Debates of Feb. 7th, 1995

Income Tax

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, the hon. member ought to know that what this means is, that we negotiated an agreement with the United States to avoid double taxation of Canadians.

Formerly, a Canadian who had a residence in the United States had to pay taxes unless he had a tax credit, and the same applied to an American who had a residence here. Since many Americans have residences in this country, what we did was to protect Canada's tax base.

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, my question is for the Minister of Finance.

Just yesterday, the Minister of Finance asked the official opposition to make suggestions for reducing expenditures. Yet on December 15 in this House, he denounced proposals made by the Bloc Quebecois and denounced the fact that they would only amount to a reduction of $5 billion.

Rather than contemplating another tax increase for the middle class, why does the government refuse to act on the suggestions made by the official opposition, such as collecting $6 billion in unpaid taxes, eliminating duplication which costs $3 billion in Quebec alone, scrapping over $1 billion in unproductive subsidies to companies, cutting the defence budget-

[The Speaker]

Order, please. I remind hon. members that they should ask questions and not give little speeches. I would ask the hon. member to state his question immediately.

[Pierre Brien, Bloc, Témiscamingue, QC]

What a shame, Mr. Speaker, I still had a few hundred million dollars earmarked for the Minister of Finance.

Why is he considering raising taxes for the middle class instead of following the suggestions made by the Bloc Quebecois?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, the only suggestions offered by the Bloc Quebecois were the same ones as the Auditor General made. In congratulating us, the Auditor General also congratulated the Minister of National Revenue on his efforts in this regard. There is nothing new in their suggestions.

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, I have a supplementary question for the Minister of Finance.

Does the Minister of Finance intend to act on the warning against increasing taxes given him by the business council on national issues, which said that the overall tax burden in Canada is already too high, jeopardizing investment projects and, more seriously, hampering efforts to reduce unemployment faster?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, I have said repeatedly that we intend primarily to cut government spending. As to specific decisions, we will have to wait for the budget.

I find it somewhat of a paradox, however, with the whip of the Bloc Quebecois having just suggested that we should pay no attention to business leaders, to have the member for Temiscamingue ask us now to listen to what the business leaders have to say. There seems to be a bit of a lack of consistency here.

The Budget

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, yesterday the finance minister said it would be fruitless for Reformers to ask questions about the budget because he would not under any circumstances get into specifics. Yet representatives of the financial institutions seem to be learning a great deal about the budget from off the record conversations with government insiders. For example, Sherry Cooper, chief economist of Nesbitt Burns says that those in the know tell her the government will save $5.25 billion in spending reductions next year and $7 billion in 1996-97.

Will the minister provide the House with the list of institutions and others who have been provided with this type of information about the forthcoming budget and will he explain why he is not willing to provide the same details to this House and the Canadian people?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, I can assure the leader of the third party that no such information has been provided to any financial institutions and therefore he has his answer.

I did participate in a telephone conference call with Sherry Cooper along with 50 or 60 others, including a full representation from the financial press.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, I can understand why the finance minister wants to try to con the markets and outline his budget strategy to financial analysts. They are uncertain and worried about the government's fiscal direction. The Canadian people are also uncertain and worried about the government's fiscal direction and they need some reassurances.

How is it that the government can find ways to reassure financial analysts on the size of the budget deficit and spending cuts, but will not tell the Canadian people anything about pending tax increases? Why the double standard? It is their money.

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, we have been able to reassure financial markets because we have been able to say that this year, as the Prime Minister has said, for the first time in a long, long time the Canadian government is going to hit its deficit targets. We have also been able to reassure financial markets because we have said that in the years to come we are going to continue to hit those targets.

We have been able to reassure the Canadian people and those who are in need when we have said that we will not engage in the kind of fiscal savagery recommended by the Reform Party.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, if you set your targets low enough, even the Conservatives can hit them.

The government seems to be finding ways of getting information to the money markets about the budget in order to prepare their reaction and calm their fears, but it is unprepared to provide the same information to this House and the Canadian people who have an even greater stake in the budget.

I am wondering whether the Prime Minister condones this double standard or whether he is willing to be as frank with the Canadian people as his finance minister is apparently willing to be frank with financial analysts.

Is the Prime Minister willing to tell the Canadian people today, yes or no, whether the government intends to increase taxes in the forthcoming budget? Be as frank with them as the minister is with the analysts.

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, you will have to be patient because we will be asked that question every day until the day of the budget. Everybody knows we cannot reveal the contents of the budget before budget night. We will respect the rule that has existed for a long time.

One thing is clear. This government has said to the Canadian public and the business community that we would meet our targets and the targets will be met.

Unemployment Insurance

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Mr. Speaker, my question is for the Minister of Human Resources Development. Of all the recommendations made in the Liberals' majority report on social program reform, one is particularly heinous since it aims to require that young people work more weeks than the rest of the population in order to qualify for unemployment insurance, even though young people already have a hard time finding stable jobs.

Does the Minister of Human Resources Development endorse the recommendation made by his Liberal colleagues, which, in an underhanded and discriminatory way, sets up a two-tiered unemployment insurance system with the lower level of coverage going to young people?

[Lloyd Axworthy, Liberal, Minister of Human Resources Development and Minister of Western Economic Diversification]

Mr. Speaker, first if I might I would like to take the opportunity to thank all members of the committee on

human resources who completed their work in sometimes somewhat trying circumstances. I want to tell them I appreciate very much the way in which they made a real effort to reflect the views of Canadians.

As far as the specific recommendations are concerned, we will be looking at all the views and recommendations contained in the committee report submitted, both the majority and minority reports. We will be looking at them very carefully as we go about preparing government programs for the reform of our social institutions.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Mr. Speaker, the problem is that, during the consultation process, not one of the witnesses told us that a system penalizing young people was needed.

How can the minister justify his government's determination to make young people second class citizens, by forcing them to increase the debt load they accumulate during their studies and by restricting their access to unemployment insurance, even though they often hold unstable jobs?

[Lloyd Axworthy, Liberal, Minister of Human Resources Development and Minister of Western Economic Diversification]

Mr. Speaker, as I just explained a committee report is not a government policy. It is very important that we clarify the distinction.

On the other hand, I would say that having read the majority report very carefully, I was very impressed by the number of recommendations made concerning the way in which we could begin to target more assistance directly to young people to help them get into the job market.

It seems to me that one of the most important initiatives or directions the committee majority report recommends is that we devote far more resources to things like internship programs, transitions between school and work, helping students get better aid and assistance to go back to school.

Providing positive programming is really the direction we have to go in. That was certainly the spirit in which the majority committee report was expressed.

Governor General

[Deborah Grey, Reform, Beaver River, AB]

Mr. Speaker, today the Reform candidate for Ottawa-Vanier said that the soon to be appointed Governor General should be required to pay his fair share of taxes. I and I am sure every other Canadian wholeheartedly agree. Now that the Queen pays income tax, why should her representative in Canada not pay?

My question is for the Prime Minister. Will he send a positive signal to Canadian taxpayers by asking the new Governor General to voluntarily pay income taxes like the rest of us?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, to begin with, the Governor General has voluntarily returned his pension to the crown. He was not obliged to do that. There was no obligation at all, yet he accepted to do that.

This legislation has been in existence for a long time. Perhaps we might have to review it and adjust the circumstances to that reality, but this is the way governors general have been treated in Canada since 1867.

We will look into that and see if we can do something. At the same time we have to treat this Governor General the same way we treated the governors general in the past.

[Deborah Grey, Reform, Beaver River, AB]

Mr. Speaker, of course the Queen set the precedent in 1993 when she offered voluntarily to pay income taxes.

Things are different now from what they were in 1867. With today's harsh economic climate when Canadians are being forced to make do with less from sea to sea, a $95,000 salary tax free plus benefits does seem a little steep.

The government has talked a lot in the last few weeks about making the taxation system fairer. Why not start at the top with the Governor General? Equal means equal.

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, it is not necessary to tell the House that the Governor General on his private income, if he has other income, is paying his taxes. It is exactly what the Queen has offered to do in England if I am well informed. She is paying taxes on her private income, not on her public income.

International Trade

[Stéphane Bergeron, Bloc, Verchères, QC]

Mr. Speaker, in its policy statement on foreign affairs and international trade tabled today, the government expresses its firm intention to diversify our trade relations with Asia since, in its opinion, Canadian trade is too focused on the U.S. market.

Nowhere in its statement does this government describe the U.S. as a strategic market for Canadian exporters. It sounds like an updated version of the famous third option favoured by the Liberals in the 1970s.

Does the Minister for International Trade intend to cut human and financial resources allocated to the promotion of trade with the U.S. and reduce the number of trade commissioners, as suggested by Liberal senators and members of Parliament on the special joint committee?

[Roy MacLaren, Liberal, Minister for International Trade]

Mr. Speaker, in Canada's search for additional international markets it is not in any way our intention to play down opportunities in the United States. They are real, they are tangible and of course they represent the greatest part of our foreign trade.

Our programs of support range across a whole spectrum. Some relate to the border states for example. Some relate to small and medium sized enterprises entering the export world for the first time, principally in the United States. It is our intention to continue to support those programs.

[Stéphane Bergeron, Bloc, Verchères, QC]

Mr. Speaker, my supplementary question is for the Prime Minister. The Prime Minister claims that he cares about human rights; why in that case did he not see fit to raise this issue during his meeting with Central American leaders, including the President of Guatemala, a country denounced by Amnesty International for its systematic violation of human rights?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, I raised this kind of issue several times whenever circumstances allowed it. In fact, I raised this very issue, in the presence of the President of Guatemala, at the breakfast meeting we had with the six Central American government leaders.