House of Commons Hansard #246 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was horse.
Peter Milliken LiberalParliamentary Secretary to Leader of the Government in the House of Commons
Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to 11 petitions.
André Ouellet LiberalMinister of Foreign Affairs
Mr. Speaker, I am honoured to commemorate, in the name of the government, one of the most important events of the century: the creation of the United Nations Organization on October 24, 1945.
Fifty years ago, the first signatories of the UN Charter, including one of Canada's greatest prime ministers, Mackenzie King, gathered together in San Francisco to work out their vision of hope for humanity.
Amid the ruins of a devastated world, our predecessors firmly believed that, for the sake of humanity, they had to build a better future. They also knew that peace and development were not a matter for a few countries but one for the whole planet and all its peoples.
Today, as we contemplate the achievements and turmoil of the past 50 years, one thing is clear: the UN is a universal organization, not only because almost all the countries of the world are members, but because it is involved in all fields of human activity.
From peacekeeping and peacemaking to education and the fight against poverty; from human rights and development to the environment, human health, refugee assistance and programs to promote economic stability and growth; from democratization efforts to initiatives to share technologies and improve food and agriculture, Canada can be proud of the progress made by the UN in improving the fate of millions around the world.
But we can also be proud of our contribution to these efforts. We Canadians were among the first to sign the charter. It was also a Canadian, the late lamented John Humphrey, who wrote the first draft of the Universal Declaration of Human Rights in 1948.
It was my predecessor, Lester B. Pearson, who helped usher the UN into adulthood. Among his valuable contributions to the UN, none was more visionary than his proposal to help set up the first peacekeeping operation in 1956 during the Suez crisis. Since then, more than 100,000 Canadians have served in over 30 peacekeeping missions around the world, without mentioning our contribution to the Korean war. Today I want to pay tribute to those who have served and those who have died in the service of peace and in the service of the United Nations.
Canada has worked through the UN to fight for the rights of the poor and the underprivileged, to promote respect for the environment and to push for disarmament. We have consistently been one of the largest suppliers of food aid. We have assisted in missions to monitor elections in many parts of the world.
The International Civil Organization is based in Montreal. The Food and Agriculture Organization was founded in Quebec City and just last week celebrated its anniversary by holding a major conference there.
Canada has played a leading role in the international atomic energy agency as well as in many other UN specialized agencies. We have served on the security council in every decade since the UN was created and we have recently declared our intention to run for a security council seat for the 1999-2000 term.
And last year, Canada announced that it would nominate the City of Montreal as the future home of the Secretariat for Biodiversity.
As we stand here today at the beginning of the next chapter in UN history and on the threshold of the 21st century, I am pleased to state that Canada remains firmly committed to the United Nations system. I pledge our continued support for the UN's goals.
I had the honour of addressing the United Nations General Assembly in New York last month. I outlined what Canada believes should be the UN's main priorities for the years ahead. This government believes the UN should pay particular attention to three main objectives: preventive diplomacy, rapid reaction and peace building.
All of the components of the UN system must help identify and resolve tensions before they generate into conflict. When preventive diplomacy efforts fail, the UN must be able to intervene quickly and effectively on the ground.
In New York I tabled Canada's report on how to increase the UN's rapid reaction capability. I was encouraged by the positive attention given to our recommendation.
Alongside these efforts, the UN must continue its ongoing work of peace building and articulate the visions of development centred on the individual and one that balances the economic and social agendas for the purpose of improving the well-being of society.
Just as the world has undergone many changes since 1945 and has had to adapt to new requirements, modern technology and fiscal restraints, so must the United Nations greet its future with a strategy for revitalization to meet the challenge of the next century. Those challenges often arise quickly and harshly. Canada will continue to hold out its hand to the UN to help ensure that the general assembly, the security council and indeed the whole UN family are best able to meet the needs of the future in a co-ordinated, efficient and fiscally responsible manner.
The UN has accomplished great things in its first 50 years. There have of course been set backs. We can make the UN better, however we cannot hope to make it better when some countries do not pay their dues. Countries can pay their dues and they should now. That is not to say that we cannot reform the scale of assessments to reflect current economic realities. We should and without delay.
The UN at 50 should take stock of what it has done, how it has done it and how it can do things better in the future. We must look back and reflect on the spirit that carried the architects of the UN forward. Their vision was bold. Their challenges were great.
Today we are faced with universal problems that threaten the achievements of the last 50 years. Unlike 50 years ago, we have a proven universal mechanism that can help us meet those challenges. Let us make it stronger and better. That is the challenge for the years to come.
Stéphane Bergeron Bloc Verchères, QC
Mr. Speaker, I am proud to have this opportunity today to speak on behalf of the Bloc Quebecois on this fiftieth anniversary of the founding of the United Nations Organization.
The Minister of Foreign Affairs gave a relatively appropriate picture of the past achievements of the UN, the challenges facing it today and the role played by Canada.
In my comments on this anniversary, I would like to focus on two main issues which I feel are fundamental and which may have been purposely avoided by the minister.
First, the matter of promoting human rights and democracy. Second, since this is the era of globalization, I would like to discuss that very typical characteristic of the UN, its universality. The UN's membership includes nearly 200 countries, 28 of which joined since 1990.
First, human rights and democracy. As I listened to the Minister of Foreign Affairs say how proud he was, and rightly so, of Canada's contribution, adding that it was a Canadian, the late John Humphrey, who wrote the first draft of the universal declaration of human rights in 1948, I could not help thinking of this government's lax approach to promoting human rights and democracy.
Considering that this government has refused to commit itself to recognizing the results of the referendum to be held next week in Quebec, it is somewhat surprising to see the minister holding forth at the United Nations and recalling the UN's achievements in promoting human rights and democracy.
That takes some nerve, I must say. And coming from a government that has decided from now on to focus exclusively on business interests and literally to turn its back on promoting human rights and democracy, it is downright embarrassing.
The late John Humphrey must be turning over in his grave today. The Bloc Quebecois has strongly criticized and condemned Canada's abdication of its historic responsibility for human rights and democracy.
Before I finish my comments on this first point, I will read one of the most interesting recommendations made by the Bloc Quebecois in the dissenting report of the Special Joint Committee reviewing Canadian foreign policy. The Bloc Quebecois recommended that the Department of Foreign Affairs and International Trade and CIDA, working in co-operation with NGOs and business corporations, draw up guidelines to give concrete expression to the key components of Canada's foreign policy respecting democracy and human rights.
Among other things, these guidelines could include a mandatory framework for analysing situations involving gross and reliably attested human rights violations. They were to be formulated as
soon as possible and made public no later than the UN's 50th anniversary celebrations scheduled for October 24, 1995. But October 24, 1995 is today, and what is the government tabling? Nothing, nothing tangible on promoting human rights and democracy. What an opportunity lost by Canada.
These guidelines were to serve as inspiration for new legislation and regulations to govern the transactions of the Department of Foreign Affairs and International Trade, CIDA, NGOs and business corporations with states belonging to the international community.
We felt that Canada's foreign policy, as it concerns democracy and human rights, should be more consistent and absolutely honest and open, so as to maintain the respect and prestige Canada had acquired, which a sovereign Quebec would certainly have been able to perpetuate.
Today there is every indication that this will be the case if Quebecers vote in favour of sovereignty on October 30. More than ever before, and this is again borne out today, it is high time that Quebec was finally able to participate fully in international politics, realize its aspirations and defend its own interests. Faithful to its democratic values of openness and tolerance, Quebec fully intends to stress greater concern for humanitarian aid and equality among nations.
This brings me to my second point, the universal aspect of the UN and the lessons to be learnt. I would like to refer now to several quotes from the secretary general of the United Nations' speech on nationalization and globalization at the first conference of young leaders, May 24, 1992.
The timely words of the UN secretary general are even more timely today. He said: "In order to enter into a relationship with another, we must first be ourselves. For that reason, the first prerequisite for the proper globalization of our modern life is a solid sense of identity. Excessive or misunderstood globalization might result in the creation of a kind of cultural soup, one uniform culture, which would do nothing positive for the world".
A sound sense of identity. Such was the message of the secretary general of the United Nations. This in fact is really the code for access to the world, a body of cultural references. According to the secretary general, the United Nations is that body of cultural references.
Now, what is the situation concerning cultural identity and cultural reference for Canada and Quebec? English Canada, we agree, needs solid anchor points in order to cope with the invasive American culture. Quebecers, on the other hand, base their identity on Quebec first and foremost. Therein lies Canada's whole problem; it is based on the assumption of a single nation, with one and the same culture, the so-called Canadian culture.
This denial of the existence of Quebec as a historically constituted nation disavows the existence of two founding peoples. Canada is, therefore, having serious problems defining itself. It is, in fact, a country still in search of an identity. Its existential problem is that it is torn in two directions by a dual identity. Recalling the words of John A. McDonald at the time Canada was created: "We have created Canada; now we must create Canadians", we in Quebec are saying "We have created Quebecers; now we must create Quebec".
To return to my main theme, the concept of the nation-state: a nation is, first and foremost, a shared desire for a shared life. It is the first step toward universalism. Universalism itself, therefore, is nourished by nation states. The secretary general's speech illustrated the value of another underlying principle of universality, and that is sovereignty. He expressed it as follows: It is the art of making unequal powers equal. Without state sovereignty there is a danger of chaos, a danger of destroying the very instruments of international co-operation".
He continued as follows: "A world in order is made up of independent nations, each open to the other, respecting their differences and their similarities".
This is one of the most essential messages, perhaps the most essential one, we can glean from the United Nations Organization, that great international institution which embodies these essential values more than any other body. This is why we believe that a sovereign Quebec will be able to participate fully in international life in its own right, bolstered by a solid identity, a solid anchor point, a single and unique cultural reference. Then it will be able to communicate with other nations, with the universal, to use the terms of the UN secretary general. It will do so by assuming its fair share of the obligations imposed upon it by its allegiance to the values of democracy, peace and justice.
There is no doubt whatsoever that this is the spirit within which a sovereign Quebec will assume its responsibilities on the international scene. Since Quebec is faithful to these values, there is no doubt in our minds that the United Nations will open its doors wide to us the day after our accession to the status of a sovereign state.
Bob Mills Reform Red Deer, AB
Mr. Speaker, 50 years ago the charter of the United Nations mapped out many high principles. These were noble aspirations but the reality of the UN has not lived up to that dream.
For decades the UN has remained incapable of acting forcefully to achieve those principles. The primary problem is that it cannot adequately finance its operations. If the UN is to respond to the many global problems which exist it must have sufficient resources to do the job. Since it has not been doing its job effectively, it is
difficult for the UN to take the moral high ground and pressure its member states to pay up.
What is required is major reform and the sooner the better. Without this I cannot blame some of those in default for not paying their bills. Why invest in an operation that is so bureaucratically top heavy, inefficient, and many times ineffective?
A further problem with the UN is the inefficient way the specialty agencies operate. Studies have found significant overlapping and duplication of work, limited responsiveness as well as a lack of transparency. In these agencies the UN has a tough time getting its job done. Certainly this is something that has created a number of institutional obstacles.
There are many areas where the UN should be improved and overhauled for the 21st century. To begin and most important, Canada must insist the UN eliminate the duplication and waste which contributes to its ineffectiveness. If the UN is ever to recover from its current crisis, this is an absolute prerequisite.
Furthermore, Canada must take a proactive and constructive role in reforming the UN so that it can better live up to its original goals of collective security, freedom, justice and human development. Canada is a respected player in the UN and we can provide effective leadership in the reform process. This will be extremely important going into the 21st century.
We must also strengthen the UN to attack the root causes of conflict, lack of democracy, poverty, abuse of human rights, intolerance and the uncontrolled spread of military technologies. In addition, many of the environmental problems which have emerged over the past several decades cannot be remedied without effective international co-operation. A revitalization of an effective UN would greatly help in all these areas.
The minister mentioned peacekeeping. This is a very important duty of the UN in which Canada has played no small part. Canadians attach a great deal of importance to our country's peacekeeping tradition but times have changed and peacekeeping is becoming more perilous and unpredictable. Therefore, this Parliament must establish clear criteria to make sure that our scarce peacekeeping resources are used where they can be most helpful and not used where conditions are unacceptable. We must realize that Canadians cannot participate everywhere. Our men and women in uniform have served the cause of peace very honourably for years and we are very proud of them.
Never again should our troops be left to twist in the wind, as happened in Bosnia, while the government in Ottawa failed to remove them for months and months from a dead end mission where the mandate could not be carried out properly.
In conclusion, the UN faces many challenges over the coming years. If this 50th anniversary celebration is to mean anything, then we must address these challenges head on. The UN will not survive unless it becomes effective, accountable and transparent in all of its activities. These are the changes that we need. These are the changes that the Reform Party will support.
John Godfrey Liberal Don Valley West, ON
Mr. Speaker, I have the honour to present the ninth report of the Standing Committee on Industry entitled "Performance Benchmarks for Small Business Financing by Banks: A Progress Report".
I am particularly pleased to draw the attention of the House to the fact that this report is supported by members of all three political parties on the committee.
The report follows up on the committee's second report to the House "Taking Care of Small Business". It sets out a framework for banks to report their small business loan statistics to the industry committee on a quarterly basis. This data will allow the committee to track the performance of the banks in their relationship with small and medium size businesses and to select specific benchmarking issues for future investigations.
The committee will hold meetings with the banks to discuss this report and related matters during the week of November 6.
Jerry Pickard Liberal Essex—Kent, ON
Mr. Speaker, I have the honour to present the 10th report of the Standing Committee on Agriculture and Agri-Food which deals with Bill C-61, the agriculture and agri-food administrative monetary penalties bill.
After very fruitful discussions with departmental officials and all others concerned, I am proud to report the bill with several amendments.
I also would like to thank all committee members for their co-operation, and the staff and departmental officials who expedited the discussions very well.
Susan Whelan Liberal Essex—Windsor, ON
Mr. Speaker, pursuant to Standing Order 36, I wish to present four petitions that have been signed by the constituents of Essex-Windsor.
The first petition has over 2,400 signatures and is from members of the CAW local in Windsor. They urge the government to
implement an emergency surtax on the profits of banks and other financial institutions to pay off the deficit.
Susan Whelan Liberal Essex—Windsor, ON
The second petition calls on Parliament to act immediately to extend protection to the unborn child through amendments to the Criminal Code.
Susan Whelan Liberal Essex—Windsor, ON
The third petition deals with the social issue regarding same sex relationships.
Susan Whelan Liberal Essex—Windsor, ON
Finally, Mr. Speaker, I would like to present a petition on behalf of my constituents concerning gun control.
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, pursuant to Standing Order 36, I wish to present a petition which has been circulating all across Canada. The particular petition has been signed by a number of Canadians from Moose Jaw, Saskatchewan.
The petitioners would like to draw to the attention of the House that managing the family home and caring for preschool children is an honourable profession which has not been recognized for its value to our society. They also state that the Income Tax Act discriminates against families that make the choice to provide care in the home to preschool children, the disabled, the chronically ill or the aged.
The petitioners therefore pray and call on Parliament to pursue initiatives to eliminate tax discrimination against families that decide to provide care in the home to preschool children, the disabled, the chronically ill or the aged.
Chuck Strahl Reform Fraser Valley East, BC
Mr. Speaker, I will present several petitions today. They have come in over the summer and this fall and are from people in British Columbia.
The petitioners say that over the last 10 years Canadian taxpayers have invested millions of dollars in infrastructure at Canadian Forces Base Chilliwack. The Canadian taxpayer will have to absorb any loss incurred by shutting down CFB Chilliwack and replacing that infrastructure elsewhere. This is the last army base unit in B.C. and the only military base in the lower mainland and in the entire British Columbia region. Due to its favourable climate CFB Chilliwack is able to provide optimum year round training.
Therefore the petitioners are calling upon Parliament to re-examine the closure of CFB Chilliwack to see if perhaps it should not stay open.
Peter Milliken LiberalParliamentary Secretary to Leader of the Government in the House of Commons
Mr. Speaker, I ask that all questions be allowed to stand.
The House resumed from October 23 consideration of the motion that Bill C-93, an act to amend the Cultural Property Export and Import Act, the Income Tax Act and the Tax Court of Canada Act, be read the third time and passed.
Cultural Property Export And Import ActGovernment Orders
The Speaker
When Bill C-93 was last before the House the hon. member for Mississauga East had 28 minutes remaining for debate. Therefore I now recognize the hon. member for Mississauga East on debate.
Albina Guarnieri LiberalParliamentary Secretary to Minister of Canadian Heritage
Mr. Speaker, the tax incentives provided in the Cultural Property Export and Import Act are for all Canadians and not only for the wealthy.
The act has been in effect for almost 20 years, that is since 1967. It has evolved and it must continue to do so in order to encourage Canadians to keep within the country those objects that are part of our heritage. The more Canadians are aware of the existence and purpose of this legislation, the more they donate interesting property related to our heritage.
Indeed, we notice an increase in the number of gifts made to public institutions and authorities responsible for keeping such property and making it accessible to ordinary citizens, the rich as well as the poor, now and in the future.
Economic considerations are not the only reasons underlying this bill. It is also important to make sure that our cultural heritage remains here in Canada. When the original legislation was passed, it did not include any deterrent to prevent the sale of Canadian cultural property on the free market. Consequently, Canadians have forever lost many important elements of their culture and heritage.
These objects were sold abroad and have become the property of public and private collections throughout the world. This is a major and permanent loss of heritage for Canadians.
Cultural and heritage institutions in Canada have a long and proud history.
Our first museums had an educational purpose: to organize and transmit knowledge in the natural sciences. For example, the first known museum in Canada dates back to 1831, when the Halifax Mechanics Institute opened a public museum and reading room. Later came the establishment of the arts museums. By 1903 Canada had 21 museums. Today our museums are respected and renowned worldwide.
The Canadian Museum of Civilization is one of those renowned institutions which attract visitors from all over the world. People come here to admire its distinctive architecture. But what would that magnificent building be without its collections? Without their artifacts, works of art and books, our museums, galleries and libraries would only be empty buildings, rooms and walls.
Bill C-93 will ensure that the collections of Canadian museums, art galleries and libraries are up to date, diversified and exciting.
Canadians are increasingly interested in their heritage. They expect the government to play a role in developing heritage collections. Bill C-93 is an attempt to meet these expectations.
An article in The Ottawa Citizen in October 1994 described the importance of gifts of cultural property for Canadian museums. Here is the story of one such gift.
Ainslie Loomis was a university student in 1939 and regularly visited Britnell's bookstore in Toronto. One day, while browsing through a box of old books, she came across an album of photographs entitled The Antiquities of Cambodia , which had been published in 1867. The price was marked as $2.25, but Britnell's dropped it to 75 cents. In 1993, and now living in Brantford, she gave the album to the National Art Gallery of Canada; it was worth $10,000.
The article went on to explain that the National Gallery of Canada came into being through gifts of works of art. At its creation in 1880, the National Gallery's collection comprised only donated works.
Leanora McCarney of Hull, Quebec, has been giving works of art to the National Gallery for 15 years. She says that when they travel abroad they see galleries with entire wings full of donated works. She does not believe Canadians are in the habit of donating works the National Gallery. She hopes to start a trend, because she feels people should understand that what is involved is their heritage.
In making it easier for people to donate cultural property to museums, galleries and libraries, the government will perhaps make Leonora McCarney's wish come true.
The implementation of measures, like Bill C-93, to consolidate our museum, gallery and library collections has an effect on other sectors of the economy besides the arts and culture. Cultural tourism is a flourishing part of the tourism industry.
On the whole, the tourism industry brings in nearly $30 billion a year and employs over 600,000 Canadians in 60,000 tourism related industries.
In Canada, recent trends indicate most tourists visiting Canada want a cultural experience different from their own. The Department of Canadian Heritage is trying to improve heritage tourism in Canada.
Many examples may be found in Canada of the contribution cultural tourism makes to the local economy, while promoting people's awareness of cultural values and encouraging their participation.
Thus the activities proposed at the Musée de la civilisation in Quebec City are an excellent way to approach culture, community development and cultural tourism.
Opened in 1988, the museum promotes experience on a human scale with a collection of over 80,000 pieces illustrating life in Quebec.
The leadership role of this museum in the city's cultural and educational development is widely recognized. This museum is now regarded as an essential tool for promoting public participation in cultural heritage activities.
Clearly museums, galleries and libraries are not elitist shrines or ivory tower domains for the happy few. They are democratic, diverse institutions open to all citizens. They make a vital contribution to the cultural and scientific life of the community. In Canada, museums, galleries, archives and libraries are resources and inspiration to people of all communities, backgrounds, ages and abilities.
To all Canadians our museums, galleries and libraries represent our authentic and irreplaceable link with our history, culture and heritage. Successful passage of Bill C-93 will help to ensure that these institutions remain vibrant temples of the human spirit, a strong presence for all Canadians to inspire us and reflect who we are.
I cannot emphasize too strongly the importance of this bill, this legislative jewel, for the future development of Canada as a nation. The Cultural Property Export and Import Act is currently the only
legal mechanism available in Canada that promotes conservation, thus helping to define our heritage. Again, this incentive to establish and protect Canadian culture is only an incentive and not a tax deduction or loophole. This incentive in the form of an individual tax credit is available to all Canadians.
Its scope was broadened in 1992 to include artists by encouraging them to donate their creations to designated institutions interested in collecting their work. I do not need to explain to you that artists are among our poorest fellow citizens, at least financially. This tax incentive provides us with a way, however small it may be, to allow major works by living artists to enter the public domain, where they will help inspire and educate citizens much better than if they remained hidden in the artists' workshops.
The Cultural Property Export and Import Act plays another very important role: encouraging Canadians to espouse philanthropic principles, to think about future generations, to seek today what may become a national treasure tomorrow, and to collect works of art.
Those who argue that cultural property donations can only come from the rich are completely mistaken, to say the least. In fact, some of the greatest collectors in the world had very little money at their disposal and sometimes even went without food in order to buy works of art.
We need more of these people in our country, people who can recognize what is of aesthetic value, people who can have a passion for history or, even better, people who can understand the scientific and technical symbols which define us as a nation.
This bill is designed for those who feel it is their civic duty to keep alive our heritage as a young country, and it seeks to welcome objects which are symbolic and representative of our country. To promote the making of collections and to stimulate a philanthropic spirit is the least that the federal government can do to ensure that our heritage remains accessible to all Canadians.
Our country is still very young. It is less than 150 years old. We have a duty to develop existing private and public collections, so that our culture can thrive and be the envy of other countries. More importantly, this will allow Canadians to be fully aware of their place and identity as a nation.
Given the current economic context, it is particlarly appropriate for us to take all possible measures to keep our cultural treasures in Canada, and to encourage the public to think twice before selling abroad family objects brought here by their ancestors over a century ago, not to mention a masterpiece by Riopelle bought 25 years ago for next to nothing.
We are talking about Canada's heritage but, more importantly, about the preservation and development of that heritage.
I am convinced that everyone in this House should support this wise piece of legislation.
Because the arguments are sound I encourage all members of the House to support the bill, which is based on sound logic and makes good sense for the country.
Cultural Property Export And Import ActGovernment Orders
The Speaker
I wish to inform the House that pursuant to Standing Order 33(2), because of the ministerial statement, Government Orders will be extended by 23 minutes today.
Monte Solberg Reform Medicine Hat, AB
Mr. Speaker, I am rising to speak to Bill C-93 and I will argue today that not only is this piece of legislation flawed, this whole act is completely unnecessary. I am quite amazed at the lengths to which the government has gone to introduce this type of legislation for what appears to be not a problem at all or at least a very minor problem. I will argue the legislation has caused far more problems than it could ever hope to solve.
I quote from a Revenue Canada pamphlet called "Gifts and Income Tax":
The Income Tax Act and the CPEIA provide tax incentives to people who want to sell or donate significant cultural property to Canadian institutions.
The Canadian Cultural Property Export Review Board-is responsible under the CPEIA for certifying that an object is of "outstanding significance and national importance".
When an object of this nature is donated to a designated Canadian institution or public authority, and is certified by the CCPERB, the donor does not realize a capital gain. For purposes of the tax credit, the donor can claim the FMV of the gift up to the total amount of tax still payable after claiming any credits for charitable donations and gifts to Canada or a province.
When that legislation was originally brought in I believe in 1977, right from that time we have had all kinds of problems with people trying to take advantage of that legislation.
I quote from a newspaper article, March 24, 1995, in the Montreal Gazette :
Tax avoidance schemes under which unscrupulous art donors obtain bloated write offs for works given to public galleries and museums are on the rise across the country, the Canadian Museums Association warned yesterday.
These dubious donations have become so rampant in recent months that Ottawa might shut down the program under which tens of millions of dollars of art is donated to Canadian public institutions each year, said John McAvity, executive director of the 2,000-member association.
Warning members to be more vigilant against such schemes, McAvity said: "The donations in question appear to be motivated purely by tax avoidance
considerations rather than philanthropic reasons-These donors appear to be neither serious nor knowledgeable collectors or even known to the museums".
Under the scheme, which dates back at least 20 years, a donor buys a work of art for well below the artist's usual fee. The donor would then have the work evaluated for four or five times the amount he had paid for the work, donate the piece to a gallery, museum or registered charity and write off 100 per cent of the evaluated amount, art experts explained.
At the heart of the donation issue is the concept of fair market value.
Michel Rolland, president of a firm that facilitates art donations to public institutions, said that if a client was able to obtain a work of art for well below the usual going rate then the client has made a shrewd investment.
But a Revenue Canada brochure states that "the generally accepted meaning is the highest price, expressed in terms of money, that the property would bring in an open and unrestricted market between a willing buyer and a willing seller who are both knowledgeable, informed and prudent, and who are acting independently of each other".
In other words, if you were willing to only pay $2,000 for a work of art then you should in all likelihood only get a tax receipt for $2,000, said Robert Kerr, a Montreal chartered accountant who writes for the Gazette .
After five or so lean years many artists are desperate to sell their work at almost any price, said Thérèse Dion, a local art consultant.
Rolland's Art-Transit Int. Co. has paid Montreal artist Catherine Widgery 20 per cent of the usual price for her work. "If it is a $10,000 work, I get $2,000", she said.
Similarly, a copy of an Art-Transit artist's contract obtained by the Gazette shows that some artists are paid only 18 per cent of their usual rate.
"It seems like a win-win situation", said one Montreal artist who did not wish to be identified. "Museums are happy to get things free. Artists are happy because they have a bit of money in their pockets. So everybody is happy. What is not kosher is that a client is buying it (a work) at below its value, but getting the write off for a different amount".
Still the artist added "I find the whole thing a bit fishy, but everybody's doing it".
According to the documents obtained by the Gazette , Art-Transit's warehouse contained, as of January 26, a total of 7,241 works of art.
These include works by several artists.
The documents also show that some of the artists have enormous quantities of works with Art-Transit: Guiangoldo Fucito is listed as having 494; Francine Larivée has 440; and Claude Paul Gauthier has 485.
The point is that while some people say it is a win-win situation, it is good for the artists and it is good for the people getting the write offs. It is profoundly unfair to taxpayers who are granting these people a write off for the full appraised value of the art work. In this case it is art work that was bought for $2,000 but that according to the appraisal is worth $10,000 and therefore the write off is $10,000.
This thing is nothing but a huge rip off. We are talking about over 7,000 works of art in one company alone where this is being done. I have no idea what the value is but it has to be astronomical. This is not fair. This is a rip off.
Previous to 1977 when this legislation came into place people donated works of art, artefacts, sculptures, whatever, because they wanted to give them to museums. They did it for altruistic reasons. They are philanthropic. They did not care about the write off.
There were museums previous to 1977. There were art galleries. There was lots of art in them. According to this article, since before 1977 we have had this problem with these scams. It would be bad enough if that were all there was to it. This tax credit is far richer than one can get if one donates to a regular registered charity.
If one donates to the food bank all one can do is donate up to 20 per cent of total income which is the most one can get a deduction for. However, if an art dealer or someone savvy who knows the tax law can work this deal they can actually write off their entire tax for a year by donating these so-called works of art. To me that is unbelievable.
A gentleman from an art gallery came in front of the Canadian heritage committee in Hamilton. In his judgment most people would give out of the goodness of their heart but there are some people who are on to this. He said it was probably the wealthiest people who would make the biggest contributions to the art galleries and take advantage of this situation.
What we have is a tax avoidance scheme, in my judgment, that permits the wealthiest Canadians to get away with paying little or no tax. That is profoundly unfair.
In the last budget the government was talking at length about how we had to have tax fairness. My hon. friend across the way is nodding. This is not tax fairness. This is not in alignment with any kind of taxation system that treats people the same way. Absolutely not.
Why are we fooling around with legislation like this? We should be rolling this legislation back. We should be bringing in flat tax or a single tax or a proportional tax, a tax system that treats people equally. We certainly do not want one that treats people who donate art better than people who give to the food bank or to the Salvation Army or to the cancer society. That is ridiculous. How can we justify that? That is absolutely out of the realm of anything that makes sense.
I am sure people are wondering how much this costs Canadians every year. Last year there was something like $60 million in tax deductions handed out. Depending on people's tax situation, it could amount to as much as the full $60 million in actual loss to the Canadian treasury if people did not donate to anything else and it consumed absolutely all their income so they did not pay any income tax at all. That is not realistic, and I recognize that. However, suffice it to say that people did avoid paying millions and
millions of dollars in taxation because of this scheme. That is not fair and that is not right. We should have a transparent system.
Just before the last election there was a bit of a furore in the newspapers about former Prime Minister Mulroney donating his personal papers to the National Archives. Someone said they saw a figure of how much of a tax break he was to get. The gentleman subsequently said he had made an error and he did not know why he quoted that figure. That is not the point. The point is that we have no idea how much people get in terms of a tax break for the donations they make. These things are protected through the Income Tax Act. We have a situation where people are making donations and we have no idea how much they are being appraised for because that would violate their privacy. Is that the best system?
It was not very long ago that someone at the National Gallery of Canada decided it was a good idea to buy "The Voice of Fire". It was an American art piece. It was three stripes. It cost approximately $1.8 million. People went absolutely berserk, and rightfully so. In my judgment it was a complete waste of money.
If we visit the gallery and look at the comment book, people have said over and over again: "The emperor has no clothes". I think Canadians feel that way too. The point is that we know how much money we paid for that piece of art, but for these other things we do not know how much revenue we are forgoing when we purchase them. That is wrong. It should be out in the open. We should know how much we are paying, either through a tax credit or directly for items that are purchased on our behalf by our government. That is how an open democracy should work.
The legislation is completely contrary to that. That is why we should not be fooling around with the amendment to the legislation but should instead be repealing the whole bill. It is absolutely ridiculous.
I want to talk about some of the specifics of the legislation. The legislation offers an appeal process over and above the cultural export review board. If people do not feel they are getting a fair price from the review board for their donation they can ultimately appeal it to Revenue Canada. If memory serves, that was the situation prior to 1993 or 1991, I have forgotten which. At any rate we would be returning to that situation.
I question whether we should have the review board at all. It is another layer of bureaucracy. How are the people appointed to the review board? They are appointed the same way everyone else is appointed to government boards. They are appointed on the basis of who they know. They are appointed because of their connections. It is quite conceivable that a former prime minister, such as Brian Mulroney, could donate papers and have the decision made on the value of those papers by people he appointed to the board. It is ridiculous.
A few times the National Archives of Canada has gone to the board and the board has said this is the value of the former prime minister's papers. We never find out what it is, but those people who may indeed have been appointed by the prime minister are making those judgments.
This appeal process will allow us to go to Revenue Canada and ultimately I suppose to the tax courts. However, our sources tell us that we have approximately 6,000 cases before the tax court today, 6,000 backlogged cases. Why are we bringing more stuff to these people? Why are we bringing more decisions for them to make? I would think there are more important things for those people to be doing than arguing about the price of somebody's dinosaur fossil or their three stripes on a piece of paper, their so-called art.
I make another point about the legislation. I believe the legislation, which goes back to 1977, and the art bank, which falls under the purview of the Canada Council, have worked against artists. They have hurt artists by flooding the market with all kinds of art and alleged art that has no business being out there in the marketplace today. We have something like 18,000 pieces of art stored in warehouses today, stuff that is supposed to be in the art bank.
We have this legislation that encourages art galleries to go ahead and purchase these things because the money is not coming out of their budgets. All they are doing is going to the people at the export review board and saying: "We think this is pretty good. Put an evaluation on it. The guy is going to give it to us. Whether or not we hang it on the wall now or at any time in the future is really irrelevant, because it does not cost us a thing". They are not working with a budget. They can bring in as much of this stuff as they want. The only ones who pay are the taxpayers.
The people in this article say it is a great scheme and everybody wins. It is win for the art gallery and win for the artist, but it is big time lose for taxpayers who are out millions and millions and millions of dollars in revenue. There are no safeguards built in to ensure the galleries and the museums are using their power to do this responsibly. There is no check in place to make sure that happens.
This is horrible legislation. I would argue that before 1977 we had very good art galleries. We were able to hold on to our works of art. We were able to maintain different pieces of important cultural
property because people ultimately gave these things to our institutions over a period of many years. We know they did that.
Surely this new legislation encourages some people to use the system by taking advantage of the tax credits. Also, the legislation encourages us to keep not only Canadian art but American art and artefacts and foreign artefacts of all kinds as well. People are using this to say this is to keep Canadian culture in Canada. We should be accurate here and say that it is also used to buy all kinds of foreign art.
The fact is that people gave art before 1977 to these institutions. In trying to encourage people to give even more we have opened up a Pandora's box. We have allowed all kinds of people to milk the income tax system, to take advantage of it to the point where we now have the Montreal Gazette writing articles about it. We really have what amounts to a tax avoidance scheme going on, which obviously costs taxpayers millions and millions of dollars. That is ridiculous.
We have that problem. We have the problem that it is not transparent. We have people donating but we never know how much money they get in the form of tax deductions for their art. We have an export review board that could be appointed by people like the Prime Minister, who will end up passing judgment on things they want to give. We have a problem with the art market being flooded because of this type of incentive, this kind of screwy incentive we have here. We have all kinds of problems with this extra bureaucracy and extra cost to solve what was a very minor problem.
Instead of proposing an amendment that will send this to the tax courts where there is a backlog of 6,000 cases, why do we not just do away with the whole thing? Let us just do away with it. Then we can get rid of all these problems. We will not have the Montreal Gazette writing nasty stories about all the scams that are being worked to take advantage of the situation.
We will not have, on the one hand, people in our party and in the Liberal Party campaigning to simplify the tax system and, on the other hand, the government working against that concept by providing tax incentives for the wealthiest of Canadians to take advantage of this system and avoid paying tax. That is crazy. It is so unfair it is unbelievable. I cannot believe the government, the minister, the parliamentary secretary and members across the way are arguing for this type of legislation.
I hope people take the time to write some letters about this. I hope they take the time to contact their MPs and ask how this can be fair.
Let me conclude by saying that although this is a fairly innocuous piece of legislation, when people find out about it they will not be pleased. They will say that when the government spoke in the last budget about achieving tax fairness they believed the government. Now the government is turning around and proposing legislation that is exactly contrary to that. I hope the government will realize that and stop the bill before it goes any further.
Albina Guarnieri Liberal Mississauga East, ON
Mr. Speaker, I rise on a point of order. I wonder if I could have unanimous consent to seek clarification on some of the member's comments.
Cultural Property Export And Import ActGovernment Orders
The Acting Speaker (Mr. Kilger)
The Chair can only ask for unanimous consent. The first three speakers have 40 minutes without questions or comments, but with unanimous consent the House can do whatever it so chooses. Is there unanimous consent?
Dennis Mills Liberal Broadview—Greenwood, ON
Agreed.
Monte Solberg Reform Medicine Hat, AB
Mr. Speaker, I rise on a point of order. I would be happy to do that and I will ask my colleagues to consent to do that. However I have to disappear for a radio interview at 11.30 a.m. I have to get back to my office. If we could do this in five or six minutes it would be great.
Cultural Property Export And Import ActGovernment Orders
The Acting Speaker (Mr. Kilger)
We will have to. I have to stay within the 40-minute constriction as much as possible. I would hope that certainly would happen.