House of Commons Hansard #228 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was taxes.


Climate ChangeOral Question Period

3 p.m.

Hamilton East Ontario


Sheila Copps LiberalDeputy Prime Minister and Minister of the Environment

Mr. Speaker, last summer we saw very directly the potential devastating cost of climate change in the forest fires that burned from east to west an area of commercial forests equal to the size of the province of New Brunswick. We had the second worst forest fire period on record.

The commercial loss in forestry alone last year was $3 billion. The direct cost of the fires and storms caused by global warming was $500 million. Contrary to the claims of the Globe and Mail , a longer growing season for farmers will lead to less productivity because the level of moisture is going to remain the same, putting us in a position of facing further droughts.

Canadian Wheat BoardOral Question Period

3 p.m.


Vic Althouse NDP Mackenzie, SK

Mr. Speaker, my question is for the Minister of Agriculture and Agri-Food.

The northern hemisphere's grain harvest is near completion, indicating little change in global supplies that should dampen the current, strong rising price trend. Because of the rising prices, can the minister tell the House why the government persists in maintaining wheat board initial prices for wheat and barley that are about one dollar a bushel below the open market domestic price? Is he trying to undermine the wheat board system?

Canadian Wheat BoardOral Question Period

3 p.m.

Regina—Wascana Saskatchewan


Ralph Goodale LiberalMinister of Agriculture and Agri-Food

Mr. Speaker, I am sure the hon. member will recognize his last sentence as a gratuitous remark that is rather out of place.

Like the hon. member, I too hope that initial payment levels in Canada can be increased progressively throughout the current crop year and from my point of view the sooner the better.

There are two factors that need to be borne in mind. First, even though the North American harvest may be virtually complete, the western Canadian harvest is now only about 60 per cent complete. There are still questions to be answered about final quantity and quality. It would obviously be premature on the basis of the amount that is completed so far to move at this point with respect to initial payments.

However, I fully expect the Canadian Wheat Board to make its most favourable recommendations to me at the earliest possible date.

The other factor the hon. gentleman should bear in mind is a warning against any hasty increase in initial payments that could provide the Americans with additional grist for their mill in their ongoing, unwarranted attacks against the Canadian Wheat Board.

Presence In GalleryOral Question Period

3 p.m.

The Speaker

I would like to draw members' attention to the presence in the gallery of the Hon. Nicholas Soames. Besides being the minister of state for the armed forces of Great Britain, perhaps my colleague, whom I met with earlier today, will permit me to say also that in this very Chamber his grandfather, the Right Honourable Sir Winston Churchill, addressed a joint session of this House in 1941.

I present to you the Hon. Nicholas Soames.

Presence In GalleryOral Question Period

3:05 p.m.

Some hon. members

Hear, hear.

Presence In GalleryOral Question Period

3:05 p.m.

The Speaker

Colleagues, I have received notices of points of order. I will take them in the order in which I received them.

Points Of OrderOral Question Period

3:05 p.m.


Warren Allmand Liberal Notre-Dame-De-Grâce, QC

Mr. Speaker, during question period the member for Calgary West referred to a letter which I had sent to one of my constituents who had asked me questions about the referendum. As a matter of fact, that letter was one of several letters exchanged with this same constituent.

Since the hon. member for Calgary West only referred to part of a point I was making to the constituent, I would like the entire point to be on the record and I quote from the letter:

I might say in closing that the results of the referendum will not be binding and have no legal consequences. It is simply a plebiscite in which the people of Quebec will be expressing their preferences. As such, even with the best result, the PQ government could only use it to negotiate a constitutional amendment and even then the federal government has no obligation to respond.

I would ask the hon. member for Calgary West that since the letter he sent over to me is incomplete, would he table the complete letter in the House so that all members can read it.

Points Of OrderOral Question Period

3:05 p.m.

The Speaker

We have a request by the hon. member. If there is unanimous consent for the tabling of this letter then the Chair would be prepared to receive it.

It there unanimous consent?

Points Of OrderOral Question Period

3:05 p.m.

Some hon. members


Points Of OrderOral Question Period

3:05 p.m.

Lethbridge Alberta


Ray Speaker ReformLethbridge

Mr. Speaker, in my point of order I am referring to section 409(3) of Beachesne's with regard to the question that was raised by my hon. colleague from Calgary West. The question was whether it was hypothetical or not.

I would like to make a request to the Chair that the question be reviewed. I listened to the question and I believe that according to citation 409.3 questions can be asked for information with regard to policy. I believe the question would qualify under that. I would appreciate the Speaker's review of the matter.

Points Of OrderOral Question Period

3:05 p.m.

The Speaker

I will take the Reform Party House leader's request to heart.

It seemed to me at the time the preamble that set up the question set it up to be a hypothetical question. I will look at it and if I find there is reason to come back to the House I will.

Business Of The HouseOral Question Period

3:05 p.m.


Michel Gauthier Bloc Roberval, QC

Mr. Speaker, as usual, I will ask my hon. colleague, the government House leader, to tell us what is on the agenda for the next little while.

Business Of The HouseOral Question Period

3:05 p.m.

Windsor West Ontario


Herb Gray LiberalLeader of the Government in the House of Commons and Solicitor General of Canada

Mr. Speaker, I am pleased to provide the weekly business statement.

Commencing today and continuing through next Tuesday we will be calling business in the following order: Bill C-102, amending the customs tariff, Bill C-90 regarding the Excise Tax Act, then Bill C-94 on fuel additives. Following that Bill C-103 respecting magazines, Bill C-98 regarding oceans, Bill C-93 regarding cultural property, Bill C-62 with respect to administra-

tive agreements for regulatory purposes and Bill C-84 regarding the regulatory process.

Next Wednesday we propose to call third reading of Bill C-45 which tightens up the corrections and parole process.

When this is completed I would like to proceed with second reading of Bill C-78, the witness protection legislation.

This is our weekly business statement.

Business Of The HouseOral Question Period

3:10 p.m.

Lethbridge Alberta


Ray Speaker ReformLethbridge

Mr. Speaker, one of the things which occurred in the spring session was the heavy agenda. Many of the important legislative items came in in the latter part of the session, in the last three to four weeks. We were then faced with time allocation. We forced through a number of readings of bills under, I would say, duress, as members of the House of Commons.

I would ask the government House leader if there are pieces of legislation which are planned and will those pieces of legislation be made available to us, or at least will the House be advised that they are coming within the next 10-day period?

Business Of The HouseOral Question Period

3:10 p.m.


Herb Gray Liberal Windsor West, ON

Mr. Speaker, obviously there is other legislation which we intend to debate in addition to the legislation which has already been mentioned on the Order Paper. I will see what further information I can provide my hon. friend. I cannot say that everything we intend to introduce before the Christmas adjournment can be made available in the next 10-day period. There are things which we are working on within the government. Some measures have not had the drafting process completed.

I would think there are measures which will be introduced before the Christmas adjournment regarding which we cannot inform our hon. friend within the next 10-day period. However, I will endeavour to be helpful in responding to his question.

Points Of OrderOral Question Period

3:10 p.m.

The Speaker

Colleagues, yesterday the hon. parliamentary secretary to the government House leader pursued the point of order raised by the hon. member for Roberval on Tuesday, September 19, 1995 relating to a question of the hon. member for Vaudreuil.

At that time, the hon. member for Roberval asked me to review the question the hon. member for Vaudreuil had put to the President of the Queen's Privy Council for Canada and Minister of Intergovernmental Affairs. The hon. member for Roberval was wondering about the nature of this question and how it related to the responsibilities of the federal government.

Yesterday, the hon. parliamentary secretary to the government House leader expressed the opinion that the question was in order, as the minister is in fact responsible for intergovernmental issues.

I did review Hansard and I have come to the conclusion that, as formulated, the question asked by the hon. member for Vaudreuil does not strictly speaking meet the guidelines on oral questions. It was seeking an opinion from the minister instead of information on a matter coming within his administrative capacity.

The Chair should at least have cut in and asked that the question be restated in terms that related more closely to the government's administrative responsibilities. As a matter of fact, yesterday, the hon. member for Brome-Missisquoi asked a similar question in a way that meets the requirements of our rules.

All hon. members will no doubt sympathize with the Chair that in the cut and thrust of question period sometimes certain questions escape your Speaker. I take this opportunity to ask for all hon. members to co-operate with the Chair and formulate the questions so that they are strictly relevant to the administrative responsibilities of the government, that they are not based on hypotheses, and respect the dignity of this Chamber in the choice of vocabulary.

Customs ActGovernment Orders

September 21st, 1995 / 3:10 p.m.

Regina—Wascana Saskatchewan


Ralph Goodale Liberalfor the Minister of Finance

moved that Bill C-102, an act to amend the Customs Act and the Customs Tariff and to make related and consequential amendments to other acts, be read the second time and referred to a committee.

Customs ActGovernment Orders

3:15 p.m.

Winnipeg North Centre Manitoba


David Walker LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, I appreciate the opportunity to begin debate on second reading of Bill C-102, an act to amend the Customs Act and Customs Tariff.

I will begin by going through the major points the bill touches on. It provides for the enhancement to Canada's duty deferral program, including duty drawback, inward processing and bonding warehousing to improve the competitive position of Canadian industry.

It provides for tariff reductions on a wide range of manufacturing inputs and certain other goods requested by Canadian manufacturers to improve competitiveness.

It provides for increases in travellers' exemptions on what is called basket tariff items to facilitate the processing of travellers.

It provides for amendments to the Access to Information Act to ensure confidential business information provided to Revenue Canada and finance is protected from disclosure to third parties.

The conversion of the Canadian retailers duty remission order 1993 is changed for statutory provisions to improve the transparency of these tariff relief provisions.

Certain regulatory tariff reductions will be introduced directly into the customs tariff to improve the transparency of these tariff relief provisions.

It provides for seasonal and non-seasonal tariff provisions for dry shallots to ensure they are duty free when unavailable from Canadian growers.

There are amendments to allow for possible future improvements to preferential tariff treatments for the world's poorest developing countries to improve their export opportunities.

It provides for the withdrawal of the duty free British preferential tariff rate on certain rubber footwear to protect Canadian production and jobs.

It provides for a clarification of various provisions in current customs and tariff legislation.

It provides a number of other technical and housekeeping changes to the customs tariff.

A number of these provisions, including the tariff reductions, increases in travellers' exemption and withdrawal of the BPT, the British preferential tariff on rubber footwear, came into effect on the tabling of the notice of ways and means motion by the Minister of Finance on June 13, 1995. The remaining provisions, including the duty deferral amendments, are to come into force by order in council after royal assent.

This bill contributes largely to the good government theme that we have provided to Canadians since the election two years ago. A number of the measures provided for in Bill C-102 build on the government's review of Canada's tariff regime announced in the 1994 budget and are designed to ensure Canada remains a favourable location for producing goods and for investment and also that Canadian businesses, including small businesses, are placed in a better position to profit from Canada's free trade agreements.

Certain amendments, for example the enhancements to duty deferral programs and tariff reductions on manufacturing inputs, are designed to lower business' input costs and maintain and enhance the competitiveness of Canadian businesses in Canadian and world markets.

Bill C-102 also provides for a number of technical changes to simplify and clarify and modernize the customs tariff and its administration and make it easier and less costly for business to access tariff relief programs. The amendments to facilitate the processing of travellers at the border will allow Revenue Canada, through its customs section, to focus on other important border issues such as the smuggling and processing of growing commercial imports.

Several of the amendments in Bill C-102 result from broad consultations with the private sector and are at its request to respond to competitiveness problems faced by Canadian businesses.

The bill seeks to implement three major tariff amendments that will deliver significant long term benefits to Canadian businesses and individuals.

I will outline these. The first two will improve the competitive position of Canadian industry by lowering input costs, thereby creating employment opportunities for Canadians and lowering prices for consumers. The two amendments to which I am referring are the enhancement to Canada's duty deferral programs and the reduction of tariffs on a wide range of manufacturing imports.

A third amendment, increasing travellers' exemptions, will facilitate the processing of travellers. In addition to benefiting consumers this will help our customs officers focus on real priorities by processing our growing commercial imports and combating the crime of smuggling. The legislation also contains a number of technical changes that will help modernize the customs tariff and its administration.

We believe the proposed changes will affect billions of dollars worth of trade. Their impact then will be both beneficial and significant in scope.

Because of the significance of these changes the government has consulted on them, responding directly to problems Canadians, whether in their businesses or as individuals, have identified. We can say therefore with confidence the measures I am about to describe will be welcomed by the great majority of Canadians affected by them. I urge my hon. colleagues to bear this in mind when they are asked to give their support to the bill.

Let me outline each of the three major amendments. I will first talk about the enhancements to Canada's duty deferral programs. I know duty deferral is not the stuff of everyday conversation and so I will take a moment to provide some background.

Duty deferral programs defer or relieve certain customs duties and taxes on imported goods which are re-exported. Canada presently has three duty deferral programs, duty drawback, inward processing and bonded warehousing. Over the years Canadian business has asked for improvements to these programs to make them more competitive with similar programs of our major trading partners.

The changes contained in the bill before us respond to that need. They will enhance, streamline and consolidate these three programs. They will provide as much up front relief as possible to ease cash flow pressures and to reduce input costs on Canada's exports.

The proposed changes will also make the program more easily accessible for small and medium size businesses by reducing the administrative restrictions currently in place. Other changes will enable regions to market Canada's duty deferral programs more effectively in competition with free trade zones around the world. This will help attract and keep investment in Canada. The changes I have described enjoy broad industry and regional support.

Mr. Speaker, for other members of Parliament in your area of St. Catharines there will be a great deal of improvements through the changes in these programs. The government is very proud of its ability to help out areas such as the Niagara Peninsula in dealing with the American market. In Winnipeg there are many proposals being brought forward as a result of the changes we are proposing.

It is a key priority of the government to ensure Canadian business has every opportunity to compete fairly and effectively and profit fully from Canada's expanding access to international markets.

Related to the enhancement of duty deferral is a change to the Access to Information Act. This change will protect the confidentiality of taxpayer information provided by the importing community under the Customs Act, Customs Tariff and the Special Import Measures Act.

Let me turn now to the second major amendment to Bill C-102, the reduction in tariffs on a wide range of manufacturing inputs. This amendment is also directed toward the relief of duties on Canadian manufacturing inputs so that our producers compete more effectively. This amendment will enhance the competitiveness of Canadian producers both internationally and within Canada.

In essence we will be removing a competitive disadvantage that currently burdens Canadian manufacturers vis-à-vis with their American counterparts. We will do this by reducing tariffs on some 1,500 imported manufacturing inputs dutiable at rates higher than those of the United States. I remind my hon. colleagues this measure was announced in the 1994 budget. It is being implemented now following extensive consultations. The measure enjoys strong industry support.

To appreciate the significance of this measure hon. members should be aware that one third of Canada's imports are manufacturing imports. Since American tariff rates are on average about 3.2 percentage points below ours, 5.4 per cent versus 8.5 per cent, U.S. producers enjoy a significant advantage.

Right now this discrepancy negatively affects Canadian manufacturers, principally in the domestic markets. That is because exporters are entitled to receive reimbursement of their input duties through what is commonly known as duty drawback or inward processing.

However, as of January 1, 1996 under the NAFTA drawback will be subject to certain restrictions. Therefore to ensure Canadian exporters enjoy the full benefit of Canada's free trade agreement we must bring our most favoured nation status tariffs on input in line with those of the United States. The 1,500 inputs covered by this amendment account for over $2.5 billion in trade.

The third amendment is the increase of duty exemptions for Canadians travelling abroad. Traveller exemptions are adjusted periodically. However, our exemptions have not been increased since 1983. As a result they are currently out of line with the exemptions provided for by our major trading partners. Our current limits are $20 after a 24 hour absence, $100 after 48 hours and $300 after seven days, but only once a year.

U.S. limits in a striking contrast are $400 once a month with a general exemption of $200. Residents of the European Union can bring in about $300 Canadian in dutiable goods after any absence.

The status quo is hard on consumers and customs officials alike. It also runs counter to Canada's and the United States' commitment under the accord of our shared border to permit travellers and goods to move easily across the Canada-U.S. border. For these reasons the bill will raise the levels of exemptions to as follows: to $50 from $20 after a 24 hour absence; to $200 from $100 after 48 hours and to $500 from $300 after seven days, with the once a year limit being dropped. Naturally Canadian travellers will welcome this change. It also benefits customs administration because it will ease border congestion.

As I said earlier, this will enable Canadian customs authorities to concentrate more effectively on real priorities like cracking down on smugglers and processing commercial imports. These have increased by 43 per cent since 1992.

I am aware some of my hon. colleagues may be concerned about the possible impact on retailers in border areas. I too care about

these retailers but I am convinced this legislation will not have a negative impact on their operations.

In short, this should be regarded as a simple updating measure with minimal economic or revenue loss and a potentially positive impact on trade, business and tourism. It is already operating without disruption.

In addition to the three principle amendments, the bill contains a number of other changes of a largely technical or housekeeping nature. Most will serve to clarify the intent of existing custom and tariff provisions.

Also included in the legislation is a measure that will, like the increase in traveller exemptions, work to streamline Canada's customs clearance procedures under what is known as a basket tariff item basis.

Under this travellers measure the government is proposing to replace the thousands of existing categories of goods with as few as 12 categories. This will speed up collection of duties from travellers at the border by more than 50 per cent.

The bill also provides for tariff reductions on certain finished goods. These reductions have been made at the request of Canadian manufacturers on grounds of competitiveness.

There is only one tariff rate increase in the package. The British preferential tariff is being withdraw from certain rubber footwear, thereby restoring the 20 per cent most favoured nation tariff rate.

This change is consistent with the permanent removal last year of a general preferential tariff on rubber footwear from developing countries. It will prevent countries from circumventing the general preferential tariff withdrawal action and thereby jeopardizing production and jobs in the Canadian shoe industry.

Former British preferential trade tariff exports will still have access to the Canadian market. They will simply have to compete on the same basis as other foreign suppliers.

At the same time the bill allows for possible future improvements to preferential tariff treatment for the world's poorest developing nations. I am confident that Canadians support the goal of enabling these countries to improve their export opportunities. Such changes could also result in lower import costs that will benefit Canadian consumers.

Some of my hon. colleagues may ask about the revenue implications of all these changes as I am outlining them today. As I have already said, the decision to increase travellers' exemptions has minimal implications for government revenues. As for the revenue impact and other measures, we are confident that any cost will be more than outweighed by the long term economic benefits of the proposals: improved competitiveness, increased exports and enhanced employment prospects for Canadians.

In short, the legislation is about providing a meaningful, long term boost to the Canadian economy. It will help ensure that Canada maximizes its benefit under the free trade agreement we have entered. It enjoys the support of business and consumers alike.

Last year alone, Canada's merchandise trade surplus with the U.S. was over $28 million, our largest ever. The benefits to Canadians of such a healthy export sector are beyond doubt, and the government is committed to ensuring that they continue and expand. I urge all my hon. colleagues to join me in sustaining that commitment by supporting the legislation.

Customs ActGovernment Orders

3:30 p.m.


Pierre Brien Bloc Témiscamingue, QC

Mr. Speaker, Bill C-102 is rather complex but can be summarized easily by explaining that it seeks to lower custom duties, in compliance with NAFTA's most-favoured-nation tariff.

This bill includes some 100 pages of tariff items which I will not list, for obvious reasons. We will support this legislation because it is consistent with the opening up of our borders, something which the Bloc Quebecois has always promoted and which reflects the situation that has always prevailed in Quebec, particularly since 1988, when free trade was a major issue in the federal elections. At the time, Quebecers massively supported a party which was promoting free trade. The 1988 election was essentially a vote on free trade and the Conservative party won.

Quebecers showed their strong desire to be part of the major economic blocs. They felt confident that they could do well in the context of a global market.

Bill C-102, an act to amend the Customs Act and the Customs Tariff and to make related and consequential amendments to other acts, is essentially in line with the recent North American Free Trade Agreement.

Some provisions of this bill seek to amend amounts and increase exemptions, depending on the length of the stay abroad, when goods are brought back to Canada.

These amounts vary depending on certain factors, including the length of stay. In fact, these provisions have been in effect for several months, since a ways and means notice was passed before the end of the last session.

This is all part of promoting trade with our economic partners in the United States and now Mexico, and increasingly, there are plans to extend this free trade zone to other countries, Chile, for instance, and then we would have a vast economic zone covering North America and gradually extending towards South America. This is now the policy of a government that, since it came to power, has been won over by the arguments of certain ministers, including

the Minister of International Trade who was pro free trade, although his leader was far less enthusiastic, at least during the last election campaign.

But once they came to power, common sense seems to have prevailed. We now see on the government benches a party that is very pro free trade and very open to international trade, which corresponds with the interests of the Canada they represent and the interests of the Quebec we represent.

You can see what I am driving at. Of course I am going to draw a parallel with what is going to happen. I just want to say I am surprised at what people say outside the House or even in the House when they talk about the political situation in Quebec. As we know, in Quebec there will be a referendum in which Quebecers will be asked to speak out on sovereignty, and also on an offer of economic and political partnership which, to use the terms of this bill, is aimed at maintaining the free circulation of goods, persons, capital, a customs union, a monetary policy, manpower mobility, and so forth. All measures we are trying to take now.

Canada today, especially with respect to the free circulation of goods and services, capital and individuals-admittedly not as free in the case of individuals, but consider the other three-especially with the Americans and the Mexicans and soon with the Chileans, and there is also a whole strategy of trade development, which is more important for provinces like British Columbia or the other western provinces where they are looking at the Asian market for business opportunities.

However, behind all these rules for trading with these countries, we have to look at the figures and the nitty-gritty. Today, trade between Quebec and Ontario is very substantial. Trade in goods and services between the two is around 40 to 45 billion. I would like to say to those who are listening to us that when I see a government, the present federal government, adopting a measure such as this which is aimed at facilitating trade with the United States, I have trouble understanding why the same thing would not be done with a partner just on the other side of its border, that is Quebec, instead of saying "Between us and you trade will be restricted".

I was listening to the parliamentary secretary's interesting statement, in which he said that it would make it possible to reduce input costs. That when you reduce input costs, it makes it possible to create employment opportunities and stimulate exports. That is absolutely true.

The input referred to is the material used to produce a finished product. For example, the wood used to make a piece of furniture is an input. So, the items used as an input in production, that is where customs tariffs are reduced progressively on inputs, tending toward their eventual elimination in order to create employment. This is the same logic which gave rise to the goods and services tax. That system of taxation resulted in no tax on inputs used in manufacturing. That is what the previous government did.

The members of this government vigorously criticized this tax, which they labelled as new but which replaced an old one. It did not necessarily replace it because they are very much aware that this tax is totally in line with the principles they are defending in this act, that is to encourage our exports. Yet the GST is not perfect. There will be a chance to discuss it when taxation is discussed a little later this afternoon. We are still waiting for the amendments the government intends to propose and implement in order to make good on its election promises. It does not have much time left. I doubt it can do so but we will have an opportunity to discuss this later.

Saying that we must promote our exports and ensure that the materials used in our exports are as cheap as possible is quite consistent with the trade logic of 1995 and the next decade.

Political decisions matter little. However, if Quebecers decided to take control of their political future while maintaining economic links with Canada, why would an entrepreneur from Ontario, for instance, who buys materials from Quebec because they are cheaper there say, "In the future I will buy more expensive materials; I want to be less competitive because the Prime Minister of Canada tells me we should not do business with Quebec"?

Do you think this kind of logic will prevail? No way. What will prevail is the same capitalist business logic in effect today. These people will look for the cheapest materials and products available. They will continue to buy and to sell to all those willing to buy their products. No one will refuse to sell goods and services to those who want to buy them. This is not the way our economy works.

I do not know any entrepreneur in Quebec or Canada who would refuse to sell their products to anyone because of their political affiliation or the political system in which they live. Even Canadian business people invest in South Africa despite its very controversial political system. Although that country does not have the most stable political system, people still invest there because they see business opportunities in mining and gold among other sectors.

The people who will invest here know that it will be more profitable for them. It will be the same thing the day after the referendum. They invest here because they see the best market opportunities.

That is why I am quite puzzled by the Prime Minister's political stand. His Minister of Labour, who is responsible for the referen-

dum in Quebec, seems out of step with the bill before us, which is aimed at promoting Canada's foreign trade.

It seems to me that this government is committed to promoting trade so Canadian businesses can export as much as possible. I would be very surprised if, after October 30, the government decided to put a brake on this direction for all kinds of political reasons because its stated priority, although it is still hard to believe, is job creation. If job creation is a priority, would it be in the government's interest to act in a way that will hinder job creation? I think not.

The people of Quebec and Canada can clearly see the economic conditions we are in. In Ville-Marie, where I live, if I look across the lake as I wake up in the morning, I can see Ontario. All that separates us is a lake just a few miles long. So, on not too foggy days, we can see the other side of the lake. On week-ends, people often go across to buy goods and services in Ontario; out of habit for some, but also because a certain type of service-based economy has developed over there. The same thing goes for the other end of my riding, in the City of Témiscamingue, where 200 Ontarians come in to work every morning at a very successful pulp and paper operation we have there. These people will want to keep on working in Quebec, I am sure. They will also want Quebec customers who buy their products in their shopping centres and businesses to keep doing so. Coincidentally, Témiscamingue is also located in the riding represented by the Premier of Ontario, who just got himself elected on the promise of major tax reductions.

I am convinced that he will want to look after the interests of his constituents, protect their jobs and business opportunities for the local business community. There will be discussions, negotiations and agreements. Everybody will keep working according to the spirit of the legislation before us today and which we support. It is intended to foster foreign trade. The days of closed, self-centred economies are over. Around the world, all markets are becoming increasingly open, forming into major trading blocs, be it in Europe, here in North America, in South America or Asia.

Last year, a parliamentary delegation travelled to Australia. It became clear that this country wished to integrate the Asian economic bloc. Everyone is trying to join a bloc without necessarily losing their own political identity in the process. Australians remain Australians, even though they are trying to join the Asian economic market place.

The same choice is being put to the people of Quebec, who will have to decide. What I want to do is to reassure them by showing them that, when we see people act like the government today, we realize that when the time comes to take concrete action, the economic reality prevails over the strategic political line designed to sow fear, confusion and doubt in the people's minds. I often say that economics are one thing and politics another. I was involved with economics before getting into politics, and I may revert back some say, who knows, but it is quite clear to me that trends-

Customs ActGovernment Orders

3:40 p.m.


Jim Silye Reform Calgary Centre, AB

Six weeks from now.

Customs ActGovernment Orders

3:45 p.m.


Pierre Brien Bloc Témiscamingue, QC

We will see. If Quebecers say yes, it will indeed be soon. Otherwise, we will see. There is an economic logic which all political parties, regardless of their position, have had to recognize in recent years. I doubt there are many in this House who are opposed to the opening up of our borders and to the fact that we can now help our businesses have access to foreign markets.

The American market is extremely appealing and will be even more so in the years to come, given the natural interest that currently exists for a north-south trade corridor. Over time, we did manage to develop an east-west economy in Canada. We built a railroad network and developed infrastructures to promote interprovincial trade. We can now see what is happening with the dismantling of the railway system. The more natural corridors are now emerging. The government can no longer afford to try to create artificial corridors.

Nevertheless, east-west trade developed over time and will continue to exist, but there is a natural need for a north-south movement of goods and services. The northern U.S. states immediately come to mind, but there is also the whole American market. Some very interesting business opportunities currently exist and will continue to exist after October 30.

We will do well if our entrepreneurs are able to manufacture products which offer a good quality-price ratio. If we are good today, we will still be good in a month. Canadians will still be good in a month and so will Quebecers, in those sectors where they already do well. However, we will not instantly become good in those sectors where do not already do well. We will have to work hard. But we will continue to do business on the basis of the logic that governs business activity.

At some point, we will have to stop getting the public confused by saying that business activity develops according to the political opinions of politicians. The business community will be there long after this government is gone. The logic that governs free trade will probably prevail longer than this government, at least I hope so, thus offering interesting development opportunities.

Later on this afternoon, I will have the opportunity to address another bill dealing with taxation. However, the bill before us, which contains some 100 pages of amendments designed to reflect the international agreements and treaties signed by Canada, promotes economic development and is also in line with the economic logic that currently prevails and that will continue to prevail in the future. I am pleased to see that the government is headed in the right direction. When it comes to the economy as a concrete reality, the logic that applies will still apply in six weeks.

Customs ActGovernment Orders

3:45 p.m.


Jim Silye Reform Calgary Centre, AB

Mr. Speaker, today we are discussing and debating Bill C-102, an act to amend the Customs Act and the customs tariff and make related and consequential amendments to other acts. It is a fairly large bill and there are some pretty good items in here. I would like to address a few of them.

The Reform Party favours and supports Bill C-102. This bill reduces tariffs on a broad range of goods used as inputs in Canadian manufacturing and operations and on certain finished goods. It enacts changes to streamline and consolidate Canada's duty deferral programs and make them more accessible to all manufacturers. It increases the amount of goods that Canadians can bring home from abroad. I will get back to that more specifically later.

Overall, this bill reflects all Canadian tariffs where previously the tariff was higher than the U.S. level. This of course was a requirement in the NAFTA agreement and allows us to compete on an equal footing with the United States.

This bill sets the framework for establishing free trade zones within Canada. By streamlining regulations regarding tariffs, cities or other regions are now able to provide additional incentives to set up a free trade zone. This allows free trade zones to be set up and funded under the auspices of local rather than the federal government, that level of government closest to the people. It is a philosophy and a theory we support. It eliminates the duplication of services among federal, provincial and municipal governments. It even gets communities involved and is something that is headed in the right direction.

Other tariff reductions in the bill are part of a biannual review of Canadian tariffs and are a result of ongoing consultations with various industries and other requests to lower tariffs to increase the competitiveness of Canadian exports.

I would like to say to the taxpayers who are listening to the debate today that this bill gives effect to what they have already been enjoying. It often baffles me how we can be doing things when the law has not yet been passed, but we are out there in the marketplace doing it. I do not know how it works. Nevertheless, this is a measure my party supports.

For those taxpayers who are listening, this is a bill that increases the limits when they go to the United States. If Canadian citizens are out of the country for not less than 24 hours they can bring home $50 worth of product. If they are out for 48 hours it is $200, and if it is not less than seven days it is $500.

Reformers support Bill C-102 because it reduces tariffs and makes Canadian business more internationally competitive. It is in favour of free trade, as our party has been all along. It started that way and it always will be that way, unlike the government.

Government members argued and said that they were against the NAFTA. They argued and said that they would renegotiate the NAFTA. They argued and said that it is not in the best interests of Canadians. Perhaps the hon. member for Kamloops might have a few more words to say on that topic. However, when they formed the government they reneged on that promise. I recall that they indicated in the red book that they would look at the NAFTA. I believe the government made the right decision. It was wise for them to change their minds. It was wise to break that promise. It did Canadians a favour and we will benefit from it in the long term.

Of all the tariff changes, and there are well over 1,500, there is only one increase in tariff; all the others are decreases. In case the finance minister wants to buy a pair to present his next budget, the increase is on rubber boots imported from Great Britain. I think he needs a pair of rubber boots. We all know how he keeps digging our debt hole deeper and deeper every day. He believes in digging deeper. He is committed to digging deeper. He is only adding at the rate of 3 per cent of GDP. That is much less than the Conservative government, but it is still in the billions and billions of dollars. He keeps adding to the problem, not solving the problem. I think a pair of boots rather than a pair of shoes might be ideal for the next budget. Why not, in light of our economic situation?

This is an opportunity for me to put in a plug for something I think has to happen. It has to come about. The time has come. There are members on the other side who agree with this and there are members on this side who agree with this. I believe there are even some members of the Bloc Quebecois who agree with it. Whether they are in this country or in another country, they will probably have to look at this as well.

Why not look at the total reform of our taxation system? Simplify it by redistributing the tax base. Broaden the tax base so that we can introduce the lowest possible rate. This sort of taxation system that is being bandied about is called a flat tax. A flat tax is something that should be debated. It is necessary.

The underground economy is growing. We know how strong the underground economy is in Atlantic Canada. We have just come back from there and we know it is operating. We know that it operates here. I know it operates in Calgary. I know it operates in Edmonton. There is no need for that to happen.

Businesses are losing out to American companies. Bills like Bill C-102 help to restore faith in imports and exports. It helps to bring us back to competitiveness. However, because of our complicated income tax system investors are investing outside of Canada at a faster pace than ever before. I hope the government listens and does something about it.

The United States is also looking. The United States initiated the free trade discussions and is looking at ways and means to improve their tax system. The United States already has a lower tax regime than we do. It already has governments that spend less than we do. Our problem is still high spending in this country, and the government will not reduce it fast enough. Eventually, when we get over on the other side, we will be able to solve that problem.

If the United States is going to be looking at a flat tax, we should be doing the same. If we are not working in parallel, if we are not working in unison, we will become uncompetitive and our businesses will not be able to compete. If we do not address this and soon, it will hurt an awful lot of Canadians and this country.

We encourage the government to continue further down the road established by this bill and continue to reduce tariffs to facilitate international trade. The federal government has extensive powers to reduce tariffs further and should continue to do so.

There is one item I just remembered. When the parliamentary secretary to the Minister of Finance addressed Bill C-102 he indicated that this bill and also Bill S-9 would help the customs people do a good job and represent us well. When he made that point he gave the impression that our customs officials are right on top of it and doing a good job.

I would like to point out to him two issues and two stories. We read about the spray story in the media where Bob and Ramona Edgerton got rapped on the knuckles for bringing that in. This is another one that sadly distresses me. This happened to a couple who came to Canada on a holiday. It happened at the Huntington-Sumas border crossing. They are in their sixties. They were driving through customs. The official asked if they had anything to declare. As Mr. Edgerton says in his own words:

The sin was, of course, honesty. While files of cars with Canadian plates streamed north unimpeded, I told the customs agent that we had a bottle of wine and a six-pack of beer in the trunk.

He asked what kind of bottle and I told him a "jug". This immediately excited him and he was out of his border hut in a flash-well more like a waddle. Sitting for hours and harassing geriatric tourists doesn't keep one physically fit.

Anyway, he seemed puzzled by the word "jug" (perhaps the term is unknown in Canada) and demanded to see it. I opened the trunk and pointed to a paper sack; therein was a jug of cheap white wine. The agent examined it at length. It was as if it was the Holy Grail had fallen into his hands.

The man replaced the jug and started to scribble on a pad. I started to close the trunk, but he stayed my hand, demanding to examine the six-pack of beer. This he did with the bedazzled look of a person who is viewing a six-pack for the first time.

Then he announced that I could pay duty or abandon these items. I foolishly opted for duty. Inside the office, I encountered another agent who examined the first one's citation and asked if I had a receipt for the wine and beer.

Back I went to the car and after some rummaging actually found a grocery receipt. All this time scores of cars with Canadian plates were streaming northward at a mighty clip. Not a truck was opened, hardly did they pause at the checkpoint.

We know that smuggling of guns and liquor is also a big item with these trucks, so we should have been checking a few of them.

I took the receipt inside, handed it over. The beer and wine had cost just under $12. The agent inside said the duty would be $18. I couldn't believe it! A duty of 150 per cent.

It was then I decided to abandon the potables to the customs people, who next asked me-demanded, actually-that I sign a receipt. I signed something that was written partially in French. I don't read French. I may have agreed to give up my possessions and spend my few remaining years in a penal colony outside Yellowknife. I know not, nor do I care.

What I do know is I shall never willingly return to Canada, which will no doubt please most Canadians. The question then is how to recoup my $12. I thought of poaching a few salmon from the mighty Fraser or spray-painting a police cruiser.

But no. Instead, my plan is to avoid all western Canadian games events, cancel a trip to Vancouver, begin dieting and get out of Canada post haste.

Actually, the customs people-who even now are drinking cheap white wine and quaffing economy beer-have not cost me $12, but saved me hundreds. Oh, Canada.

Doug Walker has gratefully returned to his home in Asheville, North Carolina.

I would not want this government to think that everything it has done, the way it has done it, and how it has done it is perfect. It is not a perfect world. There is work out there to be done. To gloss over events like this hurts Canada and its reputation. I see no need for that kind of action and activity. That division and that department should be looked at.

Customs ActGovernment Orders

4 p.m.


Walt Lastewka Liberal St. Catharines, ON

Mr. Speaker, it is a great pleasure for me to speak today on Bill C-102. As a member of the St. Catharines promotion task force prior to my election as MP and one who had worked on free trade zones in the U.S., it gives me great pleasure to be able to speak today as a member of Parliament on the bill.

I would be remiss if I did not give credit to a number of committee members in St. Catharines: Don Chambers, Don Johnston, Don Wiley, Ian Spraggon, James Wakil and Mike Haines who helped in the work on free trade zones.

Free trade zones in the U.S. are right across the border from us. There are six free trade zones with which the Niagara area has to compete. It is not only the fact that they are free trade zones but the Association of Free Trade Zones meets directly across the border in Buffalo.

While doing some research and working on the committee it was interesting to note the advantages of free trade zones that were published in the U.S: land and store imported goods quickly without full custom formalities; wait until goods leave the zone to pay duty; display goods in showrooms in the zone and have buyers inspect and sample merchandise; process, assemble and otherwise process goods to qualify for lower duty; when manufacturing in a foreign trade zone choose the most advantageous type of duty and quota limitations; salvage or repair damaged goods duty and quota free while finding a suitable market; and store goods indefinitely to await the best market conditions. These are only some of the advantages proposed by free trade zones in the U.S.

Curiously the six free trade zones across from the Niagara area were all started by a Canadian, George Keitner, from Montreal. I give him credit for starting free trade zones. In the previous government he could not get his point across that in addition to free trade and NAFTA we had to work out the details in the accounting systems of our country. It seems that those details were not taken care of back home.

We had consultations and worked with various communities across the country. I had the pleasure of working with members from the communities of Vancouver, Calgary, Newfoundland, St. Catharines and Montreal. Consultations with businesses have accommodated Bill C-102. More important, business, industry and manufacturing people played a part in the changes.

Other advantages were the streamlining and consolidating of duty deferral programs in the customs tariff; making the paperwork more user friendly; making it easier on cash flow; and, more important, allowing various businesses in regions and municipalities to effectively market their programs from their areas.

We all have various opportunities in our communities, no matter where we come from as members of Parliament. The bill will allow various teams in communities to create their focus and exporting niche. We have different products across the country so we can all take advantage of additional exports.

As cited in the foreign affairs and international trade report last spring, creating and promoting an international orientation for business in Canada should be a priority objective. Bill C-102 helps meet that objective by providing access to the program by the businesses and communities I mentioned earlier and by allowing the economic development programs to flourish. It does not restrict. It assists business manufacturers to make things happen. Of course in the end this means jobs for Canada.

I especially like the wording of the bill. As my colleague across the way mentioned, the bill is quite thick. Current inward processing allows the relief of customs duties and the various taxes and excise taxes and enables the cost of doing business to come down. The bill also allows new manufacturers and new start-up companies to get into the business instead of having a history on which they have to report. Having new businesses getting into exports allows us to build our international export trade.

Streamlining customs duties and requirements will make it much easier for our manufacturers. We will have to build in accountability but it is better to build in accountability rather than restrictions.

I am reminded when we toured many of the free trade zones in the U.S. of the physical barrier requirement. In Bill C-102 no physical barrier will be required. It will be an easy and simple system, created as such so that our manufacturing strength in Canada can be improved even further on the export markets.

I am also reminded imported goods and domestic goods can be used interchangeably. Many of the items previous speakers have mentioned will be advantageous. After touring some 60 free trade zones in the U.S. and having discussions with various people, the government in the co-operation with the users of the bill has made a substantial improvement on how we do business in Canada.

As mentioned before, it is the duty of the Government of Canada to assist business in making things happen. In the bonded warehouse provisions, activities currently provided for in the bonded warehouse legislation such as storage, packaging, repackaging, labelling, normal maintenance, servicing, complying with any applicable law of Canada and testing of same will continue. There are also improvements. The government needs to continue to look at our systems, in this case duty deferral and remission programs, and make continuous improvements as we go along.

Over time product research and product lifecycles change. Therefore our accounting system needs to change. In the proposal storage time has been increased to four years, which will allow various businesses and companies in the manufacturing sector to determine their own productivity planning, to determine their own productivity cycles, rather than the system telling them how to produce.

In previous discussions I mentioned the 60 free trade zones with which our committee exchanged information. In this government proposal and the submission put forward we have taken the best of many free trade zones and incorporated them into our structure. It is a team Canada approach to making things happen.

As a result we will increase our exports. More and more companies and businesses will see that although their competitors may be unproductive they will be co-operating as they export more and more products around the world. We are into a global situation and these improvements are perfect timing as we look forward to next year's budget.

I bring to the attention of the House how manufacturing will benefit from this proposal. Often we take manufacturing and manufacturing jobs lightly. We forget that some 1.8 million Canadians are directly employed in manufacturing and over 2 million depend on our industry for their livelihood. Almost 50 per cent of goods manufactured in Canada are exported. In 1980 it was 25 per cent and now it is 50 per cent.

I also bring to the attention of the House that some 75 per cent of the research and development in the private sector is done in manufacturing.

With the assistance of Bill C-102 I am sure that many manufacturing businesses will take advantage of the system because the cost of doing business will be reduced. When we reduce the cost of doing business we allow for more business to be done and we can compete on a world scale.

The government continues to work to remove paperwork and make the system more effective. It helps companies and businesses to spend their time on sales, research and productivity. It will improve exports, Canadian quality and costs, making us even more competitive. As I mentioned earlier, jobs in Canada will be improved by exports without a major cost or expenditure by the

government. There is a way to improve the employment situation and make things happen.

I commend the finance department for all the work it has done on the bill. It is obvious that with support from the three previous speakers and working together as Canadians we can improve our system in Canada and complete on a global level.

Customs ActGovernment Orders

4:10 p.m.


Charlie Penson Reform Peace River, AB

Mr. Speaker, as we have heard a couple of times today, we are debating Bill C-102, an act to amend the Customs Act and customs tariff and make related amendments to other acts.

This is a very important bill. As the trade critic for our party I say that it is vitally important to reduce tariffs as quickly as we can. The Reform Party fully supports the bill.

The bill reduces well over 1,500 tariffs and since we are a pro free trade party we are in favour of all of them. The tariffs being reduced are on a broad range of goods used as inputs into Canadian manufacturing operations on certain finished products. By reducing these tariffs our costs of manufacturing will be reduced. The result is that manufacturers will be able to invest more money into plants and equipment.

This type of tariff reduction, I would submit, is a stimulant to our economy. It will create more jobs than the old-fashioned job creation programs we have seen in the past. I urge the government to go further down the road and establish as many cuts to existing tariffs as possible to move this along as quickly as possible.

The cost incurred by Canadian manufacturers are already high enough by virtue of our climate and our great distance from markets. Let us give our manufacturers a break and eliminate these tariffs wherever possible.

We will also be eliminating a lot of paperwork and red tape. Working through all the red tape is a big cost of doing business. I would not be surprised if many of these tariffs actually cost the government more to collect than what it gets from them.

Not long ago I recall reading a story about the so-called Asian tigers of the South Pacific that have enjoyed spectacular growth because they have slashed tariffs more quickly than their competing nations. That demonstrates open competition is very good. We have seen growth rates in some of those areas of 10 per cent per year.

We in Canada have been too cautious in this regard and too concerned about protecting industries and companies that do not really deserve that protection. I would much rather see real competition in the marketplace rather than protectionism.

Bill C-102 also increases the value of goods that travellers returning to Canada can bring back. Returning residents now have a $50 exemption after the absence of 24 hours, an increase of $30. The exemption for 48 hours goes to $200 from $100 and the seven day exemption increases from $300 to $500, all good moves I think.

These changes bring Canadian travellers' exemptions into line with those of our major trading partners and eliminates some of the petty hassles we have heard addressed in the House earlier today that travellers face at our border. I would rather see customs officials concentrating on drug and gun smugglers and other types of smugglers than have them preoccupied with what amounts to a pair of Adidas runners.

Another measure the bill streamlines is customs clearance procedures by treating goods imported by travellers as basket tariff items. My understanding is there is a proposal presently under consideration to replace the thousands of existing customs categories to just 12. That would be welcome as well.

When these changes are implemented at a later date they should speed up our collection of duties by more than 50 per cent. The time savings will allow Revenue Canada to focus on processing commercial imports and spend more time for enforcing the laws against smuggling.

The final major change the bill brings about is streamlining and consolidating the duty deferral programs, making them more accessible to the manufacturing community. Canada has three programs which defer or relieve duties on goods for export or goods awaiting formal entry into Canada. These are duty drawback, inward processing and bonded warehouse programs. By eliminating certain administration restrictions that currently exist these programs will be now more accessible to small and medium size companies.

The Standing Committee on Foreign Affairs and International Trade is currently studying ways to make small and medium size companies more able to take advantage of trade pacts we have introduced in the House such as NAFTA and the GATT agreement. Anything we can do to relieve the pressure they have in doing business in this country is welcome.

Because these free trade zones will now be set up and funded under the auspices of local government rather than the federal, cities and other regions will have greater incentives to set up these free trade zones. I believe more natural trade corridors will develop as a result of this.

Such a free trade zone was set up at the Vancouver airport in March 1994. More recently a similar free trade zone was established at an Edmonton airport. I believe Atlantic Canada is a natural one that should take advantage of this as well.

These free trade zones allow businesses to bring in goods from abroad without paying the federal GST, provincial sales tax or import duties until the goods actually leave the free trade zones. Companies are free to repackage, test or make value added modifications to these imported goods. No taxes or duties are payable until the goods are shipped off again. The companies get to use their working capital for a longer period of time and save a lot of unnecessary paperwork.

Here is another example of how the government can stimulate by getting out of the way; free the hands of business, cut the bureaucracy, the red tape, and watch this great country get back on track. It is something we certainly need.

We support all of these measures and we welcome additional measures to make further cuts in tariffs even if we do it unilaterally.

Customs ActGovernment Orders

4:15 p.m.


Nelson Riis NDP Kamloops, BC

Mr. Speaker, I am pleased to have an opportunity to say a few words regarding Bill C-102.

At a time when too many Canadians are out of work, too many Canadians are underemployed and too many Canadians who are employed find it a struggle to make ends meet as a result of low paying jobs and so on, in the service sector particularly, Bill C-102 is a step which will facilitate expansion in the manufacturing sector. It will have a direct bearing on an increase in future jobs. In that sense we see there is an upside to this legislation which will be helpful to people from coast to coast.

I was pleased to find that Bill C-102 enables customs officers to spend more time with clients. This is much needed. A constituent of mine, Tony Walters, was visiting in the American southwest not long ago and when he came across the border into Canada he indicated to the customs officer he had bought himself a pair of riding boots made of armadillo skin. The customs officer said he would have to keep the boots and examine them. My friend asked if there were any problems. The officer said he did not think so but that he had to confiscate the boots, which he did.

Nothing happened. My friend some weeks later inquired and the officer said: "We notice there are armadillo skins on these boots and we think they might be an endangered species in the future". My friend said: "Fair enough, but at the moment they are not an endangered species and there is no reason I cannot collect my riding boots". He said: "You will have to wait and check with the minister".

I checked with the Minister of National Revenue, who is responsible for customs, and told him of the plight of my constituent. The minister said he would look into it but unfortunately that is the last I have heard of it.

I did receive a call from my constituent who informed me he had received a letter from Canada Customs saying it had burned the boots. My friend was not pleased. He felt they were legitimate riding boots, a legitimate import. They cost him a couple of hundred dollars and they had been burned by Canada Customs. He felt he was due some compensation. It seemed to me he was right in that assumption. Perhaps the Minister of National Revenue is out there listening and will once again address this matter. As I said, unfortunately I did not hear anything back from him once I brought it to his attention.

Bill C-102 moves us in an encouraging direction by eliminating more than 1,500 manufacturing input tariffs. It will be good for the expansion sector. However, what has driven this bill is the NAFTA. This will bring our tariff schedules in line with American manufacturers in an effort to obtain a more harmonious or level playing field in the manufacturing sector between Canada and the United States. We have had the NAFTA debate and it is over.

I will register a concern which I, my party and increasing numbers of Canadians have. I do not want to say anything against our American friends but is it wise for an exporting country to put so many of its eggs in one trade basket, to link itself so inextricably, intensely and extensively with one country?

I think we can all acknowledge that now for all intents and purposes economically speaking we are the equivalent of an additional U.S. state or territory. Our economy and the economy of the United States is inextricably connected. That makes us very vulnerable to economic occurrences in the United States. If its economy starts to falter the ramifications will ripple through our economy within minutes.

I know many members of the House are enthusiastic supporters of the NAFTA and what that means and that we are now nothing more than an economic extension of the United States.

In our long term best interest as a country is it to our economic advantage to put all of these trade eggs in one basket? Will our children and grandchildren benefit from this initiative? I do not think so and I raise that as an extension of the debate on Bill C-102.

On balance we support this legislation. I particularly like the idea that the duty exemptions for travellers have been increased. As I recall, the last increase was in the early eighties. Now travellers will be able to bring in goods duty free to reflect these changing times. I still think they are too small. However, it is a step in the right direction.

My friend from Calgary Centre raised the point that one of the motives behind this legislation is to bring our tax regime in Canada more closely in line with that of the United States. He expanded to say it would not only be in terms of tariffs and so on but also our corporate and individual taxation systems.

He mentioned theirs was somewhat lower than ours in Canada. I noticed the Minister of Health is here. One reason our tax system is somewhat higher than in the United States is a reflection of some of the benefits we obtain because of our tax system.

I had the good fortune two years ago to spend time on a formal visit to the United States. Part of that visit included a visit with an American family every evening to talk about life as it saw it and to provide an opportunity for it to meet a Canadian to hear about what life in Canada is all about.

One of the questions I asked every evening for 28 days in succession concerned what that family paid for health care, what the cost for that family was. In every case the cost of health care, not to the same extent we have in Canada but at least close to it, varied between $5,000 and $7,000 per family. That is what it cost them out of their pockets each year. That was a system through

which all sorts of medical services were deductible. If someone had their tonsils out they might have to pay a $500 deductible.

While we discuss taxation-goodness knows we are doing it today and I suspect we will be doing it for many weeks beyond this-as we work to compare the tax regimes of the United States and Canada we should always keep in mind the relative benefits citizens in each country receive as a result of those tax regimes.

(Motion agreed to, bill read the second time and referred to a committee.)