House of Commons Hansard #104 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was children.
Paul Martin LiberalMinister of Finance
Mr. Speaker, the hon. member, as is his wont, is engaging in idle speculation. The government will make an announcement when there is an announcement to be made.
Monte Solberg Reform Medicine Hat, AB
Mr. Speaker, the Liberal ties to the big tobacco industry are well known. Yesterday's actions by the government made it clear that it puts its friends in tobacco above the health of young Canadians. How ironic that yesterday was National Child Day. The finance minister needs to explain to Canadians why he and his government have sacrificed the health of our children so that his friends in the tobacco industry are appeased.
Is this legislation being blocked by the finance minister, a former director of Imasco?
David Dingwall LiberalMinister of Health
Mr. Speaker, both the substance and the tone of the question are inappropriate. The response to the substance of the question is absolutely not.
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
Mr. Speaker, my question is directed to the Minister of Finance.
In its analysis of corporate taxation presented this week, the Bloc suggested abolishing the partial capital gains exemption for businesses and using the money, which represents nearly one half billion dollars annually, to offer small businesses a tax rebate tied to their job creation performance.
If the Minister of Finance wants to demonstrate his concern for fairness and job creation, is he prepared to make a commitment before this House to eliminate this useless expenditure immediately and allocate the money saved to tax measures that will promote employment?
Paul Martin LiberalMinister of Finance
Mr. Speaker, as a member of the Standing Committee on Finance, the hon. member must be aware that this committee looked into the matter a few years ago, and at the time, the government made a survey of small businesses in Canada to find out whether the $500,000 exemption was helpful in creating jobs, or whether we should find another way.
All small business associations in Canada, including those in Quebec, and most small businesses that appeared before the
Standing Committee on Finance or met with government officials said that this exemption was crucial to maintain fairness, and is still crucial for creating jobs, and that is our position.
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
Mr. Speaker, I am afraid I was misunderstood. I was not referring to the capital gains exemption on the first $500,000 but the partial inclusion of capital gains which consists in taxing only 75 per cent of capital gains and leaving the remaining 25 per cent fully tax exempt.
The minister referred to the Standing Committee on Finance. So far, at the hearings we had in June, July and August, the conclusion was unanimous: this measure is a very costly one, and there is no good reason for keeping it. When even the Canadian Bankers' Association wants to see it abolished, that certainly means something. So we have $500 million annually that is absolutely nothing. The purpose of this measure was to avoid double taxation where there was a wealth tax. Today, the government takes $500 million and just throws it away, especially in the pockets of the wealthiest in this country.
Will the minister promise to eliminate this unnecessary tax expenditure and allocate $500 million annually to job creation?
Paul Martin LiberalMinister of Finance
Mr. Speaker, once again, the hon. member is wrong. We have analyzed the situation. The vast majority of small companies in the high-tech sector, a very important industry in Quebec, have told us that to increase their equity, to raise capital, it was very important to have access to research and development credits.
Paul Martin Liberal LaSalle—Émard, QC
Yes, yes. Capital gains are used to raise money. Unfortunately, the hon. member does not understand. In fact, I can tell you that people with the FTQ solidarity funds said they agreed with this exemption because it helped them raise money.
Garry Breitkreuz Reform Yorkton—Melville, SK
Mr. Speaker, in 1969 the Liberal minister of Indian affairs said: "The government believes that its policies must lead to the full, free and non-discriminatory participation of the Indian people in Canadian society. It requires that the Indian people's role of dependence be replaced by a role of equal status, opportunity and responsibility, a role they can share with all other Canadians".
Can the Deputy Prime Minister tell Canadians why the Prime Minister, the Liberal government and the Liberal Party have abandoned this equality principle, this common sense approach to solving the serious problems being experienced by aboriginal people in this country?
Ron Irwin LiberalMinister of Indian Affairs and Northern Development
Mr. Speaker, I was sitting here today with the hope that this member would ask the question.
I just finished watching this member on television. We have to deal with poverty, with schools, with roads, with social assistance, with economic development, and this member's idea of equality is to send $10,000 to each Indian in this country. I just heard him on television. That is his policy which I have waited three years to hear. If we do that, then who is going to deal with the poverty? Who is going to build the hospitals? If that is his idea of equality, then the Reform Party should go out there and talk to a few Indians.
Garry Breitkreuz Reform Yorkton—Melville, SK
Mr. Speaker, this morning on television the minister of Indian affairs could not answer this simple question: Are aboriginal people equal?
Will the minister promise Canadians that none of the royal commission's recommendations will be implemented unless they can pass the test of equality?
Ron Irwin LiberalMinister of Indian Affairs and Northern Development
Mr. Speaker, for this hon. member I will answer that question.
The idea of the Reform Party on Indians and equality is to keep them poor, keep them uneducated and keep them on the reserves. I have heard the idea of the Reform Party for three years. It thinks Indians live in paradise. The member who is grinning stood in this House and said that he knows that aboriginal men burn their wives with cigarettes. That is ignorance. I do not think anybody in this country accepts that.
When the leader of the Reform says that Canadians are not hearing the message of the Reform, they are hearing it and they do not like it. That is why Reform is sinking.
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
Mr. Speaker, a few minutes ago I asked the Minister of Finance a question. However, either my explanations were not sufficiently clear, or the minister was a bit mixed up, so I would like to try again.
There has been partial inclusion of capital gains since 1987; 75 per cent of the capital gain is taxed at the corporate tax rate; 25 per cent of this capital gain, which is income like any other income, is completely tax exempt. This 25 per cent is placed in a capital dividend account and paid to shareholders, not reinvested.
Since there is general agreement in Quebec, and in Canada, that this partial inclusion of capital gains must be eliminated, that it is costing $400 to $500 million a year that other taxpayers must pay, will the minister undertake to eliminate it?
Paul Martin LiberalMinister of Finance
Mr. Speaker, the answer to the question is exactly the same one I gave earlier. It is part of the refundable tax credit. Capital gains exemptions make it possible for our companies to raise capital and benefit Canadian shareholders. This is an advantage they have over a company that must borrow money and pay interest, for example, or an American company that must raise capital in the United States, but is looking for Canadian investors.
What we want to do is encourage investment in Canada. That is part of a sound system. If we make changes here, other changes will have to be made somewhere else. The fundamental question is how we are going to help Canadian companies increase their equity. That is part of the system.
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
Mr. Speaker, when a Quebecer or a Canadian earns a dollar, the whole dollar is taxed, all of it, at a rate that can go as high as, or higher than, 40 per cent. When a rich shareholder, a rich corporation holding shares that appreciate in value year after year, is taxed, it is taxed on only three quarters of the amount at a reduced rate, not the full 100 per cent.
How is it justified that 25 per cent of this capital gain is handed back in this ineffective and unproductive manner to the richest holders of Canadian capital, who do not reinvest in the economy, when the rest of the population must pay the full amount?
Paul Martin LiberalMinister of Finance
Mr. Speaker, the member does not seem to understand that we have an equity problem in Canada. We are having difficulties in Canada compared to other countries. Our SMEs, our Canadian companies, are having trouble raising money to establish an equity base they can use for lending, investing and creating jobs.
There are exemptions for political reasons, for creating jobs or investing in the future. This is what we are talking about. It is part of a sound system. We can change it, but if we do, there will be repercussions elsewhere.
Furthermore, there are many incentives in Quebec, and at the summit the government decided to keep them for exactly the same reason: to create jobs and stimulate economic growth.
Judy Bethel Liberal Edmonton East, AB
Mr. Speaker, my question is for the Secretary of State for Science, Research and Development.
The R and D stakeholders that I met across western Canada as part of the Prime Minister's task force on commercializing government science research made it absolutely clear that effective, public-private R and D partnerships in strategic sectors of our economy are critical to enhancing Canada's competitiveness, to bringing our products to market and to creating jobs.
How will the investment announced yesterday benefit Canadians in British Columbia, in the west and throughout the country with Ballard Power Systems, the environmental technology company in Burnaby?
Research And DevelopmentOral Question Period
November 21st, 1996 / 2:40 p.m.
Portage—Interlake Manitoba
Liberal
Jon Gerrard LiberalSecretary of State (Science
Mr. Speaker, I would like to thank the hon. member for her question.
The government believes in developing new technologies in Canada and building the industries of the future in these new technologies. One of these new technologies is fuel cells which produce electricity in an environmentally friendly way from hydrogen and oxygen. Ballard Power Systems is a company which holds 83 world leading patents in this area, providing an advantage to Canada.
The investment yesterday of $30 million through Technology Partnerships Canada in Ballard Power Systems provides an example of how the government is working in partnership with the private sector to create jobs and industries in Canada.
Jim Hart Reform Okanagan—Similkameen—Merritt, BC
Mr. Speaker, the Liberals have pulled a CF-18 flip-flop. In opposition they criticized the tendering process. When they are in power they have a chance to right a wrong and they refuse to do it. Like the Tories they awarded Bombardier an untendered $216 million contract. John Turner opposed it. Brian Tobin opposed it. The current foreign affairs minister opposed it. The current health minister opposed it.
How can the Minister of National Defence justify this shameful Liberal flip-flop giving Bombardier an untendered $216 million contract?
Douglas Young LiberalMinister of National Defence and Minister of Veterans Affairs
Mr. Speaker, the extension of the contract for the maintenance of the CF-18s was done in June.
However, there is one thing about which I want to make certain. As we pursue this line of questioning, which is interesting, I want to make certain that I understand the position of my friends in the Reform Party.
Very recently three contracts for Hercules were awarded to CAE of Edmonton, Alberta, totalling $108 million. It was done on the same basis. Very recently Computing Devices Canada was awarded a contract for the land forces communications system on the same basis. It is worth $90 million.
I want to know if it is a question of cherry picking, a question of principle or do they know the difference between the two.
Jim Hart Reform Okanagan—Similkameen—Merritt, BC
The principle, Mr. Speaker, is quite simple. It is value for money. It is taxpayers' money.
The only way to ensure that Canadians get value for money is to put contracts out to tender. If Bombardier is the best, it will win. Even the Tories put the contract out to tender before they rigged it.
The minister keeps talking about keeping the costs down. If the minister cares about keeping the costs down, then why did his department fail to conduct a review of the contract before handing it to Bombardier? They did not even review the contract.
Douglas Young LiberalMinister of National Defence and Minister of Veterans Affairs
Mr. Speaker, a very thorough review of the situation is required when a contract like this is extended. It was the third or fourth contract extension since the original competed contract was awarded.
The important thing is that even the hon. member in conducting a review himself or anyone who was interested, would know that Canadair is the only company in Canada at this time equipped to do this kind of work.
There are a number of directed contracts. What I want the hon. member to do is to make sure he addresses the question of the Hercules contract in Edmonton and also the contract that I referred to earlier for CAE. Is it just a question of trying to pick the divisive kind of elements which the hon. member likes to raise from time to time? Is it a question of principle or is speaking of principles in matters like this with the Reform Party like talking to an alley cat about a marriage licence?
Jean-Paul Marchand Bloc Québec-Est, QC
Mr. Speaker, yesterday in the official languages committee, the Minister of Canadian Heritage stated that there was no assimilation of francophones outside Quebec, despite all of the statistical evidence to the contrary.
If assimilation does not exist, as the minister claims, what explanation is there for the fact that, since the adoption of the Official Languages Act in 1969, the percentage of francophones now using English in the home has risen from 15 to 24 per cent in Ottawa, from 55 to 65 per cent in Hamilton, from 17 to 30 per cent in Sudbury, and from 42 to 52 per cent in Winnipeg and St. Boniface?
Sheila Copps LiberalDeputy Prime Minister and Minister of Canadian Heritage
Mr. Speaker, what the hon. member refuses to consider is that, at the present time, our young francophone and anglophone Canadians are the most bilingual generation in the history of Canada.
It is equally true-another fact he denied yesterday-that, according to Statistics Canada, up to 99 per cent of francophones outside Quebec who wish to study in French are able to do so, precisely because of the constitutional and official languages policies.
Yes, the statistics were based on francophones outside Quebec, despite the hon. member's false allegation that they included francophones in Quebec.