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.
Diane Marleau Liberalfor the Minister of Finance
moved that Bill C-90, an act to amend the Excise Tax Act and the Excise Act, be read the second time and referred to a committee.
David Walker LiberalParliamentary Secretary to Minister of Finance
Mr. Speaker, it is with great pleasure that I rise to speak at second reading of Bill C-90. This is an important bill in that it will give legislative effect to excise tax changes announced earlier this year, including measures that were contained in the budget of February 27, 1995.
The key budget measures in this legislation are: first, changes to the air transportation tax that will recover a greater proportion of the cost of providing air transportation services and facilities.
Second, an increase in the rate of excise tax on gasoline equal to 1.5 cents per litre that will assist the government in meeting its deficit reduction targets.
Third, amendments to the marking requirements for tobacco products for sale in Prince Edward Island that will phase out the sale of black stock or unmarked tobacco products and allow for the sale of Nova Scotia marked tobacco products.
Last, changes to the seizure and notification provisions in respect of offences under the Excise Act that will improve the efficiency and effectiveness of enforcement activities.
The bill also contains important changes in respect of excise tax rates for tobacco products for sale in Quebec, Ontario and Prince Edward Island. The amendments contained in the bill will give legislative effect to a modest federal excise tax increases that were announced earlier this year in conjunction with provincial tobacco tax increases in these three provinces.
These tax increases follow the success to date of the national action plan to combat smuggling in significantly reducing contraband tobacco activity and restoring the domestic tobacco market to legitimate Canadian wholesalers and retailers.
Let me begin by addressing the key budget features that are implemented by Bill C-90, the air transportation tax. As part of the government's efforts to meet its deficit reduction targets the budget of February 27, 1995 proposed changes to the air transportation tax that will recover a greater proportion of the cost of providing air transportation services and facilities.
In accordance with this proposal the bill contains amendments to the Excise Tax Act that will increase the maximum air transportation tax on higher priced domestic and transborder air travel and the tax on international air travel purchased in Canada from $50 to $55.
In addition, the maximum tax on transborder air travel subject to the United States' 10 per cent air transportation tax and the tax on international air travel purchased outside Canada will increase from $25 to $27.50. These new rates will apply to air travel purchased on or after May 1, 1995. Where air travel is purchased outside Canada and the tax is not prepaid, the new rates will apply to air travel which includes an international departure from Canada on or after May 1.
These changes to the air transportation tax will generate additional revenues of $27 million in the 1995-96 fiscal year and $33 million in the 1996-97 fiscal year.
Also as part of the government's efforts to meet its deficit reduction targets, the budget of February 17, 1995 proposed to increase the rate of excise tax on leaded and unleaded gasoline and aviation gasoline by 1.5 cents per litre.
To give legislative effect to the proposals Bill C-90 contains amendments to the Excise Tax Act that will increase the excise tax on leaded gas and aviation gasoline from 9.5 cents per litre to 11.0 cents per litre and the excise tax on unleaded gasoline and aviation gasoline from 8.5 cents to 10 cents per litre.
These changes apply to sales of gasoline and aviation gasoline after February 27, 1995 and will raise an additional $500 million per fiscal year. At the same time I would like to note that the federal excise tax on diesel fuel will not be increased.
The budget of February 27, 1995 also announced the government's intention to phase out the sale of black stock or unmarked tobacco products and authorize the sale of Nova Scotia marked tobacco products in Prince Edward Island. These changes are being
undertaken at the request of and pursuant to an agreement between the governments of Nova Scotia and Prince Edward Island concerning the use of Nova Scotia marked tobacco products.
In order to give effect to this agreement Bill C-90 contains a series of technical amendments to the taxation, offence and rebate provisions of the Excise Tax Act. These amendments will effectively phase out the sale of black stock tobacco products and authorize the sale of Nova Scotia marked tobacco products in Prince Edward Island at the reduced rate of federal excise taxes that are applicable in Prince Edward Island. These changes will be effective on royal assent to the bill.
The final budget related measure contained in this bill involves changes to the seizure and notification provisions of the Excise Act. The Excise Act currently provides that officers must seize any vehicle used to transport alcohol and tobacco in contravention of the Excise Act even where relatively minor amounts of contraband are discovered. In the past this provision has created enforcement difficulties by forcing officers to seize vehicles in situations where seizure is neither a practical nor an appropriate remedy. To rectify the situation this bill amends the Excise Act to provide officers with the discretion to use the power to seize vehicles that are used to transport contraband alcohol and tobacco.
The Excise Act will also be amended to require that where officers have evidence that a person other than the person from whom the vehicle is seized has an ownership or similar interest in a vehicle, the officers shall take reasonable efforts to ensure that notification of seizure is sent to the last known address of that person.
Both of these measures will operate to improve the efficiency and effectiveness of enforcement activity.
Finally, Bill C-90 contains important changes to the excise tax rates for tobacco products for sale in Quebec, Ontario and Prince Edward Island. As my hon. colleagues are aware, the national action plan to combat smuggling was announced by the Prime Minister on February 8, 1994. The combination of initiatives launched under this plan, including increased enforcement resources, tobacco tax changes and the special surtax on tobacco manufacturers has proven effective in significantly reducing contraband tobacco activity and restoring the domestic tobacco market to legitimate wholesalers and retailers.
As a result of these efforts, the government has been able to take important first steps toward the long term restoration of uniform federal excise tax rates for tobacco products across Canada.
In Quebec and Ontario federal excise tax rates are being increased by 60 cents per carton of 200 cigarettes, while in Prince Edward Island excise taxes are being increased by $1 per carton of 200 cigarettes and 32 cents per 200 tobacco sticks.
It is important to note that these federal excise tax increases are being undertaken in conjunction with provincial tobacco tax increases in the three provinces. These joint federal-provincial tax increases follow the scheme of matching tax reductions announced under the national action plan and reinforce the importance of co-ordinated, federal-provincial action to deal effectively with contraband activity.
The excise tax increases in respect of cigarettes for sale in Quebec and Ontario are effective February 18, 1995 while the increases in respect of tobacco sticks and cigarettes for sale in Prince Edward Island are effective April 1, 1995. These changes will generate an additional $65 million in federal revenues on a fiscal year basis.
In conclusion, and as members can tell from the outline of this speech, Bill C-90 is an important bill. This bill enacts a number of key revenue raising measures contained in the budget of February 27, 1995.
While I would note that the budget delivered on that date emphasizes reductions in spending by a margin of seven to one over tax increases, the measures contained in this bill relating to the air transportation tax and the excise tax on gasoline are key components of the government's commitment to both increased cost recovery and meeting its deficit reduction targets.
Other measures, such as the amendments to the seizure and notification provisions of the Excise Act will improve the delivery of enforcement activity, while changes to the tobacco marking scheme for Prince Edward Island will allow for greater efficiency in serving the Prince Edward Island market.
Finally, the changes to the excise tax rate for tobacco products for sale in Quebec, Ontario and Prince Edward Island emphasizes the success to date of a national action plan to combat smuggling and to raise important, additional revenue for the government.
As a result, I would urge my colleagues to give speedy passage to this bill.
Pierre Brien Bloc Témiscamingue, QC
Mr. Speaker, this is our third bill this afternoon. We shall continue, but our differences are now going to surface. We could agree on the first two bills, but we can only go so far. When we get to the excise tax on gasoline, our views will no longer coincide.
Bill C-90 contains a number of acceptable measures to which we have no objection. For instance, bringing the price of cigarettes
back to levels that are less an incentive to consumption. Provided this does not resurrect the smuggling network and does not give them that opportunity, I think it is satisfactory. Everyone expected this, if we want to keep fighting cigarette smuggling from the point of view of law enforcement and avoid encouraging people to buy this product, on health grounds.
Of course we have some questions, because there are a number of problems we will have to deal with in connection with anti-smoking campaigns. We need a plan with a very clear-cut purpose to ensure this campaign does not encourage smoking, especially among the young and young women, where smoking is very widespread. We will have to find ways to restrict tobacco consumption.
I will be very brief about this aspect. I agree that reducing the excise tax probably helped to destabilize smuggling rings, but there was not much in the way of law enforcement. Smuggling still exists because we have not dealt with the real problem. We may have the same problem with other products. It could happen whenever the tax on the product is unreasonably high. That is one reason we have to be careful in the case of gasoline, because there is a limit to what the public will tolerate.
When we consider the price of gas, when we break down the price at the pump, fortunately people do not see the real price, because taxpayers would be rather upset. The price includes a lot of different taxes. So many that we may have gone too far, especially-and this was said by the Canadian Automobile Association-since there is no guarantee that this money is invested in highway maintenance or used to compensate for environmental damage. It all goes into the consolidated fund, and there is no way to find out how this revenue is used.
In fact, they were in favour of creating a fund to ensure that gasoline taxes are used to compensate for the impact on the environment or reinvested in road maintenance. They did not talk much about an environmental fund, but if this initiative ever went ahead, one option would be to bypass the consolidated revenue fund and put part of this tax revenue into environmental funds.
There are other measures, including an air transportation tax, which would increase the maximum tax on international air travel from $50 to $55. This is no big deal, but when we consider taxation in general, after two years in the House, after everything that has been said and heard and discussed on the subject, the tax on gas was discussed in the last budget and this was basically a fiscal measure to quickly raise $500 million.
The purpose of this tax was to raise revenue fast. The air transportation tax was affected as well, and once again, it was changed at the expense of people in the regions, because they reduced the tax on short haul flights but the tax on longer flights was increased, in the case of domestic flights, which means that people in Baie-Comeau, Val-d'Or or Rouyn, in my region, are now faced with a tax increase of several dollars. It is not much, but the price of plane tickets was already very high.
But the major tax initiative, the campaign promise, was not to increase gasoline taxes, but to change the tax on goods and services. That was the campaign promise. The subject was raised in the House and studied in committee. The committee gave a report, which, if memory serves me, lasted 17 or 18 hours. The next day in the House, the Prime Minister distanced himself from the report, because the committee-and when I refer to the committee, I am excluding myself and the Bloc Quebecois-proposed a tax, a sort of hybrid tax on business activities mixed in with the GST, in other words, a very short lived and now shelved proposal.
The Prime Minister's promise was that two years after the Liberals arrived in power, let us give them two and a half years-so we will say January 1, 1996-the GST would disappear. Both during the election campaign and in the House, I have heard the Prime Minister say: "We hate this tax and we are going to eliminate it". Now, whether he hates it less or whether he is not going to eliminate it, the Prime Minister is no longer saying that he will eliminate the GST.
Is the magic gone? What happened? There is no more mention of it at all, just as with every hot item here in Ottawa. The government gives the illusion of working on real things, but the legislative agenda is sparse. They are all more or less contentious matters, which have already been announced, whereas we are still waiting for measures on pension reform and on unemployment insurance reform.
What of the new human resource investment fund that is to be set up by the Minister of Human Resources Development, which is very important and will involve the reform or dismantling of the network of employment centres? Everyone is waiting to see it to get an idea where the federal government is going, but only a minimum of information is being provided, because of the political context in Quebec, and the federal government does not want to tell us clearly what is happening.
It is a bit unfortunate, particularly on the part of people like the Minister of Intergovernmental Affairs, who is taking pleasure in saying that the Government of Quebec is hiding things or studies. Well, here they are keeping what will happen after the referendum really under wraps. The people do not know what is going on. They have a hard choice to make, and I understand them, but when they look at the No side, they see nothing. They do not know what will happen to them. It will be a matter of trust. Are they going to trust the people who represent this camp, the present Prime Minister? If I were he, I would be worried. I am not sure people are going to give him a blank cheque to do what he likes afterward.
We are entitled to expect to know what initiatives the government plans to take. It remains silent, however. About the GST, though, I would like to remind them, because the opportunity is too good to miss, that they made promises to the people. In the finance committee, we heard just about anything. That tax is a bad one, everyone agrees on that, on a number of things.
The underlying principles are not all bad in it, but some government members were saying that the black market economy was due in large part to the GST. There are limits. Let us not exaggerate. The figures bandied about were surprising. The government was said to be losing billions of dollars in revenue just because people did not accept the GST. There is some truth in that, but not in the proportions they were talking about in the elections or before the committee.
Nevertheless, this was their opinion. They have all become silent about the GST. Apparently there was some discussion about it in caucus before Parliament resumed. There has been some discussion but not much in public, and in the long run the hope is that people will forget.
Implementing a reformed tax is not easy. The main criticism of the GST by business was the short time between when the decisions were made, when the tax was defined, and when it was implemented. Since it was all done very rapidly there was a great deal of confusion. This has moreover never been settled completely because there are still close to a billion dollars in unsettled accounts or unrecovered taxes, in large part the result of the initial difficulties many people experienced in understanding the tax.
If they want to reform this tax before the end of their mandate, there is not much time left for defining the rules. It is surprising that we are not hearing about it any more. These are people who are asking Quebecers to write them a blank cheque and trust them at their word. And yet, during the election campaing, they promised to do away with this tax and replace it with something else. Since that something else has not been defined yet, the first part is irrelevant. Nobody is currently looking for something else. Once in a while, the finance minister uses fancy words to tell us that he is holding discussions with his provincial counterparts, but are all these discussions leading somewhere? Where is this getting us?
We know full well that they were hoping for a Liberal government in Ontario, which would have been more inclined to cooperate; as we know the main stumbling block to revamping this tax is the fact that Ontario still taxes inputs used in the manufacture of other goods. For instance, a piece of wood used to manufacture a piece of furniture becomes an input when processed.
In Ontario, a number of inputs are taxed, apparently to the tune of a few billions of dollars. If both taxes were harmonized, Ontario would stand to lose substantial revenues.
As a result, far from being simple, the tax system is relatively complex. Quebec went ahead with harmonization but this reveals once again one of the fundamental problems of the current political system in Canada, which is the result of the federal government's spending power allowing it to spend in any area it chooses; but to do this it must collect money.
Since all governments, either provincial or federal, collect money the same way, through income tax and other taxes, the stakeholders are numerous. More particularly in Quebec, because in Quebec we never really had any confidence in receiving money indirectly through transfer payments. If we look at what is going on now, perhaps we did the right thing; it is still far better to get tax points than transfer payments, because sooner or later the government could very easily be tempted to cut them.
That has really complicated the system for people. For businesses as well. I am often asked by business people in my province what the concrete advantages for us would be if Quebec were to decide to take control of its own destiny and be fully autonomous, while maintaining relations with our trade partners? When we talk with them, they soon realize that there are very concrete, immediate advantages for them, and I am happy to underline that to my Reform colleague. Indeed, there will be only one taxation system.
For them, that means a lot less paperwork, a lot less trouble, and it is a lot easier to understand. It is the same for individuals. One need only think of the spring, when the deadline for income tax returns is near; we get out our receipts, our employment statements, our unemployment insurance statements or other papers, and have a look at them to fill our income tax returns. It is extremely complicated.
Not much effort is put in making things simpler. Eliminating one level of government will already be an improvement in that area. For starters, this natural tendency towards duplication, with two levels of government collecting money they are free to spend as they please, will no longer be an issue.
This is one of the major problems with this political system in which a $500 billion debt was accumulated without any concrete steps being taken to restructure the federal government's spending power, this power to spend that eventually turned into the power to get into debt. What was achieved by this in concrete terms? With respect to employment, it did not even succeed in preventing unemployment and joblessness from reaching unacceptable levels.
There is one lesson to draw from the current situation and that is that we just cannot keep our heads buried in the sand all the time and claim on the basis of any odd statistical report that we are living in the best country in the world. It is not true that we have to hide behind this kind of thing.
I went to a school of administration where we studied cases, problem cases, and ways of resolving them. The first step in a good diagnostic, and the same applies to our personal circumstances, it is always the case, is to admit a problem exists. When I see people who refuse to admit there is a problem, even when it is staring us in the face, then the problem is compounded. I think that the people should not feel reassured, even though they have been told that in future administrative agreements will be negotiated or other ways will be found to improve the system. Unless we change the basic rules, we will always have problems.
It is unfortunate that we in Canada have trivialized such an important word as "constitution". A constitution sets out the rules of the game. Before sitting down to play a parlour game, people should first agree on the rules. If, in the middle of the game, they start to disagree on how the rules should be interpreted, they will have problems. That is what is happening with our Canadian constitution. We cannot agree on the rules of the game but we are not redefining them. This creates a lot of problems. We have tried to change the rules over the years but all our efforts have met with failure.
A country that is afraid to discuss its constitution is a sick country. A country whose prime minister refuses to use the word Constitution because he is not very proud of it is a country with a lot of problems. And this is what we see in Canada, at present. They say: We do not want to talk about it. They are ashamed. They are ashamed because there are past events they would rather not refer to.
Having said that, I would like to come back to the bill before the House and state that we cannot support the tax on gasoline, which raised the price per litre by 1.5 cents following the last budget. Since these taxes are often not visible, we tend to forget about them. After a couple of days, we forget about them, but I now have the opportunity to remind all those who are listening that they should not forget the 1.5 cent increase per litre they have been paying these last few months, because of the federal government and the measures undertaken in the last budget to generate $500 million.
Taxpayers are willing to let the government raise more taxes if it keeps a better control over its spending, but it is frustrating to give more and more money to the government and feel there is no real improvement in our debt situation.
It is all very fine to say that the Minister of Finance is likely to meet his deficit target of about $32 billion this year, but that still leaves us with a $32 billion deficit.
With our economic situation and the likelihood of a slowdown in the United States-maybe not later this year, but next year-that could affect Canada too, there is no guarantee we will still be on track with our public finances. The Conservatives had reduced the deficit to an acceptable level, but when the recession came about, it went out of control. It is a bit like trying to cram something into a box. When the box is too full, it just bursts open.
I think the same thing is happening now. Every time the box bursts open, it becomes harder and harder to pick up the pieces. The deficit has now reached a level that is extremely high.
We are certainly not willing to support measures aimed at increasing government revenues when there is still so much to do in terms of reducing government spending.
In conclusion, I want to remind the government of its commitments, one of which was to review the GST. We thought that it was too little, that the whole tax system needed to be looked at. We offered our help but the government refused. We did a detailed study of the GST in committee. Recommendations were made but the government never followed up on those recommendations, particularly those of the Bloc Quebecois, which were the best among those contained in the report. The day after the report was tabled, the Prime Minister himself rejected a recommendation made by the Liberal majority.
So they have commitments. They say they are people of their word and look after the real problems and are concerned about them. During the election campaign they said they were going to change the tax. We are still awaiting outcome and are eager to see what happens.
The Minister of Health, who was on the finance committee herself at the time, must really know what is happening with this tax. They must have been studying it when it was introduced. The time has come for them to act and to stop hiding behind all the illusions they are giving the public about getting down to the real problems. Because in reality, nothing much happens in this House, except for the legislative agenda, which drags on and must be adopted. The real issues have to be put on the table so we can see what they are really going to offer the people. We will be able to do much more enlightened things.
Jim Silye Reform Calgary Centre, AB
Mr. Speaker, before I begin my speech on Bill C-90, I will comment on the speech from the member for Témiscamingue about broken promises. I agree the government promised to get rid of the GST but it will not get rid of it. The Deputy Prime Minister promised to resign if the govern-
ment did not get rid of the GST and she is still here and will not resign. This is another example of two broken promises.
Bill C-90 is a tax bill, pure and simple, and a huge tax grab that serves only to hurt the economy. The Liberals have been big on their flowery rhetoric of no tax increases. On a personal basis they did keep that promise. However, Bill C-90 hits Canadians in their pocketbooks both at the pumps and in the air.
Our main contention or disagreement with the bill is it implements the 1.5 cent per litre gasoline tax discussed in the 1995 budget. This revenue raising measure, a tax hike, will raise $500 million. As Reformers we vehemently oppose this measure.
My colleague, the member for Lethbridge, will rise this afternoon as well and talk more about the effects of gas taxes, and so I will leave this important subject for him.
Other aspects of the bill include an increase in the air transportation tax from $50 to $55 for domestic and transborder flights purchased in Canada, and from $25 to $27.50 for transborder flights purchased outside Canada. The tax on airlines is based on the amount of time people spend in the air. It is designed to recover government costs for things like air traffic controllers, maintenance, et cetera.
This is the second time in as many budgets the finance minister and the Liberals have increased the airline transfer tax; $40 on domestic flights when they took office and $55 now, a $15 increase. This tax hike, revenue raising measure, will raise $27 million to $33 million for government spending.
Bill C-90 increases the excise tax rates on tobacco products for sale in Quebec and Ontario by 60 cents per carton and on tobacco products for sale in Prince Edward Island by $1 per carton. Originally in Bill C-11 the Liberals thought the best way to battle the underground economy was through reductions in incentives to smuggle because of the high rate of taxation; that is, take the profit out of smuggling. I agreed with that position and it was a good thing to do. It worked on cigarettes, so why not do the same for liquor which is now also causing a big problem at the borders and is offering opportunities for smugglers to make extra money and not pay their share of the taxes?
They killed the taxes on smokes in Ontario and Quebec and now those taxes are creeping up again. This revenue raising measure, this tax hike, will generate $65 million for government spending.
I question how the government spends our money. Every one of these three measures increase taxes when the finance minister presented his budget, pretending all along he was not raising taxes. What we need is tax decreases, lower taxes so people can create long term meaningful jobs. If people have more disposable income in their hands and in their pockets and businesses had more disposable income they could stimulate the economy. The government is blind as to what to do in terms of an economic philosophy which has long term meaningful benefits for the country.
We have just come back from Atlantic Canada. It does not want any part of ACOA. It told us that. ACOA subsidizes and helps high risk businesses. High risk businesses have a tendency to have a high failure rate. Those people concluded early on that therefore the government is subsidizing failure and they do not want that. They want the government to not spend that money and to lower their taxes instead, leave the money in their pocket and they will look after themselves very well, thank you very much. That is in P.E.I., in Nova Scotia and in New Brunswick and Newfoundland. Those provincial governments, Newfoundland and New Brunswick, are cutting with real cuts, unlike this government.
Government red tape, involvement and intrusion are all driving up costs and driving investment out of the country. The government may laugh and think it has have the perfect plan but sadly and faster than we realize capital is leaving the country. The global market has shrunk the opportunities to having it as quick as pushing a button on a computer. We can move products, goods, services and the dollar signs simply go from one account to another and Canada is not participating. Canada is blind with its cumbersome, complicated, convoluted Income Tax Act and we are missing opportunities.
We need lower taxes and a new tax system, a flat tax with high and good personal exemptions and no double taxation. It is funny that when we deal with other countries such as the United States on NAFTA we send trade representatives with to meet its trade representatives. We negotiate agreements with them. What do we do? We eliminate double taxation. We lower tariffs. We look at ways of stimulating more competition. We look at ways of helping business. When the government comes back to Canada to its own people and businesses it raises taxes and keeps double taxation. That is hypocritical. Why does it not have its trade representatives negotiate with the finance minister and get it changed?
What we need is a simplified taxation system that reduces compliance costs and makes everybody more willing to participate and able to participate in stimulating the economy.
Bill C-90 amends seizure and notification provisions of the Excise Tax Act to provide enforcement officers with greater discretion. Previously customs officers had to seize vehicles if contraband tobacco was discovered. This bill will allow them some discretion. However, I do not know if this discretion is the answer for some of these officers in light of a couple of stories about senior citizens from the States travelling to Canada and being treated like terrorists for a bottle of pepper spray used to fight off attackers.
Another couple was recently forced to pay $18 of tax on $12 worth of wine and beer.
Bill C-90 is a disgrace for the Liberals. They claim they are not raising taxes. They try to use smoke and mirrors but the finance minister's rhetoric is not fooling anybody. Canadians know how this hurts them. Canadians see it every day. They will not forget at the next election.
The Reform Party is opposed and will always stand opposed to tax increases and we are against Bill C-90.
Ray Speaker ReformLethbridge
Mr. Speaker, it is my pleasure in one sense to speak to Bill C-90 but in another sense not at all because what we are talking about is the Liberals following tradition, just as the Conservatives did in the 10 years they were in government, of increasing taxes. That is all we hear and they are following the traditional pattern of new taxes for Canadians.
Here we are after the fact. The taxes have already been implemented and we in the House are asked to stand up and pass a law which puts legislative effect to that action of the government. That is wrong in principle. I cannot believe how the government is able to do that. I know there is precedent for it in this assembly. We witnessed this in the spring session, last fall and the spring before. The government brought legislation forward to legislate some tax act or some act that was already happening in the general public without a legislative authority. In principle that is absolutely wrong. That is one of the first reasons I am saying no to Bill C-90.
There is another reason. We are witnessing government in the pockets of Canadians, government at the table of Canadians and government in the gas tanks of Canadians. The government is a partner and wants to be an ever increasing and intervening partner in the private finances of individual Canadians.
Look at tax freedom day. It is sometime in July before Canadians are free from taxes. They have finally paid their taxes to the government in July of each year. Canadians are working half of the year to pay their taxes to the government. That is wrong. It is suppressive and it is not good for Canada. That is why the Reform Party has said over and over we must reduce the tax load on Canadians. To do that we must first reduce the deficit. That will lead to a balanced budget and responsible spending. That is what must happen.
We talk about the government at the table. During our recent visit to the maritimes we heard all kinds of presentations from people in the maritimes and Newfoundland who told us the representation in that part of Canada is inadequate. There are major problems not being dealt with. They are suppressed by taxes. They were not listened to in terms of gun legislation, in terms of health care, in terms of tougher criminal laws, and the list goes on. The inshore fishermen, the mid-shore fishermen and the hand liners all said they tried to tell the government what it should do but it does not listen.
Excise Tax ActGovernment Orders
The Acting Speaker (Mr. Kilger)
It would seem the hon. member for Lethbridge has as many supporters for his view on his side as there are dissenters on the other side. I am caught in the middle and I am having great difficulty hearing.
Ray Speaker ReformLethbridge
Mr. Speaker, Canadians want to hear what we say in the House of Commons and they certainly want to judge the points of view the various parties have with respect to a variety of issues.
During my visit to the maritimes I had the pleasure of being in Digby County where we met many friends and people who were interested in the point of view of the Reform Party. My wife and I visited one of the restaurants. We had an excellent seafood dinner, at the end of which I was presented with the bill. I looked at the bill and I said to my wife: "Do you realize you and I were not alone at this table? Do you realize there was a third party sitting here with us enjoying dinner? I am sure it was one of my good colleagues from the Liberal Party acting as a phantom".
When I looked at the bill there was GST at 7 per cent, there was PST at 8 per cent and then there was the 15 per cent tip. About 30 per cent of the bill was this third partner sitting at the table, enjoying the food, but taking it back to Ottawa. Not only is the government in the pockets of Canadians, it sits at our table every day, taking things away from us.
Now let us talk about the gas tax.
Let us talk about the excise tax in this bill where government is in our gas tank. It is unbelievable the percentage of taxes that are now in a litre of gas or a gallon of gas, whichever way you want to describe it. The percentage of take is unbelievable. When we drive up to the pump the government says: "You pay for your gas and we are taking this percentage of that revenue that was paid for the gas". If we compare that to what the retailer gets, the percentage is very minimal for the retailer.
After the new excise tax of 1.5 cents per litre of tax was put on, retailers said to me: "We must take that out of our percentage. We cannot increase the price any more. The competition is very keen at the street level. We cannot increase price. So where does the 1.5 cents come from? It comes out of our net profit".
Anyone who has been in the retail business relative to gasoline sales at the pump or has talked to retailers who sell gas from the pump knows the margin is very slim. Many of them say they sell the gas just to get the customer up to the door, that they do not make any money at it but have to make a gain on the other services.
By this bill that is before us and by its act earlier in the spring in the announcement of the budget, the government only hurt small business across this nation.
The chart that was sent out to all of us in this assembly states: Where does your gasoline dollar go? The source of this is the Government of Canada. It issued this statement on June 27, 1995. It shows gasoline prices right across Canada. For example, in Vancouver a litre of gas is 59.6 cents and the taxes out of that are 48 per cent. The dealer gets about 5 per cent of it. In Calgary taxes are 43 per cent, dealer 7 per cent; in Regina taxes 49 per cent, dealer 6 per cent; in Winnipeg taxes 44 per cent, dealer 7 per cent; in Toronto taxes 52 per cent, dealer 5 per cent, which is even worse; in Whitehorse taxes 32 per cent, dealer 10 per cent, which is perhaps a little more reasonable and maybe that is the right place to live; in Saint John taxes 42 per cent, dealer 8 per cent; in Halifax taxes 48 per cent, dealer 6 per cent; in Charlottetown taxes 44 per cent, dealer 9 per cent; in St. John's taxes 47 per cent, dealer 7 per cent; in Yellowknife taxes 34 per cent, dealer 13 per cent.
The major portion of the gasoline price is excise taxes. We in this House think that there is a cow we can milk continually and increase that tax. I think we have milked it for everything we can. The 1.5 cents per litre is another nail in the coffin of many of the dealers across Canada and the retailer is suffering the consequences of this legislation.
I could talk about the consumer or the person who needs gasoline to go to work, to carry out business in and across Canada. Those people are hurt in a very drastic way. I have heard it being said by the Bloc members, I have heard it from the Liberal members, I have heard it from my colleagues here as Reformers that if we are to improve the economy of Canada it will be the small businessman. The small businessman will do it for us.
When we enact increases in excise tax of 1.5 cents per litre on gasoline it is obvious what that would do to small business across Canada. It only suppresses them. It does not allow them to have that capital to reinvest or to do other things. The government has made a move here that is contrary to the rhetoric I hear from the Minister of Finance who says the economy is going to grow, we are going to help small business and they are going to be the engine for our economy. I hear him saying all those things with the wave and the gusto of his arms. Here is a policy that cuts the cloth in a negative way.
So how can we support this? We cannot. The Reform Party is against it. We are going to vote against Bill C-90.
John Richardson Liberal Perth—Wellington—Waterloo, ON
Mr. Speaker, I rise to conclude on the government's behalf the section on Bill C-90.
Bill C-90 is just the legalization or legitimization of items covered in the 1995 budget in the areas of air transportation tax, excise tax on gasoline, and the marketing requirements for tobacco products sold in Prince Edward Island in order to sort the problems out there and to allow for sale the Nova Scotia marked tobacco products. As well, there is a seizure notification provision with respect to offences under the excise tax which will improve the efficiency and effectiveness of the enforcement activities.
This is basically a housekeeping bill that follows up and has to be done to legitimize and formalize our budget process. It also contains important changes with respect to the excise tax rates for tobacco products for sale in Quebec, Ontario, and Prince Edward Island. The amendment contained in this bill will give legislative effect to the modest federal excise tax increases that were announced earlier this year in conjunction with the provincial tobacco tax increases.
No one who sat through this modest tax increase likes it, but this kind of tax was a restructuring type tax. These taxes are necessary to sort out.
The air transportation tax will increase the maximum air transportation tax on the higher domestic and transborder air travel in Canada from $50 to $55. This is not a significant amount, but it would assist in underwriting the loss leading operations we have in running our international airports and the airports in Canada.
Gasoline taxes are needed to keep up the Trans-Canada Highway and other vital routes in the movement of goods and services in Canada.
In closing, I would like to say that the government taxes were modest in reference to the budget and were based on the need to service our airports and roads across Canada and to restructure some of the taxes in some of the provinces as well as the tobacco selling in Prince Edward Island.
Excise Tax ActGovernment Orders
The Acting Speaker (Mr. Kilger)
Is the House ready for the question?
Excise Tax ActGovernment Orders
The Acting Speaker (Mr. Kilger)
Is it the pleasure of the House to adopt the motion?
Excise Tax ActGovernment Orders
The Acting Speaker (Mr. Kilger)
All those in favour of the motion will please say yea.
Excise Tax ActGovernment Orders
The Acting Speaker (Mr. Kilger)
All those opposed will please say nay.
Excise Tax ActGovernment Orders
The Acting Speaker (Mr. Kilger)
In my opinion the yeas have it.
And more than five members having risen:
Excise Tax ActGovernment Orders
The Acting Speaker (Mr. Kilger)
Call in the members.
And the bells having rung:
Excise Tax ActGovernment Orders
The Acting Speaker (Mr. Kilger)
Pursuant to Standing Order 45, the division on the question now before the House stands deferred until Monday at the ordinary hour of daily adjournment, at which time the bells to call in the members will be sounded for not more than 15 minutes.
Don Boudria Liberal Glengarry—Prescott—Russell, ON
Mr. Speaker, on a point of order, I thought I heard the Speaker indicate that the vote would be at the hour of ordinary adjournment. I was under the impression we had agreed to have that vote at 6 p.m. In any case, I think you would find that is the agreement we had made and what we had indicated. There is already a vote at 6 p.m.
Excise Tax ActGovernment Orders
The Acting Speaker (Mr. Kilger)
Is there unanimous consent that the hour be set at six o'clock?
Peter Milliken Liberal Kingston and the Islands, ON
Mr. Speaker, I think you might find consent to call it 5.30 p.m.