Finance Committee on Dec. 8th, 2009

[Ted Menzies, Conservative, Macleod, AB]

With all due respect, Mr. Mulcair, I hope you'll respect what I'm going to ask for here.

We have some officials with us here this evening. If Mr. Mulcair wishes to continue, that's fair, but with all due respect, if there are not going to be any further questions for our officials, could we please allow them to be excused for the evening?

[The Chair, Conservative, James Rajotte]

Well, the challenge is if there's an amendment done at the end that we would want their comment on.

[Ted Menzies, Conservative, Macleod, AB]

I've tried. Thank you for the respect for our public servants.

[Thomas Mulcair, NDP, Outremont, QC]

I have so much respect for our public servants that I want them to stay so that we can take advantage of their expertise and experience--

[Ted Menzies, Conservative, Macleod, AB]

Let's move on, Tom.

[Thomas Mulcair, NDP, Outremont, QC]

--and I noticed that they were taking notes as I read to them the difference between the Ontario and B.C. HST, which the Canadian Federation of Independent Business is opposing.

I was explaining to you why, because once you know why, I'm convinced you're going to vote against it as well.

[Some hon. members]

Oh, oh!

[An hon. member]

You're already asleep. You're dreaming.

[Thomas Mulcair, NDP, Outremont, QC]

To go back to what I was saying:

One, there was a benefit to consumers built into the change as the combined sales tax rates were reduced at the same time as the base broadened, and two, small businesses themselves felt part of the process as there was a degree of consultation missing from current initiatives.

That's from the Ontario and B.C. ones. It continues:

It often surprises public policy makers that small business owners often view things through the eyes of their customers rather than through the lens of their own business. I believe the lack of an overall rate reduction partly explains the concern our members have with the harmonization initiatives in Ontario and B.C.

We believe that's a good point at which to start, Mr. Chairman.

Also, for the benefit of my friend and colleague, Mr. McCallum, I will now read from a resolution passed at Hull at a Liberal Party annual meeting. I can't name all the people who were there. Some of them are still elected and I can't name them, but Paul Martin, Jean Chrétien, Ethel Blondin, and Sheila Copps, all of fond memory, were there. Here's what was resolved by the erstwhile Liberals, now led by a right-wing phalange:

Be it further resolved that the Liberal Party of Canada rejects the G.S.T., and more particularly, categorically rejects the imposition of the G.S.T. to First Nations and their citizens throughout Canada on the grounds that it is in violation of their aboriginal and treaty rights which are recognized and affirmed in the Constitution, and is inconsistent with the principle of self-government.

Of course, as Mr. McCallum would tell you, that was then and this is now.

But they went on to say the same thing in French.

Be it resolved that the Liberal Party of Canada rejects the GST, and more particularly, categorically rejects the imposition of the GST on first nations and their citizens throughout Canada…

[A voice]

Point of order.

[The Vice-Chair, Liberal, Massimo Pacetti]

Yes, Mr. Kramp.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Is there any need to repeat it in French when we have translators? Is it not redundant to repeat the identical message?

[The Vice-Chair, Liberal, Massimo Pacetti]

Well, if Mr. Mulcair feels that it's necessary to repeat it in French, we have no set time limits.

But I would request, Mr. Mulcair, that you cease from or try to avoid saying the same thing in two different languages, because we do have translators. Just to expedite the interest...not to expedite but to maintain the interest of your colleagues, perhaps doing one language because they are using translation....

But I leave it up to you. The time is yours, Mr. Mulcair.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Chairman, your comment only reaffirms a very dangerous admission on the part of the Liberal Party of Canada. You are telling me that the French version of your resolutions is nothing more than a slavish translation of what was adopted in your only real official language English. I can certainly read the only official version in English and rely on—

[The Vice-Chair, Liberal, Massimo Pacetti]

You can begin in French, Mr. Mulcair. What I was trying to say is that, if you don't trust the translation, you can repeat your comment in English, or vice versa. It is only out of courtesy for your colleagues around the table.

[Thomas Mulcair, NDP, Outremont, QC]

Thank you, Mr. Chairman.

So, I was saying that if the Liberal Party, for which you do not appear to have a great deal of respect, passed these unilingual English resolutions and relied on a slavish translation, I would agree with you. But, in that case, how could Mr. Kramp improve his perfect knowledge of the two official languages by comparing the simultaneous interpretation provided by the experts who are with us today and what is proposed in the two versions; that is an extraordinary exercise for Mr. Kramp and for you, members of the Liberal Party, because you will be able to listen carefully to the experts who are with us today—our close collaborators who are at the back of this room, in order to determine whether the party succeeded—

[The Vice-Chair, Liberal, Massimo Pacetti]

Mr. Mulcair, please confine yourself to the subject. Otherwise, we will—

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Chairman, allow me a friendly reminder: I was actually reading a document that is perfectly relevant.

[The Vice-Chair, Liberal, Massimo Pacetti]

I leave that to your discretion.

[Thomas Mulcair, NDP, Outremont, QC]

He interrupted me, you helped him interrupt me, and now you have the gall to say that I am the one that has a problem. That really is a bit much.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you.

[Thomas Mulcair, NDP, Outremont, QC]

I am going to try to continue what I was doing as a parliamentarian, which was to read a document, this ersatz resolution from the Liberal Party that reads as follows:

Be it further resolved that the Liberal Party of Canada rejects the GST, and more particularly, categorically rejects the imposition of the GST on first nations and their citizens throughout Canada, on the grounds that it is in violation of their aboriginal and treaty rights which are recognized and affirmed in the Constitution, and is inconsistent with the principle of self-government.

And I must say that you are absolutely right, because it ends completely up in the air with the word “and” in the French version.

Mr. Chairman, we are talking about a bill which is the logical conclusion of the demolition project undertaken by the Conservative Party four years ago. Motivated by an ideology which refutes the utility of any government intervention, they began to attack whole parts of our economy. They started by sabotaging the manufacturing and forest industries, particularly in Quebec and Ontario, but the forest industry in British Columbia and New Brunswick also suffered the torments of this policy. How did they go about this? Well, it wasn't difficult, Mr. Chairman. With the assistance of their henchmen in the Liberal Party, they proposed radical reductions in the taxes paid by the most profitable corporations. Why do I say “the most profitable corporations”? Well, it's very simple. If a company did not make any profit, it did not have to pay taxes. As a result, the Conservatives reduced the tax payable of the most profitable corporations by some $60 billion.

It is important to remember that Mr. McCallum and other members of his political party encouraged them to do this even more quickly. I recall that when the Minister of Finance came into the House a year and a half ago, he said that he was reducing corporate taxation far more quickly than he would have dared to, thanks to the Liberals encouraging him to act even more quickly. If you want to understand our opposition to this proposal, that is where you have to start, because it marks the beginning of a long process that compromised whole sectors of our economy, particularly the manufacturing and forest industries.

How did they create the tax room necessary to provide a $60 billion tax cut to the most profitable corporations? Well, they looted the Employment Insurance Fund; they took some $57 billion out of it, egged on, once again, by their henchmen in the Liberal Party. Some would say that makes absolutely no difference; that $57 billion was just notional; just government money being transferred into general government revenues, into the Consolidated Fund.

In fact, Mr. Chairman, there is a huge difference between the two. The monies in the Employment Insurance Fund had been paid by every single Canadian company, on behalf of every single one of their employees. Whatever your company's financial status—whether you are just breaking even, losing money or making money—you are a certified general accountant, so you know that a business owner has no choice: even if he loses his money, he has to contribute to the Employment Insurance Fund. All employees contribute to the same fund. Sixty billion dollars worth of tax room was created by stealing the money of corporations in Quebec, Ontario and across Canada, who were either losing or earning money and whose contributions were transferred to the government's general revenues. The result of that operation was to provide tax cuts to the most profitable corporations, particularly in the oil and banking sectors—corporations such as EnCana, which our colleagues from Alberta are well acquainted with, which received windfall profits—money that was totally unexpected and unhoped for and which they had absolutely no need for either—amounting to several hundred million dollars. They would have made exactly the same investments.

That just goes to show the extent to which the Conservative ideology, encouraged every step of the way by the Liberals, has harmed the economy. It's just like in some countries, where they force people to pay their own executioner. In this case, it was the Liberal Party doing the Conservatives' dirty work. In addition, the companies that suffered most were helping the oil industry which, it is important to remember, did not apply the fundamental principles of sustainable development, such as cost internalization and the polluter-pay and user-pay principle.

So, the oil industry continues to produce, using the tax room created by the money stolen from companies that are already experiencing very tough times because of the high value of the Canadian dollar. The oil sector is really overheating, which in turn is fuelling the unprecedented rise in the Canadian dollar. It then becomes increasingly difficult to export our forest and manufacturing products.

Before the current crisis hit us—in other words, prior to the fall of 2008—we had already lost 450,000 jobs—in Quebec and Ontario alone—especially in the manufacturing and forest industries. That is the consequence. Ontario, which is grappling with financial difficulties of a magnitude never seen before—because of the choices made by Conservatives, supported by their big brothers here in Ottawa—is now coming cap in hand to ask the federal government to change its legislation. But what is behind all of this? The plan is to continue the most significant transformation of our tax system in the history of Canada—a transformation involving the transfer of corporate taxes to individuals in the amount of $60 billion. And, by the greatest of coincidences, that just happens to be the exact amount of the deficit recorded this year. Rather than applying the principles of sustainable development, internalizing the cost of greenhouse gases and pollution caused by the oil sands, in particular—which is the fundamental principle of sustainable development—we are passing all of that on to future generations. But, it gets even worse: we are burdening the future generations with this deficit rather than internalizing the cost and creating a fund so that, at this critical time, we can at least build the infrastructure that will allow us to produce clean and renewable energy.

That is a vision for the future that we could have supported, Mr. Chairman, but they are totally incapable of that. Since the Liberals believe in nothing and have absolutely no principles of any kind, they are supporting, even encouraging, this steady erosion at every step in the process. That is why they have no choice but to support this kind of insane proposal, which will generate new taxes on heating oil in northern Ontario, for example. As if people on fixed income or the poor could afford to absorb this cost. That is what the first nations leaders have just been explaining. As was mentioned, once again, the large corporations are the only ones who will benefit from this. Once again, it is the people who will be footing the bill.

I know that you are a learned man, Mr. Chairman, and that you like to look at this type of material; so, if you're interested, have a look at the numbers produced by Statistics Canada on the average income of Canadians since the North American Free Trade Agreement was signed. NAFTA created enormous wealth in Canada, except for one slight problem: the gulf separating the richest from the poorest is widening. The gap between the two is growing ever larger. The fact is that the Canadian middle class earns less in 2009 than it earned when the North American Free Trade Agreement was first signed, despite a significant increase in wealth in Canada. How is that possible? Well, it's quite simple. Once again, all of our policies seek to benefit the richest members of society. And this is another example of that. Here we are helping business escape its tax responsibilities and piling them on ordinary Canadians instead.

That is the reality of this exercise, Mr. Chairman, and my comments provide the backdrop to our fierce opposition to Bill C-62. I would just like to conclude this brief introduction with the following comment: right from the beginning, we have been saying that Minister Monique Jérôme-Forget was right in stating that Quebec was entitled to be compensated. Like us, you heard the explanation given earlier: there is an inconsistency between the situation in Quebec, when it comes to tax collection and the other criteria that have been mentioned, and what is going to be required under this bill. It is quite clear that Quebec will never be compensated—unless, of course, it relinquishes its jurisdiction over tax collection. In my opinion, that is not likely to occur any time soon, but perhaps members of the Bloc know something that we don't know in that regard. We'll see.

The fact remains, Mr. Chairman, that we are vehemently opposed to this plan. We see it as the reflection of a society which is no longer the one we have been trying to build since World War II. Canada has always known, and successive governments always knew—despite the fact that, from time to time, some rather surprising individuals, shall we say, ended up being prime minister—that to give value to the number two country in the world, based on size, in order to add value, the government needed to have a comprehensive vision that would allow it to play a key role in developing the country. The government must have such a vision, a vision that will make it possible to develop the resources and wealth that we are creating, while ensuring that they are shared fairly. Governments have always understood that—until four years ago. The Conservatives do not understand—nor do the Liberals, it seems—that in order to give value to the second largest country in the world, with a population of barely 30 million, the government must have a vision.

Conservative ideologues claim that this means the government ends up choosing the winners. In English, they say: “You're choosing winners”. That is their simplistic way of saying that the government has no business being involved, that there is a perfectly free market out there which determines the trade-offs for us, so that we don't even have to think about them. The problem is that they have chosen their winner, and there is only one: the oil industry.

In the Netherlands after the Second World War—and this is extremely well documented—people saw the economy collapse because petrodollars were allowed in without any concern for balance. Now the balanced economy that we have been building in Canada since World War II is being destabilized by the Conservatives, with the willing complicity of the Liberals.

Companies in the Beauce, family firms that have been making furniture for generations now find themselves forced to shut down because of the high value of the loony. The value of the loonie is artificially high because of a refusal to take the obvious steps—in other words, internalizing the cost of pollution and GHGs associated with the oil sands. They don't even have the good sense to say that developing a clean and renewable energy fund would be a good solution for the future. We continue to see companies that derive a living from forest products shut their doors, we continue to see manufacturers shut down, and we continue to see massive layoffs in companies across Quebec and Ontario, in particular, but also in other provinces.

Mr. Chairman, we find it inconceivable that anyone, in all good conscience, would want to continue this gradual erosion that is the result of the Conservative ideology in relation to our provincial economies. The provinces, often with a vision and assistance from the government, have patiently built businesses that are successful. In the last four years, however, they have been gradually snuffed out because the Conservatives have chosen a single winner, the oil industry, based on their ideology, the losers being Quebec and Ontario. Thus it is even more scandalous to see the Liberals supporting this process every step of the way, a process aimed at destabilizing a once well-balanced economy.

I invite those who are interested to read an article published Monday of last week—eight days ago, in other words—in The Guardian, a British newspaper. George Monbiot wrote a highly critical piece about Canada. It's very interesting. According to his analysis, we are in the process of sacrificing our economy on the altar of the oil sands. We aren't even smart enough to retain second and third oil sand processing jobs here in Canada. The recent Keystone project, one of the many pipelines to have been approved since the Conservatives took office, exports some 500,000 barrels a day, and here I am talking about crude. At the same time, we are exporting work for 18,000 people south of the border, because we have no vision.

We do not realize that we are drawers of water and hewers of wood, and that we are making exactly the same mistakes we made back in the days of Duplessis, when we exported logs to be processed somewhere else. We were exporting our ore for someone else to provide value added, and we were not even collecting one cent a ton. That is where we are now in Canada, in 2009. It's scandalous, Mr. Chairman.

For all those reasons, the NDP is opposed to this Conservative policy aimed at changing our tax system, as usual, to benefit the large corporations. In the history of Canada, this is the largest transfer of business fiscal capacity to individuals ever seen. We, at least, will be there to stand up and say loud and clear, at every step of the process, that this is unacceptable and that it is a betrayal of Canada and the best of everything it had. We are sabotaging the balanced economy we have succeeded in building since World War II.

Mr. Chairman, to summarize, the NDP is adamantly opposed to this continuation of the operation started four years ago by the Conservative Party to transfer the tax burden from corporations onto the backs of hard-working Canadians. Now, how have they done that? How has it happened that this is the continuation of that? As we heard from the first nations who were here tonight, and as we heard even from the Canadian Federation of Independent Business, it's quite obvious that the HST is a straight transfer of the tax obligations of corporations. Why do you think the Chamber of Commerce was in here saying that this is great for corporations? The tax money is still going to be collected; it's just not going to be collected from them anymore. It's going to be collected from individuals.

This has been four years that the Conservatives have been carrying out this policy of transferring the tax load from corporations onto the backs of citizens. The first and most important step they took was to provide tax reductions in the order of $60 billion to Canada's richest corporations. Now, why do I say the richest corporations, Mr. Chairman? It's quite clear that if your company had not been making money, you hadn't paid any taxes and therefore you didn't profit in any way, shape, or form from a tax reduction. Only the companies that had been paying the bulk of those taxes got that money. And where were they? Well, they were in the oil patch and they were the banks.

You can't create that fiscal space overnight--$60 billion. How did they find the fiscal room in Canada to provide that $60 billion tax reduction for the corporations? It wasn't complicated. They pillaged; they looted the employment insurance fund. It was $57 billion in there. They said afterwards that it's a notional amount; it's on paper. It's all government money and they're just taking it from there and sticking it into the general revenue fund of the government. It doesn't really change anything. Actually, it does, because there's a huge difference between who paid in and who had the money as it came out.

Every employer in Canada, whether they were making money, breaking even, or losing money, was obliged to pay into the employment insurance fund for every single one of their employees. That $57 billion was there to even out the cyclical element of the employment market. We're at the bottom of that cycle right now. That money was needed.

To make matters worse, to add insult to injury, it's now being calculated that we're going to be $19 billion short--that's with a “b”--given the current freeze on those contributions, as we come out of the recession. In other words, not only did employers whose companies might have been losing money see their contributions to the employment insurance fund pillaged, sent over to general revenue, and then turned into tax reductions for the richest corporations, which they couldn't benefit from, but they're again going to be taxed to the order of $19 billion to re-inflate the employment insurance account, which is going to be left short by that amount. Those are the calculations that have been made, both by this committee and by the various ministries.

Mr. Chairman, that constituted the first step in the Liberal-Conservative march towards removing the tax burden of enterprises and businesses in this country and putting it onto the backs of ordinary working Canadians. In the process they bled out 450,000 jobs from Ontario and Quebec. They had been lost. Those jobs I just described had been lost in the manufacturing and forestry sectors, just in Ontario and Quebec, prior to the current recession hitting in fall 2008, Mr. Chairman. That's the reality.

This is now the band-aid that the Liberals are helping the Conservatives put on the gaping wound they caused by bleeding out those 450,000 jobs. There's no way that Ontario could have avoided the tens of billions of dollars of shortfall they now have given the choices their big brothers in Ottawa made with the Conservatives. As they killed manufacturing and forestry in Ontario on the altar of the expediency of the oil sands, the tar sands, they created the situation we're in now. Instead of having some vision, including, for example, internalizing the environmental and greenhouse gas emission costs, internalizing a fund that could create at least something for future generations in the way of green renewables, they're continuing to take in the petro dollars from the States as they pump the raw product from the tar sands south--pumping jobs with it, by the way.

The Keystone pipeline is exporting 18,000 jobs south of the border, but they don't care. They're getting the dollars into Alberta quickly.

What has that been doing? It's been pushing the Canadian dollar artificially higher. If we had at least internalized the cost, it would have had a softening effect on those spikes of the Canadian dollar. But it was those high rates.... It was when the Canadian dollar actually went past the U.S. dollar that we saw manufacturing concerns in the Beauce and in Ontario—manufacturing concerns that were part of a balanced economy we had built up since the Second World War.

We had always understood that to give value to the second largest country in the world with only 30 million people required government intervention and vision. That vision is sorely lacking now. And that's not just on the Conservative side; we've always known that's been part of their ideology. What is the most galling now is that they're being aided by their henchmen in the Liberal Party, who help them every step of the way and encourage them on.

Now in Ontario the government is taxing ordinary Canadians again with a very regressive sales tax. Why is a sales tax more regressive than another tax? Why do we use that term? It's quite simple. If you have a retired couple on a fixed income who are trying to get by and you increase the cost of their heating oil by 8%, guess what? They can't find the money. They can't print the money. They are going to be hit with an increase in the cost of their heating oil.

It's always the people who are least able to afford it who are hit with this type of regressive tax. It is regressive because there is no curve to it, unlike an income tax, which is progressive, which increases....

Mr. Chair, I'm going to have to ask you to do something about decorum.

[The Chair, Conservative, James Rajotte]

Decorum outside the room or inside the room?

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Chair, this is Parliament. You have an obligation to ensure some ability of this committee to function.

[The Chair, Conservative, James Rajotte]

Can we request that someone on the Liberal side see if we can get the noise reduced? We have another hour here.