Mr. Speaker, I am pleased to participate in the debate on Bill C-93, an act to implement certain provisions of the budget which was tabled in February. I wish to direct my comments to those parts of Bill C-93 that allow certain Indians in British Columbia to impose an excise tax and value added tax on sales of tobacco products on reserves.
I have had the opportunity to speak to the last three budgets and each time the conclusion is inescapable. The Minister of Finance still does not have it right.
Government generated debt and the resulting tax burden is placing many Canadians in a position of financial hopelessness, unable to get ahead and forced to survive with a current personal debt load equivalent to 95 per cent of their annual personal disposable income. This has grown since 1982 from 62 per cent. This administration has picked Canadians' pockets for a further $24 billion in taxes.
Before I turn to parts II, III and IV of Bill C-93 on the tobacco taxation issue, I would like to make a few comments regarding the manner in which the Indian affairs department is run and offer a few suggestions on what the government could do to improve the legacy of poverty that grips so many members of First Nations.
In 1976-77, not so very long ago, total government departmental spending for the Department of Indian Affairs and Northern Development was $587 million. Today that number is $4.3 billion. This is an increase of 2.4 per cent over last year's budget. All of this for 573,000 status Indians registered under the Indian Act, about 2 per cent of Canada's population.
This sink hole of spending is sad because we have continued misery and a sense of hopelessness where so many of our native people live and continue to live. Despite the spending restraint placed on all other government departments, the spending of the Department of Indian Affairs and Northern Development to 1998-99 will grow an accumulative 12.7 per cent during the term of this government compared with a decline of 24.4 per cent in other departments. This is the only federal department in which spending in 1998-99 will be higher than in 1994-95. It has a history of misguided priorities where the current minister feels that maintaining this native dependency on the federal treasury will deliver these people to self-sufficiency. This is a cruel hoax.
Furthermore, the Canadian taxpayer is suffering because despite all the federal largesse and misguided paternalism, the status Indians who live on reserves do not pay income, property or sales taxes on purchases sold on or delivered to their reserves. The department is totally compromised on this taxation issue.
Section 87 of the Indian Act is surely an outdated, out of step section of the act which protects and maintains this counterproductive exemption.
Total government spending for Indians for all departments runs $7 billion. This excludes the taxation exemption or forgone revenue which results from section 87 of the Indian Act. Reform's position on section 87 is clear. We saw some signs in the Nisga'a negotiations and Sechelt negotiations in British Columbia where the federal government is not dealing straight on the taxation issue.
We have also seen how this tax exemption creates a circumstance where there is no mandate for any other federal department on reserves. For example, the Department of National Revenue has no mandate. This has entrenched a longstanding, self-serving mandate by the Department of Indian Affairs and Northern Development, which has been very counterproductive.
This artificial financial arrangement has also led to many economic dislocations. Lower wages have been justified by the government, lower welfare rates, all kinds of things have been lowered on reserves because of the absence of taxation on these kinds of schemes. In my view this is very counterproductive and in the view of many others.
In hindsight the anecdotal evidence is that native run businesses with a focus on taxation exemption have not been nearly as successful as native run businesses which have operated with the same entrepreneurial focus as off reserve businesses.
To really demonstrate that none of this shows that the taxation exemption is really working, one could ask why are 43 per cent of on reserve natives in Canada on welfare. There are certainly some people getting bloated on the morass of spending. One place is the Hull bunker for the department of Indian affairs which houses 34,000 bureaucrats. Accompanying these public servants are consultants, negotiators, lawyers and advisers, all taking a piece of the $7 billion in action and keeping the myth and their club memberships alive.