Mr. Speaker, on the subject of business taxation, I would like to resume the debate where I left off when I responded to the budget speech of the Minister of Finance. At that time I was talking about the debt that Canadians have accumulated over the last 20 years.
I think it would not be a bad idea to repeat the image I was using when I demonstrated to Canadians, and Quebecers in particular, where we are when we talk about the national debt.
We are in a huge black hole, the vastness of which we can barely imagine. It is not unlike the black holes astronomers are looking at in the sky. They try to measure their size, but in order to do so they need very sophisticated instruments, like telescopes. Yet, even with these instruments they can barely gauge the size of these holes.
To visualize the Canadian debt, this huge black hole, to allow the individual not familiar with large figures to grasp its size, we have to use instruments which talk to people. We can use figures. As I said at the end of my speech, last week, between 1993-94 and 1997-98, the debt will go from $508 billion to $619 billion, which means an increase of $111 billion. It does not look very big, it sounds like a small number, but when you think about it and when you compare it with other figures you are familiar with, you realize that it is really enormous.
I used the example of a person playing Loto-Québec and winning a million dollars. One million dollars is enough to make you a millionaire, to reach the dream of anyone, becoming a millionaire.
But, one billion dollars is $1,000 million. This means that, over the last four years, if the federal government had distributed that money to Canadians, it would have created 111,000 millionaires, but it did exactly the opposite.
Since 1993-94, Canada has deprived itself of 111,000 new millionaires because it increased its debt. A thousand millions is a one followed by nine zeros. This means that any new Canadian born this morning already has a $20,000 debt. If he had any trouble breathing, such a knowledge would be enough to choke him. You know, when an infant is born, a small slap on the buttocks is usually enough to give it life, to force it to breathe for the first time. But, if an infant could understand what is going on and if we showed him the debt, it would refuse to breathe and say: I would rather not be alive in this country. However, each week in this House our Prime Minister praises the merits of this vast and beautiful country, the best in the world with its $619 billion debt.
Last week, I said: "If this is the best country in the world, we can stop travelling, we will never see any better". It is true. It is impossible to find beauty in figures such as these. However, this is what our Prime Minister does. He finds it beautiful. He boasts about it and tries to have people believe that we are reaching our goals.
Of course success can mean different things to different people. The Prime Minister says that the deficit was reduced from $42 billion when they formed the government to $24 billion this year. It is true there has been a improvement in the sense that every year people are getting a little bit less in debt than they used to do. They still pay groceries with money they have accumulated or that they did not have. They still buy groceries on credit, they borrow money from abroad, from the United States, from Japan, from England, all around the world, from Germany. They are borrowing to buy groceries.
As my grandfather or my father would have said: "We are living too high off the hog". Perhaps this is not parliamentary language, Mr. Speaker, but it allows those who usually use colorful imagery to better understand what we mean. It means having a lifestyle that we cannot afford. It means that if we wanted to pay off this debt, because we are not paying it off right now, we are only slowing its growth. Instead of increasing by $42 million a year, it is increasing by $24 billion a year.
But we will have to pay that debt one day, and to be able to do so, there must come a time, somewhere in the history of Canada, when the government takes in more than it is spending. Only then will it be able to reimburse a part of the debt. And how can we expect this to happen quickly? I will give you an example: with a $619 billion debt, assuming that we managed to save $1 billion a year on that $619 billion without increasing the debt-we would not increase the debt each year, but on the contrary, we would put aside $1 billion a year to pay it off. Well, the way things are going now, it would take 619 years.
This week, we celebrated the 109th birthday of the oldest woman in Canada. Poor lady, she will not have lived long enough to see the end of the debt, even if she holds a longevity record.
But let us go further than that. Let us try even harder to save, to cut spending and let us assume that in the next few years, in four or five years, we can manage to have a zero deficit, and even better than that, to put aside $5 billion a year that we would use to reduce the $619 billion accumulated debt. Well, even at $5 billion a year, it will take us about 120 years to pay off all the federal government's debt. Of course, this does not take into account the fact that we as taxpayers have to pay off provincial, municipal, school board, personal debts, etc.
There again, it would take 120 years. I could be long gone and Canada's debt would still not be paid off, which comforts me in a way, because it reminds me that, considering the amount, I could not pay it off by myself no matter how long I live. This is small comfort to me, but it is far from being one to my children.
Such is the situation in Canada now. In fact, what is being proposed to change this situation? We heard the budget speech and we realized that it contained nothing. It did not propose any measure to eliminate the deficit and the debt. On the contrary, we are just coasting along. Two years ago we adopted measures that were supposed to be implemented one, two, or three years down the road, others five years later. For now, taxpayers are not hurt because these measures are not being implemented right away. That makes them easier to swallow.
That does not hurt taxpayers for the moment. They are told that it will not be implemented right away, which is a little easier to take.
The only new measures that have been adopted will not be implemented now either, but at the end of the Liberals' mandate. They only have one or two more years to go, because the Prime Minister is already starting to lay down the background.
So, there is no action here. We were expecting the Prime Minister to assume his responsibilities and take strong measures, particularly with regard to business taxation. However, what do we see under the guise of measures about business taxation? The finance minister has told us that there will be a review of business taxation. That will hurt. When the government sets out to study something, it usually means that it does not know what to do. That is exactly what we are being told. There will be a review, not some kind of a review, but a thorough review. That means, first, that it will be a lengthy process, and, second, that once the review is over, the government will be aware of all the problems because they will have been thoroughly reviewed. So an in-depth review of business taxation is to be conducted, not by just anybody, Mr. Speaker, but by a technical committee with a view to three general objectives. First, to promote job creation and economic growth; second, to simplify the taxation system; and third, to enhance its fairness.
First of all, let us have a look at the membership of this committee. Since this is meant to be a serious committee that will make in-depth studies, the Minister of Finance preferred not to take any chances. He appointed the most eminent experts. Who are the greatest experts to advise the government on tax havens and tax avoidance? We know the measures under consideration are legal for the time being, but the tax loss runs into the hundreds of millions of dollars annually.
So, the government decided to appoint responsible, experienced and highly qualified people to this committee. Let me give an example: someone from Price Waterhouse, a company that has expertise in this area. Why is it so? Because it has many clients who use tax havens that it had recommended. I will not go through the whole list of companies that sit on this committee, because the minister did it on budget day. There are about ten members, not taking academics into account. A few more experts have been appointed on the basis of their knowledge, because they are experienced managers or advisers in companies that already use tax havens. You can be sure no mistake will be made.
When these companies advise the government, I would be very surprised if they recommended ways to go after their main clients. And if they do so, they will first warn their clients that they should beware because the government is about to strike.
This is not a very good way of examining this issue, because these experts are in conflict of interest.
Of course, we asked the minister of Finance why he was appointing these people who are obviously caught in the middle of a conflict of interest? The minister told us that, in order to get good advice, he needed to hire the best experts around. It is a bit like the police chief who would set up a committee made up of Hell's Angels to fight crime, because no one else knows the crime scene better than these bikers, who deserve then to sit on the committee.
I do not want to make any comparison between these accountants and the Hell's Angels. This is not what I want to do. I just want to show how ridiculous the whole situation is and how these people, in both cases, are in a conflict of interest.
In how many months will the committee table its recommendations? No one knows. But one of its goal is to promote employment. I would imagine that these same people also advise banks. We can see how deeply the banks are committed to solving the unemployment situation and how they perceive the growth problem.
This year, Canada's four or five major banks made billions of dollars in profits, one billion and some hundreds of millions of dollars in profits, which, of course, had some impact first and foremost on the income of the presidents of these banks. As for the second consequence, one would have expected that the increase in profits-which is growth-would have translated into the creation of new jobs but we realized that, on the contrary, the number of jobs in these five banks either remained stable or decreased. This is how these companies conceive employment and growth. I certainly hope that the committee of experts will examine at length this philosophy of the banks and that it will be able to recommend other ways to revive the economy.
The system must be simplified. Sure, suggestions to that end were often made to the government. Each year, at the time of the budget speech, suggestions are made to the government on ways to reinvent business taxation in order not only to put an end to loopholes but also to find longer term solutions. The present policy is only aimed at putting an end to loopholes. We put an end to loopholes and we think that the whole system is fixed.
This way, new loopholes soon appear and experts are usually quick to detect them and take advantage of them.
The only solution is to simplify the system so that we know once and for all where taxation is headed. Businesses need stability. We are told year in and year out that businesses cannot prosper without a stable economic and political situation. They need a stable climate.
I imagine that such a stable climate also starts with fiscal goals. We must tell businesses what lies ahead for them. We must tell them, we must tell the thousands of businesses that have made profits for 15 years and do not pay one cent in taxes that, starting tomorrow, they will have to pay a minimum tax. This is what we must tell them and we must ensure that these measures will not apply only for one year or until the next elections. We must tell them that they will pay taxes as long as they will be in business. It is a matter of distributive justice.
It is a matter of having each citizen pay, whether it is an individual or a corporation. It is a matter of ensuring that each Canadian, each citizen pays his fair share of tax. Therein lies stability. When corporations know that, they make plans and they anticipate. In any case, with the benefits they already have and they will keep, you can be sure that corporations, even if their net profits decrease, will use their expenses to pay less taxes. Corporations can buy themselves many things.
Business executives include in their expenses many things that we, as individuals, cannot. Once they have charged all that, they can afford to have lower revenues; they do not have any more expenses to pay; everthing else has been paid by the corporation. Under these circumstances, leftover profits could be taxed at a higher rate and there would still be some left.
Lastly, the taxation system which, hopefully, will be implemented would take into account the fact that at present, if we look at taxation-and I will conclude with this-in 1993-94, personal income tax represented 44 per cent of all the government's tax revenues, while corporate tax accounted for only 8.1 per cent. In 1997-98, and notice the change, individual taxpayers will pay a little more, that is 47.6 per cent of all taxes in Canada, while the corporations will pay only 12 per cent. It was the same in 1961, corporations paid 15 per cent, and individuals 27 per cent. Look at that increase. Who absorbed that increase since then? The individual taxpayers, not the corporations.
The analysis that the technical committee will make will have to focus especially on that. The problem no longer lies in the pockets of individual taxpayers, but in the pockets of other taxpayers, namely, of course, the big corporations.