Madam Speaker, I am happy to take part in the debate today on Bill C-28. Essentially Bill C-28 is an act implementing sections of the 1997-98 budget.
In fact the bill is before me here. I see it is 464 pages long. It is a very legal document. Section 1 of the act is probably the easiest part of the whole document. Section 1 might be cited as the Income Tax Amendments Act, 1997, but for the average laymen trying to work their way through the act it would only add to the difficulty that we already have with some 1,500 pages of Income Tax Act.
There was a time when average Canadians could do their own taxes. We have a farm in the Peace River country of Alberta and for a number of years we did our own income taxes. However over the years it became more and more difficult and we found that it was important to hire an accountant.
The accountants I know tell me that it is becoming more and more difficult even for them. They tell me that one accountant in a firm can phone for a ruling on a certain section of the act on a Monday and get one answer from the department of revenue. Another partner might phone on a Friday and get an entirely different interpretation. We have 1,563 pages of income tax which is added to every year by things like these amendments. In addition to that, we have thousands of pages of precedents and rulings.
I would like the prime minister, who says he can write zero with his famous pen, to make an act that is very easy to understand and easy for people to do their own tax. In fact we have talked about the idea of introducing a flat tax. It makes a lot of sense to me. Take the income of an average family, use whatever the tax rate is, 20%, and send that in. The difficulty I guess would be what to do with all the unemployed accountants. That is what I tell my accounting friends. However, even they are having difficulty these days fathoming these kinds of amendments that are coming forward every year.
Today in the House the prime minister said that he is going to start paying down the debt. At the rate that he has suggested it is going to be a very long process. I think he said a billion dollars a year. With a $583 billion debt it is going to be a very long process.
This is a government that has an insatiable appetite for taxpayers' money. Part of the reason why is that we have this massive federal debt that takes debt servicing in the form of interest. The interest on this debt last year was $46 billion. Almost one-third of the taxes that the average family sends to Ottawa every year goes to debt servicing retirement. It simply is not good enough.
I heard a number of people on the other side of the House today say that one of the things that is going to be changed as a result of Bill C-28 is that it is going to allow for transfers to the provinces through the CHST to be increased from $11.5 billion to $12.5 billion. I would ask the question: When will this Liberal government be ready to return the amount of money to the Canadian health and social transfers that it took away in the last Parliament? The funding was $18.5 billion a year. This is the government that reduced it to $11.5 billion and then tells us that by returning $1 billion it is doing a great service to the country.
My home province of Alberta has gone through sizeable downsizing in terms of government operations, including health care. We have all faced it. The local attitude seems to be to blame the provincial governments. What we have to remember is that a sizeable part of the reason that downsizing was necessary was the 35% in cuts in transfers from the federal government to the provinces. Now the government is telling us that it is going to return $1 billion a year. I do not think it is good enough. It has to share in the blame for some of the things that have happened in that area.
We have seen some demonstrations by students in the last few weeks in terms of tuition fees and the high cost of education in this country. That was part of the $7 billion in cuts by this government. I think the government has to do the honourable thing and return this funding to the levels prior to the cuts during the last Parliament.
Yes, we need to get government right in this country but it is all about priorities. We have to get our priorities right.
What do we have in this country? We have the highest rate of income tax among our industrial trading partners in the whole world. We have Canada pension plan rates rising by 73% over the next six years. We have unemployment figures that still hover in the 9% range when our major trading partner just south of the border, which we export some 80% of our product to, is almost half of that.
That has been consistent for 30 years. We could put it on a graph and chart it and that is the way it would go. Good times and bad times, there is a 4% to 5% spread between Canada and the United States in terms of unemployment rates. Why is that?
I suggest it has quite a bit to do with the poor performance of our currency. We are at a 35 year low for the Canadian dollar. We have a third world currency in this country. People looking to invest in Canada have to look at that. Canadians wanting to invest in countries like Chile, how much can they buy with this low Canadian dollar? It simply is not good enough.
What else is happening? Our debt in this country as I mentioned earlier is $583 billion. It is 73% of our total gross domestic product per year. It simply is not good enough.
The foreign affairs and international trade committee in the last Parliament did a study asking small and medium size businesses why they were not in the export market. What they told us was rather startling. There were a number of factors. Too high a cost of doing business in Canada. Too high a cost in payroll taxes and business taxes. They also told us that the amount of regulation was hurting them greatly.
One company from Ontario even suggested that after moving to Michigan it had a much better chance of doing business back in Canada across provincial borders than it did working in Ontario. We have more barriers to trade between our provinces in Canada than all of the European Union combined. That is absolutely absurd.
One of the things I noticed in this bill is that there are amendments made to the act which would allow some provision for a change of status for family farms in terms of income tax. I want to take the opportunity to mention the amount of duress that Canadian farmers are under these days. I know about it personally. My riding is largely agricultural and people are hurting greatly. What can we do about it? First we can get our cost of business down and cost of inputs down, but we can do more than that.
This government has an obligation to go to the next round of the World Trade Organization talks on agriculture and make the case that domestic subsidies in Europe are hurting us greatly. They are hurting us although we are all on a phase down through the last round of the GATT. The starting point for the phase down was 1986, the highest levels of subsidies in the European Union and the United States in the history of the world. When we get a 15% phase down from up here, we still have substantial subsidies that are hurting our Canadian farmers.
People are hurting. They are hurting greatly. This government has an obligation to go to those talks and make that case. Our Canadian farmers in grains, oilseeds and beef are subsidy and tariff free. We are leading the way. That is not the case among our major trading partners. I suspect that this government will not have the courage to do that.
On the other hand we have a supply managed farm industry that has tariffs of over 300% in many areas. Three hundred per cent on one side with a protectionist policy and an absolutely subsidy free, tariff free side on the grains, oilseeds and beef sector that I suggest is going to be traded off in the next trade rounds by our own government.
We might do some tinkering with this bill to make it a little easier to write off something on the farm. The big issue affecting Canadian farmers is low prices that can be greatly enhanced and improved if this government had the courage to go to those trade talks and be honest with the public and say “We have a sector that is subsidy free. We need some help in convincing other countries to do the same”.
In conclusion, there is a lot of tinkering going on with this bill. It is going to add a lot of pages to our Income Tax Act. the real issue is getting the government debt down, getting our businesses competitive and allowing Canadians to keep more money in their pockets.