Debates of Dec. 15th, 1994

Social Program Reform

[Bonnie Hickey, Liberal, St. John's East, NL]

Mr. Speaker, many of my constituents of St. John's East have given the discussion paper on reforming our social programs serious consideration. They have written and phoned me with their views and come into my office for meetings. Also, over 100 constituents turned out to a public meeting that I hosted on November 29.

I am pleased to say that this meeting was a success. It was good to see on a cold Newfoundland night that there was a good cross-section of people in my riding who had come out to express their opinions.

I am currently preparing a report which summarizes the points made at the meeting and will be forwarding it to the minister and the standing committee on human resources.

The government has asked Canadians for their views on social security reform. I have told my constituents that I will ensure their views on this issue are well known.

Special Interest Groups

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, I am pleased to rise and submit my second Liberals copy Reform award.

Number two on the list is the hon. member for Hamilton-Wentworth who said: "The practice of using tax revenues to finance special interest groups with particular axes to grind has created a multimillion dollar system of bureaucratic patronage that operates with little accountability to ministers, MPs, the media, or the taxpayer".

It appears that Liberal backbenchers are finally beginning to see the light and have added the Reform blue book to their reading list.

Unlike the red book the blue book calls for the reduction and/or elimination of funding to special interest and advocacy groups. Unfortunately cabinet is not listening.

To date we have seen no action by this government to cut back interest group funding. To cabinet we say enough is enough. Listen to what the Reform Party is saying. Listen to what the Liberal backbenchers are saying. Stop funding special interest groups and start giving taxpayers a break.

Taxation

[Michel Gauthier, Bloc, Roberval, QC]

Mr. Speaker, for 14 months now the Minister of Finance has been utterly unable to convince his Cabinet colleagues to take the measures necessary to bring about a substantial reduction in his deficit.

In an attempt to fulfill their commitments and reduce the deficit to 3 per cent of the GDP, Liberal members are proposing to further increase the burden of taxpayers, who are already weighed down with taxes, particularly those in the middle class.

Given that now is the time when taxpayers make decisions about the amounts they will invest in RRSPs, would the minister simply take advantage of this final question period to reassure worried taxpayers by undertaking publicly not to tax RRSPs in his next budget?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, the member for Roberval knows very well that we will have to wait for the budget. The Minister of Finance is not really in a position to make budget announcements here, in the House, even if Christmas is approaching. We will have to wait until the end of February.

That being said, I am sure the member will admit that if we wish to meet our objectives, cuts will have to be made. It would be of great help if his party would make constructive suggestions on exactly where we should cut.

[Michel Gauthier, Bloc, Roberval, QC]

Mr. Speaker, this being the festive season, I will cordially remind the Minister of Finance that we have been suggesting tax expenditure cuts for more than a year now. What I cannot understand is why he does not implement our suggestions. We will make some more before the holidays, if he wants to keep an ear out.

I will even offer him a suggestion today. The national Treasury should make a priority of recovering $6.6 billion in unpaid taxes owed to the government. We are not talking about people who have paid their taxes, but about unpaid taxes totalling $6.6 billion. Since he should first recover this amount, could the Minister of Finance then undertake not to look at taxing group dental and medical plans, which have a particular impact on families?

[David Anderson, Liberal, Minister of National Revenue]

Mr. Speaker, despite repeated efforts on this side of the House the Bloc still does not understand what accounts receivable are.

In the accounts receivable there are many Canadians who are having difficulty paying on time, but who have made arrangements with the government to pay over a period of time. They owe us money. No question. They pay it back with interest.

Also in that accounts receivable are certain Canadians who dispute tax questions with us. They say we do not owe as much as you say. When we examine their documents we often discover that they are right. I certainly do not think we should be collecting money from Canadians who do not owe it to us.

The accounts receivable are exactly that. We are coming off a bad recessionary period, the Tory recession. We are coming on to the margin recovery. We are doing all we can to help Canadians who are having difficulty and who are now getting back on their feet.

The last thing we are going to do is force them into receivership and bankruptcy by the policies adopted by the Bloc Quebecois.

[Michel Gauthier, Bloc, Roberval, QC]

Mr. Speaker, it may be that I do not understand what an account receivable is at Revenue Canada, but the Auditor General of Canada and I think alike. Neither of us understand. These members do not understand and neither does the public. The minister is the only one to understand.

[Some hon. members]

Hear, hear.

[Michel Gauthier, Bloc, Roberval, QC]

Let me get back to my question to the Minister of Finance, Mr. Speaker. Perhaps I will get a serious answer. Does the Minister of Finance see the commitment his Prime Minister made during the election campaign not to raise taxes for two years, a solemn commitment made to all Canadians, as a commitment that should be honoured? And if so, why does he not come out and say so clearly, today, instead of letting uncertainty hang over the heads of taxpayers?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, more to the point, we have to ask ourselves: is our tax system, here, in Canada, entirely fair? Or does it have loopholes, a point that some of the hon. member's colleagues have already raised? Are there loopholes that should not be looked at?

If, contrary to his colleagues, the hon. member is of the opinion that the system is perfectly fair, that no changes are required, fine, no changes will be made in the next budget, but we think that the system is not entirely fair and that changes will be required. We certainly intend to assume our responsibilities.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I was happy to hear the Prime Minister admit that there are tax inequities. This, incidentally, is one of the proposals he will find in the report submitted to him by the Official Opposition, which suggests 10 ways to reduce his deficit problem. I would ask him to read these recommendations, which were tabled in both official languages about two weeks ago. It may be time for him to read them.

In order to meet their commitment to reduce the deficit to 3 per cent of GDP by 1996-97, the Liberal members on the finance committee are proposing higher taxes for all taxpayers through a supposedly temporary surtax. The Official Opposition, however, believes that the deficit can be substiantially reduced without raising personal income tax, by making vigorous efforts to collect unpaid taxes and cut spending, including inappropriate tax expenditures.

Instead of raising taxes for all taxpayers, will the Minister of Finance finally decide to fairly and seriously consider all the proposals made by the Official Opposition to help him cut the deficit in an intelligent way?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, first of all, yes, I did read the Bloc Quebecois's report. I can assure the hon. member that we intend to consider these recommendations carefully. It should, however, be pointed out to the hon. member that these recommendations would help us with only a tiny portion of the $42 billion deficit. I would ask the hon. member if he could make suggestions that will really help us solve the deficit problem and the structural problems facing us.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I would calmly remind the Minister of Finance that, based on our calculations, which he has not contradicted, our 10-point proposal would amount to about $15 billion in cuts and savings of all kinds and in new taxes that would make rich Canadians pay their fair share, if they do not already. I would invite him to reassess our proposals.

I put my supplementary question to the Deputy Prime Minister. Does she intend to reprimand her finance minister, as the Prime Minister did yesterday on the issue of high interest rates, so that the finance minister will reject the idea of a surtax that would hit all taxpayers, which would be totally inconsistent with the Prime Minister's own election commitment?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, the Bloc Quebecois just said that it has given us suggestions in terms of deficit reduction of some $15 billion. I hate to contradict their mathematics, but the number is nowhere near that. In fact it is not even one third of that.

That being said, what really must be done in this House by the opposition, and indeed the Reform Party have done it in part and have said they are going to do it before the budget, is to give us a comprehensive plan. It is quite easy to make great speeches. It is quite easy to set out targets with no background. But what is very, very difficult is to do the line by line study that allows us to deal with the profound structural problems of our economy and the way that governments spend.

In the month and a half that the opposition is going to have off, I would invite them to sit down and really work up a proper plan so that when we come down with the budget we can have an intelligent debate.

Security Intelligence Review Committee

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, the SIRC report on the Bristow affair brought forward this morning is a whitewash. It does not adequately address the Reform Party's primary concern, namely that a paid agent of the former Progressive Conservative government allegedly tried to build links between Reform and extremist groups for the purposes of discrediting Reform in an election.

The Mulroney-Campbell administration may or may not have known what Grant Bristow was doing but they were certainly aware of his activities and they were in a position to use that information for political advantage.

Will the Solicitor General tell this House why SIRC did not more thoroughly investigate this particular concern and what he intends to do about it?

[Herb Gray, Liberal, Leader of the Government in the House of Commons and Solicitor General of Canada]

Mr. Speaker, the Security Intelligence Review Committee was created by an act of Parliament, adopted by this House and the other place, to operate at arm's length from CSIS, at arm's length from the minister, at arm's length from the government. In short, it operates very much like a permanent commission of inquiry. It presented its report. I tabled that report in the House today.

I understand the hon. leader's question. However, I think that question would best be put to SIRC itself. I understand its members are appearing before a subcommittee of the justice committee tomorrow. That would be a very good vehicle for asking such questions.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, sections of the SIRC report read like a who's who of the Tory party. Their names are sprinkled throughout the report: Lewis, Jelinek, Dobbie, Segal, Sparrow, Campbell. Many of these people were reported to have had meetings with key players in the Bristow affair and were involved in smear campaigns against the Reform Party. Yet, in interview after interview with these former Tory politicians, SIRC avoided asking the key hard questions.

Will the Solicitor General agree that a committee like SIRC composed of political partisans investigating alleged improprieties by politicians makes a mockery of natural justice and discredits the internal security system in this country?

[Herb Gray, Liberal, Leader of the Government in the House of Commons and Solicitor General of Canada]

Mr. Speaker, the members of the Security Intelligence Review Committee are appointed by order in council in exactly the same way as a short term commission of inquiry. They have the fullest powers to investigate, to seek documents, to question people under oath and they are in a position to complete a full and comprehensive report into matters they look into. That is what they have done. That report is before us for questioning and also is before us to use as a resource to make sure that CSIS is operating in a way required by law.

I suggest to the hon. leader of the Reform Party that he take another look at the report. Its basic purpose was to investigate allegations about the conduct of CSIS not about the conduct of political figures. It has done this job. I suggest that he and his colleagues follow up their concerns by addressing their questions directly to the members of SIRC when they appear before the parliamentary subcommittee or for that matter, seeking out meetings with them directly.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, today's SIRC report on the Bristow affair highlights the inadequacies of checks and balances on CSIS. It is also clear that the mechanisms for monitoring the activities of CSIS are ineffectual. They are open to political manipulation by virtue of the patronage appointments to the Security Intelligence Review Committee.

Will the minister agree that the highly political and completely ineffectual Security Intelligence Review Committee should be done away with? Will he agree that the parliamentary subcommittee on national security should be made the watchdog of CSIS and should be given the teeth to do the job?

[Herb Gray, Liberal, Leader of the Government in the House of Commons and Solicitor General of Canada]

Mr. Speaker, I reject the premise and innuendo of the hon. member's question.

The SIRC was created by an act of this Parliament to operate at arm's length from the government, from Parliament itself and from CSIS. I really question why he thinks a subcommittee of this House made up of people linked directly to political parties is less partisan than the arm's length Security Intelligence Review Committee. There is a contradiction in what he says.

Tax Credits

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, my question is for the Minister of Revenue.

While the major Canadian banks are declaring record profits of over $4 billion this year, we learn that these same banks will benefit from some $300 million in tax credits for research and development, in particular for expenses to develop software used in current operations, such as automated teller machines. The Auditor General has denounced such tax credits as ineffective.

Can the revenue minister confirm that nearly $300 million in tax deductions will swell the banks' profits, which already amount to $4 billion, and that these credits are for so-called R&D expenses which are really nothing but current expenditures?

[David Anderson, Liberal, Minister of National Revenue]

Mr. Speaker, the hon. member can rest assured that there will be no payment on pseudo claims for tax credits.

We have a very strict procedure for dealing with the tax credits for scientific research and experimental development. The three criteria are: first, there must be advanced knowledge; second, there must be a real risk of failure involved; and third, the research must be undertaken by experts.

We are now assessing the applications. I might add that anybody can put in a request for such an application. It simply does not mean that Revenue Canada will accept it. We are looking at it closely with over 300 auditors and also a large number of scientific experts to make sure that in fact no money is paid under this scheme other than that which is due to be paid.

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, my supplementary question is for the Minister of Finance.

First of all, I would like to remind him that he started by saying that the Bloc Quebecois had no suggestions. Five minutes later, he was up to $5 billion. So that he can do his figure work better, I would like to remind him that we are talking about $1.6 billion for defence, $3 billion in corporate subsidies, and $6 billion in unpaid accounts. The Minister of Finance should get his figures straight and by the end of Question Period, we may find that the deficit is much smaller.

Yesterday, the Minister of Finance asked us where to cut. Here is another suggestion. Does he intend to end the waste of public funds denounced by the Auditor General and reduce his spending by $300 million, in addition to savings suggested by the Bloc Quebecois?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, I fully endorse what the Minister of National Revenue just said. The purpose of these tax credits for research and development is certainly to create new technology. It is not for companies to do things that they should do anyway as good management.

I think that the Minister of National Revenue answered the question very well and I can tell you that he has just stated the finance minister's position too.

Security Intelligence Review Committee

[Val Meredith, Reform, Surrey—White Rock—South Langley, BC]

Mr. Speaker, the SIRC report on the Heritage Front affair is full of contradiction. It states that CSIS did not investigate the Reform Party or its membership. Yet in the same report it has acknowledged that a CSIS Ottawa region investigator searched the names of the contributing individuals and companies to the Reform Party leader's 1988 campaign against the CSIS databases.

I ask the minister if this does not constitute an investigation of the party and its membership, what does?