Debates of March 23rd, 1998

Income Tax Amendments Act, 1997

[The Acting Speaker (Mr. McClelland)]

That is correct. According to my list the hon. member for Beauport—Montmorency—Orléans has the floor.

[Michel Guimond, Bloc, Beauport—Montmorency—Orléans, QC]

Mr. Speaker, I would like to begin by saying what a great pleasure it is for me to speak to Bill C-28.

As I am the Bloc Quebecois transport critic, some of my colleagues might be wondering what lies behind my interest in this bill introduced by the Minister of Finance.

As I was saying, there are aspects of this bill that I, as transport critic, find very important, one of them being a clause to which my colleague, the member for Saint-Hyacinthe—Bagot, has drawn wide attention during oral question period, in the media scrums and in earlier debates. I am talking about clause 241.

The Minister of Finance is the sponsor of this bill, clause 241 of which improves the tax treatment of offshore shipping companies held by Canadian companies.

For several weeks now, the government has denied that this measure will benefit the Minister of Finance's companies, but senior finance department officials and the government's ethics counsellor have admitted that Canada Steamship Lines could indeed benefit from this measure. Important questions remain unanswered.

The opposition is unanimous, and this is not some Bloc Quebecois fabrication. The four opposition parties on this side of the House have indicated clearly to the chair of the Standing Committee on Finance, in a letter from the four finance critics dated February 12, that they would like to see a special subcommittee of the Standing Committee on Finance struck as quickly as possible for the purpose of clarifying the situation with respect to the interpretation of clause 241 in Bill C-28. That was clear.

It is our contention, and we are supported in this by the other opposition parties, that the Minister of Finance is trying, through Bill C-28, to get the House to pass a bill that could very well give his shipping company, Canada Steamship Lines Inc., of which he is the sole owner, certain tax advantages.

Even if the Minister of Finance defends himself by saying that his company has been in a blind trust since he became the minister, he will not remain the minister for the rest of his life and could eventually benefit from these tax changes.

The Minister of Finance and representatives of his company contend that Canada Steamship Lines does not intend to use this provision to benefit from the measures in clause 241. While it is not their intention, that does not mean that they are not entitled to, and that is the subtlety we must watch out for.

Let us have a look at the holdings and the assets of the Minister of Finance. We will look at the ships. I had information on certain ships obtained from the Lloyd's Register of Ships. Let us see if we can untangle things a bit.

A look at the Minister of Finance's assets reveals that CSL owns a number of companies registered in Barbados: CSL Cabo Shipping Line Barbados, wholly owned; Innovaforce Shipping Inc., registered in Liberia; CSL Asia Investments Inc., also registered in Liberia. He is up to his elbows in tax havens. Over his head in tax havens.

I decided to track the registration of the ships belonging to Canada Steamship Lines. My research revealed that Atlantic Erie was called, in 1988—and I know I am not allowed to name the Minister of Finance, but perhaps it was his father—the Honourable Paul Martin. It was probably his father, who was a minister. This ship is registered in the Bahamas.

We also learned from Lloyd's Register of Ships that the Atlantic Superior —

[An hon. member]

Why don't you just get in the gutter?

[Michel Guimond, Bloc, Beauport—Montmorency—Orléans, QC]

So that got a reaction on the other side, did it? When a sensitive spot is touched, it is a bit like a visit to the chiropractor, when he hits a sensitive nerve. It makes one holler, like the Liberals are doing now. Let them. If what I was saying was totally meaningless, the Liberals would not feel obliged to defend themselves. Moving on, let us look at another ship.

The Atlantic Superior is owned by Atlantic Superior Shipping Co. Inc., which is also registered in the Bahamas.

Two others are also registered in the Bahamas: CSL Atlas , owned by Canada Steamship Lines, and CSL Innovator , also owned by Canada Steamship Lines.

I see time is passing, and I will have to conclude in a few moments. My purpose with these comments is not to carry out a witch hunt and formally accuse the Minister of Finance of conflict of interest. What we want to demonstrate is that there is an apparent conflict of interest. The meetings between my hon. colleague for Saint-Hyacinthe—Bagot and Finance Canada officials, and his contacts with the government's ethics counsellor, indicate that there is an apparent conflict of interest.

[Eleni Bakopanos, Liberal, Ahuntsic, QC]

Apparent.

[Michel Guimond, Bloc, Beauport—Montmorency—Orléans, QC]

Apparent, yes. I hear the hon. member for Ahuntsic yelling “apparent” at me, but I would remind her that a minister of the crown has a duty to avoid any suspicion of an apparent conflict of interest. Any suspicion, precisely so as to not end up with a conflict. One must protect oneself from this.

There are still many questions without answers. Why was the Minister of Finance the one to sponsor this bill? Why did he not have the Minister of State for Financial Institutions, the hon. member for Willowdale, do it? Why did he do it himself?

We consider this an imprudent act, one exposing the Minister of Finance to criticism. These 4 CSL vessels registered in the Bahamas clearly indicate that someone can, if enterprising, take advantage of tax havens.

When we know that the company in question belongs 100% to the Minister of Finance, it is no wonder ordinary citizens, the people watching us today on television, have lost confidence. It is because such loopholes exist.

This does nothing for the credibility of this institution. Most members here try to do a good job. We try to thoroughly research the issues and when something like this is thrown in our faces, how do you think we feel?

One might also wonder why Canada Steamship Lines does not register its ships to Canada, as would normally be done. The Desgagnés group bought the Rio Orinoco , which was wrecked off île d'Anticosti, and renamed it the Thalassa Desgagnés . The Thalassa Desgagnés carries oil between Miami and certain islands in the West Indies and the Gulf of Mexico. It is registered to Canada and has a Canadian crew.

I think there are shipping companies that show they are capable of assuming their responsibilities by hiring people from this country and paying their taxes here. We see that the Minister of Finance says one thing and does another. Everyone claims to be lily-white, but when we see this sort of sleight of hand, it worries us. That was what I wished to say.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, I rise to speak to Motion No. 2 at report stage of Bill C-28.

The motion addresses the perceived conflict of interest the hon. Minister of Finance finds himself in with respect to certain provisions of the bill, principally article 241 which would change the tax treatment of shipping companies.

It is well known to members of this place and the public that the Minister of Finance holds through a blind trust principal ownership of Canada Steamship Lines, a major international shipping company. Members of the opposition have raised the question as to whether or not he may be in a conflict of interest by having acted as the sponsor of this bill.

Let me say at the outset that I believe the hon. Minister of Finance is a honest and diligent member of this place and is deserving of respect. Even though I often disagree with him, I personally do not believe that the Minister of Finance acted as the sponsor of this bill in order to derive any kind of personal financial benefit. I rather suspect, given the nature of his responsibilities, that he likely never read the bill. I suspect very few members of the House have actually read a technical tax bill such as this one. What we read are summaries provided to us by either the department or by our research staffs. Oftentimes those summaries do not stipulate a particular provision such as article 241. It is entirely plausible that the Minister of Finance was not aware that article 241 posed a potential conflict of interest for him.

Nevertheless, it is incumbent upon ministers, when they bring bills forward to parliament, that they be well and thoroughly advised about the contents of such legislation. They should know whether or not they may find themselves in a potential conflict position vis-à-vis their own personal business interests and whether or not those interests are managed through a blind trust. In this case it would appear to me that the Minister of Finance was let down by his advisers, by his bureaucrats who recommended that he act as the principal sponsor of the bill but who did not flag, did not highlight, did not emphasize the potential conflict between his private business interests and article 241 which deals with the tax treatment of shipping companies.

Rather than simply dismissing the criticism which opposition members have levelled at the finance minister out of hand as he has done, rather than suggesting that this is some kind of mean-spirited smear campaign, I suggest the government members, and the Minister of Finance in particular, should take to heart in a constructive way the criticism that has been levelled with respect to this perceived conflict.

The minister should go to his officials, if he has not already done so, and say “You have put me in a very embarrassing position by giving me bad advice. I should not have acted as the principal sponsor of this bill”.

Another minister, say the Secretary of State for International Financial Institutions could easily have brought the bill forward. The Minister of National Revenue could have brought this bill forward. The Minister of Finance should have gone to his officials and said, “You gave me bad advice. There was clearly at least a perceived conflict here between myself and this legislation. My name ought not therefore to have been that of the sponsor of the bill”, and somebody should be held to account.

That is really the issue I want to address. It is one of ministerial accountability. It is a principle which is absolutely central to the traditions of Parliament.

We have inherited from our mother Parliament in Great Britain a remarkable institution. It is an institution where the executive branch of the government represents the authority of the crown and has the enormous power of the state vested in it. Police powers, taxing powers and military powers are vested in the executive branch. In this case they are manifested in the cabinet, the governor in council. Members of the cabinet have a fiduciary responsibility to this legislative body to ensure that they are never even in a perceived conflict between their ministerial responsibilities, their responsibilities on behalf of the crown, and their business affairs as private citizens. They also have a profound responsibility to this legislature and to the people that we as MPs represent to take responsibility for what happens in their departments.

I am greatly disturbed by the increasing pattern of ministerial unaccountability, where we find instances like this which come to the surface where ministers refuse to take responsibility for what admittedly may be bad advice given to them by their bureaucrats, but advice which they accept and for which they ought to be held accountable.

If the ministers are not held accountable, who is? The ministers represent their bureaucracies, their departments, which are creatures of this legislature. If they slough off responsibility and they say, “It was just an error. It was just a mistake. It was a small oversight. I cannot be answerable for it. My bureaucrats cannot be answerable for it”, then what is the point of having this Parliament? Why not just have an executive branch of government that is answerable to no one?

That is the ultimate logical conclusion of this kind of incremental diminishment of the principle of ministerial responsibility and accountability which ought to have been much more clearly respected by the Minister of Finance in responding to the criticism levelled at him with respect to Bill C-28.

It is not just Bill C-28 where we see a recent example of conflict of interest. In this House in recent days the official opposition has raised the very troubling example of the recent appointment to the Senate of a certain Ross Fitzpatrick by the Right Hon. Prime Minister. I do not know Mr. Fitzpatrick. I have no reason to believe that he is anything but an honourable, diligent and loyal Canadian citizen. I have no reason to believe he will not be a hard working and responsible senator, fulfilling his constitutional responsibilities.

However, it is a fact that Mr. Fitzpatrick was chairman of the board of a corporation on which the current Prime Minister sat as a director. It is furthermore a fact that the Right Hon. Prime Minister, when he was a private citizen in 1987, exercised a stock option which was given to him by Senator Fitzpatrick which generated a personal profit of $45,000 in the space of one week. It is furthermore a fact that when initially questioned about this stock deal, initially questioned about his corporate position on the Viceroy Resources Board, the Right Hon. Prime Minister claimed that he had received no compensation.

I know the rules of this place and would never suggest that the Prime Minister has misled the House. But the facts show a very clear incongruity between the reality and what the Prime Minister said. It is another shocking example of where we see a perceived, if not real, conflict of interest which government members just expect us to walk away from.

I know there are members on that side who were once in opposition. I know that if Prime Minister Mulroney had appointed the chairman of a board on which he served and from which he received a substantial financial benefit that Liberal members of Parliament in opposition would have raised a bloody furore that never would have stopped until somebody's head was on a platter. I say good on them because the role of an opposition party is to hold the government to account.

I was in the Liberal Party in 1987. Every single person in the Liberal Party, every political observer in the country, knew that the Prime Minister, who was then a private citizen, was likely to run again for political office. He received a personal financial benefit. It is clearly, in my view, a conflict of interest for him to have appointed to the Senate somebody from whom he received a personal financial benefit.

These examples carry on. Just today we raised another case of a former employer of the Prime Minister who received a remunerative government patronage position.

[Some hon. members]

Oh, oh.

[Jason Kenney, Reform, Calgary Southeast, AB]

I do not know why hon. members are heckling. This is how Parliament functions. The opposition raises questions. They are supposed to answer.

In closing, I want to say that we need to reinforce the tradition of ministerial accountability and stop these conflicts of interest which are undermining Parliament and its institutions.

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, we are now in the final stage of debate on Bill C-28, which has made headlines since the House reconvened last month.

However, just hours before the vote on this legislation, the public is still not reassured about clause 241, which would put the Minister of Finance in an apparent conflict of interest.

In spite of the questions asked by the Bloc Quebecois and the other opposition parties, the Prime Minister and the Deputy Prime Minister have avoided any debate by refusing to provide answers to the opposition, which wanted and still wants to have the situation clarified.

Moreover, all the efforts made to have the Standing Committee on Finance hear witnesses on this issue have been vain, except for the Prime Minister's ethics counsellor, who appeared before the committee.

[The Acting Speaker (Mr. McClelland)]

The hon. member for Saint-Hyacinthe—Bagot, on a point of order.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, our fellow members from the Reform Party and the Liberal Party should show some respect toward my Bloc Quebecois colleague, who is making an eloquent speech.

[The Acting Speaker (Mr. McClelland)]

The member for Saint-Hyacinthe—Bagot has made a very good point.

Resuming debate, the hon. member for Drummond.

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, I realize this speech is hurting the Liberals, but I would ask for a modicum of respect during this debate.

The Prime Minister basically gave a gag order to his caucus and it was complied with. Since February 5, when the Bloc Quebecois showed what—

[The Acting Speaker (Mr. McClelland)]

If hon. members want to carry on a conversation, please do so in the lobby. The hon. member for Drummond has the floor. If you are going to keep this up, go outside.

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, I would appreciate getting back the time I was deprived of because some members do not respect my right to speak in this House.

We are still debating Bill C-28 and, as I was saying, the Prime Minister gave his caucus an order to silence the opposition, and that order was complied with.

Since February 5, when the Bloc Quebecois showed what is really behind Bill C-28, the opposition has been facing systematic obstruction co-ordinated by the Prime Minister's office. If the Liberal government has nothing to hide, why is it stubbornly refusing to respond to the opposition on this issue?

The ethics counsellor himself said that Bill C-28 had not been drafted according to the rules and that, if they had to do it again, some measures would have to be taken to avoid this conflict of interest situation.

He recognized, as we do, that there were serious problems with the way the finance minister was doing things and that the code of ethics the government had adopted in 1994 was not observed.

On the basis of this statement and in an attempt to get to the bottom of the matter, the four opposition parties took the unprecedented step of joining together both in the House and in a press conference to demand that light be shed on this nebulous matter.

Once again, the Prime Minister did not accede to the opposition's request, thereby confirming what we suspected all along: it is in the interest of some individuals that the truth never be known.

To resolve this impasse caused entirely by the government, the Bloc Quebecois is proposing a sensible alternative, which would be in keeping with expressed wish of the various opposition parties.

The Minister of Finance, who is in an apparent conflict of interest situation, should delete from Bill C-28 clauses 241 and 242, which have led to so many questions that have remained unanswered for more than a month now. The minister could include these two clauses in a different schedule of the bill or in a different bill altogether, as suggested by the Prime Minister's ethics counsellor.

In this respect, my colleague from Saint-Hyacinthe—Bagot proposed an amendment that I fully support, as it responds to the many representations made by the opposition, including a request for a special subcommittee to provide answers to some of the questions the government has refused to answer so far.

The ethics counsellor, who works for the Prime Minister, contends that it is not important to know whether or not CSL, the company owned by the Minister of Finance, would benefit from the provisions contained in Bill C-28. In that case, why did Mr. Wilson contact CSL the very day this matter was brought up to inquire as to whether the company was taking advantage of these provisions or contemplating to do so?

In addition, Mr. Wilson has admitted that he was not an expert in tax planning. However, he seems to accept at face value, without outside opinions, the statement from CSL to the effect that the company had no intention of using the provisions contained in Bill C-28.

For several weeks, the government has been denying that the Minister of Finance is at the very least in an apparent conflict of interest situation, arguing that the minister is not the one who introduced the provisions on shipping. Yet, the ethics counsellor contradicted the government by admitting that the Minister of Finance had sponsored Bill C-28 and that that creates an appearance of conflict of interest.

Mr. Wilson says, in this regard, that procedural problems in the Department of Finance put the Minister of Finance in an awkward situation and that things would have been done differently had he been advised, as he should have, before C-28 was introduced.

Since the ethics counsellor admits that the Minister of Finance is in a position of appearing to be in a conflict of interest, how should the federal government's June 1994 code of ethics apply in this case?

Mr. Wilson also suggests that the Minister of Finance was not aware of the content of Bill C-28 before the Bloc raised these issues in the House a number of weeks ago. Could the minister responsible for the Income Tax Act so easily have shirked his responsibilities in connection with a bill he was sponsoring and how does the public view a Minister of Finance who did not know what was in his own legislation?

Is ministerial accountability not a fundamental principle of our parliamentary system? The least I can say is that the government's stubborn refusal to open up the entire matter does little to lighten the suspicions hanging over the minister, on the contrary.

I would like to turn my attention to another point in Bill C-28, which concerns transfers to the provinces.

What this bill confirms is the unfortunate plan for making cuts, which the Minister of Finance dreamt up to reduce his deficit on the backs of others. What they are saying is that $48 billion in savage cuts to transfers for education, health and social assistance will be reduced to $42 billion. What a relief. This is no increase in transfers to the provinces. It is less of a cut.

In this regard, changing the cash floor for transfer payments to $12.5 billion is nothing more than a vulgar election promise, legitimized by the National Forum on Health, in order to fool the people into thinking they are giving more, when in fact the provinces and Quebec have to work with $42 billion less, while the federal government rubs its hands together at the prospect of encroaching on provincial jurisdictions with the money it saved.

Who is going to pay the social cost of the budget approach of this Liberal government? The sick, the unemployed and the most disadvantaged of our society. They are the real artisans of the first balanced budget. The Liberals have nothing at all to be proud of.

When one sees this Liberal government unable to admit it made a poor choice in its last budget, when one sees the federal Liberals encouraging the government to poke its nose into education, is it any surprise that the Prime Minister is trying to conceal the truth in the case of the Minister of Finance and the apparent conflict of interest?

On the eve of a provincial election, even the Quebec Liberals are asking their federal big brothers to be discreet and to respect the traditional demands of Quebec, but it is a bit too late for the Liberals.

With such eloquent examples as Bill C-28, which once again dumps the deficit onto the provincial governments, while offering the Minister of Finance some attractive tax opportunities, Quebeckers understand better and better whom the federal government is working for.

They understand that government decisions will never bear any resemblance to their wishes until those decisions are all made where their interests are really taken into account: in the Quebec National Assembly.

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, like our last speaker said, I am sure the finance minister may not have had any ill intentions in bringing forward this bill. Certainly Motion No. 2 which we are talking to would suit to chastise the minister for this. Probably he could blame a civil servant for not advising him correctly.

I put forward another concept which might be one of arrogance. Across the way we see a lot of arrogance. We see arrogance which leads to not considering what the real facts are, in fact not really caring much about the kind of perception that is created by the bills put forward in the House. When that level of arrogance reaches all the politicians right from the front bench to the back, we know what usually happens. Possibly that golden age we heard talked about this weekend might well be at its peak at this point when we witness that sort of arrogance across the way.

Politics is so much perception; what people think is happening is almost as important as what really is. I put forward that the perception that is being painted by the government at this point with its patronage appointments, with its special committees, with taking care of all of its members so well certainly starts to resonate among the people. I will relate a few incidents which will bring this point out.

I was at the APEC meeting in Vancouver last fall. It was very interesting. I was sitting at a table talking to foreign delegates from the various APEC countries. At the table were two defeated Liberal candidates.

Just to give an idea of the patronage and the kind of thing that goes on, these two gentlemen made it very clear that they had received two nights accommodation at the Waterfront hotel in downtown Vancouver. Those who know that hotel know the cost. They had received transfers in a limousine to the hotel. They and their spouses had been invited to these various high class banquets.

These men were defeated Liberal candidates. One of them had run in Esquimalt. He said to the gentleman next to him “So you are from Papua. What is a Papua?” This candidate said “Why are you here?” “I am from New Guinea and we are actually a member of APEC”. You can see the perception. All of us at the table said he had just insulted a representative of another government. The guy from northern B.C. was even better. He said to the guy beside me “So you are from Australia. You are not an Asian. You cannot be here. This is just for Asians. Sir, what are you here for?”

Perception. Patronage. That is what this is all about. That is what this motion is all about. Remember that perception is everything.

We could go on to the Senate appointments we have just seen and the sort of arrogance there. Certainly when we go through that whole thing regarding Mr. Fitzpatrick the perception is not what actually happened. That happens in business. I understand that. I come from a business background.

It is the perception. You do not name the guy to the Senate. You do not appear to be rewarding that person for something. Maybe it is more honest in Alberta where Nick Taylor says “I worked for the Liberal Party for 40 years and so I deserved it. Yes it is patronage. Yes I took the patronage. Yes it is part of this whole thing and I do not mind finally getting my freebies, my return for that sort of patronage”.

It is perception. It is why people have so little respect for the today's politicians. We could go on. In the area I represent we talk about Mr. Fowler, a good friend of mine who is our representative at the United Nations. This guy got himself in lots of trouble. We even had to shut down the Somalia inquiry because it was getting too close to him. He was rewarded with patronage. Perception is what it is all about.

We all know that the minister I shadow is the godfather of Winnipeg. Nothing happens in Winnipeg without the godfather knowing about it.

Patronage. Perception. That is what it is all about. That is what hurts this place. That is what hurts this country. That is what hurts what we do here. It is perception. What the finance minister is doing might be just fine, but the perception is that something is not working properly there.

When I am in my constituency I talk about planet Ottawa. I talk about the place that is not related to anything to which the normal person might relate. There is little accountability. There is little transparency. There is little worry about perception and there is a great deal of arrogance. Seldom do the Liberals listen to the people. Seldom do they ask the people what they think because of the confidence and arrogance that is built here does not tend toward that.

With respect to Bill C-28 and taxation, what are people saying about taxation? What are they saying in the streets? They are saying the government should take care of that debt, lower the taxes and stop spending.

We look at it from a business perspective. As I said I come from business. As soon as the business grew too big, there was no more incentive. The government took more and more and more and finally one would say “Why should I keep working for the government? Why should I keep risking my capital for the sake of paying more in taxation?” This government is destroying people's initiative.

What about young people? Twenty thousand young people leave this country every year, PhDs and masters graduates. Why do they leave? They leave because we have the highest tax levels in the G-7. They leave because they see no light at the end of the tunnel. They see a doomed pension plan. They see an insurmountable debt. They start looking around. It is a brain drain we as a country cannot afford.

Going on to payroll taxes, there has been a 73% increase in payroll taxes. What will that do for jobs?

I have to tell this House about visiting with people in three countries where there was a different method for pensions. A method was there for them to look at and to be part of their system. They had a private plan where they could look at their investment and see what it was worth to them. We must provide that initiative, that incentive, that whole thing which makes this country such an important and workable unit.

Very briefly, this is a snapshot of this country looking from outside. We have a $583 billion debt. We have a $45 billion interest payment which is destroying our social programs, our educational programs and is creating unemployment. In our military we discipline the guys at the bottom but none at the top. Our dollar is down in the tank. We have not learned very much. Everything we are doing is hurting our future generations.

I plead with this government to start being concerned about perception, about transparency. Start doing things as the Canadian people ask it to.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I am the member for Lévis. Everyone knows that we have an big shipyard in my riding. I felt an obligation to take part in the debate on Bill C-28. Although not all its clauses deal with shipping, there is one that does, and that is clause 241.

The purpose of the motion now before us moved by the member for Saint-Hyacinthe—Bagot is to delete this clause. Why? For a number of reasons, one in particular. In our view, there appears to be a conflict of interest, because this bill was introduced by the Minister of Finance. Although his interests are held in a trust, he administers several shipping companies under one holding company known as Canada Steamship Lines.

This company has several ships, but also has subsidiaries. The main feature of these subsidiaries is that they are all over the map internationally. Clause 241 of the bill reads as follows:

1. the corporation has as its principal business in the year the operation of ships that are used primarily in transporting passengers or goods in international traffic—

I asked myself why tax benefits were being given only to those in international shipping and with offshore interests.

In my opinion, this did not seem fair to the others because, ideally, a country's policy should promote its citizen's interests.

A number of companies administer the finance minister's interests in the shipping sector. The minister's interests are held in trust. The minister has companies in various sectors, but primarily in the shipping sector, and he has had them for a long time.

Some who made comments in this House said the Minister of Finance may have made a technical mistake by introducing the bill, since only one clause deals with international shipping. And we are told the minister did not take part in the drafting of that clause. Instead, he is said to have asked the Secretary of State for Financial Institutions to do it. Therefore, the minister would not be in a conflict of interest, or in an apparent conflict of interest.

This explanation leaves a bad taste in the mouth. We did not get clear answers to the questions we asked in the House and in the finance committee. We noticed that Mr. Wilson, the ethics counsellor, sometimes made statements that differed from what he wrote. All this does not seem very open, consistent or logical.

The issue deserves a closer look. We were told it was a technical mistake, but the whole issue must be put in the proper context.

Clause 241 of Bill C-28 is similar in every respect to clause 151 of Bill C-69, which was introduced last year and which, oddly enough, died on the Order Paper when the election was called. The Minister of Finance or his officials cannot claim it was an oversight, since Bill C-69 was also sponsored by the minister, which means the same mistake was made twice.

Talking about the election, I will tell the House a short story. During the election campaign, someone phoned and asked me to point out, during my campaign, that one of the ships belonging to Canada Steamship Lines was flying the flag of the Bahamas. When I checked the next day, things had suddenly changed: the ship was now registered in Canada. As members can see, one's image is important during an election campaign.

But the election is now behind us and we can see that the precautions taken were short lived. The Liberals forgot about being cautious, with the result that the Minister of Finance is again sponsoring a similar bill.

Clause 241 is a small provision. It should have been the concern not only of the Minister of Finance, but of all ministers who are allegedly concerned about Quebec's interests, especially those who were elected in Quebec. This matter should also have been a concern in the maritimes, for everyone with an interest in the shipyards. In 1993, the Liberal candidates at the time made a formal commitment to hold a summit on Canada's shipping industry. It was to be held during the Liberals' first mandate, but they did nothing.

About a month before he resigned, the New Brunswick premier, Mr. McKenna, was the chair of the provincial premiers' conference in St. Andrews. What did he do in the face of the drop in the number of jobs in Saint John? There is a major shipyard there too. When the work on the frigates for national defence ended, the number of jobs at Saint John Shipbuilding also dropped, as it did in all the small shipyards the company had bought in the maritimes. The same thing happened in the west. The same thing happened in the Great Lakes region, where Ontario's two remaining shipyards are to be found.

In four years the government has not held a summit and has not developed any new shipping policy. This is why Mr. McKenna along with all the other provincial premiers called for a real policy on shipbuilding.

The member for Mercier, who kept a close eye on the deliberations at the Liberal convention on the weekend, told me that the young Liberals moved a resolution to have the government establish a policy on shipbuilding.

I would therefore like to take this opportunity to remind those on the other side, the party in power at this time, of their promises of 1993, of the resolution passed by the young convention delegates this past weekend, of the adoption of a common position by all premiers at Saint Andrews last fall, promoted particularly by the former premier of New Brunswick, Mr. McKenna.

It seems to me that, in response to all that, the Minister of Industry ought to ask the Standing Committee on Industry to examine closely a new policy on shipbuilding. This policy ought to take into consideration the suggestions the Shipbuilders' Association of Canada has been making for at least a year, which boil down to four points. First of all, an improved export funding and loan guarantee program, similar to the one in the United States, should be implemented. Second, they call for new vessels built in Canadian shipyards to be exempted from the present Revenue Canada leasing regulations.

There should also be a reimbursable tax credit, somewhat similar to the Quebec government's measures on ships and drilling platforms that have been in place for at least a year. Finally, they call for elimination of the unilateral aspects of NAFTA which allow the Americans to send their ships here while we are not allowed to do the opposite.

I would point out very briefly that the United States has a very advantageous policy for shipbuilding. They do not, unfortunately, want to join with the countries calling for an end to subsidies. Consequently, for the past 20 years at least, the European countries involved in shipbuilding continue to subsidize their shipbuilders, as do the Asian countries.

Canada wants to play a lead role by saying that it will not do what they are trying to negotiate internationally. But, since we are one of only a few countries who do not, our shipbuilding industry is in the worst position of any in the world.

[Andrew Telegdi, Liberal, Kitchener—Waterloo, ON]

Mr. Speaker, I will be fairly brief but I feel I have to rise to correct some perceptions.

The member for Red River talked a long time about the perceptions of our plan in Ottawa. I can only say that we have some little green men in the House who have trouble with perception. They occupy the benches of the Reform Party.

Surely nobody would expect the government not to follow through on its agenda, particularly when we are following a federal election. We went forward, put our plan to the electorate and were elected on it. To make such comments about the Canada pension is totally wrong.

It is totally preposterous for members of the opposition to talk about perceptions and the brain drain after we tabled the budget in the House very recently. We did a whole lot to try to counter the brain drain. We put forward the millennium scholarship fund and extended money to the granting councils.

The reality is that the electorate has the perception and elected the government because it expected that it would carry out its promises.

I do not want to get in on a long discussion about perceptions and what kind of perception is given to the country when people say they will not move into Stornoway and the next thing they do is move into Stornoway, or what it means when people say they came to Ottawa to do politics differently and to establish a better decorum and then exhibit virtually the worst decorum in the House of Commons.

The perception of the Canadian public in terms of the job we are doing as a government in carrying out our mandate is good. All I can say to the member is that he really wants to check out his perception to make sure that he, as the government has, undertakes the kind of official opposition role the public expects from the official opposition.

[The Acting Speaker (Mr. McClelland)]

Before we proceed, I have been following the debate and I have to tell hon. members that from time to time it has been a real struggle to figure out how we are staying relevant.

I put everybody in the House on notice right now that if you are not going to be relevant in discussing the debate at hand, do not bother getting up.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I would like to speak to Motion No. 2. The Bloc motion is one that we support. We think it is a good idea. We think the government should be put on notice, as you have put us on notice, Mr. Speaker, that conflict of interest is completely and utterly unacceptable.

The motion was put in an effort to make sure that all members of the House would not benefit from the position we have today. I think we would all agree. That is why the motion was put forward and the Reform Party strongly supports it.

Be that as it may, the issue strikes at the heart of what has been mentioned repeatedly in the debate today, the confidence of Canadian people in the government and this institution. Conflict of interest or even the perception of conflict of interest erodes public confidence in this institution. If it erodes the public confidence in this institution, we as an institution cannot carry out our duties. If the public does not have confidence in us the public will suffer, we will suffer and our nation will suffer.

The government has demonstrated that cracks are developing in its midst. Motion No. 2 not only speaks to the issue of conflict of interest but also the repeated efforts by the government to use patronage as a way of solidifying its political base, its tax and spend sentiment, and its way of doing business that was thrown out by countries around the world. As we can see from the Liberal convention last weekend they are now looking at doing it again.

When will the government see that tax and spend ways will not only compromise the country but its ability to stay in power, not that we mind that incidentally? Taxes have been increased. The government, though, stated that taxes had gone down. This goes back to the root of the confidence of people in the government. It cannot say on the one hand that it will decrease taxes and on the other hand increase them.

My colleague from Medicine Hat eloquently demonstrated in the House that the government has repeatedly increased taxes and through bracket creep has taken more and more money out of the pockets of Canadians and put it in its own pocket for uses it sees fit, not for uses the public sees fit.

The government has shown a disregard for Canadian people. It will pay a political cost as well as a social cost for doing so. The social cost will result in its erosion in the eyes of the public. It will erode our economy and our social programs. The government does not have to go back to its tax and spend ways.

Motion No. 2 illustrates in microcosm that the government repeatedly failed to earn the respect of Canadian people. The government failed to do a number of things in Bill C-28. It has nibbled around the edges of our tax system rather than actually deal with it in a substantive way.

A few things can be done. We should improve the skills of our workforce. We should enable the private sector to put enough money into its research and development and hiring practices. Then we would have an improved workforce which would allow the private sector to be competitive in the 21st century.

We should lower taxes. The Reform Party has been fighting for lower taxes for a long time, and yet the government has failed to do it, even though other countries around the world have been doing it and demonstrating the fruits of this action.

The government says that by lowering taxes we are going to compromise the ability of social programs. It is the government's high taxes which are compromising the social programs that the have not people in this country have come to rely on. Therefore the government is compromising the very people it professes to want to help.

The government needs to lower taxes and decrease the rules and regulations that repeatedly strangle the private sector. The government needs to ensure that we have a pension plan which is privatized and effective. We need a health care system which will provide Canadians with the care they need when it is needed.

We do not have rationing on the basis of economics, we have rationing on the basis of the government choosing to withhold moneys and therefore services because it sees fit. Therefore Canadians from across the country who are poor are going to be compromised in their health care; not the rich because they can afford to go south.

This is another example of the erosion of public confidence in government. Motion No. 2, which we support, demonstrates very clearly that we need to have this motion if the public is going to have its confidence in government restored.

I have just returned from the United States. There are many things we can learn from the Americans and there are many things they can learn from us. They did not nibble around their tax situation. They took the bull by the horns and dealt with it in an effective way. As a result, their taxes are much lower. As a result, Canadians have been fleeing this country in droves.

The best of the best have left our country and gone south. As a result, they are pervasive everywhere from Wall Street to Hollywood. They are giving the United States the best of what we have trained them to do. Why has this occurred?

This has occurred because the government has failed to provide an environment in which the private sector can function in an effective way and by doing so enable Canadians to have jobs that are high paying, that are interesting and that contribute to our economy.

We need to lower our taxes. The government needs to regain the people's confidence by doing that. The government needs to take a lesson from other countries. It needs to see what they have done in order to buttress our economy. Lower the taxes. That would give the private sector money to invest in education, research and development, and that would put Canadians back to work.

Government members say that if we do that we will compromise health care. That is bunk. By taxing and spending, raising the amount of money the government spends on the basis of taxes, people are prevented from having money in their pockets to provide for themselves. The social fabric of the country is actually eroded and the very people the government professes to help are compromised.

Fiscal responsibility and having a social conscience are two halves of the same whole. One does not exist without the other.

The government should take a leaf out of the Reform Party's book. Our plan for fiscal responsibility is to spend within our means. That will enable us to have enough money to spend on social programs for those who need them. It will enable us to have enough money for health care. It will enable us to have a pension plan that works.

It does not take money out of Canadians' pockets to put into government coffers, thereby compromising the very people who keep the country strong, the private sector of our economy and the people who slave away day in and day out in the trenches of our country trying to make a living.

Instead of helping those people, as my colleague for Medicine Hat has said many times, the government has brought in over 39 tax increases and taken thousands of dollars out of their pockets.

We can have strong social programs, we can have fiscal responsibility, we can have a stronger economy, we can put people back to work and we can have lower taxes. The government needs to look at the plans we have put forward, look at plans that have been put forth around the world and, for heaven's sake, act. Do not nibble around the edges with measures such as Bill C-28, act.

The government's repeated failure to do this might make it look good, but what goes around comes around. I can tell hon. members this much. When more and more people die while they are on waiting lists in emergency departments, when more and more people fail to get needed heart surgery, when more and more pensioners fail to have enough money in their pockets when they retire, when more and more Canadians become unemployed and look south of the border where there is a 4.8% unemployment rate, when more and more Canadians get an education in this country and leave to go south to make a living, we will recognize once and for all that the policies the Liberals have put forward have been an abysmal failure.

[The Acting Speaker (Mr. McClelland)]

Before I recognize the next speaker, I thought for the benefit of the House that I might trace back to just exactly where we are today because I was a little confused.

We are on Motion No. 2, which is in the name of the hon. member for Saint-Hyacinthe—Bagot, which requests that the bill be amended by deleting clause 241, which has to do with the registration, the head office and the residency of ownership of shipping companies.

It would be a lot easier for me if every once in a while someone might, even obtrusively, refer to shipping companies' head offices. If we do not do that we are really making a mockery of this debate.

[Jim Abbott, Reform, Kootenay—Columbia, BC]

Mr. Speaker, with the greatest respect to the Chair, may I suggest for your consideration that, if there is an issue of relevance, under normal circumstances government members will take on the responsibility of raising the issue of relevance. I must admit that I am a little curious as to why the Speaker felt compelled—

[The Acting Speaker (Mr. McClelland)]

The Speaker felt compelled because it is the Speaker's responsibility. That is why the Speaker did it. Very often members of other parties will call the attention of the House to relevancy, but ultimately the responsibility for relevance is vested in the Speaker.

[Louise Hardy, NDP, Yukon, YT]

Mr. Speaker, I appreciate your direction.

The NDP supports the amendment to delete clause 241 because it calls into question not just the finance minister; it calls into question every single MP in the House.

We were elected to come here to serve the common good, not for our own agenda or our own benefit.

The finance department has put forward amendments which it says will accomplish two things. They will improve the 1991 residence rule by applying the same test to all foreign shipping companies whether they hold their ships directly or in separate foreign subsidiaries. Second, they will confirm the longstanding policy that the exemption applies to capital gains as well as to other income.

Concern has been raised because the finance minister tabled the bill and he has a direct relationship with a shipping company, the Canada Steamship Lines. At no time did the minister's department let the ethics commissioner know about the tax amendment and its relationship to the minister.

Earlier the Reform member for Fraser Valley said that the motivation to do this was because there is a connection to business. Even though it is in a blind trust it is important that business people make decisions based totally on good business. I disagree and say that decisions to avoid and evade Canadian taxes are based on greed.

We are not talking about a small business person with a little income who is trying to keep as much as possible to continue the business; we are talking about a multinational corporation which is evading taxes in Canada.

It really worries me when I hear members of Parliament implying that it is all right to evade Canadian taxes. As citizens we agree to pool our resources and then redistribute them for medicare, for education and for social programs.

When people evade taxes, those who can pay, and who pay a substantial amount—and we are talking about millions of dollars in taxes every year that will not be coming from Canadians—it makes it harder and harder for the rest of Canadians to make up for what we are not receiving.

It is really shameful that this kind of aspersion should be cast on our finance minister. I bring it back to the point that, as members of Parliament in this House, if an aspersion is cast on one MP it falls upon all our shoulders.

On that basis alone it is important to delete this clause so that the House of Commons can maintain a good reputation. People will know that we are here for their good, not our own or not for some interest separate from those of our citizens.

Although decisions taken by the Minister of Finance have an effect on all Canadians, it is still imperative that at no time should any public office holder appear to be in a position where there is any suggestion that they would benefit from their public office. Canadians should not be put in the position of thinking that we are all here as crooks or dishonest—