Debates of May 3rd, 1994

Supply

[Mary Clancy, Liberal, Halifax, NS]

That, too. Diatribes. At any rate, the meanderings and diatribes from the other side.

There is something I have wanted to talk about for some time and this appears to be a good time. One hundred and seventy-six ridings in this country sent Liberals to the House of Commons. Out of 295 ridings that makes-

[Deborah Grey, Reform, Beaver River, AB]

A majority.

[Mary Clancy, Liberal, Halifax, NS]

A majority. Exactly. I am delighted to see that the hon. member from Beaver River understands that.

The hon. member for Beaver River has been here for a little while. Maybe she has a better grasp of it because some of her colleagues seem to think that the policy bus is driven by the opposition. We are here to say that the policy bus is not driven by the opposition; the policy bus is driven by the government. And the gas in the policy bus on this side goes back-

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

What happens to the people?

[Mary Clancy, Liberal, Halifax, NS]

The people are on the policy bus with their 176 MPs.

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

Then why do you make them push?

[Mary Clancy, Liberal, Halifax, NS]

They do not have to push because they know where the wheels are.

Hon. members on the other side do not seem to realize that all they have to do in actual fact is look at the most recent polls. Call me naive, but it looks like people are relatively happy with what is happening on this side of the House. Not just in Atlantic Canada where they are more than happy, but it looks like right across the country the approval rating for the Prime Minister and for this government is fairly high.

Now that cannot last forever and those of us who have a little experience in politics understand that. But the point is that you do not cut your cloth in policy on the government side of the House according to prevailing winds. You cut it according to what is best for Canadians, what is a tried and true policy, what is something that has been proven to work, and what is done in the judgment of a Prime Minister who has 30 years experience in this House of Commons and in every major portfolio in the Government of Canada.

That is the kind of policy and the kind of work and the kind of government Canadians want, deserve and have asked for. That is the kind of thing a number of the hon. members on the other side could certainly benefit from listening to. But again-

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Regardless of cost.

[Mary Clancy, Liberal, Halifax, NS]

Somebody is yelling over there. I do wish he would keep quiet.

At any rate when I conclude my remarks I promise the hon. member I will give ear to any comments he wishes to make, at least briefly.

The motion today in somewhat florid language states that this House implore the government. The government does not need to be implored. I do not think there has been a government in the history of Canada that has gone further in consultation with Canadians.

In case hon. members across the way have forgotten, the Minister of Finance met with Canadians from all walks of life in five major centres across this country. I happen to remember the minister at the meeting in Halifax saying: "Tell me where to cut. Where do you want me to cut?" I remember him listening and I remember him reacting.

The hon. member across the way says he did not listen. I trust the hon. member got a few letters for example from the doctors and a few other people in this country. The hon. minister did listen.

What this government does best and will continue to do is it listens. This government with its majority, put here by the vast majority of Canadians, will continue to listen. It will continue to remember that the most important thing for government is to remember compassion, to remember humanity, to remember equality and to remember who put us here.

[Deborah Grey, Reform, Beaver River, AB]

Mr. Speaker, I appreciate the comments of the hon. member. I was amused. I appreciated the spelling. That was wonderful, but I think the Hansard people do quite well.

Let us remember another party that was here recently. It had a majority of approximately 170 as well and we know where it ended up. Let us remember you can go from great heights to great depths here. If we are going to brag about how we have done, the increase in this party was not half bad either going from one member to 52. Mathematics is not my strongest point but our percentage increase was pretty marvellous.

Nonetheless, let us get on to more serious things rather than spelling particular words and meandering and diatribing, if I can make that a verb.

The hon. member talked about compassion and responsibility. We agree with that on this side of the House. What we need to

realize is the best thing we could do is to show and exercise compassion to the people in this country who truly need it.

I appreciate the hon. member's comments about women's shelters and transition homes. They are necessary. The only way we will be able to preserve those and to make sure that medicare stays strong and solid in this country is to get a grasp on the deficit. That will make sure those programs remain strong. We cannot just continue to spend our way into oblivion and then say we are committing ourselves 100 per cent to this. The debt will destroy it. My friend knows this. The debt will destroy those programs faster than anything else.

Let me talk about the National Action Committee on the Status of Women. As a woman I may have more right or responsibility or whatever than my friend from Skeena to say I believe that many of these groups which are funded by government should be funded by the people who believe they exist for a particular reason. They are the ones who should be looking after them. Let us make sure we are not always coming to government begging for money to perform the tasks we think are important. If I believe groups are worthwhile, I will fund them.

The most responsible and compassionate thing government could do would be to eliminate and lower tax loads and frustration levels for people in this country who are feeling totally overburdened. As a citizen I should be able to see the light at the end of the tunnel. I should be able to relieve my tax burden so that I can turn around and exercise compassion humanly, individually to fund some of those groups I think are important.

I would like the hon. member to prove to us that raising debt loads, raising deficits and raising taxation levels in this country are compassionate.

How is the government ever going to be able to exercise true compassion by spending the legacy of the children she talks about? What about the legacy to our children? To whom are we leaving this exorbitant debt? You cannot go on one side and then the other. The hon. member talks about the legacy of children. What about the legacy this government is leaving to children, which is the enormous debt that it will never pay off?

[Mary Clancy, Liberal, Halifax, NS]

Mr. Speaker, I thank the hon. member for Beaver River for her comments. I must have missed something which I suppose is possible but unlikely. However I have just a couple of points in case the hon. member has missed something.

The government has not raised taxes and the government has not raised the debt. Indeed the government is lowering both. Perhaps if the member paid attention to the comments of the Minister of Finance she would realize that.

I listened, I listened hard, and the member for Brant said to me as she went across to her seat: "Have they said where they are going to cut?" I did not hear them say where they were going to cut. They said they were going to cut the National Action Committee on the Status of Women, a favour whipping post, I might add. May I say that on occasion the national action committee and I have not always seen eye to eye on process although our goals are very similar. It may come as a raving shock to members on the other side that according to most statistics and most polls over 90 per cent of Canadian women, whether they call themselves feminists or not, happen to hold the same goals as the national action committee.

Probably what the hon. member does not know is that some groups belonging to the National Action Committee on the Status of Women such as women's institutes, the United Church Women of Canada and the YWCA of Canada, mainstream women's groups, hold very strong views and are part and parcel of the group. I do not want to cut the funding to them.

Perhaps the hon. member, not having a whole lot of experience in the area of feminism and gender equality, would not know that women making 60 cents for every dollar that men make have to do fairly basic things like pay the rent, feed their children and a few other important things. They do not have a lot of money to give away. Governments are important in this regard. We are not going to cut off our noses to spite our faces which appears to be the kind of thing the hon. member is advocating.

[Mike Scott, Reform, Skeena, BC]

Mr. Speaker, I would like to make the observation that while I chose to quote Paine and Locke, the hon. member chose to quote Chairman Mao. Chairman Mao, aside from having a very small mind, was responsible for one of the most atrocious, unspeakable genocides committed under his leadership in China. If she chooses to hold him up as a model, I guess that is for Canadians to see.

The hon. member imputed that my party was against supporting people in Canada who genuinely require support. That is totally false. I made that very clear in my points. I do not know how the hon. member can equate the National Action Committee on the Status of Women to people out on the streets or in Canada who really need assistance from the government.

Third, she is quite right. They are driving the policy bus. I am glad I am not on it because that policy bus is careening down the street right now at the rate of $100 million a day. There is a dead end coming up pretty shortly. They are the ones who will be responsible because they are in the driver's seat.

[Mary Clancy, Liberal, Halifax, NS]

Mr. Speaker, I am glad the hon. member for Skeena got up because I wanted to make a comment. I am not particularly going to deal with the meanderings of the hon. member in his last comment, but he did talk earlier about

something very dear to my heart. I happen to know it is dear to the heart of the member for Rosedale sitting over there as well, not to mention a few other members in the House, and that is the whole question of arts funding.

Along with the compassionate face of government and the kind of funding that we in the Liberal Party with our 150-year history in the country will continue, may I say the country that does not funds its artists, the country that does not make representation on behalf of its own culture, is the country that has no soul. The country that has no soul will wither on the vine. If the hon. member would like to see the country wither on the vine, I am sure one the fastest ways to do it is to say that we as a federal government should not be funding the arts.

I can also say I would be very interested to see how many hon. members on the other side would be prepared within their own communities to stand and deny the kind of general small group funding they were probably working on. I saw a number of reports in the newspaper about how they worked on their SEED grants. Did they cut in their ridings all those SEED grants to all the groups they mentioned? I doubt it. If they did, I think that getting off the plane when they get home, even after flying economy class, would be a bit more difficult than they heretofore encountered.

[The Acting Speaker (Mr. Kilger)]

There is only a very brief period of time left for questions or comments so we will keep it short.

[Jim Gouk, Reform, Kootenay West—Revelstoke, BC]

Mr. Speaker, I rise because I am shocked and dismayed. I listened to two colleagues on my side deliver their speeches. I was awaiting a rebuttal from the other side because my colleague suggested there was no tax relief in sight for Canadian companies. I was awaiting the plan that I know exists on the other side but we never got it.

When the hon. member for Halifax stood I thought we are going to get it. This is not a sharp shooter. This is a Gatling gun. I thought she would mow down that false notion but she did not do so either. I feel compelled now to inform the House what the Liberal plan is.

The Liberal plan is to raise the taxes of Canadian companies. If the Liberals raise those taxes a notch higher, those companies will then qualify for tax exemptions as non-profit organizations. That is the Liberal plan. I am surprised they did not share it with us.

[The Acting Speaker (Mr. Kilger)]

A closing comment from the parliamentary secretary.

[Mary Clancy, Liberal, Halifax, NS]

Mr. Speaker, I am going to say on the advice of the hon. member for Glengarry-Prescott-Russell very slowly that we did not raise taxes.

[The Acting Speaker (Mr. Kilger)]

It is my duty, pursuant to Standing Order 38, to inform the House that questions to be raised tonight at the time of adjournment are as follows: the hon. member for Mercier-Social programs; the hon. member for Richelieu-Hibernia project; the hon. member for Winnipeg Transcona-VIA Rail; the hon. member for Anjou-Rivière-des-Prairies-Hibernia project; the hon. member for Kamouraska-Rivière-du-Loup-Unemployment insurance.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Mr. Speaker, it is a pleasure to switch gears a bit and talk in a non-partisan way about some matters which I think are extremely important for the country.

The debate I just witnessed, the shouting, the unpleasantness that took place here and the emptiness of the political rhetoric are the kinds of things that have turned so many people against politics. It is a sad thing to observe, sitting in the Chamber.

I would like to talk about the fact that the underground economy is widely discussed in Canada these days. In these discussions the need for lower taxes and the reform of the taxation system are regularly linked. In my remarks I will expand on these subjects drawing heavily on information which I have obtained as a member of the Standing Committee on Finance on possible changes to the GST and during a recent Fraser Institute conference on the growth of the underground economy in Vancouver.

During the recent hearings of the finance committee many witnesses noted their concern that the GST had been a major cause of the growth of the underground economy, the loss of government revenue, and the precarious state of the government's fiscal condition. These witnesses reflected their own experiences as well as those shared by researchers and the general public. There is widespread agreement that the underground economy was encouraged by the introduction of the GST. This tax induced evasion because it is visible and imposed on every consumer purchase.

Evasion is encouraged additionally by the fact that consumers do not face any penalties for non-payment of the tax. Evasion is particularly high among small firms that supply services with a high labour content. In these industries honest owners are forced by competition from just a few bad apples into operating outside the law.

The GST is not the only determinant of the underground economy. High marginal tax rates on personal income provide incentives that often reinforce the reward of evading the GST. If you are hanged you might as well be hanged for a sheep as for a lamb. Onerous regulations of business and large surcharges on labour costs mandated by the government also encourage firms and workers to operate outside the regular economy.

There are strong incentives for persons receiving unemployment insurance or welfare benefits to work in their own households as well as in the underground economy without reporting their incomes. These social security systems penalize beneficiaries with 100 per cent tax rate on reported income above only a very small amount.

Many people are particularly concerned about the growth of the underground economy because it appears to be accompanied by a change in public attitude about the morality of tax evasion. In a recent survey 71 per cent of Canadians indicated that "most people would cheat on their taxes if they knew they could get away with it". Seventy-nine per cent agreed that people who pay all the taxes they should are fools. Can we believe that? Thirty-two per cent considered acceptable the evasion of the GST by other people.

Some analysts believe that social capital in the form of honesty, which in the past has made Canadians among the most compliant in the world in the voluntary filing of their income taxes, may have been lost irretrievably.

However it is important that the government at least try to get Canadians to return to their traditional honesty by tax reforms that simplify compliance and reduce incentives to cheat by the lowering of both marginal and average tax rates. Unfortunately the lowering of tax rates under any taxation system cannot take place until spending is cut and increased revenue due to economic growth has eliminated the deficit.

Government success in this challenging task is likely to increase further the public's incentive to evade taxes because the level of real government services per dollar of taxes collected will be falling and ultimately reach a rather low level. This phenomenon is due to the fact that in the absence of debt payment a balanced budget provides the people of Canada with a dollar's worth of government services. However in a few years the debt payments of the federal government are likely to be about $50 billion annually.

If by that time program spending remains at its present level of $125 billion and economic growth under the present tax structure yields $175 billion the budget will be balanced. At that time each dollar of taxes will provide for less than 70 cents of traditional government services. Taxpayers will have little trouble rationalizing evasion on the grounds that taxes are not providing value for their money.

During the finance committee hearings and in the public media it is often suggested that the government's financial crisis could be eliminated if only somehow it were possible to tax the underground economy. The validity of this proposition depends decisively on the size of the underground economy and the possibility of forcing it into the open.

The Fraser Institute conference saw some academics present estimates of the underground economy as high as 15 per cent of national income. On the other hand government statisticians and economists suggested that it represent 5 per cent of national income at the most and that it is probably more like 3 per cent. The difference between these two estimates is due to the use of different methods for the estimation of a phenomenon that by its very nature is not known and attempts to remain hidden.

The academics use strong assumptions about the demand for money by the public to finance regular and underground economic business. Some have found the demand for cash is higher, the higher our tax rate. In fact the amount of cash used by the public is much larger than can legitimately be used in the regular economy. The excess amount is believed to be used to finance underground activities.

Analysts in the employ of the government use sophisticated accounting data to check for the growth of discrepancies in balances which if measured completely and accurately should be zero. They also engage in sensitivity analyses of data which show the academic estimates imply phenomena that simply are not observed in the real world by any standard of measurement.

Some part of the observed differences in the estimates are due to definitions of the underground economy. Government estimates focus on the amount of income that goes unreported to the tax collectors on the one hand and is unrecorded by Statistics Canada on the other. The academic estimates include illegal activities which may be as much as 1 per cent to 2 per cent of the national income.

Some academics know of the professional bias of government analysts who prefer not to be reporting that they have done their job poorly and that they tend to make continuous adjustments to their data to avoid the development of the kind of large errors the academics claim to have discovered.

While this criticism is probably unfair, there was the astounding revelation that the U.S. Internal Revenue Service has doubled its official estimate of the amount of tax evasion after a new head had been appointed. He is alleged to have decided that the estimate of 5 per cent evasion, twice that given by his predecessor, would strengthen with congress his case for more tax collectors. The IRS is now investigating its own internal auditors. Some academics noted that official positions on the issue now imply that Canadians are 10 times as honest as Americans in filing their income tax returns.

Dr. Don Drummond, deputy minister of finance for fiscal affairs, put much credence in the maximum of 5 per cent figure for the underground economy. Importantly, he noted that this figure represents a serious problem. It equals about $35 billion and, at $17 of federal revenue per $100 of national income, it amounts to about $6 billion of foregone taxes. This is not

enough to eliminate last year's regular deficit of $42 billion but enough to help significantly the fight for a balanced budget.

However, it is unlikely that the full 5 per cent of the more or less officially admitted maximum underground economy can ever be brought into the open and made taxable. Yet I would argue that the lowering of taxes might make for more tax revenue than the $6 billion suggested by the government representatives.

For one, returns from after tax legal income would rise relative to the returns from illegal activities. More important, there would be reduced incentives to produce in the informal unmeasured household sector. This effect will be enlarged considerably when the economy recovers and the number of persons on welfare and UIC is reduced.

It is believed that persons on social assistance use much of their free time to work in this unmeasured sector which is not included in the official estimates of the underground economy. They would do less of this kind of work, hire others to do it and pay with income from their own formal work. Many economists believe that this tendency would be strengthened even more if the pending redesign of social programs makes it more difficult and less rewarding to remain on social and UIC assistance.

Let me conclude by summarizing my argument. The underground economy in Canada is large and policies that result in shrinking it would result in significant increases in tax revenue. The federal government has the opportunity to achieve this outcome by the lowering of average and marginal tax rates, the elimination and simplification of regulations and the reform of the social programs.

The issues and opportunities are clear. It is time to act on them.

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

Mr. Speaker, first I want to thank the hon. member for Capilano-Howe Sound for his representation. I thought you spoke very well. It was anything but an inflammatory speech, quite unlike some of the speeches made earlier by your colleagues from the Reform Party. You began your speech by complaining-

[The Acting Speaker (Mr. Kilger)]

Order. I remind all members to direct their statements, questions and comments through the Chair, please.

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

Mr. Speaker, I will try to follow your admonition.

I wanted to remind the hon. member from Capilano-Howe Sound that he should not have to look any further than his own colleagues to find the source for the partisan debate that has taken place in the last hour. The members of the Reform Party have done very well painting supporters of this government as the terrible oppressors of the taxpayers.

There is naturally a very legitimate debate over what is right and proper about taxes.

I suspect that there is not a Canadian anywhere who does not have at least some partial legitimate complaint about taxes. I find that acceptable. Too many of the speeches from the Reform Party members this afternoon have been monuments to greed and selfishness.

The parliamentary secretary made the comment this afternoon that the Reform Party members do not know anything about the way government works. I suspect that she is wrong on that point. I think they know very well how government works, and very often government gets in the way of their greed and their selfishness. All I hear from them is: "I don't want to share. I want to pay less. How can I get out of my responsibilities?"

They talk over and over about their rights, but never once do they talk about their responsibilities. We do have responsibilities to each other. The member from Skeena even invoked the name of Jesus Christ. I think he has nerve to use that name in this particular debate because his entire intervention was about greed and selfishness: "How can I get out of my responsibilities? Give me more as an individual but allow me to pay less. Allow me to contribute less to Canadian society."

These speakers contribute to this victimization syndrome that besets this country. We hear it from these people all the time: Politicians are rotten, leaders are rotten, Parliament is rotten, every governmental institution is rotten, you are the victim and you must cry out because those people in Ottawa and other capitals around the country are the oppressors. You do not have any responsibilities whatsoever. You are supposed to be on the take. You take everything for yourself. You do not contribute anything to your community. I think that is very irresponsible.

I have a question for the most recent Reform speaker. Tell me about your responsibilities. Where do your rights end and your responsibilities begin?

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Mr. Speaker, I appreciate this opportunity after this almost ranting and raving question to respond to challenges about my motives and the motives of my colleagues.

I know my friends here now very closely. They are as compassionate and concerned about the future of Canada and the welfare of individuals at least I would argue as some of the members on the other side. Obviously there is no merit in us having a dispute, an argument, over who is more compassionate. What a rational debate in government and in society should be about is how do we carry it out, how do we do it?

The reason why I have left a comfortable life as a professor, short of retirement, is because I am so worried that the future of our social programs is in jeopardy. We are very, very close to losing it all. This would not be the first industrial country of the world where this has happened.

I am more compassionate, I assert strongly to the member opposite. Let us have an argument on who is more compassionate. I am more compassionate. On top of that, I have a brain, a brain which says to me that it is not just a heart or a stomach with which I have to make policy. I have to look at the world around me. As I look around at the world I see this government predicting an extra $100 billion deficit in the next three years.

At a 6 per cent average that means $6 billion more spending just to serve the interest on the part of the debt they have created in six years. Do you know how much we can spend on social welfare with $6 billion? That does not count all the higher interest we owe on the already existing $500 billion. We are on a treadmill with the spending cuts we are making. The increases in revenue-

[The Acting Speaker (Mr. Kilger)]

Order, please. I regret the hon. member's time has lapsed.

[Stephen Harper, Reform, Calgary West, AB]

Mr. Speaker, I am rising today to speak to this motion by the hon. member for Calgary Centre on reforming, simplifying and making more equitable our income tax and other tax systems in Canada.

I originally had planned today to speak primarily on the issues of fiscal federalism in the few minutes that I have. In this country right now we are undergoing a series of studies and serious examinations of a number of policy areas that include social policy, not just transfers to individuals but transfers to provinces, and we have a budget that is impacting on a number of transfer programs to provinces, both this year and in future years.

All of those things are really proceeding in a number of different ways. There are intergovernmental negotiations going on. We do not have any details about that but we know it is happening. We have a social policy review. Of course we have budgetary policy and a review of the GST.

There is a wide number of studies into issues of fiscal federalism but there is no overall integrated approach to making the tax system fairer and more efficient between levels of government. That is the primary point I want to address today, some of the things that some organizations are putting out that could be done, some of the things that our various academics have proposed.

I have been sidetracked somewhat by an issue that I got into last week. It came up on the floor of the House yesterday. I want to digress and spend most of my time on that because it seemed after what was said yesterday in the House that it was a perfect opportunity to address this particular issue because it is really so relevant to the way taxes and the tax system are functioning in our country today.

I am referring to the mini controversy we have over the federal overseas tax credit. This is a tax credit that is available to Canadian workers who are working overseas for six months or more of the year, enduring hardship and separation from their families and work related expenses in that capacity. There have been recent stories, one in particular in Alberta Report , that draws attention to the fact that the federal revenue department is basically considering retroactively disallowing the use of the overseas tax credit by certain Canadian workers, much to their detriment.

This story appeared and has been on the scene. I know members of Parliament, not just myself but other members have been making inquiries into this particular matter for some time because this has been on the public record now for a couple of months. They are not getting very far with Revenue Canada I understand.

I am not a tax expert and I am not a lawyer. I would never claim to be for obvious political reasons. By implication neither am I a tax lawyer. But I did find this story quite interesting. Given the government's current unwillingness to address the issue I decided to raise it in the Commons in statements.

Yesterday in response to one of these gratuitous set up questions we have periodically, the Minister of National Revenue said I had erred in my statement and provided the House with some incorrect information and that there were in fact no legislative changes involved in this area.

What is wrong with that statement is that it has nothing to do with what I in fact said to the House or what the problem is here. Mr. Speaker, you may have seen the movie last year, The Firm . It was one of my favourite movies last year. In one particular scene-it is about tax lawyers-Gene Hackman plays Avery Tolar speaking to Tom Cruise who is playing Mitchell McDeer. He is teasing him about his upcoming tax law exam. He has a multiple choice question for the young upstart. He says: ``What is the difference between tax avoidance and tax evasion? Is it: (a) what the IRS says it is? (b) A good tax lawyer? (c) Five years in jail? (d) All of the above?''.

Just to Canadianize that we will substitute Revenue Canada for the IRS, the Internal Revenue Service in the United States, and I think the same applies here. The point I am making is that whether there have been legislative changes is too often irrelevant. Tax law in this country rarely has much to do with legislation.

We recently have been passing in this House tax changes that were brought in by the previous government, well over a year before its defeat in some cases. We have been passing those things. We have been agreeing to them on this side. We have no choice. They have been implemented for some period of time. Legislation has little to do with it and little to do with the question I raised.

The question I was raising was not a question of legal technicality or of the latest version of Revenue Canada tax rules. It has to do with the administration of the tax system in the country and the application of tax law which often leads to the second point I was raising, the far more important point, the whole issue of tax fairness and in particular issues of scope and timing.

Timing in this case is the whole issue of retroactivity of administrative and application changes in terms of the administration of the law. Scope is in terms of the application of this particular provision to some workers and not others, in particular this one provision that depending on how interpreted or how applied affects workers of foreign parented companies differently than workers of Canadian parented companies whether or not those workers are Canadian.

These are very important questions and I do not profess, nor did I in my statement, to know the right answer or what the correct policy should be. I do not know and I can understand that there are certainly legitimate costs involved in these kinds of working arrangements.

My point is that if we are going to administer a sensible, fair and improved tax system in this country it is important that we take these kinds of issues seriously and listen carefully. Neither of those things was reflected in the kind of answer that the minister gave in the House to this dilemma yesterday.

Specifically, whether or not one agrees with the overseas tax credit it is not difficult to understand the concept that fairness and retroactivity of application are two entirely different things. We should be very careful in retroactivity of either legislation or application especially when it involves substantive tax penalties for some people.

Second, it is also not hard to understand in terms of fairness that all Canadian workers should be treated as equally and as equitably as possible. I happen to believe that in the kind of new economy we are moving into capital, with the porous international borders we have and with the technical evolution we have and with many of the well run countries in the world, will do a pretty good job in the long haul of taking care of itself. I do not think it needs protectionist measures such as this.

I noticed that the revenue minister rationalized this measure as effectively a protectionist support for Canadian based companies. However, Canadian labour in the future is going to need not necessarily our help in the old sense of giving handouts but help in the sense of ensuring its full participation in this dynamic, capital driven economy. This kind of tax measure is a perfect example of one that is driven by needs, old kinds of protectionist, nationalist needs that are not consistent with the needs of Canadian workers.

Whether this particular tax credit is essential or well structured or not, I do not know. I do know that if a Canadian worker is participating in his economy, whether here or abroad, surely the application of that should not be based on the status of his employer. Canadian workers and Canadian labour should be the focus of those kinds of measures.

I see, Mr. Speaker, you are asking me to wind up. I did want to spend my time on that. I hope the government is listening and I hope it takes not just the big concerns that we have about the tax system but some of these smaller day to day tax problems that Canadians have much more seriously in the future.