Debates of March 26th, 1996

The House resumed consideration of the motion that Bill C-7, an act to establish the Department of Public Works and Government Services and to amend and repeal certain acts, be read the third time and passed.

Department Of Public Works And Government Services Act

[The Speaker]

The House will now proceed to the taking of the deferred recorded division on the motion at the third reading stage of Bill C-7, an act to establish the Department of Public Works and Government Services and to amend and repeal certain acts.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I wish to seek unanimous consent that members who voted on the previous motion be recorded as having voted on the motion now before the House.

The Liberal members will vote in favour, with the addition of the Secretary of State for Youth.

[Madeleine Dalphond-Guiral, Bloc, Laval Centre, QC]

The members of the official opposition will vote against the motion.

[Bob Ringma, Reform, Nanaimo—Cowichan, BC]

Mr. Speaker, Reform members will vote no to this, except those who might wish to vote otherwise.

[Paul Forseth, Reform, New Westminster—Burnaby, BC]

Mr. Speaker, if I had been here for the first vote I would have voted with my party against the motion. I want to say that I am here.

[The Speaker]

I take it that it is the whip of the New Democratic Party.

[Simon de Jong, NDP, Regina—Qu'Appelle, SK]

Indeed it is, Mr. Speaker. All New Democrats present today will be voting against this motion.

[John Bryden, Liberal, Hamilton—Wentworth, ON]

Mr. Speaker, if I had been here at the commencement of the vote, I would be recorded as having voted with my party. I definitely support my party.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

Mr. Speaker, had I been here for the first vote, I too would have voted with my party. I am very pleased to do so on this second vote and be recorded as so doing.

[Janko Peric, Liberal, Cambridge, ON]

Mr. Speaker, I would like to be recorded on the side of the government.

[Beryl Gaffney, Liberal, Nepean, ON]

Mr. Speaker, had I been here for the vote I would have voted with my party.

(The House divided on the motion, which was agreed to on the following division:)

[The Speaker]

I declare the motion carried.

(Bill read the third time and passed.)

[The Acting Speaker (Mr. Kilger)]

It being 5.55 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

Taxation

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

moved:

That, in the opinion of this House, the government should recognize the onerous burden of taxation upon the Canadian family, and the pressures that such taxation places upon the family, and that this government take immediate measures to provide the family with tax relief, including balancing the federal budget.

Mr. Speaker, I rise today to speak on Motion No. 148 which highlights the issue of the level of taxation that the Canadian family faces and recommends the course the government should pursue to relieve the financial and tax burden on families.

The debate today is particularly relevant in light of the federal budget tabled earlier this month. I introduced this motion to highlight the issue of taxation and the family. Normally the taxation issue is associated with individuals or with corporations. Rarely is this issue ever associated with the family in this place.

It distresses me to say that it has certainly not been a theme of this government to recognize families in its policy development beyond its perfunctory rhetoric.

I recall my beginnings as a politician. In the town of Coquitlam, there was a forum called together of federal candidates before the last election. At that forum were the candidates from all parties and members of our community. It was sponsored by a local communi-

ty newspaper, the Tri-City News , that wanted to find out what the issues were in our area.

Candidates from all parties were there: the NDP incumbent, the Liberal candidate who was the provincial president for the Liberal Party and many others. They were called on to answer to the issues that were important to our community. There was free discussion. It was all on tape. The report of that discussion went into the newspaper the following week.

At that time I did not have much experience in politics. However, I did have experience as a community volunteer, a community member, a teacher and a mother.

The issue of family distress, the monetary and cultural pressures on the families that I saw in my community, brought me to consider that perhaps change might be possible in the political process. That is what brought me to the political arena.

That afternoon in that setting the issue of the family was primary. People talked about high taxes, their hopes for the future, the choice for young mothers to stay at home, the value of parenting and less government intrusion into families. Those were the topics of discussion chosen by the people in my community.

That day I was able to answer their questions with conviction because that is exactly where I come from and that is exactly why I aligned myself with the Reform Party. The Reform Party listens to the individuals, the families and the grassroots of the community. That day again affirmed my decision to take on the risk of political life.

Those families are not skilled at the lobby table. They are not well funded to be able to bend the ears of politicians, to organize or to pressure policy direction. However, the well-being of families is what is in the hearts of Canadians and that well-being will predict the strength of the future of the country.

By introducing this motion, I wish to establish the fact that the Canadian family has been affected by the overspending and resulting over-taxation of previous and present governments and is in desperate need of tax relief. It is a fact that the federal government can provide the Canadian family with tax relief by balancing its revenues and spending.

Even as I stood as a candidate for the Reform Party, it proposed a zero in three plan to balance the budget. Through reasoned spending priorities and choices, if Reform had been elected in 1993, this year's budget would not have been looking at a projected deficit of $25 billion but would have seen us making decisions on how to allocate a budget surplus. The books would have been balanced and debt reduction and/or tax relief would have been a reality.

As my motion indicates, it is through a balanced budget that tax relief for families will be realized.

How is it that we got where we are? The inability of governments to address the real security of Canadians through proper fiscal management has a very long history. Thinking back to 1972, the then Liberal government came into power with a debt load of $16 billion. It was voted out of office in 1984, 12 years later, leaving behind it the travesty of a $160 billion federal debt which has been a millstone to the prosperity of our country and to every citizen.

The Tories could not rein in their spending and again the debt grew, first to $200 billion in 1988 and then to $485 billion in 1993.

Today, still with no firm commitment to deficit elimination by, once again, a Liberal government, the security and future of every man, woman and child stands at the mercy of an incredible $578 billion debt which is projected to increase to $620 billion by 1997.

Meanwhile, political parties of all persuasions throughout the provinces have recognized the need for deficit elimination. Even the separatist government in Quebec now recognizes the need to balance its provincial budget with a stated goal of a balanced budget only four years away.

Not surprisingly, the results of overspending over the last 30 years by successive Liberal and Tory governments have produced a record of continually increasing taxes on the Canadian family. For instance, from 1961 to 1994, taxes on the Canadian family rose some 1,167 per cent. The rate of those tax increases far outstrips the corresponding increases in the cost of food, shelter and clothing over the same period.

In 1994, the average Canadian family earned $46,488. The Fraser Institute's Tax Facts 9 outlined the tax bill that this average Canadian family faced by categorizing the taxes by type. This is what it found.

Income tax, perhaps the most easily identifiable tax, accounted for $8,250. Another continual frustration to families are the sales taxes which take another bite of $3,278. Excise taxes gobble up another $973. Then there is the auto fuel and motor vehicle taxes of $709.

There is a big bite with social security, medical and hospital taxes of $3,817 and property taxes of $1,848. There are import duties of $331, a profits tax of $1,306, natural resource taxes of $354 and all the other types of sundry taxes not included in the above are $361.

If these are added up, the total taxes paid by the average family is $21,228. That works out to 46 per cent of its cash income. It means almost half of the working hours are spent on behalf of various levels of government or others.

It is little wonder that increasing numbers of Canadians are suffering from tax fatigue. For instance, in the Angus Reid survey in 1990, 45 per cent of Canadians expressed their concern of being

financially under stress, while in 1989 that figure was only 38 per cent; still a large number.

According to a 1995 Angus Reid poll, over half of Canadians stated that they were finding it harder to make ends meet than just five years before that.

Tragically, this financial stress is especially common among young families. A two-year project entitled "Prospects for Young Families" found that in the 1970s, families headed by a person under 25 had a median income of 80 per cent of the income of all family groups combined. By 1992, however, young families had a median income of only 54 per cent of the income of all other families.

There is something wrong with this picture when hard working families find that the harder they try, the farther behind they get. If this is a land of opportunity and the envy of countries around the world, why then do we rob our families of hope or achievement as they continually run harder to accomplish less?

The effect of this level of taxation leaves the family with less and less after tax income. According to StatsCan, since 1989, after tax family income has dropped some 6.5 per cent. If we go back a full 10 years, the picture is no better.

The StatsCan study found that the average family's after tax income in 1984 was $43,204. In 1993, the figure was $43,225. That is a long time for the average family after tax income to rise by just $21-10 years.

With declining disposable income, families are left with less money to spend on their children and less money with which to realize their dreams and secure their futures. It has been demonstrated that it takes twice the working hours now to support a family as in the 1970s. The opinion of Canadians again reflects this reality. Fifty-two per cent of Canadians surveyed believe "it is just not possible to support a family on one income any more".

There is a direct correlation between the levels of taxation and the resulting loss of net income in families and the rise of dual income earner families. For instance, in 1967, 58 per cent of Canadian families had one income earner. By 1991, however, only 19 per cent of families were classified as traditional earner families while dual earner families had skyrocketed to 61 per cent.

Negative societal effects resulting from the rise of the dual wage earner family have just begun to be reported. Particularly distressing are the effects on children who with both parents working are placed in institutionalized day care.

A recent study by Dr. Mark Genuis of the National Foundation for Family Research and Education demonstrated that non-parental care of children undermines the bonding between a parent and a child. The study concluded that "insecure bonding to parents in childhood is a direct cause of clinical levels of emotional and behavioural problems in adolescence".

There are negative effects on families themselves. Thirty-five per cent of homes with both parents working outside the home with children under six experience moderate to severe levels of stress. Those attempting to balance those same pressures while coping with toddlers under three similarly report severe stress.

Excessive taxation does hurt families. What has been the response of the government since being elected in 1993? What is the Liberal approach to home economics? Their record is simply a continuation of neglect and disregard for the financial challenges of the Canadian family. It is a record of sly and subtle tax increases in spite of the finance minister's rhetorical pronouncements to the contrary. In short, it is a record that has failed to recognize the tax burden that families face.

Let me list some of the examples of tax increases the government has and will be implementing. The full fiscal impact of the 22 tax increases from all its budgets will be to suck approximately $8.8 billion from the pockets of Canadians and their families.

For instance, recent proposed changes to the RRSP rules of reducing the age of mandatory withdrawal from 71 to 69 will net federal coffers some $100 million by the year 2000. Freezing the RRSP dollar contribution to $13,500 until 2003 will garner the federal government some $215 million more over the next three years.

RRSPs are fundamental to a family's savings and wealth. Families use them not only for retirement purposes but also for purchasing homes and other investments. Instead of changing RRSP rules to further line its pockets, the government should empower families to have greater control over their private savings and finances. Reform's super RRSPs would do just that. It would empower families and give them greater control over their personal finances.

Other examples of Liberal tax increases include excise taxes which will amount to almost $1.7 billion over the next three years. Not to be forgotten of course is the government's failure to abolish the GST which will be another $17.9 billion tax grab in 1996-97 alone.

In spite of the increased revenue gouging by this government, it has no plans to offer Canadian families the tax relief they deserve and desperately need. It still has not committed to deficit elimination. The finance minister has even stated that there will not be any tax relief for some time.

Rather than recognize the contribution and importance of families and the incredible tax load they carry, the government has other priorities. One of those is the federal plan for gender equality. Millions of family tax dollars are being poured into every federal department to fund gender analysis where the goal of all women

must be to pursue economic autonomy and their value is determined by their activity in the paid workforce.

Recent government initiatives in employment equity, pay equity and day care are going to cost Canadians billions of dollars and in the meantime remove value and choice from some of our most fundamental institutions. This is all predicated on a warped and intrusive government priority agenda.

The government's mindset of neglect and disregard for the family is also reflected in other misguided spending priorities. This is illustrated in the comparison of federal spending on major diseases in our society.

In 1994-95 the federal government spent $43.4 million on the national AIDS strategy, yet in the same year it spent only $4 million on breast cancer. Considering that one in nine women will experience breast cancer in her life compared with approximately 2,000 deaths by AIDS each year, Canadian families have a right to demand an explanation of how government determines and prioritizes the allocation of their hard earned tax dollars.

These examples of overtaxation and misguided spending priorities assault the sensibilities of families. In spite of the observations I have made, there are policy alternatives. Less, not more government is one of the solutions. Social policy spending must be targeted to those most in need and public policy should promote choice and empower families.

Income splitting is one practical solution. The Reform Party's taxation task force is examining this concept to better the economic and tax status of families. Presently two incomes of say $30,000 receive much better tax treatment than a single income of $60,000. Tax treatment to allow spouses to declare and split their household income would level the playing field between dual and single wage earner families. Income splitting would level the taxation field by recognizing and valuing the idea of a home team.

The child care expense deduction could also be reformed. Presently this income tax provision allows parents to deduct expenses incurred for child care that is non-parental. The effect of this is that parents who send their children to camps or daycare facilities, or who hire a nanny can deduct that amount from their income tax. However, parents who stay at home with their children are not eligible for this deduction.

This deduction could be converted into a child tax credit that would expand choice and opportunity for families. In the last budget this government instead raised the age eligibility limit for children from 14 to 16. The result is that parental and non-institutional child care options are still not recognized in our tax law, but what is recognized is the subsidization of child care for a 16 year old teenager.

Recognizing this tax inequity and the unfair tax treatment families face, my colleague from Calgary Centre introduced a private member's bill in the first session of this Parliament which would have provided a tax deduction for all parents regardless of their income status or method of child care chosen. What was the response of this government to this innovative proposal? The proposal was dismissed out of hand and relegated to the overcrowded never never land of private members' business.

Earlier this month I joined with the member for Mississauga South to support another private member's bill that would convert the child care expense deduction to a $5,000 tax credit for parents with children under the age of seven and a $3,000 credit for children between the ages of 7 and 13.

This proposal was developed in conjunction with Dr. Mark Genuis of the Calgary based National Foundation for Family Research and Education. This proposal will expand choice and will recognize the importance and value of parenting and family in our income tax law. It is innovative proposals such as this one that can and should be implemented immediately.

Reformers believe that just as a family must balance its books, so too must the federal government. With this approach in mind we developed our zero in three proposal which we presented to the public prior to and during the last election campaign.

In February 1995 we presented our taxpayers budget which was designed to balance the federal budget within three years and implement measures to prevent future deficits and secure the interests of taxpaying families. Reformers believe that balancing the federal budget is the primary means by which tax relief can be offered and realized for families in the long term.

It is no accident that the wording of this motion we are debating today includes specific reference to deficit elimination. To date this government has failed to present any plan to balance the federal budget.

Government priorities in spending must also recognize not only special interests but the best interests of families and thus the best interests of society as a whole. Finally, the bias and discriminatory aspects that impact negatively upon the family could and should be eliminated from the Income Tax Act and its regulations.

In conclusion, it is crucial for the future of the family that government acknowledge and recognize the burden of taxation it has placed on the Canadian family. It must realize that this burden

impacts the viability and the contribution of this fundamental institution. It must realize that a dollar left in the hands of a taxpayer is better than a dollar in the hands of a bureaucrat or politician. It must realize that decisions made by parents are better than decisions enforced through programs designed by bureaucrats in Ottawa and funded by those parents' taxes.

I call on the House to design and implement new priorities; priorities that will expand choices for families rather than constrict them; priorities that will provide social and economic security for families, both for parents and their children; priorities that will provide economic social security for future generations; priorities that will empower families to realize their dreams and allow them to become a vibrant part of the future success of this great land of ours.

[Sue Barnes, Liberal, Parliamentary Secretary to Minister of National Revenue]

Mr. Speaker, I am pleased to address Private Members' Motion M-148. It is a motion that asks the government to recognize the onerous burden of taxation on the family and to take immediate measures to provide the family with tax relief, including balancing the federal budget.

Let me start by underscoring that the government fully understands the impact of Canada's level of taxation on many families. Unfortunately, what the hon. member fails to appreciate are the dramatic actions we are taking to put the country's finances in order. And she overlooks the measures we have introduced to provide targeted tax relief for families.

It is because we are acting not with quick fixes but through a strategic approach that will deliver sustained and permanent fiscal progress that I must oppose this well intended but precipitous motion. Allow me to outline how the government is addressing the fiscal and tax burden concerns raised in this private members' motion.

First let us remember not to put the cart before the horse. The fact is that we cannot begin serious tax reduction until the deficit is under control. To cut taxes in any other way would simply mean an even higher deficit and that simply guarantees that taxes would go back up again in the near future because it is the taxpayer who has to pay the interest on government borrowing.

Again, let me make the relationship clear. It is because we have had too many years of high deficits that our tax burden today is so high. We are paying for the borrowing appetite of the past. That is why we have moved on deficit reduction with courage and commitment. But we have not acted in a way that will do more damage than good. That would be the result if we took a slash and burn approach to eliminate the deficit in just a year or two. We would see too many Canadians facing real hardship, too many valid government programs virtually eliminated.

That is not our approach because that is not what the majority of Canadians want. Their choice is for a firm, balanced progress and

that we are delivering. That approach was again emphasized earlier this month when the Minister of Finance delivered his third budget. It is the third step in a comprehensive and determined effort to restore fiscal health to the country.

The budget plan shows that the government is staying on course to eliminate the deficit and put the debt to GDP ratio on a constant downward track. The fact is the government bettered its deficit target for 1994-95 and it is now clear that the deficit target for 1995-96 will be achieved or again, bettered. We are on track to reach our 3 per cent of GDP target for 1996-97. The budget even announced actions to reach a new deficit target for 1997-98 of $17 billion or 2 per cent of the gross domestic product. Indeed, these actions will enable us to move beyond the 2 per cent target toward budget balance.

These actions build on the major deficit reduction measures announced in the government's first two budgets. They include further cuts in federal departmental spending amounting to almost $2 billion. These cuts will take effect in 1998-99. For most departments this means further budget cuts of 3.5 per cent in 1998-99 and for some departments the cuts are even higher.

These measures together with the spending cuts announced in our first two budgets add up to a dramatic decline in federal government spending. In the 1993-94 time period, government spending on programs was $120 billion. By 1998-99, after six consecutive years of absolute spending declines, we will have reduced it to $105.5 billion.

In relation to the size of the economy the scale of this achievement is even more evident. Program spending that accounted for close to 20 per cent of the gross domestic product a decade ago will be reduced to 12 per cent of the GDP. This will be its lowest level in 50 years. These spending cuts will also reduce the amount of new money the government must borrow on financial markets every year.

In 1993-94 Canada's borrowing requirements were $30 billion or 4.2 per cent of our economy. By 1997-98 our actions will have reduced this requirement to just $6 billion, or only .7 per cent of GDP. This represents major progress in tackling our fiscal problems.

In 1997-98 the federal government's borrowing requirements will be at the lowest level in almost 30 years and lower than those projected for the central government of any other G-7 country.

As hon. members know, this government has focused on spending cuts not tax increases to restore the country's fiscal health. Over the three budgets taken together we will have cut seven dollars in

spending for each one dollar in new revenue. Most important, there have been no increases in personal income tax rates.

This should prove that our government is very conscious of the tax burden on Canadians. Indeed our whole program of fiscal measures is designed to achieve two payoffs. The first is to secure the future viability of key Canadian social programs such as medicare and our public pension programs. The second is to reduce taxes for Canadians.

This government believes that it would not be responsible to introduce major tax cuts before the country's fiscal problems are resolved. Nevertheless in the 1996 budget we have been able to provide targeted tax relief to families that most need it. We have not done this though at the expense of progress in reducing the deficit; rather we have reallocated revenues within the tax system.

Low income families with children are a priority concern for our government. In the 1996 budget we introduced several changes to address the needs of these families in particular.

First, we introduced a new child support system that includes guidelines to ensure fairer and consistent child support settlements, measures to help ensure that child support orders are enforced and a change in the tax treatment of child support. The new tax rules apply to new and amended child support awards beginning May 1, 1997.

Under these rules child support will not be included in the income of the recipient for tax purposes, nor will it be tax deductible for the payer. This will ensure that children who need the support most get it. It will also eliminate the need for complex tax calculations and planning by parents. Our approach will treat spending on children the same for separated parents as for intact families.

Second, to increase support for children the budget proposes to increase the working income supplement under the child tax benefit. This supplement assists low income parents to meet work expenses such as child care, transportation and clothing. It also helps to make up for the benefits lost by parents who leave social assistance and re-enter the workforce. The maximum annual benefit will be doubled in two steps. It will increase from $500 to $750 in July 1997 and to $1,000 in July 1998. When fully phased in, it will increase support by $250 million to about 700,000 low income parents.

Third, the budget proposed additional support to parents through an increase in the age limit on the child care expense deduction from 14 years to 16 years. This will be of particular benefit to single parents whose jobs require them to be away from the home at night.

Fourth, the government proposes to provide additional assistance to Canadians who provide in-home care for adult children and other relatives with disabilities. The value of the infirm dependant credit will be increased from $270 to $400 and the income threshold for the reduction in this benefit will be raised from $2,690 to $4,103.

Fifth, the government introduced several measure in the 1996 budget to increase support for students and their families. These measures provide an additional $165 million in support over three years so that students and their families will be better able to deal with the increased costs of education.

The education credit will be increased from $80 to $100 per month. This credit recognizes the non-tuition costs of schooling. The limit on the transfer of the tuition and education credits will be raised from $680 to $850 per year. This will provide a transferable credit against costs of $5,000 per year, up from $4,000 under the current rules. This measure will assist parents and spouses who pay the education costs of students.

Again, the annual limits on contributions to registered education savings plans will be increased from $1,500 to $2,000 and the lifetime limit from $31,500 to $42,000. This will assist parents to save for their children's education.

Finally, single parents attending school full time will be able to deduct child care expenses against unearned income and the deduction will apply to those completing high school. This will assist parents to undertake education or retraining.

In summary, I feel I have demonstrated that this government is taking responsible steps to put the country's finances in order and so provide a sound platform for future tax cuts. At the same time, the government is acting to provide targeted tax relief for families that need help the most.

Accordingly, I urge this House to withhold support for private member's Motion No. 148.

[Richard Bélisle, Bloc, La Prairie, QC]

Mr. Speaker, the hon. member for Port Moody-Coquitlam is asking the members of this House to support motion M-148 which reads as follows: "That, in the opinion of this House, the government should recognize the onerous burden of taxation upon the Canadian family, and the pressures that such taxation places upon the family, and that this government take immediate measures to provide the family with tax relief, including balancing the federal budget".

This motion has two important components: family income and balancing the federal budget. These two components can, in certain cases, be at odds. In fact, one of the ways of balancing the federal budget could well be to increase the tax burden on families. The

other possible ways of balancing the federal budget would be to increase the tax burden on businesses, or to cut spending.

For the Bloc Quebecois, the only real way to reduce the tax burden on individuals, in addition to balancing the budget without cutting social programs, is to find new sources of revenue. In all their interventions in this House for over two years, Bloc MPs have always made it clear that these new sources of revenue, this new money in the federal coffers, called for an immediate, in-depth review of business taxation.

Reformers, true to their own brand of logic, as always, are again suggesting spending cuts as the sole means of balancing the budget. We must remember, however, that federal spending consists primarily of transfers to individuals and to provinces, the latter amounts going a long way towards paying for the provinces' social programs. Spending cuts hit individual taxpayers the hardest and do not produce the desired results. We are therefore opposed to balancing the budget solely through cutbacks in federal spending, the approach now being taken by the federal government.

The Reform motion emphasizes the family aspect of taxation. Here, Reformers are making the same mistake as the Liberals, who are now basing the new seniors benefit on the family income of couples. When the family income has been established, the government will divide the amount of the monthly benefit into two equal parts. Is this the Liberals' way of lightening the tax burden on families? By limiting their suggestions to spending cuts, Reformers are on the wrong track. By targeting family income as the basis for government assistance to seniors, the Liberals are also on the wrong track.

We in the Bloc Quebecois want the budget balanced, but not at the expense of families and seniors.

The Bloc Quebecois is totally opposed to the government initiative to base old age pensions on family income. Taxation reform must address individual or business revenue, not family income.

For cohesiveness, the Reform motion would require a business tax reform. Successfully balancing the budget requires business tax reform rather than merely tightening up on expenditures, which will impact upon the transfer payments to individuals and to the provinces.

Given the size of transfer payments to individuals and provinces, major cuts in expenditures will, of necessity, impact upon those same individuals and families.

Essentially, these transfer payments comprise the old age pension, the guaranteed income supplement, spouse's allowance, unemployment insurance benefits, and the taxation agreements, health insurance and health care, the Canada assistance plan, education support, family allowances and the child tax credits, along with a variety of other transfer payments.

It can be seen that most of these are aimed at young people, seniors and low income families. Interfering with them would place the incomes of the least advantaged members of our society at risk. Balancing the budget cannot, therefore, go the route of cutting transfer payments, at least not in our opinion.

Between 1990 and 1995, these transfer payments accounted for between 67 per cent and 71 per cent of federal program expenditures. Their importance is therefore obvious, when we realize that the only other equally large government expenditure besides program expenditures is servicing the debt, which remains untouched. Other revenues must therefore be found.

On the other hand, individuals are already paying more than their share of taxes. Between 1990 and 1995, personal income taxes accounted for between 78 per cent and 87 per cent of federal tax revenues, while corporate taxes for that same period accounted for between 11 and 20 per cent.

In order to lighten the tax burden on families and balance the budget at the same time, we must look at the business tax aspect before making heavy cuts to the assistance available to individuals, which would only add to the pressure already being felt by our families.

We know what a heavy burden families have to bear, and we know that the only way to balance the budget without increasing the burden of individual taxpayers or making drastic cuts in social programs, as the Liberal government is doing, is to review the corporate tax system to collect the government's missing revenues from those who do not pay their fair share.

On March 6, in the budget speech, the finance minister announced the creation of a committee to review the tax system. Some members on this committee are experts in tax evasion: one is a representative of Price Waterhouse, a firm with several branches in countries considered as tax havens, such as the Bahamas, the Caiman Islands, and Switzerland; and one is a representative of Ernst & Young which is also a great user of tax havens.

For the past two years, the Bloc Quebecois has been demanding a true reform of business taxation, the only way to lighten the tax burden on Canadian and Quebec families while making it possible to balance the budget.

The business taxation review process must be public. Input from opposition members must be allowed to make the process as open and transparent as possible.

The government is promising there will be public consultation once the experts issue their report; in other words, people will have their say once the decisions are already made. Business taxation must be streamlined and businesses must be made to pay all the taxes they are exempt from. In 1994, tax expenditures on Canadian corporations amounted to $9 billion.

Before the budget, the government was saying it wanted to get businesses involved; the Prime Minister challenged them to create jobs. This rallying theme seems to have disappeared somewhere in between the throne speech and the budget. Businesses are yet to be put to task.

I fear that the Liberal government is once again going to ignore the necessary contribution of businesses to the tax system of this country, which badly needs it both to balance its budget and to lighten the tax burden on families.

Up to now, the only fiscal effort on the part of some corporations has been to contribute to the Liberal coffers; as we know, six of the eight members of the business taxation review committee come from businesses which contributed to the Liberal Party's coffers to the tune of $80,000 in 1994.

[Gary Pillitteri, Liberal, Niagara Falls, ON]

Mr. Speaker, I am pleased to speak tonight to the private members' Motion No. 148 which calls for the House to recognize the heavy burden of taxation placed upon Canadian families.

This motion also calls for immediate action to be taken to provide the Canadian family with tax relief, taking into consideration the continuous reduction and balancing of the federal budget debt.

In my opinion this motion is not very clear. It does not propose specific measures. However, the motion does call for tax relief for families and a move to a balanced federal budget, a very commendable goal.

However, the government should not support this motion. The Liberal government, in its March 6 budget, has taken several steps and measures to address the serious concerns that must have prompted this private members' motion.

We have seen that the budget does not increase taxes on the family. With serious and well balanced measures, the federal budget continues to provide expenditure restraint that will eventually lead to a balanced budget. This in turn will bring about a reduction in the broad based taxes paid by families.

The budget has shown that the Liberal government cares about families and the welfare of children. This can be seen, for example, through measures such as the doubling of the working income tax supplement. The child tax benefit will increase to its maximum level from $500 to $1,000.

These are measures that show how much our government cares for families in our society. By restoring a climate of financial health, we are paving the way for more dynamic job creation in our economy.

It is well known that by lowering the deficit we will obtain lower interest rates. This in turn will create growth and investment which will lead to more jobs and a flourishing economy.

We know that the Canadian tax system is effective and fair. According to a recent survey taken by the OECD, Organization for Economic Co-operation and Development, we rank 14th in the world. This means that there are 13 industrialized countries where the tax burden is much higher than that of Canada. Our country enjoys one of the highest standards of living of all the industrialized countries in the world.

We have learned that Canada has the highest index of human development. Of 173 countries around the world, Canada ranked first in terms of longevity, average income, spending for education and health care. This is according to the human rights development report prepared and published every year by the United Nations.

This means that in Canada our tax dollars are well spent. We are all receiving an exceptionally high value for the taxes we pay. With the new budget, the government has proven that it is meeting the fiscal targets it set.

After a lower than projected deficit last year, the government is now on track to meet or better the target of $32.7 billion in 1995-96 and 3 per cent of the GDP in 1996-97.

The budget also announced $1.9 billion in spending cuts for 1998-99. This, together with actions introduced in the last two budgets, will ensure that the deficit will continue to decline for years to come.

This motion asks for the relief of pressures that taxation places on Canadian families. The budget has already done this. Let us look at the support for families.

The Liberal government is moving ahead with improvements to the child support system in Canada. This strategy announced with the budget includes guidelines for setting child support, fairer taxation of support payments, better enforcement, and increased income supplements for working families.

The current system places the tax burden on the custodial parent and provides a deduction for the non-custodial parent. Under the new child support strategy, custodial parents will no longer pay income tax on child support payments and non-custodial parents will no longer claim a tax deduction.

These new tax rules will apply to agreements and court orders made on or after May 1, 1997. They will not apply to existing orders unless the orders are varied by the courts or unless the parties have agreed to the changes. This means children will benefit from a fairer and consistent child support which will be paid in full and on time. In addition to these measures, the parents

will be allowed to file a joint election with Revenue Canada to apply the new tax treatment.

Moreover the current age limit of 14 years for children with respect to whom the child care deduction may be claimed does not recognize the need of many parents, especially the single ones, who work at jobs which require them to be away from home at night. Accordingly, our government proposes to raise the age limit for eligible children to 16 years. This measure will complement the other changes made to the child care expense deduction and it will without any doubt assist single parents and support learning.

The increased assistance is important to the many Canadians who are caring for and supporting adult children and other relatives who have moderate to severe medical conditions. I am aware of many constituents in Niagara Falls and Niagara-on-the-Lake who are providing home care for invalid members of their families. These families will find relief in the government proposal to increase the value of the infirm dependant credit from $270 to $400 and to raise the dependant net income threshold for the phase out of benefits from $2,690 to $4,903.

The measures proposed in the budget promote fairness: fairness to the Canadian taxpayer who complies with his obligations under the Income Tax Act; fairness that will ensure everyone shoulders their fair share of the tax burden. These are reasons enough for me to vote against this motion.

[The Acting Speaker (Mr. Kilger)]

There being no further members rising for debate and the motion not being designated as a votable item, the time provided for the consideration of Private Members' Business has now expired and the order is dropped from the Order Paper.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Mr. Speaker, in the context of the adjournment proceedings, I would like to go back to a question that I asked the Minister of Human Resources Development in early March. It referred to the fact that the minister had acknowledged that the bill on unemployment insurance reform, known as employment insurance, would penalize several workers if thorough changes were not made.

Essentially, what we would like to know is what are the changes that the minister will put forward. The committee has now been sitting for a few days on the subject and the minister has given us very vague indications. On every occasion, on amendment proposals coming from the Liberal members, they were always talking about very cosmetic, very technical changes. These are minimum changes that do not go to the heart of the issue.

Essentially, the real question is this: Will the minister be able to change budgetary parameters? In the unemployment insurance reform, the government expects to use the surplus in the UI fund to compensate for the federal deficit. Even though the UI fund money is provided totally by workers and employers, the Liberal government expects to use the money that is in the surplus. It is $5 billion for this year alone. Yes, $5 billion.

Will the minister to able to do anything to ensure that the reform will be changed root and branch? Because the one that is presently on the table has been condemned everywhere, by all people involved in this reform.

Will the minister be able to do anything in the budgetary parameters? Will there be a strategy for regional economic diversification? It is one thing to try to put the burden of the unemployment issue on the unemployed, but seasonal workers do not want unemployment. These are people who are caught in a seasonal economy, an economy of regions that live on natural resources. They have the jobs that they can, and if they could have more, they would take them.

In the reform project, it would be important that the minister gives up this principle that is found in the documents saying that seasonal workers are lazy. That is essentially what is being said. In all testimonies, we have seen that does not reflect reality.

In conclusion, will the minister be able to come back to common sense? Will he use the fact that there was a change in ministers to thoroughly change the unemployment insurance reform, to put back on the table the main things that concern him and to ensure, once and for all, that there is a reform, but a reform that will really make it possible to fight unemployment and allow more people to get jobs?

[George Proud, Liberal, Parliamentary Secretary to Minister of Labour]

Mr. Speaker, employment insurance reform was designed to minimize the number of people who will not be eligible for income benefits. In fact, the new hours based entrance system opens up eligibility to people who were previously not covered by unemployment insurance.

In addition, while some individuals receive benefits for shorter periods, more individuals will have increased duration. This will have a net positive impact on social assistance.

The family supplement means benefits will increase by 7 per cent on average for claimants in low income families with children. By protecting those most in need, impacts of the reform on social assistance will also be lessened.

HRD has estimated the impact of employment insurance reforms on social assistance across the country will be in the order of $75 million by the year 2000. However, this impact will be offset by both the $300 million jobs transition fund and the $800 million reinvestment in direct re-employment assistance. About 45 per cent of current social assistance clients will meet the new eligibility requirements for these measures.

I would like to remind the hon. member that these employment benefits will give people meaningful employment and keep it. By doing that, the reforms will again reduce, not increase, the burden to provincial social assistance.

Further, the government realizes the interaction between employment insurance and social assistance clientele is a complex one. Departmental officials are now in the process of talking to the provinces in order to get their feedback on this impact analysis. They have now met with five provinces and will meet with the remaining five over the next two weeks. A key purpose of this reform is to create needed jobs and help people increase their employability.

Another issue that the legislation addresses is that of a business environment that is conducive to job creation. Lowering premiums for employers and employees is a step in that direction. That, when considered with the job and growth agenda, will help create more jobs and this will further reduce social assistance rolls.

Over all, many elements of the new employment insurance legislation benefit low income Canadians. Therefore, I urge the hon. member who professes to be concerned about the fate of this group to support the legislation and thereby be of real help to Canadians most in need.

[The Acting Speaker (Mr. Kilger)]

The motion to adjourn the House is now deemed to have been adopted.

Accordingly, this House stands adjourned until tomorrow at2 p.m., pursuant to Standing Order 24.

(The House adjourned at 6.54 p.m.)