Debates of March 11th, 1996

Job Creation

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, when we look the investments these funds make, we see that a fairly significant percentage is in debentures and has not gone directly to job creation, for the pure and simple reason-and they will tell you so-that there is a shortage of investments and it takes a bit of time. That is why I said there was enough at least for three years. There is nothing there to slow growth or job creation.

On the other hand, the measures we took with respect to these funds have been very well received throughout Canada, including in Quebec, because we recognize that these funds were established to help them get started, and, now that they are established, things are going quite well. I should add, as far as the 20 per cent is concerned, I have said in this House that it was not this government's intention to permit more than 20 per cent. But, it must be said that pension funds in Canada invest in companies that create jobs abroad.

I am sure the Leader of the Opposition would not want the Caisse de dépôt to stop investing in Canadian companies creating jobs abroad.

Business Tax System

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

Mr. Speaker, in making his budget public last week, the Minister of Finance announced his intention to establish a technical committee of outside experts on the business tax system. Some of its members are representatives of accounting firms that have affiliates in

countries considered as tax havens and advise big business on how to avoid paying Canadian taxes.

My question is to the Minister of Finance. How can he believe that the public will have confidence in a committee whose membership includes people whose own firms take advantage of tax havens, and whose very business consists precisely in advising clients on how to reduce or eliminate completely taxes payable to Revenue Canada?

[Paul Martin, Liberal, Minister of Finance]

First of all, Mr. Speaker, when the same question was asked of me last week by the same member, I told him that three committee members, including the chair, are academics with no connections with any corporations, or major multinationals.

Having said this, I am convinced that the hon. member will realize that, if what we want is to look at how to close up tax loopholes or the ways companies wrongly get around job creation or foreign investment requirements, it is worthwhile to consult precisely those who are knowledgeable about such loopholes, not people who know absolutely nothing about them.

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

Mr. Speaker, how can the minister believe for even a minute that those committee members would agree to chop off the very branch they are sitting on? Not likely. It is anything but logical.

What I am asking the Minister of Finance under the circumstances is this: Is he not in the process of providing a first class funeral for business tax reform? If that is what he is up to, let him admit it.

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, if one wants to examine social policy, one will ask those people who are experts in social policy. If one wants to examine environmental policy, one will ask those people who are experts in environmental policy. If one wants to close tax loopholes, who better to ask than those who know how to create them?

Surely the hon. member would not really want us to ask members of his party who have professed total ignorance of the Tax Act since they have been elected.

Good And Services Tax

[Deborah Grey, Reform, Beaver River, AB]

Mr. Speaker, in the budget last week the finance minister said the government was working very hard to replace the federal sales tax. The federal sales tax is the government's new synonym for the GST and replace is the new word for abolish, kill or scrap.

Creative writing is one thing but people in Canada thought they were voting in a government, not a thesaurus. Words have to mean the same thing. Replace means replace. Scrap means scrap, kill or abolish.

These people across the way have clearly broken their election promise time after time. Why will the finance minister not simply admit the government has no intention of scrapping, killing or abolishing the GST?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, I quote from the red book once again: "A Liberal government will replace the GST with a system that promotes federal-provincial fiscal co-operation and harmonization". Harmonization means harmonization means harmonization.

[Deborah Grey, Reform, Beaver River, AB]

Mr. Speaker, rest assured there will be no harmony with this harmonization, especially in the province of Alberta with no provincial sales tax.

The truth is the government has simply broken its promise to Canadians. What is worse, it plans to replace the GST with a new super tax that will increase the cost of textbooks, heating oil and funerals, to name a few.

In Ontario alone the Liberal super tax would amount to a tax increase of $3 billion a year. That is why residents of Toronto will be gathering in front of the Sheraton tonight at seven o'clock to protest this Liberal plan.

How much will this new Liberal super tax, the twin of the GST, add to the yearly tax bill of Canadians?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, it would not add to the tax bill of Canadians. If a number of the provinces were to harmonize, it could well lead to a reduction in taxes. It would certainly lead to a reduction in the cost of administration which would be passed on to consumers.

The Reform Party is so desperate to seek issues. Nobody ever said that in the province of Alberta it would be imposed on Albertans. We now have virtual harmonization in Alberta because there is no tax.

For the hon. member for Beaver River to consistently raise straw people and say here is a problem when none exists, surely to heaven she can put her attention to the problems and the opportunities of the country rather than the figments of her own imagination.

[Deborah Grey, Reform, Beaver River, AB]

Mr. Speaker, you will be surprised to learn that several straw people will be outside the Sheraton in Toronto tonight because taxes are taxes and people feel that very strongly.

The minister talks about fairer taxes. How fairer will this new super tax be? First, it increases the tax bill for consumers. No matter what he says he simply will not convince Canadians who are already paying too much in taxes. Second, it kills jobs. A recent study done by the University of Toronto estimates that the Liberal government's new super tax will kill 74,000 jobs in Ontario alone.

That is not a straw person saying that. It will also reduce real income substantially. That is not a straw person. It will also slow economic growth for real people, not straw people.

How will this new super tax be fair to anyone, especially Liberal members seeking re-election?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker this tax has been recommended by the Canadian Tax Foundation. Tax simplification is vitally important to small and medium size business.

Can the hon. member tell me why the Canadian Federation of Independent Business recommends this tax? I will tell her. It wants to create jobs among its membership. Why does the Chamber of Commerce recommend this tax? It knows how good it will be for Canadians.

What is the matter with the member for Beaver River that she refuses to accept that Canadians want tax simplification and lower costs? Why does the Reform Party not wake up and smell the roses?

Unemployment Insurance Reform

[Francine Lalonde, Bloc, Mercier, QC]

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

Yesterday, more than 2,000 people demonstrated for the withdrawal of the unemployment insurance reform bill, which now goes by the number C-12. That group was made up of Quebecers from a number of different regions, New Brunswickers, Micmac, people from the Gaspé, Acadians, anglophones, all coming together to demand that bill C-12 be withdrawn. They have had enough of the government's dumping on the disadvantaged and the middle class to control the deficit.

Will the minister acknowledge that what people are demanding, people who need a real unemployment insurance scheme, is not minor amendments but withdrawal of this bill?

[Douglas Young, Liberal, Minister of Human Resources Development]

Mr. Speaker, there is no doubt that again yesterday people were expressing their concerns about the proposed bill, which was first known as C-111. I trust that my hon. colleague, as well as those voicing their concerns yesterday, will wait for the reaction of MPs, such as my hon. colleague, who sit on the Committee on Human Resources Development.

That committee is now charged with examining Bill C-12, which is an exact reproduction of the former bill, as required by parliamentary procedure. There will, however, be changes, amendments and it is somewhat surprising to hear that the hon. member has already decided these would be minor.

I have confidence in the committee and I am confident that the proposals from members interested in improving the situation will be serious and extensive.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, we have read the budget, and if there had been any signal of an in-depth reform, we would have seen it.

Is the minister aware that, as long as the Minister of Finance continues to take $5 billion each year from unemployment insurance premiums, the best that can be done is cuts and mini-reforms, which will be disastrous both economically and socially?

[Douglas Young, Liberal, Minister of Human Resources Development]

Mr. Speaker, I should point out that the Minister of Finance has not taken any $5 billion from the unemployment insurance fund. The hon. member who is the Bloc finance critic can, I am sure, explain to his colleague that the surplus is, moreover, extremely small at this time.

That surplus is expected to increase, but I must remind the hon. member that, at this very time last year, we were in a deficit situation with the unemployment insurance fund. What is very important to realize is that we must not interfere with a surplus, even one that has actually existed until recently only in the mind of the hon. member.

Indian Affairs

[John Duncan, Reform, North Island—Powell River, BC]

Mr. Speaker, one of the government's major selling points on the Nisga'a deal was that it would end special tax exempt status for the Nisga'a.

That would be good news if it were true, but it is not. The Nisga'a deal just substitutes one kind of tax exempt status for another. It would mean that all Nisga'a lands and any business that is run by the Nisga'a central government is tax exempt.

How can the Minister of Finance justify permanent exemptions from taxation on no other basis than race?

[Ron Irwin, Liberal, Minister of Indian Affairs and Northern Development]

Mr. Speaker, one of the key issues we had to address is how to deal with taxation of aboriginal people. We did it in what we thought was a humane and progressive way by saying: "We will work with you toward profitability and self-sufficiency and at a certain time you have a responsibility to pay taxes".

It is through that type of sensitivity and philosophy that a deal was reached with the Nisga'a. I would think the Reform Party, which has been calling for a system of taxation, would hail such a

system where aboriginal people are now saying: "We will agree to that. We will pay taxes like everybody else. Just give us a hand to get there".

[John Duncan, Reform, North Island—Powell River, BC]

Mr. Speaker, the minister is continuing to perpetuate a myth that is not true in this agreement. This leads to constitutional entrenchment of tax exemption. This is unfair. It is that simple. Disguising it under the terms of a land deal makes it no less unjust. Other businesses in the area will not be able to compete with tax exempt businesses run by the Nisga'a central government.

If the Indian affairs minister is serious about fairness, will he commit to restoring real fairness by levying the same tax on the Nisga'a that all other Canadians will have to pay?

[Ron Irwin, Liberal, Minister of Indian Affairs and Northern Development]

Mr. Speaker, for the benefit of our side, this riding is represented by a Reform member, the member for Skeena, who has never mentioned a word in the House about the Nisga'a.

[Some hon. members]

Oh, oh.

[Ron Irwin, Liberal, Sault Ste. Marie, ON]

It is true, thirty per cent of his riding; 23,331 natives in the Nisga'a area are members of his riding.

Businesses at Terrace are now looking at this as a business opportunity. Rather than lining with the Reform and saying they want a referendum they are now saying: "Maybe we should get in our cars, drive that hour and a half and talk to the Joe Gosnells of the world".

Last week the media in B.C., Alberta and Ontario supported this. Bill Young, 72 years old, one of 240 people in the area, said: "I feel good about this. I think a lot of people around here feel good about it too". So do we.

Status Of Women

[Suzanne Tremblay, Bloc, Rimouski—Témiscouata, QC]

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

According to this government's third budget, in the future, pension benefits for senior women with spouses will be determined on the basis of family income, thus reducing their benefit level and their degree of financial independence. Questioned on this subject in this House last Thursday, the Minister answered, and I quote: "-nine women out of ten will get more money because of our reform".

Will the Minister of Finance finally recognize in this House that this decision to make pension benefits dependent on family income is a direct attack on the independence achieved by women as a result of 50 years of continued efforts?

[Paul Martin, Liberal, Minister of Finance]

Not at all, Mr. Speaker. As I have already stated in this House: nine women out of ten will benefit from this reform.

Take the poverty level for example; one absolutely aberrant consequence of the poverty that exists in certain parts of our country is the high percentage of women who are affected. That is why one of the goals of our reform was precisely to benefit these women. In fact, I think we have done a great job of ensuring that they will be better off.

[Suzanne Tremblay, Bloc, Rimouski—Témiscouata, QC]

Mr. Speaker, the minister, in repeating himself, left something aside; he forgot to mention that these nine out ten women are "single" women, not women with spouses.

My question is about women with spouses. Since he is so sure of his facts, this must mean that he directed his officials in the department to conduct some studies. My question to the minister is very straightforward. Tell him, Mr. Speaker, that it is very straightforward. How many women with spouses will see their pension cheques cut or taken away as a result of the bad decision announced in the minister's budget?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, 75 per cent of all Canadians will benefit from this reform. Seventy five per cent of all Canadian men and women, and women are the majority. In fact, women represent not only the majority of the population, but also the majority of seniors. Quite clearly, the vast majority of women with spouses will benefit from this program.