Bill C-47 (Historical)

Sustaining Canada's Economic Recovery Act

A second Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures

Part 1 of this enactment implements a number of income tax measures proposed in the March 4, 2010 Budget. In particular it
(a) allows for the sharing of the Canada Child Tax Benefit, the Universal Child Care Benefit and the Goods and Services Tax/Harmonized Sales Tax credit for eligible shared custody parents;
(b) allows Registered Retirement Savings Plan proceeds to be transferred to a Registered Disability Savings Plan on a tax-deferred basis;
(c) implements disbursement quota reform for registered charities;
(d) better targets the tax incentives in place for employee stock options;
(e) expands the availability of accelerated capital cost allowance for clean energy generation;
(f) adjusts the capital cost allowance rate for television set-top boxes to better reflect the useful life of these assets;
(g) clarifies the definition of a principal-business corporation for the purposes of the rules relating to Canadian Renewable and Conservation Expenses;
(h) introduces amendments that are consequential to the introduction in 2011 of new International Financial Reporting Standards by the Accounting Standards Board; and
(i) amends the Canada Pension Plan, the Employment Insurance Act and the Income Tax Act to provide legislative authority for the Canada Revenue Agency to issue online notices if the taxpayer so requests.
Part 1 also implements income tax measures that were previously announced regarding:
(a) rules to facilitate the implementation of Employee Life and Health Trusts, released in draft form on February 26, 2010;
(b) indexing of the working income tax benefit announced in the 2009 Budget;
(c) technical changes concerning TFSAs announced on October 16, 2009; and
(d) an amendment to the rules regarding labour sponsored venture capital corporations that are consequential to the introduction of TFSAs.
Part 2 amends the Air Travellers Security Charge Act, the Excise Act, 2001, the Excise Tax Act and the New Harmonized Value-added Tax System Regulations to provide legislative authority for the Canada Revenue Agency to issue online notices if the taxpayer so requests.
Part 2 also amends the Air Travellers Security Charge Act, the Excise Act, the Excise Act, 2001, the Excise Tax Act, the Brewery Departmental Regulations and the Brewery Regulations to allow certain small remitters to file and remit semi-annually rather than monthly.
Finally, Part 2 amends the Air Travellers Security Charge Act and the Excise Tax Act to extend the protection from civil liability claims that is already provided under the Income Tax Act and other federal statutes to agents of the Crown who collect the Goods and Services Tax/Harmonized Sales Tax and the air travellers security charge in intended compliance with their statutory obligations.
Part 3 amends the Federal-Provincial Fiscal Arrangements Act to facilitate the sharing of taxes under Part I.01 and Part X.5 of the Income Tax Act with provinces and territories.
Part 4 amends the Bank Act and the Financial Consumer Agency of Canada Act to require that banks belong to an approved external complaints body and to authorize the Governor in Council to prescribe the approval requirement for that body. The amendments also assign the responsibility for managing the approval process and supervising the approved external complaints bodies to the Financial Consumer Agency of Canada.
Part 5 amends the Canada Disability Savings Act to allow a 10-year carry forward of Canada Disability Savings Grant and Canada Disability Savings Bond entitlements.
Part 6 amends section 11.1 of the Customs Act to exempt from the User Fees Act fees that are charged for expedited border clearance programs and that are coordinated with international partners.
Part 7 amends the Federal-Provincial Fiscal Arrangements Act to implement the total transfer protection for 2010-11, to set out the treatment of the one-time transfer protection payment under the fiscal stabilization program, update legislative references made in the fiscal stabilization provisions and give greater clarity to the calculation of the fiscal stabilization payment.
Part 8 amends the Office of the Superintendent of Financial Institutions Act. In particular, the Act is amended to
(a) harmonize the assessment of costs associated with the administration of the Pension Benefits Standards Act, 1985 with the regime in place for the assessment of costs associated with the administration of laws governing financial institutions; and
(b) allow the Superintendent to remit assessments, interim assessments and penalties and to write off certain debts.
Part 9 amends the Pension Benefits Standards Act, 1985. In particular, the Act is amended to
(a) authorize the Minister of Finance to enter into an agreement with the provinces respecting pension plans that are subject to the pension legislation of more than one jurisdiction;
(b) authorize the Minister of Finance to designate an entity for the purposes of receiving, holding and disbursing the pension benefit credit of any person who cannot be located;
(c) permit information to be provided in electronic form, including information provided by the administrator of a pension plan to members or to the Superintendent;
(d) allow the administrator of a pension plan to offer investment options with respect to accounts maintained in respect of a defined contribution provision or accounts maintained for additional voluntary contributions;
(e) provide rules regarding negotiated contribution plans;
(f) require consent of a member’s spouse or common-law partner before the transfer of the member’s pension benefit credit to a retirement savings plan; and
(g) authorize the Superintendent to direct the administrator of a pension plan that is subject to the pension legislation of more than one jurisdiction to establish a separate pension plan for certain members, former members and survivors.

Sustaining Canada's Economic Recovery Act

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Madam Speaker, I would like to begin by thanking my hon. colleague from Kings—Hants for his excellent speech. He has a remarkable understanding of the Canadian economy, and I often find his opinions and analysis extremely relevant.

My question is around the Conservatives' attempt to raise job-killing payroll taxes. I think the member shares my view that increases in employment insurance premiums on small businesses, for example, those in my riding in rural New Brunswick would have a very negative effect on job creation.

The director of provincial affairs for the Canadian Federation of Independent Business in New Brunswick is Andreea Bourgeois, an impressive woman. I am sure my colleague has had a chance to meet with her. I met with her a number of times over recent weeks and in the summer. The CFIB makes a very compelling case about the negative effect an increase in employment insurance premiums would have. It would inflict damage on small and medium size businesses that are trying to create jobs and hire people. It would inflict damage on the economy of regions like the one I represent in New Brunswick, and the one represented by my colleague from Kings—Hants.

Could he share with us his view on this irresponsible Conservative tax increase that threatens job creation?

[Scott Brison, Liberal, Kings—Hants, NS]

Madam Speaker, I very much appreciate my hon. colleague's question and I completely agree.

It is ridiculous to increase taxes on jobs during a recession. It makes no sense. Doing so would be pure nonsense. I do not understand why the government is going ahead with a plan that will raise taxes on jobs in January, when finding a job anywhere in Canada is already very challenging for most people.

It is ridiculous. It is bad for small businesses, it is bad for the economy and for entrepreneurs, and it is bad for workers and the unemployed. This is not the right time for it.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, clearly, we see that the longer the Conservatives are in government, the more comfortable they become with debt.

I wish I could talk to Preston Manning. I would ask him to re-read Animal Farm. When the old Reform Party and Preston Manning were in this House, I remember watching him on TV refusing his pension, along with the whole caucus over there. I remember when he turned the keys to the car over to the government and said, “Here is your car”. I guess he was going to walk. He refused to move into the official residence, as I recall.

Have things ever changed with the government. Now that the Conservatives are in power, they have forgotten all the things that they promised when in opposition. They are back to accepting the pensions now. I believe they are driving the cars. They went into the stimulus spending issue very willingly. They are as bad as any government has been in terms of spending money to attract enough voters to try to get a majority government.

Things have changed an awful lot with that group in a very short period of time.

Does the member have any observations that would confirm or disagree with that assessment?

[Scott Brison, Liberal, Kings—Hants, NS]

Madam Speaker, I thank my colleague for his very difficult question. He is asking for just a couple of examples of Conservative hypocrisy in this regard and, frankly, it is really tough to narrow it to just one or two examples.

This has been a government whose stimulus package has been a political stimulus package. It has been looking for political stimulus. The poll numbers are around 30%. The Conservatives cannot get above that. It is like that country music song Looking For Love (in All The Wrong Places).

This is a government that has been more interested in counting signs than in counting jobs. This is a government with a fetish for signs but a disinterest in creating real long-term jobs and opportunities for Canadians.

There is only one thing I would quarrel with in terms of what the hon. member said. He said that this government has been as bad as any government in terms of its spending, in his view. I would say that this government has been worse than any government in history.

I can remember when we were in government, the Liberal government under Paul Martin as prime minister. There was an expenditure review committee of cabinet. I was part of that committee. In fact, it was chaired by the member for Markham—Unionville. We actually worked to reduce government spending on a department by department basis. We went through items of departmental spending line by line. We worked with the public service in a very constructive and respectful way to find areas of lower priority where we could re-prioritize, areas where there may be some waste or duplication, with the goal of getting the best value for taxpayers while providing the best services for citizens. That is when we were in a $13 billion surplus. Respect for taxpayers, respect for hard-earned tax dollars, is not something we just do when we are in deficit. It is something we do with every hard-earned dollar we receive from the Canadian people.

I am very proud of the fact that the member for Wascana, when he was the finance minister, was the last finance minister in Canada to actually reduce government spending. I think that is a good thing. Whether we are in surplus or in deficit, we have to do that. It is morally the right thing to do, because people work so hard. Canadians work so hard to pay their taxes and they are just barely getting by. It is an insult to them to do anything but that.

The member used to be a provincial member in Manitoba. I would add that it is something that provincial governments, in some cases provincial NDP governments, in some cases provincial Liberal governments, in some cases provincial Conservative governments, have to do. The buck stops with them. The buck stops with provincial governments. The buck stops with municipal governments.

As we enter this period of health and social transfer debate, discussion and negotiation, in the coming years, with provinces with record high deficits and the federal government with record high deficits, we are going to have to watch every penny on behalf of Canadian taxpayers.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Madam Speaker. tomorrow will be the beginning of December and I note that the original budget was presented on March 4, so some nine months later we are getting around to implementing some of the provisions of the budget.

I went back and looked at the original budget and I was struck by chart 1, interestingly titled “Rapid decline in deficits”. If ever there was a creative way in which one would describe this runaway deficit, this is the way to describe it.

Generally speaking, certainly when we were in government, we put the surpluses above the line and we put the deficits below the line. It is quite interesting that the Conservatives government has everything backward, or more accurately, upside down. The return to deficit should be all below the line and the surpluses of the previous government all above the line.

In an interesting way in which things are backward around here, where left is right and left is right and up is down and down is up. The government has it entirely upside down. In chart 1, this rapid decline in deficit, the Conservatives have all the deficits above the line and all the surpluses below the line. They did not actually include the surpluses of previous government, which should have been above the line. However, that would not have worked with the chart.

The interesting thing is the Conservatives were already in deficit in the fiscal year prior to the crisis with respect to the recession. They had already blown away $3 billion or $4 billion in deficit. Actually it is greater than that. It is $5.8 billion in deficit, so they were already in the hole before they started, before we got to the fiscal crisis and before we got to the issues with respect to the difficulties that the entire world experienced in the fiscal year 2008.

It is an interesting presentation. It is an interesting way in which one tries to describe up as being down and down as being up. The deficit is above the line, therefore apparently in some respects surplus, and a surplus has been below the line and therefore in some respects being described as a deficit. Given their challenges with respect to communications, one can readily see how one blows $130 million in the Prime Minister's office just to communicate that up is down and down is up.

The significance of this chart in the budget document dated March 4 is that it pretty well blows away 13 years of very difficult work on the part of the previous Liberal government. The previous Liberal government took over from the previous Conservative government, which had run up a pretty significant deficit the last year it was in office, something over $42 billion or $43 billion. It took something in the order of four years, I think it was in 1997 when we turned the corner. It was with a lot of pain, a lot of difficulty, where we had to get control over our spending and our revenue streams.

From 1997 through to 2005-06, when the last Liberal government held office, we ran surpluses and the Canadian taxpayers received the benefit of that surplus in two respects: first, in lower taxes; and second, in reduced interest rates. At some point in the previous Liberal government we were running 9%, 10%, 11%, 12% interest rates on mortgages, which was coming out of each and every pocket. As well, we were running inflation rates of 3%, sometimes 4%, sometimes 5%, which was an illusion of increases in asset value.

Two things happened in the previous Liberal government. First, the fiscal house was put in order by Messrs. Chrétien and Martin and the current member for Wascana. The second thing that happened was the monetary policy was also put in order. A band was implemented primarily by David Dodge, but also by Gordon Thiessen before him and followed up by Mark Carney, of setting the inflation rate at somewhere between 1% and 3%. That would be the band that would be an acceptable rate of inflation.

Fortunately the Conservative government cannot touch monetary policy. As a consequence, the monetary policy put in place by the previous government has remained untouched. Therefore that part of Canada's fiscal financial situation has not been messed up. The only thing that has been really messed up at this point is the fiscal policy.

Publicly I want to commend Mark Carney for continuing on with that band of inflation and his judicious and prudent use of monetary policy to achieve the best possible outcome for Canada. It is not without criticism. I am sure some members in the House would be prepared to criticize the governor on various points, but on balance, in my judgment, the governor has achieved that level of monetary stability which stands us well.

The other thing thus far that the Conservative government has not been able to mess up completely has been our financial services sector.

I recollect that when I first came here, which was back in 1997, there was an impetus on the part of financial institutions, particularly banks, to get larger, to be bigger, to bulk up, to start to be international players. They were losing their status as international players.

The pressure was on the Liberal government at the time, and particularly on the Liberal caucus and the GTA caucus, to allow banks to merge. Frankly, that was an attractive argument to many of us. I was one of them. Being from Toronto, I thought we should allow our institutions to get world-class status. I started out with the view that it would be a good idea. However, the Liberal caucus and Minister Martin had the idea that we should at least take some evidence and think about this before we allowed banks to merge.

Over the course of those caucus hearings we did change our minds, or at least I changed my mind as did a number of members of our caucus. We could see the benefit for the banks, particularly their directors and maybe some of their shareholders, but we were not overly convinced on how the Canadian public and the consumers of bank services would benefit. At the end, we decided there would be no mergers. That turned out to be a prescient decision because the banks therefore were unable to get into the acquisition of other financial institutions.

As a result of them being unable to get into the acquisition of other financial institutions primarily, which would have been American financial institutions and maybe some foreign financial institutions, they did not make a number of the disastrous decisions that came back to haunt primarily American institutions in the last few years. It was the result of a bit of good fortune, a bit of hard work and us asking ourselves the fundamental question: What was in this for the Canadian public and consumer?

The consequence of the consequence of the consequence is that the Canadian taxpayer did not have to bail out the financial services sector. Canadian taxpayers did not have to pony up moneys for that sector and therefore that crisis was avoided.

The previous Liberal administration had 13 years of difficult financial and fiscal decisions to make. I can criticize some of them, but, on balance, when Liberals left office, the financial and fiscal houses were in order. There was surplus in the accounts. Indeed, the first year of surplus for the Conservative government was largely a surplus created by the previous Liberal administration. Then there came one or two years of surplus and we started with the deficit. We now have a deficit picture that I previously described as upside down.

Now the government tells us that we should continue to trust its fiscal management, having run up a deficit in one year of something of the order of $54 billion, a cumulative deficit over the course of the next number of years of something like $165 billion. Then in kind of an interesting way, the Parliamentary Budget Officer said that there was virtually no chance the government would return to balance or surplus in the next five years, notwithstanding the protestations to the contrary by the government.

We are going to have deficits for as far as we can see. Generally speaking, we can give a reasonable prediction for two years. Heading out to five years is a bit on the remote side and there are a lot of things that can go wrong between now and then.

The Parliamentary Budget Office has described this stuff as fantasy and I tend to agree with him. The likelihood of the government ever returning to a balance or surplus is virtually non-existent.

There are two major reasons why there is no chance the government will actually return to balance or surplus. The first reason is it has destroyed the revenue bases. It is all wonderful to talk about how much fun we are having cutting taxes. The trouble is if one is to cut taxes, one also has to cut services.

There is not a corollary commitment on the part of the government to be fiscally responsible in terms of the cutting of services. It seems to want to have it both ways. It wants to run up the cost of government without any meaningful way in which to approach the reining in of costs. Simultaneously it wants to cut various revenue streams, giving ill-advised tax cuts, particularly corporate tax cuts, the result of which is deficits.

It is simple. No one can run a household or a business that way. There have to be revenues to offset expenses. If one is going to cut revenues, then one has to cut expenses. The government has not done it and continues not to do it.

Then we see the absolutely outrageous examples of how to blow money in very short order, the most significant of which was the fun and games at the G8-G20, which blew through something in the order of $1.2 billion or $1.3 billion on a weekend.

I am from Toronto and have the great honour to represent a riding in the east end of Toronto, in Scarborough, which residents there like to say is the centre of the universe. Not many people know that, but I am here to inform the House of that fact. Downtown Toronto is seen as a suburb of Scarborough.

We in the centre of the universe watched with horror, not only the spending but the image that was projected of Toronto around the world. The central image of the G8-G20 spending was burning police cars in the middle of intersections in downtown Toronto.

If ever there was some illusion that somehow or other this was going to project a good image of Toronto and all of the good things that go on in Toronto those burning police cars, those rioting people, the police in riot gear, the smashed windows of businesses and the whole ugly image that was presented was completely counterproductive to the $1.2 billion or $1.3 billion that was spent.

It does not seem to matter to the government that the government was advised well in advance by the then mayor, David Miller, and by the police chief, Bill Blair, that maintaining security, keeping security and giving security in downtown Toronto was going to be virtually impossible, that this would be an extraordinarily difficult task and it would cost literally thousands and thousands of man hours and literally hundreds of millions of dollars.

Now the bills are arriving. We got a bill in excess of half a billion dollars from the RCMP. We got a bill of $125 million from the city of Toronto police, and we have a current bill something in excess of $60 million from the Ontario Provincial Police.

Those are some significant bills and it was not as if the government was not told in advance that this would be costly and virtually impossible to do. What did it do? It essentially trashed the image of Toronto by doing something that it was advised it should not do at this location.

It is not as if it was not suggested to the government to put it in some other location. It could have put it in another secure location. It could have put it on, for instance, a military location where it could have already had security, it could have people coming and going, it could have had all the meetings that it needed to have and at the end of the day the infrastructure money would have been spent on upgrading a particular military base. I do not see what was so difficult about that.

The other thing that is really more curious than anything else is for the G8 spending the good folks in Muskoka for their time and trouble received $50 million in extras. These extras I am sure were welcomed by the folks in Muskoka. However, the same good folks in Toronto, somewhere in the order of five million people, got absolutely nothing. They got little or nothing.

Why is it that $50 million should end up in Muskoka and nothing ends up in Toronto? Toronto has the burning police car. Toronto has the smashed businesses. Toronto has the smashed windows, and Muskoka gets the gazebos. It does not seem to add up and it is a classic example of misspending and it is in some respects a typical story of why the government is in such a mess.

It has jacked up the deficit to $165 billion. That is your money, Madam Speaker, and that is my money. It has made very ill-advised decisions. It has run roughshod over the local mayor and the police chief and said, “You're going to have this conference, you're going to have it in downtown Toronto and we don't really care about your problems”. However, now the bills are starting to arrive home: $500 million plus for the RCMP, $60 million plus for the OPP, $125 million plus for the city of Toronto police, and that is not all. It is the city of Toronto taxpayers who are getting stuck with paying for the burning police car, the smashed businesses and the smashed windows.

It is an outrage the way in which the government runs roughshod over everyone. It destroys its revenue base and cannot seem to control its own spending.

[The Acting Speaker, Denise Savoie]

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Bourassa, Radioactive Waste; the hon. member for Algoma—Manitoulin—Kapuskasing, Taxation.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Madam Speaker, I am always amazed when I hear members from the other side who have been in government for some time, who seem to have failed memory. Either that or it is very selective memory because I can remember in Ontario the cuts to health care, the cuts to education and the cuts to social services.

I also spent some time with members of the Canadian Navy this past summer and they talked about the significant cuts to the military and how they are only now under this government starting to see the ability to reinvest in their ships. What we saw when our soldiers were sent into Afghanistan by the former administration is they were sent in with uniforms to prepare them for jungle warfare, not for desert warfare. So what they literally did was make our military walking targets.

How does the member propose to pay for all of the promises that they keep making from the other side of the House? From our side of the House we know that if we take a look at the public accounts we will see in the pie charts that 47% of the revenue to government comes in through personal income tax and 13% comes in from corporations. So for a very incremental adjustment in lowering corporate taxes we are going to increase the number of people who are working who are paying personal income tax. That is going to be a benefit to our economy.

My question for the member is when are the Liberals going to come clean and tell us what taxes are they proposing to raise?

[John McKay, Liberal, Scarborough—Guildwood, ON]

Madam Speaker, this is classic Conservative speak. Up is down, down is up. This is the same wonderful gang that brought Ontario reams of deficits, which Premier McGuinty is slowly digging himself out from, and that was whacked and sideswiped by this recession. The same gang is bringing to Canada what they brought to Ontario; endless deficits and that the answer to all questions, including the meaning of life, is tax cuts. That is the answer to life and the hon. member says that is right. She believes it, that the whole world is going to be a whole lot better place because of tax cuts.

If Conservatives are going to have tax cuts, they had better come clean and tell people what services are going to be cut back because right now we have the worst of all possible worlds. They are running up the deficit and killing the revenue base. The consequence is deficits as far as one can see.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, I am very pleased that the member admitted that he was wrong for originally supporting the merger of the banks because I remember that time very well and there was a lot of pressure. Certainly the Conservatives who were the Reform Party in those days were out beating the drums for allowing the banks to merge, but to give the finance minister and the prime minister of the day full credit, they did resist that.

It is a bit of an irony because that is what saved the hide of the government when the economy went south in 2008. Had the mergers been allowed to happen, had we followed the same pattern as the United States, and we have no reason to believe that it would have been any other way, we would have seen the long-tail financial liabilities that at the end of the day the people in the United States have had to accept. Let us face it, the money in the banks is simply the people's money. It is the senior citizens in my constituency who put their deposits in the bank, and if the bank is totally irresponsible and buys financial instruments that result in huge losses to the banks, they simply take it out of the pockets of the citizens of the country in the first place.

It certainly was a stroke of luck for the government of the day to hold off allowing the banks to merge. Another reason that the government of the day was successful in doing what the current government cannot is that we had a very robust economy in those days. It was easier to do what the members have been talking about because the economy was good, but nevertheless a decent job was done.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Madam Speaker, I thank the hon. member for his speech masqueraded into the question. I do agree with him.

May I say to the hon. member that it was not entirely luck, with respect to financial services. That was a fairly long and extensive hearing process the Liberal caucus went through under the chairmanship, at that point, of the member for Spadina. We delved into quite a number of areas.

One of the other interesting areas was that we kept the capital ratios up, because there was a huge pressure on the government to reduce capital ratios so that more money could be put into the system to go after loans. Of course, that is putting good money into the more dubious loans because when there is more money in the capital spending account, all the managers have to get that money out. If they do not get that money out, then they do not get to use it. And so, those things end up being done.

I might say to my hon. colleague that the Liberal approach is, so to speak, a non-ideological approach. I supported, when we had surplus, aggressive tax-cutting regimes, both personal and corporate. I think we have to have a competitive tax regime. That is just reality. We do not live in some sort of isolated universe, free from the tax rates of New York or Michigan or California or whomever our other competitors might be. We have to be competitive with those with whom we trade.

Having said that, we certainly should not enter into ill-advised tax cuts when we are running a deficit of $60 billion. There is dumb, and then there is dumber. That is in the dumb, dumber, dumbest category, that we run tax cuts and destroy our revenue base just when we are trying to dig ourselves out of a deficit hole. I throw up my hands with respect to these folks because I do not really have much hope.

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Madam Speaker, I would like to remind the members of the House that it was not very long ago that a good Liberal government here in Ottawa was making sure that the Canadian deficit and debt—particularly the Canadian debt—were decreasing gradually. As we all know, as our debt decreases, we pay less interest, and the less interest we pay, the more services we are able to provide to the public. Then the Conservatives arrived, trying to play God and perform miracles. In less than two years, the amount we paid down on the Canadian debt was completely wiped out, bringing us back to where we started.

What does this mean? It means that we must now pay additional interest that we were no longer paying. Additional interest payments mean that the public is getting fewer services. So who is paying the price?

I am asking my colleague to tell the Canadian public who, in the end, must pay the price for the Conservatives' mismanagement of Canada's public debt and deficit.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Madam Speaker, there is a pretty short answer to that. The member will, everyone watching will, everybody in this chamber will, even the hon. member who is the chair of the finance committee will have to pay for this mismanagement.

The hon. member was not here when Paul Martin was the finance minister, but he would talk about two things. He would talk about a vicious cycle and a virtuous cycle.

A vicious cycle is when we are constantly paying our debt, the debt keeps costing us more and the faster we run, the more the debt ratchets up.

A virtuous cycle is exactly the opposite. A virtuous cycle was entered into in 1997 and it basically ended in 2007. The virtuous cycle is that when we started to pay down our debt and deficit the interest rates would go down with it, and so we could actually pay it down faster. It is a simple concept to understand. Anybody who owns a mortgage understands that if interest rates actually decline and their payments remain the same, the principal amount of the mortgage goes down more quickly. That is a virtuous cycle.

The current government has reversed that. We are now in the vicious cycle. We have ratcheted up the deficit and interest rates are sure to follow.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, I am pleased to speak to Bill C-47 today, which, once again, is one of the budget implementation bills that we are dealing with before this House.

I have heard a lot of good speeches here today on this particular bill, and a lot of good speeches from the Liberal members as well. However, at the end of the day, the viewing public should know that the Liberal members, regardless of their criticism of this bill, the budget itself or in fact the government, will make certain that enough of their members are not here so that the government does survive. The Liberals have been doing this for the last couple of years, keeping the government in place.

It is great to hear some of the criticisms of the members but the reality is that when it comes time to actually stand up and vote in the House, the Liberals have not had enough of their members consistently here to vote and cause the government to fall.

Regarding Bill C-47, there are a number of implementation issues that are involved with this particular bill. I could get into them one by one, and I am sure there would be very interesting explanations, but I do want to give special attention to one or two items.

One of the big concerns I have coming out of this budget is the increase in the air travellers' security charge by 50%. Up until now, the air travellers' security charge was the second highest in the world, next to Holland. Now, with the 50% raise in the budget, Canada would be the highest taxed in the world for this particular tax.

It only stands to reason that if we are highest taxed in the world, there will be some resistance to that. I will get into what sort of resistance we are finding on the part of the consumers in Canada in a minute. I did want to state that the revenues collected through the tax over the last five years have exceeded the amount spent on security.

Over the last five years, the government has collected $3.3 billion on the taxes, and I think the public would understand if in fact it were spending the same $3.3 billion on airport security. However, that would not be true. The government is only spending $1.5 billion on security. Why would the government increase the tax by 50% when it is only spending a fraction of what it is currently collecting on security in the first place?

What is the result of this move on the part of the government? The result is that the government is turning out to be the best friend of the United States airline industry. We now have information that 50,000 Manitobans are streaming to Grand Forks to fly with United States carriers. I can assure members that 50,000 people are a lot of people.

A very recent article in the Winnipeg Sun detailed what was happening. I have been aware for probably two years now of people driving down to Grand Forks to take flights to Las Vegas and other places. They are finding that the airlines there are able to provide the service for a much lower price.

I have an example for a January 9 flight, a flight that has not even happened yet. The members can simply go out and check their computer and they will find, if there are any seats left, that they can fly from Grand Forks, North Dakota to Los Angeles on January 9, 2011 for $95.98. That is not just the airfare, because the common lead-in with airlines is to give us the low price and then whack us with the taxes. The air fare is $69.99 and the taxes are $25.69, for a total of $95.68.

The equivalent WestJet flight out of Winnipeg is $258 for the ticket and $83 for the taxes, for a total of $341. We can see that is a savings of over $200. If we multiply that for a family of four, we are talking about a significant amount of money. All people need to do is drive the extra two hours to the United States, park their car and fly to Las Vegas or, in this case, Los Angeles.

We are losing business to these carriers and we have a combination of reasons why that is. The strong dollar is certainly an issue here, but we have the issue of the increase in the air tax. Why we do this when we know our tourism is faltering?

We have a Conservative member here who has a bill dealing with a national hunting day. One of the reasons he presented that bill, which, by the way, I hope will get unanimous support in Parliament, is that the tourist operators were complaining. They are suffering. There have been reports of tourist camps that are practically going out of business after being in operation for many years, going through several generations of one family. Now they are having to close their doors because their traffic has dropped off considerably. This is as a result of, once again, the strong dollar, but also the taxation question on the air fares and the issue of passport charges.

This past summer, I happened to be at the Midwestern Legislative Conference. All of the American states are members of various conferences but this conference involves 11 legislatures from midwest states: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin; and three Canadian provinces, Manitoba, Ontario and Saskatchewan. I think Barack Obama was one of the delegates to this conference. I have been there probably six years now and in the first year or two, he was one of the delegates.

This group of legislators, composed of Republicans and Democrats, discuss and pass resolutions at their conventions. I was lucky enough to get a resolution passed this year dealing with a reduction in passport fees. We literally had it unanimously passed. As a matter of fact, one of the Liberal Party MPPs from Ontario was the seconder of the resolution at the U.S.-Canada committee of the conference.

When this resolution was introduced and it went through the committee of the conference, it received instant acceptance. It was the one issue of ten or eleven issues that they discussed in the committee that took up about half the time of the committee, with literally everyone there wanting to speak in favour of this resolution. We had legislators from the United States saying what an aggravation it was to have to go through the passport process and pay upwards of $500 for a family of four to be able to come to the conference. These are the legislators saying this. Can we imagine what the average citizen of the United States and Canada would have to say about this?

Through the security provisions that have come about since 9/11, we have continued to fortify the border and solidify the security around the border. Some would argue that it is questionable as to how more secure the border is as a result, but we certainly spent a lot of money doing this.

In a way, however, we have actually harmed ourselves because, when the Americans established the rule that their citizens needed a passport to get back into their country, they cut a lot of activity along the border. When I talk to the border legislators, whether they be Republicans or Democrats, they are of one mind on this. They accept that the bad guys do not stand at the border to try to get through legitimately. The bad buys simply smuggle whatever they are going to smuggle by going around the border, thereby thwarting these increases.

A politician in South Dakota or North Dakota is getting complaints from constituents about the border issue and about not getting enough tourists doing business in their country. On top of that, on the Canadian side of the border we are getting the same complaints about businesses not getting support from Americans. Americans used to come to Canada regularly for many years and now they are not doing it. The dollar has been strong before. During the Diefenbaker years, the dollar was as high as it is right now.

It is a combination of elements that have come together and conspired to make life very difficult for tourism in this country. Rather than coming to grips with the issue and trying to deal with it, the government is throwing roadblocks in the way. Why would there be a problem with 11 American states, Democrats and Republicans who do not normally get along that well with one another on many issues, getting together in conference and passing a unanimous resolution? Coupled with that, there are Canadians from three provinces, Conservatives, Liberals and New Democrats, all agreeing unanimously to call on the Government of Canada and the Government of the United States to do something about this.

This was in August. What has happened with this issue? Why would the Prime Minister not take a moment from his many important international trips and conferences to look at this file and pick up the phone and call Barack Obama? Both of them have received this letter from the legislators conference. It is tantamount to getting a letter from the premiers conference in Canada. I am sure when the Prime Minister gets a letter from the premiers conference in Canada, he does not ignore it. I am sure his office responds to it and tries to deal with the issue.

We have all of these legislators showing interest and passing the resolution. The question is why the Conservatives have not done something at this point to encourage the Americans to pull back on this issue. If they have not done it by now, when will they do something?

Many ideas came out of the conference, and it will be up to the governments to come up with whatever the solution might be, but one of the ideas that has been talked about is a two-for-one passport renewal process or two-for-one passport applications in a limited time. The idea is to get the number of passports up. Only about half of Canadians have passports, but only a quarter of Americans have passports. Unless or until we can get the Americans to respond positively to this, I think we will have this continual drag on business at the border.

There are many things the government could be doing. I recognize the strategy of the government is to marshal its resources in such a way as to give it maximum possibilities for a majority government at some time.

We in opposition know that the cupboard is bare, that the Conservatives are running a $56 billion deficit right now. The projections for the future are pretty bleak, and not only will they not be paying down the deficit anytime soon, they will be adding to it and accumulating an even bigger deficit in the long run to offer the Canadian people enough incentive to vote Conservative in the next election.

If the Conservatives plan to introduce a budget in the next few months, I do not really think they will introduce one that says, “Well folks, there is nothing here. We are not going to offer you anything in the election.” That will not work. It has rarely worked in the past. I would be very surprised if they used that approach. No, they will offer a bunch of goodies to the public to try to get their majority and they will hide the fact that the financial situation is worse than what they say it is. This has happened with many governments over the years. I think in one case it was called the “fudge-it budget”, where the government hides the true financial situation in the jurisdiction to get itself beyond the election, and then, surprise, surprise, things are not what they seem.

Let us look at corporate taxes. There are so many issues that one could deal with here with the government. I recall a Conservative member asking a question about tax reductions, and she is obviously a big supporter of them. She was asking a question of the previous Liberal member who spoke. She was talking about corporate tax reductions. I think she said corporate taxes made up 13% of the taxes collected and rest are personal income tax. I have news for her. I do not have the statistics here right now but I know they are available, and within her lifetime there was a time, not long ago, maybe 20 years ago or thereabouts, where the amount of corporate taxes collected in this country roughly equalled the amount of income tax collected. What has happened through successive Liberal and now Conservative governments is that the proportion of taxes raised by the government through taxes on corporations is actually being reduced, and of course, the shortfall is being made up by the public.

So we could forgive the working person in Edmonton—Strathcona or Elmwood—Transcona or any of our constituencies when they look at this and say, “Well, the government is talking about restraint”. Everybody knows there was a slight blip in the economy and a bit of a recession and we are trying to get out of it right now. I think the average member of the public is prepared to say, “I will give a little if you give a little”. But when the public sees that the initiatives of the government are to lower corporate taxes, what is that all about?

The federal government is just arbitrarily reducing corporate tax, phasing it down to 15%, when the Americans are in the range of 30%. For the Americans, I think it is almost double. What kind of studies were done? What kind of advice are the Conservatives taking that would prompt them to just arbitrarily say that they have to start reducing corporate taxes? We are already lower than the Americans, but we will go ahead and reduce them some more.

When my homeowner, my voter, looks at the statistics and sees that during a recession the banks where he is depositing his earnings made $15.9 billion, and then when he finds out that the bank president, the CEO of the Royal Bank of Canada, Gordon Nixon, and TD Bank's CEO, Edmund Clark, earned $10.4 million, we have to forgive him for being a little bit confused in wondering what this is all about.

We see the same situation in the United States, where the taxpayers have begun to revolt because they see these big corporations being bailed out. The government likes to pretend that it did not happen but we bailed out the banks. We say that we did not bail out the banks. Yes, we did. We underwrote the mortgages. Remember back in the tough times in 2008 when the Prime Minister was campaigning in his sweater and suggesting that his mother treat the stock market downslide as a buying opportunity? At that point in time, the fact of the matter is--

[The Acting Speaker, Denise Savoie]

Perhaps the hon. member can add some comments in response to questions and comments.

The hon. Minister of State for Democratic Reform.

[Steven Fletcher, Conservative, Minister of State (Democratic Reform)]

Madam Speaker, this member and I are both from Winnipeg. We represent ridings in Winnipeg.

Listening to the member speak, I have to say that it is very disappointing. The member talked about airline taxes. This is the same member who introduced a private member's bill that would penalize airlines for delays and other things, even inclement weather and other factors outside the airline's control.

In fact, we would not have airlines in Canada if the member got his way with the bill. So it is a bit rich for the member to talk about airlines.

The Winnipeg International Airport is in my riding, and also Magellan Bristol and a lot of aerospace companies. The member is against all these initiatives of this government. All these initiatives, the airport and the aerospace industry, are real jobs, on-the-ground jobs. I recall the Prime Minister making an announcement on the economic action plan and the place was packed with CAW members, Canadian auto workers, and this member is against those members having jobs. I think that is very offensive.

I wonder if the member will admit that the rejection of the NDP in last night's byelection is as a result of the zany, kooky, whacky, irresponsible policies presented by the federal NDP.