House of Commons Hansard #153 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was income.
Paul Zed LiberalParliamentary Secretary to Leader of the Government in the House of Commons
Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to 10 petitions.
Bernard Patry LiberalParliamentary Secretary to Minister of Indian Affairs and Northern Development
Mr. Speaker, pursuant to Standing Order 34, I have the honour to table, in both official languages, the reports of the Canadian section of the Assemblée internationale des parlementaires de langue française as well as the financial report concerning the meetings of the Assemblée's Commission politique et de l'administration générale and its executive in Beirut, Lebanon, on November 20 and 21, 1996.
Tony Valeri Liberal Lincoln, ON
Mr. Speaker, pursuant to Standing Order 108(2), I have the honour to present, in both official languages, the second report of the Standing Committee on Government Operations dealing with government contracting.
In response to concerns expressed by representatives from the public and private sectors, our committee sought to ensure more effective parliamentary oversight of government contracting, particularly with regard to the open bidding service. We have made a number of recommendations with a view toward making the contracting process more transparent, accessible and competitive, thus ensuring more effective management of the process by the government itself.
Pursuant to Standing Order 109, we are requesting a comprehensive government response.
Herb Gray LiberalLeader of the Government in the House of Commons and Solicitor General of Canada
moved for leave to introduce Bill C-94, an act respecting DNA identification and to make consequential amendments to the Criminal Code and other acts.
Mr. Speaker, as it is customary for the mover of the motion to say a brief word about the purpose of the bill, I want to say that this bill proposes the establishment of a national DNA databank. This is the second phase of our strategy to enable DNA evidence to be used in solving crimes. The first step was the legislation to enable DNA samples to be taken by warrant, which was passed a year ago.
I am very pleased to continue our commitment and to table legislation to carry out the second phase of the creation of a DNA databank.
Finally, I wish to inform the House that I propose to move that this bill be referred to committee before second reading, pursuant to Standing Order 73(1).
(Motions deemed adopted, bill read the first time and printed.)
David Iftody Liberal Provencher, MB
moved for leave to introduce Bill C-398, an act to amend the Bank Act (amalgamation).
Mr. Speaker, it is my pleasure to rise in the House today to present my first private member's bill, an act to amend the Bank Act respecting amalgamation.
This bill addresses recent proposals by a number of Canadian large banks and financial institutions to merge with smaller institutions in Canada.
The primary substance of the bill is to prohibit that process only in limited circumstances, for example where one of the institutions
under the advisement of the Superintendent of Financial Institutions could demonstrate insolvency.
The health of the Canadian financial sector would not be served by these kinds of amalgamations. Most Canadians feel very uncomfortable with some of the banks, particularly at this time, amalgamating even more power. With the help of my colleague, the hon. member for Trinity-Spadina, we propose to table this today.
We believe it will contribute in a very substantial way to the ongoing debate in financial institutions in Canada.
(Motions deemed adopted, bill read the first time and printed.)
Darrel Stinson Reform Okanagan—Shuswap, BC
moved for leave to introduce Bill C-399, an act to repeal the Firearms Act and to make certain amendments to the Criminal Code.
Mr. Speaker, it is a pleasure today to table my new private member's bill which would repeal Bill C-68, a gun control bill masquerading as a crime control bill, which imposes an unfair and unjust requirement for law-abiding owners of rifles and shotguns to pay new fees and register their legal firearms while it does nothing to punish the criminal misuse of firearms.
My new private member's bill will restore the Criminal Code as it was before the introduction of Bill C-68 and replace Bill C-68 with serious minimum penalties for the criminal misuse of firearms.
My bill will amend the Criminal Code to require a minimum sentence of five years for using a firearm to commit a crime or to escape from a crime scene, that penalty increased to ten years if the gun is fired. People convicted of such criminal misuse of firearms would receive a lifetime prohibition against owning a firearm, ammunition or an explosive device.
(Motions deemed adopted, bill read the first time and printed.)
Anna Terrana Liberal Vancouver East, BC
moved for leave to introduce Bill C-400, an act to amend the Canada Elections Act (registration of political parties).
Mr. Speaker, I am pleased to introduce a bill entitled an act to amend the Canada Elections Act. The intention of this bill is threefold. First, the bill amends the Canada Elections Act to allow registration of a political party by the Chief Electoral Officer when the party nominates candidates in at least 12 electoral districts throughout the country, down from the present requirement of 50 electoral districts.
Under the present act, the Chief Electoral Officer must deregister a party that does not meet the conditions set out in section 28(2) of the act.
Second, the bill removes the obligation placed on the chief agent of a political party to liquidate the assets of that party when it is deleted from the registry of political parties by the Chief Electoral Officer of Canada.
Finally, the bill lowers the amount required for deposit with the returning officer at the same time the nomination papers are filed.
(Motions deemed adopted, bill read the first time and printed.)
Andy Scott Liberal Fredericton—York—Sunbury, NB
Mr. Speaker, I have the pleasure, pursuant to Standing Order 36, to table five petitions signed by some 600 constituents of Fredericton-York-Sunbury calling on Parliament to legalize cannabis.
Art Hanger Reform Calgary Northeast, AB
Mr. Speaker, I have several petitions, the first containing 162 names. It calls on Parliament to enact legislation that will register all pedophiles.
The second petition is a similar type of request. The petitioners call on Parliament to eliminate the right of convicted pedophiles to be let out of jail on bail pending an appeal. This would ensure the protection and safety of the victims and the community from such convicted offenders. There are 165 names on this petition.
Dave Chatters Reform Athabasca, AB
Mr. Speaker, I would like to present a petition from my constituents. They bring to the attention of the House that they believe the provocation defence, as it is currently used in wife slaughter cases inappropriately and unjustly changes the focus of the criminal trial from the behaviour of the accused's intention to murder to the behaviour of the victim who from then on is identified as the one responsible for the accused's violence.
My constituents do not believe that any amount of provocation should excuse the act of murder. Therefore, the petitioners request that Parliament review and change the relevant provisions of the Criminal Code to ensure that men take responsibility for their violent behaviour.
Joe McGuire Liberal Egmont, PE
Mr. Speaker, it is my pleasure to present a petition on behalf of the constituents of Egmont.
The petition states that because there are over 30,000 nuclear weapons on earth, the petitioners pray and request that Parliament support the immediate initiative and conclusion by the year 2000 of an international convention which will set out a binding timetable for the abolition of all nuclear weapons.
Ian McClelland Reform Edmonton Southwest, AB
Mr. Speaker, it is my honour to present three petitions. The first petition begs the Government of Canada to upgrade its highway system and spend more money on the repair and maintenance of highways.
Ian McClelland Reform Edmonton Southwest, AB
Mr. Speaker, the second petition states that children have a moral right to be loved and nurtured by both parents and by members of both extended families.
Consequently, the relevant and legal rights and obligations should be fundamentally the same for both parents before and after separation or divorce.
Ian McClelland Reform Edmonton Southwest, AB
Mr. Speaker, the third petition follows the one presented by my colleague from Athabasca. It has to do with the murder of a woman by her husband and then allowing the husband who committed the act to claim provocation. This is patently unjust. It does not make sense. It speaks against the notion of fairness.
This petition, signed by over 300 residents primarily of my constituency, asks that the government review and change that law so that persons who attack and kill their spouses are not able to claim provocation as a justified defence.
Gar Knutson Liberal Elgin—Norfolk, ON
Mr. Speaker, I have five petitions. The first petition has been signed by 26 people. It calls on Parliament to support unequivocally the enlargement of NATO to include all countries of central and eastern Europe that wish to join, excluding none a priori.
Gar Knutson Liberal Elgin—Norfolk, ON
Mr. Speaker, the next four petitions signed by approximately 180 people calls on Parliament to join with the provincial governments to make a national highway system upgrading possible in 1997.
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, I have two petitions today. The first comes from Victoria, B.C.
The petitioners would like to draw to the attention of the House that our police and firefighters place their lives at risk on a daily basis as they serve the emergency needs of all Canadians. They also state that in many cases the families of police officers and firefighters killed in the line of duty are often left without sufficient financial means to meet their obligations.
The petitioners therefore pray and call on Parliament to establish a public safety officers compensation fund to receive gifts and bequests for the benefit of families of police officers and firefighters killed in the line of duty.
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, the second petition comes from Whitby, Ontario. The petitioners would like to draw to the attention of the House that managing the family home and caring for preschool children is an honourable profession which has not been recognized for its value to our society.
The petitioners therefore pray and call on Parliament to pursue initiatives to assist families who choose to provide care in the home for preschool children, the chronically ill, the aged or the disabled.
Paul Zed LiberalParliamentary Secretary to Leader of the Government in the House of Commons
Mr. Speaker, I ask that all questions be allowed to stand.
Questions On The Order PaperRoutine Proceedings
Some hon. members
Agreed.
On the Order: Government Orders:
April 9, 1997-The Minister of Finance-Second reading and reference to the Standing Committee on Finance of Bill C-92, an act to amend the Income Tax Act, the Income Tax Application Rules and another act related to the Income Tax Act.
Christine Stewart Liberalfor the Minister of Finance
Mr. Speaker, I move:
That Bill C-92, an act to amend the Income Tax Act, the Income Tax Application Rules and another act related to the Income Tax Act be referred forthwith to the Standing Committee on Finance.
Barry Campbell LiberalParliamentary Secretary to Minister of Finance
Mr. Speaker, I am pleased to be able to start off the second reading debate on Bill C-92, the Income Tax Budget Amendments Act, 1996.
The Minister of Finance has asked the House to approve this procedure so that it can be passed quickly, while allowing members to examine the bill in detail.
We cannot emphasize enough how important it is for this bill to be passed quickly. It includes a whole series of important measures for increasing the fairness and effectiveness of the Canadian tax system. The measures were initially unveiled in the 1996 budget, a
budget that received the support of the Canadian public and of this House.
Since that time a large number of Canadians have planned their affairs on the basis of these measures, many of which are of a relieving nature.
The introduction of this bill was delayed for an important reason. Most of my colleagues will recall that the 1966 budget included provisions to enhance the working income supplement of the child tax benefit, the so-called WIS.
In the period following the 1996 budget it became clear to the government that it had the opportunity and the obligation to do more to advance the well-being of Canadian children. This meant, among other things, revisiting the proposed changes to the working income supplement set out in the 1996 budget.
After extensive discussions with the provinces and territories, the federal government decided to propose in the 1997 budget the Canada child tax benefit. This new benefit would eventually combine the working income supplement with an enriched child tax benefit. This proposal represented a major step toward a national child benefit system. As a result, the changes to the WIS that would have otherwise been contained in the bill have not been included.
The bill was available to taxpayers in draft form late in 1996. Since that time, in keeping with the government's usual practice, taxpayers have had the opportunity to comment on the legislation and consult with the Department of Finance.
Let me now review briefly some of the measures included in the bill before us. As the legislation deals with taxation, probably the most important point to note is that it does not raise taxes, not corporate, not excise, not personal. Indeed, as my hon. colleagues know, the government has never raised personal income tax rates in any of the four budgets it has brought before the House. This is no small achievement, given the magnitude of the fiscal problem we inherited. Moreover, the Minister of Finance has made it clear we will lower taxes once we can afford to do so and once we know that it is permanent.
What the government has done in the meantime, and what was done in the 1996 budget, was to propose a number of measures to enhance the fairness of the tax system and ensure that it operates as effectively as possible. These measures included changes affecting registered pensions plans, RPPs and registered retirement savings plans. Those changes will help to ensure the sustainability of those programs while better targeting assistance to modest and middle income Canadians.
For instance, the bill proposes the elimination of the seven-year limit on carrying forward any unused portion of a maximum allowable RRSP contribution. This will make it easier for many Canadians who find it hard to make full RRSP contributions in their younger years to eventually benefit from the RRSP system when they can afford to do so. This is a very important change.
The bill also proposes to increase tax assistance to students and their families.
First, in the area of registered education savings plans or RESPs, the bill proposes to increase the annual contribution limit from $1,500 to $2,000 per beneficiary. It would increase the lifetime limit from $31,500 to $42,000. The 1997 budget proposed to enhance tax assistance delivered through RESPs further still. The bill also proposes to increase the amount in which the education tax credit is calculated from $80 to $100. Once again this is an amount the 1997 budget has proposed to increase still further.
The bill will also increase from $4,000 to $5,000 per year the limit on the unused tuition fees and education amounts that students may transfer to spouses or parents. This measure will also be further enhanced by the proposals in the 1997 budget.
Today's bill will also improve access to training and retraining for many Canadians who have young families to care for. Specifically, it proposes to broaden eligibility for the child care expense deduction by allowing parents who are full time students to claim the deduction against all types of income.
The bill will also raise the age limit for children for whom child care expenses may be claimed from 14 to 16, thereby providing increased tax savings for families with older children. A further measure in the bill that will benefit taxpayers caring for children is the change to the rules governing child support. The bill provides that child support paid under a court order or written agreement made after April 1997 not be deductible by the payer nor included in the recipient's income. This change reflects the widely held view that the old system of deduction inclusion was not working for the benefit of children.
This tax measure is one in a series of measures affecting child support payments that were recently approved by the House. In addition to the tax changes in the bill, this series of measures includes guidelines for the fair and uniform awarding of child support, as well as new measures for enforcing related orders.
Not only does the bill increase support for education and assistance to children, but it also increases tax assistance to the charitable organization sector. The bill reflects the government's policy of giving charitable organizations the tools they need to do their work.
For that reason the 1996 budget increased from 20 per cent to50 per cent the annual limit on the amount of a taxpayer's net income eligible for tax assisted charitable donations. Once again this is an area in which the 1997 budget has further substantially increased tax assistance.
I will skim very quickly over some other major measures in the bill. I begin with labour sponsored venture capital corporations. Generous federal and provincial tax credits have helped these funds, sponsored by labour organizations, attract large amounts of venture capital for investment in small and medium size businesses. By the time of the 1996 budget they had more than a three-year supply of capital. In view of the substantial level of capital accumulation, the bill includes a range of measures that will help keep the level of special tax assistance to these funds in line with current fiscal realities.
The bill also includes some important measures for the energy and resource sectors. For the oil, gas and mining industries, the bill would modify rules relating to the resource allowance, thereby resulting in a more stable and consistent tax structure. As for the oil, gas and mining industries the bill proposes significant improvements to the flow through share regime, improvements that will make the system less restrictive and will remove existing incentives to economically inefficient corporate decisions.
The bill also includes measures designed to promote sustainable development of energy resources by providing an essentially level playing field between certain renewable and non-renewable energy investments.
The measures I have outlined will make the tax system fairer and more efficient. They were announced as part of a budget that has been debated and approved by the House and favourably received by Canadians. Sending the bill to committee before second reading will expedite its passage while it enhances the ability of this House to review the bill intelligently. With these considerations in mind I have no hesitation in urging my hon. colleagues to approve today's motion.
Monte Solberg Reform Medicine Hat, AB
Mr. Speaker, I am pleased to rise to address this issue.
I must answer the parliamentary secretary's comments. He asserted at the beginning of his speech that the government had not increased personal tax rates. That is true but there are more ways other than raising personal tax rates to take more money from Canadian taxpayers. It is very important to point that out.
Another way the government can take money away from Canadian taxpayers is to change how it defines income. That is exactly what the government has done, and we must point that out.
The 1997 budget documents say that the only way to judge the impact of taxes is to measure the increase in taxes against growth in the economy. That is a good way of doing it. When we look at the growth in personal income taxes in Canada versus the size of the economy since the government came to power they have gone up over 14 per cent. The government has done that by redefining income. It has removed legitimate deductions so that overall Canadians have faced an increase in taxation. Ultimately that means that Canadians are paying more and more money.
That is why revenues have gone up over $24 billion in four years. That was not because of growth in the economy. Growth in the economy would not come anywhere near to accounting for that growth in revenue. Obviously the government has closed up legitimate deductions that Canadian families rely on. The result has been that the government does not need to make the cuts in departmental spending that it promised to make in the 1995 budget.
In other words the government cut the heart out of health care and higher education. They were cut by 40 per cent. It has closed more hospitals in the country than any premier. That is a fact. It has cut the heart out of higher education. Many university students are struggling to pay back loans because the government has cut back so dramatically in areas of higher education.
When it came to departmental spending, when it came to cutting in its own backyard despite its promise that it would cut by 19 per cent, the government failed to cut anywhere near that. It came up to about half that amount. The government went on a spending binge. It spent money on flags, on television production funds and all kinds of ridiculous things. It gave away money to Bombardier which just announced a $400 million profit.
The government has completely failed Canadians in the vital areas where the government should be responsible. It failed to provide the levels of health care funding that Canadians deserve and want. It failed to provide levels of higher education funding that Canadians truly deserve.
Contrary to what the parliamentary secretary says the budget deserves even more debate. We need to talk more about all these changes. We do not need to force it through committee before second reading. We need to have some real debate.
I want to follow up a bit more on what the parliamentary secretary said. He talked about personal income tax rates and I have addressed that. He failed to mention the government raised taxes in other areas: $1.5 billion for fuel taxes. We cannot ignore that. Canadians drive a lot. It is a big country. That impacts on all kinds of people.
Let us not try to suggest that because the government did not raise personal income tax rates people have not felt the rise in taxes. That is ridiculous.
Let us also talk about the massive $10 billion increase in CPP premiums the government has spearheaded. We just had the former parliamentary secretary for finance, the member from Winnipeg, saying in the newspaper in Winnipeg the other day that in 15 years we would have to revisit CPP. As he pointed out, young Canadians know that the changes being made are simply not adequate. They do not address the concerns of young Canadians. It is just like 30 years ago when the Liberal government brought in the CPP on an unsustainable footing. We will be put in the same situation because of the changes the Liberal government is bringing in now. We will be put in that same situation.
The member from Winnipeg has been honest with Canadians in pointing that out. There have been $10 billion in increases on hard working Canadian taxpayers. Ultimately the Canada pension plan will not be put on a sustainable footing. I am glad the member from Winnipeg had the courage to point that out. He deserves some credit.
I want to talk about some specifics in Bill C-92, for example the child care expense deduction. The government will raise the maximum age of children with respect to who may claim the deduction from 14 years to 16 years of age. How many people put children who are 16 years old in child care? Is that really a good use of precious government resources right now? It is ridiculous.
When people in Ontario were polled a margin of 7:1 said they would much prefer tax relief for the entire family as opposed to putting more money into child care. Effectively that is what this change does. Instead of listening to the bureaucrats, instead of using our own petty reserve of judgment which the government has done, let us listen to the Canadian people. They are telling us, said by a margin of 7:1, that they want tax relief for the entire family.
Not coincidentally that is exactly what the Reform Party proposed in our fresh start platform. We say that parenting is valuable irrespective of whether the child goes to day care or a parent chooses to stay at home and raise children. We proposed changing the child care expense deduction to a credit and extending it to every family in the country who has children 12 years of age and under. That will put more money in the pockets of all Canadians and not discriminate against those people who choose to stay at home with their children. I cannot believe the government allows that to continue when Canadians have spoken out so clearly in favour of the plan we propose.
Another change in Bill C-92, which I noticed the parliamentary secretary did not focus on, was government was requiring RRSPs
to mature at age 69 rather than at age 71. The Canada pension plan is under tremendous pressure today. People have admitted in the Liberal caucus they do not have confidence the Canada pension plan will be there to serve them well. This is what the member from Winnipeg was talking about the other day.
Why in the world are we saying that from here on in people will only be able to contribute to their RRSP until age 69? The two years between 69 and 71 are precious years for compounding. That is when they have the most money in their RRSPs. If there is another two years to contribute and to allow compounding to happen it would mean a lot more income. Unfortunately the government seems to take the approach that people should be penalized for trying to provide for their own retirement.
I fail to understand why we should be allowing the bill to be pushed through so quickly when it is an important issue. Canadians obviously feel very concerned about the viability of the Canada pension plan, especially considering the sorry record of previous federal governments and this one too in ensuring that the Canada pension plan has the necessary funding to provide for all Canadians.
I will touch for a moment on the issue of foreign reporting rules. I will allow my hon. friend from Calgary Centre to speak on this issue in a bit more detail. With respect to foreign reporting rules the government is proposing that people with offshore assets of over $100,000 must declare them and fill out the paperwork. I do not deny that there are some people who abuse the reporting of income from assets held offshore. Undoubtedly that happens. It happens in Canada as well. That is why we have auditors who go around checking these things. To all of a sudden make the assumption that all people are cheating and we have to record all their assets is absolutely ridiculous. If we apply that principle we should be doing it in Canada as well.
The government should be focusing its resources on doing more audits, if it is suspicious about people not reporting income, instead of creating one more massive bureaucracy. There will be truckloads of forms that will have to be filled out. It will ultimately cause some people to leave the country because they will not want to face that kind of scrutiny from big brother.
My time is up, but I invite my colleagues in the Reform Party to have another go at this ridiculous bill.
Roger Pomerleau Bloc Anjou—Rivière-Des-Prairies, QC
Mr. Speaker, I am pleased to speak to Bill C-92, which in a way brings the Income Tax Act and another act related to the Income
Tax Act in line with the 1996 budget, last year's budget in other words.
Before I begin, I would like to indicate my agreement with my hon. colleague from the Reform Party when he says:
"This government closed more hospitals than was ever done before by any other government". He is absolutely right. That is the reality of things.
There was absolutely nothing new in the 1996 budget and, ever since it came to the House, the Bloc Quebecois has, as you know, been calling for a complete reworking of the Canadian taxation system in order to bring it up to date. Since our arrival, we have been recommending an item-by-item analysis of all government expenditures.
This was not to be found in last year's budget, nor will it be in this year's. At the very most, the Minister of Finance announced in the last budget the creation of a technical committee on corporate taxation, or more specifically on tax havens.
The mandate of this committee is, however, too narrow for these recommendations to lead to the changes required to get Quebecers and Canadians back to work. It contained no measures specifically related to employment or to ensuring an equitable division of the tax burden between individuals and businesses on the one hand, and major corporations and small and medium size businesses on the other, the latter being the true creators of employment in both Canada and Quebec.
There are still serious doubts about the objectivity of the members of this committee. Several come from big private companies which advise wealthy clients and major corporations on how to avoid paying taxes. Certain members of the committee are, therefore, in a definite conflict-of-interest situation, and we spoke out against this situation last year.
We know that this committee has had an extension and must table its report by the end of 1997, after the election of course, and we also know that the majority of members of the committee examining the use of tax shelters by corporations themselves make use of tax shelters, and often have businesses in the tax havens they are supposed to be studying.
Yet, in its 1996 budget, the government attacked one tax measure, perhaps the only one, while unemployment is still rampant, and the Liberals have not succeeded in meeting their election promise of jobs, jobs, jobs. It has not been said often enough, nor can it ever be said often enough: the Minister of Finance has directly attacked a priority tool for job creation. The Liberal government has cut the tax assistance to workers' funds, in particular by reducing the federal tax credit linked to these funds, and by decreasing the annual maximum that can be invested in them.
The Bloc Quebecois was very critical of this decision, as you know, and even suggested, when tabling its documents on tax reform, that the maximum annual amount should be restored to the level it was before the cuts were made. We must not forget that the purpose of these funds is to create or protect jobs, mostly in Quebec. The FTQ fund alone was able to preserve or create 38,000 jobs.
The government remains inconsistent. It talks about job creation and then savagely attacks the only tax measure we could be absolutely sure would create jobs. This measure, as we said before, mainly affects Quebec, because half of the money in these funds comes from Quebec. The Bloc Quebecois has constantly been after the government on the tax system. We did so in the case of family trusts, and although the response was not always satisfactory, we have done this systematically. We did so in the case of the GST, a government promise that was not kept, and in the case of the shocking abuse of tax havens.
From the outset the Bloc has been asking for a thorough review of both corporate and personal taxes. This aspect of our tax system has not been updated for many years.
But we did more than criticize. Since we were well aware that last year the government did nothing and had no intention of doing anything in this year's budget, which has been confirmed, the Bloc did some research and drafted two papers, one on corporate taxation which received the approval of the Minister of Finance, who said we did a professional job. He took the report we wrote but has now probably dumped it in file 13.
We produced two analyses that consider all aspects of corporate and personal taxes, something that normally should have been done by the government. I may remind you it has been quite some time since Canada's tax laws were reviewed. I may also remind you that this is the first time an opposition party did the government's job by doing its own analysis of the tax system, something the government should have done.
The opposition parties have a relatively small budget for research and compared with the government, their resources are extremely limited. Nevertheless, we took the trouble to produce this study and do a full analysis of the tax system.
I would like to give you some idea of the work that was done on corporate taxation, for instance. But first, I would like explain, for the benefit of our listeners, what a tax expenditure is. When we sit on committees, the first thing tax experts tell us when they come to meet members and individuals sitting in is: "Tax laws are extremely complicated. You will need our help plus a whole battery of lawyers to understand the system". I would say that tax laws are
purposely obscure so the general public cannot understand what they mean.
I recommend reading Linda McQuaig's book recently published in English in Toronto as The Lion's Share and translated into French as La part du lion . The book shows, over a period of 30 or 40 years, precisely how wealthy Canadians used tax leverage to their advantage and to the disadvantage of the ever poorer middle class.
Fiscal spending occurs when a tax deduction is accorded for some reason to a corporation or an individual. When an individual is accorded a tax deduction of $1,000, it is as if the government sent them a cheque for $1,000-because this amount was owing to the government-as in the example given, but it looks better.
Clearly if the government sent a $50,000 cheque to a company, the public would understand what was happening and would object, so it gives a $50,000 tax credit under some provision described in a book somewhere in a huge pile of books. Nobody sees what goes on, but the $50,000 will be paid by someone other than the company-the general public.
So, if this sort of tax arrangement is made for all companies, which is what is happening in Canada, little by little, the tax burden is displaced and transferred from corporations, the rich, to the middle class, which is becoming poorer for having to pay others' taxes.
I would like to point out that we used the Carter report from 1962, which remains valid today in many cases, to prepare our analysis, which comprises some 100 pages on corporate taxes alone. We have clearly shown this in a table based on statistics on personal taxes for the 1993 taxation year taken from government documents.
We have clearly shown that, since 1950 to date, more and more taxes have been transferred from companies that should be paying them to individuals who are in fact paying them now. I would like to cite five key dates as examples, even though the trend remains constant from year to year. These five dates reveal the extent to which the tax burden has shifted from the companies-the wealthy-to individuals: in 1952, 51 per cent of Canada's income taxes were paid by corporations; in 1962, 36 per cent; in 1972,20 per cent of taxes were paid by companies; in 1982, 17 per cent; and, in 1992, 7.6 per cent. These figures are from Statistics Canada.
As we can see, from 1950 on, the burden has shifted, with the tax load being transferred from the rich to the middle class. So, today, when we look at the number of unemployed, the number of people on welfare and the number of poor people in Canada, we see that the rich have succeeded in transferring their tax debt to the people in the middle class, who are becoming increasingly poorer.
We would have liked the Minister of Finance to really examine and utilize both last year and this year the reports we provided, which he himself described as highly professional and which are based on Statistics Canada figures.
I close on this point. In the 1996 and 1997 budgets, we saw no effort by the minister to look hard at Canadian taxation.