Debates of May 3rd, 1994

Supply

[Gérard Asselin, Bloc, Charlevoix, QC]

Mr. Speaker, first of all, I must admit that the hon. member for Matapédia-Matane did listen very carefully to my comments about seniors.

As I said earlier, seniors pay taxes from the day they are born until they retire. Even after they retire, the government still finds a way to claw back by taxing any income of $26,500 or more they derive from their pension funds, their RRSPs and other financial resources they managed to set aside while raising their families.

Today's families are a little smaller than they used to be; families with 9, 10 or 12 children were not uncommon when I was growing up. Today, they are not as common but it was hard for the man who was the sole income-earner in his family to support his family and save some money for retirement at the same time.

I also said, and I am sure that in my riding of Charlevoix, from Petite-Rivière-Saint-François to Baie-Comeau, some seniors have enough money to survive, but many more were farmers, worked for minimum wage, or had to leave the region, while the mother had to raise the children on her own.

Of course, as the hon. member for Matane said, the committee we want to set up could look at family trusts, for instance, and also look at the additional corporate revenues the government does not want to tax, preferring to tax capital.

We have our work cut out for us. We have been elected for the next four years and I think we in the Bloc Quebecois must not be prevented from doing our job. Liberal members opposite often accuse us of criticizing government actions. I hope they do not want to prevent us from doing our job.

I am convinced that the silent majority is not here in this House but in people's living rooms; they may be watching us on TV and when they see us on the street, in stores or in other places, they congratulate us and tell us they agree with our comments in this House.

I did not complete extensive studies in accounting and I am not a tax expert either. I am a construction worker like most people in my riding and that of Matane. I am pleased to represent them and be able to address them as equals.

So, Mr. Speaker, I think I have taken enough time to respond to my colleague from Matane-Matapédia and I will let others take part in the debate.

[David Anderson, Liberal, Minister of National Revenue]

Mr. Speaker, I am pleased to have this opportunity to speak to hon. members on a subject that is close if not always dear to the hearts of Canadians.

Taxes mean jobs for the unemployed, hospital beds for the sick, better schools for our children. They affect the quality of life of our seniors and the protection and support of Canadians in need.

They affect modern transportation and communication systems, investment and competition. They concern workers' compensation, pension plans, health and safety, environmental and labour standards.

Taxation gives governments the resources needed to provide Canadians with the social and economic programs that they need and demand. Ultimately, the discussion of taxation is a discussion about our prosperity as a society.

Taxation has traditionally been a contract between citizens and governments to deliver these programs in exchange for the moneys that Canadians give as a result of their hard work and based on their financial ability.

In recent years we have seen the viability of that contract renegotiated as reflected in the phenomenon of the underground economy and also in smuggling. Faith in that contract and the trust that is needed to maintain it will dissolve unless governments give Canadians the best possible value for their tax dollars.

The government is determined to act in such way that Canadians again trust their government. Without that trust, we will be unable to provide the necessary programs, to reduce the deficit and eventually to lower the tax burden of Canadians.

We must let the public know what is going on, what the choices are, and why we are making those choices.

As revenue minister my commitment is to ensure at all times the integrity of our voluntary tax system. I recognize public confidence in our tax system is something that we have to earn. I and all members of the Department of National Revenue work every day to do just that.

We are working to reduce the burden of compliance, to ensure Canadians get real value from the revenue administration, and to guarantee fairness throughout the tax system.

Revenue Canada has come a long way in its efforts to improve administration.

We believe that we must be attentive to the needs of individuals and companies. We must adapt to a constantly changing society and to the business community.

We must be fair and equitable and I believe we are. We must be transparent and we are. We must listen to Canadians and we do.

Specifically we have a problem resolution program to help find solutions for taxpayers with difficulties. We have a voluntary disclosure policy for those with special problems, particularly problems of non-compliance. We have a declaration of taxpayers' rights to ensure equity in the system.

We listen on an ongoing basis and we consult with the provinces, the small business advisory committee, the large business advisory committee, the charities consultative committee, the seniors advisory committee, and the members of Parliament who act quite properly on behalf of their constituents in bringing problems or difficulties to my attention.

Tomorrow marks six months, the half-year of my time as Minister of National Revenue. In that period 1,165 letters have come to me from elected officials. Virtually they have been exclusively from members of the House and senators, although occasionally I get letters from members of provincial legislatures, mayors and city councillors.

I repeat that it is quite right and proper for representations to be made to the Minister of National Revenue by members of Parliament. I assure members of the House in all parties, all of which have sent me correspondence about concerns of their constituents, that all such letters are treated by us as fast as we can and as thoroughly as we can. The reviews we give to the cases are as fair as possible. I should add that in every case the decision ultimately rendered is entirely in accordance with taxation laws.

We have introduced in Revenue Canada a very successful E-file program that processes returns more quickly and gets the money owed to Canadians back to them faster than ever before. At the present time returns or refund cheques on E-file run about 11, 12 or 13 days. Of course that is an average. In some cases we get cheques out to people within the week.

Through the administrative consolidation of customs and excise and taxation we have created opportunities for significant administrative savings for taxpayers. This one measure alone, Bill C-2, the first substantive bill introduced in the House after the new government took office, has already resulted in a saving of approximately $30 million through improved administration.

We are working with the provinces to tackle the underground economy through co-operation and increased exchange of information. I must add that Quebec was the first province to conclude an agreement with the federal government on this subject.

The solutions of today require co-operation among all Canadians, individuals, businesses and governments, because the totality of the three levels of government represents the real tax burden on Canadians. There may be three levels of government, but it is certainly true there is only one level of taxpayer.

Federal, provincial and local governments must adopt a harmonized approach to ensure a fair and integrated tax system based on the principles of equity, efficiency and effectiveness, words that are in this motion.

If all three levels of government work together-and that has certainly been the cry of witness after witness before the finance committee-we can have in the future the possibility of reducing the tax burden on Canadians.

The department and I as revenue minister regularly meet with representatives of the provinces and we will continue to do so in order to obtain tax administration improvements quickly.

Canadians want solutions to tax problems when these arise. Canadians want reform but not disruption.

That is what we are doing. We are implementing reforms on a constant, ongoing basis, always with a strong sense that Canadians whether as individuals or in their businesses have invested a great deal of time and effort in understanding the existing tax system.

When we reform various elements of the system we need to give everyone the time to understand and accommodate the changes, the time to build on the knowledge they already have, rather than throw everything out and start again.

The motion we are debating today seeks equity, efficiency and effectiveness in the tax system. The government, the Minister of Finance and myself in particular are seeking to give substance to those principles with a pragmatic approach in which the benefits of change are constantly being weighed against the cost of disruption. We are also trying to do so with a high degree of sensitivity to the reality that these principles must be balanced.

Equity sometimes comes at a cost in terms of efficiency, for example. It is fine to pursue lofty goals, but when the lofty goals conflict one has to recognize there is a need for compromise and understanding. That spirit has motivated our approach to reform in taxation so far. However I should add we are under no illusion that balancing these forces and these reforms certainly does not preclude action.

Let me just read the titles of some bills which we have had in the House since Parliament began in January of this year. The first bill, Bill C-2, an act to amend the Department of National Revenue. It is the one I mentioned earlier. It is the consolidation of the administration of customs, excise and taxation in one department.

Bill C-5, an act to amend the customs tariff, to which royal assent was given on March 24 of this year. This extended the general preferential tariff for certain countries to June 30, 2004 unless an earlier date is fixed by order in council.

Bill C-9, an act to amend the Income Tax Act. Bill C-11, an act to amend the Excise Act, the Customs Act and the Tobacco Sales to Young Persons Act. Bill C-13, an act to amend the Excise Tax Act. Bill C-15, an act to amend certain income tax law amendments.

These are the acts relating to improving revenue administration in Canada which have been introduced in the House since January. We all know the number of acts that have been introduced is not extensive. We are relatively new in this Parliament but let us think about how many acts have related to the revenue portfolio and to the concept of improving and refining the tax system. We have had a veritable torrent of bills that all have as their objective improving the tax system.

I believe the record of reform the motion seeks is already here. I can promise the House and members who have spoken that there will be more. However as we do it, I wish to add, we will continue to be very sensitive because in our view there is a baby in this particular bath that we need to take care of very carefully. The reason I cannot support the motion is that in essence it would throw out the baby with the bath water, would throw out the bathtub and in essence gut the House as well.

The approach of the motion would not achieve the equity, efficiency and effectiveness that I believe we all seek. It would only serve to create confusion, resentment, fear and costs, all of which we in government-and I am sure members of the opposition-should seek to avoid in the tax system.

Canadians are sensible people. They do not want change just for the sake of change. They want improvements with the minimum disruption that can be had to achieve those improvements. That message is coming through loud and clear in the hearings of the finance committee dealing with replacement of the goods and services tax.

We in government have heard that message. We heard it before the election. We heard it from our constituents after the election and specifically in the finance committee on the GST, again an area of reform of the tax system I did not mention in my listing of the bills. We have heard it there time after time after time.

The government will continue to change the tax system in areas where the benefit clearly outweighs the cost. We will continue to seek to improve the operation of the tax system and the efficiency of the department that administers it, namely the Department of National Revenue. We will continue to consult and discuss with other governments, with individuals, with experts, with academics, and with businesses. We will continue to enforce the law as it is written until it is changed by a vote in Parliament.

Our effectiveness in this regard is essential to securing the one true essential of an equitable, efficient and effective tax system: the long term confidence Canadians have in the tax system and in the value of the services they receive from the government. When we act against tax cheaters and smugglers we are acting to support that confidence. It is not fair at all that jobs are lost because of tax cheating or smuggling. It is not fair when revenue is lost because some people are dishonest, when the deficit grows and when legitimate business is forced to compete unfairly against those who evade their taxes.

Because of individuals who do not pay their fair share of tax, it is difficult, if not impossible, for governments at any level to satisfy Canadians' demands for economic growth, lower deficits and meaningful jobs for the unemployed.

Canada is a wonderful, successful country, the envy of the world. But I ask members of this House and all Canadians the following question.

Can we afford to have one sick child turned away from a hospital because lost revenue has created a lack of beds? Can we allow honest and productive Canadians not to enjoy retirement in reasonable comfort and happiness because tax cheating has destroyed the value of their pensions? Can we tolerate a single business to close and lay off hardworking Canadians because we cannot guarantee a level playing field with their competitors who do not pay their taxes as they should? Clearly the answer is no.

We seek the objectives of equity, efficiency and effectiveness for the tax system. We believe we can achieve that, as I trust I have shown in this speech today, by constantly striving to improve the system. I support, and I am sure all members of this House support, equity, efficiency and effectiveness. But the method of completely throwing out the present system, completely throwing it out to change, is not in my view in the interest of this country or the Canadian taxpayer.

[Darrel Stinson, Reform, Okanagan—Shuswap, BC]

Mr. Speaker, I listened to the hon. member's speech. He touched on a few areas. One was the underground economy. There are a few questions that I would like to ask the hon. member.

He talked of a new tax to take the place of the GST. People are a little bit apprehensive about this. Everyone wants to see the GST cleaned up, me especially, but people are starting to worry that maybe this new tax might include all consumption of food and so forth. They worry about the startup costs on this. Are we looking at another startup cost along the lines of the GST?

There is another thing I would like to ask the hon. member. When I started to work I enjoyed working two shifts. It paid me to work two shifts. Today workers sit down and they figure out right to the hour when it no longer pays them to work because taxes now take over. I see this as a lost revenue because the jobs do not get done. In many cases they get put over to be done the next year. Small outfits that hire people in the bush and so forth make up to a certain amount of capital and then when the tax bite becomes too big they lay the people off to go on unemployment insurance. I wonder if the minister has looked into this area at all.

[David Anderson, Liberal, Victoria, BC]

Mr. Speaker, I thank the hon. member for the series of questions which he has asked.

He talked first of the replacement for the goods and services tax, the GST. On that I think we are generally aware in this House that the committee, members of the Reform Party, members of the Bloc and members of the government party are at the present time sequestered writing a report and suggesting alternatives to the GST. To suggest whether the tax that they might be writing, of which indeed I do not know what they may be writing, would affect food or some other product not currently taxed is difficult, indeed impossible for me to answer directly as I am sure the hon. member recognizes.

He talked correctly of the apprehensiveness of people when faced with a new tax. I suggest to the hon. member that in fact was very much the theme of what I said this afternoon. People want to have certainty with the tax system as far as it is possible as well as having improvements here and there.

This is why I stressed that this incremental approach to improving the tax system is probably the best way because it reduces apprehension. You are able to deal with one section here, another section there. You are not saying: "Look, we are throwing the whole tax system out the window and starting afresh". That would be a point where perhaps the apprehension which the hon. member has correctly identified would come closer to panic.

That is why I believe it is very important in a resolution such as this to make sure that we recognize the importance of that incremental approach. That is why I listed all those bills that have been brought before this House, plus the reference to the finance committee of the GST. All that work has been going on in the last four months by members of Parliament of all parties as they discuss these bills to show Canadians that we are trying to improve the tax system, trying to get better results and more efficiency.

I think his concern over apprehension of it by taxpayers is something which I completely share and was indeed very fundamental in what I said this afternoon.

He also mentioned startup costs, if I may just continue on that. Once again that is a very important consideration. A lot of time and effort is invested in any tax system. There were many millions of person hours spent studying it, working on it, preparing it. Tens of hundreds of thousands, probably millions of person hours were devoted over the last three or four weeks as people in Canada prepared their tax returns.

It is important for governments not to get carried away by bland ideas and great principles and ignore the practicality of making changes to the tax system.

I thank the hon. member for his questions.

[René Canuel, Bloc, Matapédia—Matane, QC]

Mr. Speaker, I welcome this opportunity to put my question to the Minister of National Revenue who said earlier that Canadians were responsible people, and I am sure Quebecers are as well, in particular the people of my riding.

On the other hand, I wonder if the minister himself is acting responsibly because while over $10 billion is devoted to unemployment, while funding for the business assistance program is frozen, employment centres in my riding are telling me they are out of money. Self-employment assistance, the SEA, is frozen and enormous amounts are paid in UI benefits, but people who want to start up a business cannot get any assistance. When the BDC in our ridings cannot manage directly the capital stock, then it is not clear; you must become profitable. The BDC is almost turning into a credit union or a bank.

Here is my question to the minister: Is this what he calls being reasonable, practical? If he is serious about helping the people in my riding, in Quebec and in Canada, should the way to go not be these programs that can help the small and medium-sized businesses and self-employed workers put their businesses in order? All that my constituents and those in other ridings as well

want is to create jobs for themselves. They do not want UI benefits. They are proud people, very proud people indeed.

[David Anderson, Liberal, Victoria, BC]

Mr. Speaker, I agree that what we want and what Canadians want are jobs. I agree with the hon. member-and I congratulate him on his remarks-that the problem we are facing today is job shortage combined with difficulties starting up new businesses. I agree that this makes for a very difficult situation.

I must add that it is very difficult for a government with a $500 billion plus debt to ignore the national debt, to ignore the deficit and to create jobs to help businesses. Not all programs are frozen. There is the unemployment insurance program and other programs he mentioned. That is why it is very important to get a report on this, a report that the Minister of Human Resources Development and member for Winnipeg-South Centre is presently working on. We must try and change the system and help the unemployed find work instead of providing assistance directly to them in the form of money.

I know that there will be differences of opinion in this House between parties, between members from either side of this House. Differences could even be expressed between members from the same party. I must say however that, like the hon. member who just spoke, I am convinced there is a need to provide jobs for Canadians who are presently out of work.

The only thing I can say to finish answering his question is that I wish I could come before this House and announce that we have money to do this or that or a new program to implement. I really wish I could. Unfortunately, there is this debt, this absolutely enormous debt we have, and a deficit which is much too high. Given this burden we have inherited from the previous government, this burden which has become huge, especially with this problem, we cannot do all we would want to do. What we are trying to do is to plan structural changes such as those the Minister of Human Resources Development will submit to this House in the coming months and try to spend the money available as wisely and efficiently as possible.

I do hope the hon. minister and myself, as well as other hon. members and ministers, will have the chance to discuss the best way to use what little money we can devote to this task.

[The Acting Speaker (Mr. Kilger)]

Order. As agreed yesterday, the time provided for the consideration of the opposition motion will be extended by 20 minutes due to the recorded vote taken earlier this day. Therefore, Private Members' Business will start at 5.50 p.m.

Resuming debate. I wonder if the hon. member for North Vancouver could give the Chair some indication as to whether he will be taking up the full complement of 20 minutes or if in fact he will be sharing his time with a colleague.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, members of the Reform will be sharing their time.

At election time there are always promises from politicians that they will change the tax system to make it fair and equitable.

Election after election they make these promises. Despite these promises being made election after election, it seems that a large group of taxpayers have decided in the last couple of years to take things into their own hands.

What I am talking about here is that most taxpayers have now reached the tax saturation point. They have started acting in ways both legal and illegal to avoid the amount of tax they have been paying. For example, Department of Finance figures list tax revenues for September 1992 at $11.07 billion and a year later in September 1993 at $10.17 billion. That is down 8.13 per cent.

Total revenue for April to October 1992 was $64.94 billion and a year later April to October 1993 $61.22 billion, a reduction of almost 5.75 per cent.

While these direct tax revenues were dropping and making it impossible for the government to meet its deficit targets the major indirect tax, the GST, was also down slightly year over year from about $15.2 billion to $15 billion. These drops in revenue seems to point toward the possibility that the tax saturation point has indeed been reached. It could well be that any further attempts by this government to increase the tax burden will result in further reductions in revenues.

Taxpayers have decided as I mentioned earlier that the system is unfair and that they will not pay any more of their earnings into the black hole of federal government spending. As I also said earlier reductions in the amount of taxes paid is being achieved through both legal and illegal means. Legally, by leaving a job where taxes are deducted at source and starting a little home-based business, a lot of taxpayers are discovering that they can deduct many expenses that they could not before.

We know also that there is an underground economy that avoids the GST by negotiating cash deals for services. This in turn leads to lower income declarations by the people providing those services. The end result is that income tax revenues are lower as well.

Of course there is much argument about the size of the underground economy. Most people if they were honest would say that they do know somebody who has paid cash for the GST discount on jobs around their home. People are not afraid to

admit this because they know that it is widespread. The feeling in the community is that the government already gets too much money and they are not giving it any more to waste.

We often hear in the emotional rhetoric of groups like the National Labour Congress that corporations are not paying their fair share of the taxes. The proof is in the fact that the percentage of total tax revenues being paid by corporations has dropped.

Anyone who does even a little bit of research can see that this is a silly argument. Corporations on average have been making less money. Many of them have had large losses over the last few years. Clearly, if they do not make any money or have a loss they will not pay any taxes. Of course their percentage of contribution to the tax take has dropped. This does not mean that corporations are not paying their fair share. In fact the tax rate for corporations has increased over the last five years.

I have heard from time to time members on the government side advocating higher corporate taxes and even implying that if we could just get these evil corporations to pay more taxes the deficit would be solved.

To those who would try to increase taxes on corporations, I would like to say the following. Corporations are no different to people in the way that they react to overtaxation and the reason that they are no different to people is that they are people.

A corporation no more pays taxes than a tractor pays taxes or a lap top computer pays taxes. It is the people who own the shares in the company who pay the taxes.

I never sat behind a corporation in school or rode on a bus with a corporation or spoke on the phone to a corporation. Yet corporations are faced with income taxes, payroll taxes, property taxes, T-1s, T-4s, T-5s, AMTs, T-778s, TCTBs and in fact they are tee'd off, as my colleague from Calgary Centre mentioned yesterday.

The owners of small corporations are usually a few members of the same family or partnership of friends. The ownership of large corporations is their shareholders, often the pension funds of these very same unions that complain that the corporations are not paying enough taxes.

The number one cost to business these days is taxes and those costs have to be passed on to the consumer just like any other cost the business faces. Those same groups who demand that property taxes should be higher for those greedy landlords then complain when the tax increases are passed on in the form of increased rents.

I repeat again that anyone who thinks that a corporation is going to act any differently to an individual is dreaming. A corporation is formed in the first place by an individual or group of individuals who get together and use their tax paid money to form that corporation.

The corporation will then cross-border shop. It will use all the available tax deductions and it will even move to another country if it perceives that the conditions in Canada are unfair. The excessive government taxation levels of today have led to corporate tax saturation as well as personal tax saturation. The loss of thousands of jobs as companies move to locations where the tax burden is lower is a disgrace.

I have mentioned in this House before that my New Zealand background has made me very familiar with the debt crisis experienced in New Zealand in 1984. As a result of that crisis, the New Zealand government learned that New Zealanders had reached tax saturation point and that the government would have to spend less and tax less.

Ten years later according to an analysis released by the Toronto-Dominion Bank on April 25, 1994, just this last week, there are some dramatic comparisons that can be made between the Canadian and New Zealand economies. Two years ago, for instance, it cost New Zealand 90 basis points more to issue 10-year money than it did for Canada.

Now it costs New Zealand 150 basis points less than it costs Canada. In that same time New Zealand's unemployment rate has dropped from above 13 per cent down to 9 per cent and the real GDP has risen to 5 per cent. There is a budget surplus expected this year of almost $1 billion. This massive improvement is a direct result of the New Zealand government's decision to spend less and tax less. The Canadian government could do well to learn from that lesson.

The Toronto-Dominion Bank's outlook for the Canadian dollar continues to be bearish because of the failure of this government to recognize the seriousness of its taxation and spending problems.

In closing, I would urge the government to recognize that we have indeed reached tax saturation point and that it should first develop a plan to get control of federal spending and second, to work toward a simplified, single tax system in keeping with the spirit of the motion before us.

[Mike Scott, Reform, Skeena, BC]

Mr. Speaker, I rise to speak on the motion before the House today. I would like to begin by talking about the role of government in a free society.

The cornerstone of freedom and justice requires acknowledgement of at least one fundamental principle: each person owns him or herself. We in Canada accept this principle and indeed embrace it because the antithesis of self-ownership is of course slavery which western democracies have condemned. I do not believe anyone in this country would ever knowingly endorse slavery.

An operational definition of slavery is that a person toils while having no ownership rights to the fruits of his toil. They are owned and/or controlled by someone else. Therefore, private or collective theft is an attack on the principle of self-ownership; a person works hard to produce tangible benefits, for example a car or a television, a house or money, and the theft of this violates the principle of self-ownership. Murder, kidnapping, assault and other acts of violence are also an attack on the principle of self-ownership and therefore must be prohibited.

Self-ownership also implies that two or more individuals should be free to engage in peaceable voluntary exchange without interference by third parties.

The protection of these rights, called natural law by philosopher John Locke and others, constitutes the proper role of a moral government. In other words, the role of government is to protect people from domestic aggression, protect the nation from foreign attack and, through a judiciary system, resolve disputes arising among its citizens.

Contrast this ideal with what has happened in Canada over the past three decades. There has been a concerted attack on the principle of self-ownership through the tax system. The federal government has gradually increased taxation levels to a point at which today the average Canadian has to work for more than half a year just to pay his or her tax bill.

We like to consider Canada a free country, but just how free are we when we are forced to give up half of everything we produce? In my view we have all become, to a large extent, slaves to Revenue Canada.

I ask the House if this is not in fact the case. Furthermore I ask just because our tax system has the force of law behind it, does that make it morally right?

South Africa had a system of apartheid for many years. That was also backed by the force of law, enforced by the state. Did the fact that apartheid was state sanctioned make it morally right? What about slavery in the United States in the last century? Was slavery morally right just because the government decreed it was law?-of course not.

In fact, apartheid and slavery represent the ultimate abuse of the principle of self-ownership. With the rise of the welfare state or state socialism all governments, including Canada, have in varying degrees made significant departures from moral government functions. The welfare state is immoral because it violates one of the basic foundations of self-ownership, the right to own what one produces.

State socialism is a political process whereby property that rightfully belongs to one person is confiscated and given to another to whom it does not belong.

The primary justification for this attack on self-ownership, at least that led by otherwise decent people, can be found in people's desire to do good things like help the poor, care for the elderly, help the sick, or create a fair income distribution.

While these may be commendable objectives, the fact of the matter is that government does not have any resources of its very own. Acknowledgement that government does not have any resources of its own forces us to recognize that the only way governments can give one citizen a dollar is to first, through intimidation, threats and coercion, confiscate that dollar from some other citizen.

If you do not believe that Revenue Canada uses intimidation, threats and coercion, just try not paying your taxes and see what happens.

In a moral society voluntary exchange should be maximized and involuntary exchange minimized. A society which maximizes voluntary exchange can be described as embracing free enterprise or a market driven economy. The opposite of a market economy is, of course, a command economy. There is ample empirical evidence as we approach the end of the 20th century that command economies do not work. The former Soviet Union is a graphic example of this.

It is no coincidence that individual freedom and liberty are virtually non-existent in a command economy because governments which maximize involuntary exchange must rely on the force of law and the force of a police state to achieve their aims.

Command economies by their very nature are immoral and in fact evil. The elite political apparatus uses the power of the state to coerce citizens to accept their economic dictates.

What I find disconcerting is the extent to which Canada, which prides itself on being a free country, has moved toward involuntary exchange.

Consider that the average Canadian must work until sometime in July to become free of his tax burden. The first six months of each year are spent producing wealth which is confiscated against his will through taxation. This money is then spent on a variety of government initiatives and programs that the taxpayer in many cases would not support on a voluntary basis.

Walter Williams, the renowned professor of economics at George Mason University, characterizes this as economic rape. In a free market business cannot get a dollar from me unless I voluntarily give it first. If a special interest group wants my money it will have to come to me first and convince me that it truly does represent my interest before I choose to give it the money.

Consider Canada today. Canadian businesses and special interest groups can get my money from me whether I choose to give it to them or not. They only have to come to Ottawa to get permission.

For example, when the directors of Massey-Ferguson, International Harvester or Bombardier want my money, when representatives of the National Action Committee on the Status of Women or the arts community needs some dough they could come knocking on my door and ask me but they know that I would probably tell them to get lost. They know that and so they come to Ottawa to secure the assistance of the government to force me to give them my money.

Thomas Paine warned that government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.

We are all aware that government needs money to operate, to perform its legitimate role. This money has to be obtained through taxes which of course constitutes coercion. However, if government limits itself to its moral functions coercion is minimized.

The federal government has strayed from this ideal, far from this ideal. When we see billions of dollars shovelled out to Canadian business and industry, to special interest groups, to subsidize money losing crown corporations and in direct transfers to Canadian families that already have incomes of over $100,000 a year we know the taxpayer has been had.

There is no justification for which this is acceptable. This is a perversion of government, a direct assault on the individual liberty of our citizens and a serious violation of the principle of self-ownership. I would argue that since we work more than half of the year to pay our taxes we are more than one-half slaves to the dictates of this federal government.

The most disturbing news is that with our massive debt and ongoing $40 billion deficit Canadians are destined to continue as slaves to a greater and greater degree.

Until government reduces spending in a meaningful way this will not change. Therefore, while changes to income tax could surely make the system fairer and more user friendly the government must couple this with serious spending reductions, with the idea that Canadians have a right to self-ownership and will make better economic decisions on a voluntary basis than this government ever will through its top down, command management.

People in countries with larger amounts of economic freedom are far richer and have greater human rights protections than people who live in countries where state socialism prevails.

The free market with its supporting institutions of private ownership of property and voluntary exchange not only advances the human condition but promotes a more moral relationship among people. The most important case for free markets is its consistency with and promotion of fundamental moral principles and respect for human rights.

Our tax system, more particularly the level of taxation in Canada, stands in dark contrast to the ideals of freedom, liberty and self-ownership.

[Peter Milliken, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, I was astounded to hear the hon. member's speech. I thought I was listening to something in 1790. This is 1994, I should remind the hon. member. We are in the 1990s. It has been 200 years since the people he quoted wrote what they wrote. I think he quoted Locke and Paine. Old Tom Paine has been dead about 200 years as I recall, the hon. member can correct me. What he wrote was relevant in his day, but surely to goodness this is grossly antiquated at this point in time. Things have changed.

When I was a student of politics I remember reading Tom Paine and some of Locke's stuff. It was regarded as dated then and that was 25 or 30 years ago. I think the hon. member really ought to update his authorities and come up with something of the late 20th century in which we now live. To go back and quote these people as a basis for saying that we are now half slaves is frankly unbelievable and unacceptable.

I noted the hon. member in his speech did not mention a thing about the benefits we get with the taxes we pay. This is something that members of the Reform Party seem to forget with monotonous regularity. They harp about government programs that are wasteful. He referred to grants to artists and to the National Action Committee on the Status of Women as examples of grants he thought were wastes of money. However he never told us where the cuts were going to come. If we cut those grants, whether it be the grants to artists or grants to the national action committee, we would not save very much money and he knows that.

What he really is talking about is cutting off the poorest of the poor at the bottom of our social ladder and telling them: "You people will have to make do on your own. We are going back to 17th century living where the poor get their money from a church or some other charitable organization and nothing whatever from the government".

[Mary Clancy, Liberal, Halifax, NS]

The deserving poor.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

The deserving poor, as the hon. member for Halifax says. If that is what the hon. member is saying, let him and his colleagues stand up and say it. Let them tell the House where the cuts are going to come because he knows all the government programs alone make up a very small percentage of the total federal budget. If the government was eliminated tomorrow there would still be a deficit on the books of the

Government of Canada. He knows that to administer all the other programs there is a cost.

I ask him to come clean with Canadians and tell us which programs he is going to cut. Is it medicare? Is it old age pensions? Is it the Canada pension plan or what? It has to be one of those and he knows it.

[Mike Scott, Reform, Skeena, BC]

Mr. Speaker, I thank the hon. member for his comments. I would like to say that the first cut we proposed was to the MPs' pension plan, for which we did not get any support from the other side of the House.

I would like to say further that just because the words of Aristotle and Plato and Jesus Christ were said 2000 years ago, does that make them any less relevant today? Is the truth not the truth? Is right not right and wrong not wrong? Does right become wrong or wrong become right just because 200 years have gone by?

I ask the hon. member to consider that the reason these people are quoted is because they spoke the truth. They had a fundamental understanding of the way society could best construct itself to operate in a manner that allowed personal freedom and liberty to exist. The hon. member laughs but he is not listening to the words.

Furthermore, the cuts the Reform Party proposed during the election campaign were very detailed. Obviously the hon. member has never looked at them but it is there for all to see. It is very comprehensive. It is probably a little outdated now because the cuts are going to have to be even more severe based on the deficits we are running. We made that plan on a deficit that has since ballooned significantly.

I will close by saying that the information is there. If the hon. member would like I will make sure he gets a copy of that.

[Ron MacDonald, Liberal, Dartmouth, NS]

Mr. Speaker, I was just driven to my feet by the riveting speech of the member opposite. I too could not quite believe what I heard but it was entertaining. It was a bit of comic relief in the Chamber which we do not often get.

I would just like to follow up on the comments of my colleague from Kingston. It is easy enough to sit down and be critical. It is easy to tell the Canadian public that you can solve all of the ills that afflict government and their personal situations. It is easy to say that you can solve the deficit situation overnight. It is called cutting, cutting and cutting. But when you cut, cut, cut you create another problem. You inflict pain on the people who can least afford to have that pain inflicted.

During the election campaign members of the Reform Party were quite good at going around talking about how they were going to control the deficit. Each and every time they were asked tough questions such as: How would you deal with the national defence budget? Would you cut Canada's standing forces by 40 per cent? "Oh no," they said. "We do not want to talk about that right now. We would just cut".

When you ask them about Canada's health care system and whether or not the proposals they were putting forward would jeopardize the integrity of the Canadian health care system and how those cuts would affect it, they did not want to answer.

Therefore, I want to ask the member this question. He mentioned during his speech that Canadians are slaves to the government and that they do not choose every expenditure that the government makes on their behalf. I think that is true. Since he is in a condemning mood today about all the programs that past governments have spent money on, does he believe the taxpayers in Canada were consulted before they started paying for his leader's suits and car?

[Mike Scott, Reform, Skeena, BC]

Mr. Speaker, I would like to address the last comment first. The taxpayers of Canada are not paying for that. That is coming from party funds.

[Some hon. members]

Oh, oh.

[Mike Scott, Reform, Skeena, BC]

Furthermore when we look at the spending program-

[The Acting Speaker (Mr. Kilger)]

I think we would all like to hear the answer to the question. The hon. member for Skeena.

[Mike Scott, Reform, Skeena, BC]

Mr. Speaker, when we look at the spending of government over the last couple of decades and we look at the billions of dollars that have been shovelled out to grants and subsidies to Canadian business and industry, when we look at the billions of dollars that have been shovelled out to foreign aid through CIDA to countries that do not need it and where the rank and file people of those countries do not benefit but the governments do, when we look at the Auditor General's report when he talks about the massive amounts of government waste, those are the things that Canadians are keying in on.

If the hon. member on the other side thinks that Canadians are in the same mode as he is, that they support the massive government spending that is going on right now, he is in for a very rude awakening down the road.

[Mary Clancy, Liberal, Parliamentary Secretary to Minister of Citizenship and Immigration]

Mr. Speaker, I must say that I am delighted to take part in the debate today.

While we are having a plethora of quotes from great minds of the 18th century, perhaps we could get in a quote from the 20th century. I am particularly interested that the hon. member for Skeena picked out the National Action Committee on the Status of Women to suggest as being unworthy of government funding.

Is it not interesting that the hon. member would pick a women's group and I wonder if he would go so far as to extend that to other women's groups as well.

[John Harvard, Liberal, Winnipeg—St. James, MB]

REAL Women.

[Mary Clancy, Liberal, Halifax, NS]

Yes, indeed, thank you to the hon. member for Winnipeg St. James.

I would tell him that there is a very famous quote with regard to where women fit in our society. I would quote that well known 20th century philosopher, Chairman Mao Tse-Tung, who said women hold up half the sky. It might be interesting if the hon. member looked into that just a bit. The quotations of Chairman Mao in his little red book are almost as relevant to the workings of this House as the rantings of the 18th century mind of Mr. Locke and some others. However that is a mere bagatelle and we will continue to the matter at hand.

I am particularly delighted to take part in the debate today because I think it is terribly important, as it frequently is in this Chamber, to put a human face on the work we do here. I am always delighted to be in the Chamber to hear my colleague and good friend from across Halifax harbour, the member for Dartmouth, as well my colleague and good friend, the member for Kingston and the Islands because the experiences in their own lives frequently puts a human face on the work that we do here.

We talk about cuts. I say this with the greatest of respect, because it is a long tradition in the House that we do not impute motive and that each one of us as parliamentarians understands that every other one of us as parliamentarians, is here to do the best job he or she can do according to his or her lights. We are here to represent our constituents and to do the best we can as well for all the people of Canada. We represent very different views, but the reason for us being here is the highest. Consequently I want to talk about some of those groups that exist on government largess, those groups that my friend from the other side perhaps in his lack of comprehension or just in his lack of experience thinks are not worthy of government attention.

Let me talk about women's groups in particular. Let me talk about transition houses. Let me talk about women's centres. Let me talk about women's health centres. Let me talk about shelters for young people. Let me talk about shelters for women who have recently been released from prison. Although coming under the specifics of provincial funding, all of these receive grants in varying amounts from either the women's program under human resources or under Employment Canada or under other government programs.

Let me tell members how important these are. I believe that the hon. member in his own soul knows that these things are important too. He says he does not. Okay, he asked for it. Let me tell him about the women who are driven from their homes in the middle of the night in fear of violence, in fear of their own lives, in fear of the lives of their children.

Let me tell him about the women who are attempting to reconstruct lives after serving a prison term, after being helped through a group, for example, like Stepping Stone in Halifax which helps prostitutes get off the street and get back into normal society.

Let me talk about women who desperately seek to improve their level of education so they can break the cycle of welfare. Let me talk about people in general, but mostly women because the vast majority of those people suffering under the yoke of poverty in this country are women.

Let me say what would happen to them if the kind of federal funding that the hon. member in his pardonable but perhaps frightening level of knowledge wants to remove from the federal budget. Let me tell the member what would happen to them.

Places like Byrony House, a transition House in Halifax would be shut down. Places like Phoenix House, a shelter for young people would be shut down. Places like the St. Leonard's Society which assist people who come out of prison and who are trying to make a new start would be shut down.

We have already seen what happens when cutbacks meant that a great number of people suffering from various kinds of mental illnesses have had to be released on to the street. We have seen in the last 10 years, the years of the Mulroney government-the hon. member should pay attention, he may learn something-what has happened when a lack of compassion has contributed to an ignorance level and people do not see what is happening to the big picture.

Go to the streets of any major city in this country. Go to my city of Halifax, a small city, and see the number of young people who are on the streets. See the number of people with various kinds of mental disorders who are on the streets because there is no place for them and because the funding is not there.

Go to Montreal and Toronto and Vancouver and Winnipeg and Calgary and Edmonton and you will see them. Is this what you want in your country? Is this what you want to be the legacy of your children? Is this what you want the world to say Canada stands for and Canada means?

If it is, I have to say that it is not what I want and it is not what anybody on this side of the House wants from the hon. member for Saint-Maurice who is the Prime Minister to the latest elected backbencher on the government side.

On this side of the House, we have a history and a tradition that says that you can do two things. Yes, on that side of the House too, as my hon. friend from Ontario reminds me, along with the rump as well. We have a history and a tradition in the Liberal Party that says the two things that drive the engine of government are not incompatible and those two things are compassion and fiscal responsibility. People who believe that the two do not go hand in hand with the greatest of respect, just do not understand the way government works.

We on this side of the House have a great tradition of reform in the best sense of the word. This is the party of Joseph Howe. This is the party of Wilfrid Laurier. This is the party of Lester Pearson. And thank God, this is the party of Pierre Elliott Trudeau and the party of Jean Chrétien.

The question of reform has always been near and dear to the hearts of Liberals because it is reform with a compassionate face. It is reform to ensure that Canadians have a standard of living that is second to none.

My hon. colleague from Dartmouth asked the learned members on the other side where they would cut. I can remember, and I know the hon. member from Dartmouth remembers this as well, five or six years ago the hon. member for Dartmouth, the hon. member for Willowdale, who is currently the chair of the finance committee, and I went out for supper after a committee meeting. We talked about the jewel in the crown of Canadian social programs, and that is medicare.

The hon. member for Dartmouth's history is in a small coal mining town on Cape Breton Island. I came from not too far from there myself, but was brought up in a larger city. The hon. member for Willowdale was brought up in the city of London, Ontario.

We discovered that each one of us had the experience in our early childhood of seeing members of our families seriously ill and prevented from getting the kind of medical care needed. Actually, in my case it was not prevented. My father had an illness for three weeks. When he died, my mother was cleaned out. There was no money left. Everything was gone because this was pre-medicare. The hon. member for Dartmouth's father suffered an industrial accident which devastated his family financially. The hon. member for Willowdale had a similar experience.

The three of us talked about this. I remember it so well. It impressed me so deeply that the three of us, coming from our different experiences were utterly committed to the fact that never in this country should Canadians have to worry about medical care. Never in this country should Canadians have to think that they could not get treatment or medical services that are life sustaining without a complete and utter danger of bankruptcy within their family.

I was seven years old when my father died. I remember the devastation of his death, obviously. But I also remember what clearly was a fear in my mother's heart because she was left a widow with no resources. My father had been a pretty successful businessman. But there was no medicare and three weeks in a hospital cleaned out everything they had managed to save and compile in 10 years.

That is unacceptable. That is not even something which should be allowed to be contemplated. When hon. members from the Reform Party talk about cuts, when they talk about user pay which with the greatest respect is absolutely one of the dumbest theories I have ever heard of but I leave that for another debate, when they talk about these things I wonder if they have truly investigated and looked at the situation.

I would advise the hon. members to go into the Library of Parliament and look at an all-party report, a unanimous report done by the health and welfare committee in the first two years of the last Parliament.

The report talked about the kinds of changes that would deal well with medicare. Unfortunately that report has never been given the kind of light it needs. It talks about preventive medicine. It talks about the kinds of things for example that the province of Quebec is particularly good at. I forget the name and I do not know if any of my colleagues here can help me, but there is a name for medical centres in the province of Quebec-

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

CLSC.

[Mary Clancy, Liberal, Halifax, NS]

I thank the hon. member for Glengarry-Prescott-Russell. Yes, CLSC.

There is something similar in my own riding, the North End Community clinic in Halifax. A particular form of community based medicine can save us a lot of money. This is clearly the way we are going to have to go and not to what I call band-aid, short sighted remedies like user pay.

This government and the red book that is the basis of this government's policy in this Parliament has a commitment to the people of Canada in the creation of jobs, in the creation of dignity, and in the absolute commitment to the fact that all Canadians are equal in the area of opportunity.

You are not somehow a second class citizen because you live in one part of the country as opposed to another part, or a second class citizen because your family tradition is to go down to the sea and fish rather than get a university degree, or rather than go to the farm and plough, or whatever. Canadians have an equality of opportunity and a right to have those opportunities and the services of their government from sea to sea to sea.

It is not something you will be more entitled to if you live in an urban riding. It is not something you will be more entitled to if you live in Ontario. It is not something you will be less entitled to if you live in the Northwest Territories.

It certainly is not something you will be less entitled to if you happen to be franco-Canadian-if I can say that, French Canadian-or if you happen to be a member of an ethnocultural group that did not necessarily get here 400 years ago.

The point is that we in this government are committed totally to the marriage of compassion and responsibility. As well, the point is that in spite of the meanderings I hear from time to time from our learned colleagues on the other side-

[An hon. member]

Diatribes.