all have the same problem, so let us share the practices that we need to implement to address these problems.

One such solution would be to have a tax rollover provision, which the Minister of Finance could introduce and which would enable individuals to sell assets and roll over those profits into purchasing and upgrading other real estate.

On the issue of seniors, many seniors live lives of quiet desperation. They cannot get access to housing. They cannot get access to health care. Again, the federal Minister of Health should work with his counterparts to address this.

I have some solutions. Right up front, there needs to be a strategic investment in assisted housing and extended care in Canada. We have an aging population. The numbers of people who are going to be over the age of 65 and who will be retired are going to increase geometrically over the next 20 years. We are ill able to deal with this. It is the largest unspoken, unheralded and unattended issue and the House is not dealing with it. We have to deal with it and we have to deal with it now while we have a surplus.

On the issue of health care, there is a simple winning solution. The government should work with its provincial counterparts and medical and nursing associations across Canada to have a national medical manpower strategy to know what kinds of doctors, nurses and technicians we need, how many we need, and where we need them.

I cannot emphasize enough how critically important this is. Regardless of how many MRIs, CT scans, hospitals or clinics we have, if we do not have the health care workers to provide care, if we do not have a competent health care person to do the history, the physical, the diagnostics and the treatment plan we require when we fall ill, we have a crisis.

As we get older, so too do our caregivers. This is a problem among nurses and physicians and it is a crisis among those who are specialists. We can go to a general practitioner and get competent diagnostics done in a number of areas, but there is only one type of person who can actually fix a knee, repair a broken leg, operate on a brain or manage a patient's dialysis. Those are specialists' responsibilities. The specialist cadre in Canada is shrinking dramatically. This is a greatly limiting step that cannot be addressed overnight and must be addressed with urgency today.

In closing, on the issue of child care, which has been mentioned, the government promised child care spaces. They are not there. This is a huge issue for Canadians. We say to the government that it does not need to reinvent the wheel. It just needs to adopt what the Liberal Party introduced by negotiating with the provinces for a national child care strategy. It works for the public. It works for the children. It works for families. It reduces crime. It saves the taxpayer money. It is healthy for our lovely country.

Those are some solutions the government can introduce. We implore the government to do so and to do it now in the interests of our country.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I have to say in listening to the member for Esquimalt—Juan de Fuca that one has the sense he and his party are still fighting the last election instead of addressing this issue, the current bill that is before us, Bill C-28, which effectively combines the budget in the spring with the mini budget that was brought in this fall. I am not sure how that serves Canadians.

I listened very carefully when he conducted what was a fairly vicious attack, actually, on my colleague, the member for Trinity—Spadina, around the issue of balance. His criticism of her speech on the budget before us, and also on the NDP's decision to oppose this budget, was that budgets need to be about balance.

Speaking of balance, I am sure the member is well aware that the government's corporate tax cuts alone will cost $50.5 billion, phased in over six years, and will keep costing the treasury $14.8 billion every year. If this member has done his homework, and he usually does, then he will also know that this budget actually will benefit the average hard-working Canadian by about $1.50 a day.

I want to ask the member whether this is his idea of balance. If it is not, why is it that not only this member but his entire caucus have decided that instead of taking a stand against the lack of balance contained in this budget, they are actually going to sit in their seats, as they have already done, and are not prepared to commit themselves or vote one way or the other?

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

Mr. Speaker, we actually do support the tax cuts that are in this bill. We support the personal income tax cuts because that puts money into the pockets of Canadians. We think a cut to the GST is not wise. We do support the corporate tax cuts. The member from the NDP does not support that.

We believe that in order for us to be responsible to Canadians, Canadians need to have jobs and the Canadian private sector must be competitive. Also, a competitive private sector enables us to generate the tax base upon which to pay for the very programs that the hon. member and all of us support: things such as child care, health care and education, the myriad social programs that Canadians need and want and that in fact enable us to help the underprivileged.

In my speech, I have offered, as have my colleagues, constructive solutions that the government could adopt to have more balance in its budget and to address problems it is neglecting, such as, and the hon. member is quite correct, day care, early learning programs, tax reductions for the poor, more money in the hands of the poor, the disabled and seniors, and health care.

There is a lot more. I could go on. I would be happy to answer another question if she would like to respond.

[Alexa McDonough, NDP, Halifax, NS]

By way of a supplementary, Mr. Speaker, the member for Esquimalt—Juan de Fuca just made my point. He knows perfectly well that the very things which not just he alone but every one of his members is standing up and calling for the government to support, the very things that he is criticizing the government for not having done with this budget, cost money.

If we give away over $50 billion in tax cuts to the corporations--and let us be clear, the single biggest beneficiaries of these tax cuts are the banks that are gouging people with service fees and the oil companies that are gouging people at the pumps--then there will be no money to support the projects that he is talking about and that his members are criticizing the government for not funding.

Where is the sense in that? Is this just an act of hypocrisy? Or is this the case of an entire Liberal caucus that has not done the math and has not done its homework in analyzing the negative impact of this budget that is taking us in the wrong direction?

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

Mr. Speaker, we, obviously, have a different view of the economy.

I would draw the member's attention to the socialist economic interventions that took place in northern Europe in the eighties where taxes were raised quite high. The private sector was constricted which meant people lost their jobs. The loss of jobs meant people were more dependent on social programs. There was less money for those social programs because, in the contraction of the private sector that occurs, when we raise taxes and make our country's economy non-competitive, ironically, we actually damage the people we want to help. We damage the ability of the tax base to fund research and development, health care, education, social programs and all the things Canadians need. It is a matter of balance.

We have some criticisms of some of the tax cuts, specifically the GST. The government should lower the tax burden on the poor and middle class, which it has not done, in a way that is broad based. Our colleagues have put forth solutions to enable the government to do that.

We will be hearing from the member for York West, who will be giving an absolute barnburner of a speech.