Debates of Nov. 20th, 1996

Taxation

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I too will have to accept the congratulations of the Minister of Finance. It must, however, be admitted that the official opposition does some good, as the minister admitted today.

But enough polite remarks directed at the Minister of Finance, for I have no congratulations for him. With all the resources at the disposal of the finance department, he could, in three years, have conducted the same in-depth study done by the Bloc Quebecois with its meagre resources and realized that he was wasting $3 billion a year in tax revenue.

[Some hon. members]

Hear, hear.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Speaking of deferred taxes, when the auditor at Consolidated Bathurst was asked "When will you pay your company's deferred taxes?", he replied "Never". Right now, deferred and accumulated taxes represent a total of $36 billion, 5 per cent of the Canadian GDP, and nobody in the finance department, starting with the minister himself, seems to be concerned.

Given the size of this tax expenditure and its unwarranted use by certain large corporations that are making a profit, will the Minister of Finance not admit that he should immediately issue rules so that one day these corporations will pay their fair share?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, unfortunately the finance critic for the Bloc Quebecois is raising his voice; gone are the measured and professional tones of yesterday. In addition, he is also misrepresenting the report.

I can tell you that as far as the notion of deferred taxes is concerned, we have looked, and will continue to look, for loopholes.

I would just like to quote one other person with almost the same philosophy: "As for taxing corporations more directly, as recommended by the Bloc Quebecois's finance critic, this cuts their profits, reduces their interest in investing and results in fewer jobs. Furthermore, the higher Quebec's tax burden, the less foreign companies will be interested in investing in that province and creating jobs there". This statement was made by Bernard Landry, Quebec's finance minister. He is right, and the Bloc Quebecois's finance critic is wrong.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, the finance minister is taking the Canadian public for a ride. What we are saying in our document is that the majority of Canadian SMEs are paying their fair share of taxes. But a few are taking advantage of tax loopholes, with the knowledge of the Minister of Finance, to avoid paying taxes.

We humbly ask him this: Will he, or will he not, assume his responsibilities and demonstrate professionalism as Minister of Finance, by looking out for the interests of all Canadian taxpayers, and not just those of large Canadian corporations?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, there are times when debate in this House takes on a form that does Canadians proud, particularly when we deal with issues in a fundamental and profound way.

No doubt the question of taxation, which is in constant evolution, is something that should not lend itself to partisan speeches, but should lend itself to real study.

Under those circumstances I did say to the Bloc Quebecois that their report which came out yesterday will make a valuable addition to the debate, as did a great number of the reports done by the Liberals in opposition help advance the yardstick.

All I would suggest to the Leader of the Opposition is that he ask his members to continue in the same vein, so that the debate can be responsible, can advance the yardstick and not simply play politics with a very important subject.

Bombardier

[Jim Hart, Reform, Okanagan—Similkameen—Merritt, BC]

Mr. Speaker, the Prime Minister is in British Columbia today to hand over $30 million to Ballard Power Systems in the hope that western Canadians will forget about the $87 million he gave to Bombardier.

It will take more than $30 million to even the score. Bombardier has just received an untendered contract from the Department of National Defence worth over $216 million.

Does the government really think that a $30 million grant in British Columbia will hide the fact that it gave another $216 million to Bombardier for the CF-18 maintenance contract?

[Douglas Young, Liberal, Minister of National Defence and Minister of Veterans Affairs]

Mr. Speaker, I am astounded at my hon. friend's question.

I would think the announcement that he alluded to which is to be made today or tomorrow by the Prime Minister respecting an investment in western Canada is one that would be welcomed by many people.

What I am really concerned about is the tremendous effort we have become involved in to make sure that facilities in western Canada are used in new and innovative ways, in new partnerships with the private sector and with our allies in western Europe.

If the hon. gentleman is suggesting that we should not pursue the air training program for western Canada I wish he would say so.

[Jim Hart, Reform, Okanagan—Similkameen—Merritt, BC]

Mr. Speaker, I thank the minister very much but he did not answer the question. This $216 million to Bombardier is for the CF-18 maintenance contract.

On October 31, 1986 Brian Mulroney gave this very same contract to Bombardier even though Bristol Aerospace of Winnipeg had the best bid. In opposition these very same Liberals cried blue murder over that contract. Now that they are in power, the Liberals have done exactly what the Tories did.

How can the Liberals justify giving this lucrative $216 million contract to Bombardier without tender? Even the Tories tendered the contract before they rigged it.

[Douglas Young, Liberal, Minister of National Defence and Minister of Veterans Affairs]

Mr. Speaker, I want to make sure because the hon. member and members of his party have been very careful and responsible in dealing with a number of issues that relate to the military elements we have to deal with at this time.

I want to make sure I understand what the hon. member is saying. Is he saying that he wishes to begin again the process of trying to determine how we can strike a deal with our allies from western Europe who require training facilities in Canada? Does he want us to start from scratch when we are into a tough competition with other parts of the world to get the very same contract?

My information is that people in western Canada hope we can conclude this deal. Our allies hope we can conclude this deal. What is good for western Canada is very good for the military forces of this country. It is also very good for Bombardier which not only operates in Quebec, as the hon. member seems to think, but also in many other parts of the country with which he may not be familiar.

[Jim Hart, Reform, Okanagan—Similkameen—Merritt, BC]

Mr. Speaker, the minister's answers are very interesting.

In opposition the Liberals called the CF-18 contract "blatant political pork barrelling that went completely against the merit principle and the bidding process". In 1986 the current Minister of Foreign Affairs accused the government of saying one thing and doing another. It looks like the shoe is on the other foot now.

Why did the Liberals say one thing in opposition and do exactly the opposite when in power? Why did they give Bombardier the $216 million untendered contract for CF-18 maintenance?

[Douglas Young, Liberal, Minister of National Defence and Minister of Veterans Affairs]

Mr. Speaker, the hon. member speaks about saying one thing and doing another.

He must at some point come to grips with whether or not his party is interested in creating jobs, with whether it is interested in protecting jobs, and it will have to decide where it wants those jobs.

The unfortunate situation here is that the hon. member and members of his party day after day in this House get up and say one thing, then turn around and ask the Minister of Finance or the Minister of Human Resources Development why we are not creating jobs in the country. Is the hon. member for or against jobs?

Quebec Referendum Act

[Michel Bellehumeur, Bloc, Berthier—Montcalm, QC]

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

According to a Toronto morning newspaper, the federal government was to announce this week if it is going to intervene in the Libman case, in which the Quebec referendum act is being contested before the Supreme Court.

Can the Minister of Justice confirm to us that the federal government is seriously considering contesting the Quebec referendum act?

[Allan Rock, Liberal, Minister of Justice and Attorney General of Canada]

Mr. Speaker, we have no intention of taking part in the Libman case, because we are convinced that all points of view on the matter will be before the court.

[Michel Bellehumeur, Bloc, Berthier—Montcalm, QC]

Mr. Speaker, are we to conclude from this clear response by the Minister of Justice that the minister recognizes the full and total legitimacy of the Quebec referendum act, and consequently disapproves of the actions of certain of his colleagues who deliberately violated the referendum act during the last referendum in Quebec?

[Allan Rock, Liberal, Minister of Justice and Attorney General of Canada]

Not in the least, Mr. Speaker. It is not our intention to take a position on the matters before the court. We have simply decided not to take part.

As I have said, the reason is clear. All points of view on these matters will be before the court. This is not, however, a federal government position which indicates our agreement with the act. It

is merely a decision to not take part in the appeal before the Supreme Court of Canada.

Taxation

[Sharon Hayes, Reform, Port Moody—Coquitlam, BC]

Mr. Speaker, the Liberal government's policy of high taxes and big government means that more and more Canadian families need a second income just to make ends meet. The average Canadian family will have to pay $27,000 this year in taxes alone. Too many Canadians are working for the government instead of their families.

My question is for the Minister of Finance. Reform will give Canadian families a $2,000 tax break by the year 2000. What does the government have to offer to Canadian families?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, Reform will withdraw $4 billion from the Canadian health and social transfer. We will not. We will protect the Canada Health Act. We will protect health care in this country. Reform will not.

Reform will gut equalization payments to those provinces which require them. What Reform is saying, according to its philosophy, is that there are families in Newfoundland and Saskatchewan who are not worthy of receiving government help. We do not believe that is the fabric of this country. It is not the philosophy on which this country was built.

I have a list of measures that the government has brought in to help Canadian families, to help Canadian children. Reform voted against every single one of them. Stand up and defend your record, not what you do in the future, but what you have done in the past.

[Sharon Hayes, Reform, Port Moody—Coquitlam, BC]

Mr. Speaker, may I say that the government has nothing to brag about with respect to transfers to the provinces.

Today is national child day. Reform's fresh start directly helps families and their children by reducing taxes dramatically. We will reduce taxes by 89 per cent for families with incomes of $30,000 and free over one million Canadian families from the tax rolls altogether.

In recognition of the importance of our children, will the Liberals commit today to increase the spousal deduction and extend the child care deduction to all parents, including those who care for their children at home?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, perhaps the member of the Reform Party could explain, given her interest in child care, that when the government broadened the eligibility for the child care expense deduction and when we extended the age limit for children, why did Reform vote against it?

When the government increased the working income supplement for working families, why did Reform vote against it? When the government enriched the tax credit for infirm dependants, why did Reform vote against it? When the government improved child support awards, why did Reform vote against it? When the Minister of Justice brought in the new guidelines, why did Reform vote against it?

Why has Reform voted against every progressive piece of legislation brought by the government into the House to help Canadian families?

Employment Insurance

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, my question is for the Minister of Human Resources Development.

Yesterday, the minister announced on behalf of the government-for the second time, given that the Minister of Finance had made the same announcement earlier-a five cent reduction in unemployment insurance premiums. Perhaps he thinks that by announcing a five cent reduction twice, people will think the total reduction will be ten cents. But no, five cents it is. In fact, he is maintaining the special deficit reduction tax on workers earning under $39,000 and their employers.

How can the minister ignore the disastrous situation of the job market and be content with announcing marginal measures that will have very little effect on employment?

[Pierre Pettigrew, Liberal, Minister of Human Resources Development]

Mr. Speaker, first of all, I would suggest to the hon. member for Mercier that the announcement was not made twice; the Minister of Finance and I did it jointly, in front of the same cameras.

We did announce-and the Minister of Finance may want to comment on this later-a five cent reduction. For the third consecutive year, our government has reduced employment insurance premiums, which is absolutely remarkable since they had risen for years.

I would also submit to the hon. member for Mercier that another program, a program for small business, was announced yesterday. Some 900,000 eligible small businesses will not have to pay any employment insurance premiums on behalf of new employees in 1997. This means that any small business in Canada that hires a new employee will not pay employment insurance premiums in 1997 and only 75 per cent of the premiums in 1998 for that employee. That is what we are doing to promote employment. That is what we announced yesterday.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, the same government will, for the first time, this coming January, impose a payroll tax on all the employers who hire part time employees working fewer than 15 hours per week.

Since premium rates represent in fact a tax on jobs-and we are not alone in thinking so-and since the employment insurance fund is forecast to grow from $5 billion this year to $10 billion next year, what is the minister waiting for to substantially reduce premium rates, as requested by the official opposition, the business community, and the Canadian Chamber of Commerce, instead of using the fund to artificially reduce the deficit?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, as the Minister of Human Resources Development just said-for the third time-we have reduced employment insurance premiums, after a decade of increases by the previous government.

To give you an idea of the philosophy behind this, I would like to quote the response of Quebec finance minister Bernard Landry to the same question. He said: "Pursuant to the commission's regulations, but also in response to repeated requests from several socioeconomic partners, the government plans to lower payroll taxes. We will do this, however, with the expectation that real job creation will ensue".

That is precisely why we have targeted small and medium size businesses, since they are responsible for the vast majority of new jobs created in Canada.

Taxation

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, it has not even come into affect yet and already the harmonized GST is killing jobs in Atlantic Canada.

Today we learn that five Greenberg stores in New Brunswick are closing as a direct result of the harmonized GST. Seventy-nine people and their families will no longer receive a pay cheque. This company alone will lose $695,000 in the first year and $563,000 each year after because of this crazy deal.

I quote the president of the company: "Somebody needs to listen. These are real people in New Brunswick with real jobs that are going away".

The Reform Party is listening. Why are Liberal MPs not listening?

My question is to the finance minister. Why is the government insisting on pushing through this insane legislation that is killing jobs in Atlantic Canada?