Mr. Speaker, Bill C-32 has now reached third reading. As my colleagues have already mentioned, we are not in any hurry to see this bill passed. At first glance, this bill seems to have been prepared in order to allow the federal government to fight tobacco smuggling and do what Quebec did a long time ago: reimburse merchants with inventories of over 5,000 cartons of cigarettes when the reduction of taxes was passed by the federal government and certain provincial governments.
While we agree with this reimbursement and want merchants to receive it as promptly as possible, there is no way we agree that the government should take that opportunity to insert into this bill two other measures that could be harmful to consumers. These measures, which are usually in fine print so that people pay no attention to them, are nonetheless of vital importance. The second measure in this bill has to do with reducing the input tax credit on the meals of executives and workers, who could claim it on business meal expenses and business entertainment
expenses. The credit was 80 per cent, and will now be reduced to 50 per cent.
What we have been calling for ever since we arrived in the House is justice for all categories of employers and workers. You will understand that, before making any pronouncements on these measures, we would like to have received a report from the finance committee that might have explained to us the detailed repercussions of this one. Perhaps it is a good idea; perhaps we should make some amendments to it; perhaps we would be surprised at certain tax evasions that some large companies will still be able to pull off by switching these expenses to other budget items.
Why does the present Liberal government always seem to be in a hurry to table bills without having the appropriate committee reports? Even at that, there are not many bills, while the number of problems to be solved is ever greater. Could there be a lack of synchronization in this government, which always seems to be governing by the seat of its pants?
So I cannot come down on the side of this measure today. I shall have to vote against it if the government refuses to give us a detailed report from the Finance Committee on its repercussions on all categories of employees and employers who will be affected by it.
Lastly, as Official Opposition critic for transportation, I was astounded to see a bill supposedly to reimburse taxes on cigarettes end up by amending air transportation taxes. Now then, for this particular measure, let me assure you that I do have all the information necessary to know that I am against this measure and I shall vote accordingly.
Firstly, I would like to point out to you that this is not the first air fare increase by the federal government. It started off, under the Conservatives, by increasing airport taxes. That $40 tax is added to all tickets, which means considerable percentage increases in some cases. Today, the federal government is at it again, with a tax that runs counter to all the requests and proposals made by the Association québécoise des transporteurs aériens.
That association made extremely serious recommendations to the present government, the first of which was to eliminate the minimum charge of $10 and set a taxation percentage of between 0 and 9 per cent. That method would have been much fairer and would have made it possible for higher taxes to be paid by people who often travel for pleasure, while people in the regions who travel because they have to would have paid less.
I am not a prophet, but I am going to try to look into the future for you. The present government is so sure that the airlines will accept this fare hike that in a few months it will also try to make them lower their fares. The government thinks that the airlines will not react and will absorb the increase. The government is wrong. The airlines already have trouble surviving. Most of our air carriers are running deficits. So, as a result of all this, the price of tickets for travellers in outlying regions will go up once again.
At first glance, the tax structure does not seem too worrisome. At present, the flat rate tax is $10, plus 7 per cent of the price of the ticket, to a maximum of $40. It is proposed that the flat rate tax be reduced to $6, and the same level of 7 per cent of the price of the ticket be maintained, up to a maximum of $50.
Government machinery costs the public a lot of money; to come up with a proposal like that takes real brainstorming, as we say where I come from. That I am sure of, since I have really suffered through several months of acute meeting mania, and particularly since the Association québécoise des transporteurs aériens had made the government a proposal that was much better thought-out and fairer to air transportation consumers in the regions.
Even the government's objectives in changing the tax structure have been laid out for us: firstly, to increase recovery of the costs of air facilities and services provided by Transport Canada and, secondly, to reduce the tax burden on short-haul domestic flights to smaller communities.
I find the first objective laudable and even desirable. If we want to reduce the deficit, we must do what it takes. We are told that this measure will increase revenues by $21 million in the first year and $14 million in subsequent years. If the government had been open, it would have mentioned the first objective and the desired results. It would not have tried to have us believe that this new tax structure would reduce the burden on short-haul domestic flights to smaller communities, because this statement, in my opinion, is far from the truth.
If this measure had been taken before deregulation, we could perhaps have believed in it; but not now.
The cost of transportation is now borne by people in outlying regions. The price of tickets to these destinations has gone up considerably in recent years.
For example: airfare between Montreal and Rimouski is currently $552 plus tax; Montreal-Saguenay, $466 plus tax; Montreal-Baie Comeau, $562 plus tax. There is not a great deal of traffic on these connections, and to turn a profit the airlines are forced to raise prices. On the other hand the Montreal-Toronto connection is heavily travelled, and the airfare is about $400.
The new rate structure is based on price and does not take into account the volume of traffic or the distances involved. The government says there is a perfect relationship between price and distance, which is not true. Price is a factor of both distance and volume. The government's policy of encouraging low ticket prices in the hope of increasing the number of airline passengers to remote areas is wrong. It is actually encouraging the heavily--
travelled short corridors like Montreal-Toronto, which are heavily used by business people, and chartered flights.
Moreover, Mr. Speaker, the government did not think to establish a rate structure that would distinguish between the domestic network and the external network. A vast majority of people on domestic flights are travelling because they have to, while those travelling outside the country are often doing so for pleasure.
Here is a striking example that I am personally very well acquainted with. As the member for Beauport-Montmorency-Orléans I travel regularly on Air Canada's economy class between Quebec City and Ottawa. The distance is approximately 916 ground kilometres return. The ticket costs $547. Under the new rate structure the tax is $50 plus GST, or approximately $88 in taxes, not counting airport taxes. I do not make these trips for fun but to carry out my duties as a member of this House.
Let us now look at a charter flight to Paris during the summer. Quebec City-Paris: about 6,000 ground kilometres, the ticket costs $499, the tax under the new rate structure is $50 plus GST, or approximately $85 in taxes. And I do not have to take that flight, Mr. Speaker, it would be a pleasure trip.
You can see from this example that an overseas flight of almost 6,000 kilometres costs me $2 less in taxes than a duty flight between Quebec City and Ottawa, and the government will tell us that the purpose of the new rate structure is to reduce the tax burden on short hops to the smallest municipalities. It is ludicrous! I would also like to point out that I cannot take a chartered flight between Quebec City and Ottawa, or between Ottawa and the regions. There are none.
The rate grid that has been put before us shows that the price of all tickets costing more than $500 will automatically go up with the new rates. This means that a number of transportation services to remote areas will be negatively affected by the new policy.
As I said at the start, Mr. Speaker, the government's number two objective in coming up with this new rate structure has not been achieved and is not transparent. On the contrary: the government is going to make things worse.
During the election campaign, the Liberal Party made great promises to the people. It was loud in its accusations that the Conservative Party showed an egregious lack of transparency. And yet today it is ready to make second-class citizens out of the residents of outlying regions. It would have been possible for the government to introduce a tax system capable of reflecting the special and often difficult situation posed by the problem of air transportation in remote regions. The government itself says that carriers have expressed concern about the excessive burden the air transportation tax imposes on short hops. So what does the government do to respond to these concerns? As we see: it wants to increase the regions' tax burden. There is Liberal logic for you! It is unacceptable to try to get us to endorse the bill as it stands.
We recognize the urgency of passing the provisions dealing with full rebates on cigarette inventories to reflect the national $5 reduction in the federal excise tax, partial rebates on inventories to reflect the corresponding reduced federal excise tax and adjustments in the fines for possessing or selling unstamped tobacco products.
On the other hand, we need more information about the portion of the bill that deals with the Goods and Services Tax, and we are entirely opposed to the new air transportation rate structure. Could the bill not be divided in three, so that we could make intelligent decisions? If the Liberal government rejects my suggestion it cannot then turn around and accuse the Bloc Quebecois of delaying rebate cheques to merchants who have been entitled to them for a long time.
The Quebec government found a much fairer way of handling this. It reimbursed all merchants, it did not try to make the small retailers shoulder the cost. We are ready to go ahead rapidly with passage of that portion of the bill, but we cannot give the government a blank cheque either on items for which we lack information or on a portion of the bill about which we have reservations we would like to make clear to our hon. colleagues from the other parties.