Madam Speaker, my first comment would be that, if I were a single mother or a student owing $20,000 listening to the debate this evening, I would go to bed pretty discouraged. There is all this finger pointing going on, with charges that the Liberals did this and the Conservatives did that. Could we not focus a bit on the future?
The Progressive Conservative Party's motion today reads as follows:
That, in the opinion of this House, the government should lower the tax burden on Canadians and offer interest relief to student loan holders in order to address the brain drain crisis which is forcing Canadians to move to the United States where unemployment rates, income tax rates and student debt levels are lower and the standard of living is 25 percent higher than in Canada.
This morning, when I read it and learned that I was to speak to it, I found the motion strange, although there are a lot of good points in it. It covers so much. It talks about tax burden, student loans, and the brain drain, and praises the United States as though it were the best place to live. I am going to look at each element in turn.
First, there is the brain drain. I did some research this morning. The chief statistician of Statistics Canada recently declared that, between 1986 and 1996, approximately 50,000 people with various levels of education left the country, while 200,000 came here to work. So we are somewhat ahead. The fact still remains, however, that there is a brain drain problem.
In this regard, a study on the behaviour of 1995 graduates shows that, two years after they obtained their degree, 24% of those with PhDs had left Canada, compared with 10% of students who had obtained a master's, and 3% of students with a high school diploma.
I would like to draw members' attention to a survey done by the Association of Universities and Colleges of Canada. This survey showed that the main factor in leaving for the United States was the salaries there.
The tax burden could be a factor, but according to the study, it is primarily the phenomenal salaries the Americans can pay in Silicon Valley and elsewhere.
One thing bothers me, however. They say the United States is a great place to live. In this regard, the Liberal Party said some interesting things today. As a country we have choices to make. If our taxes are so much higher than in the U.S., it is in large measure because of our societal decision to provide universal education and health services. That has to be paid for somehow.
On the subject of the American dream, the information I have indicates that, between 1973 and 1995, the per capita gross domestic product increased by a third and gross salaries for people in management positions decreased by 10% to US$258.
It all looks fine there, but what choices do they make as a society? Their crime rate is one of the highest in the world. Child poverty is the highest in the world. Choices have to be made, and in many instances, to my great regret, they strongly resemble the choices the Reform Party wants us to make, although I would like to hear their remarks should they change their minds.
That concerns the first two elements. The third element is student loans. Here I am going to have some fun. I am going to have fun because there is a lot to say on this subject.
We should have a quick look at the history of student debt. Students go into debt because it costs a lot to go to school. Every year tuition fees go up. Why? We have to start at the beginning.
The federal government gives large sums of money to the provinces for education. In fact, this money comes from our taxes. We must remember that. The federal government distributes our taxes to the provinces, which pay the education costs. Then for whatever reasons, the federal government makes huge cuts, leaving the provinces stuck with the problem. Fees increase, student debt increases, and the song goes on.
The federal government finally took notice of the problem. It should be praised for noticing that the student debt load is very high. Faced with the problem, the federal government said “We are going to create a scholarship fund. We will provide assistance for students because now we are rolling in surplus dough”. But we still need to see them put their money where their mouth is.
I will speak of the situation most familiar to me, the situation in Quebec, where we have the most efficient system of loans and bursaries in Canada. Don't take my word for it. That is what the president of the Canadian Student Association says, and he ought to be well informed about the situation throughout the country. He has said “If I were in Manitoba, I would be a bit jealous of students in Quebec, because they have an excellent system of loans and bursaries”. Recently, however, we have had to cut back on the system because of certain cuts in transfer payments.
The student debt load is increasing, and now the federal government is turning up as a Johnny-come-lately. The Minister of Human Resources Development said once in committee, and I was there to hear it: “The federal government is giving enormous sums to Quebec and other provinces, but has no visibility whatsoever”. Is that what the purpose of the policy is, to gain some visibility?
It has therefore created a system of loans and bursaries with its own money, to be administered at the federal level. It is not concerned in any way about whether this creates duplication, about whether it decreases efficiency, about whether it is throwing a monkey wrench into a system that is working perfectly well at the moment.
All these questions have to be asked, and they are things that bother me a great deal.
There are many things that could be done to help students. During the last election campaign, for instance, the Bloc Quebecois proposed a registered education savings plan. That could be one solution. The tax credit for tuition fees could be another. The education credit, the transfer of education credits to a spouse or parent, not taxing the first $500 of a bursary, all these could be yet other solutions. In this regard, there is a consensus in Quebec, as representatives of the Liberal Party and the Parti Quebecois, student associations and university presidents all agree with what we are saying.
Yesterday, Mr. Bouchard sent a letter to the Prime Minister of Canada asking for an emergency meeting. Since there is a consensus in Quebec, could a way not be found to take these huge amounts of money and let Quebec administer them as it sees fit, in its own jurisdiction?
It is really a shame to see this sort of petty politics. Other ideologies may be better, but I say that, on this issue, the logic is obvious.
Another point mentioned was the tax burden. In fact, many issues have been mentioned today, given the wide variety of issues covered in the motion.
I am interested in the tax burden, as it covers quite a range of things. Today's debate on the tax burden prompted the NDP, which often says things I find relevant, to speak about child poverty, and poverty in general.
I have a great deal of difficulty understanding, and I keep up on this area, how it is that, in a period of full economic growth that has gone on for several years, poverty continues to grow.
When the topic is child poverty, and it is said that one child in five is living under the poverty line, I find this frightening. As a politician, I ask myself what will be the consequences of the measures taken, or very often not taken, here in 15 or 20 years. You will tell me I am being very egotistical, because I am thinking of what will become of me in 20 years—I will be only 44—in what sort of society we will be living, when I see the steady increase in the rate of poverty. This is an up-to-date statistic, but it is also a persistent trend. We are looking at a steadily growing gap.
Four years ago, there were one million children living under the poverty line in Canada; today there are 1.5 million. That is a huge increase. If this keeps on, where are we headed? These children living below the poverty line, who have a hard time studying since they are not properly fed, and who have a hard time finding a job because of their poor education, and who have trouble making their way in the world, are much more likely to get involved in crime. All of this makes me wonder about the kind of society we will end up with.
When I see“tax burden”, I think of taxes. When I think of “taxes”, and I see more wealth and more poverty, I can see there is a problem somewhere. I am not alone in saying this. But what are we doing about it? I do not see anything happening.
In terms of tax, wealth is being created, but it does not appear to be going into government coffers. In 1950—I was not around—businesses paid 50% income tax, as did people.
People are overtaxed as they say, and I agree. It is truly hard for a single parent to pay tax on a salary of $20,000 a year.
What I am wondering is where is the money? The money stays in the bank vaults or the coffers of big business. I have, in this regard, a long list of companies that made huge profits and paid almost no income tax. I will not show it to the House, because unfortunately am not allowed. I will name some of the companies. Barrington Petroleum made profits—not revenues—in 1994 of $11 million and paid $194,000, or 1.7%, in taxes. BCE Mobile Communications Inc., with $66 million, paid 4% in taxes.
Let me continue. In 1993, the Nesbitt Burns Inc. group made profits of $50 million and did not pay a red cent in taxes. The money is there. It is in the pockets of the rich.
From what I read when I am doing research, the attitude seems to be that we should not lower the taxes of the rich, of corporations because they are the ones creating jobs. This might well seem logical at first. But their taxes have been going down for 20 years, which means less revenue for governments. Taxes have to be raised somewhere. So personal income tax is raised.
It is in this sense that I find the Progressive Conservative Party's motion interesting. When it says that Canadians' tax burden is much too high, there is no denying that. But there is also the other end of the scale, the corporate tax burden, to consider. I am not talking about SMBs nor about businesses just starting up. I am talking about healthy companies, multinationals making millions, even billions—we see the banks paying heavy taxes, but that is another debate—and not paying any taxes. I have to wonder about this, particularly when I see poverty on the increase.
I heard what my colleague from New Brunswick had to say. In New Brunswick, poverty is steadily increasing. Something is not working, and I have to really wonder. At some point, people are going to have to stop arguing and trying to blame one another. I think people will have to sit down and try to solve this serious problem. In my opinion, the first step toward solving a problem is admitting that there is one.
In his next budget, the Minister of Finance will be announcing highly laudable measures to help students, but what is needed are measures that are effective, not political. Where are things headed with measures like these? Where are things headed with one and a half million children living in poverty? And I am not talking about the parents, or the delayed impact of poverty, what I call people's inability to save.
You know, ten years ago,—and I am not talking about 20 years ago here—the savings rate was much higher than it is now. I think that the average savings per household is 1% annually. This may not be poverty right now, but that is what it will become. When we speak about future poverty, that is where I get worried. In 10, 15 or 20 years, these people will stop working and will have almost nothing set aside. There is a certain degree of income security, but it is just delayed poverty, and that is what is the cause of concern.
I think that the taxation system needs to be revamped. I am not the first one to say so, either. The last major review of the personal income tax system dates back to the work of the royal commission on taxation in the 1960s. The last time they saw fit to review the taxation system was in the 1960s. Now, instead of revising the tax laws for shipping companies belonging to the Minister of Finance, and instead of passing legislation that will benefit the rich even more, would it be possible, at some point, to sit down and look at what is not working properly in the system?
The Liberals should be aware of the inequalities in the present federal system. So should everyone. I think that, with a subject as serious as the increasing gap between rich and poor, we must stop playing politics and get moving.
In a document by the Department of Finance, it is stated that there are three factors which explain the extent of the advantages high income taxpayers enjoy: first of all, these taxpayers have the necessary resources to make better use of tax advantages; second, some of the major tax expenditures relate to investment income, most of which is earned by this group of taxpayers; third, the higher the taxation rate, the more advantageous the exemptions or deductions. So, like just about everywhere else, it takes money to make money.
It is like the 1980s, when the interest rates were raised to incredible highs. It is at such times that people get into debt. They run up debts and that enriches the—