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House of Commons Hansard #53 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was police.

Topics

Excise Tax ActGovernment Orders

3:50 p.m.

Reform

Jim Silye Reform Calgary Centre, AB

Mr. Speaker, I will be the only caucus member for the Reform Party addressing the bill today.

I rise today to address Bill C-13, an act to amend the Excise Tax and a related act. The bulk of the bill offers relief to small business, charities, health care users and rabbit growers in paying their GST. Yes, that is right, they now get back the money they paid in taxes on rabbit food.

The bill makes life easier for them or permits them to pay less. It makes permanent administrative practices already in place. One section, however, prevents people who owe over $50,000 GST to pay by cheque on Friday afternoon and get a weekend of extra interest credit because the cheque does not clear until Monday.

The only contentious section concerns financial institutions that have been trying to get their GST bill lowered by claiming that a section of the act is ambiguous. The ambiguity was discovered by tax lawyers, which justifies their high pay. It would take several paragraphs to explain the highly technical nature of the ambiguity. However the weak position of the banks is revealed by the fact that for four years they paid between $150 million and $300 million under protest. The new bill removes the ambiguity and the money stays with the government. This is a very good and sound decision under the current economic circumstances.

It is particularly refreshing to note that Bill C-13 offers relief to rabbit growers in the country. Now all the Minister of Finance has to do is magically pull out one of these rabbits from a hat and balance his budget.

My party supports Bill C-13 but it would like to point out that it represents yet another example of a federal government tinkering with an old idea that does not work.

Since its inception the GST has been a burden for business to collect on behalf of the government the moneys owed and also for the government to administer. With its countless exemptions and high rate, the GST has become symbolic of the country's chaotic tax system causing confusion and resentment among Canadians.

I have said this before and I will say it again. Canadians pay too much in taxes and want the current system overhauled, not just tinkered with.

The problem is that governments have been spending in ways that ignore both the need for a strong economy and the dangers of continued deficit spending. The government, like those before it, relies on the revenues generated by taxes like the GST and the new tax sources to fund their programs and make interest payments on the debt.

If the federal government were to truly attack the debt and not just nibble around the edges as is currently the case, tinkering with rabbits, interest payments to service it would be lower and leave it with more revenue to fund other programs.

This would give the federal government the ability to reduce its current tax hauls from hard working Canadians and give them back their disposable income which will then be spent more efficiently and effectively. They know how to spend their money on their needs better than the government knows how to spend it on their behalf on what it perceives to be their needs.

With more disposable income in the hands of taxpayers, people in the private sector will stimulate the economy creating jobs using at risk money that motivates and not government money which wastes.

Continued government overspending of debt capital, not equity capital, on rehashed programs from the 1960s and 1970s has further encouraged taxpayer resentment, unemployment, high deficits and debts. In today's world, real sustained growth depends on trade, investment and strong industry.

Over the past two decades, the country has lost the competitive edge that it once held in the world marketplace because of poor government policies combined with overspending and high taxation.

As Mr. David McLean from the Vancouver Board of Trade has said:

Foreign investors do not just look at the costs of the goods and services tax and provincial sales taxes, they add them all up. If the cost is too high then capital will not come to Canada.

This is why we must re-examine all taxation, stop tinkering and put in place a simple, comprehensible system that will take the country into the future, leaving the old policies behind.

Enough reruns. Let us create an entirely new program. Canada needs a proportional system of taxation. The Liberal member who spoke first to this bill today mentioned that the finance committee is looking for a replacement for the GST as promised by its leader. One alternative it should consider is a proportional system of taxation or, as is sometimes otherwise referred to, a flat tax.

The present system of taxation is too complicated, too high and too unfair. These factors in combination with consistent government overspending are stifling our economy. I recommend the implementation of a proportional tax on individual and corporate income.

A proportional tax is the only way to increase the revenue side of the budget, remove the incentives for the underground economy, restore fairness and, most important, stimulate economic growth, which is a priority of all of us here.

While we are fighting with our high annual deficits, the high debt and the interest on that debt, we could increase the disposable income both for corporations and individuals through a completely new taxation system. This would help speed up the process of reducing the deficit to zero and starting to supply some surplus funds to the debt. This is the kind of signal, the kind of message that will really inspire and encourage this country to be a haven for investment as it used to be.

This concept is not new to the House or the government. It was the member for Broadview-Greenwood who sits opposite me who initially, I understand, supported a single or flat tax. He wrote in his book The Single Tax : ``Lower marginal rates and more take home pay would be an incentive to work harder and smarter. The new incentives plus elimination of avoidance and evasion would lead to this tax taking in more revenue''.

I unequivocally agree with the member for Broadview-Greenwood. I am very impressed by his intelligence and insight on this subject.

The objective of this tax would be threefold. First, it would simplify current complicated tax forms so that all Canadians could understand them. I challenge the 295 members of the House for this taxation year to fill out their own income tax forms by themselves and with no help go through the form. Whatever they come up with then send it in to the Minister of National Revenue and have two independent people within that bureaucracy figure out their tax return. I would not be surprised if over half the returns had two different answers with a lot of mistakes which would prove that is very difficult and complicated. Nobody understands the 2,300 and some pages of the Income Tax Act.

This would also increase savings for the Department of National Revenue in the collection of taxes and the monitoring of all personal and corporate tax exemptions.

Second, it would restore equity in the tax system, eliminating the perception that one group of taxpayers is favoured over another by setting a lower fixed rate of tax over a certain threshold for individuals. Corporations would also pay a low fixed rate of taxation under this reform system.

Equity is when people who make relatively the same amount of income pay relatively the same amount of tax. By eliminating yesterday's incentives, which we refer to today as loopholes for the rich people, we can ensure that we capture 15 per cent or 20 per cent, whatever the flat rate would be of that income. That is what would increase the revenue for the government. We could give a high enough tax deduction for the first $12,000 or $15,000 of earned income so that nobody has to pay tax on that. That would also relieve a lot of the pressure on our social programs.

It would restore integrity and bring effectiveness to the system by eliminating the need for so many tax concessions and loopholes like those that the government is trying to close with Bill C-13. We waste our time on old laws and old rules that are not working.

The Liberal government must stop following the same path as its predecessors and show some initiative. Stop just talking the talk and walking the walk. Take some tough action and act instead of talking about acting by setting up 15 new committees. It will take six months before they come back with a recommendation which the House will then have to review for a further six months or a year. Let us take some action.

By maintaining the status quo with taxation and programs like infrastructure and the Katimavik II youth job program, Canadians are seeing nothing new from this government. When will this government wake up and realize that you cannot keep taking from Canadians higher and higher taxes and borrow indefinitely in the bond market. One of these days and soon somebody will not buy the bonds.

My hon. colleague for Beaver River said in the House yesterday something which I believe is worth repeating: "Old songs by new singers are still old songs".

The Liberal red book for example is now becoming an old song book which offers a two-track policy of growth which will, and I quote from the book, "make possible a monetary policy that produces lower real interest rates and keeps inflation low". The Liberals promise that their policies, measures, budget and all the necessary budgets made to date will get the deficit to 3.5 per cent of the GDP, will keep the interest rates low and we will have low inflation. Since the budget was released the Bank of Canada rate has jumped to a two-year high of 6.26 per cent, an increase of 2.16 per cent. Interest payments on our debt will now increase which will likely force businesses and consumer rates to follow as well in the marketplace.

As a former professional football player, I would like to point out that the current Liberal government playbook is not working. It is time to write a new one.

I finally have the attention of somebody from the government side. He finally put down the trivia that he was reading and is now listening to me. I got his attention.

The playbook is not working. It is time to write a new one, a dynamic one. Let us create a new system of taxation which is fair and simple for all Canadians, that will put to rest the need for band-aid bills like Bill C-13. It is our collective responsibility to develop new ideas and move the country toward a future based on prosperity and away from the old school ideas that just do not work.

I hope that in the Standing Committee on Finance where new ideas are being presented by witnesses from all across the country that the new proposals being suggested for a replacement for the GST are really and truly listened to and that the committee will not be just a job for backbenchers to keep them out of the way while cabinet occupies itself on the greater issues of the country.

There have been some worthwhile suggestions put forth in that committee. Some good solutions have been put forward in that committee. It comes from non-politicians, the intelligent people in this society. They have put forth some good ideas and we should be listening to them. If they do and it is on a non-partisan basis, I look forward to a report in the House that comes to you, Mr. Speaker, and says "the replacement for the GST is-"and that it has the unanimous consent of all members of the three parties in the House who are on that committee. I look forward to that and I hope it will be that conclusion.

In conclusion, easing the GST burden on the public is highly desirable and we should support all such legislation. I encourage the federal government to examine the benefits of a completely new system of taxation, a proportional tax which would remove the need for undesirable taxes like the GST and put money back into the pockets of hard-working Canadians.

The Reform Party will offer any assistance it can to move this country toward a proportional system of taxation and eliminate the need for debate and talk by the bureaucracy and politicians on useless bills like Bill C-13 when there are much better solutions to the problems, new solutions to new problems.

Excise Tax ActGovernment Orders

4:05 p.m.

The Deputy Speaker

Is the House ready for the question?

Excise Tax ActGovernment Orders

4:05 p.m.

Some hon. members

Question.

Excise Tax ActGovernment Orders

4:05 p.m.

Liberal

Don Boudria Liberal Glengarry—Prescott—Russell, ON

I rise on a point of order, Mr. Speaker. I think you would find unanimous consent for the bill to be dealt with immediately at committee of the whole.

Also, you would probably find unanimous consent to have the bill immediately dealt with at third reading after the bill is completed at committee of the whole.

(Motion agreed to, bill read the second time and, by unanimous consent, the House went into committee thereon, Mr. Kilgour in the chair.)

Excise Tax ActGovernment Orders

4:10 p.m.

The Chairman

Order. House in committee of the whole on Bill C-13, an act to amend the Excise Tax Act and a related act.

Shall clause 1 carry?

On clause 1:

Excise Tax ActGovernment Orders

4:10 p.m.

Vancouver South B.C.

Liberal

Herb Dhaliwal LiberalParliamentary Secretary to Minister of Fisheries and Oceans

Mr. Speaker, there is an amendment to clause 1 that I would like to put forward.

I move:

That clause 1 of Bill C-13 be amended by striking out line 11 on page 1 and substituting the following:

"come into force on December 17, 1990 and any regulations made for the purposes of the definition estimated federal sales tax in subsection 121(1) of the Excise Tax Act as enacted by subsection (1) may have effect from that date".

Excise Tax ActGovernment Orders

4:10 p.m.

The Chairman

Shall the amendment carry?

Excise Tax ActGovernment Orders

4:10 p.m.

Some hon. members

Agreed.

Excise Tax ActGovernment Orders

4:10 p.m.

Some hon. members

On division.

(Amendment agreed to.)

Excise Tax ActGovernment Orders

4:10 p.m.

The Chairman

Shall Clause 1, as amended, carry?

Excise Tax ActGovernment Orders

4:10 p.m.

Some hon. members

Agreed.

Excise Tax ActGovernment Orders

4:10 p.m.

Some hon. members

On division.

(Clause, as amended, agreed to.)

Excise Tax ActGovernment Orders

4:10 p.m.

The Chairman

Shall clause 2 carry?

Excise Tax ActGovernment Orders

4:10 p.m.

Some hon. members

Agreed.

Excise Tax ActGovernment Orders

4:10 p.m.

Some hon. members

On division.

(Clause 2 agreed to.)

Excise Tax ActGovernment Orders

4:10 p.m.

The Chairman

Shall clause 3 carry?

Excise Tax ActGovernment Orders

4:10 p.m.

Some hon. members

Agreed.

Excise Tax ActGovernment Orders

4:10 p.m.

Some hon. members

On division.

(Clause 3 agreed to.)

Excise Tax ActGovernment Orders

4:10 p.m.

The Chairman

Shall clause 4 carry?

Excise Tax ActGovernment Orders

4:10 p.m.

Some hon. members

Agreed.

Excise Tax ActGovernment Orders

4:10 p.m.

Some hon. members

On division.

(Clause 4 agreed to.)

Excise Tax ActGovernment Orders

4:10 p.m.

The Chairman

Shall clause 5 carry?

Excise Tax ActGovernment Orders

4:10 p.m.

Some hon. members

Agreed.

Excise Tax ActGovernment Orders

4:10 p.m.

Some hon. members

On division.

(Clause 5 agreed to.)

Excise Tax ActGovernment Orders

4:10 p.m.

The Chairman

Shall clause 6 carry?