House of Commons Hansard #52 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was drugs.

Topics

Government Response To PetitionsRoutine Proceedings

10 a.m.

Liberal

Don Boudria Liberal Glengarry—Prescott—Russell, ON

Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to several petitions.

Income Tax ActRoutine Proceedings

10:05 a.m.

Bloc

Christiane Gagnon Bloc Québec, QC

moved for leave to introduce Bill C-238, an act to amend the Income Tax Act (child support payments).

Mr. Speaker, the purpose of this bill is to amend the Income Tax Act so that child support payments can no longer be deducted from the income of the individual paying child support and are no longer added to the income of the person receiving the payments. The bill ensures that child support payments are covered by the definition of earned income included in the provisions on deductions for child care expenses.

(Motions deemed adopted, bill read the first time and printed.)

PetitionsRoutine Proceedings

10:05 a.m.

Liberal

John Maloney Liberal Erie, ON

Mr. Speaker, pursuant to Standing Order 36, I present a petition on behalf of the constituents of Erie. I wish I did not have to present this petition because I wish that the circumstances around this issue did not exist. However, they do.

A growing number of Canadians are fiercely opposed to the importation of killer cards. This petition adds 475 names to this list. These cards are contrary to moral and ethical standards. Canadians abhor crimes of violence against persons. Killer trading cards offer nothing positive for our children or adults to admire or emulate. Rather, they contribute to violence.

Not only do these cards glorify murder and the criminals who commit horrific acts of violence, but they act as a daily reminder to the victims, families and friends of the brutal violence that has struck down their loved ones as well as their security and faith in humanity.

A clear message must be sent to any printing company and/or distributor that this material is not acceptable to Canadians. A great number of Erie residents are opposed to this product and I join them in calling for an amendment to the laws of Canada prohibiting the importation, distribution, sale and manufacture of killer cards.

(Questions answered orally are indicated by an asterisk.)

Questions On The Order PaperRoutine Proceedings

10:05 a.m.

Liberal

Don Boudria Liberal Glengarry—Prescott—Russell, ON

Mr. Speaker, question No. 23 will be answered today.

Question No. 23-

Questions On The Order PaperRoutine Proceedings

10:05 a.m.

NDP

Len Taylor NDP The Battlefords—Meadow Lake, SK

Will the government implement recommendation No. 3 in the fourth report of the Standing Committee on Aboriginal Affairs, entitled: "A Time for Action" (34th Parliament, third session), which calls for the transfer of control of housing programs to aboriginal people and, if so, when and how, and, if not, why?

Questions On The Order PaperRoutine Proceedings

10:05 a.m.

Sault Ste. Marie Ontario

Liberal

Ron Irwin LiberalMinister of Indian Affairs and Northern Development

The federal government plans in the near future to consider a new housing policy that would improve housing conditions as well as strengthen aboriginal control and accountability. As stated in its Liberal plan for Canada entitled "Creating Opportunity": "The government will work with aboriginal peoples to develop an approach to housing that emphasizes community control, local resources and flexibility in design and labour requirements".

The new policy would also reduce the gap in the availability of adequate, affordable housing; increase self-reliance through greater employment and business opportunities, including those

identified in recommendation No. 3; encourage broader participation by private sector business and financial institutions; and promote skills development initiatives.

Questions On The Order PaperRoutine Proceedings

10:05 a.m.

Liberal

Don Boudria Liberal Glengarry—Prescott—Russell, ON

I ask, Mr. Speaker, that the remaining questions be allowed to stand.

Questions On The Order PaperRoutine Proceedings

10:05 a.m.

The Acting Speaker (Mr. Kilger)

Shall the remaining questions stand?

Questions On The Order PaperRoutine Proceedings

10:05 a.m.

Some hon. members

Agreed.

The House proceeded to the consideration of Bill C-9, an act to amend the Income Tax Act, as reported (without amendment) from the committee.

Income Tax ActGovernment Orders

10:05 a.m.

Victoria B.C.

Liberal

David Anderson Liberalfor the Minister of Finance

moved that the bill be concurred in.

Income Tax ActGovernment Orders

10:05 a.m.

The Acting Speaker (Mr. Kilger)

Is it the pleasure of the House to adopt the motion?

Income Tax ActGovernment Orders

10:05 a.m.

Some hon. members

Agreed.

Income Tax ActGovernment Orders

10:05 a.m.

Some hon. members

On division.

(Motion agreed to.)

Income Tax ActGovernment Orders

10:05 a.m.

The Acting Speaker (Mr. Kilger)

When shall the bill be read the third time? By leave, now?

Income Tax ActGovernment Orders

10:05 a.m.

Some hon. members

Agreed.

Income Tax ActGovernment Orders

10:10 a.m.

Victoria B.C.

Liberal

David Anderson Liberalfor the Minister of Finance

moved that the bill be read the third time and passed.

Income Tax ActGovernment Orders

10:10 a.m.

Winnipeg North Centre Manitoba

Liberal

David Walker LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, I would like to take this opportunity to lead off the debate on third reading of Bill C-9. The bill proposes to implement a number of amendments to the Income Tax Act that were announced by the previous government.

Legislation to implement these measures was introduced last June but the bill died when Parliament was dissolved. For these measures to have legal effect new legislation must be passed now by this Parliament.

Let me be clear at the start by explaining why we are going ahead with this legislation. Simply put, these past tax measures were introduced some time ago and many were said to be effective immediately when announced.

Many thousands of Canadians took the government at its word and relied on these announcements when making important personal decisions. Many have, for example, used their RRSPs to buy or build houses. Other Canadians have relied on these announcements in making significant investments or hiring new employees.

The commitments these taxpayers have made are for the most part irreversible. Consequently, if we were to reverse course many people would be put in a difficult position, an unfair situation, and the trust that Canadians have in their government, a trust that we must always strive to keep and enhance, will be dealt a powerful blow.

However, we do not approach this question as prisoners of the previous government's actions or inactions, to put it more precisely. We have carefully reviewed the measures in this legislation and believe we can support them in their own right.

With this in mind, let me review briefly the measures in this bill. First of all, there are measures that affect individual taxpayers. One is the extension of the homebuyers plan by one year through to March 1, 1994. As I mentioned before, to renege on this program would cause undue and unfair difficulties to many thousands of Canadians.

As well, the legislation provides that starting next September certain higher income Canadians will have to make quarterly instalment payments on their taxes. At the same time some 300,000 low income filers will be excused from quarterly payments and required to pay only once a year.

Another area addressed by this legislation is one of the few small attempts of the previous government to foster job creation. The December 1992 economic statement announced a one-year program of relief for unemployment insurance premiums for increased employment by small businesses.

This program has come and gone unnoticed by the far too many Canadians who are unemployed in this country. Nevertheless, a number of small business people have taken the government of the day at its word. We shall honour the bargain as a matter of public trust.

The same considerations also apply to other measures targeted at small businesses. These include the temporary small business investment tax credit for purchases of eligible machinery and equipment from December 2, 1992 to December 31, 1993; the extension of the small business financing program to the end of this year, allowing small businesses in financial difficulty to refinance up to $500,000 of debt at low interest rates; the removal of any limits on holdings of small business shares in RRSPs and RRIFs; and the extension of the 35 per cent investment tax credit available to small Canadian controlled private corporations for eligible research and developmental expenses.

In addition, this legislation will give effect to some general improvements in the tax credit incentives offered to encourage Canadian research and development. As well, it removes the annual limits on investment tax credits. This limit introduced by the previous government in 1987 reduced the effectiveness of

the ITC incentives for rapidly growing firms, one of the engines of job growth in this country.

The bill also assists resource companies by allowing 100 per cent of the first $2 million of oil and gas development expenditures to flow through directly to shareholders and be deducted by them. As well, it gives these companies greater flexibility in managing their affairs by removing the mandatory deduction of Canadian exploration expenses.

Finally, the bill puts in place new, more flexible rules for investments in labour sponsored venture capital corporations.

We did not hold out the measures in the bill as any solution to the challenge of job creation, but we do recognize the attempt. Of equal importance we recognize the commitments made by Canadians who have relied on these proposed measures.

This bill should be viewed simply as a question of parliamentary housekeeping and therefore I urge members to support it.

Income Tax ActGovernment Orders

10:15 a.m.

Bloc

Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

Mr. Speaker, I welcome this opportunity to speak in the debate on third reading of Bill C-9. Previously, I had an opportunity to speak to this bill during the debate on second reading.

At the time, without in any way denying the benefits of certain measures contained in Bill C-9 as described by my hon. colleague, the Secretary of State for Finance, I warned the present government not to make the same mistakes as the previous government. These mistakes are, in a way, reflected in Bill C-9. Let me explain.

When we look at Bill C-9, we see that it contains measures which, although beneficial, indicate a lack of vision on the part of the previous government in dealing with a world that is becoming increasingly globalized. We often talk about globalization and opening borders, and we need measures to help our companies and workers adjust to these changes. These measures must provide a framework within which companies can be confident about developing their competitive potential.

During the debate on second reading of Bill C-9, I also warned the present Canadian government about the kind of measures it should take. The budget had not yet been tabled, and I asked the Liberal government not to make the same mistakes as the previous government, which had failed to take steps to bring public finances under control, and as you know, our public finances are a disaster.

So what has happened since the second reading of Bill C-9? First, the North American Free Trade Agreement was signed, but the present government failed to put in place measures to promote Quebec and Canadian companies or help them adjust to this new agreement, which includes Mexico. Instead, a big show was made of signing and implementing this Free Trade Agreement. The Prime Minister and his Minister for International Trade played their part, just to say they had managed to reopen the North American Free Trade Agreement and introduce certain provisions on labour standards and protecting the environment.

Our analysis indicates there was nothing of the sort. There was no bilateral or trilateral agreement with our U.S. or Mexican neighbours, no measures that would ensure protection for our social standards, our labour standards, and so forth.

Despite all that, the Prime Minister and his Minister for International Trade bragged that they had obtained everything and that they were now quite ready, with appropriate measures, to face the challenge of the North American free trade.

Meanwhile, and I had raised the issue at the time, the world was signing the biggest international trade deal since 1947, the eighth GATT Agreement. Once again, while the Prime Minister and the Minister for International Trade were boasting, sticking out their chests and thinking they had made exceptional gains on the North American level, they were losing on all fronts on the international level. The fact that this government did not shoulder its responsibilities could be very costly to Quebecers in the next few years.

For example, there is the farming industry, where Canada, despite all it was saying, and in the middle of a debate on Bill C-9, lost clause XI.2c)(i) of the GATT, which had made flourishing milk and agricultural industries possible.

The Liberal Party, when in opposition denounced the Conservatives for not having taken all the necessary measures to protect that clause. Well, the Liberals did exactly the same thing.

They bragged that they had obtained everything, even though one of the fundamental pillars of Canadian agriculture had been discarded by the GATT settlement.

We are not against the GATT settlement; quite the contrary. We are free-traders and we have always said so.

We are for improvement of trade on the international level. We are for economic growth linked precisely with our capacity to produce, to export and to capture international markets.

But it is almost indecent for the Liberal Party of Canada to tell us, Mr. Speaker, despite the fact that we are all intelligent people, that Canada won everything, at that time, and that

Canada, faced with market globalization, has put in place more consistent measures than those that are in Bill C-9.

Mr. Speaker, we also asked the Liberal government, when we considered Bill C-9 at first reading, not to repeat the mistakes of the past, not to repeat the mistakes of the Conservative government and to apply such a restrictive monetary policy, that at the peak of the recession, between the end of 1990 and the beginning of 1991, there was a 5 point difference between American and Canadian interest rates.

It was an unacceptable situation.

Therefore, we suggested that the government review the whole monetary policy to ensure a fairer balance between the desire to control inflation in the long term-which is a very commendable objective-and our short-term need to create permanent jobs that about 1.5 million Canadians, including 500,000 Quebecers, are still awaiting impatiently.

But instead of that, since first reading of Bill C-9, the government of Canada, that is to say the Minister of Finance, has appointed Mr. Thiessen, the right-hand man of John Crow, the former Governor of the Bank of Canada, as his successor.

At the time of this appointment, the Governor of the Bank of Canada restated the monetary policy of his predecessor, which consisted in struggling against inflation at any rate no matter if, in the short term, we were following the same pattern the Liberals had denounced before. And yet, the need for jobs is desperate.

Mr. Speaker, from the first through the second readings, we have been asking the government not to repeat the errors made in the previous budgets, the Conservative budgets and in the present one, which shows a lack of long-term vision.

Not only did the Liberal Party of Canada repeat the same mistakes, but it has done worse and that is where the actions of the government are most reprehensible.

When I discussed Bill C-9, I would never have thought that the first Liberal budget would be so terrible, so outrageous, that it would be even more so than the most dreadful Conservative budget.

Let us recall the facts. I think it is important when considering a budget, when one is about to pass budgetary measures, to remember that this government without vision has taken similar measures, sometimes harsh ones, as a result of Bill C-9.

First, cuts of $5.5 billion in unemployment insurance over the next three years, by reducing the number of insurable weeks of employment and by targeting the poorest in years to come.

As you know, for years members of this government denounced, not lightly but in the strongest possible terms, any Conservative initiative that they deemed antisocial. For years, Liberals have practically portrayed themselves as leftists. They portrayed themselves as champions of the poorest in our society; yet, as soon as they came into office, they slashed unemployment insurance by $5.5 billion. Since last week, desperate workers, unemployed people actively seeking employment and trying to regain their dignity, have come to realize that they have been fooled by this government. I understand that the budgetary measures reducing the number of insurable weeks have really been applied only since last week.

Since then, in my own riding of Saint-Hyacinthe-Bagot, I have met desperate people. Those people are desperate because they had put some hope in this government and in the measures announced in the red book, but mainly measures announced elsewhere because the red book is nothing but a rag when assessed on its own merits. Those people had a lot of hope and saw this government, unlike the previous one, as a government that had a long-term vision, one that would create permanent jobs and would give them back their dignity.

For instance, I think of Yan, 20 years old, who wants to finish high school but who, because of this careless government, its laxness and the fact that it tends to consider every request of Quebec regarding decentralization of labour training as a whim, because of that, Yan, 20 years old, living in the riding of Saint-Hyacinthe-Bagot, will not be able to finish his job training. There is also the case of Jean-Yves, 45 years old, who will not be able to get training this year because of red tape and delays. He was told perhaps next year or in two years, depending on the federal financial support that has already been cut in several areas.

Claude, 25 years old, has a university degree and is looking for a job, but he has just been penalized by the unemployment insurance reform. Claude, 55 years old, who lives in Quebec, is the victim of a plant closure, is unemployed and has been on social assistance for a week. Last week, I was really shocked by the story of Jacques, 35 years old. Unemployed, he was given training by the federal government, but by the time he entered the labour market, the training he had received was completely outdated and would not meet business needs. I met many people in that situation. Every week, the movement Action-chômage meets with many people in that situation, such as Rachel, 40 years old and a mother of two children, who is on welfare.

Instead of helping those people by introducing humane measures such as the ones we need right now to allow these people to go back to work, to get adequate training and to obtain permanent jobs, the members opposite, the Liberals, who were saying that they wanted to give back their hope and dignity by creating

jobs, instead made cutbacks in unemployment insurance. I consider them antisocial.

Another measure that I did not expect from a first federal budget, following the speech that I delivered about the Senate, is the lack, in that first federal budget, of concrete measures to promote job creation, except for the infrastructure program. We have nothing against the infrastructure program, but that program only meets about 3 per cent of market needs. There are 1.5 million unemployed in Canada, including 450,000 in Quebec, and all we have to offer them are 45,000 jobs. Mr. Speaker, these 1.5 million unemployed Canadians will fight for the 45,000 jobs available; there will be violence.

I also noticed that since the first and second readings of Bill C-9, this government has taken no concrete measure whatsoever to create jobs, permanent jobs in reasonable quantity and of reasonable quality. Everything concerning the creation of jobs has been dealt with in a shameless fashion. I am talking here about the Job Development Program where the government recently made some cuts.

Another measure in the first Liberal budget which I could never have imagined coming from the Liberal Party of Canada is the abolition of the age credit. This government, those Liberals shamelessly reduce credits for seniors, they who used to denounce in the strongest possible terms any intention on the part of the Tories to take away from the seniors or any attempt to de-index their pensions or even cut them as was the case in the beginning. I thought these people were sincere and I now see that they never were. Under the guise of a social democratic approach, a humanistic approach, they have fooled the people of Quebec and Canada, and they will pay for that.

Nor was I expecting a $2.5 billion cut over three years in Established Programs Financing, especially in the portion earmarked for post-secondary education. Members on the other side of the House-I am looking to see who is present today-keep talking about education, they keep telling us that education is of extreme importance in order to face present challenges, to face the growing competition that results from the globalization of trade. But they cut into funding for post-secondary education.

Nor did I expect that the government would renege on a commitment made at the beginning of last year by the Liberal Party of Canada, maybe even in 1992 if I remember correctly the first statements regarding social housing. When the Conservatives cut the $600 million budgeted for the construction of new social housing units, the Liberals said that they would restore this financing, that they would start afresh with a new social housing development program. When they assumed power they quickly forgot that promise, and ignored the 350 persons who demonstrated in Ottawa three months ago to ask for decent housing conditions, for a dignity they lost a long time ago. These 350 persons were spending anywhere from 30 to 50 per cent of their income on housing, at least. This is intolerable, and even more so when you hit a stone wall like the one that the Liberals put up.

After giving hope to low income people I consider it indecent that the Liberal government is not coming through with a program, thus dashing the hopes of these people.

Analysing Bill C-9 at third reading gives me a chance to discuss, as I did at first reading, the whole vision of the government that tabled this budget. I realize the government does not have a vision and will never have any. Why? It is the same basic question over and over again. Everywhere in the world, in any democracy, when there is no clear and democratic law providing for public financing of political parties, there is always the risk that the ruling party, upon taking control, will be unable as a government to make real decisions, good decisions such as abolishing all the fiscal inequities of our system.

I remember very clearly that when Liberals were the Official Opposition they denounced almost daily the inequities of the federal fiscal system. They denounced tax evasions. They even denounced family trusts. They were probably trying to win over supporters of the New Democratic Party, which has almost disappeared since then. Along with members of the New Democratic Party, Liberals denounced the fiscal inequities of the Canadian fiscal system.

However, since the last budget, nothing was done to redress the situation. Family trusts still exist enable very rich families to avoid paying between $350 million and one billion dollars a year to the federal Treasury. The same is true of numerous agreements between Canada and countries considered tax havens. They still sign the same kind of agreement; they still have regulations allowing businesses with parent companies in such tax havens to pay hardly any taxes on their profits, while the losses they incur in these tax havens can be deducted from profits made in Canada.

Knowing what the position of the Liberal Party of Canada has been in the past, I cannot understand why they are doing the very thing they were denouncing when they were the Official Opposition, and why, after deceiving us for so many years, they are now totally lacking in vision and concern for social justice.

In his recent budget, the finance minister did nothing along the lines of what we recommended during the first debate on Bill C-9. Worse yet, he managed to do even worse than all the previous Conservative budgets. Within three months, his budget, totally devoid of any sense, lost all credibility; even

thoughhe cut $7.5 billion in social programs, the financial world reacted very negatively to his budget.

This budget harms the poor and the financial world. In financial circles, people say that the government has lost control of the public finances, that it will not be able to bring the deficit down to 3 per cent of the GDP as it has been promising for so long. Finance people are not disconnected from reality, they have a very good analytical mind, just like the Bloc Quebecois. They know that the tax revenue projections in this budget are as unrealistic as those contained in all of the previous government's budgets. They know full well that since 1988 or thereabouts, each time Canada's GDP increases by 1 per cent, federal revenues do not increase by 1 per cent, but only by a mere 0.4 per cent.

In other words, given the growth of the underground economy and the whole range of factors tied to the elasticity of tax revenues compared with the rate of taxation-I will spare you the technical details-economic growth in Canada results in lower tax revenues. Financial circles have their own highly skilled analysts who also know full well that this budget is not realistic and they have proven this over the past month. On reviewing all of the short-term and medium-term financial data, one can see the extreme volatility of interest rates, for example. The spread between interest rates on 90-day Canadian Treasury Bills-in my view, the most telling indicator of how the budget was received, of the economic situation and of the government's state of indebtedness-as compared to U.S. bills, was 213 points yesterday, when a mere two months ago, prior to the release of the Finance Minister's budget, the spread was only 40 points.

It is also clear that foreign investors have lost confidence in the Canadian dollar. A similar loss of confidence was experienced while the Conservatives were in office, but the situation has taken a turn for the worse under the Liberals.

On the one hand, then, the budget contains some extremely unpopular measures which target the least fortunate, persons who should not have to suffer any more than they already do, while on the other hand, it caters to financial circles. The Canadian government will have to pay an additional $3 to $5 billion at the end of next year in extra interest charges. The government is responsible for the increase in interest rates. It has turned its back on those who have recently renewed, or who will be renewing their mortgage shortly, by allowing interest rates to creep upward. All of this stems from the lack of credibility of the latest Liberal budget. This budget is as lacking in credibility as any of the previous Conservative budgets.

The situation is very sad indeed, Mr. Speaker, and others share our opinion. The fact that the Dominion Bond Rating Service Ltd recognized that with this budget, Canada had failed to gain control over its public finances and that consequently, it lowered Canada's rating from AAA to AA+ is significant indeed.

Considering that Scotiabank, Burns Fry Limited, the Association des manufacturiers du Québec , the Bank of Montreal, the Conseil du patronat du Québec , hardly a proponent of sovereignty, Globe and Mail analysts and the Financial Post all agree that the latest Liberal budget is as damaging as the previous Conservative budgets and totally lacking in credibility, then there has to be some truth in what we are hearing, Mr. Speaker.

When you are down to saying, as the Prime Minister did in this House on April 13, that the budget can be set aside, that what will determine what cuts and what measures to control spending need to be done and how public funds are to be managed is not that budget, but non-budgetary measures, even if the Prime Minister is somewhat disparaging about the latest Liberal budget, there is a semblance of truth somewhere in there.

This means that the most recent Liberal budget is not only as bad as the Conservative budgets were, but actually worse, because never had a previous Prime Minister of Canada run down the budget tabled by his Minister of Finance as much as this Prime Minister has.

So, and I will close on this, third reading on Bill C-9 has allowed me to see the progress made in the implementation of the measures, to see what actions this government has taken, after the alarm I tried to raise in my speech when Bill C-9 was read for the second time. I realize in the light of the actions taken, and the last budget in particular, that not one of the sensible, rational, well-thought-out recommendations made by the Official Opposition, recommendations that were mindful of social justice, human dignity, seniors, as well as young people actively looking for work and the unemployed, were taken into account for the action plan developed following the debate at second reading of Bill C-9.

I was following the goings-on in the federal political arena long before becoming a member of Parliament and before having the privilege of debating with you and I used to think that the Conservatives were the most right-wing politicians in Canada's political history. I considered their actions to be inhumane, senseless measures that did nothing to address the problems resulting from overliberal budgeting or the Canadian government financial difficulties. I felt that the social price of these measures, especially the price to the less fortunate segment of society, was too high.

Now I realize, Mr. Speaker, that the Liberal Party of Canada is even worse. Their ways are more underhanded. They cleverly wrap up right-wing, inhumane measures that hurt the most disadvantaged people in a progressive discourse, apparently intended to be open, humane, conciliatory, a discourse with a

distinctly economic flavour to it I would say, but based on economics of the modern kind, where economic analysis is combined with a profoundly humane sociological approach. It takes an anti-poverty stand. It takes a very economic approach, but a new kind of economy, which combines dollars and cents with a very humane sociological approach.

So it covers its inhumane acts with its very humane-sounding rhetoric in order to deceive the people. From the election campaign until today, we have seen that this government has no shame about fooling the people as it has done.

I will quote you a passage from an article by Laurent Laplante published in Le Droit on April 12. Speaking of the ineffective measures being taken by the Liberal Party of Canada to support economic growth, he says: ``The Conservatives, by concentrating their whole attention on the inflationary threat, finally dragged Canada into the first fully made-in-Canada recession. Mr. Martin has decided to do better; he wants to make this recession go on forever.'' I find that this passage says a lot about the difference between the Conservatives and the Liberals and I hope that we will soon be out of this regime with our heads held high, with dignity and a real plan for society, a plan to create jobs, a plan for full employment in a sovereign Quebec that is open to the world and takes a responsible attitude to the challenge facing us in an era of global markets.

Thank you, Mr. Speaker for giving me this opportunity to talk about what this government has done since the first reading of Bill C-9.

Income Tax ActGovernment Orders

10:45 a.m.

Lethbridge Alberta

Reform

Ray Speaker ReformLethbridge

Mr. Speaker, certainly it is a privilege to be able to make a few remarks on third reading of Bill C-9, an act to amend the Income Tax Act.

I must confess that I have certain mixed feelings about addressing the bill. It introduces measures that were introduced by a previous government, and here we are today putting the measures into law. In a sense it is kind of a reverse process.

When a government enacts or wishes to carry on some type of policy or objective it should move the legislation into the House, pass it and then implement the programs. We are kind of following a reverse procedure that certainly gives me mixed feelings in my legislative responsibilities. However it has happened and we are here today examining the bill as such.

On the one hand it would seem only prudent that we support the bill. It is generally referred to as a housekeeping bill. As I have said, much of the policy in it has been enacted during the past year and we are just getting around to proclaiming the law today.

In my presentation I will not pretend for a minute that it would be anything but irresponsible of us to oppose these measures merely on principle because of the circumstances. On the other hand I wish to make clear there are some principles to which I am strongly opposed, as is the Reform Party.

The Income Tax Act, as we all know, has become a very unwieldy monster symbolizing what many Canadians see as the problem with government in general and that in general there is just too much government for all of us.

The last attempt by a government to amend the text and change it led to other kinds of reforms. It led to an income tax surtax, an alternate minimum tax, tax deductions, tax credits and the complicated GST that is before the finance committee at the present time. All these have rather confused the matter.

We as Reformers believe it is time to review the Income Tax Act and the variety of methods and means by which we collect funds to operate government. We think it is most important at this point in time. Even the forms need revision.

Today I was given an article from a newspaper about the fact that Revenue Canada workers have been issued a memo inviting them to consult with some of their colleagues in filling out their tax returns. The memo says: "The time for filing your income tax return is approaching. Should you require any information or assistance in the preparation of your return, you may contact one of the employees whose name and location appear below".

Not all citizens of Canada have that privilege, but the point we want to make is made by the writer of the article and others who have commented on it: if tax department employees cannot figure out how to fill out their own returns, imagine how the rest of Canadians feel. That is a very apt comment under the circumstances.

Income Tax ActGovernment Orders

10:50 a.m.

An hon. member

Make all MPs do it here. That will help.

Income Tax ActGovernment Orders

10:50 a.m.

Lethbridge Alberta

Reform

Ray Speaker ReformLethbridge

Right. That is what should happen here, to see if we need consultation or not.

That is an impression. It is certainly a comment on the complications of the Income Tax Act. I want to speak about that in my remarks today and where we feel the process should go in reviewing the tax collection system of Canada.

I would like to make clear there are some good aspects to the bill. We would like to see the government continue with some of these programs and certainly improve on them as we proceed in the legislative session.

We know young people today cannot afford to buy homes because they are paying too much tax. We should look at some of the details. While total incomes per capita have increased 170 per cent in the last 10 years total direct personal taxes have risen

some 235 per cent. How are we doing with respect to other countries?

Canadian government revenues as a percentage of gross domestic product have increased from 24 per cent in 1950 to almost 43 per cent in 1990. Also six years ago the tax burden in Canada was approximately 20 per cent higher than that of the United States. By 1992 it had risen to 25 per cent and was projected to increase to 30 per cent by 1997. My recent reading of statistics indicates that we are at that point today. It is not just young people who are feeling the tax burden; it is all Canadians.

The homebuyers plan that allows those saving for homes to withdraw from their RRSPs to make down payments is and was a good idea. It not only puts the dream of home ownership within the grasp of more people. It provides economic spinoffs all the way down the line.

A poll released in September 1993 by the Canadian Real Estate Association confirmed that the homebuyers plan was a big success. The Angus Reid poll was conducted in five major Canadian cities. First of all it found that four out of five buyers who used the plan said it was an important factor in their decision. It was especially important for 86 per cent of first time buyers.

Second, nearly half or 49 per cent said it would have been unlikely they would have been able to buy their homes without the plan.

Third, the plan helped a significant number of home buyers surveyed: 22 per cent of all first time home buyers and 17 per cent of buyers generally.

Fourth, repaying their RRSPs is a high priority. Eighty-one per cent of respondents said it was important to repay. Fully 88 per cent said they would repay at least at the rate required by the plan. Only 4 per cent said they would not repay and would declare their withdrawals as income.

Fifth, home ownership was seen by 84 per cent of those surveyed as being at least somewhat important to retirement planning. Fifty-four per cent said it was very important. Owning a home was rated by far the most important source of income for retirement.

Sixth, the Department of Finance has already reported that the numbers have been very impressive with nearly 200,000 participants to the end of July 1993. These are indeed impressive numbers. As we well know the number of housing starts is a reliable indicator of the overall health of the economy.

The housing industry directly employs, to name a few, general contractors, carpenters, electricians, plumbers, drywallers, painters, landscapers, building product suppliers, real estate agents and lawyers. We are encouraged by such measures as the homebuyers plan and the results it has had. I am sure the limited extension of that program will be of benefit to many other Canadians.

In more general terms it is our hope the new government makes meaningful, effective reforms of the Income Tax Act, as I have already mentioned, with an aim to simplifying the process and certainly making it less complicated and fairer.

We in the Reform Party support a taxation policy that has as its principle the objective of raising funds to pay directly for government programs. We support a balanced budget concept. If we look at the history of the act it was originally intended to collect taxes to ideally pay for the services provided by government. Somewhere along the line we have lost the original intent of the tax system and have allowed it to become a tool to influence the behaviour of people. As well we have used it as a social reform instrument rather than a means by which to collect funds to pay for services. That is inappropriate and has moved us away from a rational responsible budget process.

I say in a general sense now, and certainly some of my colleagues will talk about it in detail as the weeks proceed. We should be working toward a more simple, visible, proportional system of taxation: the flat tax that many people talk about or the single tax. We believe it could be fair, more applicable, more easily administered and more easily understood by the people who have to take responsibility for sending revenue to government each year.

As we sit here today to assent to the amendments before us that were proposed by the last government, I cannot help but be a little cautious in my optimism. All of us in the House should not need reminding of the resounding message sent to the last government on October 25. We must be responsible in our deliberations and make sure we are responding to the needs of Canadians, not to our needs as either a government, an opposition party or individual MPs. We cannot allow ourselves to slip into those ways even in the slightest.

I call upon government members to assure us they will give reform of the Income Tax Act the priority it deserves. In the hearings of the finance committee on a variety of proposals to change the GST, to fix the GST or on other options, one point made by a major number of presenters was that we needed to look at all taxing instruments of government and come up with a plan that is fair, more co-ordinated and more responsive to the needs of Canadians. At the present time they feel they are not co-ordinated. Often because of that some people in our economic system are taxed to a greater extent than others.

If the government makes a commitment to make the reforming of the Income Tax Act a high priority, it shows us as the opposition party that it is making good on its promise of a new way of doing business. It also sends a strong message to the provinces that they should follow the lead of the federal government. Most important, it shows Canadians that there is hope for a new way of government. We cannot let fear of media or any

other kind of pressure inhibit our effort at reform. We have to try.

In closing I take a moment to remind my colleagues in the House that there is a big, fast moving and exciting world beyond these walls. In my brief experience in this House I am often amazed at how this simple fact gets lost in the daily shuffle of papers this institution is confronted with. We often get distracted from some of our major causes or our major concerns. However we have to recognize there is another world out there where they are throwing around words and we are doing it in this House as well. They are words like information superhighway. We as legislators must strive to keep up and be ready for change.

I leave this portion of the debate with this final thought. Failure is not fatal, but in these times failure to change might be.

Income Tax ActGovernment Orders

11 a.m.

The Acting Speaker (Mr. Kilger)

Is the House ready for the question?

Income Tax ActGovernment Orders

11 a.m.

Some hon. members

Question.

Income Tax ActGovernment Orders

11 a.m.

The Acting Speaker (Mr. Kilger)

Is it the pleasure of the House to adopt the motion?