House of Commons Hansard #133 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was finance.
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
Mr. Speaker, the Prime Minister forgot to add that this year we had a record number of bankruptcies in Canada. He forgot to say that.
My question is this: Why will the Prime Minister not admit that he failed on job creation? Why will he not admit that his slogan "jobs, jobs, jobs" was just that, like the other slogan on abolishing the GST: "scrap, scrap, scrap"? He no longer has any credibility.
Paul Martin LiberalMinister of Finance
Once again, Mr. Speaker, I think the hon. member forgot to ask his question.
Let me tell you that in the past four months, we created 85,000 new jobs in this country in the private sector alone. The vast majority of these jobs are permanent. According to most economists, this year in Canada we will create between 300,000 and 350,000 new jobs, and the same number again next year. According to most economists, according to the OECD, Canada will create more jobs than any other country in the G-7, including the United States.
Now, about the budget. Let me just quote Gérald Ponton, president of the Alliance des manufacturiers et des exportateurs du Québec: "No new taxes: good news for business and the Canadian economy. Clearly, when the government uses its fiscal flexibility as it did with the infrastructure program and the innovation fund, it is setting an example Bernard Landry would do well to follow, which he can do without increasing taxes". That is what this government has done.
Preston Manning Reform Calgary Southwest, AB
Mr. Speaker, in yesterday's budget there were a lot of questionable statements, but the biggest whopper of them all was the finance minister's claim of not raising taxes. Just days before the budget, the government raised compulsory Canada pension plan premiums, payroll taxes, by 70 per cent.
Since the Liberals came to power in 1993, income tax revenues have risen by over $15 billion, corporate tax revenues are up by almost $7 billion and the hated GST is bringing in almost $2 billion more.
How can the finance minister possibly claim that he is not raising taxes when federal tax revenues have increased by over $24 billion and the Canada pension payroll tax is being raised by 70 per cent?
Paul Martin LiberalMinister of Finance
Mr. Speaker, the fact that the Reform Party has a different set of values than most Canadians and the fact that the Reform Party does not believe in the Canada pension plan certainly does not give it licence to misconstrue what the Canada pension plan is all about and how important it is to Canadians.
The leader of the Reform Party knows full well that not one penny of Canada pension plan premiums comes to government, neither to the federal government nor to the provincial governments that joined with us. It is invested for the retirement savings of Canadians in exactly the same way as with other retirement schemes.
Just because the Reform Party does not believe in the basic institutions of the country, it is no reason to stand up in the House and deliberately misconstrue what the heck they are all about.
The BudgetOral Question Period
The Speaker
I wish the hon. Minister of Finance would withdraw the words "deliberately misconstrue".
Preston Manning Reform Calgary Southwest, AB
Mr. Speaker, the net impression of all that ranting was for the minister to be saying that he does not interpret the increase in CPP premiums as a payroll tax.
The economic analysis and forecasting division of his own department publishes papers-I can give him copies of them-in which it describes CPP premiums as a payroll tax. It has computer models for running that payroll tax and determining its negative impact on job creation when it is increased.
Last night, Judith Andrew of the Canadian Federation of Independent Business discussed the CPP premium increase as a payroll tax. If there is any group in the country that can recognize a payroll tax when it sees it, it is the CFIB.
The only people that do not believe a 70 per cent hike in CPP premiums is not a payroll tax increase is the Minister of Finance and the gullible gang across the way.
I would appreciate a straight answer to my question. Given the views of his own department, why will the minister simply not admit that CPP premiums are a payroll tax and that he has raised them by 70 per cent?
Paul Martin LiberalMinister of Finance
Mr. Speaker, the leader of the Reform Party, in his effort to destroy the Canada pension plan, consistently refers to the increase in premiums of the pension contribution that would be made.
The other day he said that these premiums would go at full maturity for a person at the maximum earnings from $945 to $1,635.
What the hon. member, the leader of the Reform Party, has not done is provide Canadians with a calculation of what his alternative would cost. Let me do it for him, in case it has slipped his mind.
In the agreement with the provinces that amount would go from $945 to $1,600. The Reform Party alternative would take it from $945 based on the Chilean model, which they have adopted, to $2,150.
Preston Manning Reform Calgary Southwest, AB
Mr. Speaker, the Reform Party has a plan for preserving both the CPP and increasing retirement income for Canadians at a lower cost than what the government proposes.
Preston Manning Reform Calgary Southwest, AB
I want to come back, Mr. Speaker, to the ethics of this issue.
I am sure that the finance minister, as an aspiring Prime Minister, realizes the importance of being honest with the Canadian people. All I am doing is cautioning the government that it is heading down the same road on this CPP premium as it went down with the GST. The Liberals have almost convinced themselves that a tax is not a tax, just like they convinced themselves that the Prime Minister never said he would kill, scrap, abolish the GST.
Will the finance minister stop and pause before he gets too deeply into this and admit that he has raised payroll taxes by 70 per cent, the greatest single tax increase in Canadian history?
Paul Martin LiberalMinister of Finance
Mr. Speaker, I am sure that the leader of the third party, as the aspiring leader of the fifth party, would like to put his own numbers before Canadians so they can make the same judgment.
We have stated that contributions to the Canada pension plan are not a tax. They are an investment in Canadians' retirement savings.
One thing is very clear. The agreement the federal government has come to with the Government of Alberta, and I notice that the hon. member has not got the courage-Mr. Speaker, I am sure he does-the hon. member will go to Alberta and will campaign against Ralph Klein because Ralph Klein signed the deal.
I am sure he will go into Ontario and will campaign against Mike Harris because Mike Harris signed the deal. I am also sure he will explain to Canadians why his alternative will cost $500 more than the federal government's changes to the CPP.
Roger Pomerleau Bloc Anjou—Rivière-Des-Prairies, QC
Mr. Speaker, my question is for the Minister of Finance.
Yesterday, the Minister of Finance told us in his budget that the deficit for the current fiscal year was $5.3 billion less than his target last year, on the same date, in his previous budget. With this manoeuvring room, the minister could, among other things-because there are a lot of things to do-pay Quebec the $2 billion it cost to harmonize its sales tax with the GST.
Will the Minister of Finance acknowledge that the McKenna formula, concocted in secret after the Government of Quebec made its requests known, serves simply to justify more unfair treatment of Quebec by the federal government?
Paul Martin LiberalMinister of Finance
Mr. Speaker, if the member would look back at the speech I made with the announcement, he will see that I set out the formula for compensation to the Atlantic provinces, Manitoba and Saskatchewan.
At the same time, I explained why Quebec, Ontario, British Columbia and Alberta would not be receiving compensation. They did not lose over 5 per cent of sales tax revenues. The reason is quite clear.
We are prepared to compensate a province if losses are involved. The hon. member will understand that, if no losses are involved, there will be no compensation. Quebec has all the information. We gave them not only our figures, but the provinces' as well.
I am prepared to sit down with the hon. member, as we did with the officials of the Quebec ministry of finance, to explain exactly how the formula works.
Roger Pomerleau Bloc Anjou—Rivière-Des-Prairies, QC
Mr. Speaker, we have a minister of finance in Quebec too. And he says harmonization with the GST would have cost Quebec $2 billion had the corporate tax burden not been increased accordingly to compensate. In Ottawa, on the other hand, the Minister of Finance says that is not so, that in fact Quebec made money in the process.
If the Minister of Finance thinks Quebec minister Landry is lying to the public, would he rise and say so?
Paul Martin LiberalMinister of Finance
Mr. Speaker, the information in my reply comes from Government of Quebec statistics. If the hon. member would care to look at sales tax revenues in 1990, 1991 and 1992, he will see that Quebec lost no more than 5 per cent of its revenues at the start.
He will also see that, in subsequent years, Quebec made money. These figures are public.
Deborah Grey Reform Beaver River, AB
Mr. Speaker, yesterday the finance minister did a pretty good impression of George Bush with his no new taxes line. Unfortunately here are the facts.
Since the Liberals came to power in 1993, federal tax revenues have increased 20 per cent while the average family income has decreased by 10 per cent. Liberal years have been good years for the finance minister but hard times for Canadian families.
Let me ask the finance minister this. How can he possibly claim that there have been no new taxes when the average income of Canadian families has dropped by 10 per cent?
Paul Martin LiberalMinister of Finance
Mr. Speaker, there is no doubt that over the course of this government's administration our revenues have gone up. Absolutely. They have gone up because we have had a stronger economy. Economic growth brings higher revenues.
If we want to fight the deficit surely to heaven it is better fight the deficit by having a stronger economy than by adopting the kind of scorched earth policies Reform would advocate which would absolutely destroy the economy.
The fact of the matter is that overwhelmingly the majority of increases in this government's revenues has come from increased economic activity primarily in the corporate sector because it is making more profits and as a result of those profits we are getting more revenue.
Deborah Grey Reform Beaver River, AB
Mr. Speaker, the argument here is not over growth, it is just who is going to get the benefit from the growth. This government is getting 20 per cent of the benefit while the Canadian public and taxpayers are losing10 per cent of it.
Since the Liberals came to power in 1993 the average family income has dropped by $3,000. I do not think families could be convinced that this is growth or that it has been really fun for them.
Let me ask the finance minister again how he can possibly claim no new taxes when the average family income has dropped by $3,000 per year and its Canadian pension plan payroll taxes have been hiked 70 per cent. How does it work?
Paul Martin LiberalMinister of Finance
Mr. Speaker, there have been in certain areas increases in taxes, increases in tax revenues. The Reform Party has opposed these. The Reform Party has gone on the web and said "these are the tax increases brought in by the federal government that we oppose".
The Reform Party opposed the elimination of the tax advantages for family trusts. It opposed the elimination of the preferential rate for large corporations. It opposed the measures that were taken to combat the underground economy. It opposed the elimination of the $100,000 lifetime capital gains tax exemption.
These are the tax increases Reformers opposed because they hurt their friends. Heaven help them if they had to help poor or middle income Canadians.
Richard Bélisle Bloc La Prairie, QC
Mr. Speaker, my question os for the Minister of Finance.
Yesterday's budget epitomized this Liberal government's inaction in the area of taxation. Three and a half years after taking office, the Minister of Finance has made no major changes; he has no real tax reform to propose to the people of Canada. Taxation is a powerful tool available to the Minister of Finance to achieve social or economic objectives.
How can the Minister of Finance explain that, despite a golden opportunity to create jobs through taxation, nowhere in his budget did he use either personal or corporate taxes to do so?
Paul Martin LiberalMinister of Finance
Quite the contrary, Mr. Speaker. In yesterday's budget, we presented highly targeted tax breaks amounting to more than $2 billion over a three year period specifically for persons with disabilities as well as substantial breaks for students or parents who want to save for their children's education. There is also the child tax benefit.
The vast majority of measures contained in yesterday's budget were precisely tax measures, tax breaks designed to help Canadians.
Richard Bélisle Bloc La Prairie, QC
Mr. Speaker, last November, the Bloc Quebecois released a corporate tax analysis, which clearly showed that up to $3 billion could be recovered and recommended this amount be invested in job creation incentives.
How does the minister justify not having done his homework in that area, in spite of this recommendation?
Paul Martin LiberalMinister of Finance
Mr. Speaker, it was done long before the Bloc's report was tabled. I could quote, for example, from previous budgets, measures like the abolition of the lifetime $100,000 capital gains exemption, the broadening of
the minimum replacement tax base or the elimination of the tax advantages offered by the use of trusts.
As I said the last time, the list goes on-