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 Specifically, the excise tax exemptions for renewable fuels, including ethanol and bio-diesel, are repealed, effective April 1, 2008.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

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Mr. Speaker, as usual the Liberal member is speaking before his light is on.

I want to comment on his comment about the member for Outremont. I would point out that if one has a brain, it is only good if it is actually used when it is time to vote in this place. It does no good to have a brain if one is not going to actually stand and use it to make a decision.

What I am really curious about is that the leader of the member's party has publicly stated his intention, or at least a direction that he would like to raise the GST from 5% to 7%. In fact another member went on television and reasserted the same thing. I do not want to see any dancing around as Liberal members have done previously. I would just like a yes or no answer.

Does the member support the stated Liberal intention to raise the GST from 5% to 7%?

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

Mr. Speaker, my response is very simple. There is no such stated intention, so there is nothing with which I can agree. Our leader has never said that he would raise the GST from 5% to 7%. The premise is incorrect so there is no question to answer.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Speaker, I wanted to ask the hon. member about the raising of the GST or actually about the GST itself. He stated that most economists do not agree with that.

I wonder what his reply would be to the service industry. The Canadian Restaurant and Foodservices Association has told us that sector has about one million employees, that 4% of the GDP is contributed by restaurants and the detrimental effect the GST has had on their economy.

In a riding like Chatham-Kent—Essex with 110,000 people, if we do the math, it would distribute another $12 million within our riding. Does that not make an effect on our economy? Is that not a good thing? Are we not moving in the right direction by reducing taxes and giving more money especially to those people that the NDP rightfully point out are the ones in the groups who need it most?

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

Mr. Speaker, it is not a matter of whether we lower taxes or not. It is a matter of which taxes we lower. We are the party that lowered personal income tax by $100 billion in the 2000 budget. Our point is not that Canadians should not pay lower taxes. Let us say there is $1 billion or $10 billion or whatever to spend. Our point is that it is far better to put those billions of dollars into the pockets of Canadians through an income tax cut and they can decide for themselves how to spend it, rather than to put that same amount of money into the pockets of Canadians through a GST cut.

The economists all agree. The economists say that personal saving is good for the country and investment. That is how we grow a bigger pie. I believe Canadians prefer it too. I believe the average Canadian would far rather see a fatter paycheque through an income tax cut than a penny or two off the price of a cup of coffee.

Let us get our debate straight. It is not about cut tax or not to cut tax. It is about if there is a certain amount of money to spend on cutting taxes, should the GST be cut or should personal income tax be cut? What I am saying is to cut the personal income tax.

[The Acting Speaker, Andrew Scheer]

It is my duty pursuant to Standing Order 38 to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Don Valley East, The Environment.

The hon. member for Chambly—Borduas.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Mr. Speaker, before my distinguished Liberal colleague leaves the House and before I begin my speech on the implementation of part of the March 2007 budget and the economic statement of October 30, 2007, I have a few words to say to him.

We sometimes hear the Conservatives ask us what the point of the opposition is, and tell us that it is only good for criticizing things.

However, the Liberals said the same thing when they were in power. They must now realize that it takes courage to be in opposition, at least enough courage to be able to vote. Votes are sometimes very significant. For example, the budget implementation vote is important. Yet, they did not have the courage to stand up.

This clearly tells the governing party to be very careful when it comes to how it views the role played by the opposition, a decisive role in a democracy.

The Bloc Québécois is against this bill to implement part of the March budget and the October economic statement. We will therefore rise and vote against this bill, because it does not meet the five conditions or priorities put forward by the Bloc Québécois. Once again, it underscores the Conservative bias for the oil and gas economy. Indeed, for them, everything revolves around the oil and gas companies.

Even though they say that their measures apply to all manufacturers and businesses, it is clear that only oil companies will really benefit. These tax breaks will save the oil companies over $520 million, while businesses in the manufacturing and forestry sectors, which are in crisis right now, will get nothing.

Other groups are being left to fend for themselves, including seniors who are being denied the guaranteed income supplement. Once again, there will be no guaranteed income supplement retroactivity, nor will there be any help for older workers. The economic statement ignored older people. It offered them nothing even though we know that the government owes them a lot of money, especially to the poorest of them who are entitled to the guaranteed income supplement. The amount of money they can receive is based on how low their income is.

This bill gives Nova Scotia and Newfoundland an unfair advantage because of their agreement with the Canadian government, and it cheats Quebec out of transfers and equalization payments. The government also ignored the environment, and we know why.

Let us examine each of these concerns. I will start with employment insurance. When we talk about helping manufacturing companies and businesses in general, we are also talking about measures to help workers. The previous Liberal member said that the NDP has a heart but no brain and that they, the Liberals, have a brain. What good is a brain without a heart?

The economic statement does not have a heart. One might think one has a brain if one subscribes to a particular philosophy or doctrine, but what good is that if the philosophy or doctrine does not include compassion and concern for those we need to look after because that is our calling and our duty? We have to look after human beings, the people we represent.

We know that unemployment is one of the most serious issues before us. Yet the previous government, even though it is now the opposition, is siding with the Conservatives to keep workers and the unemployed in a deplorable economic state.

The government is continuing to misappropriate money from the employment insurance fund, which has had a surplus of more than $54 billion over the past 12 years as a result of savings made by depriving people of benefits when they lose their jobs.

Employment insurance eligibility requirements have been tightened so much that the number of eligible individuals has been minimized. Only 42% of unemployed men and women qualify for employment insurance. I inadvertently said “unemployed men and women”. This is not entirely true. When you break down the figures, you see that only 32% of women who have lost their jobs qualify for benefits. This is quite dramatic and quite scandalous for a country that says it is fighting elsewhere for women's rights when here at home, it is depriving women of some of their rights. Similarly, only 17% of young people qualify for employment insurance.

One has to wonder where the surplus comes from. The answer is simple. If all the workers who lost their jobs received the benefits they were entitled to, there would be no surplus. One rule prevents people from receiving employment insurance benefits. The legislation refers to people who received too much money the previous time or who tried to get around the rules. These people represent between 10% and 12% of unemployed workers. Consequently, 88% of unemployed workers should ordinarily receive employment insurance benefits. Yet the actual figure is only half that, which is why there is a surplus.

The Bloc Québécois has introduced a bill in each parliament. This time, we have introduced Bill C-269, which seeks to improve employment insurance eligibility requirements. For example, a person's best 12 weeks of work would be taken into account. The maximum benefit period would increase from 45 to 50 weeks. The eligibility threshold would be 360 hours, and the coverage rate would go up from 55% to 60%. All these measures would cost approximately $1.4 billion dollars at the current unemployment rate.

This amount is less than the sum that was taken, again this year, from the employment insurance fund surplus. What is happening? Why is the government not voting with us on Bill C-269? We will debate it again tomorrow in the second hour of third reading. We have asked the government to give the royal recommendation, in accordance with the Speaker's ruling. It is cabinet that must give that recommendation. The NDP has also requested it. We are still waiting for the Liberals to follow suit and for the government to respond to our request. Why? For the House of Commons to finally vote, in a fully democratic manner, on employment insurance reform. Much to our dismay, and to the dismay of the people concerned, there is no sign of this happening so far.

When the unemployed are denied their benefits, it is not just one person who is penalized. That individual's family is penalized as well. This prevents the region's economy and the province's economy from benefiting from the economic boost that comes from a person receiving employment insurance benefits.

In each of our ridings, year after year, at least $30 million is kept out of the riding's economy because people who lose their employment are denied their employment insurance benefits.

I call that an economic crime. We here in the House of Commons are accomplices in that crime. Those who do not vote are not supporting this bill.

I am again asking our Liberal friends, the official opposition in this House, to join us in calling on the Prime Minister of Canada to give the royal recommendation so that tomorrow, in the second hour of third reading, the Speaker can announce that there will be a vote and so that we can vote on this bill soon.

Not to do so would be an act of extreme cowardice toward people who have lost their employment. Not making a concerted effort to come and vote would be worse than remaining seated. It would show a lack of courage to the people who elected us.

There is another bill dealing with employment insurance. Incidentally, I salute our friends from the NDP, who have always remained steadfast with us regarding, among other things, the need for an analysis of the precarious situation of those who find themselves without employment, despite the fact that the oil economy is flourishing. We know, however, that it is on EPO, because every other sector is collapsing.

We have kept rising in this House again and again to speak up for those who have lost their jobs. For instance, we introduced Bill C-257, to establish an independent employment insurance account, thereby putting an end to the misappropriation of funds, and make sure that the account is managed by those who are paying into it, namely the employees and the employers, and that a majority of representatives of employees and employers compose the commission administering the account. Of course, these people equally representing employees and employers could be seconded by a chief actuary. The government would also be represented. Money should also be taken every year from wherever it was diverted to and put back into the account.

All that I am relaying to the House right now is not a figment of the imagination of the member for Chambly—Borduas. It stems from the work of a parliamentary committee, namely the Standing Committee on Human Resources and Social Development. The principle of an independent EI account has been unanimously accepted and recommended to the House of Commons by the members of that committee, that is to say representatives of the Liberal Party, the Conservative Party, the New Democratic Party and the Bloc Québécois. They were unanimous.

Yesterday, this bill was voted on at second reading stage so that it could simply be referred to committee, so that the committee could complete its work. To our surprise, and I would even say our dismay, the Liberal Party voted against. We are totally bewildered and we are trying to understand. How can that be? They were on board. What made them change their minds? Is it the same thing that kept them from standing up and voting on the budget? Is it cowardice? This is quite shocking.

Last night, I spoke with representatives of the main unions, the FTQ, the CSN and the CSQ, and unemployed workers' representatives. Everyone is dumbfounded by the Liberals' behaviour. They do not understand. They are dumbfounded. They were promised that the Liberals would vote like us. This morning, during the FTQ convention attended by nearly 4,000 people, there was a unanimous vote to give Bill C-269 royal recommendation.

There is something completely illogical, and I would even say illegitimate, about how votes are held here. Indeed, it is not representative of the will of the majority of the citizens of the country and, of course of Quebec, whom we represent.

I would like to revisit another concern of ours: social housing. What does it have for social housing? Nothing.

I would remind the House that the Liberal Party stopped all subsidies for social housing, as it is called in Quebec. At the federal level, it is called affordable housing. There were two programs, one provincial and one federal. The provinces, the federal government and the municipalities all worked together to develop social housing. However, from 1992 to 2001-02, not a single cent was put into it.

Yet, the established standard to ensure sufficient social housing to house low-income people states that there must be a housing vacancy rate of at least 3%. Many towns and cities do not even have that. In my riding, out of 12 municipalities, 10 are below that, five are below 1% and in one municipality, there is a 0% vacancy rate. What happens in such a situation? Naturally, this increases the cost of housing. This also causes people with low incomes to relocate. They move to towns or cities where there are slums, since slums are the only housing they can afford.

It makes no sense for 17% of people with low incomes to have to spend 80% of their income on housing alone. They only have 20% of a meagre income to feed and clothe themselves and to live on. It is unacceptable that, in Canada, which they say has a prosperous economy, people with low incomes are put in such a position.

What should be done? We must re-establish the rule we had in the early 1980s whereby about 1% of the national budget was allocated to social housing. That is what we are asking for in order to jump-start the construction of social housing, to provide more decent housing to low income citizens.

The fourth point I would like to discuss is how we treat our seniors. It is unbelievable that last spring's budget and the recent economic statement do not contain measures to correct the monumental injustice to seniors. They are owed more than $3 billion in retroactive benefits. That is not a gift.

These individuals with very low incomes were entitled to the guaranteed income supplement. They were not informed about that. Heaven knows that individuals with a low income are, for the most part, very isolated, and not likely to be attuned to the communication networks that provide all this information. Seniors and aboriginals are some of these people. We could go sector by sector. For years, these people were deprived of the guaranteed income supplement.

What answers are we given today? They are always technical and evasive. In the past, the Liberal government played that game and nothing has changed with the present government.

A Quebec statesman said that a society is judged by how it treats its children and its seniors. I can say that the Conservative and the Liberal Parties will be judged harshly by history not only because of the horrible economic crime committed against seniors, but also because of the equally appalling injustice. These people are not asking for much; they are merely asking for their due.

I realize that my time is running out and therefore I will wrap it up. We, the Bloc Québécois, will definitely vote against this bill to implement the spring budget and the fall economic statement because this budget makes no provision for the most disadvantaged, making it unworthy of a so-called prosperous Canada.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, my questions is about Darfur, but I have people to thank first.

We need lots of support to make this House work and sometimes we forget to thank that support. We should get on the record the tremendous job that the translators do hidden in their little houses and of course the table clerks, the pages and the Speaker. These people work hard every day without the profile that we get. Without these people working hard every day the House would not run so smoothly. They all do a very professional and excellent job for us.

My question is about Darfur and the lack of action by the Conservative government. This has been called the greatest humanitarian crisis. From the moment this crisis started, Canada was in the lead, providing foreign aid and support for the African Union. Until very recently it looked like things were going well. The UN passed a motion allowing troops to go in and a peace process in Libya. A week or two ago it all started to fall apart. The peace process was not working and no one was providing troops or support.

We were astonished by the answers that we received yesterday in question period from the minister and today from the parliamentary secretary. They said that Canada was not going to add anything new to the new world effort for Darfur. The Canadian government is not going to participate in the effort.

My constituents are terribly upset about the crisis in Darfur, which as I said, is perhaps the world's greatest humanitarian crisis.

I would like to know if the member thinks there should be more attention paid to that. Does he agree that we should not get a nil answer from the minister and the parliamentary secretary, but rather we should get an answer indicating that Canada will provide more support for the people in Darfur? These people are being murdered or raped or exiled from their country.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Mr. Speaker, I join my colleague in taking this opportunity to underline the great work done by the all the support staff of the House of Commons. I am not sure what prompted such a comment on his part, but I think it is a good thing to do regardless. We have to show our appreciation from time to time.

With respect to Darfur, it is a source of concern, particularly in Quebec. I am not really in a position to speak for the other provinces, even though I keep informed about them and visit them occasionally, but in Quebec, where I am from, I perceive this very strong desire to get involved, but always with peace in mind, by taking part in peace operations. We have this yearning to provide relief to people dealing with war crimes and conflict situations, by playing first and foremost a peacemaking role.

Granted, one might argue that this is not always possible, that it is sometimes necessary to fight. Nowadays, operations do not always require the use of conventional weapons however. It is much to the credit of my hon. colleague that he brought forward this concern about Darfur, a concern which is shared. This is a very complex issue. The interests at stake in Darfur are not only those of that particular country. I think that foreign interests are creating much more tension and conflict than the internal conflicts.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I would like to ask my colleague a question about our manufacturing sector and to get his party's input on it.

The auto parts association has made a desperate call for assistance and funding on account of the high Canadian dollar. The dollar's rapid rise has affected the manufacturing base, not only in terms of autos but also the lumber industry and other types of manufacturing in Quebec and Ontario.

There used to be a technology partnership program to assist the auto industry and the aerospace industry. The aerospace program has been reinstated, but to date the auto industry program has not been reinstated. Our party is calling for that program to be brought back again, especially as a result of the appeal from the auto parts sector. There are thousands of jobs that are on the line today. We want to see this happen. I hope my colleague's party will support our call.

My colleague and his party have been strong advocates on the industry committee with myself and others for an industrial strategy supporting the manufacturing base in general. Would the member tell us more about his party's plans? The NDP has been calling for the five year capital cost reduction allowance that was proposed with the possible five year extension.

Will his party support the call of the auto parts manufacturers because of their current problem with the rising dollar? What other measures does he suggest to protect manufacturing jobs in Quebec, Ontario and the rest of Canada?

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Mr. Speaker, in a debate like this one, that seems like a key question. We think it is a very dangerous strategy for a country to concentrate its efforts on a single industry or sector—as is currently the case with the oil sector. When the sector collapses, there is no other sector available to keep the economy running.

This means that we need to find a balance. For example, the defence and armament industry received more than $25 billion over two years. Last year, in a single week $17.5 billion was announced. As for the oil sector, I will not repeat the figures, but we are talking about $520 million in tax cuts according to the economic statement before us.

Our colleague is absolutely right: we need to find a balance. We must observe the Canadian economy as it relates to all its various components, in particular those in the manufacturing, forestry and tourism sectors, in order to strike a balance when it comes to our strategic initiatives and investments.

The manufacturing sector, as well as the automobile and aerospace sectors, need strategic financial support and financial initiatives that are very targeted when they are experiencing difficulties as they are now. We should not tell these companies that we will give them tax cuts when they are making a lot of money, as oil companies are right now. These companies do not need tax cuts. They need new money injected into a development and support strategy.

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

Mr. Speaker, I have a question for the member. Mr. Lavoie from the Laurentian Bank of Canada stated that Quebec had added 70,000 jobs this year. This accounts for more than one-third of the country's total employment gain this year.

I wonder if Quebeckers would like to hear something a little more optimistic from the Bloc who do not paint a very pretty picture? He never recognizes that there are some really good things happening in Quebec.

Also, due to some of the challenges facing older workers and vulnerable communities, would the member recognize the targeted initiative for older workers that this government put in place? There is a total investment of $70 million in the targeted initiative for older workers and 11 of the projects worth $27 million have been announced in Quebec.

Our government is concerned and has shown empathy. I wonder why the member never recognizes some of the important things that this government is doing.

Would the member help the government in one other area? Through Human Resources and Social Development Canada we have sector councils. Sector councils are beneficial in helping workers in such transitions from forestry to mining. Does the member not also think these initiatives will help the residents of Quebec?

[The Speaker, Peter Milliken]

The hon. member for Chambly—Borduas may respond briefly.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Mr. Speaker, all we are doing is trying to help them, but they will not listen to us.

There is one thing that our colleague, the Parliamentary Secretary to the Minister of Human Resources and Social Development, does not want to hear. They say that 70,000 new jobs have been created, but they do not say how many jobs have been lost. What kind of jobs are left? Many of them are poorly paid.

There are two main points to consider here. People who do not have jobs have no income or very little. Many of the new jobs are so poorly paid that many of those who have to resort to food banks are actually employed.

Why is it that if they have a job and an income, they have to go to food banks at the end of the month? Because they are people with low incomes.

In Canada this year, 880,000 people a month relied on food banks, and 280,000 of those were children. That is more than the number of people living in Ottawa. There has to—

[The Speaker, Peter Milliken]

The member's time has really run out now. I gave him plenty of time to conclude his remarks, but he took too long. I apologize for having to interrupt him now.

The hon. member for Scarborough—Rouge River.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, I am happy to engage in the debate on the budget bill. Budget bills often include a lot of public policy and this budget is no exception. We have a lot of territory to cover.

Since I sit in opposition, I think my remarks will be found to be more opposition oriented, not so much critical as skeptical and demanding of more. However, I think Canadian voters expect that when they send members of Parliament in opposition, they will perform that role. I will try to be constructive as I go through my comments on the bill.

I cannot imagine that in the whole history of this country there has been a better economic backdrop for a budget. The same is arguably true for budgets under the previous Liberal government. We have a situation in Canada that has evolved over the last 10 or so years to one that is highly good looking. We have interest rates among the lowest they have been in 30 years. Unemployment is at its lowest level in just about as long a period.

I represent an area in the greater Toronto area, Scarborough, and in our Toronto area those unemployment rates are getting right down where finding replacement workers is getting close to what is called structural full employment, but that is not a complaint. I am saying that the state of the economy is such that in general across the country Canadians are faring very well.

Our gross domestic product, the measure of the strength and size of our economy has now gone over the trillion dollar mark. We are now officially a trillion dollar G-7 economy. That is big by any measure and just managing that on a day to day basis is a huge task. We realize of course that the government does not manage the whole economy. It manages a piece of it and facilitates the rest, or it should be trying to facilitate the rest.

The world marketplace is bidding up the value and price of Canadian commodities such as we have not seen for a long time. We know that from commodity to commodity there will be good years and bad years but it seems like all commodities around the world are being bid up in value and Canada has is a big land, a very big place. It has a lot of big commodities.

When I was a kid I would not have listed diamonds as one of our commodity assets but, son of a gun, I find that the explorers and prospectors have found diamonds and now we are mining diamonds in the north for the most part.

The bidding up of world commodities has placed Canada, its people and its currency in a very favourable position. However, that will not always be the case. There will be some weak years. However, with the burgeoning economies in China, South Asia and India, the buoyant, firm value of commodities will likely be around for a while. I know that Canadians, particularly Canadians in communities outside the big cities, actually gather the commodities together by mining and hunting. To those Canadians who work hard at that, it is a pleasing prospect.

The federal budget has been in balance now for almost 10 years. It has been a long time in our history since that has happened and it is a very pleasing prospect. Canadians of course are the ones who enabled that to happen. It did take a government a few years ago, a government that I was a part of, to actually bring things back in balance and it was hard work at the time.

If we listen to the debates here, we still hear criticisms from the opposite side of the House about what they call Liberal cuts to various budgets. Most of those Liberal cuts were absolutely necessary to bring our government spending in line with what our revenues were, and by 1997-98 we had actually accomplished the task.

For about 10 years we had a surplus budget and those surpluses have served us well and I hope our spending served us well. I hope it has, but that is always an issue of debate in the House.

The current account is how we measure between all the money going out of the country and all the money coming into the country. The current account has been in surplus for about seven years and that, in terms of international measurements, is a very big deal. If the current account stays in surplus on and on, our currency must, by definition, go up in value.

Our balance of trade is just the difference between what we manufacture and ship out and what we manufacture and ship in, and what goes out and comes in, in terms of services. Our balance of trade has been in surplus for many years, thanks to all the sectors of the economy that contribute to our economy, all the workers who produce goods and all the work of the people who design and ship them, the truck drivers, the trains. We ship out more than we import and that surplus goes to our current account and keeps us well off. We are a well off country by any measure.

As a result of all of those things and other things, our currency has strengthened and it has strengthened to the point where a lot of our economy is having to adjust. Some of those adjustments are painful and many of them are laid at the feet of workers, small businesses and medium size businesses across the country, and we are starting to see those adjustments now.

If people are outside the country watching, they would probably ask us what Canadians have to complain about. Needless to say, there are a few complaints out there.

Sitting in opposition, we have reviewed the budget. The budget bill is a budget implementation bill. In opposition, our job is to provide a kind of adversarial, critical role. In doing that, we also must accept that a budget implementation bill will have some good things. It cannot, for heaven's sake, all be bad. If it were all bad, we would probably see it on the front page of the newspaper every day.

Therefore, this budget implementation bill would implement a whole raft of technical changes. Most of these are technical changes but some are integral to policy changes brought about by the government.

In opposition, we like some things but we do not like other things, but in the end we need to find a balance. Normally in a budget implementation bill we would find the opposition just pro forma voting against the budget. It is something that opposition parties normally do. If there is a critical mass of things they do not like in a bill, they will just vote against it, but that is assuming that we have a majority government.

In this case, in this Parliament, we do not have a majority government so the implications of voting no just because we do not like the look of the thing would be quite significant. It would actually end up in the dissolution of Parliament if all of the opposition parties or if a majority of members were to defeat a budget bill.

There are some constraints as the opposition address the bill and I hope Canadians will recognize that. I certainly have had to do that as a member of Parliament.

What are some of the measures in the bill that I or my constituents might or might not accept. The one I know my constituents will relate to is the public transit tax credit. This current budget expands the scope of it but the tax credit already existed.

Most transit riders accept that as a good thing but there are some public policy issues surrounding it. Does this particular tax measure increase ridership on municipal transit? That might have been part of the general intention but without the full data it is not clear to me that it has increased ridership. If there is a tax break, surely it has a goal. Does it increase ridership?

The last time I read about this in my area, just one part of the country, the greater Toronto area, it did not appear to have increased ridership in the way the government thought it might, but there is data coming in from across the country and there may be data that shows this in a more positive light.

Here is another question. Does it do anything to reduce the heavy burden of the huge mass transit costs on large municipalities? The answer to that, I think, is no, it does not do anything to reduce the costs or the burden on municipalities in providing, building and maintaining mass transit.

One could argue that if the riders are given a break in taxes, then the municipalities might be able to increase the fares and, therefore, provide more revenue to the transit authority. However, that is not the plan. We do not want to start monkeying around with municipal transit fee and fare arrangements, so we will leave it alone.

When I asked those questions, many of my colleagues on this side of the House felt that, notwithstanding the pleasure it might give to a transit rider, the transit tax credit did not actually accomplish a significant public policy benefit.

A second item I want to mention is enhancing tax benefits for donations of medicine to the developing world. This measure must, by any measure, get an A+ if it works. This is to facilitate the movement of drugs out of our very rich, very well off and very well medically provided for G-7 countries to the developing world. I applaud that tax measure because it can only help. The tax expenditures, which, in accounting terms, are called tax expenditures in government, that might be involved in this tax measure, I am hopeful, will be seen by all Canadians as well spent.

A third item concerns the government wanting to streamline the process of dealing with and registering prescribed stock exchanges around the country. This brings us very close to the issue of securities regulation. The measure is so technical that I do not think it means very much to the average Canadian, but it raises in my mind the issue of the development of a national securities regulator or a regulator of securities who would manage the system nationally in partnership with the provinces.

In a way, the government may only be nibbling at a very significant policy issue. I am hopeful that the government will be able to move a bit closer to that objective of a national securities regulator. The previous government, with which I sat in the House, was not able to move the yardsticks too far ahead. There were discussions, expressions of interest and statements of principle but it is a major task to bring the provinces onside. Hopefully, one day we will get there.

The next thing I want to mention is the provision dealing with withholding the tax exemptions for cross-border interest payments. This is a good measure. We have now and will increasingly have large numbers of people in this country residing, staying or visiting on both sides of the border because that is the nature of the two countries, Canada and the U.S.A. This measure has to help. We have many other issues but we must deal with the cross-border issue. It only needs a minor tweak to assist some people and reduce the paperwork.

I will be a bit harsher on the next issue. This has to do with what the government is calling double deductions of interest expense for financing the acquisition of foreign affiliates. This was actually stated quite differently in the budget speech. I really think that the Finance Minister actually made a mistake in the budget speech, or those who helped him prepare the speech made a mistake, because when it was originally described in the budget speech, it was a decision by the government that it would ban all deductions used to purchase foreign affiliates.

This, of course, was an unwarranted, ludicrous intervention in what is a normal business tax deductibility practice when Canadian businesses do international purchases and acquisitions.

Our businesses have to be able to do that. Tax deductibility for financing is a basic routine accounting item and for some reason in the budget speech the minister seemed to have got it wrong.

In the end, in the bill, the Conservatives have refined the target thing they wanted to work on, to the double deductibility. They wanted to remove the double deductibility. That may have to be looked at from case to case, but absolutely, for sure, if a Canadian outfit is financing the acquisition of a capital property internationally, it simply has to be able to deduct the interest expense incurred in financing it. Otherwise we, as a country, will be out of business in terms of global business and international companies will not even want to be here if we have these kinds of income tax restrictions.

I think the government has repaired it, but I will let the finance committee, this House and the other house, and MPs who work on this more intensively than I do sort that one out.

Number six on my list is with respect to the income trusts. The government has measures here to deal with the taxability of income trusts.

There has been a lot said in the House and outside the House on this issue. It is pretty clear that notwithstanding the commitments made by the Prime Minister before he was Prime Minister that he would not tax these publicly traded income trusts, now the government has made the decision to do it.

The day was referred to as black Friday. It has been characterized as a breach of faith, as a broken promise, as a betrayal. This was not just a little hiccup. This had huge reverberations in financial markets. In fact, it still is. The adjustments going on are still huge and many or most of the investors, certainly not all, have real capital losses as a result of that. They will not forget.

I cannot fix this one. The Prime Minister made the commitment. The government reneged on it and that one sits for the consideration of Canadians.

The last thing I want to mention, as I get right to the end of my list, is the amount of repackaging and rebranding I see going on. The government will take $50 million or $100 million in a program, bundle it all together, and then re-announce the program with a new name. That is okay in politics. Rebranding is important. I just hope Canadians realize that a lot of the money being announced now is really just the same old program with a new brand.

I wish the new government well as it does that, but its rebranding is just as valid as my complaining that all it is, is rebranding.