House of Commons Hansard #151 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was industry.


AgriculturePrivate Members' Business

11 a.m.


Allan Kerpan Reform Moose Jaw—Lake Centre, SK


That, in the opinion of this House, the government should immediately pursue negotiations with the provinces and agri-food industry in order to reassign jurisdictional responsibilities in agriculture and eliminate overlap and duplication.

Mr. Speaker, today I am pleased to introduce debate on this votable motion. In discussing this motion I would like to share with the House a proposal that I refer to as reconfederating agriculture.

Today I will discuss the proposal in broad terms. Later in the debate I will suggest what the proposal means in practical detail about the policies, programs and budgets for governments, the agri-food industry and farmers.

Let there be no doubt about it, there has to be and there will be significant change in the way we do agriculture in the future. I hope it will be change for the better and that we will have an agriculture sector that is more market oriented, knowledge based and more productive and efficient.

I believe that we are at a time in our history when we must debate very basic ideas. We must ask ourselves, if we had to start all over again at square one knowing what we know now, what kind of agriculture sector would we design?

Someone has said that the difficulty is not in developing new ideas but in escaping from old ones. For too long we have let past ideas about how things have been determine future courses of action. New ideas are important for progress.

My motion is based on the premise that it is time to examine not only how government works but also what government does. At the end of this millennium our priority task is to determine areas where government should be involved and play a role and then seek to improve performance in those areas. In other words, we must be effective and do the right things and then we must be efficient and do the things right.

My proposal today builds on statements and ideas put forward in this House by my colleagues beginning in May of 1994. It also reflects the ideas which are being generated by many farmers, academics and farm leaders across the country. There is a real momentum building to radically alter and redesign how governments and industry function together in agriculture, in other natural resource sectors and in many other sectors of our society. This is an issue on which people are ahead of the governments in their thinking, in their ideas and in their proposals. It is time to bring those ideas and proposals to the legislative table, to look at them honestly and openly, to have the debate and discussion needed and to move forward. I am not suggesting what I will share today is the first or final word but it is a starting point for discussion and dialogue.

I want to ask three basic questions about agriculture in Canada in my remarks today. One, what does it mean to reconfederate agriculture and why do we need to do it now? Two, what should governments do in agriculture? Three, what should the agri-food industry do?

In answering the question of what it means to reconfederate agriculture and why we need to do it now, we are talking about outlining a more effective and efficient division of responsibilities between the federal government, the provincial governments and the agri-food industry.

The federal and provincial governments are both heavily involved in supporting the agri-food industry through expenditures. Because of the concurrent jurisdiction under the constitutions of the two levels of government, both federal and provincial resources tend to be allocated to similar activities. This is the basic reason for overlaps, duplications, excessive red tape and costly bureaucracies. Complicated regulations are confusing and intimidating for many farmers and processors. Confusion creates frustration and mistrust between governments and industry.

By way of current illustration of government involvement, in 1994-95 the 10 Canadian provinces will spend a total of almost $2.2 billion of taxpayers' money in support of agriculture. The federal government will kick in an additional $2.2 billion with the 10 provinces for a total of $4.4 billion. The 10 provinces had just over 10,000 agriculture civil servants employed in their agriculture departments this year, as well as the federal govern-

ment in its department, for a total of over 20,000 full time equivalent people on the public payroll in support of the private sector agriculture and agri-food industry. This translates into one agriculture civil servant for every 14 farms in Canada, or one person on the public payroll for every 19 farm operators.

We must examine the effectiveness and efficiency of these manpower and financial expenditures and what the return on investment is. For example, I have examined each province's current share of agricultural gross domestic product with the public dollars which are being spent supporting the agricultural industry in that particular province. This allows us to see how many public dollars are spent for each 1 per cent of the province's agriculture GDP share. Expressed another way, it shows how effective the agriculture industry is in a particular province by taking that public dollar and multiplying it into a share of GDP.

I have also compared the number of agricultural civil servants in each province with the number of farms and farm operators in that province. I have also compared the departmental organizations of each province with each other and with the federal department of agriculture.

The purpose of these comparisons is to see how we might be more effective and efficient. By honestly looking at these things we can learn from each other and get agriculture done smarter and cheaper. It is time to get past the political turf wars. We must address the spending of our governments in a co-operative and bold way with the vision of a new way of doing agriculture. The legal advice that I have received is that we do not need to open the Constitution. All we need to do is develop a shared vision and the political will.

I realize that we cannot just analyse organizational and economic facts and figures. Each province also has unique natural endowments such as climatic conditions, proximities to markets and the selling power of products.

It is mother nature who is not bound by geopolitical borders that determine farming activity, productivity and policy. Nevertheless, a comparison of the factors I have suggested can be helpful in determining how to do agriculture better.

Reconfederating agriculture means that we will develop a system of government in which more decisions are made at the local levels and at the farm gate. It means the devolution of some federal government responsibilities to the provincial and local levels, to the agriculture industry and to the farmer.

Why to we need to do it now? For the first time in a long time good economics and good politics are converging. We now live in a global trading environment made accessible by our market oriented, knowledge based, technologically equipped farming industry.

Developing a new system such as this does not mean an absolutely watertight allocation of responsibilities among players. We must try to reconcile competing tendencies. For example, there is a need to be global in outlook but local in application, to be small and big, to be centralized and decentralized, and to be capable of generating both economic freedom and justice for all the players. This process of reconfederating agriculture will therefore be an ongoing process of learning.

This leads to the second question. What should governments do in agriculture? I begin by reiterating what my colleagues and I have said previously in this House when we have proposed a clearer division of jurisdictions between the federal and provincial governments. It is my thinking that the jurisdiction of the provincial governments be in the physical and human resource areas. This is because those are the elements that are most unique to each province or region and are most manageable by them.

I have then proposed that the responsibility of the federal government be in one, trade policy and trade distortion adjustment support; two, whole farm income stabilization programs; three, health and safety standards; four, macrophysical, monetary and taxation policy.

These responsibilities reflect the true nature of the federal government. They assist lower levels of government by taking responsibility for those elements that span provincial boundaries and are common to all farmers and concern the whole farming industry right across the country.

We propose that the federal and provincial governments have more distinct areas of jurisdiction. This will result in public cost savings by reducing overlap and duplication. It will result in industry expansion and competitiveness by reducing the regulatory and tax burden.

Proposing this clear division of responsibilities between levels of government as well as between the public and private sectors is based on some basic assumptions about what government should do in agriculture.

I want to now briefly discuss six functions that government can most appropriately perform in support of agriculture or, for that matter, in support of other industries in the private sector. The first is research and development, an information sharing function. The purpose of basic research is to ensure we have a thing of value before we attempt to add value to it. This is often also called precommercial research and is thus usually done by the public sector.

Basic research deals with Canada's physical resources. Canada's agriculture industry is oriented on an east-west basis and covers three distinct climatic zones. The provinces that span this east-west orientation are thus blessed with different physical

resources. This is why I argue that the provinces should be more directly responsible for the physical resources of our country.

In pre-commercial basic research and development the provinces should work jointly with the federal government. This is where major public dollars should be spent. All the intellectual resources of our country should be harnessed together for pre-commercial R and D. Both government partners would also have a role in the sharing of information about the resources.

Second, governments have a limited commercial function. I assert that if we expect governments to maximize their pre-commercial activity we should also expect them to minimize their commercial functions.

A limited commercial function for governments means that they should provide a good or service that is normally not capturable by the private sector. These are called public goods or services. Their nature is that they are non-rival and non-excludable and thus not capturable for commercial purposes. Usually an entity like government is needed to identify the demand for these public goods and services, make arrangements for their provision and impose a payment on their beneficiaries.

This matter of the appropriate commercial function for government is one of the most salient and important discussions taking place today in countries and economies right around the world.

Many are saying that the obligation to provide a particular good or service should be assigned to the public or private sector based on this differentiation between non-commercial and commercial interests. Debate about which sector should provide the good or service should focus on the complementarity that each sector can bring to the society. The operative word is not compete but complete.

The choice between private and public sectors should not be one of politics but a seeking of balance, cost effectiveness and efficiency. Government should clearly invest mostly in the pre-commercial and non-commercial provision of public goods and services.

The third function that governments have is a regulatory role. All levels of government are needed to provide an appropriate and acceptable minimum level of regulatory policy upon the private sector. They should regulate in their separate areas of jurisdiction so as to minimize overlap and duplication.

One of the immediate improvements we could make in agriculture is to take all legislation that affects the industry directly and indirectly both federally and provincially, rewrite it in simple terms under one set of guidelines and administer it through a highly trained, effective single system of regulation throughout the industry.

I want to emphasize minimum level of regulatory burden. Farmers and agricultural players up and down the food chain want governments off their backs as much as possible.

The fourth function that governments perform is service. Service to the agri-food industry and general public is the sole reason for the governmental departments of agriculture and agri-food. The system of government should be of the people, by the people and for the people. Government is simply the chosen way that citizens have determined to manage their collective affairs.

The services provided by governments can be varied, however the basic role of government is to facilitate the private sector. In recent times this has come to be known as third party government, that is, an effort by elected representatives to raise resources and set social priorities through a democratic political process while leaving the private sector to do what it does best: organize for the production of goods and services.

It is not government's obligation to provide all services but rather to see that they are provided. To provide their service, governments have a taxation role, a corporate organizational role, and a spending role.

Governments should establish as low a level of taxation regime as possible. Taxation policies should not create dependency on the public sector but rather facilitate private sector entrepreneurs. Tax policy should ease the intergenerational transfer of assets. Tax money should be used primarily as investments in pre-commercial productivity and marketing enhancing programs like research and development and physical infrastructure.

In providing their services governments must efficiently and effectively organize themselves. There is lots of room for improvement in that area. The spending of public funds must be done effectively and efficiently. Public servants are stewards of funds entrusted to them by private citizens.

It is absolutely essential that taxation, spending and regulatory policy be set democratically, be clear and simple and be fair and equal for all the players. Governments should develop a taxation, spending and regulatory climate in which a free market system can flourish with justice. Governments should act as the referee who adjudicates a fair set of rules binding upon all.

The fifth function that governments have is a mediation role. Democratic governments are needed to mediate and attempt to reconcile specialized and sometimes competing interests among the sector players.

Sixth and finally, governments have an education and training function which I have already indicated is most appropriately handled by the provinces.

These then are some proposals about what governments should do in agriculture.

Finally, the third question I ask is: What should the agri-food industry do? I reiterate that we are proposing a clearer division of responsibility for the agri-food industry than what exists now. Government is too involved in the commercial business aspects of agriculture.

The basic responsibility of private industry stakeholders is to supply the demand for private goods. The industry has a commercial interest in providing a private good or service for exchange and profit. The entire life cycle of a private good or service from its envisagement through its development to its sale provides opportunities during which and from which financial benefit can occur to the provider of that good or service.

The vast majority of these private sector responsibilities and decisions should be made by the industry with minimum involvement by the government. At the commercial research and development stage private industry could profitably research and develop all material and non-material goods and services related to agriculture, including foods, animals, plants, genetics, biotechnologies, non-food products, machinery, equipment, and climate and weather forecasting, et cetera.

At the production stage private industry could profitably provide for the acquisition, preparation, planting, feeding, controlling and harvesting of livestock, plants and lands. This includes value-added initiatives.

At the processing stage the private industry could manage all matters related to goods or service, storage, inspection, grading, packing, assembly, pricing, marking and labelling.

At the transportation stage the private sector can profitably provide for the orderly process of an agri-food good or service from farm or processing gate to point of sale or export.

At the marketing stage the private sector can profitably provide for the advertising, promoting and selling of an agri-food good or service. This includes the concept of individual and/or group marketing.

Last, farm financing and insurance could profitably be done by the private sector. This includes all matters relating to securing, managing and the accounting of funds needed for the agri-food good or service life cycle and the ensuring of the material assets of the farm, including crops and livestock in the food processing industry.

There may be small niche roles for public financial services. However, the vast majority of these private sector, commercially profitable responsibilities should be handled by the private sector with minimal involvement by the government.

As I mentioned, later in the debate I will propose how we need to transfer specific policies, programs and involvements that governments now have to the industry.

The private sector is better suited to performing the six business functions than government is. These functions include the commercial function which is the provision of goods and services that are capturable by an entrepreneur and can provide him or her with the profit upon provision and sale. In other words, we want to have a free and just market system. This again is one of the most salient issues occupying the attention of economists and politicians around the world today.

That is why my colleagues and I insist on the importance of direct farmer and businessman involvement in developing agricultural policy. We must work from the bottom to the top. Business and governments alike are realizing that the more democratic they are, the more economically and socially successful they are.

Industry stakeholders should be able to democratically organize, carry out their activities-

AgriculturePrivate Members' Business

11:20 a.m.

The Acting Speaker (Mr. Kilger)

Recognizing that the mover of this bill has 20 minutes, I am under the impression that the member for Moose Jaw-Lake Centre might require a few additional minutes to conclude his intervention. I wonder if there might be consent to allow the member for Moose Jaw-Lake Centre to conclude his remarks?

AgriculturePrivate Members' Business

11:20 a.m.

Some hon. members


AgriculturePrivate Members' Business

11:20 a.m.


Allan Kerpan Reform Moose Jaw—Lake Centre, SK

Mr. Speaker, I appreciate that support from my colleagues.

I want to conclude at this point. Certainly in the next two or three hours I will have the opportunity to go into much more detail than I have done.

I began by saying it is time to reconfederate agriculture in Canada. The time is right and the need is now. I have suggested that we cannot just tinker with policies here and there. There must be a whole new way of doing agriculture based on more distinct and co-operative roles for both levels of government, as much as possible separate from each other and separate from the private sector industry. These suggestions are based on sound economic, organizational and democratic principles.

The first act our Fathers of Confederation passed some 125 years ago was the Agriculture Act of 1868. At the end of this century perhaps we as parliamentarians could have the foresight

and vision our predecessors had, the boldness, the courage, the openness and the good will to develop a new vision of responsibilities for agriculture.

I have sketched out a modest proposal. However, I would urge that we all look at this matter seriously and that we see how we can work smarter and cheaper and that we continue to provide Canadians and people around the world with the highest quality agriculture products possible.

I look forward to discussions with all my colleagues and for the House to vote in favour of this motion. More than that, I hope that serious dialogue will begin immediately with the provinces and the industry.

AgriculturePrivate Members' Business

11:25 a.m.

Prince Edward—Hastings Ontario


Lyle Vanclief LiberalParliamentary Secretary to Minister of Agriculture and Agri-food

Mr. Speaker, first I would like to thank the hon. member for Moose Jaw-Lake Centre for giving me and my colleagues in the next hours of debate on this motion the opportunity to tell the House how the government has been working with the provinces and the industry to advance agriculture and the agri-food sector.

I appreciate his concern for the viability of this important sector of our economy, one that employs 1.8 million Canadians and 15 per cent of our Canadian workforce. It is a concern I share, a concern the minister shares, and a concern our government and all of us on this side of the House share.

We also share his concern about overlap and duplication, not just in agriculture and agri-food but in all areas. That is why the government has launched a process to improve the efficiency of the federation.

The hon. member will be pleased to know that the objectives and the successes of this process are certainly ones that have gone unmatched before. The objectives and the successes are in these areas: to reduce overlap and duplication, as the hon. member is pointing out; to improve effectiveness of programs through federal-provincial co-operation; to reduce administrative costs through streamlined program arrangements; and to improve client services so that all Canadians receive the best service possible as efficiently and as effectively as we can possibly deliver to them.

In agriculture and agri-food this process is resulting in a number of important activities. All of us know the first major issue this government had to deal with after taking office somewhat over a year ago was the General Agreement on Tariffs and Trade, or GATT.

I am pleased to say I was able to join the Minister of Agriculture and Agri-Food in those last few days in Geneva. We returned from Geneva in December 1993 with the new agreement. Before we arrived back in Canada the minister had invited all of the provincial ministers of agriculture and agri-food to Ottawa for a meeting which took place less than 24 hours after we returned. This meeting was held to discuss the implications and to plan together how we could and would meet those obligations.

As a result of that meeting I was asked to head a federal-provincial task force on orderly marketing which reported to the ministers during the middle of last year and again in December 1994. As a result of everyone pulling together to get the job done, our supply managed sectors are moving forward to meet the challenges of the new trade regime. That job is not yet complete but again I want to thank everyone, every stakeholder in the industry, who got together around the same table to talk about how we can all go forward to strengthen and encourage the supply managed sectors in Canada.

The new GATT also brings the opportunity for us to take advantage of the new trading rules to expand our markets and especially to broaden our horizon beyond the United States.

Last July federal and provincial ministers of agriculture reaffirmed their commitment to work to see the Canadian agri-food exports reach $20 billion per year by the year 2000. They added a further target in a further challenge which is to regain Canada's traditional 3.5 per cent share of the global agri-food trade. When we put that challenge forward that goal moves on from $20 billion per year to $23 billion per year. With the advances made the last number of months, everyone is becoming more and more confident that we can meet and hopefully beat the $23 billion target.

The Federal-Provincial Market Development Council has developed a comprehensive work plan to accomplish these goals and both levels of government are working actively and effectively to eliminate overlap and duplication. The provinces and the federal government are also co-operating to develop a single window point of access for federal and provincial marketing programs.

Another area where we are making progress and reducing duplication is in the provision of financial services to the agri-food community. We know this is very important. Agriculture is an industry that takes a tremendous amount of capital. We must assist primary producers in all sectors to put their business plans together so they can be successful.

The Farm Credit Corporation and interested provinces are discussing strategies to reduce duplication of government services. As part of this process the Farm Credit Corporation has acquired the New Brunswick Agriculture Development Board's $37.4 million portfolio. In addition a Canada-Alberta pilot project was launched last June to combine the lending services of the Farm Credit Corporation and the Alberta Finance Services Corporation into a single delivery point. Needless to say, that makes a lot of sense. We are continuing to hold discussions with other provinces to improve efficiencies in this area.

I would like to make it clear that this is simply not a government to government process. The examples I have used so far have been primarily that. Agriculture and Agri-Food Canada is working closely with the private sector and the universities on research. Last year the department ran a pilot project called the matching investment initiative, matching dollar for dollar the money industry was willing to put up for research and research projects. The department and the private sector have been doing this in a collaborative way for a number of years with great success.

There are some other areas where that co-operation is working very well. We have safety nets, the Canada food inspection system. I could go on but I will leave those examples and a few more words to some of my colleagues who will be taking part in the debate as time goes on.

These two initiatives are significant achievements in that they show federal, provincial and even municipal co-operation to reduce overlap and duplication and to improve service.

In conclusion, I would like to again point out to everyone that agriculture is a shared jurisdiction between the federal government and the provincial governments under the Constitution. This has meant that the two levels of government have had to work together since Confederation, which is 127 years ago.

In recent years federal and provincial governments have focused on working together to make the management of this shared jurisdiction as effective as possible. A report prepared for and by the Government of Quebec last year showed that the two levels of government work well together and that the overlap and duplication is minimal. The report put the cost of overlap and duplication at 1 per cent of combined federal and provincial spending in agriculture in the province of Quebec. That is not very much.

However, I would be the first to agree that is probably 1 per cent too much. We will continue to work constantly in co-operation with all provinces and with the industry to ensure that the Canadian public gets the maximum value for its tax dollars.

In order to keep within my allotted time, I have had to reduce the number of examples I could use. However, I know that my colleagues will express more of those as we go on in the debate. We look forward to comments from everyone and suggestions as to where we can continue to make improvements.

The facts presented here today should show clearly that if we were to adopt the hon. member's motion to "immediately pursue negotiations with the provinces and agri-food industry to eliminate overlap and duplication", we would be reinventing the wheel. We are all doing that at the present time. I appreciate the emphasis and the encouragement he has given. On behalf of the government I can assure him that we will continue to move in that direction and make the federal role with our colleagues in the provinces, industry and universities even more effective than it is at the present time.

AgriculturePrivate Members' Business

11:35 a.m.


Jean Landry Bloc Lotbinière, QC

Mr. Speaker, before I start, I would ask for your consent and that of the House. I have a 20-minute speech and I will be the only speaker during the three-hour debate today. Therefore, I ask for unanimous consent to deliver my speech in full.

AgriculturePrivate Members' Business

11:35 a.m.

The Acting Speaker (Mr. Kilger)

Our colleague from Lotbinière has explained to us his predicament. He wishes his intervention to be of 20 minutes' duration, which is twice as long as usual.

He gives his assurance to the House, and as the presiding officer I take the undertaking from the hon. member for Lotbinière that no other member of the Bloc Quebecois will speak on this bill during its duration, which is three hours.

The hon. member for Lotbinière is asking, as the only spokesperson from the Bloc Quebecois on this bill, that he be allowed to speak for 20 minutes. He assures us he will be the only member from the Bloc Quebecois to speak on this bill.

Did I explain the situation correctly?

Is there unanimous consent?

AgriculturePrivate Members' Business

11:35 a.m.

Some hon. members


AgriculturePrivate Members' Business

11:35 a.m.


Jean Landry Bloc Lotbinière, QC

Thank you, Mr. Speaker and all members of this House. I am pleased to rise today to speak to Motion M-314 put forward by the Reform Party. Allow me to read the motion in question:

That, in the opinion of this House, the government should immediately pursue negotiations with the provinces and agri-food industry in order to re-assign jurisdictional responsibilities in agriculture and eliminate overlap and duplication.

There is no need to reiterate my party's position regarding overlap. It goes without saying that the Bloc Quebecois has been fighting against all these unnecessary and, above all, extremely costly cases of overlap since its arrival in this House. That is why the motion put forward by my Reform colleague is quite acceptable and even desirable.

Yet, common sense seems in short supply in this government. We find ourselves repeating over and over again why it is essential to eliminate overlap between Ottawa and the prov-

inces. The Minister of Finance should listen to us instead of going after the most disadvantaged and the middle class when he tables the budget in a few days. It is never too late to make amends.

In agriculture as in all other sectors, the federal government's presence in areas of shared jurisdiction creates unnecessary and costly overlap, as I was saying a moment ago, not only in terms of administrative costs but also in terms of duplication of policies, which often compete with or contradict each other. This, in turn, reduces the effectiveness of government measures. Measures adopted by two different levels of government regularly cancel each other out. Each level wants its priorities and objectives to prevail, and the tugging back and forth is endless as neither will let go.

But Quebec has been asking for years for control, not only over agriculture, but also over regional development, natural resources, manpower training and so on. There are also problems in areas other than areas of shared jurisdiction. The federal government does not respect the provinces' exclusive jurisdiction over areas of provincial jurisdiction, and never did.

The Reform member's motion is relevant, but does he realize that the federal government has always been, and continues to be, centralizing? Quebec knows that this government turns a deaf ear to even the most sensible suggestions when it comes to decentralizing powers to the provinces. Let us be wary of transfers of administrative responsibilities in lieu of jurisdictions. With the former, the provinces are at the mercy of the federal government which can, at any given time, cut budget allocations. In the present situation, the Liberals are likely to suggest such transfers, when we know full well that it is just passing the buck to the provinces.

The provinces are asking for responsibility, of course, but also for the income tax points that come with it. We know that the so-called flexibility of the federal government is nothing but a sham, an empty word that the big guns of federalism use to deceive us once again.

Only by becoming sovereign can Quebec exercise any real control over its socio-economic development. So, when I say that we support the motion, this means that we realize that the federal government never paid any attention to this.

The federal-provincial division of powers issue will become irrelevant once Quebec has achieved sovereignty. However, you will agree that, for some provinces, including Quebec, a federal Department of Agriculture and Agri-food is more of a burden than a benefit.

In Quebec we have two departments of agriculture, each with its own farm income stabilization scheme; we have federal and provincial involvement in marketing board systems; and we have two levels of government involved in agricultural research and farm credit. The result? The kind of overlap that causes constant fiction between both levels of government, with federal decisions being made at the expense of Quebec, and that generates major costs in the agriculture and agri-food sector, a sector that has to live with two regulatory levels and meet the requirements of programs that do not reflect the same policies.

To support this motion means putting an end to the friction caused by unclear jurisdictional divisions. For years, Quebec has received from Ottawa only half or as little as one third of federal taxes earmarked for the agricultural sector.

The several hundred million dollars foregone annually could be used to create jobs in an industry that is responsible for 11 per cent of total employment in Quebec. In 1993, Quebec received $372 million of the $3 billion budget of the Department of Agriculture and Agri-Food, a meagre 12.4 per cent, and this was better than usual.

Between 1986-87 and 1991-92, Quebec's share was 8.3 per cent, according to Agriculture and Agri-Food Canada. Interestingly, Quebec's revenues in the agricultural sector represented 16 per cent of total Canadian revenues in this sector. Furthermore, in terms of added value, the Quebec food industry represents 25.4 per cent of the Canadian food industry, according to Statistics Canada.

The following is an example of the utter confusion caused by the involvement of two levels of government in health standards and meat inspection. At the present time, at least three inspectors visit farms to get exactly the same information, which is then transferred to Health Canada, to Agriculture and Agri-Food and to the Quebec Department of Agriculture, respectively.

The federal government spends $275 million each year on inspection and regulatory procedures, in an area that is covered almost identically by the Government of Quebec. For Quebec, this outright duplication means an annual loss of $64 million.

If the provinces were given jurisdiction over agriculture and agri-food, Quebec could stop subsidizing the central government, whose policies are based on the needs of the west, as we have repeatedly pointed out in the House. These policies are based on the needs of a grain export industry, whereas Quebec's supply management policies are designed to support the livestock industry. One advantage for us would be not having to invest so much energy in Ottawa any more to establish the legitimacy of our own programs.

At this point, the short sighted view of the federal government would indicate dark days ahead for agriculture. We remain at the mercy of Ottawa's unilateral cuts. The upcoming budget provides for major cuts to the Department of Agriculture and Agri-Food, cuts that are likely to affect service to the industry and to the public.

These cuts are the result of Ottawa's wastage of public funds. This is what happens when unnecessary overlap continues unchecked.

It would be appropriate to recall here the position taken by the Union des producteurs agricoles du Québec in its brief to the Bélanger-Campeau commission in December 1990. It stated that, in the area of agriculture, Quebec wanted to take its legitimate share of federal funds and invest it according to its own priorities, policies and programs. It wanted to continue to develop agriculture in the province with the federal funds granted to it on the basis of the four forms of support to agriculture: supply management, income stabilization, farm credit and crop insurance. Each time, energy was wasted in confrontations, for the most part to no avail, trying to assert its point of view on this matter.

Obviously, Quebec is entirely prepared to assume its responsibilities in respect of agriculture and agri-food. We have all the tools to develop our industry and a strategy to do so. I myself have described this strategy to the House on more than one occasion. I would like to review its main points.

The stakeholders and parties in Quebec interested in regional development and agri-food matters met in February 1991 in Montreal and decreed that the community should take charge of its own future. The following objectives were identified during these rural estates general: respecting and promoting regional and local values; dialogue with regional and local partners; protecting and renewing resources; redistributing political power from the top down.

Thus round tables on the food sector were established in Quebec. During the conference in Trois-Rivières in June 1992, they came to an agreement on the main areas to be emphasized to ensure development of the agri-food sector in Quebec. These included, in particular, recognizing, developing and supporting human resources training; ensuring continuity, development and growth in agri-food companies; readjusting current income security programs on the basis of production costs; developing income security programs consistent with the rules of international trade; promoting funding for agricultural businesses and their transfer without incurring massive debt; providing for support for non-viable businesses likely to be reorganized within the sector and providing assistance to persons getting out of the agricultural business. Stakeholders in the Quebec agricultural community have taken measures to control decision-making in their area.

All the while, the federal government is gearing its agricultural policy to the needs of farmers out west. The agricultural bills that have been introduced in the House over the past year all dealt with the grain sector. In addition to Bill C-61, there has been Bill C-49 to amend the Department of Agriculture, Bill C-50 on the Canadian Wheat Board, Bill C-51 on Canadian grain and, now, Bill C-66 on western grain transportation.

Yes, Quebec is ready to assume full responsibility for its agricultural and agri-food sectors, but we need adequate financing, which we can only get by recovering our share of taxes earmarked for those sectors.

If by some miracle the federal government should adopt the motion and agree to transfer jurisdiction over agriculture and agri-food to provinces that want it, the provinces will have to be involved throughout the process. Therefore, the governments which will assume responsibility for the jurisdiction will have to be included in discussions on the transfer of responsibilities and in negotiations with the industry.

We must be on guard: the federal government cannot enter unilaterally into negotiations with the industry to make major changes in responsibilities between it and the industry while it is in the process of transferring jurisdiction to the provinces.

And the government should make no mistake: we are not talking about a transfer of responsibilities, but of jurisdiction. We will not be dumped on. In the case of agriculture, the power will be strictly provincial when administered by the provinces.

In Quebec, we know from our experience with fisheries that a transfer of responsibility can be unilaterally cancelled by Ottawa. We must avoid, at all costs, repeating this catastrophe in the agricultural sector.

Thus, we say yes to the motion. We would also like to say that we, the Bloc Quebecois, are able to say yes to any motion that is good, whether proposed by a Reformer, a Liberal or a Conservative. Yes to a transfer of jurisdiction, but no to transferring responsibility without transferring tax points.

AgriculturePrivate Members' Business

11:50 a.m.

The Acting Speaker (Mr. Kilger)

I know there were some discussions with the Chair as to who would speak next. During private members' hour the Chair has a great deal more flexibility in terms of recognizing members alternating from the government to opposition parties.

In this instance, just to make sure I sustain debate, I wanted to be assured whether the member for Lotbinière was going to be speaking for or against the motion. Having spoken for the motion, I will now go to a speaker who I suspect will be against the motion. I should not assume that; in private members' hour it is a free-for-all.

AgriculturePrivate Members' Business

11:50 a.m.


Gary Pillitteri Liberal Niagara Falls, ON

Mr. Speaker, the hon. member for Prince Edward-Hastings has already referred to the work the government has done with the provinces and industry to develop a whole new farm safety net program.

I would like to elaborate. The problem that had to be resolved in this process was to design a national whole farm safety net program that would still meet the specific needs of each province.

In December 1994 federal and provincial ministers received the final report of the national safety net consulting committee. A consensus was reached consistent with the recommendations of the committee. The farm income protection policy centred on three key elements: crop insurance, a national farm income program, and specific companion programs.

The new whole farm program will be built on the existing net income stabilization account, NISA. A number of changes will be reviewed with the industry to make the program trade neutral and cost effective. Companion programs would derive support tailored at provincial levels to allow for flexibility to meet specific provincial circumstances.

What is most important in this consensus is that the provinces will be able through the companion programs to identify where they want to spend their money in co-operation with the federal government.

Currently provincial and federal officials are completing the necessary details for a multilateral memorandum of understanding. The policy is based on a 60 per cent federal and 40 per cent provincial cost sharing arrangements, monitoring and management process. Once it is completed we will develop federal-provincial bilateral arrangements with each province to allow for specific companion programs.

What I have just outlined is but one example of how federal and provincial governments are continuing to work together to reduce overlap and duplication. In view of the work that is being done, I urge my hon. colleagues to reject Motion No. 314.

AgriculturePrivate Members' Business

11:55 a.m.


John Williams Reform St. Albert, AB

Mr. Speaker, I rise to speak on the private member's motion of the member for Moose Jaw-Lake Centre on jurisdictional responsibilities in agriculture. The motion encourages a complete rethinking of the role and scope of governmental involvement in the agricultural industry.

Like most farmers everywhere in Canada I believe agricultural support is not always delivered in a way that is beneficial to farmers. Taxpayers are consumers. Some of the activities performed by both federal and provincial governments are duplicated, counterproductive or even working at cross purposes. It is high time a thorough overhaul of the system was done.

Within my province of Alberta many federal programs and provincial programs are in place. Therefore the case for consolidation is clear. What started out as a way of helping farmers through the rough times has grown into a top heavy bureaucracy that needs to be pared. As a result of the growth of the department there is now one agricultural bureaucrat for every 14 farmers, which ratio is unsustainable in the long term. We owe it to both farmers and the public service to design a stable and sustainable system.

The overlap and duplication in the system make clear the case for consolidation. There are two forces pushing on the farm industry providing the impetus for making changes now. They are trade agreements with our international partners and the country's fiscal situation. However the most important reason for making the kinds of reforms the motion proposes is that farmers will receive better service from the government. It will cost less and we will all be far better off as a result.

It is important to remember that the well-being of the farming community is at the heart of why we have agricultural support programs. They are not make work programs for public servants or regional development initiatives or even ways of competing with trading partners. It is vital we keep the welfare of the farm and the farm family at the centre of our focus.

The recent trade agreements we have entered into with other nations, such as NAFTA, GATT and the World Trade Organization, have created a set of international subsidy and transportation rules to which we are a signatory. It has become clear to us that many of our current programs will have to be altered dramatically to comply with international trade rules. Being as we have to change our programs anyway to fit the new world trading system, it makes sense to take this opportunity to overhaul our approach to agriculture.

Another reason for systemic reform as I mentioned earlier is that our national finances are in a mess. We all know that. The cost of administering these programs, hundreds of them from coast to coast, is unsustainable even in the short term.

Farmers are not seeing any benefit from much of the moneys spent by the ministry of agriculture because far too much of it is spent on administration. Taxpayers are growing weary of paying more and more for less and less. The time for revolt is coming close. We hear about it in the papers every day: a tax revolt here or a tax revolt in Toronto. All across Ontario, Saskatchewan, Manitoba and Alberta, everywhere, we are hearing about tax revolts.

If we can reduce the number of program overlaps with the provinces, bring better service to farmers and save taxpayers' money, that is sufficient reason to carry out an industry wide review. There is considerable evidence that government intervention and programs designed from the top down are very often not in the best interest of farmers.

Those of us who have been in the industry for a while will remember the LIFT program from the early seventies. This was a program designed by the minister of the day to deal with low grain prices caused by a glut of grain. Farmers were given financial incentives to leave land out of production in an attempt

to firm up demand for the product. Demand did rise dramatically because right about that time the Soviets, among others, began buying vast amounts of grain on the international market. The price of grain rose dramatically.

Unfortunately most of the farmers could not take advantage of the higher prices because they had been encouraged by the government to take the land out of production. They lost the revenue. Most grain farmers ended up worse off financially as a direct result of government intervention. Farmers were told to stop growing grain. As soon as that happened, the price of the grain went up. Taxpayers paid farmers to stop producing and they could have made more money if they produced and sold it on the world market.

This is a typical situation of government intervention at the wrong time, in the wrong place, in the wrong way, that totally distorts the whole market. We end up being much worse off because of it.

Another of the great government flip-flops in agricultural policy has been the GRIP. This has been a dud from the word go. The initiative that spawned GRIP was the growing together exercise, as it was billed by the then minister of agriculture Mazankowski "a great consultation with farmers that would discover their needs and develop programs to deal with them".

When introducing the GRIP program to the prairie pools, the minister referred to it as an unprecedented exercise in partnership. He said that people on the prairies want the government to consult with them before making major decisions.

The motion put forward by the member for Moose Jaw-Lake Centre is admirable, should be given every consideration and should be supported.

AgriculturePrivate Members' Business


The Acting Speaker (Mr. Kilger)

When we come to the debate during second hour on this motion someone from the government side will lead off that hour of debate.

The time provided for the consideration of Private Members' Business has now expired. Pursuant to Standing Order 93, the order is dropped to the bottom of the order of precedence on the Order Paper.

The House proceeded to the consideration of Bill C-59, an act to amend the Income Tax Act and the income tax application rules, as reported (with amendments) from the committee.

Income Tax ActGovernment Orders


The Acting Speaker (Mr. Kilger)

There is one motion in amendment standing on the Notice Paper for the report stage of Bill C-59, an act to amend the Income Tax and the income tax application rules.

Motion No. 1 will be debated and voted on.

Income Tax ActGovernment Orders



Francine Lalonde Bloc Mercier, QC


Motion No. 1

That Bill C-59 be amended by deleting Clause 33.

Mr. Speaker, in the last budget, the federal government decided to reduce the age credit. As we know, all taxpayers aged 65 and over can ask for a tax credit equal to 17 per cent of $3,482 at the federal level and 20 per cent of $2,200 in Quebec.

This credit is non-refundable, that is, it applies to the tax payable; the excess portion is non-refundable but can be applied to the spouse.

The amendment made in the last budget is aimed at reducing this credit for seniors with a net income exceeding $25,921. This threshold will be indexed annually to the increase in the consumer price index, and this measure will be implemented gradually.

We oppose this measure because it reflects, in our opinion, a deliberate effort by the government opposite to go after the middle class, as demonstrated by the so-called social program review and by a proposal to cut UI benefits, since some recipients can earn between $25,000 and $50,000.

By targeting only those with incomes under $25,000 or $18,000-we are not against helping them, quite the opposite, as you know-by cutting off ties between those with incomes over $25,000 and those making less than $25,000, the government goes beyond simply bringing universal measures to a sudden end. It is more serious than that. Universality is not just a buzzword; it also means solidarity.

Does the government think that a senior citizen with an income of $25,000 is a rich taxpayer? Yet, it is attacking this very group, who can now enjoy themselves a little after working hard all their lives. But on $25,000 a year, you still need to manage your money carefully throughout the year if you want to enjoy yourself. It is those people who are targeted by the amendment to this tax credit.

For government that claims to be liberal to be attacking the middle class is a serious matter, because the middle class is the one largely responsible, by its work, for the financial support of government and, more importantly, the one responsible also for creating solidarity. But the middle class does not want to be the only group to pay. What is happening? Instead of reforming the tax system, as is urgently needed, the governement attacks the middle class, the unemployed and the less affluent. We were non-equivocally reminded of this fact at the rally held yesterday in Montreal by community groups and central labour bodies denouncing the fact that the proposed Axworthy reform-and it is the same thing with this change to the age tax credit-attacks the middle class, the unemployed and the less affluent instead of attending to the much-awaited review of the Canadian tax system.

Let me remind you that speaking of the budget, Lloyd Axworthy himself stated in 1985, when he was-

Income Tax ActGovernment Orders

12:05 p.m.

The Acting Speaker (Mr. Kilger)

I just want to remind the hon. members that, in addressing a minister, they should refer to his position: the Minister of Human Resources Development, the Minister of Finance, and so forth.

Income Tax ActGovernment Orders

12:05 p.m.


Francine Lalonde Bloc Mercier, QC

Thank you for reminding me, Mr. Speaker. I have been on a long Canada-wide tour, as you know; some of the veneer of parliamentary procedure may have worn off. I do not think I will need to be reminded again.

The current Minister of Human Resources Development, who was opposition critic at the time, said it was a fact that the buying power of seniors had been cut substantially and retroactively. First the government had taken their income assistance away, and now it was taking their buying power away. As if this were not enough, they were struck a third blow with a $2 billion cut in provincial transfers by 1990. He added that it was clear the budget was an attack the income of seniors in many regards.

What would this same Liberal critic say, were he a critic for the opposition, not only about a so-called reform of social programs, but also about this important age tax credit? If the Liberal government wishes to maintain throughout this country, which we crossed as members of the human resources committee, the slightest faith in some fairness in the taxation system, it must move swiftly to truly examine that system, ensuring that the unemployed, the poorest and the middle class are not saddled with the burden of the deficit and the debt.

Yes there is a debt, but certain parties who remain in the background are not worried, and in fact are helping, perhaps even cheerfully, to dismantle what provided some well-being to so many such people who are slaving away, struggling, having difficulty paying their rent or affording to take a vacation. These are the people who are threatened at this time by the proposals as a whole, both for reforming social programs and those contained in this amendment. This is why we are asking the House to adopt our amendment, and thus amend the bill.

Income Tax ActGovernment Orders

12:10 p.m.

Winnipeg North Centre Manitoba


David Walker LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, I would like to address the amendment put forward by the official opposition.

It is correct that Bill C-59 will subject the age credit to an income test. Canada's debt and the burden of high taxes and interest rates it imposes on all Canadians, including seniors, demands that government spending be both fair and effective.

This measure meets that test by ensuring that assistance goes to seniors who need it but not to those with annual incomes hitting $50,000. Under the current tax system, all Canadians 65 and older are eligible for the age credit. It delivers a combined federal-provincial tax reduction of about $950 a year.

Under the proposed legislation, individuals with net incomes below $25,921 will retain their full credit. For people with net incomes above the threshold, the credit will be reduced at a rate of 15 per cent of their net incomes exceeding $25,981. The threshold will be indexed.

I would like to make it very clear that 75 per cent of all seniors, 2.6 million people, will not be affected. In addition, most of the people who are affected will continue to receive partial benefits. In fact, only six per cent of all seniors, those whose income is over the $49,134 threshold, will stop receiving benefits altogether.

It is also important to note that the reduction will be staggered over a period of more than 12 years. In 1994, the reduction would reach half of the figure that otherwise would have been set. In addition, people will still be able to transfer the age tax credit to a spouse.

Let me assure the House that we do not take this measure lightly. It is today's senior citizens who built this country into what is considered by many the best place in the world. Our government will never forget the obligation it has to helping seniors and why.

We also must remember the obligation we owe to all Canadians to restore the fiscal responsibility that makes possible lower taxes, easing in interest rates and more jobs.

The Toronto Star in an editorial this morning made the point that as it scrambles to cut spending Ottawa can achieve fairness only if it allocates its limited resources on the basis of real need. By itself the age of 65 is not a measure of need.

That is why Bill C-59 moves to sustain aid to those seniors who do need it but not for those with significant incomes.

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12:15 p.m.

Lethbridge Alberta


Ray Speaker ReformLethbridge

Mr. Speaker, I appreciate the opportunity of being able to enter into this discussion on Bill C-59. I want to say very clearly to begin with that I do not support the amendment which was moved by the hon. member for Mercier today. There are some very strong reasons we cannot support what was suggested.

The recommendation that came in the 1994-95 budget is certainly a policy change by the Liberal government. It is a move away from universality. Now the program is targeted and takes into consideration those people most in need of additional assistance to carry out their daily responsibilities.

As has been pointed out not only by the mover but by the hon. member from the government who just spoke, this amendment would continue universality and put back in place a federal tax credit of 17 per cent or an amount of about $3,482 for any and every taxpayer 65 or over. At this point we have to ask whether we can afford it and continue to do that.

The Liberal government and Liberals when they were in opposition argued that universality should be sustained and it should continue and that should be the policy of government forever after. They argued that when the question of the clawback on old age assistance was presented before this House in the last sitting. At that time the Conservative government made the decision that we should put a clawback in place. Now that is in place and old age assistance is somewhat more targeted toward those in need.

Now we are at the stage at which the Liberals, now in government, see that the reality of our fiscal situation is bringing us to this kind of decision making and that it is most necessary. We must be able to target government funds toward those most in need. If we supported this Bloc amendment it would revert to universality and I do not think that would be realistic in light of today's current economic circumstances.

I would like to make one or two remarks with respect to the case put forward by the hon. member for Mercier today. The hon. member said in her presentation that the change of the federal tax credit from universality to one which is targeted and institutes the clawback principle is a deliberate attack on the middle class. The hon. member went on to say that it abruptly ends universality. She said that before we do these kinds of things we should have tax reform. She said we want to keep a feeling in Canada that everybody belongs and that we should keep taxes off of the unemployed, the middle class and those most in need.

That sounds like an ideal society that a socialist point of view would certainly put forward in this House.

It is always the underlying premise that one is going to take away from the rich somewhere and give to someone else. One is going to transfer payments continually to look after someone else in our society. One can understand that from people who have this kind of a left wing socialist approach to life in which they think that somebody is rich, that somebody else is earning more money than they and that through government law they must transfer those earnings to somebody else they may feel is in need.

If we look at this policy here where we had the tax credit to all taxpayers over the age of 65 it will tag seniors who have retired with huge incomes. It could be $1 million or $100,000 or $200,000 a year, we were providing an extra benefit to the rich. I do not know how well that sits with someone who looks at it from a rather left wing, socialist approach as the Bloc Quebecois does.

I have been most disappointed to hear that kind of view from that party in its contribution to this House. Most likely it has made a very good replacement in some sense for the New Democratic Party which once sat somewhere in this relative position in the House.

However, we must look at reality today. The Government of Canada has a deficit of $39.7 billion. We have interest payments of $40 billion on a debt of over $500 billion and it is moving toward $50 billion per year as our debt continues to accumulate as we continue to spend. That is the way it is. Every one minute $18,000 is added to the debt. If we look at that in terms of the income of members of Parliament, every four minutes we add $64,000 to the debt of this country on to the current accumulated debt. That is adding up very quickly and we need to do something about it.

Fiscal responsibility must be part of the policy that we have in front of us here. We must recognize that the decrease in cost to the government of some $300 million is part of an expenditure reduction program that was necessary and is necessary to be used to try and keep the level of deficit down and keep the level of interest costs down so we can get this country back on a more pay as you go basis.

Bloc members do not understand that kind of language. They feel they can have it both ways. They feel they can spend here,

tell one crowd that we are going to spend and keep all these benefits for them on this hand and at the same time we are never going to have to face fiscal reality and deal with this big deficit in the country or deal with the accumulating debt of the country. Those two policies, if they were told in the same building at the same time, would look very foolish. These inconsistencies are continually presented on the floor of this House and Canadians are not buying that kind of approach.

I know the people of Quebec, as they may watch this debate today and as members of this House point out the inconsistencies of this debate that is presented, they will not buy the kind of message that the Bloc Quebecois is presenting to Canadians in this House and in the referendum that is going on in Quebec trying to present to the people of Quebec. They will not buy it. They will see the inconsistencies. They will see that it is the wrong approach to building Canada. It is the wrong approach to building any city in Quebec. It is the wrong approach to building any community in Quebec. It is not the approach that will bring fiscal accountability to Canada, nor will it bring fiscal accountability to the province of Quebec as it should.

This amendment before us is unacceptable in principle and unacceptable in terms of the current circumstances. It is unacceptable because it comes from a philosophic bent that is unacceptable to Canadians. It is one that will not build this nation of ours.

I encourage the members of this House to vote against the amendment because it just does not fit in terms of today's reality.

Income Tax ActGovernment Orders

12:25 p.m.


André Caron Bloc Jonquière, QC

Mr. Speaker, I welcome this opportunity to support the amendment standing in the name of the hon. member for Mercier, whose purpose is to eliminate one of the proposals in the bill before the House today which would involve a considerable reduction in the age credit, the tax credit for seniors. As you know, the citizens of this country are entitled to special tax relief on the basis of age. This age credit is currently set at $3,482, which works out to a reduction in federal income tax of about $610 annually for all tax-paying seniors. Combined with the credit allowed by most provinces, this adds up to about $950.

The proposal, which our amendment before the House today would eliminate, would apply an income test to the credit, so that seniors whose net income exceeds $25,921 would see the value of their tax credit go down and, in the case of seniors whose net income exceeds $49,134, disappear altogether in two years' time. Let me explain. The proposed amendment to the Income Tax Act will initially have no impact on seniors who are among the neediest in our society. Seniors with an income of less than $25,920 will not be affected. This will only have an impact on seniors with a net income between $25,000 and $50,000.

These people belong to the middle class. These are people who have worked all their lives, have saved money for their retirement and have a net income of about $30,000 or $40,000. These people are not wealthy. These are members of the middle class who have worked to enjoy a good life during their retirement. These are the people who will be hit, and that is why the Bloc Quebecois is opposed to this amendment. I heard members of other parties say: "Sure, but this tax credit also benefited people earning $200,000, $300,000 or $400,000". I think that is rather exaggerated, since the vast majority of those who will be affected are people in the middle class with average incomes.

The message this amendment sends to people, especially to seniors, is that our society does not appreciate them. The age credit provision was included in the Income Tax Act-at least, that was my understanding-to provide some recognition for people who worked so hard to build our country and who managed to save some money for their retirement, and I think the country, whether we are talking about Canada or Quebec, should recognize their contribution. I think the age credit was a way to tell them that society valued their contribution.

The other thing I see in all this is that those who want to reduce the credit believe that seniors have a fair amount of money, that there is not enough money to go around, that there is a deficit, and that everyone has to pay. But in fact not everyone in Canada pays. I think that, before we go after the incomes of seniors, we should really look elsewhere. Over the past year, and even during budget preparation, the Bloc Quebecois suggested places to the Minister of Finance where money could surely be found to replenish government coffers so that the people in the middle class and, particularly, those 65 and over in Canada could be left alone.

They talk about family trusts, a way for the very rich to shelter large amounts of capital from taxes. They could be a source of hundreds of millions of dollars.

There is the whole business of tax havens. You know, Canada has agreements with some 15 or 16 countries, which allow companies in Canada and other countries to spread out profits and therefore to avoid paying taxes. It is primarily in countries that welcome big multinationals where people with a knack for accounting arrange for these companies not to pay any taxes.

I think we should look at these agreements and get the money that is due to Revenue Canada-Taxation. Here again, hundreds of millions of dollars are involved. This is where we should be looking, instead of targeting people who have worked hard all their lives to enjoy decent retirements.

Furthermore, we should take another look at the real minimum tax that could be charged on the profits of major corporations. Do you know that, right now in Canada-and I think many people find it disgusting; it is a real sin-there are companies, big corporations, not paying any taxes. They make profits, but they do not pay any taxes.

Under a particular accounting policy, they can carry over losses incurred in previous years. So, in a year when they make a profit, they can carry over losses from preceding years to offset it and avoid having to pay taxes.

If individual taxpayers were allowed to do the same, I think that we might be surprised by the results. Some people earn a lot of money one year and considerably less the following year, for any number of reasons. I do not think it is that easy for individuals to carry losses over from one year to the next.

There is a great deal of money to be made with a minimum tax on corporations and at the same time this would put an end to an outrageous situation that people read about in the papers: large corporations not paying a cent in income tax while individual taxpayers are seeing $500, $600, $1,000 or $2,000 deductions taken away from them. I think there is something wrong in terms of tax fairness and, as a result, the public doubts that the Canadian tax collection process is fair and equitable.

Finally, I would like to remind you that the auditor general reported that there some $6.6 billion was currently owed to the federal treasury in Canada. For one reason or another, the tax man did not collect the amounts due. At least 80 per cent of these unpaid taxes could still be recovered. This adds up to several billion dollars.

I think that, with the assurance that all amounts due will be collected, the public would accept more readily that measures such as the one we proposed this morning, although debatable, be adopted.

But first, the federal government and the Minister of Finance must demonstrate that the Canadian tax system is really fair, that corporations pay their share, that the rich pay their share, that all those who owe back taxes pay them. I think that we must resist any further tax increase on the middle class. The middle class is large. Small amounts times millions of taxpayers amount to a lot of money in the end.

But when the most heavily-taxed middle class, whether retired or younger people, come to realize that the system is no longer equitable, this gives rise to situations where people protest and refuse to pay taxes, not because they think that it is not fair to pay taxes, but because they feel that not everyone is paying his fair share.

So, I hope that my hon. colleague's amendment will be passed and that plans to eliminate the age tax credit will be reconsidered as far as certain categories of seniors are concerned, in particular middle class seniors.

Income Tax ActGovernment Orders

12:35 p.m.


John Williams Reform St. Albert, AB

Mr. Speaker, I rise to speak against the motion put forward by the Bloc to remove means testing whereby the tax credit for seniors is reduced as their incomes go up. As I have said in the House before and will say again, members of the Bloc are not only separatists but socialists too. They always want to ensure the status quo is protected: we cannot change anything given to a group of people even though it has been shown to be no longer appropriate.

We have a fiscal crisis in the country. The finance minister is starting to recognize it. The Reform Party has recognized it for a long time and has been able to raise awareness of that fact. Now the government is coming on side and saying that we really have a problem.

The Minister of Finance promised us a tough budget with some more tax increases in the name of fairness. Some may question the fairness but they are certainly tax increases. We are going to see some cuts. The Reform Party has been proposing these for many years. We ran in the election on balancing the budget within three years. We must get the job done to ensure that our social programs for those in need are protected. That is the number one priority. After that we have to ensure that we get the budget balanced.

The motion put forward by the Bloc would suggest that we continue the old situation of taxing the poor to pay for the rich. We have millionaires in the country who spend their winters in Florida, in Mexico, in southern United States and in Hawaii because they are retired. They have large incomes and a large amount of assets. Yet we continue to give them a tax break paid through the additional taxes of young families struggling to pay mortgages, young families trying to raise children, educate them and get on their feet. These people are being focused. We are calling them the middle class and saying: "You have to pay more in order that a certain segment can live in the lap of luxury and get a tax break too".

Surely it makes sense to recognize that the elderly poor need assistance, to focus on them and to remove the credit for those who can afford to pay their share of taxes. That is what it is coming down to. We want to be really fair and not like the Minister of Finance who suggests that fairness is an increase.

We want to ensure we are fair and focus the money where it will do the greatest amount of good. We should remove the tax credits from those who can afford to do without them. It is not

pleasant. We would rather not do it but unfortunately with the situation the country is in we really do not have a choice.

We hoped the Liberal government would have acted quickly and decisively to get the job done a year ago. We are $45 billion or $55 billion more in debt, and the Minister of Finance says: "I think I am going to start this time". I do not think that is good enough, but it is water under the bridge, the horse is out of the barn or whatever. Here we are today; let us hope this time the Minister of Finance will make an aggressive start rather than continue his policy of gradualism to get the budget balanced some time down the road.

Let us get the job done. If we do not get the job done we will not only find that we have to reduce the tax credit for seniors this year but we will have to eliminate it for everybody another year. We will have to cut social programs we can no longer afford that are not only desirable but almost mandatory. However we will not have the money for them.

That is the crisis looming ahead if we do not act decisively now. I cannot understand why the Bloc would suggest that we should continue allowing this tax credit for millionaires. The point is that we must move ahead.

Our leader, the member for Calgary Southwest, has said quite specifically on several occasions that we are going to introduce a budget and the Minister of Finance is going to have a budget and he is prepared to debate the two of them.

The Minister of Finance is playing games again. He told us he was going to reduce the deficit to $25 billion in three years. A couple of weeks ago he said we were to have two-year rolling targets. Everybody thought that was progress until they realized that he was only going to release them one at a time. Now he is going to say: "Guess what, my two-year rolling target is $25 billion in 1996-97".

We knew that a year and a half ago. We have not moved forward. He admitted back in October when he appeared before the finance committee that things were falling apart and he had to make extra cuts between $9 billion and $15 billion to meet his goal. Interest rates have gone up even more since then. The cost of the debt has gone up even more since then. His figures are even more off track. Yet he still has a policy of gradualism.

Death by a thousand cuts is one thing I was looking at. I was looking at Bill C-59 and the number of tax increases being proposed. These are just last year's budget increases. We have not even started to get the job done. We have seen the budget reduced from $40 billion to $39.7 billion, a minuscule drop. We have seen the $100,000 lifetime capital gains exemption eliminated. We have seen extended the taxation on employer provided benefits to include the first $25,000 of life insurance. There is the age credit we are talking about today. Business meals and entertainment expenses have been reduced from 80 per cent to 50 per cent. Divisive corporate reorganizations curtail a tax avoidance tactic that allows capital gains and so on. Investment tax credits reduce the rate at which a tax credit is calculated and so on. It is death by a thousand cuts and we have not started the job.

The deficit still has not come down in any meaningful way until the Minister of Finance introduces another budget in a few weeks time. If interest rates continue to rise that will not do any good whatsoever.

Therefore, while we support the reduction being proposed in Bill C-59 that is opposed by the Bloc, we are also saying loudly and clearly to the Minister of Finance: "Get the job done". If he gets off this policy of gradualism and deals with the crisis effectively, we can say to seniors and others who depend on social programs that we recognize we have a responsibility and want to preserve social programs for those in need. If the Minister of Finance does not get the job done now and get it done quickly, these programs will be in jeopardy because the government could not get the job done.

Income Tax ActGovernment Orders

12:40 p.m.


Gilbert Fillion Bloc Chicoutimi, QC

Mr. Speaker, I have a duty to rise today to speak to Bill C-59, an act to amend the Income Tax Act, since this bill includes several tax provisions that were announced in the last budget almost a year ago. Consequently, I will support the amendment moved by my colleague, the hon. member for Mercier.

This bill reflects an effort to correct certain shortcomings in the tax provisions, but I am not sure that the goal will be achieved since this government managed to divide Canadians and Quebecers into several categories: the rich, the poor, and the disadvantaged.

Once again, the government is going after the most disadvantaged in society. It wants to take half a billion dollars from the pockets of seniors by reducing their age credit. That is really outrageous. A lack of money precludes any kind of participation in community life. Take off your masks and tell us clearly what you have in store for our seniors, a growing number of whom live in poverty.

Is this the kind of life the Liberal government has in mind for our seniors? As you know, in 1992, the average income for seniors was $18,000 a year. Furthermore, 21 per cent of seniors are low income earners living at or below the poverty level. The government now thinks that a senior with a $25,000 income is rich. The provision in this bill is based on these people's low income. It would be unconscionable to collect such amounts when there are so many ways to get more money elsewhere.

Seniors are now eligible for non-refundable tax credits. Many of them-from across Canada, I think-are very concerned that this credit might be cut or eliminated altogether. The Liberal government decided to reduce this tax credit. This amendment is aimed at reducing, for seniors with a net income of $25,921 or over, the tax credit by 15 per cent of the amount by which the individual's net income exceeds $25,900. This credit will be completely eliminated when individual income reaches $49,000.

The government wants to implement this measure gradually over two years. In other words, half of the amount calculated will be eliminated in 1994 and the other half in 1995. This measure will affect about 250,000 senior citizens. Of that number, 170,000 are considered to be on low incomes. This verges on outright injustice to seniors on average incomes, and all for the sake of an estimated savings of $20 million in 1994-95, $170 million in 1995-96 and $300 million in 1996-97. It is outrageous, when we realize that this money will come directly out of the pockets of our senior citizens.

Need I recall that the Liberals were the first off the mark to criticize the Conservatives for cuts affecting senior citizens? In fact, on June 18, 1985, when the Minister of Human Resources Development was in the opposition, he said: "The fact of the matter is that the government has substantially reduced in a regressive way the purchasing power of senior citizens. Not only has their direct income support been taken away, but their purchasing power has been taken away. As if that were not enough, a third whammy is added through reductions in transfer payments to the provinces by $2 billion between now and 1990. The Budget is clearly a multifaceted attack on the income base of senior citizens".

And where is the Minister of Human Resources Development, now that he has changed his tune? Now that his party is in power, the minister's policies are right in step with the same policies he used to criticize so roundly, and I am referring to the reductions in transfer payments and the purchasing power of senior citizens. This government was all about promises and a red book, but now they are in power, the red book is fading fast.

The Prime Minister is a good example. After promising he would not raise taxes, he is now leaning towards taxing RRSPs, another way to increase the tax burden on the middle class. This will lead people to put less money in their RRSPs, at a time when public pension funds are showing signs that they will be unable to meet the needs of an ageing population.

The government can get its half billion dollars somewhere else. Do something about tax evasion! Many hundreds of millions of dollars are locked up in family trusts because of tax treaties with foreign countries. The perfect tax haven.

This government has a funny way of showing its recognition to people who have worked hard all their lives. What does it want? Let senior citizens enjoy their well-deserved retirement in dignity.

Unemployment is over 10 per cent. Youth unemployment is close to 17 per cent. In Quebec, more than one million people are on unemployment insurance or welfare. The government should be doing something about unemployment, for a change. Let us restore the pride of Canadians and Quebecers by putting them back to work. The government should stop taking money from the poor, but Bill C-59 is one more step in that direction, with its measures against senior citizens.

The Bloc Quebecois condemns this bill which does nothing to help this section of our population and will merely add to the number of poor people in our society. In concluding, I want to ask the following question: Is this flexible federalism? If so, this is one more reason to get out.

Income Tax ActGovernment Orders

12:50 p.m.

The Acting Speaker (Mr. Kilger)

Is the House ready for the question?

Income Tax ActGovernment Orders

12:50 p.m.

Some hon. members