Debates of Sept. 26th, 1996

Supply

[George Baker, Liberal, Gander—Grand Falls, NL]

Madam Speaker, I listened carefully to the hon. member from the Bloc. In its position as the official opposition to the Government of Canada, the job of the Bloc is always to hold the government accountable. Its job is to ensure that any legislation coming before the Chamber will be accountable to the people of Canada. In particular, its job is to watch the public purse. In particular, the Bloc motion states that the government is opening the door to other capital transfers that will deprive the federal government of hundreds of millions, and possibly billions, of dollars every year.

I cannot understand the Bloc political party. Only a year ago the transfer of money across the border to the United States was under discussion in the committees and in this Chamber. Changes were suggested to the tax treaties between Canada and the United States. The general public has to understand that these are reciprocity agreements which apply to Canadians and Americans.

A suggestion was made by the Senate banking committee in the form of a bill that came to this Chamber eventually. This political party was asked to pass judgment on a major change in tax policy that would mean a reduction in the withholding tax on multinational corporations that sent their money from their subsidiaries to their parent company in the United States. Do you know what the Bloc said, Madam Speaker? The Bloc said on page 14707 of Hansard that it was a wonderful thing because now our capital could freely flow into the United States.

I ask the hon. member to justify his position in view of what he is saying today. Here is what was said at page 15541 of Hansard : ``The bill does not specifically say how many millions and billions of dollars are at stake in this protocol. We do not know which country, Canada or the United States, will benefit the most from this tax liberalization protocol but we support these proposed tax changes''.

How does the hon. member support the position of the Bloc when it supported the movement of capital out of this country and at the same time put in the words of this motion today and present this picture to the people of Canada?

[Michel Guimond, Bloc, Beauport—Montmorency—Orléans, QC]

Madam Speaker, in Quebec, when the Canadian Broadcasting Corporation gives us the time programs will start, it always says "one hour later in the maritimes". That is confirmed by the statements of the hon. member for Gander-Grand Falls, one hour later in the maritimes, but he did not make any relevant comment on the issue.

I would like you to ask the Speaker if he would be kind enough to send me the page in Hansard where I spoke on this bill. I cannot recall saying what the member says I did. It could just be my

memory, but I really do not recall saying that. But there is one thing I remember saying and I have repeated it. What we want, and the hon. member did not understand that, is to shed some light on what really happened on December 23, 1991.

I will mention to the hon. member that I worked 14 years for Abitibi-Price. That company had a paper mill in Grand Falls, Newfoundland, in his riding. I ask the member, when he returns to his riding this weekend, to ask the paper maker, the guy who works in the boiler room, the guy who works in the chip mill if they accept the fact that the rich can move $2 billion U.S. without paying income taxes. Is it normal, is it acceptable to the paper maker in the Grand Falls mill?

[Barry Campbell, Liberal, Parliamentary Secretary to Minister of Finance]

Madam Speaker, it is a pleasure to be sharing my time with the hon. member for Renfrew-Nipissing-Pembroke, the dean of this House.

It is time to ask what is really going on here. What is the real motive behind the Bloc Quebecois' fascination with this issue?

When smart people do odd things, it ought to make a person suspicious. I am just a little suspicious about the motives operating here.

It cannot be that the Bloc wants to embarrass the previous government. That is a rather bizarre thing, not that I object.

It cannot be that the Bloc believes that the government has not acted on the auditor general's recommendations because it has done so. First, there was a moratorium on additional tax rulings; second, a referral to the finance committee; third, a very serious piece of work from the finance committee and, from that will undoubtedly flow action on the recommendations of that committee.

This fascination of the Bloc cannot be because its members think we have not responded in a timely fashion. We have.

The fascination cannot be based on some perception of interference or wrongdoing in the decision making process because the auditor general has admitted that there was no such thing.

The fascination with this issue cannot be because there is something wrong in taxpayers seeking advance tax rulings on complex transactions. As they well know, the auditor general in previous years has reviewed and praised the advance ruling process.

If the taxpayers in question wanted to do something untoward, wanted to get away with something, they certainly would not have

come to Revenue Canada and asked for a tax ruling. I suggest that they would have done it.

One of the reasons the auditor general praised the tax ruling process was that it provided, if you will, a heads up to Revenue Canada about transactions and actions out there so that Revenue Canada would be right up to date on the things that were happening. This taxpayer talked to Revenue Canada. He or she did not have to do that.

The fascination of Bloc members can be understood. It is not for any of the reasons above. It is because of who they believe the taxpayer is. Maybe it is someone rich, they say. Maybe it is an anglo. Maybe it is an ethnic. We can draw a lot of lessons from their fascination with this issue.

What lessons can we draw from the way the Bloc has handled this matter about the kind of society it would build in Quebec? Let me tell members. Based on its performance on this matter, its members would build a society in which being successful would bar a person from fair treatment.

They would build a society in which there would be no taxpayer confidentiality. They would build a society in which envy would be the basis for policy, a society led by accountants that envy, bookkeepers of offence, measurers of science. What kind of economy would be left in Quebec in that environment?

What kind of society would they build? Based on the Bloc Quebecois' minority report on this issue, I will say what kind of society it would be building: a society in which expertise and experience is dismissed if someone's opinion disagrees with its ideology.

In their minority report, Bloc members dismiss out of hand the seven out of eight tax experts who appeared before the committee and concluded that the opinions Revenue Canada provided, based on the law and regulation as it then was, were incorrect.

What kind of society would they build? It would be a society in which your opinion would be unassailable if you agreed with their ideology. They cite Professor Brooks, the other of the eight who supported the Bloc's position and disagreed with the seven other experts.

His opinion, of course, was unassailable but the other experts, in the Bloc member's opinion, had a conflict of interest. How convenient.

What kind of society would Bloc members build? A society in which minorities in Quebec might hope to be tolerated but never be quite equal. We are all minorities. It just depends where you draw your borders.

What kind of society would it be? It would be a society led by historical revisionists recasting and perverting history for their own ends. The francophone history in Canada is not one of shame but one of which to be proud. It is one of building a great country together, of opening a continent. What do they want to do? They want to lock francophones up in Quebec.

What kind of society would they build? It would be a society in which someone else is always responsible for the problems: the anglos, the rich, the ethnics, the federalists. Who will they blame if they go it alone?

It would be a society built on an insecurity so severe that they, the separatists, attempt to insulate themselves from criticism, labelling those who have criticized them as sellouts or part of some great overarching conspiracy, a society where government would decide when to suspend the rule of law, and the rule of law is all that stands between us and tyranny.

They would also build a society where it appears, based on the separatists own actions and statements, that there is collective responsibility. The Jewish community is responsible for Mr. Galganov, but the separatists and the francophone community are not responsible for Mr. Parizeau's comments about ethnics, for Mr. Landry's treatment of ethnics or Mr. Villeneuve's comments.

I am pleased to have had this opportunity to participate in this debate but I weep for Quebec, for the decent, hardworking, fair, open people of Quebec who are demeaned by the behaviour and attitude of the separatists as we have seen in this debate and in so many other debates.

I have confidence in the people of Quebec. They will never allow themselves to be led down the garden path to the narrow, stifling, miserable future the separatists have in mind for them.

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

Madam Speaker, I listened to my colleague from St. Paul's comments on the motion before us today. It is hard to believe that the hon. member for St. Paul's can make such insulting comments not only about Bloc members but about all Quebecers.

This shows-as the people listening to us will realize-how the Bloc was justified in putting forward the issue of family trusts, how this hurts the Liberal government across the way, how they are not defending the interests of taxpayers in Canada and Quebec. It is the interests of those who contribute to their election fund they are looking after.

In 10 minutes, he managed to talk about the experts he claims the Bloc Quebecois is denigrating. He forgot to say that the experts who appeared before the finance committee were invited by the committee chairman himself and that these experts come from firms that, as we said before, contribute generously to the Liberal Party's coffers.

When someone as credible as the auditor general came before this committee to shed light, to tell the truth, he was harassed. They would have fired him if they could, because he had dared to tell the truth.

Then the hon. member for St. Paul's paints everything with the same brush. This is called condemnation in-

[An hon. member]

In absentia.

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

Not in absentia, as my colleague said, but they are trying to link people who are not linked in any way. He criticized Mr. Parizeau for the comments he made the night of the referendum; he also criticized Mr. Landry's comments and those made by Mr. Villeneuve, which were condemned by everyone in Quebec.

Our colleague's remarks were dishonest and, if he is an honourable man, he will withdraw them.

He should tell us why someone who is so pure, so intent on finding the truth, is not asking his government to disclose all the facts on the family trust matter. This is what the Bloc Quebecois wants, what the auditor general wants, what the people of Canada and Quebec want: to shed light on the huge amounts of money leaving the country without a penny in tax being paid, as we have been saying for the past three years. Year after year, they cut over $5 billion a year from the programs aimed at the unemployed.

That is what we want to know. We do not want to be treated as the hon. member, who talks through his hat more often than not, has treated us.

[Barry Campbell, Liberal, St. Paul's, ON]

Madam Speaker, I will be brief. I think members can express views on either side of this side. The hon. members for the opposition never hesitate to speak their minds and provide us with their interpretation of facts, history and reality. I think we are entitled on this side to do the same. If they do not like how it sounds or how it feels, I cannot help that.

I might add one other item to my list of what sort of society they might be talking about. That is one where one's professional competence and professional ethics are attacked if one does not agree with their opinion because that is what they are doing with respect to the experts before the committee.

I remind the hon. members that one expert was invited by the Bloc Quebecois, which was entitled to have as many others as it wanted. It could only come up with one.

This issue is about taxpayer migration. This government has dealt with family trusts in the last budget to the extent that family trusts impact this issue of taxpayer migration. I think the finance committee has done an excellent job of addressing those concerns.

[Len Hopkins, Liberal, Renfrew—Nipissing—Pembroke, ON]

Madam Speaker, as I rise to speak on this motion today I am really amazed with its content. It has been some time since I saw a motion in this House that is worded in the way this one is today. It is really trying to get at rulings that were made in 1985 and 1991 relating to the immigration of taxpayers and the distribution of Canadian trust property to a non-resident beneficiary. It is also very much about migration taxation.

The opposition motion today tries to convince people that the doors are open for other transactions to leave the country and they talk of this in terms of hundreds of millions and even billions of dollars. This is an absurd assumption. What they are trying to do is create a perception of a loss of tax dollars. The finance committee has brought an excellent report into this House and found no such transactions taking place.

As I have said, this is an absurd assumption. Are billions of dollars leaving the country tax free? The answer is a clear and unequivocal no. Revenue Canada is not aware of any similar transactions since 1991, and the finance committee confirmed it found no indication of large revenue losses or tax planning opportunities that occurred because of the 1991 ruling.

The minister of revenue, as she said today, has placed a moratorium on any such rulings in this area of the Income Tax Act until such time as the government plugs the loopholes.

The hon. member for Beauport-Montmorency-Orléans indicated today that the Liberals would be blaming this on the Tory administration. The Canadian public has already passed judgment on the Tory administration. It did that on October 25, 1993 in the general election. Therefore we do not have to pass it on to it, it was there during its time. However, there was no evidence found of wrongdoing on the part of tax department officials in this ruling. That is in the report that the finance committee brought into this House.

I want to emphasize that the Minister of National Revenue has stated that we have a moratorium on any such procedures until the government plugs the loopholes. This is in effect a freeze on all procedures, and no decision to let money out of this country can be taken while that moratorium is on. How do we get fish out of a lake when the lake is frozen? We have to drill a hole. But the finance minister and the Government of Canada are saying they are going to plug the hole. The Bloc can try as it likes but it will not be able to drill a hole in the ice on that lake and get the fish out. The Government of Canada is going to review these tax laws which have not been reviewed for 25 years. It has already taken many measures in this regard.

Therefore let us not get carried away with the idea that something terrible is going on today because the finance committee, the auditor general and other officials, six leading auditors of this country, have said there was no wrongdoing. The Department of National Revenue says that nothing has happened since 1991.

If they are trying to put a hole in the Liberal armour in Quebec, they will have to try harder than this. The people of Quebec are smart enough to know they are not being led down the garden path by tactics such as this. Just reading that motion is the worst bedtime reading anybody could possibly have.

The government has stated on the floor of this House that the problem today is how to treat capital gains when someone, an immigrant, a person, a trust, a company or a partnership wants to leave Canada. That is the question. That was the auditor general's main point. The majority finance committee report of the House endorsed it by saying action must be taken. The Minister of Finance said: "We agree and we intend to take action".

At another place in Hansard on September 20, the government said that the majority finance committee report was very thorough in the way it dealt with this point and that the government intends to take action. The Minister of Finance, on behalf of the government, said: ``We wanted to shed some light on the matter and the majority report of the finance committee did so, and we intend to act''.

It becomes very clear that the motion which the House is debating today has been placed on the Order Paper by the official opposition as an example of straight crass politics, and that is why it does not mention the positive approaches that have been taken by this government to update the Income Tax Act. The average Canadian needs the facts surrounding this issue and they are getting them. They do not need the kind of political rhetoric portrayed by this motion.

I repeat that a moratorium has been placed on all rulings with respect to taxpayer migration until the government has introduced legislation and taken other steps to plug the loopholes. It wants to study the finance committee report in depth.

Let us compare ourselves with other countries. In the House we are always downgrading ourselves in many ways. I want to compare Canada's tax laws with those of other countries.

Our tax laws are tighter than those of other G-7 nations. Our tax administration system is the most highly respected of any today. It is pure speculation that money has been lost. There is no evidence from any source that money has been lost.

It is another matter when we come to a debate such as this to examine the issues in their full complexity, not just in simplistic statements such as those stated in the motion today. It is another matter to examine the actions of hardworking and dedicated officials in the context in which those actions occurred.

It is very easy to criticize somebody, talk about the good and the bad, put people into categories of heroes and the villains. But that is why it is absolutely necessary to explain the whole issue on the floor of the House. It is quite another matter when we consider that one of the central issues we are examining today relates to the highly complex and frequently uncertain area of the tax treatment of taxpayers who migrate.

Chapter 1 of the auditor general's report issued on May 7 of this year raised issues related to income tax rulings and in particular Canada's tax policy as it relates to persons who become or cease to become resident in Canada.

The fact that these concerns dealt partially with family trusts should not obscure the fact that the principal issue in this matter is the tax rules relating to taxpayer migration.

I think this is something which is very relevant. It has been said that the period since the end of the second world war will be regarded by historians as the twilight of the nation state and the dawn of the single world economy.

According to Webster's Dictionary the term globalization did not even exist until 1944. Today it is the defining watchword of our modern world. Yet surprisingly tax rules relating to taxpayer migration were not enacted by Parliament until 1971 and have not been significantly reviewed in the 25 years since they were enacted.

[Ghislain Lebel, Bloc, Chambly, QC]

Madam Speaker, I am somewhat disappointed with the remarks made by the hon. member for Renfrew-Nipissing-Pembroke, whose career as a politician is coming to an end. I am sad to see him make remarks that can only bring shame on parliamentarians.

I wonder if the hon. member, as a former chair the Standing Committee on Public Accounts and a senior member of this House, with 36 years of service, could tell us what message he thinks he is sending the Canadian people with remarks like that. When he chaired the public accounts committee, would he have let the auditor general's report be torn to pieces along with the auditor himself, who simply did his job and nothing more?

Why was this issue, which was before the public accounts committee, referred to the finance committee, an obscure committee controlled by the Liberals? The Liberals are the majority on the finance committee. Right there, there is cause for concern, there is something fishy.

A member with 36 years of experience in politics just does not lend himself to this kind of thing. Either he stays put or, better yet, he stays home because these goings-on were downright unacceptable. He mentioned experts, tax experts, the same experts who participated in the making of the December 24, 1991, decision.

In what way were the rules of law adhered to and the wish to get to the bottom of this issue respected, this issue raised by the auditor general, who, thankfully, is not working for the Liberal Party but as an agent of this House.

They shot the messenger with red hot bullets to shut him up. They tried to discredit him. Why is the ruling party doing that? Could it be that the auditor general has uncovered something he was not supposed to uncover? Did he express suspicions he should not have expressed? What need was there to attack the auditor general and deal with this matter on the quiet in a finance committee controlled by the Liberals, who are, as we know, the major players on these committees?

Does the hon. member, who has 36 years of experience in politics, take pride in what he is trying to have Quebecers and Canadians alike believe? He should not have a hard time convincing them, seeing that the scandal was revealed by sovereignists, members of the Bloc Quebecois. It is easy to convince the Canadian public, terrified of the BQ, that it was a bad thing the BQ uncovered. But the auditor general is not a member of the Bloc. He is probably the man with the highest moral authority in all of government. This is the man that they have tried to tear to pieces for possibly putting his nose in something he should not have put his nose into.

I urge the hon. member to make amends and acknowledge the fact that the Standing Committee on Public Accounts should have given the matter full consideration, reported to this House and recommended an enquiry.

[Len Hopkins, Liberal, Renfrew—Nipissing—Pembroke, ON]

Madam Speaker, I just want to say to the hon. member that it is quite obvious that I got through to the true intention of the Bloc Party in the House of Commons today when he turns around and makes a personal attack on me. My hide is thick. I can take that. But I can also dish it out.

I am going to say to him today that the Auditor General of Canada has always had the highest respect from the member for Renfrew-Nipissing-Pembroke.

I have no hesitation in saying that it was this government which took the initiative. It was not the Bloc. Do not stand and say that the Bloc took the initiative. The Government of Canada took the initiative and referred the matter to the finance committee of the House of Commons and the finance committee brought in the report.

[Claude Bachand, Bloc, Saint-Jean, QC]

Madam Speaker, first I wish to inform you that I will share my time with my colleague from Chambly, so I have ten minutes for my speech.

My first three words in the present debate are: shame, shame and shame.

I listened to the hon. member for Renfrew-Nipissing-Pembroke and I totally disagree with the chronology that he just described. I have the course of events written here, showing how cynical the government's methods were.

First of all, on December 23, Revenue Canada issued its ruling, that is to say, officials held discussions leading to a decision. In his report, the auditor general mentioned that at least four meetings were held that day. This was already preferential treatment for the kind of companies, or rich families we are discussing today.

This was also done behind closed doors. Two days before Christmas, when everybody was celebrating, officials were called together four or five times to try and to see what could be done for friends. We will prove later that they were friends of the Liberal Party.

On December 24, they issued their ruling. When asked for a ruling or when a ruling is appealed, revenue officials rarely issue a ruling within 24 hours. That happened in the case discussed today.

In 1993, the auditor general ordered Revenue Canada to publish its rulings, because he realized that it did not publish its rulings regarding family trusts. I also totally disagree with the hon. member who spoke just before me, the hon. member for Renfrew-Nipissing-Pembroke, because family trusts have been in the Bloc Quebecois' platform since the very beginning, since its founding-and I was there-and also during the election campaign.

We realized there was a major problem. The middle class and the poor were hit by all kinds of taxes and measures, while other Canadian families were benefitting from the government's generosity. We pointed this out from the very beginning and we started doing something about it, since we were elected in October. The hon. member can look at the record: the Bloc Quebecois' first questions in the early days of this Parliament related to the issue of family trusts, which was part of our platform.

Finally, on March 21, five years after the beginning of this saga, Revenue Canada made its ruling public. On May 7, the auditor general released his report, in which he alludes to a precedent that could cost Canadians hundreds of millions of dollars.

Following the release of the auditor general's report, the Bloc continued to ask questions. In a very unfair move, the government, rather than asking the public accounts committee, chaired by a Bloc Quebecois member, to review the issue, as should have been the case-although it would have been risky for the government-asked instead the finance committee to shed light on these events.

There is no surprise. The revenue minister often hides behind the report of the finance committee, because it was prepared by the Liberal majority of course, but she never talks about the minority report of that same committee. The minister claims the exercise was conducted according to normal practices.

Not so. The public accounts committee is the one that should have been instructed to examine the issue. And what did the finance committee do as soon as it convened? It asked experts to come and testify. My colleagues told you about this. I have the names of these experts.

The committee invited officials from Ernst and Young, Stikeman Elliott and Coopers and Lybrand. These are all tax consultants who give advice to rich Canadian families so they can avoid paying taxes to Revenue Canada. This is tantamount to putting the wolf in charge of the sheepfold. And this is what happened.

Once the report appeared, everybody said: "This has been done democratically, the finance committee has reviewed the issue, there is no problem, experts were called on to give evidence." Nobody tells us that foxes were called to tell us how to mind the geese. As a result, we might never know where those two billion dollars went and what families were concerned. That too was disclosed, the names of the families. Again, those are presumptions. What is sure is that it happened and maybe it keeps happening right now. Yes they can talk about ice and holes in the ice that can be plugged.

In our opinion, that keeps happening and were it not for our colleagues' intervention, our colleagues for Saint-Hyacinthe, for La Prairie and for Beauport-Montmorency-Orléans, we would still be allowing fortunes to move out one way or the other. We would ignore it. That is not exactly how we want things to be done.

Earlier, my colleague for Portneuf talked about the importance-I would rather call it the appearance-of tax equity. Is there appearance of tax equity?

[An hon. member]

Not at all.

[Claude Bachand, Bloc, Saint-Jean, QC]

Not at all.

Think about the blue-collar worker employed by the City of Saint-Jean who looks at his pay cheque on Friday and sees that a third of his pay goes to income tax and various other taxes, and who knows that at the end of the year Revenue Canada will show its claws if he contravenes the law. Can he phone Revenue Canada and ask for a ruling? Can he ask whether it is legal to do such a thing? We just got an answer this afternoon: no.

But if your name is Bronfman, if your name is Conrad Black-

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

Or Paul Martin.

[Claude Bachand, Bloc, Saint-Jean, QC]

-or Paul Martin, you can give a call not only to Revenue Canada, but also to the Prime Minister of Canada, and ask them for some kind of sweet deal.

Actually, what we would like to know is precisely what they are refusing to tell us. The young woman who is a white collar employee of the city of Saint-Luc or the bus driver working for the bus company in my riding are just fed up. They keep telling us they have had it with taxes, they are overburdened. How can a small family with a combined annual income of $45,000 and no tax loophole consider that the tax system is fair, when they hear about blatant inequities like the one being debated today?

The tax system should have the appearance of fairness. A principle of justice is that justice should appear to be done. Today, we do not even have a semblance of tax fairness.

Even the finance minister dared to say: "There is no problem with family trusts. I have my own." And we know it too. Bronfman and Conrad Black are sure to have one too, and their children will benefit from it for generations to come.

But what about the man on the street, the blue or white collar worker, the bus driver, the subway train operator, or the average worker in a company? Can they leave millions of dollars to their kids? I do not think so.

It is unfortunate that the hon. member for Nipissing has left, because the Liberal Party is so arrogant that it behaves as if it owns the House of Commons in a system where there are no rules to govern those who sit here. If it were not for the minimum rules we have around here, I think the Liberal Party would say that it owns the House of Commons and that it no longer wants an auditor general. Of course, because he does not always agree with them. But he is a watchdog; it is his role not to always agree with the Liberal Party.

The philosophy of the Liberal Party of Canada is quite simple: its members will continue to protect their rich friends. I think that we, in the Bloc Quebecois, will continue de protect the middle class citizens who are tired of being taxed and witnessing such unfairness. We will continue to protect the needy who are affected by the cuts, because, in order to balance the tax base and the budget, the government cuts programs for the underprivileged, taxes the middle class and turns a blind eye to all those rich families who flee the country with all their money.

This is not the philosophy of the Bloc Quebecois, but the philosophy of the Liberal Party of Canada. It will come back to haunt them in the next election. If they do not change their minds, the people will realize that such unfairness does not make any sense and the Liberal Party might meet the same fate as my hon. colleague for Renfrew-Nipissing-Pembroke wished upon the previous Conservative government earlier on.

It is all very well to have power, but not to the point where one becomes domineering and arrogant. The people will realize it some day. We sit here, in opposition, to make Quebecers and Canadians aware that they are much better served by an opposition party, by an auditor general who acts as a watchdog, as some kind of opposition, and wants to help the party in office to get back on track.

[English]

[Philip Mayfield, Reform, Cariboo—Chilcotin, BC]

Madam Speaker, I note that the member of the Bloc Quebecois does not take credit for raising this issue. It is the auditor general.

I would like to express my appreciation for his acknowledging that. The auditor general does have an extremely important role in holding the government accountable.

This issue raises for me the lack of accountability of this government and its intention to be even less accountable as we proceed through its mandate.

I think of the changes in legislation that are coming through where the government is seeking to have more discretion in its power as it governs. It is interesting how power seeks power.

There are little changes like changing in the legislation a "shall" to a "may", which leaves more discretion; a comment such as "in the opinion of the minister" in the legislation, which leaves no latitude for appeal.

There are a couple of issues that I would like to raise about government accountability in my own constituency. There is the appointment of returning officers. What is the accountability of the government in this?

In my constituency there have been two returning officers appointed by this government. As far as I can tell neither of them has had any public input.

As I read the qualifications, I read that the work is by nature impartial, non-partisan: "The returning officer must conduct all business accordingly. Returning officers must abide by the government's conflict of interest code and Elections Canada code of professional conduct and must abstain from all activities of a politically partisan nature".

Yet it is well known in my community that both people who were appointed-one has since resigned and the other remains appointed-are indeed part of the Liberal organization. Where is the accountability there?

I would also like to raise the issue of the Nisga'a treaty and the agreement in principle where a large portion of the province of British Columbia has been set aside without consultation of the people of British Columbia. Included in this agreement are educational matters, justice matters, infrastructure matters, commercial fishing matters. Where did the government include people in this? Where is the government's accountability to the people who elected it? This is the issue.

As we talk about family trusts, people are extremely nervous because of the way the Liberal government has gone about governing the nation, not in a fair manner at all.

[Claude Bachand, Bloc, Saint-Jean, QC]

Madam Speaker, I am pleased to see that the Reform member shares our view on this matter. We rarely agree, but on the subject of the government's responsibility regarding this iniquity, we share the same opinion. For the record, though, I would like to say that the Auditor General released his report on May 7, but that this was part of the Bloc Quebecois' electoral platform in 1993 and that, by chance, we reached the same conclusions. Of course, when the Auditor General tabled his report, we agreed with it.

I want to give the Bloc Quebecois credit for this because it had already identified the problem. The fact that the Auditor General confirmed this, put us in agreement. We too have criticized the accountability of the government, which continues to hide behind committees that, until now, have been pretty phoney.

[Ghislain Lebel, Bloc, Chambly, QC]

Madam Speaker, honestly, I cannot say that I am happy to speak today on the motion tabled by the official opposition. This is not the first time that I have criticized apparent conflicts of interests, flagrant iniquities against ordinary taxpayers by the current government.

I need only mention the Pearson Airport episode. There was even one Liberal, alleged be the revenue minister's father, who said that there were plenty of apparent conflicts of interests and shady dealings that should be investigated. And this is not from a Bloc member but from the father of the current Minister of Revenue, a very well-known Liberal named Nixon, who had made that recommendation to the government. The government did not pay heed. It was as if he had not said anything.

I remember the then Minister of Transport, who said that it was no use to dig up such things. And yet, they dig up things when they

find a low income earner who defrauded unemployment insurance of $200. They will pursue him even into his grave. It is worth their while to dig up such things. But matters involving billions of dollars is only wheeling and dealing.

The Pearson deal is not the only example. Do the members across the way remember Power DirecTv? A decision was reversed even though it had been taken by the authorities responsible for overseeing these things. The Cabinet changed it. It just happened that there were people at Power DirecTv who were close to the Prime Minister and his entourage.

In the case of Ginn Publishing, they did not even wait for the lawyer's report to again return things to friends of the government party and its leaders.

I could go on and on. I remember a minister who was in Los Angeles at one time and who came to ensure that Canadians had truly taken control of a film distribution company. He was ready to swear and put in writing that this company was really a Canadian company.

There are many examples, and everything leads us to believe that there will be others.

The Standing Committee on Finance. I was watching the Liberals pull out their hair earlier: the Standing Committee on Finance has decided this; the Standing Committee on Finance does not want to know anything, it does not want to find anything, as in the case of Pearson Airport. There is none so blind as he who will not see. This is the case of the Standing Committee on Finance. If the members opposite can convince other Canadians of this, it is their problem. But, as the member for Saint-Jean said, I am not sure they will not get their comeuppance royally in the next election, as other parties that have done similar but not such bad things as this, I would say. With some 177 seats, a government can devise laws benefiting the wealthy, and the opposition, official or not, can do nothing about it. That is what has happened in the three years since the government came into power. It is a shame involving everybody.

We come here to implore the common sense of independent experts, of six independent experts who probably were involved in a series of decisions, the one taken on 23 December 1991 in particular. They were at the party held on December 23, and we are asking them if, in their opinion, everything was done according to the rules. My colleague called that a just application of tax equity. The government is not even trying to give an appearance of clearness and cleanliness. It does not care. "We are too strong, they will never dare to destroy us, because we are the ones who decide in the end." And even the Minister of Finance said: "I do have a family trust." Indeed, and it is made up of taxable Canadian property. The day he sends his ships for a trip in the South with the intention of not bringing them back, how will we look, since he is the Minister of Finance?

That is almost what happened with the $2 billion. Can you imagine how much tax $2 billion represents? "No, we cannot do it because this is a friend. Scratch my back, I will scratch yours". That is how it works across the way.

At one point, Canadians will have to realize that they are being bamboozled as they have never been in the history of Canada. We have already seen governments making timid attempts, but today, we are seeing people taking the cash and laughing all the way to the banks-overseas. Two billion dollars! It does not make any bloody sense at all.

Still today, I thought that the haemorrhage had been staunched, but no. Today, we saw in the auditor general's report that there is still $630 million worth of loopholes of all kinds. We are not talking about petty thieves, but about big tobacco companies. It is all the same gang. When we dig a little bit, we can find the connections. People will attend a $3,000 a place fundraising dinner to have a look at the Prime Minister and have the opportunity to rub shoulders with him in the men's room.

It is terrible to say, but when you are on the government's side, no threat of any kind can rattle you, not even from the auditor general. That man was demolished. It is as simple as that. If you do not like the message, just shoot the messenger.

Not only must laws be implemented in a fair and reasonable way, but they must appear to be implemented in a fair and reasonable way, just as with justice. We operate under the rule of law, like the justice minister said this morning, and the courts established the rule of law long ago. Not only must justice be administered, but it must appear to have been administered. But appearances do not matter in this case. Old chums received a little help, and I would not be surprised if not many family trusts were left.

A provision that was reasonable and, in a certain way, logical was used ill-advisedly, it was used in a way not intended originally. It is all a sort of institutionalized misappropriation of funds with the wealthy members of society, who make off with the money, the next one with his boats, no doubt, it is probably one of the last remaining, but an inquiry must be called.

When the truth is what you want, you do what is necessary to obtain it. An independent inquiry, a royal commission if necessary, must be called, and independent experts brought in, not those who took part in the ruling. The RCMP should be involved, and the bank accounts of those who had anything to do with this ruling scrutinized closely.

When you want to find something, you look for it. In this case, they do not want to find anything, and so they are not looking. They are saying: "This is just a bunch of separatists who have stumbled over something. Nothing to worry about. The people of Newfoundland, westerners and easterners will never dare to believe separatists, so the way is clear. We can have the rink to ourselves and do as we please". That is what is scandalous about this affair, and the Liberals can tell me what they like, but it is not going to wash. It will not wash. Something stinks in this business and we will not let up until we find out what it is.

[George Baker, Liberal, Gander—Grand Falls, NL]

Madam Speaker, I have just a few words on this motion put forward by the Bloc. In looking at this motion, I think it is first, a condemnation of the Tories and second, a condemnation of the Bloc itself. I say that because what the Bloc is talking about are family trusts.

Bloc members are talking about family trusts and trying to blame the Liberal government for a report given by the finance committee. Where they are wrong is in their accusations against the Liberal government. It was the Liberal government that brought in the capital gains tax on family trusts. It was the Liberal government that brought in the rule that would supposedly close the loophole created by forming a trust because a trust does not die. This was the problem facing Canada back in 1971. Prior to that, we had the inheritance tax in Canada. We had the estate tax in Canada, as in the United States today. It also has the capital gains tax.

We had the inheritance tax and the estate tax in Canada and along came a royal commission that recommended substantial changes, the Carter commission, but those recommendations were not followed at the time. I wish some of them had been but they were not. The Liberal government at that time brought in a capital gains tax that would affect family trusts at half the normal taxation rate of income.

When that was brought in a problem came up, as it always does when one changes the law. There were ways around it, especially for paying taxes. The way was found around it by putting assets in trust so that when somebody died you would not have to pay the normal capital gains tax that was imposed by the Government of Canada in 1971.

At that time the Liberal government, in order to close the loophole, said that at the end of 21 years, regardless, the taxes that would normally have been paid on the increased value of the assets would then become due in 21 years. That was during the Liberal administration, to close the loophole of wealthy people being able to hire very expensive law firms and accounting firms to get around the tax law.

What happened? For 21 years assets had been put into a trust. On January 1, 1972 the new law came into effect and all of a sudden we are now in 1992, and guess what? That money would now be owed to the Government of Canada. It was estimated to be in the hundreds of millions of dollars.

I and other members of the opposition went through access to information and we discovered that expensive consultants were hired during the Tory regime to try and convince the government to lift that 21-year rule that the Liberals brought in, to make everybody pay up.

In looking at the correspondence to the then ministers of finance of the Tory government, you could see that a man who had $100 million in trust was going to have to pay $11 million in 1992. Another man who had $200 million might be liable for $15 million; another man with $70 million was going to have to pay $7 million. They were pleading with the Tory government: "Don't let this happen. I do not want to have to pay all this money. After all I only have $100 million". It almost made you want to cry. This was in letter after letter after letter.

Then came the consulting firms. We also received the surveys that were done by the consulting firms. I will not mention their names because if I do perhaps it will give them more business because they were very successful in changing the mind of the government of the day.

The problem became, what could somebody do with a family trust, with this magic 21 years coming up and the taxes having to be paid? Could it be rolled over? An anti-avoidance rule was brought it. A person had to go before a judge and prove that it was not being done to avoid taxes. All of these rules were there to prevent it from being done.

It is in that setting that we discuss these family trusts. A great many of them did not mind paying the taxes. From the documents that we received at that time from access to information some were quite willing to pay the tax. I recall one gentleman who owed $12 million writing to the agency that was trying to change the law saying: "I have to pay $12 million but there is no problem".

In 1985 the government of the day made a decision. The government has to be held responsible for what bureaucrats do. If the Department of Finance and Revenue Canada do something, the ministers and the government are held responsible. A decision was made.

In 1991 they moved $2.2 billion in this one instance across the border to the United States. If the purpose was to escape the 21-year rule, which I do not know if it was but I rather suspect it was not, they should not have worried at that time. They should not have worried because we had a government in power which, as sure as you are sitting there, Madam Speaker, was going to change the rules so that all of this money would not become due. That is the Tory way of doing things.

The Tories always supported, as the Reform Party does, the very wealthy in our society, the people who have loads of money and the people who they identify as keeping the economy moving.

A change was made. The change I am talking about took place on December 23, 1991. A couple of weeks later they actually removed the 21-year rule. In other words, all of these family trusts were supposed to pay taxes after 21 years. A decision of the Government of Canada said that all of this money which would have become due after 21 years would not become due until the death of the youngest member of the family.

That was the Tory government, the same Tory party that is trying now to regain power in Canada. They want to become popular across the country again, that same Tory party with those same Tory principles, the same as the Reform. Some people say the Reform Party is worse.

The Tory party said: "All of that money is not going to come due now which the Liberals proclaimed". The Liberals closed the loophole. The Trudeau administration brought it in. All taxes that are avoided will come due in 21 years. That is why it was called the 21-year rule.

At the last moment the Mulroney administration gave a reprieve. They said: "Oh, no, you won't have to pay up". At the last minute in 1992 they said: "It's okay. You won't have to pay up because we are going to bring in a tax change and we are going to change it so that the money will not become due until the death of the youngest person in the family".

The Tories were replaced by the Liberals. In the debate before the House today the Bloc say it pertains to family trusts. What did the Liberals do when they got in? It was the Liberals who closed the loophole. Along came the current finance minister and he changed the law again. The door that was opened up by the Tories has been closed. The Liberals said: "You won't be able to do that any more. We are going to give you a few years until 1999 but at the end of that, no more".

The Bloc stands in this Chamber on a motion and criticize the Liberals for creating loopholes on family trusts. It was the Liberals who closed them. It is this Liberal government and this Minister of Finance who have once again closed the family trust loophole.

The second portion of the motion is an outright condemnation of the Bloc. The reason it is a condemnation of the Bloc is because that party is supposed to be the official opposition in the House of Commons. I am not supposed to be. Liberal backbenchers are not supposed to be. We have had, on occasion, to delve into the facts to take the place of the official opposition. Why did we have to do that?

The Bloc's motion talks about condemning the Liberals for something which the finance committee suggested. It condemns the Liberals for the tax free transfers of family trusts when it was the Liberals that closed all the loopholes. The Bloc is condemning the Liberals for what the Tories did and what the Tories would do again if they ever got back into power. If the Reform Party got into power the same thing would happen.

What did the Bloc do? I have gone over the record of that political party just to see the way it has treated the transfer of hundreds of millions and possibly billions of dollars every year. The Bloc claims that the Liberals opened the doors. It is an absolute total outrage.

What did the Bloc say about the transfer of funds across the border into the United States?

The Liberals took action on the transfer of $2.2 billion, which involved, as the auditor general said, secrecy. There was secrecy in Revenue Canada on the rulings. Let us not forget that if the ruling in 1985 had become public the tax auditors and the tax lawyers would have been on to it and all of a sudden Revenue Canada and the Government of Canada would probably have realized they had a problem.

What did the current minister for Revenue Canada do? First, she said that rulings will be made public. What did the finance minister do? The finance minister closed the loophole again, just as the Liberals had closed it before the Tories opened it up again.

We had a response from the finance minister. He is perhaps the greatest finance minister in the history of the country. The minister for Revenue Canada is doing a fantastic job. They responded in concrete ways. Not only that, I understand that there are perhaps even further measures going to be taken to ensure that this will not happen again.

There are two sides to the argument. People talk about the transfer of money across borders. It is the thing to talk about these days. The borders are opening up. Barriers are being dropped. Withholding taxes are disappearing, at least between certain nations in the industrialized world. We are into globalization. We are into a situation in which multinationals control over half of the trade in our world today. What we are doing is removing barriers.

What did the Bloc members say when the United States received what it wanted through the Senate banking committee? What did Bloc members say about the announcement on the withholding tax on dividends, that is, the payment from subsidiaries to their parent companies in the United States and from subsidiaries in the United States to their parent companies in Canada-not many of them, most of it goes the other way.

What did Bloc members say when the tax rate was dropped by 50 per cent, amounting to about $700 million? They said the same thing to that as they said to the other proposition that was in the same agreement which said that the tax on interest gained would be dropped from 15 per cent to 10 per cent. The tax on royalties, even copyright royalties would be bifurcated so that they could be dealt with individually.

What did they say with that great loss of revenue? The Bloc said: "It does not specify how many millions and billions of dollars are at stake in this protocol. We do not know which country, Canada or the United States, will benefit the most from this tax liberalization proposal. We do not know, but we support it".

What did Bloc members say when the Americans wanted, and we changed, the estate tax relief that was granted to a wealthy person in Canada who had property in the United States including stocks and bonds through a Canadian bond agency? What did the Bloc say when the suggestion was made that a tax credit would be given in Canada for somebody if they had a billion dollars worth of property in the U.S. and were subjected to the U.S. inheritance tax, estate tax?

What did they say? I have it here. The Bloc said: "We are proud and happy to participate in this development in supporting this Senate proposal because it goes in the direction that we have always advocated. The only way to live side by side is to support legislation that will make more harmonious relations between the two nations".

I will conclude. The Bloc members are frustrated. What are they frustrated about? They are frustrated about the popularity of this Liberal government. They are frustrated because we are the best performing economy in the industrialized world.

[Antoine Dubé, Bloc, Lévis, QC]

Madam Speaker, the member for Gander-Grand Falls, as we have come to know him, has often shown his support for the most disadvantaged, for the people of his riding, of his province. I have the utmost respect for him. His commitment to certain fundamental things with regard to social programs and unemployment insurance, and the fact that, several times, he expressed his disagreement with the government have forced him to remain a backbencher within the Liberal Party.

I know that an election will be called some time soon. One year or maybe less from an election, the member is trying, in the presence of his whip and other colleagues who are listening to him, to improve his image within the party because he wants to run again in the next election, which is perfectly normal.

Even though he likes us and often tells us so, why not pick on the members of the Bloc Quebecois a little. They have not said all they should have said about possible loopholes for rich people.

With respect to family trusts, he tells us that the matter will be resolved in 1999. We will have other arrangements then. What does that say? It tells wealthy families that they have another three years to prepare for the forthcoming changes.

I will tell you that, as in the Pearson deal and many other instances, the bad things that the member says came from the former Conservative government, where some people benefited from certain advantages, are more often than not related to these wealthy families. Oddly enough, in these cases, the friends of the Conservative Party have become the friends of the Liberal Party.

Why is that so? One just has to read the report of the Chief Electoral Officer on political party funding. One can see that large corporations also contributed to the Liberal Party of Canada's funding, equally in most cases. This is less true of the Reform Party, which gets 80 per cent of its funding from private individuals. In the Bloc Quebecois, our funding comes solely from individuals, as is the case for the Parti Quebecois.

Would the member, who supports the have-nots, who seeks political correctness, be in favour of correcting the impression of inequity in this whole issue? That is what the Bloc is asking for. Frankly, I ask the member if he can blame us for supporting the Auditor General of Canada when he says that there is a need to shed some light on what has happened and to inform the public.

How can he blame us for wanting to shed some light on something very obscure? If nothing is found, then so be it. At least the public will be reassured, as well as the 100,000 people that the Government of Canada is suing for unemployment insurance fraud in the amount of $100 or $200. Of course, the member for Gander-Grand Falls is not saying a word about that one year away from an election. Last year, he was talking about it. Why is he not talking about it this year? Is he so eager to improve his image within the Liberal Party? In that case, he will lose my respect.

[George Baker, Liberal, Gander—Grand Falls, NL]

Madam Speaker, the Bloc members at times, very rarely but at times, do show some indication that perhaps they want to make the government accountable, something other than their trying to figure out a way to break the country up. There are rare occasions.

That is why I bring to the attention of the hon. member, to the attention of the House, to the attention of the Speaker, and through the Speaker to the people of Canada that this official opposition really does not belong in the situation we are in. They stand up

here today and talk about tax changes and blame the Liberals, when it was the Tories who did it and would do it again if they ever got in office.

Then the hon. member does not like it. He does not like it because what I have taken out of Hansard is something which I could never understand but I do know why they did it. That is how the official opposition could turn around and approve and support it and say: ``Bring it on. We love it. It is just as good as sliced bread''. Massive tax changes that they were supposed to be objecting to.

They supported the very thing today they blame the Liberals for, for more flows of capital into the United States. They asked for more. Why? They asked for more because during the debate in the House where I took these quotations from they said that they were preparing for separation. Therefore they would like to have lots of ways of getting capital into the United States because they want to deal directly with the United States. That was the logic used. According to that logic they are not fulfilling their duties as the official opposition.

What the Bloc members are scratching about now is when they realized the Government of Canada has been so fantastic as to lead the industrialized world in economic growth, the member complains about contributions to the Liberal Party. The official figures show that Canada leads Italy, France, the U.K., Germany, Japan and the United States and stands all alone in economic growth for next year. At that rate one would expect the contributions to increase.

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

Madam Speaker, I heard the most eloquent discourse of our colleague from Gander-Grand Falls.

[Antoine Dubé, Bloc, Lévis, QC]

Give him a good rating.

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

It is hard to give anything else but a good rating to such a fine speech, and I thank my colleague across the way for bringing that up.

My colleague referred to the growth of Canada during recent times and the forecasted growth for next year. I wonder if he is aware that Canada's forecasted growth for next year in terms of employment is such that it is predicted it will exceed all the European G-7 nations put together. Is he aware of that? Is that not in itself testimony to the kind of leadership that has been given to this country by the hon. Minister of Finance?

There is an excellent proposition I want to bring to his attention. Next year Canada will have the lowest deficit to GDP ratio of any G-7 nation.

In terms of net cash requirements, there will not be any net cash requirements next year. We will not be borrowing any funds from abroad. We are in this enviable position thanks to the fine leadership of the Prime Minister and the Minister of Finance.

[George Baker, Liberal, Gander—Grand Falls, NL]

Madam Speaker, I want to add one thing to the excellent dissertation that was just given.

As the hon. member is aware, those estimates were not made by the Fraser Institute or the Canadian association of accountants or any Canadian organization. All of those estimates the hon. gentleman just gave were made in Paris. Who made them? Economists representing 27 nations in the world, the OECD. Twenty-seven of the nations in the developed world whose job it is to sit down and to realize the economic growth in the world and to promote those excellent standards and lo and behold Canada leads all the rest.