House of Commons Hansard #223 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was federal.
The House proceeded to the consideration of Bill C-82, an act to amend the Royal Canadian Mint Act, as reported (without amendment) from the committee.
Royal Canadian Mint ActGovernment Orders
The Acting Speaker (Mrs. Maheu)
I have a ruling by the Speaker on Bill C-82, an act to amend the Royal Canadian Mint Act.
There is, on the Order Paper, a motion to amend Bill C-82, an Act to amend the Royal Canadian Mint Act, at the report stage.
The motion is substantially similar to an amendment previously moved and defeated in committee. Accordingly, pursuant to Standing Order 76.1(5), it has not been selected and we will now proceed to the concurrence motion at report stage.
Royal Canadian Mint ActGovernment Orders
Portage—Interlake Manitoba
Liberal
Jon Gerrard Liberalfor the Minister of Public Works and Government Services and Minister for the Atlantic Canada Opportunities Agency
moved that the bill be concurred in.
Royal Canadian Mint ActGovernment Orders
The Acting Speaker (Mrs. Maheu)
Is it the pleasure of the House to adopt the motion?
Royal Canadian Mint ActGovernment Orders
The Acting Speaker (Mrs. Maheu)
When shall the bill be read the third time? By leave, now?
Jon Gerrard Liberalfor the Minister of Public Works and Government Services and Minister for the Atlantic Canada Opportunities Agency
moved that the bill be read the third time and passed.
Réginald Bélair LiberalParliamentary Secretary to Minister of Public Works and Government Services
Madam Speaker, I rise today to address Bill C-82, a bill which will enable the Government of Canada to replace the $2 note with a $2 coin.
The bill was recently studied by the Standing Committee on Government Operations. I am pleased to say all witnesses appearing before the committee supported the introduction of a $2 coin as a cost saving measure. This confirms the results of earlier surveys conducted by the Royal Canadian Mint whereby Canadians strongly approved of the new coin given the substantial savings that accrue to the government.
Clearly Canadians appreciate any step their government takes to reduce the deficit and save money.
Representatives from the vending machine industry confirmed their support for the proposed coin, even though they expressed some concern regarding the date of introduction of this coin. They fear that they will not have time to adjust the mechanisms of all their machines by the introduction date.
I can assure hon. members that we are sensitive to these concerns. In response to these concerns the Royal Canadian Mint, the Department of Finance and the Bank of Canada will co-operate with the individuals and groups involved, and especially with the vending machine industry, to ensure a smooth introduction of the new coin on the market, in order to minimize sale and business disruptions.
There will be a public awareness campaign to promote acceptance and use of the $2 coin by the Canadian public.
The government intends to introduce the new $2 coin in early 1996, as announced by the Minister of Finance in his budget speech in February 1995. We cannot afford to delay this budget item because we all stand to gain from the introduction of this new coin.
By replacing the $2 note with the coin, Canadians will save approximately $254 million over 20 years from the reduced production and distribution costs of the $2 coin as compared to the note.
The average life span of a note is one year while the average life span of a coin is twenty years. The cost to produce the note is 6 cents per unit compared to the estimated cost to produce the coin at 16 cents per unit. This combined with the savings the government will generate by changing the metal composition of the lower denominations will result in total savings of $500 million over 20 years.
Some have suggested that half a billion in savings is small change. We disagree. In our fight to eliminate the deficit we believe every dollar saved is a dollar earned. No saving is too small or insignificant.
As the Minister of Public Works and Government Services explained to the committee members, we need five pennies to make a nickel, five nickels to make a quarter, and four quarters to make a dollar; every penny counts.
The government takes deficit reduction very seriously. Any member of the House elected on a platform to reduce or eliminate the deficit must support this initiative. As we all know, the deficit cannot be eliminated through program cuts alone. Innovative ways must be found to cut government expenditures. The introduction of the $2 coin to replace the $2 note is an innovative cost saving measure.
Some people wonder why we did not simply do away with the $2 bill. They say we would have saved even more money, but we disagree.
Canadians use $2 notes in a large number of transactions every day. Because they are so heavily used, these notes tend to be in poor condition. The coin is a practical and far more durable alternative to the note. It allows the government to save more money than it would by simply eliminating the note.
If we eliminated the $2 denomination, we would not reduce the number of coins in the purses of Canadians, on the contrary. Studies have shown that the combination of $1, $2, $5 and $10 values is the most effective in reducing the number of coins and notes required. Without the $2 note, more loonies would be needed and Canadians would carry even more change in their pockets. Two loonies weigh 14 grammes, compared to 7.3 grammes for the proposed $2 coin. If we eliminated the $2 denomination, we would have to mint more $1 coins and that would cost an extra $23 million over a period of 20 years.
Some others might wonder why the government is proposing to introduce a $2 coin at a time when more and more people are using credit and debit cards. A $2 coin might seem a step backward to a time before paper money instead of a step forward toward more plastic. Cash cards will not mean the end of cash in society.
For the foreseeable future cash will be a necessary requirement. Like credit cards and debit cards, cash cards will find their own market niche for people who prefer to manage their cash in this way. However, there will always be a need for cash. This was also confirmed during the hearings of the government operations committee.
The presentation by the Canadian Federation of Independent Grocers revealed that debit cards are not being used as often as anticipated. The extent to which cash cards may replace coinage is at this time only a matter of conjecture. However, even if cash cards replace a significant percentage of transactions most of these will be of higher value and not coinage.
Coins will continue to play a role in commercial transactions. Already coins are used to acquire numerous services such a mass transit, telephone calls, washing machines at the laundromat, video and pool games, parking meters, even showers at campgrounds. The vending machine industry is presenting us with a greater variety of products and choices. These changes reflect the nature of the vending machine industry and of our economy in general.
The only constant is change and in the modern world, the process of change is rapid, wide reaching and never ending. Businesses must constantly adapt to new technologies and new practices.
As an aside, I want to point out to my colleagues in the House that representatives of the vending industry, including the president of Coca-Cola, clearly stated the costs of converting vending equipment would not be passed on to consumers.
Some people have suggested that we should compensate the vending machine industry for the expense of altering their machines. In an era of fiscal restraint, we simply cannot afford it. We must use our limited resources very strategically in ways that result in the greatest possible benefit for the greatest possible number of Canadians.
As I said earlier, the Royal Canadian Mint, the Department of Finance and the Bank of Canada will co-operate with the industry to ensure a smooth transition. Studies conducted by the Royal Canadian Mint have shown that 79 per cent of Canadians approved of this initiative when told that it would save the government millions of dollars.
Moreover, the disappearance of the $2 note does not seem to worry Canadians too much. Forty-five per cent said they were not very concerned, while only 19 per cent felt some nostalgia but no real concern. In concluding, we believe that to be practical a currency system must adapt to change. We must stay in the lead and be an example to others.
This bill reflects the will of the Canadian government to accept change in areas where others avoided it. Change is never easy. We believe that it is by making choices that we show leadership. Sometimes, making choices means letting go of some traditions to turn with confidence towards innovation and renewal.
Jean-Paul Marchand Bloc Québec-Est, QC
Mr. Speaker, I am pleased to rise today on the subject of Bill C-82. Unlike Bill C-91 and other bills introduced by the government, which are opposed in Quebec, this bill is not. It does, however, prove conclusively that the government has blocked its ears and that it is ready to do anything when the time comes to have its bills adopted.
We have heard a speech by the minister's parliamentary secretary that was full of errors and had little to do with reality. For example, it is not right to say that the business people most affected by the issue of a $2 coin were in favour of it. It is not true. They were not in favour of it. Not a single representation was made by businessmen in favour of a $2 coin being issued. A representative of the Coca-Cola company told us they were indifferent, that is, they were prepared to make the adjustment and they, like all the other business people, asked that the government at least delay the issue of the $2 coin for a year so that the industries most affected could adjust.
This is the least we can do for the business people, industries, vending machines and companies most affected by the issue. The government plugged its ears. Companies are not even being given a year to get ready for the new coin.
Why is the government in such a hurry?
Jean-Paul Marchand Bloc Québec-Est, QC
Yes, it is definitely a matter of money. It is incredible how little time the government took to consult people.
The member for Cochrane-Superior said earlier, or seemed to imply, that, in fact, people had been consulted and were in favour. A look, however, at the government's so-called survey reveals the extent to which it was manipulated. It is not a real survey. Some people were asked if they were in favour of a $2 coin being issued if it meant a saving of $300 million.
Half the respondents were opposed, really opposed. One cannot be opposed in principle to the government saving money, but in its survey, the government did not even discuss more economical alternatives, like maintaining the status quo or eliminating the $2 bill. The people were not consulted. In fact, the public in general does not even know, in principle, that the government is planning to put out a $2 coin. This measure is slipped through, as though they wanted to impose it. Well, that is what they want to do.
Jean-Paul Marchand Bloc Québec-Est, QC
The hon. member for Cochrane-Superior is telling me it was announced in the budget. Spoken like a true Liberal. Whatever the minister or the Prime Minister says, we will vote yea.
Regardless of the fact that the business community is asking for the decision to be deferred and is against the idea, the Liberal members are all for it. Furthermore, this is the conclusion reached about Liberals in an article in the Ottawa Sun written by Douglas Fisher. When it comes to proposing bills, it is Forget constituents, forget personal belief-'' and, I would add, forget public opinion, forget all the people who might have something to say about the bills.Being a Liberal MP begins with always saying yea at the leader's command''.
They blindly follow the leader, unable it seems to express their own opinions. For all I know, maybe they are not capable of expressing their own opinions, they lack intelligence. Bill C-82 certainly does not show any signs of intelligence, just the government's indifference.
It shows that this government is not listening. It could not care less. The bill smacks of arrogance, of disregard for public opinion. The government could have consulted the public, it could have informed people that it was planning a $2 coin and really tried to find out if they were in agreement or not, but this was not done. The public has not been prepared for this soon to be introduced change.
Having done nothing to pave the way and shown little interest in public opinion, the government is going ahead. As I said, even the best informed people, those most affected by the introduction of a $2 coin, who know that it is coming, are concerned about the speed with which it is being introduced. Why the haste? Why not give the business community time to adjust?
The member for Cochrane-Superior tells us that the government will co-operate with business people in introducing the coin. This government is making empty promises. Furthermore, we were already promised consultation on this matter.
When members of the business community presented their report to the public works committee, they said that the government had promised them that after the reception given the loonie, there would be consultation when it came time to discuss the introduction of a $2 coin. There was no such consultation. If the government were truly interested in the opinion of business people or in public opinion, it would take the time to talk to them, to provide them with adequate information and to ensure that they understood the importance of issuing this coin. And if there was opposition, the government could at least have suggested alternatives, which it has not done.
It is presenting the $2 coin and saying that it will lead to huge savings. This suggestion is a joke, because any way you look at it, it would not create any savings. And there are costs involved. Admittedly, the government will save approximately $250 million, like the hon. member for Cochrane-Superior said earlier, but it will probably cost the business sector twice that amount to make the adjustments necessitated by this $2 coin. It is almost as if they are claiming that the introduction of the $2 coin will have no effect, no impact, that it will not bother anyone and that co-ops and IGAs will not have to change their cash trays and that vending machines will not have to be adjusted to make allowances for the $2 coin. All coin-operated devices will have to be updated.
Elementary math shows that the introduction of the $2 coin could cost business up to $400 million within the first year.
Jean-Paul Marchand Bloc Québec-Est, QC
Four hundred million. The hon. member for Cochrane-Superior said $80 million. That figure is only for one industry. There are 200,000 vending machines in Canada and it costs between $300 and $800 to adapt them to accept a new coin. For this industry alone, the total cost will be between $60 million and $160 million.
The hon. member just told me that it will cost the vending machine industry $80 million, but that is not important because the government will be saving $200 million. But the cost will be between $60 million and $160 million for the vending machine industry alone in Canada.
Jean-Paul Marchand Bloc Québec-Est, QC
Yes it will. There are 200,000 of them in Canada. Who is going to foot the bill? The A.F.I. Automatic Vending Company, perhaps, which objected to the bill when it appeared before the Standing Committee on Government Operations?
The hon. member for Cochrane-Superior said earlier that all businesspeople supported this move. In a letter to the members of the committee, a representative of the vending machine industry said: "The government's cost savings is my expense". He is not in agreement. If you read the letter, you notice that the representative of the industry is opposed to the introduction of a $2 coin. Once again, he suggests that he will not only incur expenses, but also that he is aware that the bottom line is that consumers will end up paying the $60 million to $160 million that the vending machine industry will have to shell out. Ultimately, consumers will end up paying.
Consumers will have to pay. This is only the beginning. Imagine, every cash register in every store across the country will eventually have to be replaced to accommodate a $2 coin.
The hon. member for Cochrane-Superior and our colleague from Manitoba do not realize that. They do not see that. This is the down to earth stuff, but they are up there in the clouds, they hear no evil and see no evil but they listen to their minister because he said: You are going to vote for this bill, come hell or high water.
How many cash registers? In Canada, probably half a million. All stores have cash registers, every cornerstore and every IGA. They will all have to change eventually. First they will have to adjust to the changeover but eventually they will have to replace them.
The representative for this association, and this for the benefit of the hon. member for Cochrane-Superior, appeared before our committee to say no, we do not want the $2 coin because it will cost us a lot of money. I will have to buy another cash register which costs between $100 and $150. They do not come cheap.
Jean-Paul Marchand Bloc Québec-Est, QC
No, of course not. People in northern Ontario will put their $2 coins in their piggybank or in another box, I imagine. That is one way. We have responsible people who are listening, people who know about these things, who are professionals and who know that cornerstores and shops will have to spend $100 and $150 to buy another cash register. This is another $75 million people will have to spend. And who is going to pay? The consumer, Mr. Speaker. You and me and the people watching us on television. They are going to have to pay. This is only the tip of the iceberg. Eventually, we will also have to change the parking meters, as the hon. member pointed out earlier, and all types of vending machines.
There are administration costs and conversion costs. Costs the government did not take the trouble to calculate, because it could not care less.
As for the cost of handling coins as opposed to bills, for example, the representative for Canada's grocers explained that to us. I think the hon. member for Cochrane-Superior was there, and if he was, he was not listening, because the hon. member for Ottawa Centre and the hon. member for Carleton-Gloucester were there, and they will be able to confirm this: introducing the new coin will cost more and it will be heavier to carry. We will have to pay someone to count the coins. There are additional costs. In his own store, he figured that introducing the new $2 coin would cost him between $10,000 and $15,000 in administration and conversion costs. And if we multiply this by 500,000 stores, it starts to add up, and quite a bit. Millions of dollars consumers will have to pay.
When the hon. member for Cochrane-Superior tells me the government will save $250 million by introducing the $2 coin, I think he is pretty gullible.
Because, in the end, who is going to pay for it? Consumers will pay two or three times more. It is too bad, because the saving we are talking about is the one the Royal Canadian Mint could theoretically make. This is the only saving we are talking about. There is no mention of all the costs that will be generated by the issue of this coin. Even here, when we look at the savings mentioned by the member for Cochrane-Superior of $250 million over 20 years-not $250 million next year-they amount to $12 million a year over 20 years. We realize that the issue of the $2 coin will cost industry and the Royal Canadian Mint dearly, because, for the Mint, it will mean producing these coins, which cost a lot more to produce than a bank note.
A $2 bill costs six cents to produce. A $2 coin costs 16 cents. In the first few years, it will cost the government and the Mint a lot. The government will have to borrow money to produce the coin. The $250 million will not be saved in the first year. The savings will be made over the long term. The turning point will come after five, six or seven years. Over time, the value of money changes. You know just as well as I do that saving a million dollars today is not the same as saving a million dollars twenty years from now, because the million in 20 years will not be worth the same as this year's million. That is a fact.
So, when the government and the member for Cochrane-Superior tell me we will be saving $254 million over 20 years, when 20 years have passed we will realize we have not saved a cent. We will, however, have forced industry, business, companies, corner stores, the IGA and everyone affected by the issue of the $2 coin to spend money immediately, next year, after the coin is issued. They will have to pay right away. Consumers are going to have to pay up front for this change.
The most absurd thing about this bill is that, as the member indicated in his presentation, the time is near when the money of the future, electronic money, will be introduced. He seemed to want to say that it did not matter. After all, we will continue to have coins, hard cash.
But if the government had taken the trouble to read up on the magnitude of the current currency revolution, it would realize that indeed times are changing. Many changes are already under way. The government does not really have to impose more costly changes that will ultimately be for nothing when, in five years perhaps, coins will be replaced with chip cards. A few days ago, on June 19, 1995, La Presse was reporting what a smart wallet the chip card was.
It was introduced in Canada on May 12 by the Royal Bank and a few other institutions under the name MONDEX. Let me read you part of the article: "A plastic card containing a microchip, the MONDEX wallet can be refilled at automatic teller machines and through certain telephones. The MONDEX package also includes an electronic safe about the size of an electronic memo pad. This safe can interface with a bank account through telephone circuits. It allows the chip card to be refilled without having to use communications channels. It will be widely available this summer".
This is taking place in Canada. The article goes on to describe how the introduction of electronic money will revolutionize the way we pay for what we buy. It is already in use in Europe. In France, money is no longer used to pay for telephone calls; they have been using cards for over ten years. In my riding, I can even pay for my newspaper with my card. The technology exists, here in Canada as well. But, apparently, government members do not read papers or magazines.
MONDEX. There a lengthy article on the subject in the June 12 issue of Business Week . That is quite recent. It is the feature article of this issue entitled The Future''. They refer to MONDEX asa new kind of electronic money known as E money'', adding that: ``Digital money is the ultimate and inevitable medium of exchange for an increasingly wired world''.
Earlier, I got the impression from the hon. member for Cochrane-Superior that he could see into the future and predict that coins will always be used, that there will always be a need for our $2 coins. It seems that others have a different opinion. It is possible that we will use less real money, that we will replace it with "E money", electronic money, and that may be happening very soon.
According to the experts who wrote the article, it could happen within the next five years. The "E money" revolution could take place that soon. This does not surprise me. In our rapidly changing world, the idea of using an electronic card to replace money does not surprise me. In fact, I would not be surprised if we more or less stopped using money, and if most people were to start using cards.
Ten or fifteen years ago, who would have thought that the use of credit cards would become so widespread? If people had been told then that, five or ten years later, they would use credit cards to pay in any hotel or store, they would not have believed that.
Sometimes, we have to open our eyes and ears to see and to understand. The government has obviously not done that in this case. We are about to enter an era which will see the introduction of a new form of money. According to experts, electronic money is definitely the way of the future, and it is also what businesspeople, merchants, bankers, corner store owners and grocery owners want.
Even if it may cost them more, they are prepared to invest in this new system, because it reduces their handling costs and their losses, it eliminates fraud and NSF cheques, it simplifies the system, and it is also a step in the right direction.
Business people are ready to invest in such a system, but not one of them supports the issuance of a $2 coin. As the hon. member for Cochrane-Superior knows, all the witnesses and all the business people who appeared before the committee were against this measure.
However, since the government will go ahead with it anyway, these business people have asked for at least a year to find new cash registers. It takes some time to change 500,000 cash registers as well as all the vending machines.
This bill provides for the issuance of a $2 coin by January 1996, which is just a few months away. The bill has not been passed yet, but the Royal Canadian Mint has already called for bids to produce the $2 metal coin.
The hon. member for Cochrane-Superior may deny it, but on May 31, 1995, the Ottawa Citizen ran as a headline Government calls standards for two dollar coin''. It is written in black and white. Another headline readIndustry seeks help with coin flip''. All the same, the government has already received several bids. We called and were told that the bids must be in by October 31, 1995.
If we need to take another five minutes to try to hammer some sense into these people, we will do it. We will at least take the time to explain these things that the government members unfortunately still do not understand.
Again, the government has called for bids to produce the $2 coin. It wants to start production on October 1, 1995, in a few months, and start distribution on January 1, 1996. This is fast, very fast.
All those affected by this measure say that things should not go so fast, that they do not totally agree with the introduction of the new $2 coin, that they want a year to adjust. But the government is not listening and still wants to go ahead with this initiative.
What is troubling me is that there are no solid arguments justifying the introduction of a $2 coin. The savings that will result from the introduction of this new coin are not a sure thing. We cannot say that savings will be achieved when we know that adjusting to the new coin will cost our industries money and that, ultimately, these costs will be passed on to the consumers.
Is this a good time to introduce a $2 coin? The government has not taken the time to consider the alternatives. Domtar, which produces our present $2 bill, has proposed to make it more durable. Right now, the life span of the bill is said to be only a year. Domtar has offered to produce a bill that could last up to three years, which would represent considerable savings. The government has not considered this alternative.
There are also other alternatives that it has not considered, such as maintaining the status quo or even eliminating the $2 bill. If the government really wanted to save money, eliminating the $2 bill would be a good way of doing it. It would not cost anything.
The government could really save money. Industries, tuck shops, municipalities would not have to adapt to a $2 coin. This is an alternative. I am not saying that it is the solution, but why rush? Why not wait a certain time, one or two years, and see how the electronic card is being integrated into people's lives? The elimination of the $2 denomination could be considered. It could always be put back in circulation later on if needed, but why now and why so fast?
The government is incredibly irresponsible because, really, nothing truly justifies a new $2 coin. If this government were really serious about saving money, I could suggest to the public works minister several ways to achieve real savings. He could have saved $300 million right off the bat this year by eliminating ACOA. This is $300 million he gives to industries. He could have supported, for instance, bills to give people in his own department the right to speak up and disclose abuses, which are numerous.
The member for Cochrane-Superior is well aware of this. The government has no control over contracting out. The government is wasting billions of dollars. But the minister will not support such bills, and yet they would be real money savers. This Minister of Public Works has also made the news with some ill considered projects, and occasionally some almost shady deals.
He had a wall, the famous Dingwall that cost several hundreds of thousands of dollars, built on a campus in his riding in Cape Breton. That was part of a $600,000 envelope squandered. I could give examples of the considerable sums of money wasted by the Minister of Public Works.
Examples of questionable spending involving the Minister of Public Works are legion and involve millions of dollars. The member for Cochrane-Superior has just said that this is a minister interested in savings. I have my doubts. This cannot be the main reason for presenting this bill with such haste, when the people actually affected by the introduction of a $2 coin want at least a year to prepare for the transition.
I would not give you $2 for this bill. In conclusion, I would say that the MP's role is often an empty one. Here we all are debating, giving speeches and arguing as reasonably as possible, but we know that the power rests with the people across the way and power often has a dulling effect. It also corrupts.
Absolute power corrupts absolutely; power just corrupts. We have examples of this. If we had the time and if it was worth the trouble to list the instances of corruption, we would do it, but I would rather conclude my comments on Bill C-82 by saying that the Bloc Quebecois is in favour of the government saving money. But we are in favour of real savings. We have suggested all kinds of ways for the government to really save money, from taxing family trusts to taxing banks. We have also made many suggestions to the Minister of Public Works regarding how he could reduce wastage of all kinds. We from the Bloc want savings. On this point, we agree. But, there is no proof that Bill C-82 will really create savings. On the contrary, it will be costly to business and consumers. People are not prepared.
There already are some 40 to 50 million $1 coins which are out of circulation. We could easily encourage the circulation of loonies which are not being used. We would have preferred that the government consider at least delaying this bill and doing its job, which is to consult with the public and to think of alternatives, such as eliminating the $2 denomination. I am not saying that this is the best option, but they could at least consider it, because there are apparently more savings to be had by dropping this denomination then by issuing a new $2 coin. They could even decide to keep up the status quo.
There are at least a few alternatives worth examining, which the government did not take the time to do. Once again, the government is not doing its job, it did not take the time to consult the public, it did not listen to the concerns and worries of the business community, it does not really have any solid arguments for introducing Bill C-82 and certainly has no solid arguments for doing it so quickly.
That is why the Bloc opposes Bill C-82.
Ken Epp Reform Elk Island, AB
Mr. Speaker, sometimes we hurry through our days without pausing to give thanks to people. While I listened to that amazing speech just past, it occurred to me again that because much to my regret I am unilingual English I would not have understood a word of it if it were not for the interpreters. I think they did a fine job in translating not only the words of the hon. member but also the emotion with which he spoke. I would like to thank and congratulate the interpreters.
We are here today to discuss Bill C-82, which would permit the government to introduce the $2 coin. When we come to the question of the $2 coin, of course when we hear of the savings that will be made it looks at first glance like an excellent idea and one we should wholeheartedly support. However, in the Reform Party we are accustomed to asking questions about these initiatives of the government. We always begin by asking what it will cost and what the net effect will be to the taxpayer.
We were sent here, all 52 of us, primarily on the platform of fiscal responsibility and the desire to balance the budget. We need to get into perspective how totally inadequate the initiatives and priorities of this government are. Here we are in the closing days of this session and this government is invoking closure and extended hours in order to put through all of this really important legislation before we are all sent home to our constituencies to do our work there.
Among all the things the Liberals have deemed to be a high priority, we have this $2 coin. Of course anyone hearing the member from the government speak earlier would have said this is indeed important; we are going to save $254 million. We could make it sound like even more by saying a quarter of a billion dollars. Instead of saying we are going to save that over 20 years, we could say we are going to save a billion dollars in 80 years. That would make it sound much more significant.
The fact of the matter is that this government speaks of this as such a huge priority, which will keep us here late at night debating and voting on these issues, as if this is going to save the country. Frankly, I wish it could. I really do. I would then be so strongly in favour of this motion that I would just say let us go for it, let us get it done, let us not wait until tomorrow, let us pass it and get it under way.
However, we need to ask what the real effect is. We need to be aware of the fact that in proportion to the total indebtedness of this government, this is really, although I hesitate to say it, a drop in the bucket. I suppose we could say it is a drop in the ocean. Unfortunately, we are taking as a priority this one little drop and allowing the big one to slip away from us. While we are worried about the cup of water that spilled off the cupboard, as the people in southern Alberta would know firsthand from their experiences, the basement is full of water from the flood. This is what the relationship is in our debt's picture.
It is very important for all members and all Canadian citizens to be aware that this saving of some $254 million over 20 years comes down to about $12.7 million per year. If we also consider that every day we are increasing our indebtedness by about $110 million, then we become aware that the saving of $254 million over 20 years is just a little over the amount by which we are increasing our indebtedness in two days. That is a shame. I hope this is not unparliamentary, but I think this is a crime.
I am not accusing the government of committing a crime, but it is derelict in its duties. It is not focusing on the picture of having to balance the budget and get government spending down in a real way.
As a matter of fact, as the House will hear in the next few minutes, this savings the government is getting is really a form of a hidden tax, as I will show in the next few minutes. The savings that are derived are so derived by increasing the costs to taxpayers, and thereby the real saving to the government is simply a form of taxation on the already overburdened taxpayer.
The question we need to ask and have answered is, as I have already indicated, why this should be such a high priority. Even though it is a significant amount of money to any individual, in balance with total government spending it is not significant enough. We ought not to be chasing this rabbit when we should be out hunting bear.
There is a big challenge out there, and we are being detracted by something glistening on the side of the road. We are being detracted while our country is going into the ditch.
I would like to ask a few questions and talk a little about the answers the government has given to some of the questions. It is important for us to become aware of what is happening here.
The first question: What is the total plan of the government in terms of currency? We are told that for the present, at least for the next five years, this is probably the only change it is going to make, with four coins being changed at the same time. Again we need to be aware that the change in metal content to the nickel, the dime, the quarter, and the 50-cent piece has nothing to do with the bill. It is just being done at the same time.
If we are going to add a $2 coin, it is wise to do it at the same time so all the coin recognition systems in coin operated machines will not have to be changed twice. It can be done all at once. We must commend the government for deciding that if we are going to make a change, let us do it all at the same time. However, we should ask whether we should be doing it at all. Is it really a saving to the taxpayer? My contention is that it is not. Here is my reasoning.
If one divides the total savings projected by the government, the $12.7 million per year over 20 years, one does not have to be a math whiz to compute this. There are approximately 29 million Canadians. Using round numbers, quite clearly we are going to be saving less than half a dollar for each one of the 29 million Canadians. As a matter of fact, it is very close to 44 cents.
If we can save $12.7 million per year, should we not be doing that? My answer would be yes, if it were a true saving. However it is a fairly safe assumption that every Canadian would use a coin operated machine a minimum of five times a year. If that is true and if the cost of retooling machines in order to recognize the new coins is included in the new cost to the vendors, say at a nominal rate of 10 cents per purchase-a 90-cent chocolate bar going up to $1, which would be typical and we can probably expect that-then for every person who uses a machine more than five times per year, which is a safe assumption, it is going to end up costing more. They will pay less in taxes but more in services. Right off the bat the equation is counterbalanced. The saving disappears when we look at it from the point of view of the taxpayer.
In addition, there is the scenario that there is going to be an accrued value here because with the old $2 bill the banks were permitted to return the surplus currency for a credit. I remember reading somewhere that the total value of being able to return the currency to the Bank of Canada, even at 5 per cent interest, worked out to a benefit of approximately $80 million per year.
There is a saving there to the government because under the rules of the banks coinage is not eligible to be returned to the bank when it is in surplus. The banks have to hold it. Consequently, there is an $80 million cost there that will go to the banks.
I suppose we should not perhaps worry about that too much, because the banks would then have an opportunity in some tangible way to contribute to our government's coffers. It would be an indirect tax, which would require no bookkeeping or anything. It is just an expense, for which they could no longer get reimbursement.
However, the banks, like other businesses, are there to make a profit and retain their earnings. Undoubtedly they will recover that cost as one of their additional costs in other ways, which again will come out of the pocket of the consumer. There is a saving to the government, which will be taken out of the consumer's pocket in another form.
Then we heard about the issue of seigniorage. This of course is very important. The difference between the value of the coin and the cost of its production is really quite significant. These new $2 coins are projected to cost around 16 cents each to produce, but of course their face value is $2. Therefore the difference, $1.84, is seigniorage. For every coin that is produced there is $1.84 benefit to the government. Here again the government's briefing notes to us included the fact that this is a large benefit to the government and they are expecting around $400 million of seigniorage.
Let us ask ourselves the question. If we can do that by producing some 244 million coins and we can give a benefit to the government of almost half a billion dollars, the temptation arises to ask why we do not produce about 10 times as many of these coins. If we did that we could pay off $5 billion worth of the government's debt. Maybe we should do a hundred times as many coins and pay it all off. Then we would not have to pay any interest.
The fact is that the seigniorage is another form of tax. The government issues a coin to a bank that pays $2 for it to the government. That is true. That is currency, which is really a representative value of each citizen's proportional share of the assets of this country. That is really what it is, because the coin in itself does not have the value. It is not a gold coin that is worth $2 in metal. It has a couple of components in it. It is nickel and things like that. The total value of the coin is 16 cents. So the coin has no inherent value. Hence, in a way very similar to our printed currency, it is a promissory note. It is a coin of value against the assets of the country.
If you increase the number of coins, then really you simply divide the value of the country among all the citizens. You would say that is done with the $2 bill right now. That is absolutely correct. If we take the $2 bills out of circulation and put the $2 coins into circulation, then there is no difference. The fact that we claim seigniorage on it is a magical rabbit trick, which tries to tell people that we now have more value to the Canadian government when we do not.
I would like to talk a little about the changes that should be made to this bill.
As was indicated at the time we started to debate the bill today, we tried to introduce an amendment because we were concerned, as were all members of the committee. I hasten to remind members of the committee that we shared a concern regarding the implementation of the new currency. Even though it is outside the concern of this bill and outside the study of the committee, we were concerned about the implementation and the introduction of all the new coins: the new dime, nickel, quarter and 50-cent piece. Very few coin machines recognize the 50-cent piece. Most of them recognize nickels, dimes, quarters and loonies.
When the new coins are introduced every one of them will require a coin recognition system for the three new coins. Two nickels, two dimes and two quarters will have to be recognized by the machine because they have different weight properties. Just that change would require an alteration to the mechanism that recognizes coins for all coin operated machines.
In addition, the machines have to recognize the new two-dollar coin as well as the old loonie. Whereas the old ones had to recognize only four coins, the new mechanism will now have to recognize eight different coins.
It is important to recognize that this change is a very costly one. There are some devices out there right now which, with a minimum of adjustment, will be able to accommodate the new machines. We have heard in committee testimony some estimates as low as $70 per machine. However there are many machines with mechanisms that will be obsolete. Individual owners of the machines will either be forced to replace them entirely or simply take the machines out of business. In some instances perhaps the individual will simply stop the business of coin operated machines.
We have no idea how many machines are out there. We are talking about food vending machines, pop machines, cigarette vending machines and lottery machines. By listing the machines I am not indicating in any way my approval of them but they are out there. We also have telephones and parking meters.
I know there was some giggling on the other side when the member from the Bloc was listing these items. That represented a lack of concern for all businesses, and there are many of them, that make their livelihood in this way.
I received a letter from a person in an adjoining riding to mine. I assume he felt he would perhaps get a little better hearing from me than from his Liberal MP. Perhaps he wrote to me because I was on the committee and in opposition. It was not Edmonton Southeast; it was a different riding adjacent to mine and with a Liberal representative. We can all figure it out if we know the geography.
The person said that he was in this business. He had a number of coin operated machines and because of his business he had a number of change making machines, machines which were geared up to making change for a two-dollar bill, a five-dollar bill and a ten-dollar bill. He said those machines would have to be changed. Either he would have to change his vending machines to recognize the two-dollar coin or he would have to change his change making machines to recognize the two-dollar coin. He also said it would cost a minimum of $750 each to alter the machines. This was how he made his living.
The total cost of his small family business was $138,000. He said: "This is a tremendous cost to me. If you just dump it on me it is far more than I can afford to take in one year". Among all other considerations for going slowly on making these alterations that is another reason. He would have the opportunity to amortize the cost over a greater length of time without incurring huge interest costs.
We talked earlier today about lending money to small business people. I am sure he would have to borrow the money if this measure were implemented quickly. There is a cost that is very real and it is a large amount of money to him.
There is another reason for giving a little better time line. Businesses cannot produce overnight the new coin identification devices. There must be time for research and development. We heard in committee testimony that the mint had not submitted true industrial quality samples of the coins. That is rightfully so because it has not been approved by Parliament. They need to get all the coins. They need to have all the nickels, both the dimes and both the quarters. The loonie stays the same but they need the new two-dollar coin. They need samples of the four new coins before they can begin their research and development into the design of the new mechanism.
After that they have to build a prototype and go through sufficient testing to ascertain that those coin recognition devices are accurate and dependable. The last thing we want to do is to arrange the affairs of the country in such a way that the recognition devices of all business people who directly depend
on our coinage system and its acuity, size and weight will not clearly discriminate between them.
Let me explain that. There are two kinds of errors the machines can make that are both very detrimental. The first error is that of not recognizing a legitimate coin. If a customer goes to a machine wanting to make a purchase and his new quarter and new two-dollar coins are rejected, he gets upset. We are told by people in the industry that when people submit a coin which is rejected several things happen. First, some of the rejections result in jamming so the person does not get the product or his coin back. Therefore the mechanism must be very reliable in recognizing legitimate coins. It must not jam. It must recognize them and accept them.
Another thing that frustrates the customer is if he submits the coin and it goes straight through to the coin return pocket. He wants the machine to accept the coin because he wants to buy the product, whatever he is after. If he cannot get it because the machine will not accept the coin, he will probably kick the machine. The industry people told us that in committee. They say their coin recognition machines must be highly reliable because if they fail to recognize legitimate coins their machines are subject to a lot of vandalism.
We would not want to impose that on people who depend upon the Canadian government's coinage system. That is why they have to be given ample time to research and develop coin recognition machines.
As I said there are two types of errors. One is failing to accept a legitimate coin. The other is failing to reject an illegitimate coin. That is every bit as important. Coin recognition devices must also have the ability to recognize a slug from the electrical department or a washer or something that is not a legitimate coin. The devices must reject those or the merchant will be ripped off. The devices must be very reliable.
It is not realistic for us to pass Bill C-82 at the end of June and give the government the right to introduce these new coins in early 1996. That is less than a year away. It is just over six months away. That is not adequate and the industry has told us so.
I will not make several pejorative statements to the government. I will rather try to appeal to its common sense and concern for the business people that we have heard expressed often. I am challenging the government to put actions to its words. I appeal to its business sense and to its sense of caring for Canadian people. That is what we are here for.
A very legitimate concern is that the coin recognition systems have to be developed. They have to be brought into production. As I said that requires a research and development phase, a testing phase of the prototypes and then full production. After that the devices get shipped out. In some cases they will be retrofits for existing mechanisms. In other cases they will be actual replacements. The merchants will have to take the old device out of the machine and replace it completely with a new one. Sometimes that will involve changing from some of the old mechanical devices to the new electronic devices. It may mean wiring changes. It can mean all sorts of different things. In some cases it will mean the changing of the solenoids that actually operate the delivery systems.
We have to give industry time for the research, the development, the testing, the production and the installation. If we in the House believe that by snapping our fingers and passing a law it can be done overnight, it is not realistic. I appeal to members opposite to do it right.
I remember a colleague at the technical institute where I worked who used to have a little placard over his desk that read: "If you don't have time to do it right, when will you find time to do it again?" That is the issue here. If we do not do it right we will produce a lot of frustration and anger. Right now we are already facing that. Many small business people I talk to keep crying about the GST. A lot of the vending machine operators are in that category. They landed up picking up the tab for GST out of their own pockets. They were opposed to it. They are still opposed to it. They are saying: "The government said it would eliminate it and it is still here. When will that happen?"
There is already a deep anger across the country about the GST and other unfair taxes. If we add this frustration and difficulty for the same people again it will further erode the respect of people for the government and their willingness to participate in our economy through our voluntary tax system. Without that, the whole system would fail.
We need to make certain we do this right. If the government is going to go through with this despite my previous pleading that it is not economic and should not be done, then at least it should get the timing right. That is very important.
In my previous speech I asked the minister a number of questions. The minister was kind enough to give me a written response. In his covering letter he said: "Thank you for your letter". After the speech I received a phone call in my office. I was asked to submit my questions in writing and the minister would provide answers to them. He said: "I trust these responses will satisfy your concerns and that you will now be in a position to support Bill C-82".
Frankly I am appreciative of the minister and his staff taking the time to answer my questions. They covered about five or six pages.
I regret the answers are insufficient. For example, I asked what was the estimated total impact on the retail sector, including items such as cashier trays and coin counting machines. Basically the answer was that one year ago the industry estimated it would cost $25 million. Since then they have raised their cost to $80 million and the last line is: "The cost of adjustment will vary". In other words, the government does not have the answer. That is not good enough. Until we have those answers it should not jam this bill through.
I asked what the effect would be on the economy. Again, some answers were given but they were very general. No real work has been done. Consider the soft drink industry.
Again we urge the government to consider not having a new $2 dollar coin. If it costs too much to print $2 bills, just eliminate them. I know there are two sides to the argument of eliminating the $2 currency. We do this for values less than $1. If you look at our currencies for less than $1 we go from 1 cent to 5 cents. Why can we not go from a $1 coin to a $5 bill? It is exactly the same. I am not going to repeat myself but I insist it is absolutely the same. If you go from 1 cent coin to a 5 cent coin that is parallel to going from $1 coin to a $5 bill.
I am not going to repeat what I said in my previous speech. If anybody is interested in this I urge them to read it since I gave a really good, well thought out, well documented speech when this bill was debated previously. I raised the same point then that with the weight of these coins we are talking about the difference to a person of having to carry an extra one-half ounce. That is the difference.
Some members opposite may disagree. For a small fee I will give a math lesson after hours. I would have to ask the government to seriously consider that as an option. It would not cost a great deal to implement that change, only the cost of producing the currency. If we are going to stay with the $2 currency, there is one thing that was not properly considered: the use of a more durable substrate. That has not been studied.
The current $2 bills wear out very rapidly. That is because the quality of the paper provided is not adequate for the kind of circulation these $2 bills get.
We talked to suppliers of the substrate for the printing of the bills. They said with the new plasticized material they could produce a $2 note that could last two to four times as long and it would only cost marginally more to produce. Has that been studied as an alternative? As far as we know it has not and we think it should be.
We had many other questions. I would concede that some were adequately answered. When I asked if dropping the $2 denomination was considered, the government simply answered that eliminating the $2 coin was considered and rejected. It then went on to say that Canadians depend on the $2 note for a great number of their transactions. I believe that to be true because it is there.
However, if the next denomination in paper were $5 we would still only be required to carry four coins in order to produce the $4 and the next one would be the $5 and then we would have the change in between as well.
With all that being said, the message I want to give to the members opposite is one that is very clear. I appeal to their common sense to reject this bill but failing that, I would like to at least have it amended. The work of this Parliament is to pass good laws. Is that not our prayer at the beginning of each day: "Help us to pass good laws?"
However, included in that definition is that we must reject bad laws or we must amend bad portions of laws before we pass them so they will be good laws.
Therefore I move:
That the motion be amended by deleting all the words after the word "that" and substituting the following:
That Bill C-82, an act to amend the Royal Canadian Mint Act be not now read a third time, but be referred back to the Standing Committee on Government Operations for the purpose of reconsidering clause 1.
That clause is with respect to the issue of the timing of the bill.
Elwin Hermanson Reform Kindersley—Lloydminster, SK
Mr. Speaker, I want to assure the members opposite that I will not be long, but it is only fair that having seconded an amendment that I speak briefly to it. I assure members opposite, who I know are concerned about the time, that I will be the only Reformer speaking on the amendment.
All across Canada, Canadians are doing business today. They were buying and selling. They were working and travelling. They were caring for kids and patients in hospitals. That is the real Canada. In here we are debating minting a $2 coin in place of a $2 bill when this country is going $100 million a day in the hole. That is a really sad case to consider.
I just want to briefly outline why we suggest that a January 1996 implementation date is not a reasonable and fair imposition on small business, which is the engine of our economy.
In the bill the government has failed to address the actual cost to the industry of the conversion to a $2 coin. My hon. colleague from Elk Island has given us 101 on the cost of implementing this bill and certainly a 101 course on vending machines and the problems involved in converting them to accept $2 coins in the new regime that is being planned by the Canadian Mint under the supervision of the minister of public works.
The cost to the industry will be substantial and in all likelihood these costs will be passed down to the consumer. As just an example for comparison, when pulp prices increased there was an increase in the price of newsprint resulting in an increase in the price of newspapers which was then passed on to the consumer. The same will happen with the vending machine industry.
Three organizations have asked the government to reconsider this proposal and, in particular, the implementation timetable for Bill C-82. They are the Canadian Soft Drink Association, the Canadian Automatic Vending Merchandising Association and the Canadian Bankers Association. The CSDA represents manufacturers and distributors of soft drinks across Canada. Members distribute their products through approximately 100,000 vending machines. The CSDA, along with all vending industries, is requesting that the federal government delay by one year the introduction of the new coins to provide adequate time to convert existing coin mechanisms to new ones.
Paulette Vinette, president and CEO of the Canadian Soft Drink Distributors Association estimates that it will cost its industry $200 per machine to convert existing mechanisms to accept the new coins and as much as $600 to replace an existing mechanism. The total cost to the industry would be approximately $30 million.
The Canadian Automatic Vending Machine Association estimates that changes to pop, potato chip and candy machines will cost between $75 and $800. The total cost of conversion to the industry, according to Canadian Automatic Vending, will be as much as $80 million. This $80 million cost also includes the government's plans to replace the metal alloy used in pennies, nickels, dimes, quarters and 50-cent pieces with cheaper plated steel coins.
They also bemoan the fact that the proposed date of implementation will not provide the industry with enough time to develop and implement the required modifications. That is a real problem. The industry has yet to receive sample coins from the Mint so that it can develop coin recognition equipment.
Vending machine operators are asking that the federal government provide compensation to help defray the cost of conversion to some 200,000 pop and candy machines. These operators insist that they are unfairly bearing the burden of cost cutting by the government.
In 1967, when the government fiddled with the metal content of the coin, the government agreed to compensate vending machine operators for half the replacement costs of the coin mechanisms. That is not the case in this bill, therefore more time should be offered to the industry.
Cash registers will also have to accommodate the extra coin. Instead of having five slots for coins, the registers will have to have six. This will result in additional costs for the cash register users.
The Canadian Bankers Association also has concerns with the introduction of the $2 coin, as I pointed out during second reading. The Canadian Bankers Association has proposed a total abandoning of the $2 coin as mentioned by my colleague from Elk Island.
The banks have anywhere from $30 to $50 million in excess loonies sitting in the vaults and as the government has refused to take back the surplus coins, the banks are unable to earn interest on that money. This is likely to be repeated with the $2 coin.
The government is so confident that the Commons will approve the $2 coin that it has asked manufacturers for quotes to deliver 25 million blanks by the beginning of October 1, 1995.
The Reform Party proposes that the government reconsider its decision to delay the introduction of the coin for a year. This will allow vending operators the time needed to convert the machines. Ideally we should scrap the coin but if that does not happen, we should certainly delay its implementation.
Mark my words, there will be big problems if the government pushes this ahead too quickly. The minister of public works has not shown good judgment in the past and he is not showing good judgment now by insisting on ramming this legislation through before the industry and small business people have time to adjust to its consequences. I would appeal to the minister to be more considerate.
In closing, I want to update the House. In my speech at second reading I recognized that the government was probably going to ram this bill through. We would prefer that it did not ram it through but it probably will. We would prefer if it was to ram it through that it would consider some amendments.
If it is going to go through, those members have said that they want suggestions for what should be put on the $2 coin. I made a suggestion at second reading and surprisingly enough it is getting a lot of support from across the country.
I ask that the minister of public works consider putting a replica of the Hanson buck, a white tailed deer on the $2 coin. I did that to deal with some disparity in the images and the representations on our bills.
I have to be careful not to use props in the House but I am using real notes. We have a $20 bill which was actually donated by the hon. member for Simcoe Centre to the Heart Foundation for me to ride a bicycle to raise money for the Heart Foundation this coming weekend.
It has on it a replica of the common loon swimming in a pond.
We have the $10 dollar bill with a replica of the osprey. It is a beautiful animal. May I have a donation to my cause by from the hon. member from Kingston and the Islands? I appreciate that he donated five dollars for me to ride this bike on the weekend to raise dollars for the heart foundation.
The $5 dollar bill has on it a belted king fisher, a beautiful animal as well. Then we are to get rid of the two dollar bill. It has on it a very nice picture of two robins. I guess we will have to say goodbye to the robins and have a new coin.
We have the loonie in existence already and it has a loon on its tail side. The quarter has a caribou. The loon actually is from the wetlands; the caribou is from the north. Our next coin is the dime with the Bluenose on it, representing the history of the Maritimes and the wonderful history surrounding the Bluenose .
The next denomination is the five cent piece with a beaver on it, representing the development of Canada when the fur trade occurred and the country was inhabited by trappers and traders looking for this pelt. The penny has a maple leaf.
It so happens the prairies were overlooked in all these symbols and so I have recommended to the minister of public works and to the Canadian mint that they consider a replica of the Hanson buck on our new $2 dollar coin should they go ahead with it. I have a lot of support for this idea. I have had support from people from Halifax to Montreal. Fellow members of Parliament have supported this.
A newspaper report said I wanted to put a dead deer on the $2 dollar coin. I do not know if that beaver is alive, but I know the Hanson buck was and was a beautiful animal. It represents a world champion record for the nicest antlers of any white tail ever taken. It broke an 80 year old record held by the Americans and certainly it would be a wonderful replica, a wonderful image to put on our $2 dollar coin should we pass this bill. It is elegant. It has been represented in paintings, in photographs. It represents an animal that has been an environmental success through proper conservation practices.
If the minister goes ahead with this $2 dollar coin, please delay its implementation. I ask the minister to consider putting the Hanson buck on the coin.
I encourage entrepreneurs who might be listening to invest and start manufacturing men's suspenders because our pants will weigh a lot more with our pockets full of $2 dollar coins. Women's apparel manufacturers may need more shoulder shoulder pads and probably stronger purse straps.
Walt Lastewka Liberal St. Catharines, ON
Mr. Speaker, being a new member I would from time to time like to get clarifications on using props in the House. I wanted to make sure I understood for my future speeches that flaunting the rules, bending and breaking them every which way is permissible. Is there a rule on that?