Debates of March 23rd, 1998

Reserve Force Act

[Jim Hart, Reform, Okanagan—Coquihalla, BC]

moved that Bill C-232, an act to facilitate participation in the reserve force, be read the second time and referred to a committee.

Madam Speaker, I rise today on behalf of the people of Okanagan—Coquihalla to speak to my private member's Bill C-232, the citizen soldier act. This bill will entitle employees of the federal government to a period of leave not exceeding two months annually for the purpose of training in the Canadian Armed Forces reserve. This legislation does not affect the private sector and private sector employers.

The question of legislating employers to allow training time for reservists with full time employment has been a contentious issue for some time now and, in particular, since the increased contributions in military activity since the early 1980s.

In response to the problem a national organization called the Canadian Armed Forces Liaison Council was designed. It was first established in 1978 with a goal that was not aggressive enough to accomplish its mandate of bringing more employers into agreement with allowing reservists to participate in the Canadian Armed Forces reserve.

In 1992 it was reorganized, given its present name and a new, more challenging mandate. The Canadian forces liaison council's mandate not only includes promoting reserves to the business community, but also advances reservists' concerns to business and works directly with employers in the area of recruitment.

The Canadian forces liaison council has been very successful. More than 3,000 employers have indicated their support of the reserve force in writing, including more than 1,700 who have adopted a military leave policy.

Some employers also pay the difference between military and civilian pay and other employers are even giving two additional weeks' leave for courses in the reserve.

I acknowledge that the Canadian forces liaison council has done a wonderful job. However, its role has been limited to the private sector and there is room for improvement, in particular when it comes to the need for the federal government to take a leadership role in allowing its employees to participate in reserve training.

This first came to my attention in 1994 when the then chief of defence staff, General John de Chastelain, appeared before the special joint committee reviewing Canada's defence policy.

When I posed a question to the chief of the defence staff on this issue he told the committee that the federal government was the worst offender in allowing training time for reservists.

Again in 1995, after the report on restructuring the reserves was presented to the Minister of National Defence and then to the House committee on defence and veterans affairs, I asked the members of the commission, the three commissioners, again to confirm whether or not the federal government was playing a proactive role in allowing reservists the training time they required to participate in the Canadian Armed Forces. Again they agreed with me that the Government of Canada, the federal government, the largest employer in our nation, was not in fact promoting reserve friendly policies in office protocol.

There it is. A contradiction exists. On the one hand the government encourages private sector employers to have their employees participate in reserve training through the Canadian forces liaison council. On the other hand, public service employees are not receiving that same encouragement. Bill C-232 addresses that discrepancy.

When surveying different defence associations across the country about my bill, I received a letter from Lieutenant Colonel D.W. Wright, representing the Royal Canadian Armoured Corps Association. He said that the Government of Canada has provided for limited military leave within the Public Service Staff Relations Act. Employees are permitted to receive a leave of absence for military duty and may elect to receive either their government salary or their military per diem.

He goes on to say that, unfortunately, the regulation is permissive rather than directive and most often thwarted by supervisors who exercise the ultimate discretion.

I will repeat that because it is very important and very disturbing for people who wish to serve their country through the reserve force. He said that the policy is most often thwarted by supervisors in the federal government who exercise the ultimate discretion. Therefore that means the reservists must devote their annual holidays which they have earned through their work with the federal government to meet their training obligations.

It is with this poor record of the federal government in mind that I introduced Bill C-232. This bill does not attempt to supersede the fine work done by the Canadian forces liaison council in the Canadian business community.

The Minister of National Defence, through the Canadian forces liaison council, would still be able to negotiate with private sector employers training time for private sector reservists. This bill does not affect them in any way, shape or form. What it does is directly attempt to address the poor record of the federal government when it comes to reserve training. With Bill C-232 I hope to accomplish three fundamental things: one, to enhance participation in the Canadian Armed Forces reserve; two, to ensure reservists receive the training required for effective augmentation of the regular forces; and third, to lay the groundwork for a national mobilization plan for Canada.

Participation in the reserves can benefit employers tenfold. Through their part time military experience reservists acquire many skills that are transferable to their jobs, including leadership, discipline and loyalty. Often reservists acquire special technical skills which they can use in their specific trade or profession in their civilian life.

Many employers have discovered the tremendous value of reserve training and education as their employees become more productive, more capable and highly motivated. All they ask in return from their employer is to train and upgrade through their military qualifications.

In the past few years Canadians have had the opportunity to examine firsthand the role reservists play domestically and internationally. I thought I would take just a few moments to talk about those instances.

Most recently, of course, the ice storm in eastern Canada required the deployment of some 4,000 reservists to the provinces of Ontario, Quebec and New Brunswick to assist in humanitarian relief.

Similarly, last year's floods in the Red River Valley required the deployment of some 500 reservists.

On the international scene, 800 UN peacekeepers, or 20% of Canada's entire UN commitment during the UNPROFOR mission in Yugoslavia were reservists, part time soldiers, citizen soldiers.

In 1993 it is interesting to note that Canadian soldiers fought their biggest battle since the Korean war. The battle in the Medak pocket pitted Canadian personnel and French troops against the war-hardened Croatian army. More than half of that proud troop was made up of citizen soldiers, reservists from the militia in Canada.

The Canadians won the battle. It was a true success for our Canadian Armed Forces, for reservists and for the total force operation.

Reservists continue to play an important role in the Canadian Armed Forces as part of the total force. They serve with distinction domestically and internationally and remain a vital link between the Canadian military and society at large.

The federal government, as Canada's largest employer, should create an environment where individuals can explore service in the reserves and serve their country. For example, militia units generally are made up with over 60% of their soldiers being either students, seasonal workers or unemployed persons. These soldiers have very few problems when it comes to finding the necessary time to train. However, once the militia reservist has finished their schooling and finds a full time job, the reality is that their priorities change. They tend to quit the reserves, quit the militia unit, and go into civilian life. They see this option as being easier than juggling their lives to ensure time for work, friends and the militia. These soldiers, in a way, are being punished for trying to keep a regular job and a regular life while trying to serve the government and Canada as well.

This bill is designed to enhance participation in the reserve from all walks of life, not just from the ranks of students and the unemployed. The federal government must take a leading role in facilitating participation in the Canadian Armed Forces reserve. As an employer, government departments and agencies can help individuals balance their careers with a desire to serve their country.

This attitude will filter down to smaller private sector employers. This is a very important point. One of the reasons for this bill is leadership by example. We want the federal government to do what the federal government is asking the private sector to do through the Canadian Armed Forces liaison council.

This will have two dramatic impacts. First, many working Canadians will have the opportunity to consider serving their country part time in the reserves. Second, the reserves and the armed forces in general will benefit from the new pool of skilled tradesmen and people with new abilities entering the Canadian Armed Forces.

Bill C-232 will entitle employees of the federal government a period not exceeding two months annually for training or service in the reserves. I will talk for a moment about the two month period which I have suggested. It is a length of time not to exceed two months.

I picked the two month period because the first training course a reservist must take is the general military training course. It is commonly referred to as recruit training. Some of us would call it boot camp. It is an eight week course and new recruits must successfully complete the course in order to continue service in the militia.

Reservists may receive their recruit training on weekends. Usually it is over an extended period of time, about six months in length. They have to attend recruit training every weekend, or it is offered on an eight week summer course.

Many people interested in serving with the reserves have been unable to commit to the eight week period during the summer, especially when they are employed full time. Some are unable to give up their weekends for a six month period. Others cannot get permission from their employers to take the summer course. Therefore service in the reserves is not an option for these people at this time.

Bill C-232 will enable employees of the federal government and crown corporations to take the initial eight week recruit training course. This will open up the reserve option to many working Canadians who previously could not take that course.

This does not mean that the reservists will want a two month training period every year. In fact reservists would not even have the opportunity to take two months a year. They would still have to apply for a course. They would have to meet a certain criteria. Most of the courses available to the reserves are not eight weeks in duration. In fact the normal period is about two weeks and that is why in my bill I specifically say up to an eight week period.

There are essentially three types of reserve service. Class a is a part time status which involves working one or two nights at the local community armoury and working on some weekends. Training cannot consist of more than 12 full consecutive days. Class b and class c services involve longer periods of continuous reserve employment.

The important point to note is that except for the initial training course most other training and specialty courses are two weeks in duration.

Another important point in my bill is forced generation. If Canada is realistically to look at the mobilization plan outlined in the 1994 white paper, a policy such as this one would have to be put in place.

I would ask for unanimous consent of the House for Bill C-232 to be votable.

[The Acting Speaker (Ms. Thibeault)]

Does the hon. member have unanimous consent of the House to make the bill votable?

[Some hon. members]

Agreed.

[An hon. member]

No.

[Ovid Jackson, Liberal, Parliamentary Secretary to President of the Treasury Board]

Madam Speaker, it is my pleasure to speak on Bill C-232 presented by my colleague from Okanagan—Coquihalla, an act to facilitate participation in the reserve forces of Canada.

I fully support participation in the reserves. In fact, in my riding of Bruce—Grey we have the Grey and Simcoe Foresters and Lieutenant-Colonel Rutherford who went to Somalia. We know of the good work of citizen soldiers. They serve their country very well. It is actually quite a good program.

The Public Service of Canada already has regulations in place that facilitate the granting of leave to its employees for this reason. Military leave for employees in the federal government is subject to reserve forces training leave regulations under the National Defence Act and leave with pay and without pay policies of the Treasury Board.

Crown corporations operate under their own terms and conditions of employment. Many have included military leave provisions for their employees who are reservists.

I am also pleased to report that approximately 3,000 other employers in Canada have participated in the provisions for military leave on their terms and conditions of employment. In its current form the proposed Bill C-232 does not bring any new benefit to reservists and it does not meet Canadian forces operational requirements. I therefore have no choice but to oppose the bill.

I draw the attention of members to clause 2(1) of the proposed legislation as it actually reduces the current flexibility of the length of military leave and its compensation. First, this provision would be more restrictive than the current treasury board policy which does not limit military leave to a two month period and allows a choice of leave with or without pay to the discretion of the deputy minister.

In addition, the restriction of two months of leave would not meet some requirements on United Nations peacekeeping missions which are at least 10 months and could be in excess of 12 months for United Nations military observers.

Second, the provision does not address the issue of compensation. It only provides for an annual leave of absence for a period not exceeding two months. As I have pointed out, currently public service employees have the choice to request leave with pay or leave without pay for most reservist activities.

Third, this provision does not provide any flexibility to deputy ministers who currently may grant or deny military leave. At the time of a downsized public service it is essential that deputy ministers keep some flexibility in the operational requirements of their departments.

Notwithstanding, deputy ministers have been granting military leave in accordance with Treasury Board policies. Between April 1991 and March 1997 an average of 314 public service employees per year were granted military leave with pay and an average of 20 public service employees per year were granted leave without pay.

It must also be noted that since 1970 there has been no adjudicated complaint for not granting military leave in the public service. As well, during the gulf war deputy ministers supported granting a leave of absence without pay to employees wanting to serve in the Canadian Armed Forces whether voluntary or involuntary. These employees were guaranteed the protection of their employment status regardless of the length of the leave of absence.

I would like to address another point. Employees of the government and crown corporations are subject to different legislation and regulations. Therefore these latter employees cannot be treated in the same manner as is being proposed in clause 2(1). It is my view that clause 2(1) of the proposed legislation would place more restrictions on the participation of reservists. Furthermore it is my view that clause 2(2) would have an effect on the participation of the reservists and that private sector employers would view the legislation as unjustified interference by the federal government in their labour relations practices.

The Minister of National Defence already has the authority to enter into agreements with any employer. Therefore clause 2(2) would not provide any new authority that does not exist already. Moreover it would be impractical for the Minister of National Defence to enter into an agreement with an estimated 10,000 current employers of reservists.

The possibility of using legislation to mandate employer support for military leave and to provide job protection for reservists serving the Canadian forces has already been studied. It was found that such legislation could lead employers to discriminate against reservists in their hiring practices. As well, it would result in a significant financial burden for certain employers and would cause a general backlash on the part of some employer associations.

In closing, I reiterate my position. I fully support the participation in the reserve forces. I must oppose the bill because it would not promote participation and it would not make it easier for citizens of Canada who wish to participate in reservists activities.

On another note, I have been a member of the Grey and Simcoe Foresters in my riding of Bruce—Grey since 1968. I speak to the men and women who participated whether it was the ice storm we recently had in Ontario and Quebec or the floods out west. There is no doubt in mind that reservists are necessary and important. They have certain skills.

For instance, we could have a medical doctor who is maybe a professor emeritus of some university with specialist skills in case of a sudden chemical war. In situations where their services may be required there is no doubt in my mind that these men and women will volunteer their services. Canadians are well known for this. Dr. Bethune who went to school in the riding of Bruce—Grey participated in China with blood transfusions and his work helping people overseas is well noted.

I reiterate that I love the reservists. I think they play a great role. It is great that we can draft an engineer working for a firm to go overseas to rebuild a bridge that was damaged in a war torn place.

The Canadian example is great for the world. We export our democracy and our civil way of living. We would like the world to be like us because we are a great country.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, I am pleased to rise today in support of Bill C-232 and the principle involved in it. As I understand, it is basically that the government should practise what it preaches to the private sector and institute a regime within its own house that would permit Canadians who work for the federal government to have leave for training as the member intends in the bill.

There might be some problems that could have been straightened out in committee if the bill had been made votable and referred to committee. I do not think the member on the government side made a convincing case for the necessity of the bill being defeated at this point.

If the bill contains the germ of a good idea, which I think it does and which I think the government member thought it did, I do not know why unanimous consent was denied by a government member. This could have gone to committee. The committee could have sorted out some of the details and perhaps come back to the House with an improved and amended bill but nevertheless a bill that would have gone some way toward accomplishing what the hon. member intends in the original draft of the bill.

I add my own compliments and those of my colleagues for the work done by reservists over the years both domestically in terms of the ice storm and the flooding in Winnipeg and in terms of work they have done as part of Canada's peacekeeping forces around the world.

If the bill were to go ahead, it would provide an opportunity for more Canadians serving in the armed forces reserve to participate, having had the benefit of more training than they sometimes have now as a result of the difficulty some of them experience, particularly those who are working for the federal government but also those in the private sector although the bill is intended to deal with those working for the federal government. I am referring to the difficulty they experience in getting the permission and the time to take the kind of training they would like to have the benefit of.

It appears we are to have a smaller regular armed forces as there have been numerous cuts both in the strength and in the resources available to the Canadian Armed Forces. Then we would rely more and more on reservists to do the kinds of things we want our armed forces to do, whether it be in peacekeeping, addressing a civil disaster or whatever the case may be.

One thing has always mystified me over almost 19 years of being in the House. Why have reserves always had to be on the begging end of things when it comes the defence budget? It is the one area where there has been no disagreement among the parties.

We have disagreed here in the past on cruise missiles, nuclear submarines, all kinds of things. But no one has ever disagreed about the importance of the reserves and the fact that they need more resources than they get.

That unanimity or consensus has never seemed able to provide the impetus for any government that I have experienced so far to provide the reserves with the kind of policy framework and the resources they so clearly need. These are needed if they are to fulfil both their traditional role and the expanded role which is being increasingly required of them as a result of the cuts in the regular forces and the increasing demand on Canada to participate in various peacekeeping efforts.

It is regrettable the government decided to stand in the way of this bill at least going to committee. These things could have been considered in committee so that we might have before us some legislation which required the federal government to make this kind of leave available to its employees who are active in the reserves and who wish to have this kind of training.

This would have benefited many people who serve in the many fine regiments in Winnipeg, the reserve regiments, the Fort Garry Horse, the Queen's Own Cameron Highlanders, the Royal Winnipeg Rifles and of course those who serve in both the navy and the air force reserves. There are a lot of Canadians in Winnipeg who are active in the reserves. I am sure I speak on behalf of them when I say that this bill should have been given more consideration than it apparently has been given by the government.

I regret that the bill has not been made a votable item on the floor of the House of Commons and sent to committee. Then we could have had a recommendation come back to the House that would have made it that much easier for the men and women in the Canadian Armed Forces reserves to get the kind of training they are entitled to.

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

Madam Speaker, I would like to congratulate my colleague the hon. member for Okanagan—Coquihalla not only for bringing this private member's bill forward but also on his recent marriage. Congratulations to him.

My friend and colleague has done a tremendous amount of work for the military for quite some time. As our previous defence critic he did an enormous amount of work bringing the plight of the members in the armed forces to the forefront.

Bill C-232 which my friend from Okanagan—Coquihalla has brought to the House is an effort to try to augment the ability of our armed forces to continue to do the great job it does in increasingly difficult times. As we in this House know, the armed forces has had a very difficult time with cuts. As such the number of people in our armed forces to carry out its duties has diminished dramatically.

How do we deal with this? How do we ensure that we are going to have enough people to carry out our duties and our international obligations as a member of NATO and so many other groups?

Bill C-232 enables us to buttress up the number of people in our armed forces through reserve members. The bill calls for a number of people to be taken from the public sector up to two months every year to carry out their training, their duties and their activities as part of a Canadian reserve force that would be integrated into our existing standing forces.

The bill challenges the government to show leadership. The defence committee's 1994 white paper said very clearly to the government that reservists are needed to buttress up the armed forces. A way to do that is to provide opportunities for members of the public to become reservists.

So far the government has again failed to act on its promise. We have roughly 25,000 members in the reserve force today. The government has stated that it needs 30,000. Bill C-232 paves the way for the government to do this. The bill allows people in the public sector to take up to two months from their jobs to become part of a regular standing unit as reservists.

This bill clearly allows the government to fulfil its duties and obligations as part of the 1994 white paper. The bill tries to stimulate the government into helping our beleaguered armed forces personnel and units to have enough manpower to carry out their duties.

Our armed forces personnel have had very difficult times over the last few years. In my riding of Esquimalt—Juan de Fuca they have had extraordinarily difficult times with cuts that have been made willingly and in the context of fiscal responsibility. However, what the government is doing now is cutting even further into the muscle and bone of our armed forces.

In the depot area of my riding which has been a model for downsizing and streamlining, the government is going to put these people's jobs up for tender. That is okay as long as the people who have those jobs right now are able to compete for those jobs in a fair and equitable fashion. The government is not giving them that option.

The situation is awful. Many of these people have been working in the armed forces for decades and for a wage that is below welfare rates and they are actually being forced to leave their jobs. These people who have been working below welfare rates are working because they support the military, they support the armed forces, they love their jobs and they love our country.

After all the downsizing which has taken place within their groups and which has been done willingly and effectively, the ministry of defence has now said it is going to take away their opportunity to bid for their jobs. It is going to give the jobs out to the private sector. This serious problem not only is happening in my riding of Esquimalt—Juan de Fuca but is happening all across this country.

We are asking that the members in the armed forces today be allowed to bid for their jobs in a fair and equitable fashion. The minister should not throw the baby out with the bath water. These people should not lose their jobs. We are going to lose jobs and effectiveness in the military if these jobs are tendered out to the private sector.

Our armed forces personnel are having a terrible time in terms of their finances. Some are living below the poverty level. There are some things the government can do immediately to buttress up the situation in our armed forces.

First a solution could be to make the accommodation assistance allowance non-taxable and payable to all people within our armed forces. We should also enable the local commanders to have greater flexibility in how to handle the resources on their base. They are restricted right now by the Treasury Board. They could become much more nimble and fiscally responsible and have more money to help their people and would not be a burden on the taxpayer if they were able to have more flexibility.

The government has also raised rents dramatically on members' quarters while they have had a pay freeze for the last seven years. One cannot on the one hand go to our military personnel who are already being paid substandard wages and freeze their wages, and on the other hand jack up their rents by as much as 10% to 12% a year.

What kind of message does that give to our armed forces? It tells them that we do not care about them. That should never happen to these hardworking men and women who put their lives on the line to keep our country safe and to fulfil our international obligations.

This bill and other suggestions need to be dealt with as soon as possible.

Our military personnel have not had the hearing they require from this government. This government has failed our military personnel repeatedly in the past. It has not given them the tools to do their job. It has not given them the money to live on. And this is in the face of men and women, Canadians, who are giving their lives and working because they believe in the institution of our Canadian military. Many come from generations of military personnel and it is part of their heritage as it is part of our heritage to have a fine fighting force.

The government needs to tell these people what their obligations and duties are and where they fit in to the foreign policy picture. Do not leave them hanging out in left field. Support them. Give them the confidence and respect they have given this country for decades and we will have an armed forces that will be as good as it can be.

My colleague from Okanagan—Coquihalla, a former member of the armed forces, a man who knows what he is talking about, has put forth Bill C-232. It is a good and sensible bill, a pragmatic bill that is congruent with the government's obligation. In 1994 the government promised to build a strong reserve force that would complement a shrinking armed forces personnel base. That reserve force would enable us to fulfil our international obligations in a way which is consistent with our objectives as a country.

I ask that every member in this House, in particular government members as they are are the linchpins in this, to look at the armed forces and to think about supporting its members, many of whom live in their ridings. Support Bill C-232 not only for our armed forces personnel but also for Canada.

[David Price, Progressive Conservative, Compton—Stanstead, QC]

Madam Speaker, I am pleased to speak on this bill, the reserve force act. As I see it this act was designed to facilitate service in the reserves of Canada's armed forces.

I am in agreement with the idea behind this bill. This is a very real issue of operating and training and recognizes that our reservists are a crucial element of the Canadian forces. Canada gets 24% of its soldiers from the reserve for only 3% of its budget. More training means more expertise for our reservists and more expertise means stronger Canadian forces.

I was in the reserves as a young man. I am likely in this Chamber today as a direct result of lessons learned.

However as with much of what the Reform Party does in this House, this bill has not been properly thought through. There are some real dangers in this bill that have to be considered. When I say dangers, I mean dangers to the Canadian forces.

I am quite sure the Reform Party has not thought of this but if this bill were to pass, it would be a further excuse for this Liberal government, a government with no respect for the Canadian forces, to further cut regular forces. It would give the government an opportunity to say “We have these well-trained reservists. We are a peace loving nation. We have priorities, we can now get rid of our regular force”.

I do not know about the Reform Party but my party refuses to allow the Liberal Party any more excuses to cut the defence department's budget. It has already been cut by 25% since the Liberals took office. As we have seen in the defence committee, this has had negative effects on the military's ability to perform. It has also had a grave effect on the state of morale in our forces. My party will not give the Liberal government any more reason to further cut the defence budget.

I will talk briefly about the practical effects of this bill, the effects it will have if implemented and the way it stands now. I am thinking of a postmaster in one of my 39 small municipalities. Could he or she leave for two months? Because of this government's downsizing, there is not enough staff to rotate. Will he leave and the mail will not be delivered for two months, or does the Reform Party expect this Liberal government to pay for a replacement for two months?

In my own riding I know of several government employees who are officers in the reserve. One man is the commanding officer of the Sherbrooke Hussars. He is in charge of maintenance of all school buildings in the municipality. In his job it would be nothing short of impossible for him to leave for two months. Granted, he has worked out a very good arrangement with the school board.

I welcome the opportunity to meet the member for Okanagan—Coquihalla to further discuss the bill and I look forward to it coming up in committee.

[Mac Harb, Liberal, Ottawa Centre, ON]

Madam Speaker, the intentions of the bill seem to be quite reasonable. However, when we look at the two aspects proposed, it might prove to be counterproductive.

In Canada we have many reservists who have served their country extremely well. For example, when the flood took place in Manitoba, over 800 reservists participated. Over 4,000 reservists participated in local communities in Quebec, Ontario and New Brunswick and elsewhere across the country. The recent ice storm that struck a good part of eastern Ontario as well as western Quebec and the Montreal area saw many reservists helping out local communities. Reservists have played an incredible leadership role on the national scene. Many of our reservists have participated in international peacekeeping missions around the globe and have proved to be model citizens we are all proud of.

The intent of the bill is to do two things. First, it will ask the Government of Canada or any crown corporation to allow each employee who is a reservists to have two months leave at most. The second intention of the bill will also ask the private sector to do the same. As a result of that, each reservists will have two months leave to participate in reservist activities, whether he or she works for the federal government or for the private sector.

When we look at this in isolation it sounds reasonable. However, many of the activities our reservists participate in will require more than two months. In some cases reservists will have to be on the job for 10 months or more. If there is an activity that requires more than two months, reservists will not be able to participate. At the federal level we have a system which will allow reservists to have 10 or more months leave when it is required. We have no need to concern ourselves with government policy concerning reservists. When it comes to the private sector, however, if we pass this legislation in the House of Commons, provinces will have to modify their labour codes to be consistent with what we have passed here. If we tell an employer that by law he has to allow a reservists leave for two months every year, we will create an absolute reverse discrimination against reservists. The employer may choose not to hire a reservist because he is obliged by law to give the reservist two months leave per year in order to participate in activities.

The intention of the legislation may be good, but the implementation of it may prove to be counterproductive.

We now have in place a better system. It leaves an arrangement existing now with the liaison office to deal with reservists entering into agreement with the private sector so that the private sector can do it as a part of that agreement.

I am happy to report and to share with my colleagues that presently there are approximately over 3,000 employers across Canada who participate in the hiring of reservists and who work with the military and the armed forces in order to make it easier for those reservists to have a position that is flexible and a position that will allow them to serve their country in times of need here in Canada or outside the country.

We may as well not have any legislation that is not consistent and that does not provide the reservists with a better opportunity.

I want to congratulate my colleague for thinking about the importance of making the job of reservists easier and for helping them to participate. But these reservists would be better off with what we have now than to move to the new proposal.

Now over 25% of our military deployment in Canada are considered reservists. They are doing an outstanding job for the country. Frankly, if we were to move with some sort of proposal, it would have to prove to be better than what we have. To that extent, I would be inclined not to support those two amendments in the legislation as proposed by my colleague.

I want to go on record once again on behalf of my constituents in Ottawa Centre and many of the people who live in eastern Ontario in passing along our great appreciation and thanks to not only the reservists who worked so diligently during the recent crisis in eastern Ontario and across Quebec and in the Atlantic provinces but to the military as a whole.

Frankly, quite often we forget to look in the mirror to see who we are and to realize that in fact we have some of the finest military forces in the world, that we are extremely proud of what they have done not only here in Canada but across the world.

They are model citizens. They have served their countries greatly, reservists included. They have participated in missions and they were model citizens. They have done great service to their country.

I have many reservists in my constituency in Ottawa Centre. I want to congratulate them too. I have many young Canadians who want to be part of that wonderful service and also I want to tell them that this is a great service to their country, go for it.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Madam Speaker, I am delighted to have the opportunity to speak in this debate.

I looked at the member's proposals very carefully. I have a very genuine concern that I hope he will address in his summing up remarks.

What Bill C-232 does, as I read it, is make it a right for a reservist to have a two month leave of absence annually from the civil service. This is where my concern is.

When we give people a certain right to something, then it changes the entire character of that institution.

My concern is that if the reserve organization fills its complement of soldiers and these soldiers all have a right to a two month leave of absence from their employer, I presume with pay, then there might be a situation where a poorer quality of reservists may stay in the reserve forces. He or she would be guaranteed. He or she does not have to make a sacrifice to stay in the forces because of the mandatory two week leave of absence they get for drilling or service in the militia.

I think it is very dangerous. As I read it, one of the reasons why our reservists have consistently proven to be such fine soldiers wherever they have served is there has been a screening of them as volunteers. They have had to make sacrifices usually in order to belong to the reserve forces. That generally elevates the quality of soldier who serves overseas. I would be afraid that with making mandatory leave would erode the quality of soldier we would have staying in the reserve.

[Jim Hart, Reform, Okanagan—Coquihalla, BC]

Madam Speaker, I would like to thank all members who participated in this debate on Bill C-232, an act to enhance the participation of the Canadian Armed Forces reserve.

In particular I would like to thank the government members for coming here with the notes of deputy ministers of various departments telling us why the federal government should not enhance or encourage members of the federal government to participate in the reserve force. This is one of the problems.

I think one of the government members who spoke here today basically has talked to bureaucrats and has talked to deputy ministers but did not get into the grassroots, did not talk with the reservists themselves.

I am very proud to stand in this House and say that I served five years in the regular force and five years in the reserve force of the Canadian Armed Forces. These problems that this bill will address are real. These problems are becoming more and more evident with the policies of this government. In 1993 when this government took over in its white paper it reduced the regular force to some 60,000. This government was on track to reserve the reserve force. All the while our international commitments and commitments domestically are increasing.

The arguments the government put up today are not reasonable. The argument stating this would not allow people in the reserve to go out on UN peacekeeping missions is pure balderdash. This is basically saying that the reservists are unable to get the training to even apply for that international commitment at this point because the federal government is thwarting their ability to apply for those courses. The government is saying no and if it does say, they have to use their own personal leave.

It does not prevent them from applying for a peacekeeping mission for 10 to 12 months. Granted, other arrangements would have to be made with an employer, because this is not job protection legislation. This is only to ensure they get their training to enable them to apply for other missions, to serve our country.

This bill will address the enhancement of the Canadian Armed Forces to more than just unemployed people and students. It will open the forces up to a wide variety of people with different skills that will bring a new meaning to the term citizen soldier. This will bring new skills and abilities and it will also address another very important issue in the white paper of 1994 by this Liberal government, a mobilization plan.

The minister of the day outlined a mobilization plan with four strategic ways to expand our force if needed. None of those commitments have been met. This bill addresses it because whatever mobilization plan we have in this country, we will require trained and capable armed forces personnel and they will have to be made up partly with reservists.

No, this bill does not discriminate against reservists. There are discrimination laws in this country. A pregnant woman cannot be discriminated against, and neither can a reservist. That is a basic principle in this country.

Those arguments that have been put forward have blinders on to the facts. We have a Canadian Armed Forces that is declining in numbers, a reserve force that needs training and training time.

We have international and domestic commitments that are increasing on a yearly basis, almost on a daily basis, yet this Liberal government has failed to do anything for those people and for the state of the Canadian Armed Forces.

In closing, with those arguments and because we have heard today in this debate that we have support in principle from the Conservative Party, we have support from the Reform Party, we have support in principle from the New Democratic Party and, by the sound of the Liberal speakers and the notes they got from their bureaucrats to argue against this bill, there was even a hint of support in principle from those people, I would say, for goodness sake, let us not stand in the way of progress. Let us move this bill to the next level, send it to committee and get all of these details ironed out there.

I would therefore move again that Bill C-232 be deemed votable by the House.

[The Acting Speaker (Ms.Thibeault)]

Does the hon. member have the unanimous consent of the House to make this a votable motion?

[Some hon. members]

Yes.

[Some hon. members]

No.

[The Acting Speaker (Ms. Thibeault)]

The time provided for the consideration of Private Members' Business has now expired and the order is dropped from the Order Paper.

The House proceeded to the consideration of Bill C-28, an act to amend the Income Tax Act, the Income Tax Application Rules, the Bankruptcy and Insolvency Act, the Canada Pension Plan, the Children's Special Allowances Act, the Companies' Creditors Arrangement Act, the Cultural Property Export and Import Act, the Customs Act, the Customs Tariff, the Employment Insurance Act, the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the Income Tax Conventions Interpretation Act, the Old Age Security Act, the Tax Court of Canada Act, the Tax Rebate Discounting Act, the Unemployment Insurance Act, the Western Grain Transition Payments Act and certain acts related to the Income Tax Act, as reported (with amendment) from the committee.

Income Tax Amendments Act, 1997

[The Acting Speaker (Ms. Thibeault)]

There are three motions in amendment on the Notice Paper for the report stage of Bill C-28.

Motion No. 1 will be debated and voted on separately.

Motion No. 2 will be debated and voted on separately.

Motion No. 3 will be debated and voted on separately.

[Monte Solberg, Reform, Medicine Hat, AB]

moved:

Motion No. 1

That Bill C-28 be amended, in Clause 178, by replacing lines 35 to 40 on page 315 with the following:

“Canada;”

Madam Speaker, I am pleased to stand today to debate Bill C-28, and in particular Motion No. 1

I should start by saying that I object to this bill on three grounds primarily.

First, it is a bill that discusses income tax without providing any tax relief for Canadians. Second, it is a bill that talks about income tax but does not provide people with a simplification of the tax codes, something that has become very confusing for many people. Finally, it is a bill that really typifies this government's aimless approach to dealing with the problems of the nation. It is a bill that really does major on the minors.

Specifically, Madam Speaker, let me speak to the motion that you have just read. This motion attempts to roll back what I believe is a real attack on the sovereignty of other levels of government by the federal government. Essentially what the government is proposing to do is to circumscribe the ability of municipalities to raise revenues for their constituents, for the people of their cities, villages and towns, through subsidiary corporations. There are many such organizations like that in Canada today.

I want to explain to the House and to people who are watching this via television why it is really important that municipalities continue to have the ability to raise these revenues without having them taxed by the federal government.

First, I want to point out that it was the federal government, going back to the 1993 election, which made a solemn commitment that it would not cut transfer payments to the provinces. During the leaders' debate we know that our current Prime Minister, when asked about cutting federal transfer payments for health care, said “I said yesterday, replying to Mr. Bouchard, that I promise they will not go down and I hope that we will be able to increase them”. The rest is history.

We know that the Prime Minister did not meet his commitment. He did not come anywhere close. In fact he cut transfer payments in total by about $6 billion. The result was that the provinces had $6 billion less money for health care and higher education.

What did they do? They had to find some way to save money as well, so they started to make cuts. One of the areas that was hit were the municipalities. Municipalities were hit and were unable, in many cases, to provide some of the services that they typically had been providing. At the same time the government was expecting them to pick up even more services. Traditional services which they used to fund, they were unable to fund. At the same time provincial governments were asking them to pick up new services. In fact the federal government was doing the same thing.

We now see in this particular piece of legislation, Bill C-28, the federal government proposing to tax another level of government, something which I think is wrong. I think it is incorrect, particularly when this level of government, which is the level of government closest to the people, the one that is best able to judge, the level of government that does the best job of delivering services, is being asked to pick up more of the load. It is wrong for the federal government to propose to take away revenues that they earn through their subsidiaries in their own municipalities. It is absolutely wrong, but that is precisely what the government is proposing to do.

That is not the end of it. The final point, and maybe the most important point, is that these taxes inevitably always are passed on to the consumer. We know that. Every member in this House knows it. We know that when corporations are taxed, those corporations pass taxes on to the consumer. That is precisely what will happen this time as well.

We know that this government has a penchant for raising taxes. We know that we have the highest personal income taxes in the G-7 already. They are 56% higher than the G-7 average. We know that if we were to be competitive with the United States in terms of tax levels we would have to have a tax cut in this country of over $35 billion.

I know my colleagues across the way will say that we must take into account what happened in the last budget, which reduced taxes by partially eliminating the 3% surtax. Indeed it did. But what they did not tell us in the budget is that they just finished increasing payroll taxes through the Canada pension plan premiums which people have to pay.

In fact, that tax increase will be the largest tax increase in Canadian history.

What the government does not talk about is the phenomenon of bracket creep, an inflation tax that happens every year. This year alone bracket creep will more than wipe out any tax relief that the government is proposing to give us through its reduction in the surtax. Eight hundred and eighty million dollars is what the government surtax would give Canadians in tax relief. On the other hand, bracket creep would take $1 billion out of their pockets. Canadians, just on that level alone, are coming out as net losers.

We say to our friends in the government that increasing taxes is not a way to help anybody. When are they going to learn? When are they going to figure that out? We have had 107 tax increases since the Tories and the Liberals came to power. We have staggering levels of taxation.

At the Liberal convention this weekend we heard Liberals saying that we must have tax relief. When is the government over there going to wake up and figure out that it is time for Canadians to have some tax relief? I am sick to death of seeing the government come up with new and creative ways to tax Canadians. That is essentially what it has done with this provision in Bill C-28. This is yet another sneaky, back door way of increasing taxes.

I hope my colleagues around the House, who are concerned about the government's trampling on other jurisdictions, understand that what the government is essentially doing is proposing to tax another level of government, proposing to invade its jurisdiction and to invade its sovereignty. That is wrong and it is unproductive. It does not help when we are trying to build and unite a nation. However, that is precisely what the government is doing.

I sat on the finance committee when this bill made its way through Parliament in the last Parliament. We heard a representative from the Federation of Canadian Municipalities who spoke against this particular provision because they could see what was going to happen. The government is again coming up with a new way to rip money out of taxpayers' pockets. It is wrong. We need to stand up against this sort of creeping taxation that the government has relied on to suck ever more money out of taxpayers' pockets.

I was looking through some documents a few minutes ago and noted that between 1993 and, according to the government's own projections, 1999 we will have seen federal income tax revenues rise by over 40%.

My friends will say that was growth in the economy. Give me a break. Growth in the economy would not even be half of that. It would not even come close to accounting for that massive increase in income taxes. This is an increase of over $20 million. It is a 40% increase. Where did that come from? It came from these sorts of sneaky, back door taxes that this government has used 36 times in order to get more money out of the pockets of Canadians.

It is no wonder we had people standing up at the Liberal convention chiding the government and telling it we need to have lower taxes in this country.

I will simply conclude by saying to my friends across the way and to my colleagues around the House that this is an important issue for municipalities. They are already struggling to provide services that used to be provided by other levels of government. They are struggling to provide basic infrastructure for their constituents. Let us not approve this and further circumscribe the ability of municipalities to provide those services.

Let us go the other way. Let us ensure that the government starts to fulfil some of its promises that it made in previous elections to provide greater transfers to other levels of government which do a far better job of delivering services than a big, fat, bloated central government in Ottawa. Let us hold this government to those promises.

[Tony Valeri, Liberal, Parliamentary Secretary to Minister of Finance]

Madam Speaker, as I sat here and listened to the intervention from the member for Medicine Hat, I could not help but come up with a one-word description and that is hypocrisy.

I cannot believe he actually stood up and talked about the fact that he wanted to now support infrastructure at the local level when it was the Reform Party that stood up in this House day after day saying the federal government should not put forward an infrastructure program for the municipalities that was partnered by the federal level, the provincial level and the local level. Those projects that took place at the local level took place because the local municipalities provided input and direction as to where the money should flow, bottom up.

As he stood there I was amazed that he actually had the nerve to talk about the bill doing nothing more than providing tax increases. What about the $1.5 billion increase in transfer payment going to health, going to a different level of government? What they do not understand is that if you remove something it is a decrease. If you put something back it is in fact an increase in the eyes of those who are receiving it.

Then he goes on to talk about tax increases and that is what this is all about. Then he made reference to the Canada pension plan. I think he only once had a point to make with respect to the motion. Other than that he talked about the broader issue. He brought up CPP so I thought it would be important to comment on that. And he made reference to the fact that CPP was a tax increase.

Once again I just want to be perfectly clear, and I will speak slowly so the member can understand, that a tax increase occurs when in effect revenues flow to the consolidated account, to government revenue. CPP premiums flow to a separate CPP fund and that fund will be managed to provide rates of return in the best interests of Canadians.

I know they have great difficulty understanding that. Let us talk about another, what they often refer to as a payroll tax, the employment insurance premiums. Let us talk about the $7 billion reduction which has taken place since we came into office.

There are a number of points I find quite surprising that the hon. member would make and then go on to defend in this motion and this intervention. Let us talk about the motion for one moment.

We now have Reformers saying they want the municipalities to compete with the private sector. That is essentially what they are saying. They are saying let us take taxes that are collected by the municipality, collected in the form of property taxes, and set up a corporation which will compete with other private sector organizations. Now they want municipalities to compete in private business. They stand up here and argue that they are the big defenders of businesses. Now they want municipalities to actually go out and compete with those corporations.

What in fact the government is doing with Bill C-28 is ensuring there is a level of service provided to local taxpayers by municipalities while at the same time allowing those taxpayers in the municipality to engage in activities outside their specific municipalities while at the same time ensuring that private business is allowed to compete on a level playing field.

The 10% factor came into play. If 10% of a municipality's income is derived from activities outside its jurisdiction, it remains tax exempt. If its income is derived by more than 10% outside its jurisdiction, the municipality loses the tax exempt status.

I can give an example of where one municipality is providing hydro to another municipality through an intergovernmental agreement. The municipality providing the hydro will still remain tax exempt. We are saying in an activity where a municipality is deriving income greater than 10% perhaps as a result of these intergovernmental activities it should not lose that tax exempt status because it is still providing a service to municipalities.

We can talk about areas where the government did receive interventions along those lines and I point to the examples of Edmonton and Calgary where those municipalities came forward and provided that scenario. The government responded by allowing them to maintain that tax exempt status.

The Department of Finance has received a number of interventions. One of the amendments passed in committee of which the hon. member is a member was to provide for a deferral of one year from 1998 to 1999 of the application of the proposed amendments to tax treatments of municipal corporations. This will allow for a detailed review of all the comments and recommendations forwarded to the government's attention on this issue.

The government's intent is not, as the opposition party attempted to paint, to tax another level of government. What is intended is to provide a fair and equitable way for municipalities to maintain their tax exempt status while providing services to their local municipality and their local residents while at the same time ensuring that private businesses and Canadians who are involved in businesses are able to compete on a fair and equitable basis.

The Reform Party puts forward this motion that would allow a municipality to enter any jurisdiction and compete by setting up a corporation with taxpayer dollars collected through property taxes and compete with other private sector organizations. It is absolutely incredible that it would make that type of recommendation.

We are not competing with the private sector. The role of the private sector is very clear. Businesses should be allowed to compete among themselves and should not use taxpayer dollars in the form of local municipal corporations, as the Reform Party is suggesting, to compete with. It is absolutely incredible the Reform Party would actually say that.

On a more technical note, the motion is deficient in that while it intends to remove the 10% income test in paragraph 149.1(d)(5), it leaves in that paragraph the reference to subsection 1.2 which becomes meaningless in the absence of the 10% income test. The actual motion presented to this House does not reflect what I believe the Reform Party was intending to do to begin with.

The motion as it is presently put forward is flawed. The basis on which the hon. member makes the argument that this government is intending to tax another level of government by putting forward this motion is completely false. Reformers go on to argue that the purpose of this federal government is to put in place tax increases to Canadians, which is completely incorrect.

The budget provided targeted tax relief and reinvestment not only in transfers to the provinces but directly to Canadian students in allowing them to access education and compete in the global economy.

The bill is providing a framework for municipalities to provide services to their local communities in an effective, tax exempt manner. When those municipalities decide they want to derive more than 10% of their income from their activities outside their local jurisdiction they will be treated just like any private business and they will be taxed.

Put in that context to any councillor at the local level it would be a surprise if they stood in opposition to this. The government has already taken measures to respond to continued interventions and we will do so over the next coming year.

[André Bachand, Progressive Conservative, Richmond—Arthabaska, QC]

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.

[Steve Mahoney, Liberal, Mississauga West, ON]

Mr. Speaker, I will address the Reform suggestion that municipalities should somehow be given special status or be granted the ability to go outside of their own jurisdictions or responsibilities. We must first understand that municipal governments are put in place primarily to serve constituents within their own boundaries. There is no question they are under a lot of stress.

I have served some 10 years on municipal council. In fact my wife currently sits as a member of Mississauga and Peel regional council. I am fairly close to what is going on at the municipal level.

I believe that what municipalities want more than anything from senior levels of government, whether it is the provincial or the federal government, are some long term visions, some long term planning. What they have experienced particularly in recent years has been almost knee jerk. All senior levels of government in attempting to balance their books are shifting the burden and the responsibility.

Municipalities are not allowed to run a deficit. It is an interesting concept, one which perhaps we should be looking at at this level of government. In fact we should be legislating it. We would agree with members opposite on a few of those issues. I think it has merit and makes sense at least within the mandate of a government to take a look at ensuring that we balance our books.

Municipalities are allowed to carry a certain amount of debt. They can carry up to what is referred to as 25% of their own in kind revenue. In kind revenue could include everything from taxes, to fees, to levies, to special agreements, whatever could be cash in lieu.

In the case of my municipality we are fortunate in many ways to have Pearson International Airport within the boundaries of the city of Mississauga. Every time members of this place land at Pearson, they land in Hazel McCallion country. We were going to call it McCallion international airport but that never got off the ground.

The point is that the federal government pays a substantial amount in the form of cash in lieu of taxation because the federal government does not pay property tax, nor does the province. We pay a cash in lieu of taxation to the city of Mississauga as a result of the facility that we all use, known as Pearson International Airport. We pay a cash in lieu amount which is quite substantial. When you combine all the revenue from the taxes that are derived from all the businesses at Pearson International Airport, the city would benefit from federal cash transfers to the tune of $40 million to $45 million a year, including the airport cash in lieu, the post office cash in lieu and the taxes that are paid by the businesses that exist within the structure of Pearson International Airport.

The municipality has a very important relationship with the federal government. There would also be a number of instances where the province would pay cash in lieu to the municipality.

There is a clear relationship between the federal government, the provincial government and the municipalities. In fact, the Association of Municipalities of Ontario, on which I served as a board member for three years, has called upon a new definition with the province and the federal government to recognize the role of the municipal government in Confederation. I think that makes sense as well.

We tend to guard our territories a little bit in a parochial sense, or as my friend Jim Bradley would say, a “pariochal” sense. We get a little bit excited about this stuff. At the end of the day and as I hear members opposite say on a regular basis, there is only one taxpayer and clearly that is true. We should be trying to establish better relationships with our municipal colleagues and to put in place clear definitions and clear lines of authority.

I have talked about the parochial issues that surround municipal government. We can see it any day in my community. There are fights going on between Mel Lastman and Hazel McCallion, or Peter Robertson and somebody else. There are disagreements that go on. At the end of the day the mayors and the municipal councillors are elected to fight for the people within their own jurisdictions, within their own boundaries.

A councillor may be elected on a ward system. A mayor is elected at large. In some communities both are elected at large. I think Guelph elects its council at large. Members have seen some of the ads. The city of Vaughan ran some ads which caused consternation. It called itself the city above Toronto and everything which that implies, that life is better and so on. Vaughan is a beautiful community, no question.

If we were to establish tax rules and grant exemptions as the Reform members are looking at, in essence we would pit municipal politician against municipal politician. We would pit community against community.

Something that has always been avoided at the municipal level is this concept of bonusing. It is something we see in the United States. I know many of the ideas Reform puts forward do indeed come from south of the border. But this is one that would cause great disruption in the existing relationship between municipalities.

One of the things that I think has been very beneficial in the GTA has been the establishment of the mayors and chairs committee, founded by my mayor but participated in by all mayors across the GTA. The committee meets on a regular basis.

From time to time we see some acrimony. The new mayor from mega Toronto will walk in with an entourage of press and cameras and so on behind him and everyone kind of gets their back up. He will stay for a little while and then he will get up and leave after they have had a bit of a fight. I have also experienced the other side. The other side is that these politicians and their staff tend to roll up their sleeves on a regular basis and they try to work co-operatively to the benefit of the GTA.

The principle is that we want to attract business, tourists, conferences, conventions from all over the world into the GTA. Once they land at the McCallion international airport they can then decide where exactly it is they would like to locate their new plant.

In many cases the decisions are based on something as simple and yet as profound as the quality of the schools in a community. When those businesses locate they want to know that when they move their families in from Asia, Europe, the United States or wherever it is, that they are going to be able to enrol their children in good quality safe environments for them to go to school both at the elementary and secondary levels. They look at those kinds of minute details when locating here.

If we were to set up a system where we would encourage municipalities to start offering perks or bonuses to try to generate revenue or to try to beat out the guy next door to them to try to attract that business instead of working co-operatively, it is my submission that we would be establishing a system that would not work to the benefit of the people who live in those communities. At the end of the day in municipal government we all have to try to get along.

I would submit in closing that what the Reform Party and all of us here should be thinking about are ways that we can say to those municipalities “Here is some long term planning, here are some goals, here is guaranteed funding”, something they would love from provincial governments.

Channelling our energy in that direction will be much more constructive than trying to create some form of special status that will lead to increased competition in an area where a municipal government should not be trying to take business away from one of its colleagues.

I do not support Reform's motion in this regard.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, I was delighted to hear the comments of the hon. member for Mississauga West.

The member referred to the Hazel McCallion international airport. Perhaps it should be called the Liberal boondoggle international airport after this government has wasted $200 million in the botched Pearson contract buyout. It is something for the member to stand in his place and remind Canadians, like rubbing salt in the wounds, about what a terrible, atrocious job he and this government did in reversing the contract rights of people who had a vested interest in that airport which cost taxpayers over $200 million.

The member spoke as well about the need for the federal government and all levels of government to co-operate with the municipalities. He said why can we all not just get along. We need clear rules and guidelines so the municipalities know exactly what the relationship is with the federal government.

It is very interesting because the member's idea of a co-operative relationship with the municipalities is to pass Bill C-28 without their support, to impose a tax on the businesses owned by municipalities, on their utility companies. That is his idea of a co-operative relationship. That is the government's idea of a co-operative relationship with taxpayers. The federal government says “We will co-operate in taking money out of your wallet”. That is its idea of co-operation. I call it a tax grab.

What the hon. member seeks to do by supporting this bill and opposing our motion is to impose a tax on profitable corporations owned by municipal governments. These are important revenues to many municipalities. Many municipalities rely on the revenues they generate from these corporations. They turn those revenues back into the corporations to reinvest in the utility infrastructures of their cities, towns and villages. Others rely on it to help supplement their general revenues.

Make no mistake about it. If we do not support Motion No. 1 on Bill C-28 we will in effect be deciding to raise property taxes indirectly because there will be less revenues coming into municipal coffers. We will also be putting municipal politicians who have been dealing with downloading from the senior levels of government for the past decade in the very difficult position of trying to decide which areas of their utility infrastructure they can cut back on. That is not good.

We just went through the terrible experience of the ice storm in southern Quebec and eastern Ontario. Tens of thousands of Canadians are still recovering from the terrible consequences of that devastating natural disaster. If we learned one thing it is the need for all levels of government to be absolutely focused and dedicated on maintaining a top rate utility infrastructure that can defeat the attacks made on it by natural disasters like the ice storm. We need municipal utility companies.

It is interesting that on the island of Montreal, I understand that while most of Montreal was blacked out at the height of the ice storm, the municipality of Westmount was still lit up. Why? Because it has its own locally managed and owned utility company with an infrastructure that is so sophisticated it withstood the collapse of the power network.

By imposing a tax on that kind of utility company this government would undermine the ability of municipalities like Westmount to maintain a power infrastructure which can withstand some of the challenges it needs to face. That is one of the reasons we have proposed this motion which would prohibit the imposition of this tax on subsidiary corporations owned by Canadian municipalities.

It is really another back door tax grab. This Liberal government is very artful when it comes to presenting tax increases as mere housekeeping amendments. That is why it claims it has not raised taxes in the past five years since it was elected in 1993. In fact any close study of the books will conclude that the government has raised taxes at least 37 times, not including the most recent federal government budget. It is little amendments like this one which, albeit indirectly and almost invisibly, end up sucking more out of the pockets of local taxpayers.

It is true that there is only one taxpayer. The hon. Minister of Finance has said that on many occasions. If it is true, as politicians repeat it all the time, then why do we not respect that basic truth of political reality? Why does the federal government jemmy around with the rules of taxation of businesses owned by municipalities and in effect impose a higher tax on local taxpayers?

It is not Hazel McCallion or Mel Lastman or Jean Doré or Pierre Bourque; it is not the mayors who own these corporations. It is local taxpayers who own these corporations. They belong to them. By taxing money away from the profitable utility corporations they own we are imposing a tax on them.

This reminds me of a tax change the government made in the last session, a change to the Public Utilities Income Tax Transfer Act, PUITTA, a long, technical name. Precisely for that reason the government thought it could make a significant change to Public Utilities Income Tax Transfer Act that nobody would notice.

Of course Reformers noticed. We opposed this enormous tax grab as vigorously as we could. The government still passed it. It said that privately owned utilities, private sector utilities, would no longer be able to compete on a level playing field with their counterparts in the public sector.

In Alberta, the province I represent, we have a vigorous private sector economy. We believe in something the government does not understand very well called free enterprise. We believe that privately owned, privately managed businesses in the private sector are ten times out of ten more productive and more efficient in servicing consumers than crown corporations. That is why Albertans have maintained an infrastructure of private utilities.

It just so happens that publicly owned utilities like Ontario Hydro and Hydro Quebec do not have to pay income tax or corporate tax on their profits. I do not quarrel with that. Perhaps it is a sensible policy. Until 1996 the federal government provided a rebate to consumers of private utilities because private utilities had to pay those taxes.

In effect this rebate levelled the playing field so that an elderly lady paying for her heating bill in southwest Edmonton would not have to pay the portion that was going into the tax coffers of the federal government. That is what PUITTA did. It helped that woman and millions of other consumers of private utility services. It levelled the playing field so that they were not paying more than their counterparts in Ontario or Quebec who were taking advantage of utility services provided by public crown corporations.

The government said to Alberta and private utility consumers that it was sorry they did not count as much as the people being serviced by crown corporation utility providers. It made a technical change in the tax act like the one in Bill C-28. It made a technical change, a housekeeping amendment, that most people did not notice. The government called it a spending cut and generated a few hundred million dollars in new revenue out of the pockets of hard pressed taxpayers whose utility bills principally in the province of Alberta went up.

That is what the change to PUITTA did. It is the same kind of back door, sneaky tax increase we find in Bill C-28, which we in the official opposition are trying to rectify through this motion.

In closing, my party and I believe in a principle known as subsidiary, a principle of political theory which suggests—and I believe it is a self-evident truth—that the lowest level of government, the level of government closest to people is the best level of government to serve them. We need to respect that level of government, not to treat it in the backhanded manner the bill seeks to do. We say to municipal politicians and property taxpayers that we want to avoid this back door tax increase. That is why we seek support for Motion No. 1.

[Chuck Strahl, Reform, Fraser Valley, BC]

Madam Speaker, it is a pleasure to speak. After the fine speech by my colleague I feel like saying amen and sitting down, but I will not.

I would like to take a little different angle on some of the problems with Bill C-28. As has already been noted, it is another tinkering bill. People on that side of the House seem impressed that they have a 460 page book in both official languages which they can add to the long chain of books that drags and tugs behind business people, entrepreneurs and families as they try to make their way in the world. It hangs behind them like the dead weight it is. The bill will not improve the situation. It is tinkering that does not get to the real nub of the problem that tax rates are too high. The bill does nothing to address that. The amendment put forward by the Reform Party is at least an attempt by the official opposition to rectify a systemic problem on for members on that side of the House. They have never met a tax they did not like.

I would like to look at the taxation problems, especially in the context of British Columbia, and to put forward some Reform Party ideas to stimulate growth, especially in British Columbia where we are at the precipice, it seems, of being in a very serious financial situation.

I will quickly give some background. British Columbia was the only province in Canada last year to post a net loss in jobs. The situation is very serious. The unemployment rate right now in rural areas is pushing 13%. The idea that British Columbia can be taxed and milked and the rewards of that sent off to Ottawa to be distributed by the good graces of those across the way is not going over very well in British Columbia right now. We feel we need to hang on to as many dollars as we can in our own province.

In February the jobless rate in B.C. hit a four year high. Experts predict B.C. will lose even more jobs this year. The TD Bank predicts economic growth of .5%, virtually stagnant growth. In essence British Columbia is virtually in a recession.

Consumer and business confidence is down. The forestry industry is on the ropes. The industry that I made my living in for over 20 years is now virtually shut down in a good part of the province. I will not blame all the woes of the forestry industry on the federal Liberals. However it is enough to say that B.C. is in bad shape economically for a variety of reasons.

How have the Liberal tax policies contributed? In British Columbia's case there are some specifics that are only applicable to British Columbia. The Asian economic flu, as they call it, affected that province worse than others. High taxes are stunting growth. There is only one set of taxpayers. Certainly the NDP provincial government of British Columbia is partially responsible for the highest marginal tax rates in North America at 54%. It is very much a disincentive to entrepreneurship and investing.

The federal Liberals are not without fault. Since 1993 the Liberals have raised taxes 37 times in one way or another by administrative tinkering as in this bill or as in the PUITTA case mentioned earlier, by bracket creep, and by hidden tariffs and hidden user fees. It all adds up to more disincentive for people in British Columbia to invest and to take risks with their capital.

According to the Fraser Institute, in 1997 the average British Columbia family spent $28,400 in taxes. The KPMG management consulting study suggested what the federal government could do to help. It appears that British Columbia has been shortchanged by $1.3 billion through federal government procurement policies. Contrary to what the Minister of Finance said in our province last week, the Liberals have to take at least some of the blame for the economic downturn in British Columbia.

People say that it was kind of a cold winter here. I do not know if that is true, but they did say it was interesting the finance minister finally had his hands in his own pockets for a change. In British Columbia he still has his hands in our pockets.

What does the bill do? Does it lower taxes to build consumer confidence and attract investment across Canada and in British Columbia? No, it does not. The government continues to collect billions and billions of dollars more each year and to offer us small amounts of what it calls tax relief by reducing a surtax on the income tax and a few other tinkerings. It takes tens of billions of dollars more in increased income. It is no wonder British Columbia finds itself on the economic mat with its back to the floor.

The CPP increases passed by the Liberal government were rammed through by using time allocation and by refusing to allow lengthy debate in the House. An Informetrica report indicates that in British Columbia alone 9,100 jobs will be lost with the CPP tax increases alone.

The government continues to tax and continues to spend. Instead of leaving money in the hands of business people, homemakers and families and allowing them to spend it as they see fit, the government takes their money, brings it to Ottawa, deducts 50% for handling and gives it back in services never asked for or programs that do not actually help the economy.

I do not know how much longer the government thinks British Columbians can handle this kind of abuse. It cannot be for much longer because we are already stagnant. We are already facing a recession. There is no hope in sight with the Liberal government tax policies.

What would Reform do? Instead of spending the fiscal dividend before allocating it in the budget, Reform would invest 50% of budgetary surpluses on lowering taxes. Our initial target is to reduce taxes to save the average family over $2,000 by the year 2001. That would mean $2,000 every year to do with as a family would see fit. Let us imagine what that would do to the local economy of towns like Abbotsford and Chilliwack that I represent with 150,000 people or maybe 60,000 or 70,000 families. Let us imagine the impact that much money would have on the local economy.

The Reform Party would achieve these targeted reductions in taxes by reducing the GST and by increasing the basic personal deduction to $7,900. We would reduce capital gains tax, another job killer the Liberal government seems to think is a money milk cow. The Reform Party would reduce job killing payroll taxes paid by employers and extend the child care expense credit to all parents whether they raise their children at home or send them to day care.

In our opinion they need help with their finances and more of the money left in their hands. The government should not say they can only have the money if they send their children to day care. The government should be saying that it wants to help them raise their families and leave more money with them. The government should not choose the type of child care they use. It should allow them to make the decision. The Reform Party thinks that parents or families can make that decision better than the government can.

Overall our measures would focus $2.5 billion in tax relief for British Columbians. I cannot tell how desperately tax relief is needed. We need some way of infusing more money into the local economy in British Columbia and not sending it to Ottawa where it is spent on programs, often programs that we never asked for and do not do any good as we try to build our economy back up.

The Reform Party believes tax reductions would give consumers and business people confidence again that when they invest money or take a risk they can get ahead. We believe tax reductions would attract investment and immigrants to stay in our province with their money, with their investments, to build the province and to stay where tax rates are reasonable instead of where the tax rates are confiscating too much of the wealth. The Reform Party believes that tax reductions would create jobs.

The idea that a nation can tax itself into prosperity is one of the cruelest delusions that has ever befuddled the human mind. I agree. Prosperity is not created in a country by taxing it into prosperity. It is not possible. It has been tried over the last couple of decades. It is time for another tack, especially in British Columbia where tax relief could be offered to the people who need it most: the entrepreneurs, the families and the people who live in a province that is on the edge of a serious recession.

[Bob Mills, Reform, Red Deer, AB]

Madam Speaker, as the last speaker pointed out, tax relief certainly is something we hear no matter where we go in the country.

The budget tells us the government's agenda. As we travel around our constituencies the people tell us their concern is for debt and tax relief. They tell us to stop spending. It appears the government has chosen to go in exactly the opposite direction.

The biggest problem facing the country today is debt and interest payments. The bill does nothing to address them or any type of tax relief for the very tired taxpayer.

Bill C-28 attempts to make some cosmetic changes but as usual it does not go nearly far enough. We made some amendments but we know what will happen to those. The government is not prepared to accept amendments. It is not prepared to accept what people are telling us as we travel around. Overall, Bill C-28 gets a very high failing grade.

This bill unfortunately flies in the face of what people are telling us and what a majority of Canadians feel. When it comes to tax reform, Canadians want us to flatten the tax base. They want us to simplify the tax system and they want it to be less onerous, if nothing else, on small businesses, which provide the great majority of jobs in this country. Our tax form is so complex with over 2,000 pages. Amendments come out on a daily basis. Accountants must go to course after course on a monthly basis in order to simply upgrade. They are trying to stay ahead of what the tax man is trying to tell us.

There is enormous frustration across this country by individual taxpayers and small business taxpayers. The Liberal government fails to hear this message. It perpetuates rising taxes and the overspending that is so common in this place. During the past few years there have been over 30 tax increases. Most of them are hidden and the government constantly says that there have been no tax increases. But when we look at the revenue figures it is very easy to see where the tax increases have been.

This bill has a few good points. Encouraging charitable donations is an area that should be sponsored. On the issue of volunteerism, we are now asking volunteers to do more and more. But if we are going to encourage volunteers and if government is going to abrogate its responsibilities, then we must give them tax relief so they can do that. We must prevent the abuses that go on. That is the key message.

Increasing the contributions for registered education savings funds is a positive which has been taken right from our platform. We are pleased the government at least can read and has read our platform.

We can look at other things but overall we find that this bill simply tinkers. It simply touches a few areas but as usual it does not go nearly far enough to provide any sort of tax relief for the taxpayer. Taxpayers must see light at the end of the tunnel. They must know that at some point they are going to get a break so that at some point they can rearrange what their lives are all about and they can do what we all want, provide more jobs.

By constantly raising taxes we are destroying initiative in this country. While we would all agree there are some areas that need help like education and health care, it will come through a rearrangement of spending and not by increasing taxation. The very worst thing we could do is put more money in government hands because government wastes that money. We have many examples of that.

The weaknesses in this bill are obvious. It is our job as official opposition to alert taxpayers that the tax and spend of the Liberal government are back. This kind of piecemeal bill is an indication of how seriously this government takes any kind of tax relief.

Young Canadians are particularly hard hit by this sort of legislation. They are asking what the government does with all the tax money it gets. If these young Canadians are lucky enough to get jobs, when they get their first cheques they will start to look at their deductions. Year by year they are asking more and more what the government does with that money. The government needs to have an answer. The government needs to be more accountable and needs to particularly account for all the waste going on.

In terms of competition we are now a global society. We must compete with other countries, with other businesses. We have the highest personal income tax in the G-7, 56% higher than the average G-7 partner. We are destroying our ability to compete.

I have been fortunate for 35 years to travel to pretty well every country in the world. As I have done that I have started to realize how our country is falling behind.

Yes, it is a great place to live. Yes, I think we can recover, but we are falling behind. One of the key reasons for that is we have too high a tax level.

The government refuses to listen to Canadians. A Liberal member distributed a questionnaire showing that 42% in his riding wanted debt reduction as number one and 37% wanted tax relief. Close to 80% of his riding said they want to have lower taxes and debt reduction. What does the government do? It increases spending.

That is not what the people are asking. The people do not want more spending. They want rearrangement within the spending but they do not want the government to start spending again. Above all, they do not want to pay more taxes.

As the Liberal government goes on and ignores this factor the problem becomes more critical. We could throw in some what ifs here. What if interest rates change? What if the Asian flu affects Canada? What if oil prices stay low? There are a lot of what ifs the government is not taking into consideration.

It says we are now into a golden age. It is a golden age as long as everything goes as predicted but we also know what happens when you assume that.

We have close to 200,000 young people out of work and looking for jobs. We have a whole generation being lost and we know that taxes cost jobs.

Payroll taxes in 1966 were $803. In 1993 they were $3,272. We have the most recent figures. There has been a 73% increase in CPP. In January one of the things I found by travelling to some other countries is that there are other ways to do things such as payroll taxes and pension plans. I will always remember the faces of some of those people who told me how proud they are of the type of pension plan they have. Ask young Canadians about their pension plans and I know what the results will be.

It appears that the government is happy with 9% unemployment. It appears it is happy with a $583 billion debt and $45 billion in interest payments. It appears it is happy and will accept that.

With that kind of thinking, I think on this day, Academy awards night, the government will be much like the Titanic , and of course we know what happened to that ship. I believe the Liberal tax and spend policy will lead to that same sort of final result.

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

Madam Speaker, it is a pleasure to speak on Bill C-28.

This issue goes to the heart of the situation in the country today, the heart of our economical and societal problems that we have been having for a long time but that the government has now failed to address.

The government again had an enormous opportunity to deal with the tax structure in a way that would provide the greatest stability and greatest infusion, stimulation to our economy that we have had in decades. It has done what usually happens, it has nibbled around the edges rather than getting to the heart of the issue, taking the bull by the horns and dealing with it.

The solutions are out there. I wish the government had given as much zest and gusto to this bill as it has over the last five years in providing the tax increases for the Canadian public. We are reaping what we have sown and that is manifest quite clearly in the 9.8% unemployment rate that Canadians suffer from, the actual rate being much higher, and the nearly 20% unemployment rate our students labour under. This is completely unacceptable, particularly when we look south of the border and see that the U.S. has an unemployment rate of about 4.5% whereas just north it is 9.8%. Why is that so?

The bottom line is we have to look at what we really want to do. We want to provide for an economy that is going to enable Canadians to have the best social and economic situation that they can possibly have. We also want to have social programs that provide for those who cannot take care of themselves and provide the social programs that we rely on that set us apart from other countries that do not have them such as our health care program.

However, we need to do that in the context of being able to do this within our means. In other words, we spend not more than what we make. Can we do this? Indeed we can. We do not have to adopt what went on south of the border where there are huge discrepancies between those who have and those who have not, but there are leafs to take from that book. In fact, there are leafs to take from our own history.

The Conservative government around 1992 under Mulroney lowered taxes. What happened? Government revenues went up. As a result, the government went on a wild taxing spree and government revenues went down. The lesson in this, as it is south of the border, is when taxes are lowered government revenues can go up which would enable us to provide more money for our social programs such as health care which is suffering dramatically and also ensure that people will have enough money to provide food for their children, a place to stay, a roof over their heads, education and opportunities. The government has failed to do this. Instead it has nibbled around the edges with Bill C-28.

There are other examples from around the world that we can look at. Look at what is happening in England. It has taken charge of the situation. It has not nibbled around the edges and it has implemented some sensible programs.

What can we do? For years the Reform Party has told the government to ensure that the debt goes down. If we bring the debt down then interest payments will decrease and there would be more money for the social programs that we want to pay for. Looking at the American or the British situation, people will have more money in their pockets to be able to provide for themselves.

The government likes to tout its much lauded economic statistics and say it has done so well. It has done well on paper but it has not done well at the dinner table of Canadians. People have less disposable income today.

Let us go through a few more solutions that the government can adopt apart from what my colleagues in the Reform Party have eloquently stated today. We have to eliminate the waste of tax dollars and business subsidies to businesses that do not need them and develop a right to work legislation. When the right to work legislation was put forward in the United States over 75% of new manufacturing jobs went into those states.

Right to work legislation enables those companies to be much more aggressive on the international market. For the individual person that right to work legislation provided $2,800 more in their pockets. That is what we are trying to, put more money in the coffers so we can ensure we will stabilize our eroding social programs which are eroding because the government has increased taxes, has failed to deal with the economic situation in this country and in doing so has failed to provide the stable funding required for health care, education and other programs.

Payroll taxes need to be decreased. Right now we are sitting on a $13 billion employment insurance surplus. Why are we doing that? So the government can go in an scoop out a bit of money, put it in its pocket and use it when it needs to. The best thing that the government can do is lower EI premiums, particularly in view of the fact that it has just doubled the CPP premium for companies. Canadians had a rude awakening on January 1, in particular those who are providing the bulk of the jobs, those who are self-employed. Why do we continually try to compromise the private sector in this country, the private sector that the Minister of Finance and the Prime Minister have repeatedly said is the primary engine of growth in Canada? Why are we preventing Canadians from getting the jobs they deserve?

England has put forth a new deal for students. It has created, for example, a university of industry. In this university students will learn the skills which will be required in the future that will enable them to have high paying jobs. Also, it has provided a new deal for students by giving the private sector tax incentives to hire new students.

One of the biggest complaints any of us will hear from private employers in our ridings is that the taxes are too high and therefore they cannot hire new people. They cannot invest in their companies. They cannot invest in research. They cannot invest in apprenticeships. They cannot invest in creating new jobs. When we have a situation like that we erode the ability of our economy to be able to provide for people.

This is not one or the other. It is not jobs or social programs. It is not affluence for the rich and be damned for the poor. We can take care of both. In fact it is beneficial in ensuring that we have a strong economy to have strong social programs.

Repeated government overspending by Liberal and Conservative governments has, contrary to popular belief, been the primary destroyer of our social programs. If we spend more and increase our debt, we pay more interest which means we have less money to provide for programs such as health care. As a result, we have people dying in our hospitals. People are waiting for two days in the emergency department to get into an intensive care unit bed. A senior person in severe pain has to wait 14 months for a new hip. That is not a health care system which is providing good care for Canadians.

We can do it. We can provide the strong social programs and we can provide a strong economy. We can do both. We do not have to reinvent the wheel in doing that.

There are other solutions. We can eliminate the personal income tax surcharges. Why do we continue to pile more taxes on people? The government thinks it knows best how to spend Canadians' money. Let the people decide what they want to do. Let the government take what it needs to provide for social programs and give the rest to the public to ensure that they have enough money to provide for themselves.

We underestimate the ability of people to provide for themselves. Let us give them that opportunity, while not forgetting that we have an enormous responsibility and a duty to provide for those people who cannot take care of themselves. That is the hallmark of having a kind, considerate, caring society from which we all derive an enormous amount of benefit.

In closing, the government should decrease taxes, ensure that the money it spends is spent wisely on social programs that we need, and also ensure that it pays down the debt. For heaven's sake, it should take a leaf out of the books of other countries which have used innovative measures, tax incentives and research and development to strengthen the education system and to link the education system to the future needs of industry. If we do all of that, instead of nibbling around the edges with Bill C-28, we will have a strong economy, we will have strong social programs and we will have a stronger nation.