Debates of May 8th, 1996

Family Trusts

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, it is a shame that, in a debate as important as this one, the opposition finance critic is unable to assume the same responsible tone as his leader.

Let me just repeat that, in our 1995 budget, we eliminated any possibility to use family trusts for tax purposes.

I would like the hon. member, who advocates transparency, to tell me this: Is he afraid to see the finance committee review this matter? I think the important thing is transparency in showing the responsibility borne by the department of revenue, the department of finance and the Government of Canada.

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

Let me put the question to the Minister of Finance again, Mr. Speaker.

If the minister is not afraid of reforming the tax system, why is he having the work done behind closed doors by the very experts who advise their clients to transfer $2 billion to the U.S.? That is what is happening.

My question to the Minister of Finance is quite simple. Will he call for an independent review to be conducted immediately to shed light on both cases identified by the auditor general and any other case that may have surfaced since, particularly since he became the Minister of Finance, because he certainly did nothing to eliminate these scandalous family trusts?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, the House should be aware of what the opposition is asking.

A situation had arisen under the previous government and in 1991 the auditor general reported on it. As in other instances, this government takes very seriously the reports of the auditor general. We have said we believe that the Canadian people are entitled to have all of the facts. We think this should be looked at openly in the finance committee.

What is the finance critic for the Bloc Quebecois saying? He is saying: Do it behind closed doors. Do not do it in front of us. Do not let the Canadian people have the facts. Do not sit there in open, public debate to take a look at it. What is the matter? Are you afraid of the truth?

Taxation

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, yesterday I asked the Prime Minister whether he was willing to enter into a federal-provincial tax relief agreement to ensure that tax cuts given by provincial governments like Ontario remained in the pockets of taxpayers.

The finance minister responded by saying that the issue had been discussed extensively at federal-provincial meetings and that a general agreement existed that one level of government would not tax away tax reductions made by another.

Does such a general agreement in fact exist, and if it does, will the finance minister table it in the House?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, the hon. member asked this question yesterday and I answered it.

I said that there was a general understanding among all of the finance ministers that it would be counterproductive for one level of government to fill in tax room given by another. What we really wanted to do was to get the economy going.

He knows there is not a written agreement. I said that yesterday. I made it very clear the previous six times he asked the question. The matter was discussed among all of the finance ministers and that agreement exists. I repeat it here again in the House.

If the hon. member would like to ask me the question another 16 times I will give him the same answer.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, the federal government, through its GST harmonization program, temporarily left $170 million in the pockets of New Brunswick taxpayers, a tax reduction.

Two weeks later the Liberal premier of New Brunswick announced that he was working on a new business tax to get that $170 million into provincial coffers, a case of one level of government taking away a tax reduction granted by another, precisely the thing that the finance minister had said the federal and provincial governments agreed not to do.

Given the fact that his verbal agreement with the provinces is obviously being disregarded, will he commit to reaching a written federal-provincial tax relief agreement with the provinces?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, because the leader of the opposition party cannot find anything real to talk about, he continues to set up straw men. Let me take the hon. member's situation.

In order for the governments of Atlantic Canada, the Government of New Brunswick in this instance, to go through a period of profound structural change leading to very deep tax reform, the federal government embarked on a cost sharing proposal with Atlantic Canada.

Effectively that cost sharing proposal said that the provincial governments involved would pick up the first 5 per cent loss on their revenues and then there would be a sharing after that.

It was very clear that the provincial governments were going to have to make up their losses in two ways: through increased economic activity and the possibility of tax increases elsewhere. The hon. member has talked about the shift from consumers to business. What may well happen in some of the provinces is that they may well go back and take some of that tax savings from business in order to keep the consumer cost down.

The hon. member really ought to understand, first, what was done and, second, he ought to try not to contradict himself consistently every-

[The Acting Speaker (Mr. Kilger)]

The leader of the Reform Party.

[Preston Manning, Reform, Calgary Southwest, AB]

In other words, Mr. Speaker, a tax reduction granted by one level of government has been sopped up by another level of government, which is precisely my point.

Yesterday Ontario cut its payroll taxes, something that the finance minister and everybody else has said creates jobs. However, the federal government is killing jobs by holding its payroll taxes high to support an inordinate level of UI contributions and proposing further increases to try to stabilize financing of the CPP.

If there really is a federal-provincial understanding of harmonization for tax relief, why is the federal government creating upward pressure on payroll taxes while the Ontario government is trying to cut payroll taxes at the same time?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, let me point out to the leader of the third party minus three that in the last budget, payroll taxes were cut by $1.2 billion.

Second, as a result of the deficit actions taken by this government and by the provincial governments, interest rates in this country are close to 4 percentage points lower than they were over a year ago. That is a substantial tax decrease for Canadians.

The question I would put to the leader of the Reform Party is this. If today he recommends that there be further decreases in unemployment insurance premiums, why did he not recommend that in his budget of a year ago but recommended instead that unemployment insurance premiums be kept at a very high level.

[The Acting Speaker (Mr. Kilger)]

As we go into the second round of questions, I hope, and I will be looking for your co-operation, for shorter questions and shorter answers.

Manpower Training

[Francine Lalonde, Bloc, Mercier, QC]

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

Last Friday, the minister's remarks on the federal government's withdrawal from the area of manpower were distressing to say the least. So with no follow-up to the proposed agreement tabled by Quebec on January 18 and negotiations with Quebec at a standstill, the minister acknowledged that the time had come to sit down at the table, but with representatives of all the provinces.

Are we to understand from the minister's response that Quebec should wait until all the representatives of all the provinces reach an agreement, when, in Quebec, a consensus was reached years ago on the patriation of manpower policies and programs?

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

No, Mr. Speaker, because the hon. member is right. The consensus in Quebec is well known. However, I think everyone would agree that, before the federal government puts its position forward, we should all be sure what we are prepared to propose.

Quebec's proposal contains some very interesting points. Our commitment is simply that, when we have a proposal ready, and we should have one soon, we would like to put the federal proposal to the representatives of all the provinces. However, Quebec is obviously much further ahead in its approach, and the consensus there, which the member referred to, is well known.

I hope that once we have clearly defined Canada's position on all the issues, not just on manpower training but also on active measures, we will be able to move rapidly by sitting down at the table with Quebec's representatives and reach an agreement.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, the minister has reassured me by saying that the mother of all negotiations is not dead.

Can the minister confirm he is ready to negotiate with Quebec not only on manpower training but on all active measures, as requested by Quebec?

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

Mr. Speaker, of course, there will be rather significant differences among the 10 provinces and the territories with respect to the resources and networks needed to deliver programs. But, to get back to the situation with Quebec, there is no doubt that, even in Part II of the Employment Insurance Act, which is now before Parliament, all active measures are on the table.

As I was saying to the hon. member, the first thing we want to do is look at the commitment made by the Prime Minister and by others to withdraw from manpower training, but we are also

prepared to look at all the elements, including active measures, being discussed with Quebec and the other provinces.

Goods And Services Tax

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, the holy harmonization hymn book, chapter 7, verse 5, states on the harmonized GST: "We think that Albertans will applaud this move to an improved tax system".

I invite the Prime Minister to come to Alberta and say that. I hope when he comes he brings a very large Inuit carving with him because he will need it, I guarantee that.

Can the Prime Minister explain how his taking a billion dollars out of the pockets of Canadians to finance a tax break in Atlantic Canada demonstrates the Prime Minister's commitment to equality and why will Albertans really applaud the picking of their pockets?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, what the hon. member requires is a bit of a lesson in understanding the nature of the Canadian economy.

The Canadian economy is very different in Alberta than it is in Nova Scotia. It is very different in Ontario than it is in British Columbia. For instance, would the hon. member suggest that the oil and gas taxation policy be the same in Alberta as applies to the manufacturing industry in Ontario? Clearly not, because they are different circumstances.

We are dealing with deep structural change. It is the kind of structural change that let the Canadian government help the western grain farmers. At this time Atlantic Canada is going through a very positive set of changes and it is the responsibility of the Canadian government to enable and facilitate that change.

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, what Canadians want from coast to coast is equal treatment.

Ralph Klein, the premier of Alberta, has called for equal tax treatment. Even the Prime Minister's little buddy in Alberta, Grant Mitchell, has called for equal treatment. He says: "Albertans expect to have the federal portion of the harmonized tax collected in Alberta reduced to equal the level collected in those provinces".

When will the Prime Minister demonstrate his true commitment to fiscal equality by either lowering the GST for the rest of Canada or trashing this obvious payoff to Atlantic Canadian premiers?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, by equal treatment, is the member saying that the same taxation regime should be applied to the oil and gas industry in Alberta as is applied to the manufacturing industry in Ontario? Is the hon. member saying that Ontario should not have been given a billion dollars in stabilization payments in the 1990s? Is he saying the federal government should not have helped out with tax reform in 1972 to compensate for the revenues lost by provinces?

If that is what the hon. member is saying, then it is very clear that he does not understand the Canadian economy, what holds it together and what is going to make it grow.

Immigration

[Osvaldo Nunez, Bloc, Bourassa, QC]

Mr. Speaker, my question is for the Minister of Citizenship and Immigration.

In 1982, the Liberal minister of immigration decided that Victor Régalado, a Salvadorian national, was a refugee within the meaning of the Geneva Convention. In the past 14 years, Victor Régalado married a Canadian, had two children born in Quebec, and has shown that he was not a threat to national security. Yet, we learned this morning that departmental officials have decided to deport Mr. Régalado for reasons of national security.

Since these officials could not justify Mr. Régalado's deportation order, could the minister tell us in what way Mr. Régalado is a threat to national security?

[Lucienne Robillard, Liberal, Minister of Citizenship and Immigration]

Mr. Speaker, you will understand that, under the Privacy Act, it is very difficult to publicly discuss the case of a person currently in Canada.

I also want to say that, as Minister of Citizenship and Immigration, I have a duty to ensure the integrity of the system. I do not see why we would not, in this particular case, clearly follow the acts and regulations relating to immigration.

[Osvaldo Nunez, Bloc, Bourassa, QC]

Mr. Speaker, the minister has the discretionary power required to resolve this situation. The minister, her predecessors and her officials have demonstrated negligence and a lack of compassion in this case.

How can the minister explain that a foreign national having no status can live, work and study here for 14 years without immigration authorities making a decision in his case?

[Lucienne Robillard, Liberal, Minister of Citizenship and Immigration and Acting Minister of Canadian Heritage]

Mr. Speaker, it is not a lack of compassion to apply the law and thus act fairly toward those waiting to emigrate to Canada.

It has taken a long time, yes, but I must point out that people have the right of appeal to all levels in Canada. Right now, this case is being handled according to the provisions of the Immigration Act and Regulations. I can assure members of this House that we are acting in all fairness in this case.

Benefits

[Art Hanger, Reform, Calgary Northeast, AB]

Mr. Speaker, I have received a long term policy initiative document marked "protected", dated March 8, 1996, from the justice department listing the following initiatives related to personal relationships: marital and family status, same sex couples and family and dependant benefits.

Canadians have the right to know the minister's agenda. Is it his intention as a next step in his agenda to pursue family and dependant benefits for same sex couples?

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

Mr. Speaker, it is obvious the hon. member thinks he is on to something here, which might be his first argument against Bill C-33. We would think for a party that speaks so much about firearms it would know the difference between finding a smoking gun and shooting blanks.

The hon. member should know the protected document that was taken from my files refers to a discussion paper enabling the government to participate in tribunals and before courts in which there are claims for same sex benefits under federal programs.

As Minister of Justice I am obligated to defend those claims on behalf of the government and I would expect to find in my office a paper that discusses just how I will defend them. That is what the document is about.