Mr. Speaker, I would like to speak to the Reform motion. The arguments of the hon. member from the Reform Party have nothing to do with the motion.
I would however like to comment on the issue of municipalities. I believe the government does not understand the concept of municipalities either. Having been a mayor for over ten years, I will point out certain facts. Municipalities change; some decide to amalgamate while others decide to work together.
So, what we are saying—and this will be my question for the government—is that, when partners sign an agreement, an intergovernmental agreement between two municipalities, the 10% will not apply. I think it is important because, as we are increasingly seeing it in Quebec, the mixed enterprises are forming partnerships that can go as far as being a 50-50 split between a municipality and the private sector.
I do not think the government is necessarily familiar with the issue of municipalities locally. So I do have a question. Could the government perhaps enlighten us as to what would happen if the 10% in income from services outside the geographic limits and the jurisdiction of municipalities were exceeded but through an agreement with other municipalities. The government cited the example of providing hydro. Does the 10% not apply in such a case? Will the tax exemption be maintained? It is not clear. It is not clear in the request made by the Reformers, nor is it on the government side.
Close attention will have to be paid to the matter of the 90%. As I said earlier, in more and more associations, groups and mixed companies, there is much stronger participation from the private sector. This is a fact.
Another comment I will make—and I must say that we will not be able to support the Reform motion—is that the government ought to be careful because dealing with federal and municipal taxes is one thing, but interfering in a municipal jurisdiction is something else.
Under the Canadian Constitution, municipalities are delegate governments controlled by the provinces. They are not governments recognized under the Constitution Act, 1867 as the federal and provincial governments are. They are delegate governments. We could go as far as saying there could be a single municipality per province.
I would like to caution both my colleagues in opposition and on the government side to be careful when they talk about any legislation dealing with municipalities. Municipalities are facing deficits as well because, let us not forget that, when the federal government cuts assistance to the provinces, the provinces make a stink. When in turn the provinces make cuts, supposedly in response to federal cuts, the municipalities and school boards are left holding the bag. Municipalities are currently confronted to a major challenge.
I think we should pay attention to this. Unfortunately, in Bill C-28, the government lost track of daily realities. It forgot to mention that any official agreement between municipal governments, even one exceeding 10%, may be exempt from tax.